SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
October 6, 2014
among
SPECIALTY RETAILERS, INC.
As Borrower
STAGE STORES, INC.
As Facility Guarantor
The LENDERS Party Hereto,
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Administrative Agent and as Collateral Agent
JPMORGAN CHASE BANK, N.A.
REGIONS BANK
as Co-Documentation Agents
BANK OF AMERICA, N.A.
as Syndication Agent

and
WELLS FARGO BANK, NATIONAL ASSOCIATION
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES LLC.
REGIONS BANK
as Joint Lead Arrangers and Joint Bookrunning Managers
___________________________

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TABLE OF CONTENTS
 
 
Page
 
 
 
ARTICLE I Definitions
2
 
 
 
SECTION 1.01.
Defined Terms
2
SECTION 1.02.
Terms Generally
36
SECTION 1.03.
Accounting Terms; GAAP
36
SECTION 1.04.
Rounding
37
SECTION 1.05.
Times of Day
37
SECTION 1.06.
Letter of Credit Amounts
37
 
 
 
ARTICLE II Amount and Terms of Credit
37
 
 
 
SECTION 2.01.
Commitment of the Lenders
37
SECTION 2.02.
Increase in Total Commitment
38
SECTION 2.03.
Reserves; Changes to Reserves
40
SECTION 2.04.
Making of Loans
40
SECTION 2.05.
Overadvances
42
SECTION 2.06.
Swingline Loans
42
SECTION 2.07.
Letters of Credit
43
SECTION 2.08.
Settlements Amongst Lenders
51
SECTION 2.09.
Notes; Repayment of Loans
53
SECTION 2.10.
Interest on Loans
53
SECTION 2.11.
Default Interest
54
SECTION 2.12.
Certain Fees
54
SECTION 2.13.
Unused Commitment Fee
54
SECTION 2.14.
Letter of Credit Fees
54
SECTION 2.15.
Reserved
55
SECTION 2.16.
Nature of Fees
55
SECTION 2.17.
Termination or Reduction of Commitments
55
SECTION 2.18.
Alternate Rate of Interest
55
SECTION 2.19.
Conversion and Continuation of Loans
56
SECTION 2.20.
Mandatory Prepayment; Commitment Termination; Cash Collateral
57
SECTION 2.21.
Optional Prepayment of Loans; Reimbursement of Lenders
58
SECTION 2.22.
Maintenance of Loan Account; Statements of Account
59
SECTION 2.23.
Cash Receipts
60
SECTION 2.24.
Application of Payments
62
SECTION 2.25.
Increased Costs
62
SECTION 2.26.
Change in Legality
63
SECTION 2.27.
Payments; Sharing of Setoff
64
SECTION 2.28.
Taxes
65
SECTION 2.29.
Security Interests in Collateral
68
SECTION 2.30.
Mitigation Obligations; Replacement of Lenders
68
 
 
 
ARTICLE III Representations and Warranties
69

(ii)

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SECTION 3.01.
Organization; Powers
69
SECTION 3.02.
Authorization; Enforceability
69
SECTION 3.03.
Governmental Approvals; No Conflicts
69
SECTION 3.04.
Financial Condition
69
SECTION 3.05.
Properties
70
SECTION 3.06.
Litigation and Environmental Matters
70
SECTION 3.07.
Compliance with Laws and Agreements
70
SECTION 3.08.
Investment and Holding Company Status
70
SECTION 3.09.
Taxes
71
SECTION 3.10.
ERISA
71
SECTION 3.11.
Disclosure
71
SECTION 3.12.
Subsidiaries
71
SECTION 3.13.
Insurance
71
SECTION 3.14.
Labor Matters
72
SECTION 3.15.
Security Documents
72
SECTION 3.16.
Federal Reserve Regulations
72
SECTION 3.17.
Solvency
72
 
 
 
ARTICLE IV Conditions
72
 
 
 
SECTION 4.01.
Effective Date
72
SECTION 4.02.
Conditions Precedent to Each Loan and Each Letter of Credit
75
 
 
 
ARTICLE V Affirmative Covenants
76
 
 
 
SECTION 5.01.
Financial Statements and Other Information
76
SECTION 5.02.
Notices of Material Events
78
SECTION 5.03.
Information Regarding Collateral
79
SECTION 5.04.
Existence; Conduct of Business
80
SECTION 5.05.
Payment of Obligations
80
SECTION 5.06.
Maintenance of Properties
80
SECTION 5.07.
Insurance
80
SECTION 5.08.
Casualty and Condemnation
81
SECTION 5.09.
Books and Records; Inspection and Audit Rights; Appraisals; Accountants
81
SECTION 5.10.
Physical Inventories
82
SECTION 5.11.
Compliance with Laws
82
SECTION 5.12.
Use of Proceeds and Letters of Credit
83
SECTION 5.13.
Additional Subsidiaries
83
SECTION 5.14.
Further Assurances
83
 
 
 
ARTICLE VI Negative Covenants
83
 
 
 
SECTION 6.01.
Indebtedness and Other Obligations
84
SECTION 6.02.
Liens
85
SECTION 6.03.
Fundamental Changes
86
SECTION 6.04.
Investments, Loans, Advances, Guarantees and Acquisitions
86

(iii)

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SECTION 6.05.
Asset Sales
87
SECTION 6.06.
Restricted Payments; Certain Payments of Indebtedness
88
SECTION 6.07.
Transactions with Affiliates
89
SECTION 6.08.
Restrictive Agreements
89
SECTION 6.09.
Amendment of Material Documents
89
SECTION 6.10.
Additional Subsidiaries
90
SECTION 6.11.
Fixed Charge Coverage Ratio
90
SECTION 6.12.
Fiscal Year
90
SECTION 6.13.
Environmental Laws
90
 
 
 
ARTICLE VII Events of Default
90
 
 
 
SECTION 7.01.
Events of Default
90
SECTION 7.02.
When Continuing
93
SECTION 7.03.
Remedies on Default
93
SECTION 7.04.
Application of Proceeds
94
 
 
 
ARTICLE VIII The Agents
95
 
 
 
SECTION 8.01.
Administration by Administrative Agent
95
SECTION 8.02.
The Collateral Agent
95
SECTION 8.03.
Agreement of Required Lenders
95
SECTION 8.04.
Liability of Agents
96
SECTION 8.05.
Notice of Default; Actions on Default
97
SECTION 8.06.
Lenders’ Credit Decisions
97
SECTION 8.07.
Reimbursement and Indemnification
97
SECTION 8.08.
Rights of Agents
98
SECTION 8.09.
Notice of Transfer
98
SECTION 8.10.
Successor Agent
98
SECTION 8.11.
Reports and Financial Statements
99
SECTION 8.12.
Delinquent Lender
100
SECTION 8.13.
Arrangers, Documentation Agent and Co-Syndication Agent
103
SECTION 8.14.
Agent for Perfection
103
SECTION 8.15.
Relation Among the Lenders
103
SECTION 8.16.
Collateral and Guaranty Matters
104
 
 
 
ARTICLE IX Miscellaneous
104
 
 
 
SECTION 9.01.
Notices
104
SECTION 9.02.
Waivers; Amendments
105
SECTION 9.03.
Expenses; Indemnity; Damage Waiver
107
SECTION 9.04.
Successors and Assigns
108
SECTION 9.05.
Survival
110
SECTION 9.06.
Counterparts; Integration; Effectiveness
111
SECTION 9.07.
Severability
111
SECTION 9.08.
Right of Setoff
111
SECTION 9.09.
Governing Law; Jurisdiction; Consent to Service of Process
112
 
 
 
 
 
 

(iv)

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SECTION 9.10.
WAIVER OF JURY TRIAL
112
SECTION 9.11.
Headings
113
SECTION 9.12.
Interest Rate Limitation
113
SECTION 9.13.
Additional Waivers
113
SECTION 9.14.
Confidentiality
115
SECTION 9.15.
Patriot Act
116
SECTION 9.16.
Foreign Asset Control Regulations
116
SECTION 9.17.
No Advisory or Fiduciary Responsibility
116
SECTION 9.18.
Existing Credit Agreement Amended and Restated
117
SECTION 9.19.
Keepwell
118
 
 
 

(v)

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EXHIBITS
A.
Form of Assignment and Acceptance
B-1
Form of Revolving Note
B-2
Form of Swingline Note
C
Opinion of Counsel to Loan Parties
D
Form of Compliance Certificate
E
Form of Borrowing Base Certificate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

    
    
    
    
    
    

(vi)

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SCHEDULES
1.1
Lenders and Commitments

1.1(a)
Existing Letters of Credit

1.3
Fiscal Periods

2.23(a)
DDAs

2.23(b)
Credit Card Arrangements

2.23(c)
Blocked Accounts

2.23(f)
Disbursement Accounts    

3.04
Change Since Prior Fiscal Year End

3.05(c)(i)
Title to Properties; Real Estate Owned

3.05(c)(ii)
Leased Properties

3.06
Disclosed Matters

3.12
Subsidiaries

3.13
Insurance

5.01(i)
Financial Reporting Requirements

6.01
Indebtedness

6.02
Liens

6.04
Investments

(vii)

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SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 6, 2014 among:
SPECIALTY RETAILERS, INC., a Texas corporation, having its principal place of
business at 10201 Main Street, Houston, Texas 77025 (the “Borrower”); and
STAGE STORES, INC., a Nevada corporation, having its principal place of business
at 10201 Main Street, Houston, Texas 77025 (the “Facility Guarantor”); and
the LENDERS party hereto; and
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and as
Collateral Agent for the Lenders, a national banking association having a place
of business at One Boston Place, Boston, Massachusetts 02108; and
JPMORGAN CHASE BANK, N.A. and REGIONS BANK, as Co-Documentation Agents; and
BANK OF AMERICA, N.A., as Syndication Agent.
W I T N E S S E T H:
WHEREAS, the Borrower, among others, has entered into that certain Amended and
Restated Credit Agreement, dated as of June 30, 2011 (as amended and in effect
on and prior to the date hereof, the “Existing Credit Agreement”) by, among
others, the Borrower, the Facility Guarantors party thereto, the “Lenders” as
defined therein, Bank of America, N.A. as “Administrative Agent” and “Collateral
Agent”, Wells Fargo Capital Finance, LLC as “Documentation Agent”, and JPMorgan
Chase Bank, N.A. and Regions Bank as “Co-Syndication Agents”; and
WHEREAS, in accordance with Section 9.02 of the Existing Credit Agreement, the
Borrower, the Facility Guarantors, the Lenders and the Agents desire to amend
and restate the Existing Credit Agreement as provided herein; and
WHEREAS, prior to the amendment and restatement of the Existing Credit
Agreement, among other things, Bank of America, N.A. resigned as Administrative
Agent and Collateral Agent, and the Lenders and the Borrower appointed Wells
Fargo Bank, National Association as successor Administrative Agent and
Collateral Agent, and Wells Fargo Bank, National Association has accepted such
appointment.
NOW, THEREFORE, in consideration of the mutual conditions and agreements set
forth in this Agreement, and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the undersigned hereby agree
that the Existing Credit Agreement shall be amended and restated in its entirety
to read as follows (it being agreed that this Agreement shall not be deemed to
evidence or result in a novation or repayment and reborrowing of the Obligations
under the Existing Credit Agreement):

1

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ARTICLE I
Definitions
SECTION 1.01.    Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
“Accelerated Borrowing Base Delivery Event” means either (i) the occurrence and
continuance of any Event of Default, or (ii) the failure of the Borrower to
maintain Excess Availability at least equal to twelve and one-half percent
(12.5%) of the Loan Cap. For purposes of this Agreement, the occurrence of an
Accelerated Borrowing Base Delivery Event shall be deemed continuing (i) so long
as such Event of Default is continuing, and/or (ii) if the Accelerated Borrowing
Base Delivery Event arises as a result of the Borrower’s failure to achieve
Excess Availability as required hereunder, until Excess Availability has
exceeded twelve and one-half percent (12.5%) of the Loan Cap for thirty (30)
consecutive Business Days, in which case an Accelerated Borrowing Base Delivery
Event shall no longer be deemed to be continuing for purposes of this Agreement.
The termination of an Accelerated Borrowing Base Delivery Event as provided
herein shall in no way limit, waive or delay the occurrence of a subsequent
Accelerated Borrowing Base Delivery Event in the event that the conditions set
forth in this definition again arise.
“ACH” shall mean automated clearing house transfers.
“Accommodation Payment” has the meaning provided therefor in Section 9.13.
“Account” shall mean “accounts” as defined in the UCC, and also all: accounts,
accounts receivable, receivables, and rights to payment (whether or not earned
by performance) for: property that has been or is to be sold, leased, licensed,
assigned, or otherwise disposed of; services rendered or to be rendered; a
policy of insurance issued or to be issued; a secondary obligation incurred or
to be incurred; arising out of the use of a credit or charge card or information
contained on or used with that card.
“Additional Commitment Lender” has the meaning provided therefor in Section
2.02(a).
“Adjusted LIBO Rate” means,
(a)    with respect to any LIBO Borrowing for any Interest Period, an interest
rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
(i) the LIBO Rate for such Interest Period multiplied by (ii) the Statutory
Reserve Rate, solely to the extent the Statutory Reserve Rate is greater than 0;
and
(b)    with respect to any Prime Rate Loan for any interest rate calculation, an
interest rate per annum (rounded upwards, if necessary, to the next 1/100 of one
percent) equal to (i) the LIBO Rate for an Interest Period commencing on the
date of such calculation and ending on the date that is thirty (30) days
thereafter multiplied by (ii) the Statutory Reserve Rate, solely to the extent
the Statutory Reserve Rate is greater than 0.

2

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The Adjusted LIBO Rate will be adjusted automatically as to all Loans then
outstanding as of the effective date of any change.
“Adjusted Total Commitments” shall mean, at any time, the sum of (i) the
Ordinary Commitments (as set forth on Schedule 1.1) for each Lender, plus (ii)
the Seasonal Commitment Increase Utilized Amount.
“Adjustment Date” means (i) the day that is ninety (90) days following the
Effective Date, and (ii) thereafter, the first day of each fiscal quarter of the
Borrower, commencing January 31, 2015.
“Administrative Agent” means Wells Fargo, in its capacity as administrative
agent for the Credit Parties hereunder.
“Affiliate” means, with respect to a specified Person, another Person that
directly or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified or is a
director or officer of such Person.
“Agents” shall mean collectively, the Administrative Agent and the Collateral
Agent.
“Agreement” means this Second Amended and Restated Credit Agreement, as
modified, amended, supplemented or restated, and in effect from time to time.
“Agreement Value” means, for each Hedging Agreement, on any date of
determination, an amount determined by the Administrative Agent equal to:
(a)    in the case of a Hedging Agreement documented pursuant to the Master
Agreement (Multicurrency-Cross Border) published by the International Swap and
Derivatives Association, Inc. (the “Master Agreement”), the amount, if any, that
would be payable by any Loan Party or any of its Subsidiaries to its
counterparty to such Hedging Agreement, as if (i) such Hedging Agreement was
being terminated early on such date of determination, (ii) such Loan Party or
Subsidiary was the sole “Affected Party”, and (iii) the Administrative Agent was
the sole party determining such payment amount (with the Administrative Agent
making such determination pursuant to the provisions of the form of Master
Agreement); or
(b)    in the case of a Hedging Agreement traded on an exchange, the
mark-to-market value of such Hedging Agreement, which will be the unrealized
loss on such Hedging Agreement to the Loan Party or Subsidiary of a Loan Party
to such Hedging Agreement determined by the Administrative Agent based on the
settlement price of such Hedging Agreement on such date of determination; or
(c)    in all other cases, the mark-to-market value of such Hedging Agreement,
which will be the unrealized loss on such Hedging Agreement to the Loan Party or
Subsidiary of a Loan Party party to such Hedging Agreement determined by the
Administrative Agent as the amount, if any, by which (i) the present value of
the future cash flows to be paid by such Loan Party or Subsidiary exceeds (ii)
the present value of the future cash flows to be received by such Loan Party or
Subsidiary pursuant to such

3

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Hedging Agreement; capitalized terms used and not otherwise defined in this
definition shall have the respective meanings set forth in the above described
Master Agreement.
“Allocable Amount” has the meaning provided therefor in Section 9.13.
“Applicable Law” means as to any Person: (i) all laws, statutes, rules,
regulations, orders, or other requirements having the force of law and (ii) all
court orders and injunctions, and/or similar rulings, in each instance ((i) and
(ii)) of or by any Governmental Authority, or court, or tribunal which has
jurisdiction over such Person, or any property of such Person, or of any other
Person for whose conduct such Person would be responsible.
“Applicable Margin” means:
(a)    From and after the Effective Date until the first Adjustment Date, the
percentages set forth in Level I of the pricing grid below; and
(b)    From and after the first Adjustment Date and on each Adjustment Date
thereafter, the Applicable Margin shall be determined from the following pricing
grid based upon the Average Daily Excess Availability for the fiscal quarter of
the Borrower ended immediately preceding such Adjustment Date; provided,
however, that until the first Adjustment Date, the Applicable Margin shall not
be established at Level II (even if Average Daily Excess Availability for Level
II has been met); provided however that notwithstanding anything to the contrary
set forth herein, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent may, and at the direction of the Required
Lenders shall, immediately increase the Applicable Margin to that set forth in
Level I (even if the Average Daily Excess Availability requirements for a
different Level have been met) and interest shall be determined in the manner
set forth in Section 2.11; provided further if any Borrowing Base Certificates
are at any time restated or otherwise revised (including as a result of an
audit) or if the information set forth in any Borrowing Base Certificates
otherwise proves to be false or incorrect such that the Applicable Margin would
have been higher than was otherwise in effect during any period, without
constituting a waiver of any Default or Event of Default arising as a result
thereof, interest due under this Agreement shall be immediately recalculated at
such higher rate for any applicable periods and shall be due and payable on
demand.
Level
Average Daily Excess
Availability Criteria
Prime Rate Loans
LIBO Loans
I
Less than 40% of the Loan Cap
0.50%
1.50%
II
Equal to or greater than 40% of
the Loan Cap
0.25%
1.25%

“Appraisal Percentage” shall mean, (i) during all times other than the period
from June 1 through September 30 of each year, 90%, and (ii) during the period
from June 1 through September 30 of each year, 92.5%.
“Appraised Value” means the net appraised liquidation value of the Borrower’s
Eligible Inventory as set forth in the Borrower’s inventory books and records as
determined from time to time by an independent appraiser satisfactory to the
Administrative Agent.

4

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“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender (c) an entity or an Affiliate of an entity that
administers or manages a Lender, or (d) the same investment advisor or an
advisor under common control with such Lender, Affiliate or advisor, as
applicable.
“Arrangers” means Wells Fargo, MLPFS, Regions Bank, and J.P. Morgan Securities
LLC.
“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 9.04, and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
“Availability Reserves” means such reserves as the Administrative Agent from
time to time determines in the Administrative Agent’s reasonable discretion as
being appropriate to reflect the impediments to the Agents’ ability to realize
upon the Collateral. Without limiting the generality of the foregoing,
Availability Reserves may include (but are not limited to) reserves based on (i)
rent (but in no event to exceed two months’ rent) for leased locations in the
states of Virginia, Washington, Pennsylvania and any other state in which
Applicable Law provides a landlord with a Lien for unpaid rent having priority
over the Lien of the Collateral Agent and for distribution centers for which the
Loan Parties have not delivered a landlord’s waiver to the Collateral Agent;
(ii) Gift Certificates and Merchandise Credit Liability; (iii) customs, duties,
and other costs to release Inventory which is being imported into the United
States; and (iv) past due Taxes and other governmental charges, including, ad
valorem, real estate, personal property, sales, and other Taxes which might have
priority over the interests of the Collateral Agent in the Collateral.
“Average Daily Excess Availability” shall mean the average daily Excess
Availability for, as applicable, either (a) the immediately preceding fiscal
quarter, (b) the immediately preceding Fiscal Month, or (c) each Fiscal Month
during any projected twelve (12) Fiscal Months.
“Bank of America” shall mean Bank of America, N.A., a national banking
association.
“Bank Products” means any services or facilities provided to any Loan Party by
the Administrative Agent, the Collateral Agent, any Lender or any of their
respective Affiliates, including, without limitation, on account of (a) Hedging
Agreements, (b) purchase cards, (c) leasing, (d) Factored Receivables, and (e)
supply chain finance services including, without limitation, trade payable
services and supplier accounts receivable purchases, but excluding Cash
Management Services.
“Bankruptcy Code” means Title 11, U.S.C., as now or hereafter in effect, or any
successor thereto.
“Blocked Account Agreements” has the meaning set forth in Section 2.23(c).
“Blocked Account Banks” shall mean the banks with whom the Borrower has entered
into Blocked Account Agreements.

5

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“Blocked Accounts” shall have the meaning set forth in Section 2.23(c).
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.
“Borrower” means Specialty Retailers, Inc., a Texas corporation.
“Borrowing” shall mean (a) the incurrence of Loans of a single Type, on a single
date and having, in the case of LIBO Loans, a single Interest Period, or (b) a
Swingline Loan.
“Borrowing Base” means, at any time of calculation, an amount equal to
(a)    the Credit Card Advance Rate multiplied by the face amount of Eligible
Credit Card Receivables, plus
(b)    the Appraisal Percentage of the Appraised Value of Eligible Inventory,
net of Inventory Reserves; minus
(c)    the then amount of all Availability Reserves.
“Borrowing Base Certificate” has the meaning assigned to such term in
Section 5.01(f).
“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.04.
“Breakage Costs” shall have the meaning set forth in Section 2.21(b).
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in Boston, Massachusetts, New York, New York or Houston,
Texas are authorized or required by law to remain closed, provided that, when
used in connection with a LIBO Loan, the term “Business Day” shall also exclude
any day on which banks are not open for dealings in dollar deposits in London or
such other eurodollar interbank market as may be selected by the Administrative
Agent in its sole discretion acting in good faith. Except as otherwise provided
herein, if any day on which a payment is due is not a Business Day, then the
payment shall be due on the next day following which is a Business Day and such
extension of time shall be included in computing interest and fees in connection
with such payment.
“Capital Expenditures” means, for any period, (a) all expenditures made or costs
incurred (whether made in the form of cash or other property) for the
acquisition, improvement or repair of fixed or capital assets of the Parent and
its Subsidiaries, in each case that are (or would be) set forth in a
Consolidated statement of cash flows of the Parent and its Subsidiaries for such
period prepared in accordance with GAAP as capital expenditures, and (b) Capital
Lease Obligations incurred by the Parent and its Subsidiaries during such
period. For purposes of this definition, the purchase price of equipment that is
purchased simultaneously with the trade-in of existing equipment or with
insurance proceeds shall be included in Capital Expenditures only to the extent
of the gross amount of such purchase price less the credit granted by the seller
of such equipment for the equipment being traded in at such time or the amount
of the proceeds, as the case may be.

6

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“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
“Cash Collateral Account” shall mean an interest-bearing account established by
the Borrower with the Collateral Agent at Wells Fargo under the sole and
exclusive dominion and control of the Collateral Agent designated as the
“Specialty Retailers Cash Collateral Account”.
“Cash Dominion Event” shall mean either (i) the occurrence and continuance of
any Event of Default, or (ii) the failure of the Borrower to maintain Excess
Availability of at least the greater of (i) $25,000,000 or (ii) twelve and
one-half percent (12.5%) of the Loan Cap for a period of five (5) consecutive
Business Days. For purposes of this Agreement, the occurrence of a Cash Dominion
Event shall be deemed continuing (i) so long as such Event of Default is
continuing, and/or (ii) if the Cash Dominion Event arises as a result of the
Borrower’s failure to achieve Excess Availability as required hereunder, until
Excess Availability has exceeded the greater of (i) $25,000,000 or (ii) twelve
and one-half percent (12.5%) of the Loan Cap for thirty (30) consecutive
Business Days, in which case a Cash Dominion Event shall no longer be deemed to
be continuing for purposes of this Agreement, provided that a Cash Dominion
Event shall be deemed continuing (even if an Event of Default is no longer
continuing and/or Excess Availability exceeds the required amount for thirty
(30) consecutive Business Days) at all times after a Cash Dominion Event has
occurred and been discontinued three (3) times in any period of 365 days. The
termination of a Cash Dominion Event as provided herein shall in no way limit,
waive or delay the occurrence of a subsequent Cash Dominion Event in the event
that the conditions set forth in this definition again arise.
“Cash Management Services” means any cash management services or facilities
provided to any Loan Party by the Administrative Agent, the Collateral Agent or
any Lender or any of their respective Affiliates, including, without limitation:
(a) ACH transactions, (b) cash management services, including, without
limitation, controlled disbursement services, treasury, depository, overdraft,
and electronic funds transfer services, (c) foreign exchange facilities, (d)
credit card processing services, and (e) credit or debit cards,.
“Cash Receipts” has the meaning provided therefor in Section 2.23(c).
“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. § 9601 et seq.
“Change in Control” means, at any time, (a) during any period of twelve (12)
months, individuals who at the beginning of such period constituted the board of
directors of the Parent (together with any new directors whose election or
appointment by such board of directors, or whose nomination for election by
shareholders of the Parent, as the case may be, was approved by a vote of a
majority of the directors still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
board of directors then in office; or (b) any person or

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group (within the meaning of the Securities and Exchange Act of 1934, as
amended) is or becomes the beneficial owner (within the meaning of Rule 13d-3
and 13d-5 of the Securities and Exchange Act of 1934, as amended, except that
such person shall be deemed to have “beneficial ownership” of all shares that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time) directly or indirectly of
thirty-five percent (35%) or more of the total then outstanding voting power of
the Voting Stock of the Parent on a fully diluted basis, whether as a result of
the issuance of securities of the Parent, any merger, consolidation, liquidation
or dissolution of the Parent, any direct or indirect transfers of securities or
otherwise, or has the right or ability to Control the Parent; or (c) the failure
of the Parent at any time to own, directly or indirectly, 100% of the capital
stock or other equity interests of the Borrower and other Loan Parties (other
than the Parent) free and clear of all Liens.
“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.25(b), by the designated lending office of such Lender
or by such Lender’s or the Issuing Bank’s holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement; provided
however, for purposes of this Agreement, (i) all requests, guidelines or
directives in connection with the Dodd-Frank Wall Street Reform and Consumer
Protection Act, and (ii) all 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 be deemed to have gone
into effect and been adopted after the date hereof.
“Charges” has the meaning provided therefor in Section 9.12.
“Code” means the Internal Revenue Code of 1986 and the Treasury regulations
promulgated thereunder, as amended from time to time.
“Collateral” means any and all “Collateral” as defined in any applicable
Security Document.
“Collateral Agent” means Wells Fargo, in its capacity as collateral agent under
the Security Documents.
“Comenity Bank” means Comenity Bank (formerly known as World Financial Network
National Bank) or its successors.
“Commercial Letter of Credit” means any Letter of Credit issued for the purpose
of providing the primary payment mechanism in connection with the purchase of
any materials, goods or services by the Borrower in the ordinary course of
business of the Borrower and any banker’s acceptances related thereto.

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“Commercial Letter of Credit Agreement” means the Commercial Letter of Credit
Agreement relating to the issuance of a Commercial Letter of Credit in the form
from time to time in use by the Issuing Bank.
“Commitment” shall mean, with respect to each Lender, the aggregate commitment
of such Lender hereunder in the amount set forth opposite its name on Schedule
1.1 hereto or as may subsequently be set forth in the Register from time to
time, as the same may be (i) reduced from time to time pursuant to Section 2.17
or (ii) increased from time to time pursuant to Section 2.02 hereof.
“Commitment Fee” has the meaning provided therefor in Section 2.13.
“Commitment Increase” has the meaning provided therefor in Section 2.02(a).
“Commitment Increase Date” has the meaning provided therefor in Section 2.02(c).
“Commitment Percentage” shall mean, with respect to each Lender, that percentage
of the Commitments of all Lenders hereunder in the amount set forth opposite its
name on Schedule 1.1 hereto or as may subsequently be set forth in the Register
from time to time, as the same may be (i) reduced from time to time pursuant to
Section 2.17 or (ii) increased from time to time pursuant to Section 2.02
hereof.
“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.
“Concentration Account” shall have the meaning set forth in Section 2.23(c).
“Confidential Information” shall mean any earnings information, including sales
and profitability trends, as well as any other non-public information with
respect to any aspect of the Loan Parties’ business which is disclosed to the
Agents or a Lender by any Loan Party, either directly or indirectly, in writing,
orally, electronically, graphically or otherwise. Confidential Information shall
not include any information (a) which is in the possession of any Agent or
Lender (from a source which has no obligation of confidentiality to the Loan
Parties, to the best knowledge of such Agent or Lender) prior to disclosure
thereof by the Loan Parties, (b) is approved for release by written
authorization of the Borrower, (c) is independently developed and disclosed by a
third party to any Agent or Lender, or (d) as has become generally available to
the public, not as a result of any action or inaction by any Agent or Lender.
“Consent” means actual consent given by a Lender from whom such consent is
sought. If ten (10) Business Days after receipt of written notice to a Lender
from the Administrative Agent of a proposed course of action to be followed by
the Administrative Agent without such Lender’s giving the Administrative Agent
written notice of that Lender’s consent to such course of action, such Lender
shall be deemed not to have consented thereto.
“Consolidated” means, when used to modify a financial term, test, statement, or
report of a Person, refers to the application or preparation of such term, test,
statement or report (as applicable) based upon the consolidation, in accordance
with GAAP, of the financial condition or operating results of such Person and
its Subsidiaries.

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“Consolidated EBITDA” means, at any date of determination, an amount equal to
Consolidated Net Income of the Parent and its Subsidiaries on a Consolidated
basis for the most recently completed Measurement Period, plus (a) the following
to the extent deducted in calculating such Consolidated Net Income: (i)
Consolidated Interest Charges, (ii) the provision for Federal, state, local and
foreign income Taxes, (iii) depreciation and amortization expense and (iv) other
non-recurring expenses reducing such Consolidated Net Income which do not
represent a cash item in such period or any future period (in each case of or by
the Parent and its Subsidiaries for such Measurement Period), minus (b) the
following to the extent included in calculating such Consolidated Net Income:
(i) Federal, state, local and foreign income tax credits and (ii) all non-cash
items increasing Consolidated Net Income (in each case of or by the Parent and
its Subsidiaries for such Measurement Period), all as determined on a
Consolidated basis in accordance with GAAP.
“Consolidated Fixed Charge Coverage Ratio” means, at any date of determination,
the ratio of (a) (i) Consolidated EBITDA for the most recently completed
Measurement Period minus (ii) Capital Expenditures made during such period (net
of any landlord contributions to tenant improvements of the Parent and its
Subsidiaries during such period), minus (iii) the aggregate amount of Federal,
state, local and foreign income taxes paid in cash during such period (but not
less than zero) to (b) Debt Service Charges in each case, of or by the Parent
and its Subsidiaries for the most recently completed Measurement Period, all as
determined on a Consolidated basis in accordance with GAAP.
“Consolidated Interest Charges” means, for any Measurement Period, the sum of
(a) all interest, premium payments, debt discount, fees, charges and related
expenses in connection with borrowed money (including capitalized interest) or
in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers’ acceptance financing and net costs
under Hedging Agreements, but excluding any non-cash or deferred interest
financing costs, and (b) the portion of rent expense with respect to such period
under Capital Lease Obligations that is treated as interest in accordance with
GAAP minus (c) interest income during such period (excluding any portion of
interest income representing amounts accrued in a previous period and received
in the current period), in each case of or by the Parent and its Subsidiaries
for the most recently completed Measurement Period, all as determined on a
Consolidated basis in accordance with GAAP.
“Consolidated Net Income” means, as of any date of determination, the net income
of the Parent and its Subsidiaries for the most recently completed Measurement
Period, all as determined on a Consolidated basis in accordance with GAAP,
provided, however, that there shall be excluded (a) extraordinary gains and
extraordinary losses for such Measurement Period, (b) the income (or loss) of
the Parent and its Subsidiaries during such Measurement Period in which any
other Person has a joint interest, except to the extent of the amount of cash
dividends or other distributions actually paid in cash to the Parent and its
Subsidiaries during such period, (c) the income (or loss) of a Subsidiary during
such Measurement Period and accrued prior to the date it becomes a Subsidiary of
the Parent or any of the Parent’s Subsidiaries or is merged into or consolidated
with the Parent or any of its Subsidiaries or that Person’s assets are acquired
by the Parent or any of its Subsidiaries, and (d) the income of any direct or
indirect Subsidiary of the Parent to the extent that the declaration or payment
of dividends or similar distributions by that

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Subsidiary of that income is not at the time permitted by operation of the terms
of its Organizational Documents or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that Subsidiary,
except that the Parent’s equity in any net loss of any such Subsidiary for such
Measurement Period shall be included in determining Consolidated Net Income.
“Control” means the possession, directly or indirectly, of the power (a) to vote
twenty percent (20%) or more of the securities having ordinary voting power for
the election of directors of a Person, or (b) to direct or cause the direction
of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. The terms “Controlling” and
“Controlled” have meanings correlative thereto.
“Cost” means the cost of purchases, as reported on the Borrower’s inventory
books and records, based upon the Borrower’s accounting practices which are in
effect on the date of this Agreement. “Cost” does not include inventory
capitalization costs or other non-purchase price charges (such as freight) used
in the Borrower’s calculation of cost of goods sold.
“Covenant Compliance Event” means either (a) that an Event of Default has
occurred and is continuing, or (b) Excess Availability at any time is less than
the greater of (i) $25,000,000 or (y) ten percent (10%) of the Loan Cap. For
purposes hereof, the occurrence of a Covenant Compliance Event shall be deemed
continuing (i) so long as such Event of Default is continuing, and/or (ii) if
the Covenant Compliance Event arises as a result of the Borrower’s failure to
achieve Excess Availability as required hereunder, until Excess Availability has
exceeded the greater of (i) $25,000,000 or (y) ten percent (10%) of the Loan Cap
for thirty (30) consecutive Business Days, in which case a Covenant Compliance
Event shall no longer be deemed to be continuing for purposes of this Agreement;
provided that a Covenant Compliance Event shall be deemed continuing (even if an
Event of Default is no longer continuing and/or Excess Availability exceeds the
required amount for thirty (30) consecutive Business Days) during any twelve
month period at all times after a Covenant Compliance Event has occurred and
been discontinued on three (3) occasions during such twelve month period. The
termination of a Covenant Compliance as provided herein shall in no way limit,
waive or delay the occurrence of a subsequent Covenant Compliance Event in the
event that the conditions set forth in this definition again arise.
“Credit Card Advance Rate” means 90%.
“Credit Card Agreement” shall mean, with respect to each Account and/or Payment
Intangible which arises from a consumer revolving credit account arrangement,
and collectively with respect to all of such Accounts and/or Payment
Intangibles, the agreements between the Borrower and each Credit Card Processor,
governing the terms and conditions of the Account/and or Credit Card Processor,
as such agreements may be amended, modified or otherwise changed from time to
time and as distributed (including any amendments and revisions thereto) to
holders of such consumer revolving credit card accounts.
“Credit Card Issuer” shall mean any Person (other than Borrower or other Loan
Party) who issues or whose members issue credit cards, including, without
limitation, Comenity Bank or any other third party administering a private label
credit card program for any of the Loan

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Parties and from Visa, MasterCard, American Express Co., Discovercard, and other
major credit card processors and other issuers approved by the Administrative
Agent.
“Credit Card Processor” shall mean any servicing or processing agent or any
factor or financial intermediary who facilitates, services, processes or manages
the credit authorization, billing transfer and/or payment procedures with
respect to Borrower’s sales transactions involving credit card or debit card
purchases by customers using credit cards or debit cards issued by any Credit
Card Issuer.
“Credit Card Notifications” has the meaning provided therefor in Section
2.23(c).
“Credit Extensions” as of any day, shall be equal to the sum of (a) the
principal balance of all Loans then outstanding, and (b) the then amount of the
Letter of Credit Outstandings.
“Credit Party” or “Credit Parties” means (a) individually, (i) each Lender and
its Affiliates, (ii) the Administrative Agent and the Collateral Agent, (iii)
the Issuing Bank, (iv) the Arrangers, (v) each beneficiary of each
indemnification obligation undertaken by any Loan Party under any Loan Document,
(vi) any other Person to whom Obligations under this Agreement and other Loan
Documents are owing, and (vii) the successors and assigns of each of the
foregoing, and (b) collectively, all of the foregoing.    
“DDAs” means any checking or other demand deposit account maintained by the
Borrower.
“DDA Notification” has the meaning provided therefor in Section 2.23(c).
“Debt Service Charges” means for any Measurement Period, the sum of (a)
Consolidated Interest Charges paid or required to be paid for such Measurement
Period, plus (b) principal payments made or required to be made on account of
Indebtedness (excluding the Obligations and any obligations on account of
Synthetic Leases but including, without limitation, Capital Lease Obligations)
for such Measurement Period, in each case determined on a Consolidated basis in
accordance with GAAP.
“Debtor Relief Laws” means the Bankruptcy Code and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.
“Default” means any event or condition that constitutes an Event of Default or
that upon notice, lapse of time or both would, unless cured or waived, become an
Event of Default.
“Delinquent Lender” has the meaning therefor provided in Section 8.12.
“Delinquent Lender’s Future Commitment” has the meaning therefor provided in
Section 8.12.

