Exhibit 10.1

 

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FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

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FLEET RETAIL GROUP, INC.

AS ADMINISTRATIVE AGENT AND

COLLATERAL AGENT

 

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REVOLVING CREDIT LENDERS

NAMED HEREIN

 

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FLEET RETAIL GROUP, INC.

THE TRANCHE B LENDER

 

WELLS FARGO FOOTHILL, INC.

AS SYNDICATION AGENT

 

NATIONAL CITY BUSINESS CREDIT, INC. and

HELLER FINANCIAL, INC.

AS CO-DOCUMENTATION AGENTS

 

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CASUAL MALE RETAIL GROUP, INC.

 

THE BORROWERS’ REPRESENTATIVE

FOR:

 

CASUAL MALE RETAIL GROUP, INC.

DESIGNS APPAREL, INC.

 

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October 29, 2004

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ARTICLE 1 - DEFINITIONS:    2 ARTICLE 2 - THE REVOLVING CREDIT:    39     2.1.  
Establishment of Revolving Credit.    39     2.2.   Advances in Excess of
Borrowing Base (OverLoans).    40     2.3.   Initial Reserves. Changes to
Reserves.    40     2.4.   Risks of Value of Collateral    40     2.5.  
Commitment to Make Revolving Credit Loans and Support Letters of Credit    41  
  2.6.   Revolving Credit Loan Requests.    41     2.7.   Making of Revolving
Credit Loans.    43     2.8.   SwingLine Loans.    43     2.9.   The Loan
Account.    44     2.10.   The Revolving Credit Notes    45     2.11.   Payment
of The Loan Account.    45     2.12.   Interest on Revolving Credit Loans.    46
    2.13.   Revolving Credit Commitment Fee    47     2.14.   Administrative
Agent’s Fee    47     2.15.   Unused Line Fee    47     2.16.   Revolving Credit
Early Termination Fee.    47     2.17.   Agents’ and Lenders’ Discretion.    48
    2.18.   Procedures For Issuance of L/C’s.    49     2.19.   Fees For L/C’s.
   50     2.20.   Concerning L/Cs.    51     2.21.   Changed Circumstances.   
53     2.22.   Designation of Borrowers’ Representative as Borrowers’ Agent.   
53     2.23.   Lenders’ Commitments.    54     2.24.   Increase of Commitments
   55     2.25.   References to Original Agreement    57 ARTICLE 3 - The Tranche
B Loan:    57     3.1.   The Tranche B Loan.    57     3.2.   The Tranche B Note
   57     3.3.   Payment of Principal of the Tranche B Loan.    58     3.4.  
Interest On The Tranche B Loan.    58     3.5.   Payments On Account of Tranche
B Loan    59 ARTICLE 4 - CONDITIONS PRECEDENT:    59     4.1.   Due Diligence.
   59     4.2.   Opinion    60     4.3.   Additional Documents    60     4.4.  
Officers’ Certificates    60     4.5.   Rochester Acquisition    60     4.6.  
Representations and Warranties    60     4.7.   Minimum Day One Excess
Availability    61     4.8.   All Fees and Expenses Paid    61

 

(ii)

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    4.9.   Collateral, Etc.    61     4.10.   No Default.    61     4.11.  
Financial Statements; Legal Due Diligence; No Adverse Change.    61     4.12.  
No Litigation    62     4.13.   Benefit of Conditions Precedent    62 ARTICLE 5
- GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES:    62     5.1.   Payment
and Performance of Liabilities    62     5.2.   Due Organization. Authorization.
No Conflicts.    63     5.3.   Trade Names.    64     5.4.   Infrastructure.   
64     5.5.   Locations.    64     5.6.   Stores.    65     5.7.   Title to
Assets.    65     5.8.   Indebtedness.    66     5.9.   Insurance.    67    
5.10.   Licenses    68     5.11.   Leases    68     5.12.   Requirements of Law
   68     5.13.   Labor Relations.    68     5.14.   Maintain Properties    69  
  5.15.   Taxes.    70     5.16.   No Margin Stock    70     5.17.   ERISA.   
70     5.18.   Hazardous Materials.    71     5.19.   Litigation    71     5.20.
  Dividends. Investments. Entity Action    71     5.21.   Permitted Acquisitions
   72     5.22.   Loans    73     5.23.   Restrictions on Sale of Collateral;
License Agreements    74     5.24.   Protection of Assets    74     5.25.   Line
of Business.    74     5.26.   Affiliate Transactions    75     5.27.   Further
Assurances.    75     5.28.   Adequacy of Disclosure.    76     5.29.   No
Restrictions on Liabilities    77     5.30.   Other Covenants    77     5.31.  
Inventory Purchasing    77 ARTICLE 6 - FINANCIAL REPORTING AND PERFORMANCE
COVENANTS:    77     6.1.   Maintain Records    77     6.2.   Access to Records.
   78     6.3.   Prompt Notice to Administrative Agent.    79     6.4.  
Borrowing Base Certificate    80     6.5.   Weekly and Monthly Reports    80    
6.6.   Quarterly Reports    80

 

(iii)

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    6.7.   Annual Reports.    80     6.8.   Officers’ Certificates    81    
6.9.   