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“Delinquent Lender Rate” means (a) for the first three (3) days from and after
the date the relevant payment is due, the Base Rate, and (b) thereafter, the
interest rate then applicable to Loans that are Prime Rate Loans (inclusive of
the Applicable Margin applicable thereto).
“Deteriorating Lender” means any Delinquent Lender or any Lender as to which (a)
the Issuing Bank or the Swingline Lender has a good faith belief that such
Lender has defaulted in fulfilling its obligations under one or more other
syndicated credit facilities, (b) (i) becomes or is insolvent or has a parent
company that has become or is insolvent or (ii) becomes the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee, or custodian or appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment or has a parent company that has become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment,(c) has notified the Borrower, the Administrative
Agent, or any Lender in writing that it does not intend to comply with all or
any portion of its funding obligations under this Agreement, (d) has made a
public statement to the effect that it does not intend to comply with its
funding obligations under the Agreement or under other agreements generally (as
reasonably determined by the Administrative Agent) under which it has committed
to extend credit, or (e) has failed, within two (2) Business Days after written
request by the Administrative Agent, to confirm that it will comply with the
terms of the Agreement relating to its obligations to fund any amounts required
to be funded by it under the Agreement.
“Dollars” or “$” refers to lawful money of the United States of America.
“Drawing Document” means any Letter of Credit or other document presented for
purposes of drawing under any Letter of Credit.
“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02)
“Eligible Assignee” means (a) a Credit Party or any of its Affiliates; (b) a
bank, insurance company, or company engaged in the business of making commercial
loans having a combined capital and surplus in excess of $300,000,000; (c) an
Approved Fund; (d) any Person to whom a Credit Party assigns its rights and
obligations under this Agreement as part of an assignment and transfer of such
Credit Party’s rights in and to a material portion of such Credit Party’s
portfolio of asset based credit facilities, and (e) any other Person (other than
a natural person) approved by the Administrative Agent (such approval not to be
unreasonably withheld or delayed) and, so long as no Event of Default is
continuing, by Borrower (such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall
not include a Loan Party or any of the Loan Parties’ Affiliates or Subsidiaries.
“Eligible Credit Card Receivables” means either Accounts or Payment Intangibles
due to the Borrower on a non-recourse basis from Comenity Bank or any other
third party administering a private label credit card program for any of the
Loan Parties and from Visa, MasterCard, American Express Co., Discovercard, and
other major credit card processors, in each case reasonably acceptable to the
Administrative Agent as arise in the ordinary course of business,

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which have been earned by performance and are deemed by the Administrative Agent
in its reasonable discretion to be eligible for inclusion in the calculation of
the Borrowing Base. Without limiting the foregoing, none of the following shall
be deemed to be Eligible Credit Card Receivables:
(a)    Accounts and/or Payment Intangibles that have been outstanding for more
than five (5) Business Days from the date of sale;
(b)    Accounts and/or Payment Intangibles with respect to which the Borrower
does not have good, valid and marketable title thereto, free and clear of any
Lien (other than Liens granted to the Collateral Agent, for its benefit and the
ratable benefit of the other Credit Parties, pursuant to the Security
Documents);
(c)    Accounts and/or Payment Intangibles that are not subject to a perfected
first priority security interest in favor of the Collateral Agent, for the
benefit of itself and the other Credit Parties (it being the intent that
chargebacks in the ordinary course by the credit card processors shall not be
deemed violative of this clause);
(d)    Accounts and/or Payment Intangibles which are disputed, are with
recourse, or with respect to which a claim, counterclaim, offset or chargeback
has been asserted (to the extent of such claim, counterclaim, offset or
chargeback);
(e)    Accounts and/or which are acquired in a Permitted Acquisition unless and
until the Collateral Agent has completed an appraisal of such Accounts and/or
Payment Intangibles, establishes an advance rate and reserves (if applicable)
therefor, and otherwise agrees that such Accounts shall be deemed Eligible
Credit Card Receivables; or
(f)    Accounts and/or Payment Intangibles which the Administrative Agent
determines in its reasonable discretion to be uncertain of collection.
“Eligible In-Transit Inventory” shall mean, as of the date of determination
thereof, without duplication of other Eligible Inventory, Inventory (a) which
has been shipped from a foreign location for receipt by the Borrower within
sixty (60) days of the date of determination, but which has not yet been
delivered to the Borrower, (b) for which payment has been made by the Borrower
and title has passed to the Borrower, (c) for which the document of title
reflects the Borrower as consignee (along with delivery to the Borrower of the
documents of title with respect thereto), (d) as to which the Collateral Agent
has control over the documents of title which evidence ownership of the subject
Inventory (such as by the delivery of a customs broker agency agreement,
satisfactory to the Collateral Agent), and (e) which otherwise would constitute
Eligible Inventory.
“Eligible Inventory” shall mean, as of the date of determination thereof, (a)
Eligible In- Transit Inventory, (b) Eligible L/C Inventory, and (c) items of
Inventory of the Borrower that are finished goods, merchantable and readily
saleable to the public in the ordinary course deemed by the Administrative Agent
in its reasonable discretion to be eligible for inclusion in the calculation of
the Borrowing Base. Without limiting the foregoing, unless otherwise approved in

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writing by the Administrative Agent, none of the following shall be deemed to be
Eligible Inventory:
(a)    Inventory that is not owned solely by the Borrower, or is leased or on
consignment or the Borrower does not have good and valid title thereto;
(b)    Inventory (other than Eligible In-Transit Inventory and Eligible L/C
Inventory) that is not located at a distribution center used by the Borrower in
the ordinary course or at a property that is owned or leased by the Borrower;
(c)    Inventory that represents (i) goods damaged, defective or otherwise
unmerchantable, (ii) goods that do not conform in all material respects to the
representations and warranties contained in this Agreement or any of the
Security Documents, or (iii) goods to be returned to the vendor, including
without limitation, such goods at locations at which Borrower maintains such
Inventory as specified in the Borrowing Base Certificate delivered hereunder;
(d)    Inventory that is not located in the United States of America (excluding
territories and possessions thereof) other than Eligible In-Transit Inventory
and Eligible L/C Inventory;
(e)    Inventory that is not subject to a perfected first-priority security
interest in favor of the Collateral Agent for the benefit of the Credit Parties;
(f)    Inventory which consists of promotional or marketing materials, samples,
labels, bags, packaging, and other similar non-merchandise categories, including
without limitation, such Inventory at locations at which Borrower maintains such
Inventory as specified in the Borrowing Base Certificate delivered hereunder;
(g)    Inventory that is obsolete, unusable, or otherwise unavailable for sale;
(h)    Inventory as to which insurance in compliance with the provisions of
Section 5.07 hereof is not in effect;
(i)    Inventory which has been sold but not yet delivered or as to which the
Borrower has accepted a deposit; or
(j)    Inventory which is acquired in a Permitted Acquisition unless and until
the Collateral Agent has completed an appraisal of such Inventory, establishes
an advance rate and Inventory Reserves (if applicable) therefor, and otherwise
agrees that such Inventory shall be deemed Eligible Inventory.
“Eligible L/C Inventory” shall mean, as of the date of determination thereof,
without duplication of other Eligible Inventory, Inventory (a) not yet delivered
to the Borrower, (b) the purchase of which is supported by a Commercial Letter
of Credit having an expiry within sixty (60) days of such date of determination,
(c) for which the document of title reflects the Borrower as consignee (along
with delivery to the Borrower of the documents of title with respect thereto),
(d) as to which the Collateral Agent has control over the documents of title
which evidence

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ownership of the subject Inventory (such as by the delivery of a customs broker
agency agreement, satisfactory to the Collateral Agent), and (e) which otherwise
would constitute Eligible Inventory.
“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any Governmental Authority, relating in
any way to the environment, preservation or reclamation of natural resources,
handling, treatment, storage, disposal, Release or threatened Release of any
Hazardous Material or to health and safety matters.
“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, natural resource damage, costs of
environmental remediation, administrative oversight costs, fines, penalties or
indemnities), of any Person directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the Release or threatened Release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time and the regulations promulgated and rulings issued thereunder.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Parent, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Parent or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Parent or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Parent or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Parent or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Parent or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
“Event of Default” has the meaning assigned to such term in Section 7.01.

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“Excess Availability” means, as of any date of determination, the difference, if
any, between (a) the Loan Cap, and (b) the outstanding Credit Extensions.
“Excluded Swap Obligation” means, with respect to any Facility Guarantor, any
Swap Obligation if, and to the extent that, all or a portion of the Guarantee of
such Facility Guarantor of, or the grant by such Facility Guarantor of a
security interest to secure, such Swap Obligation (or any Guarantee 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 Facility Guarantor’s
failure for any reason to constitute an “eligible contract participant” as
defined in the Commodity Exchange Act and the regulations thereunder at the time
the Guarantee of such Facility Guarantor or the grant of such 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 Guarantee or security interest is or becomes illegal.
“Excluded Taxes” means, with respect to the Agents, any Lender, the Issuing Bank
or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise Taxes imposed on
(or measured by) its gross or net income by the United States of America, or by
the jurisdiction under the laws of which such recipient is organized or in which
its principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits Taxes imposed by
the United States of America or any similar Tax imposed by any other
jurisdiction in which the Borrower is located, (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.30(b)), any withholding Tax that (i) is imposed on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding Tax pursuant to
Section 2.28(a), or (ii) is attributable to such Foreign Lender’s failure to
comply with Sections 2.28(e) or (f), and (d) any United States federal
withholding tax that would not have been imposed but for a failure by such
recipient (or any financial institution through which any payment is made to
such recipient) to comply with the applicable requirements of FATCA.
“Existing Credit Agreement” has the meaning set forth in the recitals hereto.
“Existing Letters of Credit” are identified on Schedule 1.1(a).
“Factored Receivables” means any Accounts originally owed or owing by a Loan
Party to another Person which have been purchased by or factored with Wells
Fargo or any of its Affiliates pursuant to a factoring arrangement or otherwise
with the Person that sold the goods or rendered the services to the Loan Party
which gave rise to such Account.
“Facility Guaranty” means the Amended and Restated Guaranty dated as of June 30,
2011 executed by the Facility Guarantors in favor of the Agents, the Issuing
Bank and the other Credit Parties.

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“Facility Guarantors” means the Parent and each of its Subsidiaries, now
existing or hereafter created, other than (i) Foreign Subsidiaries and (ii) the
Borrower.
“Facility Guarantors Collateral Documents” means all security agreements,
mortgages, pledge agreements, deeds of trust, and other instruments, documents
or agreements executed and delivered by any Facility Guarantor to secure the
Obligations.
“FATCA” shall mean Sections 1471 through 1474 of the Code and the United States
Treasury Regulations or published guidance with respect thereto.
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three (3) Federal funds brokers of
recognized standing selected by it.
“Fee Letter” means the letter entitled “Fee Letter” among the Borrower and the
Administrative Agent dated as of the Effective Date, as such letter may from
time to time be amended.
“Financial Officer” means, with respect to the Borrower, the chief financial
officer, treasurer, controller or assistant controller of the Borrower.
“Fiscal Month” means any fiscal month of the Parent and its Subsidiaries as set
forth on Schedule 5.01 hereto.
“Fiscal Periods” means the accounting periods of the Parent and its Subsidiaries
set forth on Schedule 1.3 hereto.
“Fiscal Year” means any period of 52 or 53 consecutive weeks ending on the
Saturday closest to January 31 of each calendar year.
“Fitch” means Fitch IBCA, Duff & Phelps, a division of Fitch, Inc., and its
successors.
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the
District of Columbia.
“Foreign Subsidiary” means any Subsidiary that is (a) organized under the laws
of a jurisdiction other than the United States of America or any State thereof
or the District of Columbia, and (b) all or substantially all of the property
and assets of which are located outside of the United States.
“Fronting Fee” means an amount equal to 0.25% per annum of the average Letter of
Credit Outstandings during each calendar quarter.

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“Fund” means 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 business.
“GAAP” means principles which are (a) consistent with those promulgated or
adopted by the Financial Accounting Standards Board and its predecessors (or
successors) in effect and applicable to that accounting period in respect of
which reference to GAAP is being made, and (b) consistently applied with past
financial statements of the Parent and its Subsidiaries adopting the same
principles.
“Gift Certificate and Merchandise Credit Liability” means, at any time, the
aggregate face value at such time of (a) outstanding gift certificates and gift
cards of the Borrower entitling the holder thereof to use all or a portion of
the certificate to pay all or a portion of the purchase price for any Inventory,
and (b) outstanding merchandise credits of the Borrower.
“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation, provided that the term “Guarantee” shall not include endorsements
for collection or deposit in the ordinary course of business. The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation for which the Guarantee is made (or, if less,
the maximum amount of such primary obligation for which such guarantor may be
liable pursuant to the terms of the instrument evidencing such Guarantee) or, if
not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such guarantor is required to perform thereunder), as
determined in good faith.
“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes, mold, fungi
or similar bacteria, and all other substances or wastes of any nature regulated
pursuant to any Environmental Law, including any material listed as a hazardous
substance under Section 101(14) of CERCLA.

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“Hedging Agreement” means any interest rate protection agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
foreign currency exchange agreement, commodity price protection agreement, or
other interest or currency exchange rate or commodity price hedging arrangement
designed to hedge against fluctuations in interest rates or foreign exchange
rates.
“Incremental Loan Commitment Requirements” means, with respect to any request
for a Commitment Increase made pursuant to Section 2.02 or any provision of a
Commitment Increase on a given Commitment Increase Date, the satisfaction of
each of the following conditions: (i) no Default or Event of Default then
exists, and (ii) the Borrower has not theretofore reduced the Commitments
pursuant to Section 2.17 hereof.
“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money (including any obligations which are without
recourse to the credit of such Person) or with respect to deposits or advances
of any kind, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person upon which
interest charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances, (k) all Hedging
Agreements, (l) the principal and interest portions of all rental obligations of
such Person under any Synthetic Lease, Tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing where such
transaction is considered borrowed money indebtedness for Tax purposes but is
classified as an operating lease in accordance with GAAP, and (m) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of capital stock or other ownership or profit
interests in such Person or in any other Person (or warrants, rights or options
to acquire such capital stock or ownership interests). The Indebtedness of any
Person shall include, without duplication, the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Indemnitee” has the meaning provided therefor in Section 9.03(b).
“Initial Lender” means each of Wells Fargo, Bank of America, JPMorgan Chase, and
Regions Bank.

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“Intercreditor Agreement” shall mean (a) that certain Intercreditor Agreement
dated as of September 12, 2003 by and among the Loan Parties, Bank of America
(as successor by merger to Fleet Retail Group, LLC (f/k/a Fleet Retail Finance
Inc.)), and World Financial Network National Bank, now known as Comenity Bank,
as amended and in effect from time to time, and (b) an intercreditor agreement
with any third party administering a private label credit card program for any
of the Loan Parties in substitution for Comenity Bank, on terms reasonably
acceptable to the Administrative Agent (which agreement shall be deemed
reasonably acceptable if it contains the same terms as the intercreditor
agreement with Comenity Bank).
“Interest Payment Date” means (a) with respect to any Prime Rate Loan (including
a Swingline Loan), the first day of each calendar month, and (b) with respect to
any LIBO Loan, on the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part, and, in addition, if such LIBO Loan has
an Interest Period of greater than ninety (90) days, on the last day of the
third month of such Interest Period.
“Interest Period” means, with respect to any LIBO Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is seven (7) days or one (1), two
(2), three (3), or six (6) months thereafter, as the Borrower may elect by
notice to the Administrative Agent in accordance with the provisions of this
Agreement, provided that (a) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day, and (b) any Interest Period that commences
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month during which such
Interest Period ends) shall end on the last Business Day of the calendar month
of such Interest Period, (c) any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date, and (d) notwithstanding
the provisions of clause (c), except as set forth above, no Interest Period
shall, unless approved by the Administrative Agent and all of the Lenders, have
a duration of less than seven (7) days, and if, by reason of clause (c), any
Interest Period applicable to a LIBO Borrowing would be for a shorter period,
such Interest Period shall not be available hereunder. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
“Inventory” has the meaning assigned to such term in the Security Agreement.
“Inventory Reserves” means such reserves as may be established from time to time
by the Administrative Agent in the Administrative Agent’s reasonable discretion
with respect to the determination of the saleability, at retail, of the Eligible
Inventory or which reflect such other factors as affect the market value of the
Eligible Inventory. Without limiting the generality of the foregoing, Inventory
Reserves may include (but are not limited to) reserves based on changes in the
following since the date of the most recent Inventory appraisal or commercial
finance examination (i) seasonality; (ii) Shrink; (iii) imbalance; (iv)
Inventory character; (v) Inventory composition; (vi) Inventory mix; (vii)
markdowns (both permanent and point of sale); and/or (viii) promotional business
practices.

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“Investment” means (a) any stock, evidence of Indebtedness or other security of
another Person, (b) any loan, advance, contribution to capital, extension of
credit (except for current trade and customer accounts receivable for inventory
sold or services rendered in the ordinary course of business and payable in
accordance with customary trade terms) to another Person, (c) any purchase of
(i) stock or other securities of another Person, or (ii) the assets comprising a
division or business unit or a substantial part of the business of any Person
(whether by purchase of assets or securities), (d) any commitment or option to
make any such purchase, or (e) any other investment, in all cases whether now
existing or hereafter made.
“ISP” means, with respect to any Letter of Credit, the International Standby
Practices 1998 (International Chamber of Commerce Publication No. 590) and any
subsequent revision thereof adopted by the International Chamber of Commerce on
the date such Letter of Credit is issued.
“Issuer Documents” means with respect to any Letter of Credit, the Letter Credit
Application, the Standby Letter of Credit Agreement or Commercial Letter of
Credit Agreement, as applicable, and any other document, agreement and
instrument entered into by the Issuing Bank and the Borrower (or any Subsidiary)
or in favor of the Issuing Bank and relating to any such Letter of Credit.
“Issuing Bank” means each Initial Lender, in its capacity as the issuer of
Letters of Credit hereunder, and any successor (but not any assignee) to such
Initial Lender in such capacity. The Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of the
Issuing Bank, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.
“JPMorgan Chase” means JPMorgan Chase Bank, N.A., a national banking
association.
“L/C Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.
“L/C Bank Obligations” means, at any date of determination, the aggregate
undrawn amount available to be drawn under all outstanding Letters of Credit.
For purposes of computing the amounts available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of any Rule under the ISP
or any article of the UCP, such Letter of Credit shall be deemed to be
“outstanding” in the amount so remaining available to be drawn.
“Lease” means any agreement, whether written or oral, no matter how styled or
structured, pursuant to which the Borrower or any of its Affiliates are entitled
to the use or occupancy of any space in a structure, land, improvements or
premises for any period of time.
“Lenders” shall mean the Persons identified on Schedule 1.1 hereto, as modified
to include any Additional Commitment Lender, and each assignee that becomes a
party to this Agreement as set forth in Section 9.04(b).

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“Letter of Credit” shall mean each letter of credit that is (a) issued pursuant
to this Agreement for the account of the Borrower, (b) a Standby Letter of
Credit or Commercial Letter of Credit, (c) issued in connection with the
purchase of Inventory by the Borrower and for other purposes for which the
Borrower has historically obtained letters of credit, or for any other purpose
that is reasonably acceptable to the Administrative Agent, and (d) in form
reasonably satisfactory to the Issuing Bank. The term “Letter of Credit” shall
include the Existing Letters of Credit.
“Letter of Credit Fees” shall mean the fees payable in respect of Letters of
Credit pursuant to Section 2.14.
“Letter of Credit Outstandings” shall mean, at any date of determination, the
sum of (a) with respect to Letters of Credit outstanding at such time, the
aggregate maximum amount that then is or at any time thereafter may become
available for drawing or payment thereunder plus (b) all amounts theretofore
drawn or paid under Letters of Credit for which the Issuing Bank has not then
been reimbursed. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of any Rule under the ISP
or any article of the UCP, such Letter of Credit shall be deemed to be
“outstanding” in the amount so remaining available to be drawn.
“Letter of Credit Application” means an application for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the
Issuing Bank.
“Letter of Credit Indemnified Costs” has the meaning specified in Section 2.07.
“Letter of Credit Related Person” has the meaning specified in Section 2.07.
“Letter of Credit Sublimit” means an amount equal to $50,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Total Commitments. A
permanent reduction of the Total Commitments shall not require a corresponding
pro rata reduction in the Letter of Credit Sublimit; provided, however, that if
the Total Commitments are reduced to an amount less than the Letter of Credit
Sublimit, then the Letter of Credit Sublimit shall be reduced to an amount equal
to (or, at Borrower’s option, less than) the Total Commitments.
“LIBO Borrowing” shall mean a Borrowing comprised of LIBO Loans.
“LIBO Loan” shall mean any Loan bearing interest at a rate determined by
reference to the Adjusted LIBO Rate in accordance with the provisions of Article
II.
“LIBO Rate” means for any Interest Period with respect to a LIBO Rate Loan, the
rate per annum which appears on the Reuters Screen LIBOR01 page as of 11:00
a.m., London time, on the second London Business Day preceding the first day of
such Interest Period (or if such rate does not appear on the Reuters Screen
LIBOR01 Page, then the rate as determined by the Administrative Agent from
another recognized source or interbank quotation), for a term, and in an amount,
comparable to the Interest Period and the amount of the LIBO Rate Loan requested
(whether as an initial LIBO Rate Loan or as a continuation of a LIBO Rate Loan
or as a conversion of a Base Rate Loan to a LIBO Rate Loan) by Borrower in
accordance with this Agreement (and, if any such rate is below zero, the LIBO
Rate shall be deemed to be zero),

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which determination shall be made by Administrative Agent and shall be
conclusive in the absence of manifest error. If such rate is not available at
such time for any reason, then the “LIBO Rate” for such Interest Period shall be
the rate per annum determined by the Administrative 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 LIBO Rate Loan being made,
continued or converted by Wells Fargo and with a term equivalent to such
Interest Period would be offered to Wells Fargo by major banks in the London
interbank eurodollar market in which Wells Fargo participates at their request
at approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
“Liquidation” means the exercise by the Administrative Agent or Collateral Agent
of those rights and remedies afforded to such Agents under the Loan Documents
and Applicable Law as a creditor of the Loan Parties with respect to the
realization on the Collateral, including (after the occurrence and during the
continuation of an Event of Default) the conduct by the Loan Parties acting with
the consent of the Administrative Agent, of any public, private or
“going-out-of-business”, “store closing” or other similar sale or any other
disposition of the Collateral for the purpose of liquidating the Collateral.
Derivations of the word “Liquidation” (such as “Liquidate”) are used with like
meaning in this Agreement.
“Loan Account” has the meaning given to such term in Section 2.22(a).
“Loan Cap” means, at any time of determination, the lesser of (a) the Adjusted
Total Commitments or (b) the Borrowing Base.
“Loan Documents” means this Agreement, the Notes, the Letters of Credit, the Fee
Letter, all Borrowing Base Certificates, the Blocked Account Agreements, the DDA
Notifications, the Credit Card Notifications, the Security Documents, the
Facility Guaranty, the Facility Guarantors Collateral Documents, the
Intercreditor Agreement and any other instrument or agreement now or hereafter
executed and delivered in connection herewith or therewith, including (i) any
Cash Management Services provided by the Administrative Agent, the Collateral
Agent, any Lender or any of their respective Affiliates, and (ii) any Bank
Product provided by the Administrative Agent, the Collateral Agent, any Lender
or any of their respective Affiliates, each as amended and in effect from time
to time.
“Loan Party” or “Loan Parties” means the Borrower and the Facility Guarantors.
“Loans” shall mean all loans (including Swingline Loans) at any time made to the
Borrower or for account of the Borrower pursuant to this Agreement.

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“London Business Day” means a day on which commercial banks are open for general
business (including dealings in foreign exchange and foreign currency deposits)
in London, England.
“Margin Stock” has the meaning assigned to such term in Regulation U.
“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, property, assets, prospects, or condition, financial or otherwise,
of the Parent and its Subsidiaries taken as a whole, (b) the ability of the Loan
Parties to perform any material obligation or to pay any Obligations under this
Agreement or any of the other Loan Documents, or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or any of
the material rights or remedies of the Administrative Agent, the Collateral
Agent or the Lenders hereunder or thereunder. In determining whether any
individual event would result in a Material Adverse Effect, notwithstanding that
such event in and of itself does not have such effect, a Material Adverse Effect
shall be deemed to have occurred if the cumulative effect of such event and all
other then existing events would result in a Material Adverse Effect.
“Material Indebtedness” means Indebtedness (other than the Loans, Letters of
Credit and obligations under Leases) of the Borrower in an aggregate principal
amount exceeding $25,000,000. For purposes of determining the amount of Material
Indebtedness at any time, the amount of the obligations in respect of any
Hedging Agreement at such time shall be Agreement Value.
“Maturity Date” means October 6, 2019.
“Maximum Rate” has the meaning provided therefor in Section 9.12.
“Measurement Period” means, at any date of determination, the most recently
completed twelve Fiscal Months of the Parent.
“Minority Lenders” has the meaning provided therefor in Section 9.02(c).
“MLPFS” means Merrill Lynch, Pierce, Fenner & Smith Incorporated.
“Moody’s” means Moody’s Investors Service, Inc.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA to which the Parent or any ERISA Affiliate is making or accruing an
obligation to make contributions, or has within the preceding five (5) plan
years made or accrued an obligation to make contributions.
“Multiple Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of the Parent or any
of its Subsidiaries or any ERISA Affiliate and at least one Person other than
the Parent, any Subsidiary or the ERISA Affiliate or (b) was so maintained and
in respect of which the Parent, any Subsidiary or any ERISA Affiliate could have
liability under Section 4064 or 4069 of ERISA in the event such plan has been or
were to be terminated.

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“Net Proceeds” means, with respect to any event, (a) the cash proceeds received
in respect of such event, including (i) any cash received in respect of any
non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, in each case net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses (including appraisals, and
brokerage, legal, title and recording Tax expenses and commissions) paid by any
Loan Party to third parties (other than Affiliates) in connection with such
event, and (ii) in the case of a sale or other disposition of an asset
(including pursuant to a casualty or condemnation), the amount of all payments
required to be made by any Loan Party as a result of such event to repay (or to
establish an escrow for the repayment of) Indebtedness (other than Loans) which
is secured by such asset and constitutes a Permitted Encumbrance that is senior
to the Lien of the Collateral Agent.
“Non-Delinquent Lender” means each Lender other than a Delinquent Lender.
“Notes” shall mean (a) the promissory notes of the Borrower substantially in the
form of Exhibit B-1, each payable to the order of any Lender requesting such
Note, evidencing the Revolving Loans, and (b) if requested by the Swingline
Lender, the promissory note of the Borrower substantially in the form of Exhibit
B-2, payable to the Swingline Lender, evidencing the Swingline Loans.
“Obligations” means (a) the due and punctual payment by the Loan Parties of
(i) the principal of, and interest (including all interest that accrues after
the commencement of any proceeding by or against any Loan Party under any Debtor
Relief Laws, whether or not allowed in such case or proceeding) on the Loans, as
and when due, whether at maturity, by acceleration, upon one or more dates set
for prepayment or otherwise, (ii) each payment required to be made by the Loan
Parties under this Agreement in respect of any Letter of Credit, when and as
due, including payments in respect of reimbursement of disbursements, interest
thereon and obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise, of the Loan Parties to the
Credit Parties under this Agreement and the other Loan Documents (including all
fees, costs, expenses and indemnities that accrue after the commencement of any
proceeding by or against any Loan Party under any Debtor Relief Laws, whether or
not allowed in such case or proceeding), and (b) the due and punctual payment
and performance of all the covenants, agreements, obligations and liabilities of
each Loan Party under or pursuant to this Agreement, and the other Loan
Documents, and (c) the payment and performance under any transaction with any of
the Arranger, Agents or any Lender, or any of their respective Affiliates, which
arises out of (i) any Cash Management Services, or (ii) Bank Products; provided
that the Obligations shall not include any Excluded Swap Obligations.
“Organizational Document” means, relative to any Loan Party, its limited
partnership agreement, its certificate of incorporation, formation or limited
partnership, its operating agreement, its by-laws and all shareholder or equity
holder agreements, voting trusts and similar arrangements to which such Loan
Party is a party or which is applicable to its capital stock, its limited
partnership agreement and all other arrangements relating to the control or
management of such entity.

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“Other Taxes” means any and all current or future stamp or documentary Taxes or
any other excise or property Taxes, charges or similar levies arising from any
payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
“Overadvance” means, at any time of calculation, a circumstance in which the
Credit Extensions exceed the Loan Cap.
“Parent” means Stage Stores, Inc., a Nevada corporation.
“Participation Register” has the meaning provided therefor in Section 9.04 (e).
“Payment Conditions” means, at the time of determination, that (a) no Default or
Event of Default then exists or would arise as a result of the making of the
subject payment and (b) after giving effect to such payment, (i) the Pro Forma
Availability Condition has been satisfied and (ii) the Consolidated Fixed Charge
Coverage Ratio, as calculated on a pro-forma basis for the twelve months prior
to such payment, will be equal to or greater than 1.0:1.0. Prior to undertaking
any payment which is subject to the Payment Conditions, the Loan Parties shall
deliver to the Administrative Agent and the Lenders evidence of satisfaction of
the conditions contained in clause (b) above on a basis (including, without
limitation, giving due consideration to results for prior periods) reasonably
satisfactory to the Administrative Agent; provided that, so long as Excess
Availability is equal to or greater than fifty percent (50%) of the Loan Cap,
the Loan Parties shall not be required to deliver to the Administrative Agent
and the Lenders evidence of satisfaction of the conditions contained in clause
(b) above with respect to the repurchase of the equity interests of the Parent
on the open market in the ordinary course of business (the “Ordinary Course
Stock Buybacks”); provided further that, nothing herein shall be deemed a waiver
of the requirements set forth in clauses (a) and (b) above as a condition to the
Parent making any Ordinary Course Stock Buybacks, and the making of any Ordinary
Course Stock Buybacks shall be deemed a representation and warranty by the Loan
parties that such requirements have been complied with.
“Payment Intangibles” has the meaning set forth in the UCC, together with all
income, payments and proceeds thereof, owed by a Credit Card Issuer or Credit
Card Processor to a Loan Party resulting from charges by a customer of a Loan
Party on credit or debit cards issued by such Credit Card Issuer in connection
with the sale of goods by a Loan Party, or services performed by a Loan Party,
in each case in the ordinary course of its business.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
“Perfection Certificate” means a certificate in the form of Annex 1 to the
Security Agreement or any other form approved by the Collateral Agent.
“Permitted Acquisition” means an Investment in, a purchase of stock or equity
interest in, a purchase of all or a substantial part of the assets or properties
of any Person, any exchange of securities or equity interests with any Person,
any transaction, merger or consolidation or acquisition of all or a substantial
portion of the assets of any Person, or any acquisition of any

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retail store locations of any Person (each of the foregoing an “Acquisition”)
which satisfies each of the following conditions:
(a)    The Acquisition is of a business permitted to be conducted by the
Borrower pursuant to Section 6.03(b) hereof and the Person to be acquired, or
whose assets are to be acquired, shall be a United States company; and
(b)    Prior to and after giving effect to the Acquisition, no Default or Event
of Default will exist or will arise therefrom; and
(c)    The Person making the Acquisition must be a Loan Party or a Subsidiary
which will become a Loan Party in accordance with Section 5.13 hereof; and
(d)    If the Parent or its Subsidiary shall merge with such other Person, such
Parent or Subsidiary shall be the surviving party of such merger; and
(e)    If such Person becomes a Subsidiary of a Loan Party, such Person shall
become a Loan Party in accordance with Section 5.13 hereof and the Loan Parties
(including such Person) shall take such steps as are necessary to grant to the
Collateral Agent, for the benefit of the Credit Parties, a legal, valid and
enforceable perfected first priority security interest in all of the assets
(excluding capital stock or equity interests) acquired in connection with such
acquisition; and
(f)    The Payment Conditions shall have been satisfied; and
(g)    Such Acquisition shall have been approved by a majority of the board of
directors (or the equivalent governing body) of the Person which is the subject
of such Acquisition and such Person shall not have announced that it will oppose
such Acquisition or shall not have commenced any action which alleges that such
Acquisition will violate Applicable Law.
“Permitted Encumbrances” means:
(a)    Liens imposed by law for Taxes that are not yet due or are being
contested in compliance with Section 5.05;
(b)    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 thirty (30) days or are
being contested in compliance with Section 5.05;
(c)    pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;
(d)    deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

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(e)    judgment liens in respect of judgments that do not constitute an Event of
Default under Section 7.01(k); and
(f)    easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary.
provided that, except as provided in any one or more of clauses (a) through (f)
above, the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.
“Permitted Investments” means each of the following:
(a)    direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within ninety
(90) days from the date of acquisition thereof;
(b)    Investments in commercial paper (i) issued by a corporation (other than a
Loan Party or an Affiliate of a Loan Party) organized under the laws of any
state of the United States or the District of Columbia maturing within ninety
(90) days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P, Moody’s, or Fitch,
or (ii) issued by a Lender maturing within 270 days from the date of acquisition
thereof;
(c)    Investments in insured certificates of deposit, banker’s acceptances and
time deposits maturing within ninety (90) days from the date of acquisition
thereof issued or guaranteed by or placed with, and demand deposit and money
market deposit accounts issued or offered by, (i) any domestic office of any
commercial bank organized under the laws of the United States of America or any
State thereof that has a combined capital and surplus and undivided profits of
not less than $1,000,000,000, or (ii) any Lender;
(d)    fully collateralized repurchase agreements with a term of not more than
thirty (30) days for securities described in clause (a) above (without regard to
the limitation on maturity contained in such clause) and entered into with a
financial institution satisfying the criteria described in clause (c) above or
with any primary dealer and having a market value at the time that such
repurchase agreement is entered into of not less than 100% of the repurchase
obligation of such counterparty entity with whom such repurchase agreement has
been entered into; and
(e)    Shares of investment companies that are registered under the Investment
Company Act of 1940, as amended, and invest solely in one or more of the types
of securities described in clauses (a) through (d) above,
provided that, notwithstanding the foregoing, no such Investments shall be
permitted to commence (i) after the occurrence of a Cash Dominion Event, unless
no Loans are then

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outstanding, and (ii) unless such Investments are pledged to the Collateral
Agent as additional collateral for the Obligations pursuant to such agreements
as may be reasonably required by the Collateral Agent.
“Permitted Overadvance” means an Overadvance determined by the Administrative
Agent, in its reasonable discretion, (a) which is made to maintain, protect or
preserve the Collateral and/or the Lenders’ rights under the Loan Documents or
which is otherwise for the benefit of the Credit Parties, or (b) which is made
to enhance the likelihood of, or to maximize the amount of, repayment of any
Obligation, or (c) is made to pay any other amount chargeable to any Loan Party
hereunder; provided that Permitted Overadvances shall not (i) exceed ten percent
(10%) of the then Borrowing Base in the aggregate outstanding at any time or
(ii) unless a Liquidation is occurring, remain outstanding for more than
forty-five (45) consecutive Business Days, unless in case of this clause (ii),
the Required Supermajority Lenders otherwise agree; and provided further that
the foregoing shall not (1) modify or abrogate any of the provisions of Section
2.07(f) hereof regarding the Lenders’ obligations with respect to L/C
Disbursements or the provisions of Sections 2.06 and 2.08 regarding the Lenders’
obligations with respect to Swingline Loans, or (2) result in any claim or
liability against the Administrative Agent (regardless of the amount of any
Overadvance) for “inadvertent Overadvances” (i.e. where an Overadvance results
from changed circumstances beyond the control of the Administrative Agent (such
as a reduction in the collateral value)), and further provided that in no event
shall the Administrative Agent make an Overadvance, if after giving effect
thereto, the principal amount of the Credit Extensions (including any
Overadvance or proposed Overadvance) would exceed the Commitments.
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Plan” means a Single Employer Plan or a Multiple Employer Plan.
“Prime Rate” shall mean, for any day, a fluctuating rate per annum equal to the
highest of (a) the rate of interest in effect for such day as publicly announced
from time to time by Wells Fargo as its “prime rate”; (b) the Federal Funds
Effective Rate for such day, plus 0.50%; and (c) the Adjusted LIBO Rate for a 30
day interest period as determined on such day, plus 1.0%. The “prime rate” is a
rate set by Wells Fargo based upon various factors including Wells Fargo’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 announced rate. Any change in Wells Fargo’s prime rate, the Federal
Funds Effective Rate or the LIBO Rate, respectively, shall take effect at the
opening of business on the day specified in the public announcement of such
change.
“Prime Rate Loan” shall mean any Loan bearing interest at a rate determined by
reference to the Prime Rate in accordance with the provisions of Article II.
“Pro Forma Availability Condition” shall mean, for any date of calculation with
respect to any payment, the Pro Forma Excess Availability following, and after
giving effect to, such transaction or payment, will be equal to or greater than
fifteen percent (15%) of the Loan Cap.

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“Pro Forma Excess Availability” shall mean, for any date of calculation, after
giving pro forma effect to the transaction then to be consummated, the projected
Excess Availability as of the end of each Fiscal Month during any subsequent
projected six (6) Fiscal Months.
“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan
Party that has total assets exceeding $10,000,000 at the time the relevant
Guarantee or grant of the relevant security interest becomes effective with
respect to such Swap Obligation or such other person as constitutes an “eligible
contract participant” under the Commodity Exchange Act or any regulations
promulgated thereunder and can cause another person to qualify as an “eligible
contract participant” at such time by entering into a keepwell under Section
1a(18)(A)(v)(II) of the Commodity Exchange Act.
“Real Estate” means all land, together with the buildings, structures, parking
areas, and other improvements thereon, now or hereafter owned by any Loan Party,
including all easements, rights-of-way, and similar rights relating thereto and
all leases, tenancies, and occupancies thereof.
“Register” has the meaning set forth in Section 9.04(c).
“Regulation U” means Regulation U of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
“Regulation X” means Regulation X of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
“Release” has the meaning set forth in Section 101(22) of CERCLA.
“Required Lenders” shall mean, subject to the provisions of Section 8.12, at any
time, Lenders having Commitments greater than 50% of the Adjusted Total
Commitments, or if the Commitments have been terminated, Lenders whose
percentage of the outstanding Credit Extensions (after settlement and repayment
of all Swingline Loans by the Lenders) aggregate greater than 50% of all such
Credit Extensions, it being understood, for avoidance of doubt, that any
provision hereof that requires the vote of the Required Lenders shall not
require the consent of the holders of the Obligations described in clause (c) of
the definition of Obligations (as such definition is in effect on the Effective
Date); provided that the Commitment of, and the portion of the Credit Extensions
held or deemed held by, any Delinquent Lender or Deteriorating Lender shall be
excluded for purposes of making a determination of Required Lenders.
“Required Supermajority Lenders” shall mean, subject to the provisions of
Section 8.12, at any time, Lenders having Commitments outstanding representing
at least 66 2/3% of the Adjusted Total Commitments outstanding or if the
Commitments have been terminated, Lenders whose percentage of the outstanding
Credit Extensions (after settlement and repayment of all Swingline Loans by the
Lenders) aggregate not less than 66 2/3% of all such Credit Extensions, it being
understood, for the avoidance of doubt, that any provision hereof that requires
the vote

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of the Required Supermajority Lenders shall not require the consent of the
holders of the Obligations described in clause (c) of the definition of
Obligations (as such definition is in effect on the Effective Date); provided
that the Commitment of, and the portion of the Credit Extensions held or deemed
held by, any Delinquent Lender or Deteriorating Lender shall be excluded for
purposes of making a determination of Required Supermajority Lenders.
“Reserves” means all (if any) Inventory Reserves and Availability Reserves.
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any shares of any class of capital
stock or equity interests of any Loan Party or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock or
equity interests of any Loan Party or any Subsidiary or any option, warrant or
other right to acquire any such shares of capital stock or equity interests of
any Loan Party or any Subsidiary. Without limiting the foregoing, “Restricted
Payments” with respect to any Person shall also include all payments (whether in
cash, securities or other property) made by such Person in respect of stock
appreciation rights plans, equity incentive, achievement or similar plans and
all proceeds of a dissolution or liquidation of such Person.
“Reuters Screen LIBOR01 Page” means the display page LIBOR01 on the Reuters
service or any successor display page, other published source, information
vendor or provider that has been designated by the sponsor of Reuters Screen
LIBOR01 page.
“Revolving Loans” means all Loans at any time made by a Lender pursuant to
Section 2.01.
“Seasonal Commitment Increase Amount” means, solely during the Seasonal
Commitment Increase Period, the increase of the Ordinary Commitment (as set
forth on Schedule 1.01) of the Seasonal Commitment Increase Lender in an amount
up to $50,000,000.
“Seasonal Commitment Increase Lender” means Wells Fargo.
“Seasonal Commitment Increase Utilized Amount” means that portion of the
Seasonal Commitment Increase Amount that the Borrower has elected to utilize
during each Seasonal Commitment Increase Period in accordance with the
provisions of Section 2.01(c).
“Seasonal Incremental Loan Commitment Requirements” means, with respect to any
request by the Borrower to utilize the Seasonal Commitment Increase Amount made
pursuant to Section 2.01(c), the satisfaction of each of the following
conditions: (a) no Default or Event of Default then exists, and (b) the Borrower
has not theretofore reduced the Commitments pursuant to Section 2.17 hereof.
“Seasonal Commitment Increase Period” means the period commencing on July 1 of
each calendar year and ending on December 31 of such calendar year.
“S&P” means Standard & Poor’s Rating Services, a division of the McGraw-Hill
Companies, Inc.

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“SEC” means the Securities and Exchange Commission.
“Security Agreement” means the Amended and Restated Security Agreement dated as
of the June 30, 2011 among the Loan Parties and the Collateral Agent for the
benefit of the Credit Parties, as amended and in effect from time to time.
“Security Documents” means the Security Agreement, the Facility Guarantors
Collateral Documents, and each other security agreement or other instrument or
document executed and delivered pursuant to Sections 5.13 or 5.14 to secure any
of the Obligations.
“Settlement Date” has the meaning provided in Section 2.08(b) hereof.
“Shrink” means Inventory which has been lost, misplaced, stolen, or is otherwise
unaccounted for.
“Single Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of the Parent or any
of its Subsidiaries or any ERISA Affiliate and no Person other than the Parent,
its Subsidiaries or the ERISA Affiliate or (b) was so maintained and in respect
of which the Parent, any Subsidiary or any ERISA Affiliate could have liability
under Section 4069 of ERISA in the event such plan has been or were to be
terminated.
“Solvent” means, with respect to any Person on a particular date, that on such
date (a) at fair valuations, all of the properties and assets of such Person are
greater than the sum of the debts, including contingent liabilities, of such
Person, (b) the present fair saleable value of the properties and assets of such
Person is not less than the amount that would be required to pay the probable
liability of such Person on its debts as they become absolute and matured, (c)
such Person is able to realize upon its properties and assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts beyond such Person’s ability to pay
as such debts mature, and (e) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or transaction, for which
such Person’s properties and assets would constitute unreasonably small capital
after giving due consideration to the prevailing practices in the industry in
which such Person is engaged. The amount of all Guarantees at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, can reasonably be expected to become an actual or matured
liability.
“Standby Letter of Credit” means any Letter of Credit other than a Commercial
Letter of Credit.
“Standard Letter of Credit Practice” means, for the Issuing Bank, any domestic
or foreign Law or letter of credit practices applicable in the city in which the
Issuing Bank issued the applicable Letter of Credit or, for its branch or
correspondent, such Laws and practices applicable in the city in which it has
advised, confirmed or negotiated such Letter of Credit, as the case may be, in
each case, (a) which letter of credit practices are of banks that regularly
issue letters of credit in the particular city, and (b) which laws or letter of
credit practices are required or permitted under ISP or UCP, as chosen in the
applicable Letter of Credit.

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“Standby Letter of Credit” means any Letter of Credit that is not a Commercial
Letter of Credit and that (a) is used in lieu or in support of performance
guaranties or performance, surety or similar bonds (excluding appeal bonds)
arising in the ordinary course of business, (b) is used in lieu or in support of
stay or appeal bonds, (c) supports the payment of insurance premiums for
reasonably necessary casualty insurance carried by any of the Loan Parties, or
(d) supports payment or performance for identified purchases or exchanges of
products or services in the ordinary course of business.
“Standby Letter of Credit Agreement” means the Standby Letter of Credit
Agreement relating to the issuance of a Standby Letter of Credit in the form
from time to time in use by the Issuing Bank.
“Stated Amount” means at any time the maximum amount for which a Letter of
Credit may be honored.
“Statutory Reserve Rate” means, for any Interest Period, the rate (expressed as
a decimal) applicable to the Administrative Agent during such Interest Period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System for determining the maximum reserve requirement
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. LIBO Loans shall be deemed to constitute eurocurrency funding and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
“Subordinated Indebtedness” means Indebtedness which is expressly subordinated
in right of payment, in form and on terms approved by the Agents in writing, to
the prior payment in full of the Obligations.
“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s Consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
“Swap Obligation” 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.

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“Swingline Lender” means Wells Fargo, in its capacity as lender of Swingline
Loans hereunder.
“Swingline Loan” shall mean a Loan made by the Swingline Lender to the Borrower
pursuant to Section 2.06 hereof.
“Synthetic Lease” means any lease or other agreement for the use or possession
of property creating obligations which does not appear as Indebtedness on the
balance sheet of the lessee thereunder but which, upon the insolvency or
bankruptcy of such Person, may be characterized as Indebtedness of such lessee
without regard to the accounting treatment.    
“Tax Agreement” means a tax sharing agreement among the Parent, the Borrower and
its Subsidiaries, in form and substance satisfactory to the Administrative
Agent.
“Taxes” means any and all current or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
“Termination Date” shall mean the earliest to occur of (i) the Maturity Date, or
(ii) the date on which the maturity of the Loans are accelerated and the
Commitments are terminated, or (iii) the date of the occurrence of any Event of
Default pursuant to Section 7.01(h) or 7.01(i) hereof.
“Total Commitments” shall mean, at any time, the sum of the applicable
Commitments at such time as set forth on Schedule 1.1. As of the Effective Date,
the Total Commitments aggregate $350,000,000.
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Prime Rate.
“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, however, that if a term is defined in Article 9
of the Uniform Commercial Code differently than in another Article thereof, the
term shall have the meaning set forth in Article 9; provided further that, if by
reason of mandatory provisions of law, perfection, or the effect of perfection
or non-perfection, of a security interest in any Collateral or the availability
of any remedy hereunder is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than New York, “Uniform Commercial Code” means the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such perfection or effect of perfection or
non-perfection or availability of such remedy, as the case may be.
“UCP” means, with respect to any Letter of Credit, the Uniform Customs and
Practice for Documentary Credits 2007 Revision, International Chamber of
Commerce Publication No. 600 and any subsequent revision thereof adopted by the
International Chamber of Commerce on the date such Letter of Credit is issued.
“UFCA” has the meaning provided in Section 9.13.

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“UFTA” has the meaning provided in Section 9.13.
“Unused Commitment” shall mean, on any day, (a) the then Adjusted Total
Commitments minus (b) the sum of (i) the principal amount of Loans then
outstanding (including the principal amount of Swingline Loans then outstanding)
and (ii) the then Letter of Credit Outstandings.
“Voting Stock” means, with respect to any Person, the outstanding stock of all
classes (or equivalent interests) which ordinarily, in the absence of
contingencies, entitles holders thereof to vote for the election of directors
(or Persons performing similar functions) of such Person, even though the right
so to vote has been suspended by the happening of such contingency.
“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.
“Well Fargo Disbursement Accounts” has the meaning provided therefor in Section
2.23(f).
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02.    Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03.    Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect on the Effective Date, provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to reflect the effect of any change occurring
after the date hereof in GAAP or in the application thereof on the operation of
such provision (or if the Administrative Agent notifies the Borrower that the
Required Lenders request an amendment to any provision hereof for such purpose),

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regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such provision shall have been amended in accordance
herewith. Notwithstanding the foregoing, any obligations of a Person under a
lease (whether existing now or entered into in the future) that is not (or would
not be) a Capital Lease Obligation under GAAP as in effect on the Effective
Date, shall not be treated as a Capital Lease Obligation solely as a result of
the adoption of changes in GAAP outlined by the Financial Accounting Standards
Board in its press release dated March 19, 2009.
SECTION 1.04.    Rounding.
Any financial ratios required to be maintained by the Loan Parties pursuant to
this Agreement shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of places
by which such ratio is expressed herein and rounding the result up or down to
the nearest number (with a rounding-up if there is no nearest number).
SECTION 1.05.    Times of Day.
Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).
SECTION 1.06.    Letter of Credit Amounts.
Unless otherwise specified, all references herein to 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 of any Issuer Documents related thereto,
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.
ARTICLE II
Amount and Terms of Credit
SECTION 2.01.    Commitment of the Lenders.
(a)    Each Lender severally and not jointly with any other Lender, agrees, upon
the terms and subject to the conditions herein set forth, to extend credit to
the Borrower on a revolving basis, in the form of Revolving Loans and Letters of
Credit and in an amount not to exceed the lesser of such Lender’s Commitment or
such Lender’s Commitment Percentage of the Loan Cap, subject to the following
limitations:
(i)    The aggregate outstanding amount of the Credit Extensions shall not at
any time exceed the Loan Cap.

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(ii)    No Lender (other than the Issuing Bank, acting in such capacity) shall
be obligated to issue any Letter of Credit, and Letters of Credit shall be
available from the Issuing Bank, subject to the ratable participation of all
Lenders, as set forth in Section 2.07. The Borrower will not at any time permit
the aggregate Letter of Credit Outstandings to exceed $50,000,000.
(iii)    Subject to all of the other provisions of this Agreement, Revolving
Loans that are repaid may be reborrowed prior to the Termination Date. No new
Credit Extension, however, shall be made to the Borrower after the Termination
Date.
(b)    Each Borrowing of Revolving Loans (other than Swingline Loans) shall be
made by the Lenders pro rata in accordance with their respective Commitments.
The failure of any Lender to make any Loan shall neither relieve any other
Lender of its obligation to fund its Loan in accordance with the provisions of
this Agreement nor increase the obligation of any such other Lender.
(c)    Notwithstanding the foregoing, so long as the Seasonal Incremental Loan
Commitment Requirements are satisfied, the Borrower shall have the right at any
time after the Effective Date, during the Seasonal Commitment Increase Period
only, to utilize the Seasonal Commitment Increase Amount. In connection with the
exercise of such Seasonal Commitment Amount, Borrower shall notify the Seasonal
Commitment Increase Lender in writing, not more than two (2) times during each
Seasonal Commitment Increase Period, of its election to so utilize the Seasonal
Commitment Increase. Each such notice shall (i) be received by the Seasonal
Commitment Lender not less than ten (10) Business Days prior to the date on
which the Borrower intends to utilize the Seasonal Commitment Amount, and (ii)
shall state the Seasonal Commitment Increase Utilized Amount that Borrower has
elected to utilize, provided, however, that each such increase shall be not less
than $10,000,000 during each Seasonal Commitment Increase Period. No Seasonal
Commitment Increase shall become effective unless and until each of the
following conditions has been satisfied:
(i)    the Seasonal Incremental Loan Commitment Requirements shall have been
satisfied; and
(ii)    the Borrower shall have paid such fees and other compensation to the
Seasonal Commitment Increase Lender as set forth in the Fee Letter.
SECTION 2.02.    Increase in Total Commitment.
(a)    So long as the Incremental Loan Commitment Requirements are satisfied,
the Borrower shall have the right at any time after the Effective Date, and from
time to time after the Effective Date, to request an increase of the Total
Commitments to an amount not to exceed $450,000,000. Any such requested increase
shall be first made in writing to all existing Lenders on a pro rata basis. In
the event that any existing Lender does not notify the Administrative Agent
within twenty-one (21) Business Days from the receipt of the requested increase
that the existing Lender will increase its Commitment and the amount of its
increase, the existing Lender shall be deemed to have declined the requested
increase of its Commitment. To the extent that one or more existing Lenders
decline to increase their respective Commitments, or decline to

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increase their Commitments to the amount requested by the Borrower, Wells Fargo
may arrange for other Persons to become Lenders hereunder and to issue
commitments in an amount equal to the amount of the increase in the Total
Commitments requested by the Borrower and not accepted by the existing Lenders
(each such increase by either means, a “Commitment Increase,” and each such
Person issuing, or Lender increasing, its Commitment, an “Additional Commitment
Lender”); provided, however, that (i) no Lender shall be obligated to provide a
Commitment Increase as a result of any such request by the Borrower, and (ii)
any Additional Commitment Lender which is not an existing Lender shall be
subject to the approval of the Administrative Agent, the Issuing Bank, the
Swingline Lender and, provided no Event of Default has occurred and is
continuing, the Borrower (which approval shall not be unreasonably withheld),
and (iii) nothing contained herein shall constitute the unconditional obligation
of Wells Fargo to provide or obtain commitments for such Commitment Increase, as
Wells Fargo is only agreeing hereby to use its best efforts to arrange for
Additional Commitment Lenders. Each Commitment Increase shall be in a minimum
aggregate amount of at least $10,000,000 and in integral multiples of
$10,000,000 in excess thereof.
(b)    No Commitment Increase shall become effective unless and until each of
the following conditions has been satisfied:
(i)    the Borrower, the Administrative Agent, and any Additional Commitment
Lender shall have executed and delivered a joinder to the Loan Documents in such
form as the Administrative Agent may reasonably require;
(ii)    the Incremental Loan Commitment Requirements shall have been satisfied;
(iii)    the Borrower shall have paid such fees and other compensation to the
Additional Commitment Lenders as the Borrower and each such Additional
Commitment Lenders may agree;
(iv)    the Borrower shall have paid such arrangement fees to the Administrative
Agent and/or Wells Fargo as the Borrower and such Persons may agree;
(v)    if requested by the Administrative Agent, the Borrower shall deliver to
the Administrative Agent and the Lenders an opinion or opinions, in form and
substance reasonably satisfactory to the Administrative Agent, from counsel to
the Borrower reasonably satisfactory to the Administrative Agent and dated such
date;
(vi)    to the extent requested by any Additional Commitment Lender, a Note will
be issued at the Borrower’s expense, to each such Additional Commitment Lender,
to be in conformity with requirements of Section 2.09 hereof (with appropriate
modification) to the extent necessary to reflect the new Commitment of such
Additional Commitment Lender; and
(vii)    the Borrower and the Additional Commitment Lenders shall have delivered
such other instruments, documents and agreements as the Administrative Agent may
reasonably have requested.

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(c)    The Administrative Agent shall promptly notify each Lender as to the
effectiveness of each Commitment Increase (with each date of such effectiveness
being referred to herein as a “Commitment Increase Date”), and at such time (i)
the Total Commitments under, and for all purposes of, this Agreement shall be
increased by the aggregate amount of such Commitment Increases, (ii) Schedule
1.1 shall be deemed modified, without further action, to reflect the revised
Commitments and Commitment Percentages of the Lenders, and (iii) this Agreement
shall be deemed amended, without further action, to the extent necessary to
reflect such increased Total Commitments (including, without limitation, Section
2.01(a)(i)).
(d)    In connection with Commitment Increases hereunder, the Lenders and the
Borrower agree that, notwithstanding anything to the contrary in this Agreement,
(i) the Borrower shall, in coordination with the Administrative Agent, (x) repay
outstanding Loans of certain Lenders, and obtain Loans from certain other
Lenders (including the Additional Commitment Lenders), but in no event in excess
of each such Lender’s Commitment, or (y) take such other actions as reasonably
may be required by the Administrative Agent, in each case to the extent
necessary so that all of the Lenders effectively participate in each of the
outstanding Loans pro rata on the basis of their Commitment Percentages
(determined after giving effect to any increase in the Total Commitments
pursuant to this Section 2.02), and (ii) the Borrower shall pay to the Lenders
any costs of the type referred to in Section 2.21 in connection with any
repayment and/or Loans required pursuant to preceding clause (i).
SECTION 2.03.    Reserves; Changes to Reserves.
(a)    The initial Inventory Reserves and Availability Reserves as of the date
of this Agreement are those set forth in the Borrowing Base Certificate
delivered pursuant to Section 4.01(d) hereof.
(b)    The Administrative Agent may hereafter establish additional Reserves or
change any of the Reserves described in Section 2.03(a), in the exercise of the
reasonable discretion of the Administrative Agent, after furnishing five (5)
days prior notice to, and after consultation with, the Borrower (whose consent
to any Reserve shall not be required) (provided that no such prior notice shall
be required if a Cash Dominion Event exists or for (1) changes to any Reserves
resulting solely by virtue of mathematical calculations of the amount of the
Reserve in accordance with the methodology of calculation previously utilized
(such as, but not limited to, rent and Gift Certificate and Merchandise Credit
Liabilities), or (2) changes to Reserves or establishment of additional Reserves
if a Material Adverse Effect has occurred or it would be reasonably likely that
a Material Adverse Effect to the Lenders would occur were such Reserve not
changed or established prior to the expiration of such five (5) day period).
SECTION 2.04.    Making of Loans.
(a)    Except as set forth in Sections 2.18 and 2.26, Loans (other than
Swingline Loans) by the Lenders shall be either Prime Rate Loans or LIBO Loans
as the Borrower may request subject to and in accordance with this Section 2.04,
provided that all Swingline Loans shall be only Prime Rate Loans. All Loans made
pursuant to the same Borrowing shall, unless otherwise specifically provided
herein, be Loans of the same Type. Each Lender may fulfill its Commitment with
respect to any Loan by causing any lending office of such Lender to make

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such Loan; but any such use of a lending office shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of the
applicable Note. Subject to the other provisions of this Section 2.04 and the
provisions of Section 2.26, Borrowings of Loans of more than one Type may be
incurred at the same time, but no more than six (6) Borrowings of LIBO Loans may
be outstanding at any time.
(b)    The Borrower shall give the Administrative Agent two (2) Business Days’
prior telephonic notice (thereafter confirmed in writing) (unless the
Administrative Agent notifies the Borrower in writing that three (3) Business
Days’ is required) of each LIBO Borrowing and one (1) Business Day’s prior
telephonic notice (thereafter confirmed in writing) of each Borrowing of Prime
Rate Loans. Any such notice, to be effective, must be received by the
Administrative Agent not later than 1:00 p.m. on the second (or third if
applicable) Business Day in the case of LIBO Loans prior to the date on which,
and on the first Business Day in the case of Prime Rate Loans prior to the date
on which, such Borrowing is to be made. Such notice shall be irrevocable and
shall specify the amount of the proposed Borrowing (which shall be in an
integral multiple of $500,000, but not less than $1,000,000 in the case of LIBO
Loans and not less than $100,000 in the case of Prime Rate Loans) and the date
thereof (which shall be a Business Day) and shall contain disbursement
instructions. Such notice shall specify whether the Borrowing then being
requested is to be a Borrowing of Prime Rate Loans or LIBO Loans and, if LIBO
Loans, the Interest Period with respect thereto. If no election of Interest
Period is specified in any such notice for a Borrowing of LIBO Loans, such
notice shall be deemed a request for an Interest Period of one month. If no
election is made as to the Type of Loan, such notice shall be deemed a request
for Borrowing of Prime Rate Loans. The Administrative Agent shall promptly
notify each Lender of its pro rata share of such Borrowing, the date of such
Borrowing, the Type of Borrowing being requested and the Interest Period or
Interest Periods applicable thereto, as appropriate. On the borrowing date
specified in such notice, each Lender shall make its share of the Borrowing
available at the office of the Administrative Agent at One Boston Place, Boston,
Massachusetts 02108, no later than 1:00 p.m., in immediately available funds.
Unless the Administrative Agent shall have received notice from a Lender prior
to the proposed date of any Borrowing that such Lender will not make available
to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with this Section and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined in good faith
by the Administrative Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to Prime Rate Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing. Upon receipt of the funds made available by the
Lenders to fund any Borrowing hereunder, the Administrative Agent shall disburse
such funds into a Wells Fargo Disbursement Account or otherwise in the manner
specified in the notice of borrowing delivered by the Borrower and shall use
reasonable efforts to make the funds so received from the Lenders available to
the Borrower no later than 4:00 p.m.

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(c)    The Administrative Agent, without the request of the Borrower, may
advance any interest, fee, service charge, or other payment to which any Agent
or their Affiliates or any Lender is entitled from the Borrower pursuant hereto
or any other Loan Document and may charge the same to the Loan Account
notwithstanding that an Overadvance may result thereby. The Administrative Agent
shall advise the Borrower of any such advance or charge promptly after the
making thereof. Such action on the part of the Administrative Agent shall not
constitute a waiver of the Administrative Agent’s rights and the Borrower’s
obligations under Section 2.20(a). Any amount which is added to the principal
balance of the Loan Account as provided in this Section 2.04(c) shall bear
interest at the interest rate then and thereafter applicable to Prime Rate
Loans.
SECTION 2.05.    Overadvances. The Agents and the Lenders have no obligation to
make any Loan or to provide any Letter of Credit if an Overadvance would result.
The Administrative Agent may, in its discretion, make Permitted Overadvances
without the Consent of the Lenders and each Lender shall be bound thereby. Any
Permitted Overadvances may constitute Swingline Loans. The making of any
Permitted Overadvance is for the benefit of the Borrower; such Permitted
Overadvances constitute Revolving Loans and Obligations. The making of any such
Permitted Overadvances on any one occasion shall not obligate the Administrative
Agent or any Lender to make or permit any Permitted Overadvances on any other
occasion or to permit such Permitted Overadvances to remain outstanding. The
making by the Administrative Agent of a Permitted Overadvance shall not modify
or abrogate any of the provisions of Section 2.07(g) regarding the Lenders’
obligations to purchase participations with respect to L/C Disbursements or
Section 2.08 regarding any Lender’s reimbursement obligations with respect to
Swingline Loans.
SECTION 2.06.    Swingline Loans
(a)    The Swingline Lender is authorized by the Lenders, but is not obligated,
to make Swingline Loans up to (i) $15,000,000 plus (ii) the Permitted
Overadvances, in the aggregate outstanding at any time, consisting only of Prime
Rate Loans, upon a notice of Borrowing received by the Administrative Agent and
the Swingline Lender (which notice, at the Swingline Lender’s discretion, may be
submitted prior to 1:00 p.m. on the Business Day on which such Swingline Loan is
requested); provided that the Swingline Lender shall not be obligated to make
any Swingline Loan in its reasonable discretion if any Lender at such time is a
Deteriorating Lender, unless the Swingline Lender has entered into satisfactory
arrangements with the Borrower or such Lender to eliminate the Swingline
Lender’s risk of full reimbursement with respect to such Swingline Loan.
Swingline Loans shall be subject to periodic settlement with the Lenders under
Section 2.08 below.
(b)    Swingline Loans may be made only in the following circumstances: (A) for
administrative convenience, the Swingline Lender may, but is not obligated to,
make Swingline Loans in reliance upon the Borrower’s actual or deemed
representations under Section 4.02, that the applicable conditions for borrowing
are satisfied or (B) for Permitted Overadvances. If the conditions for borrowing
under Section 4.02 cannot be fulfilled, the Required Lenders may direct the
Swingline Lender to, and the Swingline Lender thereupon shall, cease making
Swingline Loans (other than Permitted Overadvances) until such conditions can be
satisfied or are waived in accordance with Section 9.02 hereof. Unless the
Required Lenders so

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direct the Swingline Lender, the Swingline Lender may, but is not obligated to,
continue to make Swingline Loans notwithstanding that the conditions for
borrowing under Section 4.02 cannot be fulfilled. No Swingline Loans shall be
made pursuant to this subsection (b) (other than Permitted Overadvances) if the
aggregate outstanding amount of the Credit Extensions would exceed the Loan Cap.
SECTION 2.07.    Letters of Credit.
(a)    Upon the terms and subject to the conditions herein set forth, the
Borrower may request the Issuing Bank, at any time and from time to time after
the date hereof and prior to the Termination Date, to issue, and subject to the
terms and conditions contained herein, the Issuing Bank shall issue, for the
account of the Borrower one or more Letters of Credit; provided that no Letter
of Credit shall be issued if after giving effect to such issuance (i) the
aggregate Letter of Credit Outstandings shall exceed the Letter of Credit
Sublimit, (ii) the aggregate Credit Extensions would exceed the Loan Cap, or
(iii) the aggregate outstanding amount of the Loans of any Lender, plus such
Lender’s Commitment Percentage of the outstanding amount of all Letter of Credit
Outstandings, plus such Lender’s Commitment Percentage of the outstanding amount
of all Swingline Loans would exceed such Lender’s Commitment; and provided,
further, that no Letter of Credit shall be issued if (A) the Issuing Bank shall
have received notice from the Administrative Agent or the Required Lenders that
the conditions to such issuance have not been met or (B) there exists a
Deteriorating and/or Delinquent Lender, unless (i) such Lender’s participation
with respect to such Letter of Credit is reallocated pursuant to Section 8.12,
or (ii) the Issuing Bank has otherwise entered into arrangements reasonably
satisfactory to it and the Borrower to eliminate the Issuing Bank’s risk with
respect to the participation in such Letter of Credit of such Lender, which
arrangements may include the Borrower cash collateralizing such Defaulting
Lender’s participation with respect to such Letter of Credit in accordance with
Section 8.12; and provided further that the Issuing Bank shall not be required
to issue any such Letter of Credit in its reasonable discretion if: (X) any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the Issuing Bank from issuing such
Letter of Credit, or any Applicable Law relating to the Issuing Bank or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Bank shall prohibit,
or request that the Issuing Bank refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the
Issuing Bank with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the Issuing Bank is not otherwise compensated
hereunder) not in effect on the Effective Date, or shall impose upon the Issuing
Bank any unreimbursed loss, cost or expense which was not applicable on the
Effective Date and which the Issuing Bank in good faith deems material to it, or
(Y) the issuance of such Letter of Credit would violate one or more policies of
the Issuing Bank applicable to letters of credit generally.
By submitting a request to the Issuing Bank for the issuance of a Letter of
Credit, the Borrower shall be deemed to have requested that the Issuing Bank
issue the requested Letter of Credit. Each request for the issuance of a Letter
of Credit, or the amendment, renewal, or extension of any outstanding Letter of
Credit, shall be irrevocable and shall be made in writing pursuant to a Letter
of Credit Application by a an authorized officer of the Borrower and delivered
to the Issuing Bank and the Administrative Agent via telefacsimile or other
electronic method of transmission reasonably acceptable to the Issuing Bank not
later than 11:00 a.m. at

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least two Business Days (or such other date and time as the Administrative Agent
and the Issuing Bank may agree in a particular instance in their sole
discretion) prior to the requested date of issuance, amendment, renewal, or
extension. Each such request shall be in form and substance reasonably
satisfactory to the Issuing Bank and (i) shall specify (A) the amount of such
Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of
such Letter of Credit, (C) the proposed expiration date of such Letter of
Credit, (D) the name and address of the beneficiary of the Letter of Credit, and
(E) such other information (including, the conditions to drawing, and, in the
case of an amendment, renewal, or extension, identification of the Letter of
Credit to be so amended, renewed, or extended) as shall be necessary to prepare,
amend, renew, or extend such Letter of Credit, and (ii) shall be accompanied by
such Issuer Documents as the Administrative Agent or the Issuing Bank may
request or require, to the extent that such requests or requirements are
consistent with the Issuer Documents that the Issuing Bank generally requests
for Letters of Credit in similar circumstances. The Administrative Agent’s
records of the content of any such request will be conclusive. The Borrower and
the Credit Parties hereby acknowledge and agree that all Existing Letters of
Credit shall constitute Letters of Credit under this Agreement on and after the
Effective Date with the same effect as if such Existing Letters of Credit were
issued by Issuing Bank at the request of the Borrower on the Effective Date.
Each Letter of Credit shall be in form and substance reasonably acceptable to
the Issuing Bank, including the requirement that the amounts payable thereunder
must be payable in Dollars.
(b)    Each Standby Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one (1) year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one (1) year after such renewal or extension) and (ii) the date that is
five (5) Business Days prior to the Maturity Date, provided that each Standby
Letter of Credit may, upon the request of the Borrower, include a provision
whereby such Letter of Credit shall be renewed automatically for additional
consecutive periods of twelve (12) months or less (but not beyond the date that
is five (5) Business Days prior to the Maturity Date) unless the Issuing Bank
notifies the beneficiary thereof at least thirty (30) days prior to the
then-applicable expiration date that such Letter of Credit will not be renewed.
(c)    Each Commercial Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date 180 days after the date of the issuance
of such Commercial Letter of Credit and (ii) the date that is five (5) Business
Days prior to the Maturity Date.
(d)    Drafts drawn under each Letter of Credit shall be reimbursed by the
Borrower in dollars on the same Business Day of any such drawing by paying to
the Administrative Agent an amount equal to such drawing not later than
12:00 p.m. on (i) the date that the Borrower shall have received notice of such
drawing, if such notice is received prior to 10:00 a.m. on such date, or
(ii) the Business Day immediately following the day that the Borrower receives
such notice, if such notice is received after 10:00 a.m. on the day of drawing,
provided that the Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.04 that such payment be financed
with a Revolving Loan consisting of a Prime Rate Loan or Swingline Loan in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting Prime Rate
Loan or Swingline Loan. The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment
under a

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Letter of Credit. The Issuing Bank shall promptly notify the Administrative
Agent and the Borrower by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Bank has made or will make payment thereunder,
provided that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse the Issuing Bank and the
Lenders with respect to any such payment.
(e)    If the Issuing Bank shall make any L/C Disbursement, then, unless the
Borrower shall reimburse the Issuing Bank in full on the date such payment is
made, the unpaid amount thereof shall bear interest, for each day from and
including the date such payment is made to but excluding the date that the
Borrower reimburses the Issuing Bank therefor, at the rate per annum then
applicable to Prime Rate Loans, provided that, if the Borrower fails to
reimburse such Issuing Bank when due pursuant to paragraph (d) of this Section,
then Section 2.11 shall apply. Interest accrued pursuant to this paragraph shall
be for the account of the Issuing Bank, except that interest accrued on and
after the date of payment by any Lender pursuant to paragraph (g) of this
Section to reimburse the Issuing Bank shall be for the account of such Lender to
the extent of such payment.
(f)    Immediately upon the issuance of any Letter of Credit by the Issuing Bank
(or the amendment of a Letter of Credit increasing the amount thereof), and
without any further action on the part of the Issuing Bank, the Issuing Bank
shall be deemed to have sold to each Lender, and each such Lender shall be
deemed unconditionally and irrevocably to have purchased from the Issuing Bank,
without recourse or warranty, an undivided interest and participation, to the
extent of such Lender’s Commitment Percentage, in such Letter of Credit, each
drawing thereunder and the obligations of the Borrower under this Agreement and
the other Loan Documents with respect thereto. Upon any change in the
Commitments pursuant to Sections 2.02 or 9.04, it is hereby agreed that with
respect to all Letter of Credit Outstandings, there shall be an automatic
adjustment to the participations hereby created to reflect the new Commitment
Percentages of the assigning and assignee Lenders. Any action taken or omitted
by the Issuing Bank under or in connection with a Letter of Credit, if taken or
omitted in the absence of gross negligence or willful misconduct, shall not
create for the Issuing Bank any resulting liability to any Lender.
(g)    In the event that the Issuing Bank makes any L/C Disbursement and the
Borrower shall not have reimbursed such amount in full to the Issuing Bank
pursuant to this Section 2.07, the Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each Lender of such failure,
and each Lender shall promptly and unconditionally pay to the Administrative
Agent for the account of the Issuing Bank the amount of such Lender’s Commitment
Percentage of such unreimbursed payment in dollars and in same day funds. If the
Issuing Bank so notifies the Administrative Agent, and the Administrative Agent
so notifies the Lenders prior to 11:00 a.m. on any Business Day, each such
Lender shall make available to the Issuing Bank such Lender’s Commitment
Percentage of the amount of such payment on such Business Day in same day funds
(or if such notice is received by the Lenders after 11:00 a.m. on the day of
receipt, payment shall be made on the immediately following Business Day). Each
Lender acknowledges and agrees that its obligation to deliver to the
Administrative Agent, for the account of the Issuing Bank, an amount equal to
its respective Commitment Percentage of each Letter of Credit Disbursement
pursuant to this Section 2.07(g) shall be absolute and unconditional and such
remittance shall be made notwithstanding the occurrence or continuation

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of a Default or Event of Default or the failure to satisfy any condition set
forth in Section 4.02 hereof. If and to the extent such Lender shall not have so
made its Commitment Percentage of the amount of such payment available to the
Issuing Bank, such Lender agrees to pay to the Issuing Bank, forthwith on demand
such amount, together with interest thereon, for each day from such date until
the date such amount is paid to the Administrative Agent for the account of the
Issuing Bank at the greater of the Federal Funds Effective Rate and a rate
determined in good faith by the Administrative Agent in accordance with banking
industry rules on interbank compensation. Each Lender agrees to fund its
Commitment Percentage of such unreimbursed payment notwithstanding a failure to
satisfy any applicable lending conditions or the provisions of Sections 2.01 or
2.07, or the occurrence of the Termination Date. The failure of any Lender to
make available to the Issuing Bank its Commitment Percentage of any payment
under any Letter of Credit shall neither relieve any Lender of its obligation
hereunder to make available to the Issuing Bank its Commitment Percentage of any
payment under any Letter of Credit on the date required, as specified above, nor
increase the obligation of such other Lender, and such Lender shall be deemed to
be a Delinquent Lender and the Administrative Agent (for the account of the
Issuing Bank) shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Delinquent Lender Rate until paid
in full. Whenever any Lender has made payments to the Issuing Bank in respect of
any reimbursement obligation for any Letter of Credit, such Lender shall be
entitled to share ratably, based on its Commitment Percentage, in all payments
and collections thereafter received on account of such reimbursement obligation.
(h)    Whenever the Borrower desires that the Issuing Bank issue a Letter of
Credit (or the amendment, renewal or extension of an outstanding Letter of
Credit), the Borrower shall give to the Issuing Bank and the Administrative
Agent at least two (2) Business Days’ prior written (including telegraphic,
telex, facsimile or cable communication) notice (or such shorter period as may
be agreed upon in writing by the Issuing Bank and the Borrower) specifying the
date on which the proposed Letter of Credit is to be issued, amended, renewed or
extended (which shall be a Business Day), the stated amount of the Letter of
Credit so requested, the expiration date of such Letter of Credit, the name and
address of the beneficiary thereof, and the provisions thereof. If requested by
the Issuing Bank, the Borrower shall also submit a letter of credit application
on the Issuing Bank’s standard form in connection with any request for the
issuance, amendment, renewal or extension of a Letter of Credit.
(i)    The obligations of the Borrower to reimburse the Issuing Bank for any L/C
Disbursement shall be unconditional and irrevocable and shall be paid strictly
in accordance with the terms of this Agreement under all circumstances,
including, without limitation: (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement or provisions therein or herein; (ii) the
existence of any claim, setoff, defense or other right which the Borrower may
have at any time against a beneficiary of any Letter of Credit or against the
Issuing Bank or any of the Lenders, whether in connection with this Agreement,
the transactions contemplated herein or any unrelated transaction; (iii) any
draft, demand, certificate or other document presented under any 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; (iv) payment
by the Issuing Bank of any Letter of Credit against presentation of a demand,
draft or certificate or other document which does not comply with the terms of
such Letter of Credit; (v) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or

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provide a right of setoff against, the Borrower’s obligations hereunder; (vi)
the fact that any Event of Default shall have occurred and be continuing; (vii)
the Issuing Bank or any of its branches or Affiliates being the beneficiary of
any Letter of Credit; or (viii) the Issuing Bank or any correspondent honoring a
drawing against a Drawing Document up to the amount available under any Letter
of Credit even if such Drawing Document claims an amount in excess of the amount
available under the Letter of Credit. None of the Administrative Agent, the
Lenders, the Issuing Bank or any of their Affiliates shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank, provided that the foregoing
provisions of this subparagraph (i) shall not be construed to excuse the Issuing
Bank from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by the Borrower to the extent permitted by Applicable Law) suffered by the
Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(j)    If any Event of Default shall occur and be continuing, on the Business
Day that the Borrower receives notice from the Administrative Agent or the
Required Lenders demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in the Cash Collateral Account an amount
in cash equal to 103% of the Letter of Credit Outstandings as of such date plus
any accrued and unpaid interest thereon. Each such deposit shall be held by the
Collateral Agent as collateral for the payment and performance of the
Obligations of the Borrower under this Agreement. The Collateral Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such Cash Collateral Account. Other than any interest earned on
the investment of such deposits, which investments shall be made at the option
and sole discretion of the Collateral Agent at the request of the Borrower and
at the Borrower’s risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such Cash Collateral Account shall be applied by the
Collateral Agent to reimburse the Issuing Bank for payments on account of
drawings under Letters of Credit for which it has not been reimbursed and, to
the extent not so applied, shall be held first for the satisfaction of the
reimbursement obligations of the Borrower for the Letter of Credit Outstandings
at such time and thereafter be applied to satisfy other Obligations of the
Borrower under this Agreement. In the event that all

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reimbursement obligations and all other Obligations hereunder have been paid,
any remaining funds in the Cash Collateral Account shall be released to the
Borrower.
(k)    Borrower agrees to indemnify, defend and hold harmless each Credit Party
(including the Issuing Bank and its branches, Affiliates, and correspondents)
and each such Person’s respective directors, officers, employees, attorneys and
agents (each, including the Issuing Bank, a “Letter of Credit Related Person”)
(to the fullest extent permitted by Law) from and against any and all claims,
demands, suits, actions, investigations, proceedings, liabilities, fines, costs,
penalties, and damages, and all reasonable fees and disbursements of attorneys,
experts, or consultants and all other costs and expenses actually incurred in
connection therewith or in connection with the enforcement of this
indemnification (as and when they are incurred and irrespective of whether suit
is brought), which may be incurred by or awarded against any such Letter of
Credit Related Person (other than Taxes, which shall be governed by Section
2.28) (the “Letter of Credit Indemnified Costs”), and which arise out of or in
connection with, or as a result of:
(i)    any Letter of Credit or any pre-advice of its issuance;
(ii)    any transfer, sale, delivery, surrender or endorsement of any Drawing
Document at any time(s) held by any such Letter of Credit Related Person in
connection with any Letter of Credit;
(iii)    any action or proceeding arising out of, or in connection with, any
Letter of Credit (whether administrative, judicial or in connection with
arbitration), including any action or proceeding to compel or restrain any
presentation or payment under any Letter of Credit;
(iv)    any independent undertakings issued by the beneficiary of any Letter of
Credit;
(v)    any unauthorized instruction or request made by a Loan Party to the
Issuing Bank in connection with any Letter of Credit or requested Letter of
Credit or error in computer or electronic transmission;
(vi)    an adviser, confirmer or other nominated person seeking to be
reimbursed, indemnified or compensated;
(vii)    any third party seeking to enforce the rights of an applicant,
beneficiary, nominated person, transferee, assignee of Letter of Credit proceeds
or holder of an instrument or document;
(viii)    the fraud, forgery or illegal action of parties other than any Letter
of Credit Related Person;
(ix)    the Issuing Bank’s performance of the obligations of a confirming
institution or entity that wrongfully dishonors a confirmation; or

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(x)    the acts or omissions, whether rightful or wrongful, of any present or
future de jure or de facto governmental or regulatory authority or cause or
event beyond the control of the Letter of Credit Related Person;
in each case, including that resulting from the Letter of Credit Related
Person’s own negligence; provided, however, that such indemnity shall not be
available to any Letter of Credit Related Person claiming indemnification under
clauses (i) through (x) above to the extent that such Letter of Credit
Indemnified Costs arise as a result of (A) the gross negligence or willful
misconduct of a Letter of Credit Related Person as determined by a final,
non-appealable judgment in a court of competent jurisdiction or (B) the wrongful
honor or dishonor by the Issuing Bank or any of the Issuing Bank’s Affiliates of
a proper demand for payment made under a Letter of Credit, except if such
dishonor resulted from any act or omission, whether rightful or wrongful, of any
Governmental Authority. The Borrower hereby agrees to pay the Letter of Credit
Related Person claiming indemnity on demand from time to time all amounts owing
under this Section 2.07(k). If and to the extent that the obligations of the
Borrower under this Section 2.07(k) are unenforceable for any reason, the
Borrower agrees to make the maximum contribution to the Letter of Credit
Indemnified Costs permissible under applicable Law. This indemnification
provision shall survive termination of this Agreement and all Letters of Credit.
(l)    The liability of the Issuing Bank (or any other Letter of Credit Related
Person) under, in connection with or arising out of any Letter of Credit (or
pre-advice), regardless of the form or legal grounds of the action or
proceeding, shall be limited to direct damages suffered by the Borrower that are
caused directly by the Issuing Bank’s gross negligence or willful misconduct or
any wrongful honor or dishonor of a drawing under a Letter of Credit, except if
such dishonor resulted from any act or omission, whether rightful or wrongful,
of any Governmental Authority. The Issuing Bank shall be deemed to have acted
with due diligence and reasonable care if the Issuing Bank’s conduct is in
accordance with Standard Letter of Credit Practice or in accordance with this
Agreement. The Borrower’s aggregate remedies against the Issuing Bank and any
Letter of Credit Related Person for wrongfully honoring a presentation under any
Letter of Credit or wrongfully retaining honored Drawing Documents shall in no
event exceed the aggregate amount paid by the Borrower to the Issuing Bank in
respect of the honored presentation in connection with such Letter of Credit
under Section 2.07(e), plus interest at the rate then applicable to Prime Rate
Loans hereunder. The Borrower shall take action to avoid and mitigate the amount
of any damages claimed against the Issuing Bank or any other Letter of Credit
Related Person, including by enforcing its rights against the beneficiaries of
the Letters of Credit. Any claim by the Borrower under or in connection with any
Letter of Credit shall be reduced by an amount equal to the sum of (x) the
amount (if any) saved by the Borrower as a result of the breach or alleged
wrongful conduct complained of; and (y) the amount (if any) of the loss that
would have been avoided had the Borrower taken all reasonable steps to mitigate
any loss, and in case of a claim of wrongful dishonor, by specifically and
timely authorizing the Issuing Bank to effect a cure.
(m)    The Borrower shall be responsible for preparing or approving the final
text of the Letter of Credit as issued by the Issuing Bank, irrespective of any
assistance the Issuing Bank may provide such as drafting or recommending text or
by the Issuing Bank’s use or refusal to use text submitted by the Borrower. The
Borrower is solely responsible for the suitability of the Letter of Credit for
the Borrower’s purposes. With respect to any Letter of Credit containing

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an “automatic amendment” to extend the expiration date of such Letter of Credit,
the Issuing Bank, in its sole and absolute discretion (unless otherwise provided
in the Letter of Credit), may give notice of nonrenewal of such Letter of Credit
and, if the Borrower does not at any time want such Letter of Credit to be
renewed, the Borrower will so notify the Administrative Agent and the Issuing
Bank at least 15 calendar days before the Issuing Bank is required to notify the
beneficiary of such Letter of Credit or any advising bank of such nonrenewal
pursuant to the terms of such Letter of Credit.
(n)    Without limiting any other provision of this Agreement, the Issuing Bank
and each other Letter of Credit Related Person (if applicable) shall not be
responsible to the Borrower for, and the Issuing Bank’s rights and remedies
against the Borrower and the obligation of the Borrower to reimburse the Issuing
Bank for each drawing under each Letter of Credit shall not be impaired by:
(i)    honor of a presentation of any Drawing Document that appears on its face
to have been signed, presented or issued (A) by any purported successor or
transferee of any beneficiary or other Person required to sign, present or issue
such Drawing Document or (B) under a new name of the beneficiary;
(ii)    acceptance as a draft of any written or electronic demand or request for
payment under a Letter of Credit, even if nonnegotiable or not in the form of a
draft or notwithstanding any requirement that such draft, demand or request bear
any or adequate reference to the Letter of Credit (so long as such draft, demand
or request is consistent with the terms of the Letter of Credit);
(iii)    the identity or authority of any presenter or signer of any Drawing
Document or the form, accuracy, genuineness or legal effect of any Drawing
Document (other than the Issuing Bank’s determination that such Drawing Document
appears on its face to comply in all material respects with the terms and
conditions of the Letter of Credit);
(iv)    acting upon any instruction or request relative to a Letter of Credit or
requested Letter of Credit that the Issuing Bank in good faith believes to have
been given by a Person authorized to give such instruction or request;
(v)    any errors, omissions, interruptions or delays in transmission or
delivery of any message, advice or document (regardless of how sent or
transmitted) or for reasonable errors in interpretation of technical terms or in
translation or any delay in giving or failing to give notice to the Borrower;
(vi)    any acts, omissions or fraud by, or the insolvency of, any beneficiary,
any nominated person or entity or any other Person or any breach of contract
between any beneficiary and any Borrower or any of the parties to the underlying
transaction to which the Letter of Credit relates;
(vii)    assertion or waiver of any provision of the ISP or UCP that primarily
benefits an issuer of a letter of credit, including any requirement that any
Drawing Document be presented to it at a particular hour or place;

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(viii)    payment to any paying or negotiating bank (designated or permitted by
the terms of the applicable Letter of Credit) claiming that it rightfully
honored or is entitled to reimbursement or indemnity under Standard Letter of
Credit Practice applicable to it;
(ix)    acting or failing to act as required or permitted under Standard Letter
of Credit Practice applicable to where the Issuing Bank has issued, confirmed,
advised or negotiated such Letter of Credit, as the case may be;
(x)    honor of a presentation after the expiration date of any Letter of Credit
notwithstanding that a presentation was made prior to such expiration date and
dishonored by the Issuing Bank if subsequently the Issuing Bank or any court or
other finder of fact determines such presentation should have been honored;
(xi)    dishonor of any presentation that does not strictly comply or that is
fraudulent, forged or otherwise not entitled to honor; or
(xii)    honor of a presentation that is subsequently determined by the Issuing
Bank to have been made in violation of international, federal, state or local
restrictions on the transaction of business with certain prohibited Persons.
(o)    Unless otherwise expressly agreed by the Issuing Bank and the Borrower
when a Letter of Credit is issued (including any such agreement applicable to an
Existing Letter of Credit), (i) the rules of the ISP and the UCP shall apply to
each Standby Letter of Credit, and (ii) the rules of the UCP shall apply to each
Commercial Letter of Credit.
(p)    The Issuing Bank shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
Issuing Bank shall have all of the benefits and immunities (A) provided to the
Agent in Article VIII with respect to any acts taken or omissions suffered by
the Issuing Bank in connection with Letters of Credit issued by it or proposed
to be issued by it and Issuer Documents pertaining to such Letters of Credit as
fully as if the term “Agent” as used in Article VIII included the Issuing Bank
with respect to such acts or omissions, and (B) as additionally provided herein
with respect to the Issuing Bank.
(q)    In the event of a direct conflict between the provisions of this Section
2.07 and any provision contained in any Issuer Document, it is the intention of
the parties hereto that such provisions be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 2.07 shall control and govern.
SECTION 2.08.    Settlements Amongst Lenders
(a)    The Swingline Lender may, at any time, and shall, not less frequently
than weekly, on behalf of the Borrower (which hereby authorizes the Swingline
Lender to act on its behalf in that regard) request the Administrative Agent to
cause the Lenders to make a Revolving Loan (which shall be a Prime Rate Loan) in
an amount equal to such Lender’s Commitment

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Percentage of the outstanding amount of Swingline Loans made in accordance with
Section 2.06, which request may be made regardless of whether the conditions set
forth in Article IV have been satisfied. Upon such request, each Lender shall
make available to the Administrative Agent the proceeds of such Revolving Loan
for the account of the Swingline Lender. If the Swingline Lender requires a
Revolving Loan to be made by the Lenders and the request therefor is received
prior to 12:00 p.m. on a Business Day, such transfers shall be made in
immediately available funds no later than 3:00 p.m. that day; and, if the
request therefor is received after 12:00 p.m., then no later than 3:00 p.m. on
the next Business Day. The obligation of each Lender to transfer such funds is
irrevocable, unconditional and without recourse to or warranty by the
Administrative Agent or the Swingline Lender. If and to the extent any Lender
shall not have so made its transfer to the Administrative Agent, such Lender
agrees to pay to the Administrative Agent, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent at the greater of the Federal Funds
Effective Rate and a rate determined in good faith by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(b)    The amount of each Lender’s Commitment Percentage of outstanding
Revolving Loans shall be computed weekly (or more frequently in the
Administrative Agent’s discretion) and shall be adjusted upward or downward
based on all Revolving Loans and repayments of Revolving Loans received by the
Administrative Agent as of 3:00 p.m. on the first Business Day following the end
of the period specified by the Administrative Agent (such date, the “Settlement
Date”).
(c)    The Administrative Agent shall deliver to each of the Lenders promptly
after the Settlement Date a summary statement of the amount of outstanding
Revolving Loans (including Swingline Loans) for the period and the amount of
repayments received for the period. As reflected on the summary statement, each
Lender shall transfer to the Administrative Agent (as provided below), or the
Administrative Agent shall transfer to each Lender, such amounts as are
necessary to insure that, after giving effect to all such transfers, the amount
of Revolving Loans made by each Lender with respect to Revolving Loans
(including Swingline Loans) shall be equal to such Lender’s applicable
Commitment Percentage of Revolving Loans (including Swingline Loans) outstanding
as of such Settlement Date. If the summary statement requires transfers to be
made to the Administrative Agent by the Lenders and is received prior to 12:00
p.m. on a Business Day, such transfers shall be made in immediately available
funds no later than 3:00 p.m. that day; and, if received after 12:00 p.m., then
no later than 3:00 p.m. on the next Business Day. The obligation of each Lender
to transfer such funds is irrevocable, unconditional and without recourse to or
warranty by the Administrative Agent. If and to the extent any Lender shall not
have so made its transfer to the Administrative Agent, such Lender agrees to pay
to the Administrative Agent, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Administrative Agent at the greater of the Federal Funds Effective Rate
and a rate determined in good faith by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

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SECTION 2.09.    Notes; Repayment of Loans.
(a)    Upon the request of a Lender or the Swingline Lender, as applicable, the
Loans made by each Lender (and to the Swingline Lender, with respect to
Swingline Loans) shall be evidenced by a Note duly executed on behalf of the
Borrower, dated the Effective Date, in substantially the form attached hereto as
Exhibit B-1 or B-2, as applicable, payable to the order of each such Lender (or
the Swingline Lender, as applicable) in an aggregate principal amount equal to
such Lender’s Commitment (or, in the case of the Note evidencing the Swingline
Loans, $15,000,000).
(b)    The outstanding principal balance of all Swingline Loans shall be repaid
on the earlier of the Termination Date or on the date otherwise requested by the
Swingline Lender in accordance with the provisions of Section 2.08(a). The
outstanding principal balance of all other Obligations shall be payable on the
Termination Date (subject to earlier repayment as provided below). Each Note
shall bear interest from the date thereof on the outstanding principal balance
thereof as set forth in this Article II. Each Lender is hereby authorized by the
Borrower to endorse on a schedule attached to each Note delivered to such Lender
(or on a continuation of such schedule attached to such Note and made a part
thereof), or otherwise to record in such Lender’s internal records, an
appropriate notation evidencing the date and amount of each Loan from such
Lender, each payment and prepayment of principal of any such Loan, each payment
of interest on any such Loan and the other information provided for on such
schedule; provided, however, that the failure of any Lender to make such a
notation or any error therein shall not affect the obligation of the Borrower to
repay the Loans made by such Lender in accordance with the terms of this
Agreement and the applicable Notes.
(c)    Upon receipt of an affidavit of a Lender as to the loss, theft,
destruction or mutilation of such Lender’s Note and upon appropriate
indemnifications of Borrower, the Borrower will issue, in lieu thereof, a
replacement Note in favor of such Lender, in the same principal amount thereof
and otherwise of like tenor.
SECTION 2.10.    Interest on Loans.
(a)    Subject to Section 2.11, each Prime Rate Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum that shall be equal to the then Prime Rate, plus the
Applicable Margin for Prime Rate Loans.
(b)    Subject to Section 2.11, each LIBO Loan shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 360 days) at a
rate per annum equal, during each Interest Period applicable thereto, to the
Adjusted LIBO Rate for such Interest Period, plus the Applicable Margin for LIBO
Loans.
(c)    Accrued interest on all Loans shall be payable in arrears on each
Interest Payment Date applicable thereto, at maturity (whether by acceleration
or otherwise), after such maturity on demand and (with respect to LIBO Loans)
upon any repayment or prepayment thereof (on the amount prepaid).

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SECTION 2.11.    Default Interest.
Effective upon the occurrence of any Event of Default and at all times
thereafter while such Event of Default is continuing, at the option of the
Administrative Agent or upon the direction of the Required Lenders, interest
shall accrue on all outstanding Loans (including Swingline Loans) (after as well
as before judgment, as and to the extent permitted by law) at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to the rate (including the Applicable Margin for Loans) in effect
from time to time plus 2.00% per annum, and such interest shall be payable on
demand.
SECTION 2.12.    Certain Fees.
The Borrower shall pay to the Administrative Agent, for the account of the
applicable Credit Parties, the fees set forth in the Fee Letter as and when
payment of such fees are due as therein set forth.
SECTION 2.13.    Unused Commitment Fee.
The Borrower shall pay to the Administrative Agent for the account of the
Lenders, a commitment fee (the “Commitment Fee”) equal to 0.25% per annum on the
basis of actual days elapsed in a year of 360 days multiplied by the average
daily balance of the Unused Commitment during the period commencing on and
including the Effective Date and ending on but excluding the Termination Date.
Upon the occurrence of an Event of Default, at the option of the Administrative
Agent or at the direction of the Required Lenders, the Commitment Fee shall be
determined at the rate set forth in Section 2.11. The Commitment Fee so accrued
in any calendar quarter shall be payable on the first day of the next calendar
quarter, in arrears, except that all Commitment Fees so accrued as of the
Termination Date shall be payable on the Termination Date. The Administrative
Agent shall pay the Commitment Fee to the Lenders based upon their Commitment
Percentage.
SECTION 2.14.    Letter of Credit Fees.
(a)    The Borrower shall pay the Administrative Agent, for the account of the
Lenders, on the first day of each calendar quarter, in arrears, a fee (each, a
“Letter of Credit Fee”) equal to the following per annum percentages of the face
amount of the following categories of Letters of Credit outstanding during the
subject quarter:
(i)    Standby Letters of Credit:    At a per annum rate equal to the then
Applicable Margin for LIBO Loans.
(ii)    Commercial Letters of Credit: At a per annum rate equal to the then
Applicable Margin for LIBO Loans minus 0.50%.
(iii)    After the occurrence and during the continuance of an Event of Default,
at the option of the Administrative Agent or upon the direction of the Required
Lenders, the Letter of Credit Fee shall be increased by an amount equal to two
percent (2%) per annum.

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(b)    The Borrower shall pay to the applicable Issuing Bank, the Fronting Fee
on the first day of each calendar quarter, in arrears and such other fees and
charges in connection with the issuance, negotiation, settlement, amendment and
processing of each Letter of Credit issued by such Issuing Bank as are
customarily imposed by the Issuing Bank from time to time in connection with
letter of credit transactions.
(c)    All Letter of Credit Fees shall be calculated on the basis of a 360-day
year and actual days elapsed.
SECTION 2.15.    Reserved.
SECTION 2.16.    Nature of Fees.
All fees shall be paid on the dates due, in immediately available funds, to the
Administrative Agent, for the respective accounts of the Administrative Agent,
the Issuing Bank, and the Lenders, as provided herein. All fees shall be fully
earned on the date when due and shall not be refundable under any circumstances.
SECTION 2.17.    Termination or Reduction of Commitments.
Upon at least three (3) Business Days’ prior written notice to the
Administrative Agent, the Borrower may, at any time, in whole permanently
terminate, or from time to time in part permanently reduce, the Commitments.
Each such reduction shall be in the principal amount of $5,000,000 or any
integral multiple of $1,000,000 in excess thereof. Each such reduction or
termination shall (i) be applied ratably to the Commitments of each Lender and
(ii) be irrevocable when given. At the effective time of each such reduction or
termination, the Borrower shall pay to the Administrative Agent for application
as provided herein (i) all Commitment Fees accrued on the amount of the
Commitments so terminated or reduced through the date thereof, (ii) any amount
by which the Credit Extensions outstanding on such date exceed the amount to
which the Commitments are to be reduced effective on such date, in each case pro
rata based on the amount prepaid, and (iii) any Breakage Costs, if applicable.
Except as specified in this Section 2.17, no fee, penalty or premium shall be
payable in connection with any termination or reduction of the Commitments.
SECTION 2.18.    Alternate Rate of Interest.
If prior to the commencement of any Interest Period for a LIBO Borrowing:
(a)    the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b)    the Administrative Agent is advised by the Required Lenders that, as a
result of a Change in Law after the Effective Date, the Adjusted LIBO Rate for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their Loans included in such Borrowing for such
Interest Period;

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then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Borrowing
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a LIBO Borrowing shall be ineffective and (ii) if any Borrowing
Request requests a LIBO Borrowing, such Borrowing shall be made as a Borrowing
of Prime Rate Loans.
SECTION 2.19.    Conversion and Continuation of Loans.
The Borrower shall have the right at any time, on two (2) Business Days’ prior
irrevocable notice (unless the Administrative Agent notifies the Borrower in
writing that three (3) Business Days’ is required) to the Administrative Agent
(which notice, to be effective, must be received by the Administrative Agent not
later than 1:00 p.m. on the second (or third if applicable) Business Day
preceding the date of any conversion), (x) to convert any outstanding Borrowings
of Loans (but in no event Swingline Loans) of one Type (or a portion thereof) to
a Borrowing of Loans of the other Type or (y) to continue an outstanding
Borrowing of LIBO Loans for an additional Interest Period, subject to the
following:
(a)    no Borrowing of Loans may be converted into, or continued as, LIBO Loans
at any time when an Event of Default has occurred and is continuing;
(b)    if less than a full Borrowing of Loans is converted, such conversion
shall be made pro rata among the Lenders based upon their Commitment Percentages
in accordance with the respective principal amounts of the Loans comprising such
Borrowing held by such Lenders immediately prior to such conversion;
(c)    the aggregate principal amount of Loans being converted into or continued
as LIBO Loans shall be in an integral of $500,000 and at least $1,000,000;
(d)    each Lender shall effect each conversion by applying the proceeds of its
new LIBO Loan or Prime Rate Loan, as the case may be, to its Loan being so
converted;
(e)    the Interest Period with respect to a Borrowing of LIBO Loans effected by
a conversion or in respect to the Borrowing of LIBO Loans being continued as
LIBO Loans shall commence on the date of conversion or the expiration of the
current Interest Period applicable to such continuing Borrowing, as the case may
be;
(f)    a Borrowing of LIBO Loans may be converted only on the last day of an
Interest Period applicable thereto;
(g)    each request for a conversion or continuation of a Borrowing of LIBO
Loans which fails to state an applicable Interest Period shall be deemed to be a
request for an Interest Period of one (1) month; and
(h)    no more than six (6) Borrowings of LIBO Loans may be outstanding at any
time.

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If the Borrower does not give notice to convert any Borrowing of LIBO Loans, or
does not give notice to continue, or does not have the right to continue, any
Borrowing as LIBO Loans, in each case as provided above, such Borrowing shall
automatically be converted to a Borrowing of Prime Rate Loans at the expiration
of the then-current Interest Period. The Administrative Agent shall, after it
receives notice from the Borrower, promptly give each Lender notice of any
conversion, in whole or part, of any Loan made by such Lender.
SECTION 2.20.    Mandatory Prepayment; Commitment Termination; Cash Collateral.
The outstanding Obligations shall be subject to payment and mandatory prepayment
as follows:
(a)    If at any time the amount of the Credit Extensions exceeds the Loan Cap,
the Borrower will immediately upon notice from the Administrative Agent (A)
prepay the Loans in an amount necessary to eliminate such excess, and (B) if,
after giving effect to the prepayment in full of all outstanding Loans such
excess has not been eliminated, deposit cash into the Cash Collateral Account in
an amount equal to 103% of the Letters of Credit Outstanding.
(b)    The Revolving Loans shall be repaid in accordance with the provisions of
Section 2.24 hereof.
(c)    Subject to the provisions of Sections 2.20(a) and (b), outstanding Prime
Rate Loans shall be prepaid before outstanding LIBO Loans are prepaid. Each
partial prepayment of LIBO Loans shall be in an integral multiple of $500,000.
No prepayment of LIBO Loans shall be permitted pursuant to this Section 2.20
other than on the last day of an Interest Period applicable thereto, unless the
Borrower simultaneously reimburses the Lenders for all “Breakage Costs” (as
defined in Section 2.21(b) below) associated therewith. In order to avoid such
Breakage Costs, as long as no Event of Default has occurred and is continuing,
at the request of the Borrower, the Administrative Agent shall hold all amounts
required to be applied to LIBO Loans in the Cash Collateral Account and will
apply such funds to the applicable LIBO Loans at the end of the then pending
Interest Period therefor and such LIBO Loans shall continue to bear interest at
the rate set forth in Section 2.10 until the amounts in the Cash Collateral
Account have been so applied (provided that the foregoing shall in no way limit
or restrict the Agents’ rights upon the subsequent occurrence of an Event of
Default). No partial prepayment of a Borrowing of LIBO Loans shall result in the
aggregate principal amount of the LIBO Loans remaining outstanding pursuant to
such Borrowing being less than $1,000,000. Except as provided in Section 2.17,
any prepayment of the Revolving Loans shall not permanently reduce the
Commitments.
(d)    All amounts required to be applied to all Loans hereunder (other than
Swingline Loans) shall be applied ratably in accordance with each Lender’s
Commitment Percentage.

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(e)    Upon the Termination Date, the Commitments and the credit facility
provided hereunder shall be terminated in full and the Borrower shall pay, in
full and in cash, all outstanding Loans and all other outstanding Obligations.
SECTION 2.21.    Optional Prepayment of Loans; Reimbursement of Lenders.
(a)    The Borrower shall have the right at any time and from time to time to
prepay outstanding Loans in whole or in part, (x) with respect to LIBO Loans,
upon at least two (2) Business Days’ prior written, telex or facsimile notice to
the Administrative Agent prior to 1:00 p.m., and (y) with respect to Prime Rate
Loans, on the same Business Day if written, telex or facsimile notice is
received by the Administrative Agent prior to 1:00 p.m., subject to the
following limitations:
(i)    Subject to Section 2.24, all prepayments shall be paid to the
Administrative Agent for application, first, to the prepayment of outstanding
Swingline Loans, second, to the prepayment of other outstanding Loans ratably in
accordance with each Lender’s Commitment Percentage, and third, to the funding
of a cash collateral deposit in the Cash Collateral Account in an amount equal
to 103% of all Letter of Credit Outstandings.
(ii)    Subject to the foregoing, outstanding Prime Rate Loans shall be prepaid
before outstanding LIBO Loans are prepaid. Each partial prepayment of LIBO Loans
shall be in an integral multiple of $500,000. No prepayment of LIBO Loans shall
be permitted pursuant to this Section 2.21 other than on the last day of an
Interest Period applicable thereto, unless the Borrower simultaneously
reimburses the Lenders for all “Breakage Costs” (as defined in Section 2.21(b)
below) associated therewith. No partial prepayment of a Borrowing of LIBO Loans
shall result in the aggregate principal amount of the LIBO Loans remaining
outstanding pursuant to such Borrowing being less than $1,000,000.
(iii)    Each notice of prepayment shall specify the prepayment date, the
principal amount and Type of the Loans to be prepaid and, in the case of LIBO
Loans, the Borrowing or Borrowings pursuant to which such Loans were made. Each
notice of prepayment shall be irrevocable and shall commit the Borrower to
prepay such Loan by the amount and on the date stated therein. The
Administrative Agent shall, promptly after receiving notice from the Borrower
hereunder, notify each Lender of the principal amount and Type of the Loans held
by such Lender which are to be prepaid, the prepayment date and the manner of
application of the prepayment.
(b)    The Borrower shall reimburse each Lender on demand for any loss incurred
or to be incurred by it in the reemployment of the funds released (i) resulting
from any prepayment (for any reason whatsoever, including, without limitation,
conversion to Prime Rate Loans or acceleration by virtue of, and after, the
occurrence of an Event of Default) of any LIBO Loan required or permitted under
this Agreement, if such Loan is prepaid other than on the last day of the
Interest Period for such Loan or (ii) in the event that after the Borrower
delivers a notice of borrowing under Section 2.04 in respect of LIBO Loans, such
Loans are not made on the first day of the Interest Period specified in such
notice of borrowing for any reason other than

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a breach by such Lender of its obligations hereunder or the delivery of any
notice pursuant to Section 2.18. Such loss shall be the amount as reasonably
determined by such Lender as the excess, if any, of (A) the amount of interest
which would have accrued to such Lender on the amount so paid or not borrowed at
a rate of interest equal to the Adjusted LIBO Rate for such Loan, for the period
from the date of such payment or failure to borrow to the last day (x) in the
case of a payment or refinancing with Prime Rate Loans other than on the last
day of the Interest Period for such Loan, of the then current Interest Period
for such Loan or (y) in the case of such failure to borrow, of the Interest
Period for such Loan which would have commenced on the date of such failure to
borrow, over (B) the amount of interest which would have accrued to such Lender
on such amount by placing such amount on deposit for a comparable period with
leading banks in the London interbank market (collectively, “Breakage Costs”).
Any Lender demanding reimbursement for such loss shall deliver to the Borrower
from time to time one or more certificates setting forth the amount of such loss
as determined by such Lender and setting forth in reasonable detail the manner
in which such amount was determined.
(c)    In the event the Borrower fails to prepay any Loan on the date specified
in any prepayment notice delivered pursuant to Section 2.21(a), the Borrower on
demand by any Lender shall pay to the Administrative Agent for the account of
such Lender any amounts required to compensate such Lender for any loss incurred
by such Lender as a result of such failure to prepay, including, without
limitation, any loss, cost or expenses incurred by reason of the acquisition of
deposits or other funds by such Lender to fulfill deposit obligations incurred
in anticipation of such prepayment. Any Lender demanding such payment shall
deliver to the Borrower from time to time one or more certificates setting forth
the amount of such loss as determined by such Lender and setting forth in
reasonable detail the manner in which such amount was determined.
(d)    Whenever any partial prepayment of Loans is to be applied to LIBO Loans,
such LIBO Loans shall be prepaid in the chronological order of their Interest
Payment Dates.
SECTION 2.22.    Maintenance of Loan Account; Statements of Account.
(a)    The Administrative Agent shall maintain an account on its books in the
name of the Borrower (the “Loan Account”) which will reflect (i) all Swingline
Loans, all Revolving Loans and other advances made by the Lenders to the
Borrower or for the Borrower’s account, (ii) all L/C Disbursements, fees and
interest that have become payable as herein set forth, and (iii) any and all
other Obligations that have become payable.
(b)    The Loan Account will be credited with all amounts received by the
Administrative Agent from the Borrower or otherwise for the Borrower’s account,
including all amounts received from the Blocked Account Banks and any
Concentration Account, and the amounts so credited shall be applied as set forth
in Section 2.24(a). After the end of each calendar month, the Administrative
Agent shall send to the Borrower a statement accounting for the charges, loans,
advances and other transactions occurring among and between the Administrative
Agent, the Lenders and the Borrower during that month. The monthly statements
shall, absent manifest error, be final, conclusive and binding on the Borrower,
unless otherwise

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objected to in writing by the Borrower within fifteen (15) days after receipt of
the monthly statement.
SECTION 2.23.    Cash Receipts.
(a)    Annexed hereto as Schedule 2.23(a) is a list of all present DDAs, which
Schedule includes, with respect to each depository (i) the name and address of
that depository; (ii) the account number(s) maintained with such depository; and
(iii) to the extent known, a contact person at such depository.
(b)    Annexed hereto as Schedule 2.23(b) is a list describing all arrangements
to which the Borrower is a party with respect to the payment to the Borrower of
the proceeds of all credit card charges for sales by the Borrower.
(c)    The Borrower shall (i) at the request of the Administrative Agent, at any
time after the occurrence and during the continuance of a Cash Dominion Event,
deliver to the Administrative Agent notifications executed on behalf of the
Borrower to each depository institution with which any DDA is maintained in form
satisfactory to the Administrative Agent, of the Administrative Agent’s interest
in such DDA (each, a “DDA Notification”), and (ii) deliver to the Administrative
Agent on the Effective Date notifications to each of the Borrower’s credit card
clearinghouses and processors of notice in form satisfactory to the
Administrative Agent, (each, a “Credit Card Notification”), and (iii) within
ninety (90) days after the Effective Date, enter into agency agreements with the
banks maintaining the deposit accounts identified on Schedule 2.23(c)
(collectively, the “Blocked Accounts”), which agreements (the “Blocked Account
Agreements”) shall be in form and substance satisfactory to the Administrative
Agent. The DDA Notifications, Credit Card Notifications and Blocked Account
Agreements shall require, after the occurrence and during the continuance of a
Cash Dominion Event, the sweep on each Business Day of all available cash
receipts from the sale of Inventory and other assets, all collections of
Accounts, all Net Proceeds, and all other cash payments received by the Borrower
from any Person or from any source or on account of any sale or other
transaction or event (all such cash receipts and collections, “Cash Receipts”),
to a concentration account maintained by the Borrower at Wells Fargo or with
another Lender reasonably satisfactory to the Administrative Agent with whom a
Blocked Account Agreement has been executed (the “Concentration Account”). In
that regard, after the occurrence and during the continuance of a Cash Dominion
Event, the Borrower shall cause the ACH or wire transfer to a Blocked Account or
to the Concentration Account maintained at Wells Fargo, no less frequently than
daily (and whether or not there is then an outstanding balance in the Loan
Account) of (A) the then contents of each DDA, each such transfer to be net of
any minimum balance, not to exceed $5,000, as may be required to be maintained
in the subject DDA by the bank at which such DDA is maintained; and (B) the
proceeds of all credit card charges not otherwise provided for pursuant hereto.
Further, after the occurrence and during the continuance of a Cash Dominion
Event, whether or not any Obligations are then outstanding, the Borrower shall
cause the ACH or wire transfer to the Concentration Account maintained at Wells
Fargo, no less frequently than daily, of the then entire ledger balance of each
Blocked Account and other Concentration Account, net of such minimum balance,
not to exceed $5,000, as may be required to be maintained in the subject Blocked
Account or Concentration Account by the bank at which such Blocked Account or
Concentration Account is maintained. In the event that, notwithstanding the
provisions of this
 

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Section 2.23, after the occurrence and during the continuance of a Cash Dominion
Event, the Borrower receives or otherwise has dominion and control of any such
proceeds or collections, such proceeds and collections shall be held in trust by
the Borrower for the Administrative Agent and shall not be commingled with any
of the Borrower’s other funds or deposited in any account of the Borrower and
shall, within one (1) Business Day after receipt, either be deposited into a
Blocked Account or the Concentration Account maintained at Wells Fargo, or dealt
with in such other fashion as the Borrower may be instructed by the
Administrative Agent. For purposes of clarity, until a Cash Dominion Event has
occurred and has not been discontinued, the Borrower shall have full control and
dominion over, and may use, any and all cash and Cash Receipts as the Borrower
may determine in its sole discretion and shall not be required to deposit or
transfer, or cause to be deposited or transferred, any cash or Cash Receipts
into a Concentration Account.
(d)    The Borrower shall accurately report to the Administrative Agent all
amounts deposited in the Blocked Accounts and Concentration Accounts to ensure
the proper transfer of funds as set forth above. If at any time after the
occurrence and during the continuance of a Cash Dominion Event, any cash or cash
equivalents owned by the Borrower are deposited to any account, or held or
invested in any manner, otherwise than in a Blocked Account or Concentration
Account that is subject to a Blocked Account Agreement, the Administrative Agent
shall require the Borrower to close such account and have all funds therein
transferred to an account maintained by the Administrative Agent at Wells Fargo
and all future deposits made to a Blocked Account or Concentration Account which
is subject to a Blocked Account Agreement.
(e)    The Borrower may close DDAs upon prior written notice to the
Administrative Agent and may open new DDAs by providing the Administrative Agent
written notice thereof, together with, at the request of the Administrative
Agent, at any time after the occurrence and during the continuance of a Cash
Dominion Event, a copy of the appropriate DDA Notification for the new
depository consistent with the provisions of this Section 2.23 and otherwise
satisfactory to the Administrative Agent. The Borrower may close a Blocked
Account or Concentration Account (other than the Concentration Account
maintained with Wells Fargo) upon prior written notice to the Administrative
Agent, together with written confirmation that the funds in the closed Blocked
Account or Concentration Account have been, or are then being, transferred to
another Blocked Account or another Concentration Account and may open new
Blocked Accounts or Concentration Accounts by providing the Administrative Agent
written notice thereof, together with a Blocked Account Agreement with the new
depository consistent with the provisions of this Section 2.23 and otherwise
satisfactory to the Administrative Agent.
(f)    The Borrower may also maintain with the Administrative Agent at Wells
Fargo one or more disbursement accounts (the “Wells Fargo Disbursement
Accounts”) to be used by the Borrower for disbursements and payments (including
payroll) in the ordinary course of business or as otherwise permitted hereunder.
The only Disbursement Accounts as of the Effective Date are those described in
Schedule 2.23(f).
(g)    The Concentration Account maintained at Wells Fargo is, and shall remain,
under the sole dominion and control of the Collateral Agent. The Borrower
acknowledges and agrees that (i) the Borrower has no right of withdrawal from
such Concentration Account, (ii) the funds on deposit in each Concentration
Account shall continue to

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be collateral security for all of the Obligations and (iii) the funds on deposit
in the Concentration Accounts shall be applied as provided in Section 2.24(a).
SECTION 2.24.    Application of Payments.
(a)    As long as the Obligations have not been accelerated and no Liquidation
has commenced, all amounts received by the Administrative Agent from any source,
including the Blocked Account Banks and the Concentration Accounts, and all
prepayments made by the Borrower shall be applied in the following order: first,
to pay interest due and payable on Credit Extensions and to pay fees and expense
reimbursements and indemnification then due and payable to the Administrative
Agent, the Arrangers, the Issuing Bank, the Collateral Agent, and the Lenders
(other than fees, expenses and indemnifications relating to Obligations
described in clause SIXTH of this Section 2.24(a)); second to repay outstanding
Swingline Loans; third, to repay other outstanding Revolving Loans that are
Prime Rate Loans and all outstanding reimbursement obligations under Letters of
Credit; fourth, to repay outstanding Revolving Loans that are LIBO Loans and all
Breakage Costs due in respect of such repayment pursuant to Section 2.21(b) or,
at the Borrower’s option (if no Event of Default has occurred and is then
continuing), to fund a cash collateral deposit to the Cash Collateral Account
sufficient to pay, and with direction to pay, all such outstanding LIBO Loans on
the last day of the then-pending Interest Period therefor; fifth if an Event of
Default then exists, to fund a cash collateral deposit in the Cash Collateral
Account in an amount equal to 103% of all Letter of Credit Outstandings; sixth,
to pay all other Obligations that are then outstanding and then due and payable,
including without limitation, all Obligations arising out of any Cash Management
Services and Bank Products which are then due and payable. If all Obligations
then due and owing are paid and Letters of Credit Outstandings cash
collateralized, any excess amounts shall be deposited in a separate cash
collateral account, and as long as no Event of Default then exists, shall be
released to the Borrower upon the request of the Borrower and utilized by the
Borrower prior to any further Revolving Loans being made. Any other amounts
received by the Administrative Agent, the Issuing Bank, the Collateral Agent, or
any Lender as contemplated by Sections 2.17, 2.20, 2.21 and 2.23 shall also be
applied in the order set forth above in this Section 2.24.
(b)    All credits against the Obligations shall be conditioned upon final
payment to the Administrative Agent of the items giving rise to such credits. If
any item credited to the Loan Account is dishonored or returned unpaid for any
reason, whether or not such return is rightful or timely, the Administrative
Agent shall have the right to reverse such credit and charge the amount of such
item to the Loan Account and the Borrower shall indemnify the Administrative
Agent, the Collateral Agent, the Issuing Bank and the Lenders against all claims
and losses resulting from such dishonor or return.
SECTION 2.25.    Increased Costs.
(a)    If any Change in Law shall:
(i)    impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender or any holding company of any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

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(ii)    impose on any Lender or the Issuing Bank or the London interbank market
any other condition (not including, for the avoidance of doubt, any condition
with respect to Taxes, which shall only give rise to additional payments to the
extent provided by Section 2.28) affecting this Agreement or LIBO Loans made by
such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBO Loan (or of maintaining its obligation
to make any such Loan) or to increase the cost to such Lender or the Issuing
Bank of participating in, issuing or maintaining any Letter of Credit or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then such
Lender shall promptly notify the Borrower thereof, and the Borrower will pay to
such Lender or the Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank, as the case may be,
for such additional costs incurred or reduction suffered.
(b)    If any Lender or the Issuing Bank reasonably determines that any Change
in Law regarding capital or liquidity requirements has or would have the effect
of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or
on the capital of such Lender’s or the Issuing Bank’s holding company, if any,
as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing Bank or
such Lender’s or the Issuing Bank’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s or the Issuing
Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding
company with respect to capital adequacy or liquidity), then such Lender shall
promptly notify the Borrower thereof, and from time to time the Borrower will
pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank or such
Lender’s or the Issuing Bank’s holding company for any such reduction suffered.
(c)    A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section and setting forth in reasonable detail the manner in which such amount
or amounts were determined shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within ten (10) Business Days after receipt thereof.
(d)    Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation so long as such
Lender or the Issuing Bank, as applicable, has complied with the provisions of
this Section 2.25.
SECTION 2.26.    Change in Legality.
(a)    Notwithstanding anything to the contrary contained elsewhere in this
Agreement, if (x) any Change in Law shall make it unlawful for a Lender to make
or maintain a LIBO Loan or to give effect to its obligations as contemplated
hereby with respect to a LIBO

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Loan or (y) at any time any Lender reasonably determines that the making or
continuance of any of its LIBO Loans has become impracticable as a result of a
contingency occurring after the date hereof which adversely affects the London
interbank market or the position of such Lender in the London interbank market,
then, by written notice to the Borrower, such Lender may (i) declare that LIBO
Loans will not thereafter be made by such Lender hereunder, whereupon any
request by the Borrower for a LIBO Borrowing shall, as to such Lender only, be
deemed a request for a Prime Rate Loan unless such declaration shall be
subsequently withdrawn; and (ii) require that all outstanding LIBO Loans made by
it be converted to Prime Rate Loans, in which event all such LIBO Loans shall be
automatically converted to Prime Rate Loans as of the effective date of such
notice as provided in paragraph (b) below. In the event any Lender shall
exercise its rights under clause (i) or (ii) of this paragraph (a), all payments
and prepayments of principal which would otherwise have been applied to repay
the LIBO Loans that would have been made by such Lender or the converted LIBO
Loans of such Lender shall instead be applied to repay the Prime Rate Loans made
by such Lender in lieu of, or resulting from the conversion of, such LIBO Loans.
(b)    For purposes of this Section 2.26, a notice to the Borrower by any Lender
pursuant to paragraph (a) above shall be effective, if any LIBO Loans shall then
be outstanding, on the last day of the then-current Interest Period or such
earlier date as may be legally required; and otherwise such notice shall be
effective on the date of receipt by the Borrower.
SECTION 2.27.    Payments; Sharing of Setoff.
(a)    The Borrower shall make each payment required to be made by it hereunder
or under any other Loan Document (whether of principal, interest, fees or
reimbursement of drawings under Letters of Credit, or of amounts payable under
Sections 2.21(b) 2.21(b), 2.25 or 2.28, or otherwise) prior to 12:00 p.m. on the
date when due, in immediately available funds, without setoff or counterclaim.
Any amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 100 Federal Street,
Boston, Massachusetts, except payments to be made directly to the Issuing Bank
or Swingline Lender as expressly provided herein and except that payments
pursuant to Sections 2.21(b), 2.25, 2.28 and 9.03 shall be made directly to the
Persons entitled thereto and payments pursuant to other Loan Documents shall be
made to the Persons specified therein. The Administrative Agent shall distribute
any such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, except with
respect to LIBO Borrowings, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
under each Loan Document shall be made in dollars.
(b)    All funds received by and available to the Administrative Agent to pay
principal, unreimbursed drawings under Letters of Credit, interest and fees then
due hereunder, shall be applied in accordance with the provisions of Section
2.24(a) or 7.03 hereof, as applicable, ratably among the parties entitled
thereto in accordance with the amounts of

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principal, unreimbursed drawings under Letters of Credit, interest, and fees
then due to such respective parties.
(c)    If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in drawings under Letters of Credit or Swingline
Loans resulting in such Lender’s receiving payment of a greater proportion of
the aggregate amount of its Loans and participations in drawings under Letters
of Credit and Swingline Loans and accrued interest thereon than the proportion
received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Loans and
participations in drawings under Letters of Credit and Swingline Loans of other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans and participations
in drawings under Letters of Credit and Swingline Loans, provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in drawings under Letters of Credit to any assignee or
participant, other than to the Borrower or any Affiliate thereof (as to which
the provisions of this paragraph shall apply). The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under Applicable
Law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of setoff and counterclaim
with respect to such participation as fully as if such Lender were a direct
creditor of the Borrower in the amount of such participation.
(d)    Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has 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 Borrower has 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 Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank 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 Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
SECTION 2.28.    Taxes.
(a)    Any and all payments by or on account of any obligation of the Borrower
hereunder or under any other Loan Document shall be made free and clear of and
without deduction for any Indemnified Taxes, provided that if the Borrower shall
be required to deduct any Indemnified Taxes from such payments, then (i) the sum
payable shall be increased as

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necessary so that after making all required deductions for Indemnified Taxes
(including deductions for Indemnified Taxes applicable to additional sums
payable under this Section) the Agents, such Lender or the Issuing Bank (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions, and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with Applicable Law.
(b)    In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with Applicable Law.
(c)    The Borrower shall indemnify the Agents, each Lender and the Issuing
Bank, within ten (10) Business Days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Agents, such Lender
or the Issuing Bank, as the case may be, on or with respect to any payment by or
on account of any obligation of the Borrower hereunder or under any other Loan
Document (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto. A certificate
as to the amount of such payment or liability delivered to the Borrower by a
Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or
on behalf of an Agent, a Lender or the Issuing Bank setting forth in reasonable
detail the manner in which such amount was determined, shall be conclusive
absent manifest error.
(d)    As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e)    Any Foreign Lender that is entitled to an exemption from or reduction in
U.S. Federal withholding tax shall deliver to the Borrower and the
Administrative Agent two copies of either United States Internal Revenue Service
Form W-8BEN or Form W-8ECI, or any subsequent versions thereof or successors
thereto, or, in the case of a Foreign Lender claiming exemption from in U.S.
Federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of “portfolio interest”, a (i) Form W-8BEN, or any subsequent
versions thereof or successors thereto and (ii) a certificate representing that
such Foreign Lender is not (A) a bank for purposes of Section 881(c) of the
Code, (B) is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and (C) is not a controlled foreign
corporation related to the Borrower (within the meaning of Section 864(d)(4) of
the Code)), properly completed and duly executed by such Foreign Lender
claiming, as applicable, complete exemption from or reduced rate of, U.S.
Federal withholding Tax on payments by the Borrower under this Agreement and the
other Loan Documents, or in the case of a Foreign Lender claiming exemption for
“portfolio interest” certifying that it is not a foreign corporation,
partnership, estate or trust. Such forms shall be delivered by each Foreign
Lender on or before the date it becomes a party to this Agreement (or, in the
case of a transferee that is a participation holder, on or before the date such
participation holder becomes a transferee hereunder) and on or before the date,
if any, such Foreign Lender changes its applicable lending office by designating
a different lending office (a “New Lending Office”). In addition, each

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Foreign Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Foreign Lender.
Notwithstanding any other provision of this Section 2.28(e), a Foreign Lender
shall not be required to deliver any form pursuant to this Section 2.28(e) that
such Foreign Lender is not legally able to deliver.
(f)    Upon the request of the Borrower, any Lender that is not a Foreign Lender
shall deliver to the Borrower two copies of United States Internal Revenue
Service Form W-9 or any subsequent versions thereof or successors thereto,
properly completed and duly executed. If any Lender fails to deliver Form W-9 or
any subsequent versions thereof or successors thereto as required herein, then
the Borrower may withhold from any payment to such party an amount equivalent to
the applicable backup withholding Tax imposed by the Code, without reduction.
(g)    The Borrower shall not be required to indemnify any Lender or to pay any
additional amounts to any Lender in respect of U.S. Federal withholding tax
pursuant to paragraph (a) or (c) above to the extent that the obligation to pay
such additional amounts would not have arisen but for a failure by such Lender
to comply with the provisions of paragraphs (e) or (f) above. Should a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall, at such Lender’s expense, take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
(h)    Each of the Lenders agrees that upon the occurrence of any circumstances
entitling such party to indemnification or additional amounts pursuant to
Section 2.28(a) or (c), such party shall use reasonable efforts to take any
action (including designating a new lending office and signing any prescribed
forms or other documentation appropriate in the circumstances) if such action
would reduce or eliminate any Tax (including penalties or interest, as
applicable) with respect to which such indemnification or additional amounts may
thereafter accrue.
(i)    If any Lender reasonably determines that it has actually and finally
realized, by reason of a refund, deduction or credit of any Taxes paid or
reimbursed by the Borrower pursuant to subsection (a) or (c) above in respect of
payments under the Loan Documents, a current monetary benefit that it would
otherwise not have obtained and that would result in the total payments under
this Section 2.28 exceeding the amount needed to make such Lender whole, such
Lender shall pay to the Borrower, with reasonable promptness following the date
upon which it actually realizes such benefit, an amount equal to the lesser of
the amount of such benefit or the amount of such excess, in each case net of all
out-of-pocket expenses incurred in securing such refund, deduction or credit.
(j)    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 reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent, at the time or times
prescribed by Applicable Law and at such time or times reasonably requested by
the Borrower or the Administrative Agent, such documentation prescribed by
Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower or the

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Administrative Agent to comply with its obligations under FATCA, 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.
SECTION 2.29.    Security Interests in Collateral.
To secure their Obligations under this Agreement and the other Loan Documents,
pursuant to the Existing Credit Agreement, the Loan Parties have granted to the
Collateral Agent, for its benefit and the ratable benefit of the other Credit
Parties, a perfected first-priority security interest in all of the Collateral
pursuant to the Security Documents. The Loan Parties hereby ratify and confirm
the security interest granted pursuant to the Security Documents.
SECTION 2.30.    Mitigation Obligations; Replacement of Lenders.
(a)    If any Lender requests compensation under Section 2.25, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.28,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.25 or 2.28, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment; provided, however, that the
Borrower shall not be liable for such costs and expenses of a Lender requesting
compensation if (i) such Lender becomes a party to this Agreement on a date
after the Effective Date and (ii) the relevant Change in Law occurs on a date
prior to the date such Lender becomes a party hereto.
(b)    If any Lender requests compensation under Section 2.25, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.28,
or if any Lender is a Delinquent Lender, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment or to an Eligible Assignee), provided that (i) the Borrower shall
have received the prior written consent of the Administrative Agent, the Issuing
Bank and Swingline Lender, which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in unreimbursed drawings
under Letters of Credit and Swingline Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.25 or
payments required to be made pursuant to Section 2.28, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and

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delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
ARTICLE III
Representations and Warranties
Each Loan Party represents and warrants to the Agents and the Lenders that:
SECTION 3.01.    Organization; Powers. Each Loan Party is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 3.02.    Authorization; Enforceability. The transactions contemplated
hereby and by the other Loan Documents to be entered into by each Loan Party are
within such Loan Party’s corporate, limited partnership, limited liability
company and other powers and have been duly authorized by all necessary action.
This Agreement has been duly executed and delivered by each Loan Party that is a
party hereto and constitutes, and each other Loan Document to which any Loan
Party is a party, when executed and delivered by such Loan Party will
constitute, a legal, valid and binding obligation of such Loan Party (as the
case may be), enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03.    Governmental Approvals; No Conflicts. The transactions to be
entered into contemplated by the Loan Documents (a) do not require any consent
or approval of, registration or filing with, or any other action by, any
Governmental Authority, except for such as have been obtained or made and are in
full force and effect and except filings and recordings necessary to perfect
Liens created under the Loan Documents, (b) will not violate any Applicable Law
or the Organizational Documents of any Loan Party or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon any Loan Party or its
assets, or give rise to a right thereunder to require any payment to be made by
any Loan Party, and (d) will not result in the creation or imposition of any
Lien on any asset of any Loan Party, except Liens created under the Loan
Documents.
SECTION 3.04.    Financial Condition.  The Parent has heretofore furnished to
the Lenders the Consolidated balance sheet, and statements of income,
stockholders’ equity, and cash flows for the Parent and its Subsidiaries as of
and for the Fiscal Year ending February 1, 2014 and as of and for the fiscal
quarter ending August 2, 2014 and for the Fiscal Month ending August 30, 2014
certified by a Financial Officer of the Borrower. Such financial statements
present fairly, in all material respects, the financial position, results of
operations and cash flows of the Parent and its Subsidiaries as of such dates
and for such periods in accordance with GAAP, subject to year end audit
adjustments and the absence of footnotes. Except as disclosed in Schedule 3.04,
since February 1, 2014, there have been no changes in the assets, liabilities,

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financial condition, business or prospects of the Parent and its Subsidiaries
other than changes in the ordinary course of business.
SECTION 3.05.    Properties. (a)  Except as disclosed in Schedules 3.05(c)(i)
and 3.05(c)(ii), each Loan Party has good title to, or valid leasehold interests
in, all its real and personal property material to its business, except for
defects which could not reasonably be expected to have a Material Adverse
Effect.
(b)    Each Loan Party owns, or is licensed to use, all trademarks, trade names,
copyrights, patents and other intellectual property material to its business,
and, to the best of each Loan Party’s knowledge, the use thereof by the Loan
Parties does not infringe upon the rights of any other Person, except for any
such infringements that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.
(c)    Schedule 3.05(c)(i) sets forth the address (including county) of all Real
Estate that is owned by the Loan Parties, together with a list of the holders of
any mortgage or other Lien thereon as of the Effective Date.
Schedule 3.05(c)(ii) sets forth the address (including county) of all Leases of
the Loan Parties, together with a list of the holders of any mortgage or other
Lien on the Borrower’s interest in such Lease as of the Effective Date. Each of
such Leases is in full force and effect, and the Loan Parties are not in default
of the terms thereof.
SECTION 3.06.    Litigation and Environmental Matters. (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of the Borrower, threatened against or
affecting any Loan Party (i) that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect, or (ii) that involve any of the Loan Documents.
(b)    Except for the matters set forth on Schedule 3.06 and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, to the knowledge
of the Borrower, no Loan Party (i) has failed to comply in all material respects
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c)    Since the date of this Agreement, there has been no change in the status
of the matters set forth on Schedule 3.06 that, individually or in the
aggregate, has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect.
SECTION 3.07.    Compliance with Laws and Agreements. Each Loan Party is in
compliance with all Applicable Law and all indentures, material agreements and
other instruments binding upon it or its property, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect. No Default has occurred and is continuing.
SECTION 3.08.    Investment and Holding Company Status. No Loan Party is (a) an
“investment company” as defined in, or subject to regulation under, the
Investment Company

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Act of 1940 or (b) a “holding company” as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 2005.
SECTION 3.09.    Taxes. Each Loan Party has timely filed, or caused to be filed,
all federal and state Tax returns and reports required to have been filed and
has paid, or caused to be paid, all Taxes required to have been paid by it,
except (a) Taxes that are being contested in good faith by appropriate
proceedings, for which such Loan Party has set aside on its books adequate
reserves, and as to which no Lien has been filed, or (b) to the extent that the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect. The Loan Parties do not intend to treat any of the transactions
contemplated by the Loan Documents as being a “reportable transaction” within
the meaning of 26 CFR 1.6011-4. Neither any Loan Party nor any of its
Subsidiaries is party to any tax sharing agreement other than the Tax Agreement.
SECTION 3.10.    ERISA. To the knowledge of the Borrower, no ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all
other such ERISA Events for which liability is reasonably expected to occur,
could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.11.    Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which any Loan
Party is subject, and all other matters known to any of them, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. None of any of the reports, financial statements, certificates
or other information furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 3.12.    Subsidiaries.
(a)    Schedule 3.12 sets forth the name of, and the ownership interest of each
Loan Party in each Subsidiary as of the Effective Date. There is no other
capital stock or ownership interest of any class outstanding as of the Effective
Date. The Loan Parties are not party to any joint venture, general or limited
partnership, or limited liability company, agreements or any other business
ventures or entities as of the Effective Date.
(b)    The Parent and its Subsidiaries have received the consideration for which
the capital stock and other ownership interests was authorized to be issued and
have otherwise complied in all material respects with all legal requirements
relating to the authorization and issuance of shares of stock and other
ownership interests, and all such shares and ownership interests are validly
issued, fully paid, and non-assessable.
SECTION 3.13.    Insurance. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of the Loan Parties and their Subsidiaries.
Each of such policies is in full force and effect. All premiums in respect of
such insurance that are due and payable have been paid.

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SECTION 3.14.    Labor Matters. There are no strikes, lockouts or slowdowns
against any Loan Party pending or, to the knowledge of the Borrower, threatened.
The hours worked by and payments made to employees of the Loan Parties have not
been in violation of the Fair Labor Standards Act or any other applicable
federal, state, local or foreign law dealing with such matters to the extent
that any such violation could reasonably be expected to have a Material Adverse
Effect. All payments due from any Loan Party, or for which any claim may be made
against any Loan Party, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of such member, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. The consummation of the transactions contemplated by the Loan Documents
will not give rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to which any Loan
Party is bound.
SECTION 3.15.    Security Documents. The Security Documents create in favor of
the Collateral Agent, for the ratable benefit of the Credit Parties, a legal,
valid and enforceable security interest in the Collateral, and the Security
Documents constitute the creation of a fully perfected first priority Lien on,
and security interest in, all right, title and interest of the Loan Parties
thereunder in such Collateral, in each case prior and superior in right to any
other Person (other than Permitted Encumbrances having priority under Applicable
Law).
SECTION 3.16.    Federal Reserve Regulations. (a)  No Loan Party is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of buying or carrying Margin Stock.
(b)    No part of the proceeds of any Loan or any Letter of Credit will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to buy or carry Margin Stock or to extend credit to others for
the purpose of buying or carrying Margin Stock or to refund indebtedness
originally incurred for such purpose or (ii) for any purpose that entails a
violation of, or that is inconsistent with, the provisions of the Regulations of
the Board, including Regulation U or X.
SECTION 3.17.    Solvency. To the best of the knowledge of each of the Loan
Parties, on the Effective Date and after giving effect to each Credit Extension
hereunder, the Borrower and each other Loan Party is, and will be, Solvent. No
transfer of property is being made by any Loan Party and no obligation is being
incurred by any Loan Party in connection with the transactions contemplated by
this Agreement or the other Loan Documents with the intent to hinder, delay, or
defraud either present or future creditors of any Loan Party.
ARTICLE IV
Conditions
SECTION 4.01.    Effective Date.     The effectiveness of this Agreement is
subject to the following conditions precedent:
(a)    The Agents (or their counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement and all other Loan Documents (or
ratifications

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thereof) (including, without limitation, the Security Documents) signed on
behalf of such party or (ii) written evidence satisfactory to the Agents (which
may include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement and all other Loan
Documents (or ratifications thereof).
(b)    The Agents shall have received a favorable written opinion (addressed to
each Agent and the Lenders and dated the Effective Date) of McAfee & Taft, a
Professional Corporation, counsel for the Loan Parties, and such local counsel
of the Loan Parties, as applicable, substantially in the form of Exhibit C, and
covering such other matters relating to the Loan Parties, the Loan Documents or
the transactions contemplated thereby as the Required Lenders shall reasonably
request. The Borrower hereby requests such counsel to deliver such opinion.
(c)    The Agents shall have received such documents and certificates as the
Agents or their counsel may reasonably request relating to the organization,
existence and good standing of each Loan Party, the authorization of the
transactions contemplated by the Loan Documents and any other legal matters
relating to the Loan Parties, the Loan Documents or the transactions
contemplated thereby, all in form and substance reasonably satisfactory to the
Agents and their counsel.
(d)    After giving effect to the transactions contemplated hereby, Excess
Availability on the Effective Date shall be not less than $150,000,000. The
Agents shall have received a Borrowing Base Certificate dated the Effective
Date, relating to the Fiscal Month ended on August 30, 2014, and executed by a
Financial Officer of the Borrower.
(e)    The Agents shall have received a certificate, reasonably satisfactory in
form and substance to the Agents, (i) with respect to the Solvency of the Loan
Parties as of the Effective Date, and (ii) certifying that, as of the Effective
Date, the representations and warranties made by the Loan Parties in the Loan
Documents and otherwise are true and complete and that no Default or Event of
Default exists.
(f)    All necessary consents and approvals to the transactions contemplated
hereby shall have been obtained and shall be satisfactory to the Agents.
(g)    The Agents shall be reasonably satisfied that any financial statements
delivered to them fairly present the business and financial condition of the
Parent and its Subsidiaries, and that there has been no material adverse change
in the assets, business, financial condition, income or prospects of the Parent
and its Subsidiaries since the date of the most recent financial information
delivered to the Agents.
(h)    The Administrative Agent shall have received and be satisfied with such
diligence and other information (financial or otherwise) reasonably requested by
the Administrative Agent.
(i)    There shall not be pending any litigation or other proceeding, the result
of which could reasonably be expected to have a Material Adverse Effect.

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(j)    There shall not have occurred any default of any material contract or
agreement of any Loan Party which could reasonably be expected to have a
Material Adverse Effect.
(k)    The Collateral Agent shall have received results of searches or other
evidence reasonably satisfactory to the Collateral Agent (in each case dated as
of a date reasonably satisfactory to the Collateral Agent) indicating the
absence of Liens on the assets of the Loan Parties, except for Permitted
Encumbrances and Liens for which termination statements and releases reasonably
satisfactory to the Collateral Agent are being tendered concurrently with such
extension of credit.
(l)    The Collateral Agent shall have received (i) all documents and
instruments, including Uniform Commercial Code financing statements, required by
law or reasonably requested by the Collateral Agent to be filed, registered or
recorded to create or perfect the first priority Liens intended to be created
under the Loan Documents and all such documents and instruments shall have been
so filed, registered or recorded to the satisfaction of the Collateral Agent,
and (ii) the Credit Card Notifications and Blocked Account Agreements to the
extent required pursuant to Section 2.23(c) hereof.
(m)    The Collateral Agent shall have received, and be reasonably satisfied
with, evidence of the Loan Parties’ insurance, together with such endorsements
as are required by the Loan Documents.
(n)    All fees due at or immediately after the Effective Date and all costs and
expenses incurred by the Agents in connection with the establishment of the
credit facility contemplated hereby (including the fees and expenses of counsel
to the Agents) shall have been paid in full.
(o)    The consummation of the transactions contemplated hereby shall not
(a) violate any Applicable Law or (b) conflict with, or result in a default or
event of default under, any material agreement of any Loan Party. No event shall
exist which is, or solely with the passage of time, the giving of notice or
both, would be a default under any material agreement of any Loan Party.
(p)    No material changes in governmental regulations or policies affecting the
Loan Parties, the Agents, the Arrangers or any Lender involved in this
transaction shall have occurred prior to the Effective Date.
(q)    There shall have been delivered to the Administrative Agent such
additional instruments and documents as the Agents or counsel to the Agents
reasonably may require or request.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.

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SECTION 4.02.    Conditions Precedent to Each Loan and Each Letter of Credit.
In addition to those conditions described in Section 4.01, the obligation of the
Lenders to make each Revolving Loan and of the Issuing Bank to issue, renew or
extend each Letter of Credit, is subject to the following conditions precedent:
(a)    Notice. The Administrative Agent shall have received a notice with
respect to such Borrowing or issuance, as the case may be, as required by
Article II.
(b)    Representations and Warranties. All representations and warranties
contained in this Agreement and the other Loan Documents or otherwise made in
writing in connection herewith or therewith shall be true and correct in all
material respects on and as of the date of each Borrowing or the issuance of
each Letter of Credit hereunder with the same effect as if made on and as of
such date, except (i) to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, (ii) in the case of any representation and
warranty qualified by materiality, they shall be true and correct in all
respects (without the deletion of such materiality qualification) and (iii) for
purposes of this Section 4.02, the representations and warranties contained in
Section 3.04 shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a), (b) or (c), as applicable, of Section 5.01.
(c)    No Default. On the date of each Borrowing hereunder and the issuance of
each Letter of Credit, and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing.
(d)    Borrowing Base Certificate. The Administrative Agent shall have received
the timely delivery of the most recently required Borrowing Base Certificate,
with each such Borrowing Base Certificate including schedules as required by the
Administrative Agent.
Each request by the Borrower for a Credit Extension shall be deemed to be a
representation and warranty by the Borrower that the conditions specified in
Sections 4.02(a) and (b) have been satisfied on and as of the date of the
applicable Credit Extension. The conditions set forth in this Section 4.02 are
for the sole benefit of the Credit Parties but until the Required Lenders
otherwise direct the Administrative Agent to cease making Loans and issuing
Letters of Credit, the Lenders will fund their Applicable Percentage of all
Loans and participate in all Swing Line Loans and Letters of Credit whenever
made or issued, which are requested by the Lead Borrower and which,
notwithstanding the failure of the Loan Parties to comply with the provisions of
this Article IV, are agreed to by the Administrative Agent, provided, however,
the making of any such Loans or the issuance of any Letters of Credit shall not
be deemed a modification or waiver by any Credit Party of the provisions of this
Article IV on any future occasion or a waiver of any rights or the Credit
Parties as a result of any such failure to comply.

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ARTICLE V
Affirmative Covenants
Until (i) the Commitments have expired or been terminated, and (ii) the
principal of and interest on each Loan and all fees and other Obligations
payable hereunder shall have been paid in full, and (iii) all Letters of Credit
shall have expired or terminated or been collateralized, to the extent of 103%
of the then Letter of Credit Outstandings, by cash or a letter of credit issued
by a financial institution and on terms reasonably satisfactory to the
Administrative Agent, and (iv) all L/C Disbursements shall have been reimbursed,
each Loan Party covenants and agrees with the Agents and the Lenders that:
SECTION 5.01.    Financial Statements and Other Information. The Borrower will
furnish to the Agents:
(a)    within ninety (90) days after the end of each Fiscal Year of the Parent,
its Consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous Fiscal Year,
all audited and reported on by Deloitte & Touche or another independent public
accountants of recognized national standing (without a “going concern” or like
qualification or exception and without a qualification or exception as to the
scope of such audit) to the effect that such Consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Parent and its Subsidiaries on a Consolidated basis in
accordance with GAAP consistently applied;
(b)    within forty-five (45) days after the end of each fiscal quarter of the
Parent, its Consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows, as of the end of and for such fiscal
quarter and the elapsed portion of the Fiscal Year, setting forth in each case
in comparative form the figures for the previous Fiscal Year and the figures as
set forth in the projections delivered pursuant to Section 5.01(e) hereof, all
certified by one of its Financial Officers as presenting in all material
respects the financial condition and results of operations of the Parent and its
Subsidiaries on a Consolidated basis in accordance with GAAP consistently
applied, subject to normal year end audit adjustments and the absence of
footnotes;
(c)    within thirty (30) days after the end of each Fiscal Month of the Parent,
its Consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows, as of the end of and for such Fiscal Month
and the elapsed portion of the Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year and the figures as set
forth in the projections delivered pursuant to Section 5.01(e) hereof, all
certified by one of its Financial Officers as presenting in all material
respects the financial condition and results of operations of the Parent and its
Subsidiaries on a Consolidated basis in accordance with GAAP consistently
applied, subject to normal year end audit adjustments and the absence of
footnotes;

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(d)    concurrently with any delivery of financial statements under clause (a),
(b), or (c) above, a certificate of a Financial Officer of the Borrower in the
form of Exhibit D (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, and (ii) setting forth reasonably
detailed calculations (A) with respect to the Average Daily Excess Availability
for such period, and (B) demonstrating compliance with Section 6.11 (whether or
not the Borrower’s obligation to comply with such covenant is then in effect;
provided that non-compliance with such covenant at any time when it is not in
effect will not constitute an Event of Default), and (iii) stating whether any
change in GAAP or in the application thereof has occurred since the date of the
Parent’s audited financial statements referred to in Section 3.04 and, if any
such change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(e)    (i)    within forty-five (45) days after the commencement of each Fiscal
Year of the Parent, a preliminary detailed Consolidated budget by Fiscal Quarter
for such Fiscal Year (including a projected Consolidated balance sheet and
related statements of projected operations and cash flow as of the end of and
for such Fiscal Year), (ii) within seventy-five (75) days after the commencement
of each Fiscal Year of the Parent, a final detailed Consolidated budget by
Fiscal Quarter for such Fiscal Year (including a projected Consolidated balance
sheet and related statements of projected operations and cash flow as of the end
of and for such Fiscal Year), and (iii) promptly when available, any significant
revisions of such budgets;
(f)    on the fifth day after the end of each Fiscal Month, a certificate in the
form of Exhibit E (a “Borrowing Base Certificate”) showing the Borrowing Base as
of the close of business on the last day of the immediately preceding Fiscal
Month, each Borrowing Base Certificate to be certified as complete and correct
on behalf of the Borrower by a Financial Officer of the Borrower; provided that
at any time that an Accelerated Borrowing Base Delivery Event has occurred and
is continuing, such Borrowing Base Certificate shall be provided weekly on
Wednesday of each week (or, if Wednesday is not a Business Day, on the next
succeeding Business Day) showing the Borrowing Base as of the close of business
on the immediately preceding Saturday;
(g)    promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed in final form by
any Loan Party with the Securities and Exchange Commission (including, without
limitation, Forms 10-K and 10-Q but excluding any registration statement on Form
S-8 or its equivalent), or any Governmental Authority succeeding to any or all
of the functions of said Commission, as the case may be; provided that the
information required to be delivered pursuant to this paragraph shall be deemed
to have been delivered on the date on which the Borrower provides notice to the
Agents that such information has been posted on the Internet and is accessible
by the Agents without charge;
(h)    notice of the incurrence of any Material Indebtedness permitted
hereunder, reasonably promptly after the incurrence thereof;

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(i)    the financial and collateral reports described on Schedule 5.01(i)
hereto, at the times set forth in such Schedule;
(j)    notice of any intended Permitted Acquisition, at least ten (10) Business
Days prior to the intended date of the consummation thereof, together with (i)
copies of the most recent audited, and if later, unaudited financial statements
of the Person which is the subject of the Permitted Acquisition, (ii) a
description of the proposed Permitted Acquisition in such detail as the
Administrative Agent may reasonably request, including copies of letters of
intent and purchase and sale agreements or other acquisition documents
(including Lien search reports) executed in connection with the proposed
Permitted Acquisition, (iii) an unaudited pro forma Consolidated balance sheet
and income statement of the Parent and its Subsidiaries as of the end of the
most recently completed fiscal quarter but prepared as though the Permitted
Acquisition had occurred on such date and related pro forma calculations of
average Excess Availability for the subsequent four fiscal quarters period, and
(iv) unaudited projections of balance sheets and income statements and related
calculations for the following four fiscal quarters, assuming the Permitted
Acquisition has closed;
(k)    notice of any intended sale or other disposition of assets of any Loan
Party permitted under Sections 6.05(c) or 6.05(d) (but only if such disposition
relates to more than ten (10) stores in a single transaction), at least ten (10)
Business Days prior to the date of consummation such sale or disposition;
(l)    promptly when due, a copy of each Store Payment Allocation (as defined in
the Intercreditor Agreement) in accordance with the provisions of Section
2.04(b) of the Intercreditor Agreement; and
(m)    promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of any Loan Party, or
compliance with the terms of any Loan Document, as the Agents or any Lender may
reasonably request.
SECTION 5.02.    Notices of Material Events. The Borrower will furnish to the
Agents prompt written notice of the following:
(a)    the occurrence of any Default or Event of Default;
(b)    the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting any Loan Party or
any Affiliate thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(c)    the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
(d)    any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect;

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(e)    any change in any Loan Party’s senior executive officers (Executive Vice
President or higher) that must be reported to the SEC;
(f)    any failure by any Loan Party to pay rent at any of such Loan Party’s
locations, which failure continues for more than ten (10) days following the day
on which such rent first came due, which failure could reasonably likely have a
Material Adverse Effect;
(g)    the discharge by any Loan Party of its present independent accountants or
any withdrawal or resignation by such independent accountants;
(h)    any collective bargaining agreement or other labor contract to which a
Loan Party becomes a party, or the application for the certification of a
collective bargaining agent;
(i)    the filing of any Lien for unpaid Taxes in an amount exceeding $500,000
against any Loan Party that would reasonably be expected to have priority over
the Lien of the Collateral Agent in the Collateral; and
(j)    the renewal or extension of the term of the private label credit card
program with Comenity Bank or the termination of such program and the
replacement of Comenity Bank with any other third party administering a private
label credit card program for any of the Loan Parties.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and, if applicable,
any action taken or proposed to be taken with respect thereto.
SECTION 5.03.    Information Regarding Collateral. (a)  The Borrower will
furnish to the Agents at least ten (10) days prior written notice of any change
(i) in any Loan Party’s corporate name or in any trade name used to identify it
in the conduct of its business or in the ownership of its properties, (ii) in
the location of any Loan Party’s chief executive office, its principal place of
business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility),
(iii) in any Loan Party’s corporate structure or jurisdiction of incorporation
or formation, or (iv) in any Loan Party’s Federal Taxpayer Identification Number
or organizational identification number assigned to it by its state of
organization. The Borrower also agrees promptly to notify the Agents if any
material portion of the Collateral is damaged or destroyed.
(b)    Each year, at the time of delivery of annual financial statements with
respect to the preceding Fiscal Year pursuant to clause (a) of Section 5.01, the
Borrower shall deliver to the Agents a certificate of a Financial Officer of the
Borrower setting forth the information required pursuant to Section 2 of the
Perfection Certificate or confirming that there has been no change in such
information since the date of the Perfection Certificate delivered on the
Effective Date or the date of the most recent certificate delivered pursuant to
this Section.

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SECTION 5.04.    Existence; Conduct of Business. Each Loan Party will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to comply with its respective Organizational Documents, as applicable, and to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its business (except to
the extent the failure to so preserve, renew and keep in full force and effect
such rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names could not reasonably be expected to result in a
Material Adverse Effect), provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.05.    Payment of Obligations. Each Loan Party will, and will cause
each of the Subsidiaries to, pay its Indebtedness and other obligations,
including Tax liabilities, and claims for labor, materials, or supplies, before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings,
(b) such Loan Party or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, (c) such contest
effectively suspends collection of the contested obligation and enforcement of
any Lien securing such obligation, (d) no Lien has been filed with respect
thereto, and (e) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect. Nothing contained
herein shall be deemed to limit the rights of the Administrative Agent under
Section 2.03(b) hereof.
SECTION 5.06.    Maintenance of Properties. Each Loan Party will, and will cause
each of the Subsidiaries to, keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted and with the exception of store closings and asset dispositions
permitted hereunder.
SECTION 5.07.    Insurance. (a)  Each Loan Party shall (i) maintain insurance
with financially sound and reputable insurers reasonably acceptable to the
Administrative Agent (or, to the extent consistent with prudent business
practice, a program of self-insurance) on such of its property and in at least
such amounts and against at least such risks as is customary with companies in
the same or similar businesses operating in the same or similar locations,
including public liability insurance against claims for personal injury or death
occurring upon, in or about or in connection with the use of any properties
owned, occupied or controlled by it (including the insurance required pursuant
to the Security Documents); (ii) maintain such other insurance as may be
required by law; and (iii) furnish to the Administrative Agent, upon written
request, full information as to the insurance carried.
(b)    Fire and extended coverage policies maintained with respect to any
Collateral shall be endorsed or otherwise amended to include (i) a mortgagee
clause (regarding improvements to real property) and lenders’ loss payable
clause (regarding personal property), in form and substance satisfactory to the
Collateral Agent, which endorsements or amendments shall provide that the
insurer shall pay all proceeds otherwise payable to the Loan Parties under the
policies directly to the Collateral Agent, (ii) a provision to the effect that
none of the Loan Parties, the Administrative Agent, the Collateral Agent, or any
other party shall be a coinsurer and (iii) such other provisions as the
Collateral Agent may reasonably require from time to time to protect the
interests of the Lenders. Commercial general liability policies shall be
endorsed to

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name the Collateral Agent as an additional insured. Business interruption
policies shall name the Collateral Agent as a loss payee and shall be endorsed
or amended to include (x) a provision that, from and after the Effective Date,
the insurer shall pay all proceeds otherwise payable to the Loan Parties under
the policies directly to the Administrative Agent or the Collateral Agent, (y) a
provision to the effect that none of the Loan Parties, the Administrative Agent,
the Collateral Agent or any other party shall be a co-insurer and (z) such other
provisions as the Collateral Agent may reasonably require from time to time to
protect the interests of the Lenders. Each such policy referred to in this
paragraph also shall provide that it shall not be canceled, modified or not
renewed (A) by reason of nonpayment of premium except upon not less than ten
(10) days’ prior written notice thereof by the insurer to the Collateral Agent
(giving the Collateral Agent the right to cure defaults in the payment of
premiums) or (B) for any other reason except upon not less than sixty (60) days’
prior written notice thereof by the insurer to the Collateral Agent. The
Borrower shall deliver to the Collateral Agent, prior to the cancellation,
modification or nonrenewal of any such policy of insurance, a copy of a renewal
or replacement policy (or other evidence of renewal of a policy previously
delivered to the Collateral Agent, including an insurance binder) together with
evidence satisfactory to the Collateral Agent of payment of the premium
therefor.
SECTION 5.08.    Casualty and Condemnation. The Borrower will furnish to the
Agents and the Lenders prompt written notice of any casualty or other insured
damage to any material portion of the Collateral or the commencement of any
action or proceeding for the taking of any interest in a material portion of the
Collateral under power of eminent domain or by condemnation or similar
proceeding.
SECTION 5.09.    Books and Records; Inspection and Audit Rights; Appraisals;
Accountants. (a)  Each Loan Party will, and will cause each of the Subsidiaries
to, keep proper books of record and account in accordance with GAAP and in which
full, true and correct entries are made of all dealings and transactions in
relation to its business and activities. Each Loan Party will, and will cause
each of the Subsidiaries to, permit any representatives designated by any Agent,
upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and its independent accountants, all at
such reasonable times and as often as reasonably requested.
(b)    Each Loan Party will, and will cause each of the Subsidiaries to, from
time to time upon the request of the Collateral Agent or the Required Lenders
through the Administrative Agent and after reasonable prior notice, permit any
Agent or professionals (including investment bankers, consultants, accountants,
lawyers and appraisers) retained by the Agents to conduct Inventory appraisals,
commercial finance examinations and other evaluations, including, without
limitation, of (i) the Borrower’s practices in the computation of the Borrowing
Base and (ii) the assets included in the Borrowing Base and related financial
information such as, but not limited to, sales, gross margins, payables,
accruals and reserves, and pay the reasonable fees and expenses of the Agents or
such professionals with respect to such evaluations and appraisals; provided
that prior to the occurrence and continuation of an Event of Default, the Loan
Parties shall only be required to pay the fees and expenses for (i) one
commercial

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finance examination and one appraisal during each twelve month period following
the Effective Date so long as the conditions set forth in clauses (ii) or (iii)
below do not apply, (ii) two commercial finance examinations and two appraisals
during each twelve month period following the Effective Date if Excess
Availability is at any time for five (5) consecutive days or more, less than
fifty percent (50%) of the Loan Cap but equal to or greater than twelve and
one-half percent (12.5%) of the Loan Cap, and (iii) three (3) commercial finance
examinations and three (3) appraisals during each twelve (12) month period
following the Effective Date if Excess Availability is at any time for five (5)
consecutive days or more, less than twelve and one-half percent (12.5%) of the
Loan Cap. Notwithstanding the foregoing limitations on the Loan Parties’
obligation to pay the expenses for appraisals and commercial finance
examinations prior to the occurrence of an Event of Default, the Administrative
Agent may, (i) undertake such additional appraisals and commercials finance
examinations prior to the occurrence of an Event of Default as it, in its
reasonable discretion, deems necessary, at the expense of the Lenders, and (ii)
if an Event of Default shall have occurred and be continuing, undertake such
additional appraisals and commercial finance examinations at the Loan Parties’
expense as it deems appropriate.
(c)    The Loan Parties shall, at all times, retain independent certified public
accountants who are reasonably satisfactory to the Administrative Agent and
instruct such accountants to cooperate with, and be available to, the
Administrative Agent or its representatives to discuss the Loan Parties’
financial performance, financial condition, operating results, controls, and
such other matters, within the scope of the retention of such accountants, as
may be raised by the Administrative Agent.
SECTION 5.10.    Physical Inventories.
(a)    The Collateral Agent, at the expense of the Loan Parties, may observe
each physical count and/or inventory of so much of the Collateral as consists of
Inventory which is undertaken on behalf of the Borrower so long as such
participation does not disrupt the normal inventory schedule or process.
(b)    The Borrower, at its own expense (either through the use of its employees
or third party inventory services), shall cause not less than one physical
inventory of the Borrower’s Inventory to be undertaken in each twelve (12) month
period during which this Agreement is in effect, using practices consistent with
practices in effect on the date hereof.
(c)    The Borrower, within thirty (30) days following the completion of such
inventory, shall provide the Collateral Agent with a reconciliation of the
results of each such inventory (as well as of any other physical inventory
undertaken by the Borrower) and shall post such results to the Borrower’s stock
ledger and general ledger, as applicable.
(d)    The Collateral Agent, in its discretion, if any Default exists, may cause
such additional inventories to be taken as the Collateral Agent determines
(each, at the expense of the Borrower).
SECTION 5.11.    Compliance with Laws. Each Loan Party will, and will cause each
of the Subsidiaries to, comply with all Applicable Laws, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

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SECTION 5.12.    Use of Proceeds and Letters of Credit. The proceeds of Loans
made hereunder and Letters of Credit issued hereunder will be used only (a) to
finance the acquisition of working capital assets of the Borrower, including the
purchase of Inventory, in the ordinary course of business, (b) to finance
Capital Expenditures of the Borrower, (c) for general corporate purposes,
including repurchases of capital stock of the Parent, payment of dividends and
Permitted Acquisitions, and (d) to pay transaction costs, fees and expenses, all
of the foregoing to the extent permitted herein. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the Regulations of the Board, including Regulations U and
X.
SECTION 5.13.    Additional Subsidiaries. If any additional Subsidiary of any
Loan Party is formed or acquired after the Effective Date, the Borrower will
notify the Agents and the Lenders thereof and, if such Subsidiary is not a
Foreign Subsidiary, the Borrower will cause such Subsidiary to become a Loan
Party hereunder and under each applicable Security Document in the manner
provided therein within ten (10) Business Days after such Subsidiary is formed
or acquired and promptly take such actions to create and perfect Liens on such
Subsidiary’s assets to secure the Obligations as any Agent or the Required
Lenders shall reasonably request.
SECTION 5.14.    Further Assurances. Each Loan Party will execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements and other documents), that may be required under any Applicable Law,
or which any Agent may reasonably request, to effectuate the transactions
contemplated by the Loan Documents or to grant, preserve, protect or perfect the
Liens created or intended to be created by the Security Documents or the
validity or priority of any such Lien, all at the expense of the Loan Parties.
The Loan Parties also agree to provide to the Agents, from time to time upon
request, evidence reasonably satisfactory to the Agents as to the perfection and
priority of the Liens created or intended to be created by the Security
Documents.
(b)    If any material assets are acquired by any Loan Party after the Effective
Date (other than assets constituting Collateral under the Security Agreement
that become subject to the Lien of the Security Agreement upon acquisition
thereof), the Borrower will notify the Agents and the Lenders thereof, and the
Loan Parties will cause such assets to be subjected to a Lien securing the
Obligations and will take such actions as shall be necessary or reasonably
requested by any Agent to grant and perfect such Liens, including actions
described in paragraph (a) of this Section, all at the expense of the Loan
Parties.
(c)    Upon the request of the Administrative Agent, the Borrower shall cause
each of its customs brokers to deliver an agreement to the Administrative Agent
covering such matters and in such form as the Administrative Agent may
reasonably require.
ARTICLE VI
Negative Covenants
Until (i) the Commitments have expired or been terminated, and (ii) the
principal of and interest on each Loan and all fees and other Obligations
payable hereunder shall have been paid

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in full, and (iii) all Letters of Credit shall have expired or terminated or
been collateralized, to the extent of 103% of the then Letter of Credit
Outstandings, by cash or a letter of credit issued by a financial institution
and on terms reasonably satisfactory to the Administrative Agent, and (iv) all
L/C Disbursements shall have been reimbursed, each Loan Party covenants and
agrees with the Agents and the Lenders that:
SECTION 6.01.    Indebtedness and Other Obligations. (a)  The Loan Parties will
not, and will not permit any Subsidiary to, create, incur, assume or permit to
exist any Indebtedness, except:
(i)    Indebtedness created under the Loan Documents;
(ii)    Indebtedness set forth in Schedule 6.01 and extensions, renewals and
replacements of any such Indebtedness provided that after giving effect to the
refinancing (i) the principal amount of the outstanding Indebtedness is not
increased, (ii) neither the tenor nor the average life is reduced, and (iii) the
holders of such refinancing Indebtedness are not afforded covenants, defaults,
rights or remedies more burdensome in any material respect to the obligor or
obligors than those contained in the Indebtedness being refinanced;
(iii)    Indebtedness of any Loan Party to any other Loan Party, all of which
Indebtedness shall be reflected in the Loan Parties’ books and records in
accordance with GAAP;
(iv)    Indebtedness of any Loan Party to finance the acquisition of any fixed
or capital assets, including Capital Lease Obligations, and any Indebtedness
assumed in connection with the acquisition of any such assets or secured by a
Lien on any such assets prior to the acquisition thereof, and extensions,
renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier maturity date or
decreased weighted average life thereof, provided that the aggregate principal
amount of Indebtedness permitted by this clause (iv) shall not exceed
$100,000,000 at any time outstanding;
(v)    Indebtedness incurred to refinance any Real Estate owned by any Loan
Party or incurred in connection with sale-leaseback transactions permitted
hereunder;
(vi)    Indebtedness under Hedging Agreements, other than for speculative
purposes, entered into in the ordinary course of business;
(vii)    Contingent liabilities under surety bonds or similar instruments
incurred in the ordinary course of business in connection with the construction
or improvement of stores;
(viii)    Reserved;
(ix)    Guarantees by a Loan Party of any obligations of another Loan Party, as
long as such obligations are not otherwise prohibited hereunder;

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(x)    any Indebtedness arising under any Leases of the Loan Parties;
(xi)    any Indebtedness assumed by the Parent, the Borrower, or any of their
Subsidiaries in connection with a Permitted Acquisition; and
(xii)    other unsecured Indebtedness, including Subordinated Indebtedness, in
an aggregate principal amount not exceeding $100,000,000 at any time
outstanding, provided that the terms of such Indebtedness are reasonably
acceptable to the Administrative Agent (such consent of Administrative Agent not
to be unreasonably withheld).
(b)    None of the Loan Parties will, nor will they permit any Subsidiary to,
issue any preferred stock (except for preferred stock (i) all dividends in
respect of which are to be paid (and all other payments in respect of which are
to be made) in additional shares of such preferred stock, in lieu of cash,
(ii) that is not subject to redemption other than redemption at the option of
the Loan Party issuing such preferred stock and (iii) all payments in respect of
which are expressly subordinated to the Obligations) or be or become liable in
respect of any obligation (contingent or otherwise) to purchase, redeem, retire,
acquire or make any other payment in respect of (A) any shares of capital stock
of any Loan Party or (B) any option, warrant or other right to acquire any such
shares of capital stock, except for obligations related to agreements or plans
existing as of the Effective Date.
SECTION 6.02.    Liens.  The Loan Parties will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a)    Liens created under the Loan Documents;
(b)    Permitted Encumbrances;
(c)    any Lien on any property or asset of any Loan Party set forth in Schedule
6.02, provided that (i) such Lien shall not apply to any other property or asset
of any Loan Party and (ii) such Lien shall secure only those obligations that it
secures as of the Effective Date, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;
(d)    Liens on fixed or capital assets acquired by any Loan Party, provided
that (i) such Liens secure Indebtedness permitted by clause (iv) of
Section 6.01(a), (ii) such Liens and the Indebtedness secured thereby are
incurred prior to or within ninety (90) days after such acquisition or the
completion of such construction or improvement, (iii) the Indebtedness secured
thereby does not exceed 100% of the cost of acquiring such fixed or capital
assets and (iv) such Liens shall not extend to any other property or assets of
the Loan Parties;
(e)    Liens to secure Indebtedness permitted by clause (v) of Section 6.01(a)
provided that such Liens shall not apply to any property or assets of the Loan
Parties

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other than the Real Estate so refinanced or which is the subject of a
sale-leaseback transaction; and
(f)    Liens on proceeds of credit card charges created or contemplated by any
agreements with Comenity Bank or any other third party administering a private
label credit card program for any of the Loan Parties, Visa, MasterCard,
American Express, Discovercard and any other major credit card processors, held
by such processor to secure chargebacks and fees arising in the ordinary course
of business with respect to the processing of credit card charges.
SECTION 6.03.    Fundamental Changes. (a)  The Loan Parties will not merge into
or consolidate with any other Person, or permit any other Person to merge into
or consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, (i) any Facility Guarantor may
merge into any other Facility Guarantor, provided that in any such transaction
involving the Parent, the Parent shall be the surviving entity, and (ii) mergers
may take place in connection with Permitted Acquisitions, and (iii) any Facility
Guarantor (other than the Parent) may liquidate or dissolve voluntarily into the
Parent, further provided that neither the Parent nor any of its Subsidiaries
shall be required to preserve any right, permit, license, approval, privilege or
franchise if the board of directors of the Parent or the board of directors,
board of members, manager(s) or general partners, as applicable, of such
Subsidiary shall determine that the presentation thereof is no longer desirable
in the conduct of the business of the Parent or such Subsidiary, as the case may
be, and the loss thereof could not reasonably be expected to result in a
Material Adverse Effect.
(b)    The Loan Parties will not engage, to any material extent, in any business
other than businesses substantially the same as, reasonably related to, or
complementary to one or more lines of business conducted by the Loan Parties on
the date of execution of this Agreement (as, for example, retail stores with
inventory categories comparable to those in Borrower’s existing stores but in
formats with different retail pricing structures); provided that any Inventory
in such stores shall not be considered Eligible Inventory unless and until the
Collateral Agent has completed an appraisal of such Inventory, establishes an
advance rate and Inventory Reserves (if applicable) therefor, and otherwise
agrees that such Inventory shall be deemed Eligible Inventory.
SECTION 6.04.    Investments, Loans, Advances, Guarantees and Acquisitions. The
Loan Parties will not purchase, hold or acquire (including pursuant to any
merger with any Person that was not a wholly owned Subsidiary prior to such
merger) any capital stock, evidences of Indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, guarantee any obligations
of, or make or permit to exist any Investment or any other interest in, any
other Person, or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit,
except:
(a)    Permitted Investments;
(b)    Investments existing on the Effective Date, and set forth on
Schedule 6.04;

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(c)    loans or advances made by any Facility Guarantor to any other Loan Party;
(d)    Guarantees constituting Indebtedness permitted by Section 6.01;
(e)    Investments 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;
(f)    Permitted Acquisitions;
(g)    loans or advances to employees in the ordinary course of business in an
amount not to exceed $2,500,000 in the aggregate at any time outstanding;
(h)    Investments in Subsidiaries that have become Loan Parties by compliance
with Section 5.13;
(i)    Investments consisting of the acquisition of credit card receivables from
Comenity Bank or any other third party administering a private label credit card
program for any of the Loan Parties, in the ordinary course of business in
connection with the termination of such private label credit card program;
(j)    Trade credit extended on usual and customary terms in the ordinary course
of business;
(k)    Investments in the nonqualified deferred compensation plans sponsored by
one or more Loan Parties from time to time; and
(l)    other Investments not to exceed $25,000,000 in the aggregate at any time
outstanding.
SECTION 6.05.    Asset Sales. The Loan Parties will not, and will not permit any
of the Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any capital stock, nor will the Loan Parties permit any of the
Subsidiaries to issue any additional shares of its capital stock or other
ownership interest in such Subsidiary, except:
(a)    (i)    sales of Inventory, or (ii) sales of used, uneconomical, obsolete,
worn out or surplus assets (other than Collateral) and equipment, or (iii)
Permitted Investments, in each case ((i) through (iii)) in the ordinary course
of business;
(b)    sales, transfers and dispositions among the Loan Parties and their
Subsidiaries, provided that any such sales, transfers or dispositions involving
a Subsidiary that is not a Loan Party shall be made in compliance with
Section 6.07;
(c)    sale-leaseback transactions involving any Loan Party’s Real Estate as
long as if the Administrative Agent so requests, the Administrative Agent shall
have received an intercreditor agreement executed by the purchaser of such Real
Estate on terms and conditions reasonably satisfactory to the Administrative
Agent;

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(d)    as long as no Overadvance shall result after giving effect thereto, the
sale or disposition of any Inventory or other Collateral in connection with the
closure of any locations at which the Borrower maintains, offers for sale or
stores any of its Inventory of other Collateral; provided that (i) any such sale
or disposition shall be conducted by such Persons and on such terms as the
Borrower and the Collateral Agent may agree, and (ii) the aggregate amount of
Inventory which may be sold or disposed of shall not exceed ten percent (10%) of
the Cost of the Borrower’s Eligible Inventory as of the Effective Date;
(e)    any issuance of shares of capital stock of the Parent in accordance with
the existing restricted stock and stock option plans or agreements or in
connection with any Permitted Acquisition; and
(f)    sales, transfers or other dispositions of credit card receivables to
Comenity Bank pursuant to its private label credit card program with the Loan
Parties or to any other third party replacing Comenity Bank and administering a
private label credit card program for any of the Loan Parties;
provided that all sales, transfers, leases and other dispositions permitted
hereby shall be made at arm’s length and for fair value and solely for cash
consideration; and further provided that the authority granted under clauses (b)
through (d) hereof may be terminated in whole or in part by the Agents upon the
occurrence and during the continuance of any Event of Default.
SECTION 6.06.    Restricted Payments; Certain Payments of Indebtedness.
(a)    The Loan Parties will not, and will not permit any Subsidiary to, declare
or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except as long as no Default or Event of Default exists or would arise
therefrom (i) the Loan Parties may declare and pay dividends with respect to
their capital stock payable solely in additional shares of or warrants to
purchase their common stock, (ii) the Loan Parties may declare splits or
reclassifications of their stock into additional or other shares of their common
stock, and (iii) the Borrower may pay cash dividends or otherwise transfer funds
to the Parent for operating expenses incurred in the normal course of business
by the Parent or paid by the Parent on behalf of the Borrower (including all
payroll and benefits costs for all Subsidiaries of the Parent, telephone,
travel, rent and other occupancy costs, professional expenses, including
consulting, audit, accounting and legal expenses, corporate insurance expenses,
data processing costs and other operating expenses), (iv) the Parent may pay
cash dividends in an amount not to exceed $30,000,000 in each Fiscal Year, and
(v) only if the Payment Conditions are then satisfied, (x) the Parent may
repurchase its capital stock and/or declare and pay other cash dividends to its
shareholders, and (y) the Subsidiaries of the Parent may declare and pay cash
dividends to the Parent or to any other Loan Party which is its stockholder.
(b)    The Loan Parties will not, and will not permit any Subsidiary to, make or
agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal
of, interest on, or fees or other charges with respect to any Indebtedness, or
any payment or other distribution (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any Indebtedness

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(other than the Obligations), except as long as no Event of Default has occurred
and is continuing or would result from such payments:
(i)    payment of regularly scheduled interest, fees, and charges and principal
payments as and when due in respect of any other Indebtedness permitted
hereunder; and
(ii)    refinancings of Indebtedness to the extent permitted by Section 6.01.
(c)    Notwithstanding any of the restrictions or limitations described in
Sections 6.06(a) or 6.06(b), the Parent and its Subsidiaries may repurchase its
respective capital stock and equity interests and/or declare and pay cash
dividends to its shareholders and members solely with the proceeds received and
tax benefits realized by the Parent or such Subsidiary resulting from or related
to the exercise of stock options granted pursuant to stock option plans adopted
by the Parent or such Subsidiary, which options are exercised in accordance with
the terms and conditions described in such plans.
SECTION 6.07.    Transactions with Affiliates. The Loan Parties will not, and
will not permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except transactions in the ordinary course of business that are at
prices and on terms and conditions not less favorable to the Loan Parties or
such Subsidiary than could be obtained on an arm’s-length basis from unrelated
third parties.
SECTION 6.08.    Restrictive Agreements. The Loan Parties will not, and will not
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of the Loan Parties or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Loan Parties or any other Subsidiary or to guarantee Indebtedness of the
Loan Parties or any other Subsidiary, provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document,
(ii) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, and (iii) clause (a) of the foregoing shall
not apply to customary provisions in leases restricting the assignment or
subleasing thereof.
SECTION 6.09.    Amendment of Material Documents. The Loan Parties will not, and
will not permit any Subsidiary to, amend, modify or waive any of their rights
under (i) their Organizational Documents, to the extent that such amendment,
modification or waiver would reasonably likely have a Material Adverse Effect,
(ii) any Subordinated Indebtedness, or (iii) any other instruments, documents or
agreements, in each case with respect to this clause (iii), to the extent that
such amendment, modification or waiver would be materially adverse to the
interests of the Lenders. The Loan Parties will not, and will not permit any
Subsidiary to, terminate the private label credit card program with Comenity
Bank (other than at the expiration of the term

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thereof in the ordinary course of business), except to the extent the Loan
Parties replace Comenity Bank with another third party administering a private
label credit card program for any of the Loan Parties and such third party
enters into an Intercreditor Agreement with the Administrative Agent.
SECTION 6.10.    Additional Subsidiaries. The Loan Parties will not, and will
not permit any Subsidiary to, create any additional Subsidiary unless no Default
or Event of Default would arise therefrom and the requirements of Section 5.13
are satisfied.
SECTION 6.11.    Fixed Charge Coverage Ratio. In the event that a Covenant
Compliance Event has occurred and is continuing, the Borrower shall not permit
the Consolidated Fixed Charge Coverage Ratio to be less than 1.0:1.0.
SECTION 6.12.    Fiscal Year. The Parent and its Subsidiaries shall not change
their Fiscal Year without the prior written consent of the Administrative Agent,
which consent shall not be unreasonably withheld, conditioned or delayed.
SECTION 6.13.    Environmental Laws. The Loan Parties shall not (a) fail to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, or
(b) become subject to any Environmental Liability except, in each case, to the
extent the same could not reasonably be expected to result in a Material Adverse
Effect.
ARTICLE VII
Events of Default
SECTION 7.01.    Events of Default. If any of the following events (“Events of
Default”) shall occur:
(a)    the Loan Parties shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any L/C Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b)    the Loan Parties shall fail to pay any interest on any Loan or any fee or
any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or any other Loan Document, when and as
the same shall become due and payable;
(c)    any representation or warranty made or deemed made by or on behalf of any
Loan Party in or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect when made
or deemed made;

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(d)    the Loan Parties shall fail to observe or perform any covenant, condition
or agreement contained in Sections 2.23, 5.01(f), 5.02(a), 5.07 (with respect to
insurance covering the Collateral), 5.09, or 5.12, or in Article VI;
(e)    any Loan Party shall fail to observe or perform any covenant, condition
or agreement contained in Sections 5.01 (other than Section 5.01(f)), 5.02
(other than Section 5.02(a)), or 5.03, and such failure shall continue
unremedied for a period of ten (10) days after notice thereof from the
Administrative Agent to the Borrower;
(f)    any Loan Party shall fail to observe or perform any covenant, condition
or agreement contained in any Loan Document (other than those specified in
clause (a), (b), (c), (d), or (e) of this Article), and such failure shall
continue unremedied for a period of thirty (30) days after notice thereof from
the Administrative Agent to the Borrower;
(g)    any Loan Party shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness when
and as the same shall become due and payable (after giving effect to the
expiration of any grace or cure period set forth therein);
(h)    any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any such Material Indebtedness or any trustee or agent on its or their behalf
to cause any such Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity;
(i)    an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of any Loan Party or its debts, or of a substantial part of its assets,
under any Debtor Relief Law or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Loan Party or
for a substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for forty-five (45) days or an order or
decree approving or ordering any of the foregoing shall be entered;
(j)    any Loan Party shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Debtor
Relief Law, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (i) of
this Section 7.01, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any Loan
Party or for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;
(k)    any Loan Party shall become unable, admit in writing its inability or
fail generally to pay its debts as they become due;

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(l)    (i)    one or more final judgments for the payment of money in an
aggregate amount in excess of $10,000,000 shall be entered against any Loan
Party or any of its Subsidiaries and the same is not satisfied, discharged,
vacated, bonded or stayed pending appeal within a period of thirty
(30) consecutive days following the date of entry;
(ii)    any non-monetary final judgment or order shall have been entered against
any Loan Party or any of its Subsidiaries that is reasonably likely to have a
Material Adverse Effect and the same is not discharged, vacated, bonded or
stayed pending appeal within a period of thirty (30) consecutive days following
the date of entry;
(m)    an ERISA Event shall have occurred that when taken together with all
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Loan Parties in an aggregate amount exceeding $10,000,000;
(n)    (i)    any challenge by or on behalf of any Loan Party to the validity of
any Loan Document or the applicability or enforceability of any Loan Document
strictly in accordance with the subject Loan Document’s terms or which seeks to
void, avoid, limit, or otherwise adversely affect any security interest created
by or in any Loan Document or any payment made pursuant thereto;
(ii)    any challenge by or on behalf of any other Person to the validity of any
Loan Document or the applicability or enforceability of any Loan Document
strictly in accordance with the subject Loan Document’s terms or which seeks to
void, avoid, limit, or otherwise adversely affect any security interest created
by or in any Loan Document or any payment made pursuant thereto, which challenge
the Administrative Agent has determined is reasonable likely to have a Material
Adverse Effect;
(iii)    any Lien purported to be created under any Security Document shall
cease to be, or shall be asserted by any Loan Party not to be, a valid and
perfected Lien on any Collateral, with the priority required by the applicable
Security Document, except as a result of any acts or omissions of any Agent or
the sale or other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents;
(o)    the occurrence of any uninsured loss to any material portion of the
Collateral;
(p)    the indictment of, or institution of any legal process or proceeding
against, any Loan Party, under any federal, state, municipal, and other civil or
criminal statute, rule, regulation, order, or other requirement having the force
of law where the relief, penalties, or remedies sought or available include the
forfeiture of any material property of any Loan Party and/or the imposition of
any stay or other order, the effect of which could reasonably be to restrain in
any material way the conduct by the Loan Parties, taken as a whole, of their
business in the ordinary course, in each case which the Administrative Agent has
determined is reasonably likely to have a Material Adverse Effect;

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(q)    the determination by the Borrower, whether by vote of the Borrower’s
partners or otherwise to: suspend the operation of the Borrower’s business in
the ordinary course, liquidate all or a material portion of the Borrower’s
assets (other than a sale of its private label credit card portfolio) or store
locations, or employ an agent or other third party to conduct a program of
closings, liquidations or “Going-Out-Of-Business” sales of any material portion
of the business; or
(r)    Any Change in Control;
then, and in every such event (other than an event with respect to any Loan
Party described in clause (i) or (j) of this Section 7.01), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by written notice to the
Borrower, take either or both of the following actions, at the same or different
times:  (i) terminate all or any portion of the Commitments, and thereupon all
or such portion of the Commitments shall terminate immediately, (ii) declare the
Loans then outstanding to be due and payable in whole (or in part, in which case
any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and all fees and
other Obligations of the Loan Parties accrued hereunder, shall become due and
payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Loan Parties, and (iii) require the
Borrower to furnish cash collateral in an amount equal to 103% of the Letter of
Credit Outstandings; and in case of any event with respect to any Loan Party
described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other Obligations of the
Loan Parties accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Loan Parties.
SECTION 7.02.    When Continuing.
For all purposes under this Agreement, each Default and Event of Default that
has occurred shall be deemed to be continuing at all times thereafter unless it
either (a) with respect to any Default, is cured or corrected to the reasonable
written satisfaction of the Required Lenders, or (b) with respect to any Default
or Event of Default, is waived in writing in accordance with Section 9.02.
SECTION 7.03.    Remedies on Default
In case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the maturity of the Loans shall have been
accelerated pursuant hereto, the Administrative Agent may proceed to protect and
enforce its rights and remedies under this Agreement, the Notes or any of the
other Loan Documents by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or any instrument
pursuant to which the Obligations are evidenced, and, if such amount shall have
become due, by declaration or otherwise, proceed to enforce the payment thereof
or any other legal or equitable right of the Agents or the Lenders. No remedy
herein is intended to be exclusive of any other remedy and

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each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.
SECTION 7.04.    Application of Proceeds
After the occurrence of an Event of Default and acceleration of the Obligations,
all proceeds realized from any Loan Party or on account of any Collateral shall
be applied as follows:
FIRST, to payment of that portion of the Obligations hereunder (excluding
Obligations set forth in clause (c) of the definition thereof) constituting fees
and indemnities due to the Agents, the Lenders and the Issuing Bank under the
Loan Documents, and the payment of all reasonable costs and expenses incurred by
the Agents in connection with such collection or sale or otherwise in connection
with this Agreement or any of the Obligations, including all court costs and the
reasonable fees and expenses of its agents and legal counsel, the repayment of
all advances made by the Agents hereunder or under any other Loan Document on
behalf of any Loan Party and any other reasonable costs or expenses incurred in
connection with the exercise of any right or remedy hereunder, under any other
Loan Document;
SECOND, to the payment of accrued and unpaid interest and principal on the
Swingline Loans;
THIRD, to the payment of accrued and unpaid interest on the Revolving Loans;
FOURTH, pro rata to the payment of outstanding principal on the Revolving Loans;
FIFTH, to the Cash Collateral Account as collateral for Letter of Credit
Outstandings up to 103% thereof;
SIXTH, to the payment of all Obligations of the Loan Parties set forth in clause
(c)(i) of the definition of Obligations;
SEVENTH, to the payment of all Obligations of the Loan Parties set forth in
clause (c)(ii) of the definition of Obligations; and
EIGHTH, to the Borrower, its successors or assigns, or as a court of competent
jurisdiction may otherwise direct.

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ARTICLE VIII
The Agents
SECTION 8.01.    Administration by Administrative Agent.
Each Lender, the Collateral Agent and the Issuing Bank hereby designate Wells
Fargo as Administrative Agent under this Agreement and the other Loan Documents.
The general administration of the Loan Documents shall be by the Administrative
Agent. The Lenders, the Collateral Agent and the Issuing Bank each hereby
irrevocably authorizes the Administrative Agent (a) to enter into the Loan
Documents to which it is a party and (b) at its discretion, to take or refrain
from taking such actions as agent on its behalf and to exercise or refrain from
exercising such powers under the Loan Documents and the Notes as are delegated
by the terms hereof or thereof, as appropriate, together with all powers
reasonably incidental thereto. The Administrative Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan
Documents, nor shall it have any fiduciary relationship with any Lender, and no
implied covenants, responsibilities, duties, obligations, or liabilities shall
be read into the Loan Documents or otherwise exist against the Administrative
Agent.
SECTION 8.02.    The Collateral Agent.
Each Lender, the Administrative Agent and the Issuing Bank hereby (a) designate
Wells Fargo as Collateral Agent under this Agreement and the other Loan
Documents, (b) authorize the Collateral Agent to enter into the Security
Documents and the other Loan Documents to which it is a party and to perform its
duties and obligations thereunder, together with all powers reasonably
incidental thereto, and (c) agree and consent to all of the provisions of the
Security Documents. All Collateral shall be held or administered by the
Collateral Agent (or its duly-appointed agent) for its benefit and for the
ratable benefit of the other Credit Parties. Any proceeds received by the
Collateral Agent from the foreclosure, sale, lease or other disposition of any
of the Collateral and any other proceeds received pursuant to the terms of the
Security Documents or the other Loan Documents shall be paid over to the
Administrative Agent for application as provided in Sections 2.21, 2.24, or
7.04, as applicable. The Collateral Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan
Documents, nor shall it have any fiduciary relationship with any Lender, and no
implied covenants, responsibilities, duties, obligations, or liabilities shall
be read into the Loan Documents or otherwise exist against the Collateral Agent.
SECTION 8.03.    Agreement of Required Lenders.
(a) Upon any occasion requiring or permitting an approval, consent, waiver,
election or other action on the part of only the Required Lenders, action shall
be taken by the Agents for and on behalf or for the benefit of all Lenders upon
the direction of the Required Lenders, and any such action shall be binding on
all Lenders, and (b) upon any occasion requiring or permitting an approval,
consent, waiver, election or other action on the part of the Required
Supermajority Lenders, action shall be taken by the Agents for and on behalf or
for the benefit of all Lenders upon the direction of the Required Supermajority
Lenders and any such action shall be binding

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on all Lenders. No amendment, modification, consent, or waiver shall be
effective except in accordance with the provisions of Section 9.02.
SECTION 8.04.    Liability of Agents.
(a)    Each of the Agents, when acting on behalf of the Lenders and the Issuing
Bank, may execute any of its respective duties under this Agreement by or
through any of its respective officers, agents and employees, and none of the
Agents nor their respective directors, officers, agents or employees shall be
liable to the Lenders or the Issuing Bank or any of them for any action taken or
omitted to be taken in good faith, or be responsible to the Lenders or the
Issuing Bank or to any of them for the consequences of any oversight or error of
judgment, or for any loss, except to the extent of any liability imposed by law
by reason of such Agent’s own gross negligence or willful misconduct. The Agents
and their respective directors, officers, agents and employees shall in no event
be liable to the Lenders or the Issuing Bank or to any of them for any action
taken or omitted to be taken by them pursuant to instructions received by them
from the Required Lenders, or Required Supermajority Lenders, or all Lenders, as
applicable, or in reliance upon the advice of counsel selected by it. Without
limiting the foregoing, none of the Agents, nor any of their respective
directors, officers, employees, or agents (i) shall be responsible to any Lender
or the Issuing Bank for the due execution, validity, genuineness, effectiveness,
sufficiency, or enforceability of, or for any recital, statement, warranty or
representation in, this Agreement, any Loan Document or any related agreement,
document or order, or (ii) shall be required to ascertain or to make any inquiry
concerning the performance or observance by any Loan Party of any of the terms,
conditions, covenants, or agreements of this Agreement or any of the Loan
Documents, or (iii) shall be responsible to any Lender or the Issuing Bank for
the state or condition of any properties of the Borrower or any other obligor
hereunder constituting Collateral for the Obligations of the Borrower hereunder,
or any information contained in the books or records of the Borrower; or (iv)
shall be responsible to any Lender or the Issuing Bank for the validity,
enforceability, collectibility, effectiveness or genuineness of this Agreement
or any other Loan Document or any other certificate, document or instrument
furnished in connection therewith; or (v) shall be responsible to any Lender or
the Issuing Bank for the validity, priority or perfection of any Lien securing
or purporting to secure the Obligations or the value or sufficiency of any of
the Collateral.
(b)    The Agents may execute any of their duties under this Agreement or any
other Loan Document by or through their agents or attorneys-in-fact, and shall
be entitled to the advice of counsel concerning all matters pertaining to its
rights and duties hereunder or under the Loan Documents. The Agents shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by them with reasonable care.
(c)    None of the Agents nor any of their respective directors, officers,
employees, or agents shall have any responsibility to the Loan Parties on
account of the failure or delay in performance or breach by any Lender (other
than by the Agent in its capacity as a Lender) or the Issuing Bank of any of
their respective obligations under this Agreement or the Notes or any of the
Loan Documents or in connection herewith or therewith.
(d)    The Agents shall be entitled to rely, and shall be fully protected in
relying, upon any notice, consent, certificate, affidavit, or other document or
writing believed by them to

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be genuine and correct and to have been signed, sent or made by the proper
person or persons, and upon the advice and statements of legal counsel
(including, without, limitation, counsel to the Loan Parties), independent
accountants and other experts selected by the Agents. The Agents shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless they shall first receive such advice or concurrence
of the Required Lenders as they deem appropriate or they shall first be
indemnified to their satisfaction by the Lenders against any and all liability
and expense which may be incurred by them by reason of the taking or failing to
take any such action.
SECTION 8.05.    Notice of Default; Actions on Default.
(a)    The Agents shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Agents have actual
knowledge of the same or has received notice from a Lender or the Loan Parties
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that the Agents
obtain such actual knowledge or receive such a notice, the Agents shall give
prompt notice thereof to each of the Lenders.
(b)    The Agents shall (subject to the provisions of Section 9.02) take such
action with respect to any Default or Event of Default as shall be reasonably
directed by the Required Lenders. Unless and until the Agents shall have
received such direction, the Agents may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to any such
Default or Event of Default as they shall deem advisable in the best interest of
the Lenders. In no event shall the Agents be required to comply with any such
directions to the extent that the Agents believe that their compliance with such
directions would be unlawful.
SECTION 8.06.    Lenders’ Credit Decisions. Each Lender acknowledges that it
has, independently and without reliance upon the Agents or any other Lender, and
based on the financial statements prepared by the Loan Parties and such other
documents and information as it has deemed appropriate, made its own credit
analysis and investigation into the business, assets, operations, property, and
financial and other condition of the Loan Parties and has made its own decision
to enter into this Agreement and the other Loan Documents and agrees that the
Agents shall bear no responsibility therefor. Each Lender also acknowledges that
it will, independently and without reliance upon the Agents 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 determining whether or not
conditions precedent to closing any Loan hereunder have been satisfied and in
taking or not taking any action under this Agreement and the other Loan
Documents.
SECTION 8.07.    Reimbursement and Indemnification.
Without limiting the Loan Parties’ obligations hereunder, each Lender agrees (a)
to reimburse (i) each Agent for such Lender’s Commitment Percentage of any
expenses and fees incurred by such Agent for the benefit of the Lenders or the
Issuing Bank under this Agreement, the Notes and any of the Loan Documents,
including, without limitation, counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders or the Issuing
Bank, and any other expense incurred in connection with the operations or
enforcement

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thereof not reimbursed by the Loan Parties and (ii) each Agent for such Lender’s
Commitment Percentage of any expenses of such Agent incurred for the benefit of
the Lenders or the Issuing Bank that the Loan Parties have agreed to reimburse
pursuant to Section 9.03 and has failed to so reimburse and (b) to indemnify and
hold harmless the Agents and any of their directors, officers, employees, or
agents, on demand, in the amount of such Lender’s Commitment Percentage, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against it
or any of them in any way relating to or arising out of this Agreement, the
Notes or any of the Loan Documents or any action taken or omitted by it or any
of them under this Agreement, the Notes or any of the Loan Documents to the
extent not reimbursed by the Loan Parties (except such as shall result from
their respective gross negligence or willful misconduct). The provisions of this
Section 8.07 shall survive the repayment of the Obligations and the termination
of the Commitments.
SECTION 8.08.    Rights of Agents.
It is understood and agreed that Wells Fargo shall have the same rights and
powers hereunder (including the right to give such instructions) as the other
Lenders and may exercise such rights and powers, as well as its rights and
powers under other agreements and instruments to which it is or may be party,
and engage in other transactions with the Borrower, as though it were not the
Administrative Agent or the Collateral Agent of the Lenders under this
Agreement. The Agents and their affiliates may accept deposits from, lend money
to, and generally engage in any kind of commercial or investment banking, trust,
advisory or other business with the Loan Parties and their Subsidiaries and
Affiliates as if it were not the Agent hereunder.
SECTION 8.09.    Notice of Transfer.
The Agents may deem and treat a Lender party to this Agreement as the owner of
such Lender’s portion of the Loans for all purposes, unless and until, and
except to the extent, an Assignment and Acceptance shall have become effective
as set forth in Section 9.04(b).
SECTION 8.10.    Successor Agent
Any Agent may resign at any time by giving five (5) Business Days’ written
notice thereof to the Lenders, the Issuing Bank, the other Agents and the
Borrower. Upon any such resignation of any Agent, the Required Lenders shall
have the right to appoint a successor Agent, which so long as there is no
Default or Event of Default, shall be reasonably satisfactory to the Borrower
(whose consent shall not be unreasonably withheld or delayed). If no successor
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment, within thirty (30) days after the retiring Agent’s
giving of notice of resignation, the retiring Agent may, on behalf of the
Lenders, the other Agents and the Issuing Bank, appoint a successor Agent which
shall be a Person capable of complying with all of the duties of such Agent (and
the Issuing Bank), hereunder (in the opinion of the retiring Agent and as
certified to the Lenders in writing by such successor Agent) which, so long as
there is no Default or Event of Default, shall be reasonably satisfactory to the
Borrower (whose consent shall not be unreasonably withheld or delayed). Upon the
acceptance of any appointment as Agent by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights, powers,

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privileges and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent’s resignation hereunder as such Agent, the provisions of this
Article VIII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was such Agent under this Agreement.
SECTION 8.11.    Reports and Financial Statements.
(a)    Promptly after receipt thereof from the Borrower, the Administrative
Agent shall remit to each Lender and the Collateral Agent copies of all
financial statements required to be delivered by the Borrower hereunder and all
commercial finance examinations and appraisals of the Collateral received by the
Administrative Agent and all notices received by the Administrative Agent under
Section 5.02 hereof, and a copy of any Borrowing Base Certificate so received
(collectively, the “Reports”). The Reports required to be delivered pursuant to
this paragraph shall be deemed to have been delivered on the date on which the
Administrative Agent provides notice to the Lenders and the Collateral Agent
that such information has been posted on the Internet and is accessible by the
Lenders and the Collateral Agent without charge.
(b)    By signing this Agreement, each Lender:
(i)    agrees to furnish the Administrative Agent with a summary of all Bank
Products (including, without limitation, all Hedging Agreements) and Cash
Management Services due from a Loan Party or to become due to such Lender from
time to time. In connection with any distributions to be made hereunder, the
Administrative Agent shall be entitled to assume that no amounts are due from a
Loan Party to any Lender on account of any Bank Products or Cash Management
Services unless the Administrative Agent has received written notice thereof
from such Lender;
(ii)    expressly agrees and acknowledges that the Administrative Agent makes no
representation or warranty as to the accuracy of the Reports, and shall not be
liable for any information contained in any Report;
(iii)    expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agents or any other party
performing any audit or examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Borrower’s books
and records, as well as on representations of the Borrower’s personnel;
(iv)    agrees to keep all Reports confidential in accordance with the
provisions of Section 9.14 hereof; and
(v)    without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold the Agents and any such other
Lender preparing a Report harmless from any action the indemnifying Lender may
take or conclusion the indemnifying Lender may reach or draw from any Report in
connection with any Credit Extensions that the indemnifying Lender has made or
may make to the Borrower, or the indemnifying Lender's

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participation in, or the indemnifying Lender's purchase of, a Loan or Loans; and
(ii) to pay and protect, and indemnify, defend, and hold the Agents and any such
other Lender preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses, and other amounts (including attorney
costs) incurred by the Agents and any such other Lender preparing a Report as
the direct or indirect result of any third parties who might obtain all or part
of any Report through the indemnifying Lender.
SECTION 8.12.    Delinquent Lender.
(a)    If for any reason any Lender shall become a Deteriorating Lender or shall
fail or refuse to abide by its obligations under this Agreement, including
without limitation its obligation to make available to Administrative Agent its
Commitment Percentage of any Revolving Loans, expenses or setoff or purchase its
Commitment Percentage of a participation interest in the Swingline Loans or
Letters of Credit (a “Delinquent Lender”) and such failure is not cured within
two (2) Business Days after receipt from the Administrative Agent of written
notice thereof, then, in addition to the rights and remedies that may be
available to Agents, other Lenders, the Loan Parties or any other party at law
or in equity, and not at limitation thereof, such Deteriorating Lender or
Delinquent Lender’s right to participate in the administration of, or
decision-making rights related to, the Loans, this Agreement or the other Loan
Documents shall be suspended during the pendency of such failure or refusal.
Further, notwithstanding the provisions of Section 2.08 hereof, the
Administrative Agent shall not be obligated to transfer to a Delinquent Lender
any payments made by the Borrower to the Administrative Agent for the Delinquent
Lender’s benefit or any proceeds of Collateral that would otherwise be remitted
hereunder to the Delinquent Lender, and, in the absence of such transfer to the
Delinquent Lender, the Administrative Agent shall transfer any such payments (i)
first, to the Swingline Lender to the extent of any Swingline Loans that were
made by the Swingline Lender and that were required to be, but were not, paid by
the Delinquent Lender, (ii) second, to the Issuing Bank, to the extent of the
portion of a Letter of Credit Disbursement that was required to be, but was not,
paid by the Delinquent Lender, (iii) third, to each Non-Delinquent Lender
ratably in accordance with their Commitments (but, in each case, only to the
extent that such Delinquent Lender’s portion of a Loan (or other funding
obligation) was funded by such other Non-Delinquent Lender), (iv) to the Cash
Collateral Account, the proceeds of which shall be retained by the
Administrative Agent and may be made available to be re-advanced to or for the
benefit of the Borrower (upon the request of the Borrower and subject to the
conditions set forth in Section 4.02) as if such Delinquent Lender had made its
portion of the Loans (or other funding obligations) hereunder, and (v) from and
after the date on which all other Obligations have been paid in full, to such
Delinquent Lender. Subject to the foregoing, the Administrative Agent may hold
and, in its discretion, re-lend to the Borrower for the account of such
Delinquent Lender the amount of all such payments received and retained by the
Administrative Agent for the account of such Delinquent Lender. Solely for the
purposes of voting or consenting to matters with respect to the Loan Documents
(including the calculation of Commitment Percentages in connection therewith)
and for the purpose of calculating the fees payable under Section 2.13 and 2.14,
such Delinquent Lender shall be deemed not to be a “Lender” and such Lender’s

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Commitment shall be deemed to be zero; provided, that the foregoing shall not
apply to any of the matters governed by subclauses (i), (ii) or (iii) under
Section 9.02(b). The provisions of this Section 8.12 shall remain effective with
respect to such Delinquent Lender until the earlier of (y) the date on which all
of the Non-Delinquent Lenders, the Administrative Agent, the Issuing Bank, and
the Borrower shall have waived, in writing, the application of this Section 8.12
to such Delinquent Lender, or (z) the date on which such Delinquent Lender pays
to the Administrative Agent all amounts owing by such Delinquent Lender in
respect of the amounts that it was obligated to fund hereunder, and, if
requested by the Administrative Agent, provides adequate assurance of its
ability to perform its future obligations hereunder (on which earlier date, so
long as no Event of Default has occurred and is continuing, any remaining cash
collateral held by the Administrative Agent pursuant to Section 8.12(b) shall be
released to the Borrower). The operation of this Section 8.12 shall not be
construed to increase or otherwise affect the Commitment of any Lender, to
relieve or excuse the performance by such Delinquent Lender or any other Lender
of its duties and obligations hereunder, or to relieve or excuse the performance
by any Borrower of its duties and obligations hereunder to the Administrative
Agent, the Issuing Bank, the Swingline Lender, or to the Lenders other than such
Delinquent Lender. Any failure by a Delinquent Lender to fund amounts that it
was obligated to fund hereunder shall constitute a material breach by such
Delinquent Lender of this Agreement and shall entitle the Borrower, at their
option, upon written notice to the Administrative Agent, to arrange for a
substitute Lender to assume the Commitment of such Delinquent Lender, such
substitute Lender to be reasonably acceptable to the Administrative Agent. In
connection with the arrangement of such a substitute Lender, the Delinquent
Lender shall have no right to refuse to be replaced hereunder, and agrees to
execute and deliver a completed form of Assignment and Assumption in favor of
the substitute Lender (and agrees that it shall be deemed to have executed and
delivered such document if it fails to do so) subject only to being paid its
share of the outstanding Obligations (including (1) all interest, fees (except
any Commitment Fees or Letter of Credit Fees not due to such Delinquent Lender
in accordance with the terms of this Agreement), and other amounts that may be
due and payable in respect thereof, and (2) an assumption of its Applicable
Percentage of its participation in the Letters of Credit); provided, that any
such assumption of the Commitment of such Delinquent Lender shall not be deemed
to constitute a waiver of any of the Credit Parties’ or the Loan Parties’ rights
or remedies against any such Delinquent Lender arising out of or in relation to
such failure to fund. In the event of a direct conflict between the priority
provisions of this Section 8.12 and any other provision contained in this
Agreement or any other Loan Document, it is the intention of the parties hereto
that such provisions be read together and construed, to the fullest extent
possible, to be in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 8.12 shall control and govern. The Delinquent
Lender’s decision-making and participation rights and rights to payments as set
forth above shall be restored only upon the payment by the Delinquent Lender of
its Commitment Percentage of any Loans, any participation obligation, or
expenses as to which it is delinquent, together with interest thereon at the
rate set forth in Section 2.11 hereof from the date when originally due until
the date upon which any such amounts are actually paid.

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(b)    If any Swingline Loan or Letter of Credit is outstanding at the time that
a Lender becomes a Delinquent Lender then:
(i)    such Delinquent Lender’s participation interest in any Swingline Loan or
Letter of Credit shall be reallocated among the Non-Delinquent Lenders in
accordance with their respective Applicable Percentages but only to the extent
(x) the Outstanding Amount sum of all Non-Delinquent Lenders’ Credit Extensions
after giving effect to such reallocation does not exceed the total of all
Non-Delinquent Lenders’ Commitments and (y) the conditions set forth in Section
4.02 are satisfied at such time;
(ii)    if the reallocation described in clause (b)(i) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Administrative Agent (x) first, prepay such Delinquent Lender’s
participation in any outstanding Swingline Loans (after giving effect to any
partial reallocation pursuant to clause (b)(i) above) and (y) second, cash
collateralize such Delinquent Lender’s participation in Letters of Credit (after
giving effect to any partial reallocation pursuant to clause (b)(i) above),
pursuant to a cash collateral agreement to be entered into in form and substance
reasonably satisfactory to the Administrative Agent, for so long as such L/C
Bank Obligations are outstanding; provided, that the Borrower shall not be
obligated to cash collateralize any Delinquent Lender’s participations in
Letters of Credit if such Delinquent Lender is also the Issuing Bank;
(iii)    if the Borrower cash collateralizes any portion of such Delinquent
Lender’s participation in Letters of Credit Exposure pursuant to this Section
8.12(b), the Borrower shall not be required to pay any Letter of Credit Fees to
the Administrative Agent for the account of such Delinquent Lender pursuant to
Section 2.07 with respect to such cash collateralized portion of such Delinquent
Lender’s participation in Letters of Credit during the period such participation
is cash collateralized;
(iv)    to the extent the participation by any Non-Delinquent Lender in the
Letters of Credit is reallocated pursuant to this Section 8.12(b), then the
Letter of Credit Fees payable to the Non-Delinquent Lenders pursuant to Section
2.07 shall be adjusted in accordance with such reallocation;
(v)    to the extent any Delinquent Lender’s participation in Letters of Credit
is neither cash collateralized nor reallocated pursuant to this Section 8.12(b),
then, without prejudice to any rights or remedies of the Issuing Bank or any
Lender hereunder, all Letter of Credit Fees that would have otherwise been
payable to such Delinquent Lender under Section 2.07 with respect to such
portion of such participation shall instead be payable to the Issuing Bank until
such portion of such Delinquent Lender’s participation is cash collateralized or
reallocated;
(vi)    so long as any Lender is a Delinquent Lender, the Swingline Lender shall
not be required to make any Swingline Loan and the Issuing Bank shall not be
required to issue, amend, or increase any Letter of Credit, in each case, to the
extent (x) the Delinquent Lender’s Applicable Percentage of such Swingline Loans
or Letter of Credit cannot be reallocated pursuant to this Section 8.12(b) or
(y) the Swingline Lender

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or the Issuing Bank, as applicable, has not otherwise entered into arrangements
reasonably satisfactory to the Swingline Lender or the Issuing Bank, as
applicable, and the Borrower to eliminate the Swingline Lender’s or Issuing
Bank’s risk with respect to the Delinquent Lender’s participation in Swingline
Loans or Letters of Credit; and
(vii)    The Administrative Agent may release any cash collateral provided by
the Borrower pursuant to this Section 8.12(b) to the Issuing Bank and the
Issuing Bank may apply any such cash collateral to the payment of such
Delinquent Lender’s Commitment Percentage of any Letter of Credit Disbursement
that is not reimbursed by the Borrower pursuant to Section 2.07.
(c)    The non-delinquent Lenders shall also have the right, but not the
obligation, in their respective, sole and absolute discretion, to acquire for no
cash consideration, (pro rata, based on the respective Commitments of those
Lenders electing to exercise such right) the Deteriorating Lender’s or
Delinquent Lender’s Commitment to fund future Loans (the “Delinquent Lender’s
Future Commitment”). Upon any such purchase of the Commitment Percentage of any
Deteriorating Lender’s or Delinquent Lender’s Future Commitment, the
Deteriorating Lender’s or Delinquent Lender’s share in future Loans and its
rights under the Loan Documents with respect thereto shall terminate on the date
of purchase, and the Deteriorating Lender’s or Delinquent Lender shall promptly
execute all documents reasonably requested to surrender and transfer such
interest, including, if so requested, an Assignment and Acceptance. Each
Deteriorating Lender and Delinquent Lender shall indemnify the Agents and each
non-delinquent Lender from and against any and all loss, damage or expenses,
including but not limited to reasonable attorneys’ fees and funds advanced by
any Agent or by any non-delinquent Lender, on account of a Deteriorating
Lender’s or Delinquent Lender’s failure to timely fund its Commitment Percentage
of a Loan or to otherwise perform its obligations under the Loan Documents.
SECTION 8.13.    Arrangers, Documentation Agent and Co-Syndication Agents.
Notwithstanding the provisions of this Agreement or any of the other Loan
Documents, the Documentation Agent, the Co-Syndication Agents, and, except as
provided in Section 2.02 hereof, the Arrangers shall have no powers, rights,
duties, responsibilities or liabilities with respect to this Agreement and the
other Loan Documents in their capacities as such.
SECTION 8.14.    Agent for Perfection.
Each Lender hereby appoints each other Lender as agent for the purpose of
perfecting Liens for the benefit of the Agents and the Lenders, in assets which,
in accordance with Article 9 of the UCC or any other Applicable Law of the
United States can be perfected only by possession or control. Should any Lender
(other than the Agents) obtain possession or control of any such Collateral,
such Lender shall notify the Agents thereof, and, promptly upon the Collateral
Agent’s request therefor shall deliver such Collateral to the Collateral Agent
or otherwise deal with such Collateral in accordance with the Collateral Agent’s
instructions.
SECTION 8.15.    Relation Among the Lenders.

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The Lenders are not partners or co-venturers, and no Lender shall be liable for
the acts or omissions of, or (except as otherwise set forth herein in case of
the Agents) authorized to act for, any other Lender.
SECTION 8.16.    Collateral and Guaranty Matters.
The Credit Parties irrevocably authorize the Agents, at their option and in
their discretion,
(a)    to release any Lien on any property granted to or held by the Collateral
Agent under any Loan Document (i) upon termination of the Commitments and (A)
payment in full of all Obligations and (B)(x) the expiration or termination of
all Letters of Credit, or (y) the deposit of cash collateral with the
Administrative Agent in an amount equal to 103% of the Letter of Credit
Outstandings, (ii) that is sold or to be sold as part of or in connection with
any sale permitted hereunder or under any other Loan Document, or (iii) if
approved, authorized or ratified in writing by the applicable Lenders in
accordance with Section 9.02;
(b)    to subordinate any Lien on any property granted to or held by the
Collateral Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 6.02(d); and
(c)    to release any Facility Guarantor that is a Subsidiary from its
obligations under the Facility Guaranty if such Person ceases to be a Subsidiary
as a result of a transaction permitted hereunder.
Upon request by any Agent at any time, the applicable Lenders will confirm in
writing such Agent’s authority to release or subordinate its interest in
particular types or items of property, or to release any Facility Guarantor from
its obligations under the Facility Guaranty pursuant to this Section 8.16. In
each case as specified in this Section 8.16, the Agents will, at the Borrower’s
expense, execute and deliver to the applicable Loan Party such documents as such
party may reasonably request to evidence the release of such item of Collateral
from the assignment and security interest granted under the Security Documents
or to subordinate its interest in such item, or to release such Facility
Guarantor from its obligations under the Facility Guaranty, in each case in
accordance with the terms of the Loan Documents and this Section 8.16.
ARTICLE IX
Miscellaneous
SECTION 9.01.    Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:
(a)    if to any Loan Party, to it at 10201 Main Street, Houston Texas 77025,
Attention: Chief Financial Officer (Telecopy No. (713) 669-2709), with a copy to
the

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attention of the Chief Legal Officer of the Loan Party at the same mailing
address (Telecopy No. (832) 900-5777);
(b)    if to the Administrative Agent or the Collateral Agent, or the Swingline
Lender to Wells Fargo Bank, National Association, One Boston Place, Boston,
Massachusetts 02108, Attention Mr. Jason Searle (Telecopy No. (855) 766-9554),
with a copy to Riemer & Braunstein, LLP, Three Center Plaza, Boston,
Massachusetts 02108, Attention: David S. Berman, Esquire (Telecopy No. (617)
880-3456);
(c)    if to any other Lender, to it at its address (or telecopy number) set
forth on the signature pages hereto or on any Assignment and Acceptance for such
Lender.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02.    Waivers; Amendments. (a) No failure or delay by the Agents, the
Issuing Bank or any Lender in exercising any right or power hereunder or under
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agents, the Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the Agents, any
Lender or the Issuing Bank may have had notice or knowledge of such Default at
the time.
(b)    Neither this Agreement nor any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the Agents and
the Loan Parties that are parties thereto, in each case with the Consent of the
Required Lenders, provided that no such agreement shall (i) increase the
Commitment of any Lender without the Consent of such Lender or increase the
Total Commitments (except as provided in Section 2.02) without the consent of
each Lender affected thereby, (ii) reduce the principal amount of any Loan or
L/C Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the Consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or L/C Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of the Commitments or the Maturity Date, without
the Consent of each Lender affected thereby, (iv) change Sections 2.02, 2.21,
2.23, 2.24 or 7.04 without the Consent of each Lender,

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(v) change any of the provisions of this Section 9.02 or the definition of the
term “Required Lenders” or “Required Supermajority Lenders” or any other
provision of any Loan Document specifying the number or percentage of Lenders
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the Consent of each
Lender, (vi) except as set forth in Section 8.16, release any Loan Party from
its obligations under any Loan Document, or limit its liability in respect of
such Loan Document, without the Consent of each Lender, (vii) except for sales
described in Section 6.05 or as permitted in Section 8.16 or the Security
Documents, release any material portion of the Collateral from the Liens of the
Security Documents, without the Consent of each Lender, (viii) change the
definition of the term “Borrowing Base” or any component definition thereof if
as a result thereof the amounts available to be borrowed by the Borrower would
be increased, without the Consent of each Lender, provided that the foregoing
shall not limit the discretion of the Administrative Agent pursuant to clause
(j) of the definition of Eligible Inventory, or to change, establish or
eliminate any Reserves, (ix) increase the Permitted Overadvance, without the
Consent of each Lender, (x) subordinate the Obligations hereunder, or the Liens
granted hereunder or under the other Loan Documents, to any other Indebtedness
or Lien, as the case may be without the prior Consent of each Lender, and
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Agents or the Issuing Bank or Swingline Lender
without the prior written consent of the Agents or the Issuing Bank or Swingline
Lender, as the case may be.
(c)    Notwithstanding anything to the contrary contained in this Section 9.02,
in the event that the Borrower requests that this Agreement or any other Loan
Document be modified, amended or waived in a manner which would require the
Consent of the Lenders pursuant to Sections 9.02(b) and such amendment is
approved by the Required Lenders, but not by the percentage of the Lenders set
forth in said Sections 9.02(b), the Borrower, and the Required Lenders shall be
permitted to amend this Agreement without the Consent of the Lender or Lenders
which did not agree to the modification or amendment requested by the Borrower
(such Lender or Lenders, collectively the “Minority Lenders”) to provide for (w)
the termination of the Commitment of each of the Minority Lenders, (x) the
addition to this Agreement of one or more Eligible Assignees, or an increase in
the Commitment of one or more of the Required Lenders, so that the aggregate
Commitments after giving effect to such amendment shall be in the same amount as
the aggregate Commitments immediately before giving effect to such amendment,
(y) if any Loans are outstanding at the time of such amendment, the making of
such additional Loans by such new or increasing Lender or Lenders, as the case
may be, as may be necessary to repay in full the outstanding Loans (including
principal, interest, fees, and all other Obligations) owing to the Minority
Lenders immediately before giving effect to such amendment, and (z) such other
modifications to this Agreement or the Loan Documents as may be appropriate and
incidental to the foregoing.
(d)    No notice to or demand on any Loan Party shall entitle any Loan Party to
any other or further notice or demand in the same, similar or other
circumstances. Each holder of a Note shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not a
Note shall have been marked to indicate such amendment, modification, waiver or
consent and any consent by a Lender, or any holder of a Note, shall bind any
Person subsequently acquiring a Note, whether or not a Note is so marked. No
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this Agreement or any other Loan Document shall be effective against the
Borrower unless signed by the Borrower or other applicable Loan Party.
SECTION 9.03.    Expenses; Indemnity; Damage Waiver. Except as expressly set
forth in the Fee Letter, (a)  the Loan Parties shall jointly and severally pay
(i) all actual reasonable out-of-pocket expenses incurred by the Agents and
their Affiliates, including the actual reasonable fees, charges and
disbursements of counsel for the Agents, for Inventory appraisers, and for
commercial finance examinations, in connection with the syndication of the
credit facilities provided for herein, the preparation and administration of the
Loan Documents or any amendments, modifications or waivers of the provisions
thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all actual reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder, and (iii) all actual
reasonable out-of-pocket expenses incurred by the Agents, the Issuing Bank or
any Lender, including the reasonable fees, charges and disbursements of any
counsel and any outside consultants for the Agents, the Issuing Bank or any
Lender, for Inventory appraisals and for commercial finance examinations, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
actual reasonable out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Credit Extensions; provided
that the Lenders who are not the Agents or the Issuing Bank shall be entitled to
reimbursement for no more than one counsel representing all such Lenders (absent
a conflict of interest in which case the Lenders may engage and be reimbursed
for additional counsel).
(b)    The Loan Parties shall, jointly and severally, indemnify the Agents, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”), against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the reasonable fees, charges and disbursements of
any counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of any Loan Document or any other agreement or instrument contemplated
hereby, the performance by the parties to the Loan Documents of their respective
obligations thereunder or the consummation of the transactions contemplated by
the Loan Documents or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the 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), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property currently or formerly
owned or operated by any Loan Party or any of the Subsidiaries, or any
Environmental Liability related in any way to any Loan Party or any of the
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto,
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that (x) such losses, claims, damages, liabilities or related
expenses resulted from the gross negligence, willful misconduct or bad faith of
such Indemnitee (or of any officer, director, employee, advisor or agent of such
Indemnitee), (y) the Loan Parties were not given notice of the subject claim and
the opportunity

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to participate in the defense thereof, at their expense (except that each Loan
Party shall remain liable to the extent such failure to give notice does not
result in a loss to such Loan Party), or (z) if the same results from a
compromise or settlement agreement entered into without the consent of the
Borrower, which shall not be unreasonably withheld. In connection with any
indemnified claim hereunder, the Indemnitee shall be entitled to select its own
counsel.
(c)    To the extent that any Loan Party fails to pay any amount required to be
paid by it to the Agents or the Issuing Bank under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Agents or the Issuing Bank,
as the case may be, such Lender’s pro rata share (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Agents or the Issuing Bank. For purposes hereof, a
Lender’s “pro rata share” shall be determined based upon its share of the
Adjusted Total Commitments at the time.
(d)    To the extent permitted by Applicable Law, no Loan Party shall assert,
and each hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
transactions contemplated by the Loan Documents, any Loan or Letter of Credit or
the use of the proceeds thereof. The Loan Parties further agree that no
Indemnitee shall have any liability to the Loan Parties, any Person asserting
claims by or on behalf of any Loan Party or any other Person in connection with
this Agreement or the other Loan Documents except (i) for breach of the
Indemnitee’s obligations under this Agreement and the other Loan Documents, or
(ii) the Indemnitee’s gross negligence, willful misconduct or bad faith.
(e)    All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 9.04.    Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that no Loan Party
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any such attempted
assignment or transfer without such consent shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agents, the Issuing Bank and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b)    Any Lender may assign to one or more Eligible Assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans at the time owing to it), provided that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
or an Approved Fund, the Borrower (but only if no Event of Default then exists),
the Agents and the Issuing Bank must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld, conditioned, or
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(ii) except in the case of an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $10,000,000 unless the
Administrative Agent otherwise consents, (iii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender’s
rights and obligations, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500. Subject to acceptance and recording
thereof pursuant to paragraph (d) of this Section, from and after the effective
date specified in each Assignment and Acceptance the Eligible Assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Section 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c)    The Administrative Agent, acting for this purpose as an agent of the Loan
Parties, shall maintain at one of its offices in Boston, Massachusetts a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and L/C Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive and the Loan Parties, the Administrative Agent,
the Issuing Bank and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d)    Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, the processing and recordation fee
referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.
(e)    Any Lender may, without the consent of the Loan Parties, the Agents, and
the Issuing Bank, sell participations to one or more banks or other entities,
other than a Loan Party (a “Participant”) in all or a portion of such Lender’s
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it), provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender

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shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Loan Parties, the Agents, the Issuing Bank and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation in
the Commitments, the Loans and the Letters of Credit Outstandings shall provide
that such Lender shall retain the sole right to enforce the Loan Documents and
to approve any amendment, modification or waiver of any provision of the Loan
Documents, provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Loan
Parties agree that each Participant shall be entitled to the benefits of
Sections 2.25, 2.27 and 2.28 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.27(c) as though it were a Lender. Each Lender,
acting for this purpose as an agent of the Loan Parties, shall maintain at its
offices a record of each agreement or instrument effecting any participation and
a register for the recordation of the names and addresses of its Participants
and their rights with respect to principal amounts and other Obligations from
time to time (each a “Participation Register”). The entries in each
Participation Register shall be conclusive and the Loan Parties, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in a Participant Register as a Participant for all
purposes of this Agreement (including, for the avoidance of doubt, for purposes
of entitlement to benefits under Sections 2.25, 2.27, 2.28 or 9.08), and such
Participants shall be subject to Section 2.28(h) and Section 2.30. The
Participation Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(f)    A Participant shall not be entitled to receive any greater payment under
Section 2.25 or 2.28 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 Borrower’s 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 2.28 unless (i) the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 2.28(e) as though it were a Lender and (ii) such Participant is eligible
for exemption from the withholding Tax referred to therein, following compliance
with Section 2.28(e).
(g)    Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to any of the
twelve Federal Reserve Banks organized under Section 4 of the Federal Reserve
Act, 12 U.S.C. Section 341, and this Section shall not apply to any such pledge
or assignment of a security interest, provided that no such pledge or assignment
of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
SECTION 9.05.    Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments

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delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Agents, the Issuing Bank or any Lender may have had notice or knowledge
of any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.25, 2.28, 9.03, and 9.14 and Article VIII shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Letters of Credit and the Commitments or the termination
of this Agreement or any provision hereof. In connection with the termination of
this Agreement and the release and termination of the security interests in the
Collateral, the Agents may require such indemnities and collateral security as
they shall reasonably deem necessary or appropriate under the circumstances to
protect the Credit Parties against (x) loss on account of credits previously
applied to the Obligations that may subsequently be reversed or revoked, (y) any
obligations that may thereafter arise with respect to Bank Products or Cash
Management Services, and (z) any Obligations that may thereafter arise under
Section 9.03 hereof.
SECTION 9.06.    Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Agents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all contemporaneous or previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Agents and the Lenders and
when the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy, pdf or other electronic
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement.
SECTION 9.07.    Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08.    Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, after obtaining the prior written consent of the
Administrative Agent or the Required Lenders, to the fullest extent permitted by
Applicable Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other

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obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of the Loan Parties against any of and all the obligations of the
Loan Parties now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender may have.
SECTION 9.09.    Governing Law; Jurisdiction; Consent to Service of Process.
(a)    THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PRINCIPLES THEREOF, BUT INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
(b)    The Loan Parties agree that any suit for the enforcement of this
Agreement or any other Loan Document may be brought in any court of the State of
New York sitting in the Borough of Manhattan or any federal court sitting
therein as the Administrative Agent may elect in its sole discretion and consent
to the non-exclusive jurisdiction of such courts. The Loan Parties hereby waive
any objection which they may now or hereafter have to the venue of any such suit
or any such court or that such suit is brought in an inconvenient forum. The
Loan Parties agree that any action commenced by any Loan Party asserting any
claim or counterclaim arising under or in connection with this Agreement or any
other Loan Document shall be brought solely in a court of the State of New York
sitting in the Borough of Manhattan or any federal court sitting therein as the
Administrative Agent may elect in its sole discretion and consent to the
exclusive jurisdiction of such courts with respect to any such action.
(c)    Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
SECTION 9.10.    WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A JURY IN ANY TRIAL OF
ANY CASE OR CONTROVERSY IN WHICH ANY LOAN PARTY, ANY AGENT, ANY LENDER OR ANY
PARTICIPANT IS OR BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED
BY OR AGAINST ANY LOAN PARTY, ANY AGENT, AND/OR SUCH LENDER OR PARTICIPANT OR IN
WHICH THE BORROWER, THE AGENTS, OR SUCH LENDER OR PARTICIPANT, IS JOINED AS A
PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF OR IS IN RESPECT OF,
ANY RELATIONSHIP AMONGST OR BETWEEN ANY LOAN PARTY OR ANY OTHER PERSON AND THE
AGENTS, OR SUCH LENDER OR PARTICIPANT. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
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INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11.    Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12.    Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts that are treated as interest on such
Loan under Applicable Law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
Applicable Law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.13.    Additional Waivers.
(a)    The Obligations are the joint and several obligations of each Loan Party.
To the fullest extent permitted by Applicable Law, the obligations of each Loan
Party hereunder shall not be affected by (i) the failure of any Agent or any
other Credit Party to assert any claim or demand or to enforce or exercise any
right or remedy against any other Loan Party under the provisions of this
Agreement, any other Loan Document or otherwise, (ii) any rescission, waiver,
amendment or modification of, or any release from any of the terms or provisions
of, this Agreement, any other Loan Document, or any other agreement, including
with respect to any other Loan Party, or (iii) the failure to perfect any
security interest in, or the release of, any of the security held by or on
behalf of the Collateral Agent or any other Credit Party.
(b)    To the fullest extent permitted by Applicable Law, the obligations of
each Loan Party hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or set-off, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Loan Party hereunder shall not be discharged or impaired or
otherwise affected by any default, failure or delay, willful or otherwise, in
the performance of the Obligations, or by any other act or omission that may or
might in any manner or to any extent vary the risk of any Loan Party or that
would otherwise operate as a discharge of any Loan Party as a matter of law or
equity (other than the indefeasible payment in full in cash of all the
Obligations).

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(c)    To the fullest extent permitted by Applicable Law, each Loan Party waives
any defense based on or arising out of any defense of any other Loan Party or
the unenforceability of the Obligations or any part thereof from any cause, or
the cessation from any cause of the liability of any other Loan Party, other
than the indefeasible payment in full in cash of all the Obligations. The
Collateral Agent and the other Credit Parties may, at their election, foreclose
on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any other Loan Party, or exercise any other right or remedy
available to them against any other Loan Party, without affecting or impairing
in any way the liability of any Loan Party hereunder except to the extent that
all the Obligations have been indefeasibly paid in full in cash. Pursuant to
Applicable Law, each Loan Party waives any defense arising out of any such
election even though such election operates, pursuant to Applicable Law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such Loan Party against any other Loan Party, as the case may be,
or any security.
(d)    Upon payment by any Loan Party of any Obligations, all rights of such
Loan Party against any other Loan Party arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations. In addition, any
indebtedness of any Loan Party now or hereafter held by any other Loan Party is
hereby subordinated in right of payment to the prior payment in full of the
Obligations. Notwithstanding the foregoing, prior to the occurrence of an Event
of Default, any Loan Party may make payments to any other Loan Party on account
of any such indebtedness. After the occurrence and during the continuance of an
Event of Default, none of the Loan Parties will demand, sue for, or otherwise
attempt to collect any such indebtedness. If any amount shall erroneously be
paid to any Loan Party on account of (i) such subrogation, contribution,
reimbursement, indemnity or similar right or (ii) any such indebtedness of any
Loan Party, such amount shall be held in trust for the benefit of the Credit
Parties and shall forthwith be paid to the Administrative Agent to be credited
against the payment of the Obligations, whether matured or unmatured, in
accordance with the terms of this Agreement and the other Loan Documents. To the
extent that any Loan Party shall, under this Agreement as a joint and several
obligor, repay any of the Obligations constituting Revolving Loans made to
another Loan Party hereunder (an “Accommodation Payment”), then the Loan Party
making such Accommodation Payment shall be entitled to contribution and
indemnification from, and be reimbursed by, each of the other Loan Parties in an
amount equal to a fraction of such Accommodation Payment, the numerator of which
fraction is such other Loan Party’s Allocable Amount and the denominator of
which is the sum of the Allocable Amounts of all of the Loan Parties. As of any
date of determination, the “Allocable Amount” of each Loan Party shall be equal
to the maximum amount of liability for Accommodation Payments which could be
asserted against such Loan Party hereunder without (a) rendering such Loan Party
“insolvent” within the meaning of Section 101 (31) of the Bankruptcy Code,
Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”) or Section 2 of the
Uniform Fraudulent Conveyance Act (“UFCA”), (b) leaving such Loan Party with
unreasonably small capital or assets, within the meaning of Section 548 of the
Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving
such Loan Party unable to pay its debts as they become due within the meaning of
Section 548 of the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the
UFCA.

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SECTION 9.14.    Confidentiality.
Each of the Lenders agrees that it will use its best efforts not to disclose
without the prior consent of the Borrower (other than to its employees,
auditors, counsel or other professional advisors, to affiliates or to another
Lender if the Lender or such Lender’s holding or parent company in its sole
discretion determines that any such party should have access to such
Confidential Information) any Confidential Information with respect to the
Borrower or any other Loan Party which is furnished pursuant to this Agreement,
provided that any Lender may disclose any such Confidential Information (a) as
may be required or appropriate in any report, statement or testimony submitted
to any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (b) as may be required or appropriate
in response to any summons or subpoena or in connection with any litigation,
provided that if the Lender is able to do so prior to complying with the summons
or subpoena, such Lender shall provide the Borrower with prompt notice of such
requested disclosure so that the Borrower may seek a protective order or other
appropriate remedy (nothing contained herein however shall result in such
Lender’s non-compliance with Applicable Law), (c) in order to comply with any
law, order, regulation or ruling applicable to such Lender, (d) in connection
with the enforcement of remedies under this Agreement and the other Loan
Documents, and (e) to any prospective transferee in connection with any
contemplated transfer of any of the Loans or Notes or any interest therein by
such Lender provided that such prospective transferee agrees to be bound by the
provisions of this Section. The Loan Parties hereby agree that the failure of a
Lender to comply with the provisions of this Section 9.14 shall not relieve the
Loan Parties of any of its obligations to such Lender under this Agreement and
the other Loan Documents. Notwithstanding anything to the contrary herein
contained, and except to the extent reasonably necessary to comply with
applicable securities laws, each party (and their respective employees,
representatives and other agents) may disclose to any Person the tax treatment
and tax structure of the transactions contemplated by this Agreement and all
materials (including opinions or other tax analyses) that are provided to such
part relating to such tax treatment and tax structure. Unless sooner terminated
by agreement of the parties, the agreements contained in this Section 9.14 shall
terminate, as to any Lender, one (1) year after the date that such Lender holds
no Obligations, provided that any such termination shall not relieve the parties
of their obligations under this Section 9.14 with respect to Confidential
Information disclosed prior to the termination hereof. Notwithstanding the
foregoing, each Loan Party consents to the publication by Administrative Agent,
any Lender or their respective representatives of advertising material,
including any “tomb stone”, press release or comparable advertising, on its
website or in other marketing materials of Administrative Agent any Lender or
their respective representatives relating to the financing transactions
contemplated by this Agreement using any Loan Party’s name, product photographs,
logo, trademark or other insignia; provided, however, that the parties hereto
acknowledge and agree that any such advertising or marketing materials shall
include only publicly available information and any Loan Party’s trademarks and
logos may be used only if appearing as provided by such Loan Party from time to
time. The Administrative Agent shall provide a draft reasonably in advance of
any press release to the Borrower for review and comment prior to the
publication thereof. The Administrative Agent reserves the right to provide to
industry trade organizations and loan syndication and pricing reporting services
information necessary and customary for inclusion in league table measurements.

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SECTION 9.15.    Patriot Act. Each Lender hereby notifies the Loan Parties that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies the Loan Parties, which
information includes the name and address of each Loan Party and other
information that will allow such Lender to identify such Loan Party in
accordance with the Act. Each Loan Party is in compliance, in all material
respects, with the Act. No part of the proceeds of the Loans will be used,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.
SECTION 9.16.    Foreign Asset Control Regulations.
Neither of the advance of the Loans nor the use of the proceeds of any thereof
will violate the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended)
(the “Trading With the Enemy Act”) or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) (the “Foreign Assets Control Regulations”) or any
enabling legislation or executive order relating thereto (which for the
avoidance of doubt shall include, but shall not be limited to (a) Executive
Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)) (the “Executive Order”) and (b) the Act. Furthermore, none of the
Loan Parties or their Affiliates (a) is or will become a “blocked person” as
described in the Executive Order, the Trading With the Enemy Act or the Foreign
Assets Control Regulations or (b) engages or will engage in any dealings or
transactions, or be otherwise associated, with any such “blocked person” or in
any manner violative of any such order.
SECTION 9.17.    No Advisory or Fiduciary Responsibility.
In connection with all aspects of each transaction contemplated hereby, the Loan
Parties each acknowledge and agree that: (i) the credit facility provided for
hereunder and any related arranging or other services in connection therewith
(including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document) are an arm’s-length commercial transaction
between the Loan Parties, on the one hand, and the Credit Parties, on the other
hand, and each of the Loan Parties is capable of evaluating and understanding
and understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with the
process leading to such transaction, each Credit Party is and has been acting
solely as a principal and is not the financial advisor, agent or fiduciary, for
the Loan Parties or any of their respective Affiliates, stockholders, creditors
or employees or any other Person; (iii) none of the Credit Parties has assumed
or will assume an advisory, agency or fiduciary responsibility in favor of the
Loan Parties with respect to any of the transactions contemplated hereby or the
process leading thereto, including with respect to any amendment, waiver or
other modification hereof or of any other Loan Document (irrespective of whether
any of the Credit Parties has advised or is currently advising any Loan Party or
any of its Affiliates on other matters) and none of the Credit Parties has any
obligation to any Loan Party

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or any of its Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan
Documents; (iv) the Credit Parties and their respective Affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of the Loan Parties and their respective Affiliates, and none of the
Credit Parties has any obligation to disclose any of such interests by virtue of
any advisory, agency or fiduciary relationship; and (v) the Credit Parties have
not provided and will not provide any legal, accounting, regulatory or tax
advice with respect to any of the transactions contemplated hereby (including
any amendment, waiver or other modification hereof or of any other Loan
Document) and each of the Loan Parties has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate. Each of the
Loan Parties hereby waives and releases, to the fullest extent permitted by law,
any claims that it may have against each of the Credit Parties with respect to
any breach or alleged breach of agency or fiduciary duty.
SECTION 9.18.    Existing Credit Agreement Amended and Restated.
(a)    On the Effective Date, (a) this Agreement shall amend and restate the
Existing Credit Agreement in its entirety and (b) the rights and obligations of
the parties under the Existing Credit Agreement shall be subsumed within, and be
governed by, this Agreement; provided, however, that the Borrower hereby agrees
that (i) the Letter of Credit Outstandings under, and as defined in, the
Existing Credit Agreement on the Effective Date shall be Letter of Credit
Outstandings hereunder, and (ii) all Obligations of the Loan Parties under, and
as defined in, the Existing Credit Agreement (as amended and restated by this
Agreement) shall remain outstanding, shall constitute continuing Obligations
secured by the Collateral, and this Agreement shall not be deemed to evidence or
result in a novation or repayment and reborrowing of such obligations and other
liabilities. Each Loan Party party to the Facility Guaranty and/or the Security
Documents acknowledges and agrees that (i) the Obligations shall include the
Obligations of the Borrower under this Agreement after giving effect to the
Effective Date, and (ii) the Liens as granted under the applicable Security
Documents securing payment of such Obligations are in all respects continuing
and in full force and effect pursuant to the terms therein and are reaffirmed
hereby. Each Loan Party is absolutely and unconditionally indebted under the
Existing Credit Agreement and the other Loan Documents (in each case as amended
and restated by this Agreement) and that all Obligations (as defined therein and
as amended and restated in this Agreement) constitute Obligations hereunder
pursuant to the terms herein, and none of them have any offsets, defenses, or
counterclaims under the Existing Credit Agreement or the other Loan Documents
immediately prior to the Effective Date, and, to the extent that any such
offsets, defenses or counterclaims exist or may have existed immediately prior
to the Effective Date, the each Loan Party hereby WAIVES and RELEASES the same.
The Agents represent and warrant to each Loan Party that the Agents have no
knowledge of any Default or Event of Default under the Existing Credit
Agreement. Each Lender represents and warrants to each Loan Party that such
Lender has, by either an assignment by such Lender to one or more other Lenders
or by the receipt by such Lender of an assignment from one or more other
Lenders, the Commitment attributable to such Lender as set forth on Schedule
1.1.
(b)    The parties hereto acknowledge and agree that on and after the Effective
Date, (i) all references to the Existing Credit Agreement or the Credit
Agreement or any similar term in the Loan Documents (other than this Agreement)
shall be deemed to refer to the Existing

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Credit Agreement, as amended and restated hereby, (ii) all references to any
section (or subsection) of the Existing Credit Agreement or the Credit Agreement
or any similar term in any Loan Document (but not herein) shall be amended to
become, mutatis mutandis, references to the corresponding provisions of this
Agreement; (iii) all references to Bank of America as the Administrative Agent
and or Collateral Agent (or in its capacity as the Administrative Agent and/or
Collateral Agent or other similar term) in the Loan Documents shall be deemed to
refer to Wells Fargo in its capacity as the Administrative Agent and/or
Collateral Agent and its successor and permitted assigns.
(c)    The parties hereto acknowledge and agree that this Agreement is an
amendment and restatement limited as written and, except as expressly provided
herein or in any other Loan Document, is not a consent to any other amendment,
restatement or waiver or other modification, whether or not similar and, except
as expressly provided herein or in any other Loan Document, all terms and
conditions of the Loan Documents remain in full force and effect unless
otherwise specifically amended hereby or by any other Loan Document.
SECTION 9.19.    Keepwell.
Each Qualified ECP Guarantor hereby jointly and severally absolutely,
unconditionally and irrevocably undertakes to provide such funds or other
support as may be needed from time to time by each other Loan Party to honor all
of its obligations under the Facility Guaranty in respect of Swap Obligations
(provided, however, that each Qualified ECP Guarantor shall only be liable under
this Section 9.19 for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 9.19 , or
otherwise under the Facility Guaranty, voidable under applicable Law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount).
The obligations of each Qualified ECP Guarantor under this Section shall remain
in full force and effect until payment in full of the Obligations. Each
Qualified ECP Guarantor intends that this Section 9.19 constitutes, and this
Section 9.19 shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Loan Party for all purposes of Section
1a(18)(A)(v)(II) of the Commodity Exchange Act.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as a sealed instrument as of
the day and year first above written.
SPECIALTY RETAILERS, INC.
as Borrower

 
By:
 
 
Name:
Oded Shein
 
Title:
Executive Vice President, Chief
 
 
Financial Officer and Treasurer
 
 
 
 
STAGE STORES, INC., as Parent and as a Facility Guarantor
  
 
 
 
By:
 
 
Name:
Oded Shein
 
Title:
Executive Vice President, Chief
 
 
Financial Officer and Treasurer

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WELLS FARGO BANK, NATIONAL ASSOCIATION, N.A.,
as Administrative Agent, as Collateral Agent, as Swingline Lender, as Issuing
Bank and as Lender
By:
 
Name:
 
Title:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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BANK OF AMERICA, N.A.,
as Syndication Agent and Lender
By:
 
Name:
 
Title:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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JPMORGAN CHASE BANK, N.A.,
as Co-Documentation Agent and Lender
By:
 
Name:
Andrew Ray
Title:
Vice President
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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REGIONS BANK, as Co-Documentation Agent and Lender
By:
 
Name:
Connie Ruan
Title:
Attorney in Fact
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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Schedule 1.1
Lenders and Commitments

Lender
Commitment
Commitment Percentage
 
Ordinary
Commitment
Seasonal
Commitment
Increase Period
Commitment
Ordinary
Commitment
Percentage
Seasonal
Commitment
Increase Period
Commitment
Percentage
Wells Fargo Bank,
National
Association
$100,000,000
$150,000,000
33.33%
x/y
JPMorgan Chase
Bank, N.A.
$75,000,000
$75,000,000
25%
x/y
Regions Bank
$75,000,000
$75,000,000
25%
x/y
Bank of America,
N.A,
$50,000,000
$50,000,000
16.67%
x/y
 
$300,000,000
$350,000,000
100%
100%

x= as to each Lender, other than the Seasonal Increase Commitment Lender, such
Lender’s Ordinary Commitment, and as to the Seasonal Increase Commitment Lender,
the sum of such Lender’s Ordinary Commitment plus the Seasonal Commitment
Increase Utilized Amount.
y= Adjusted Total Commitments

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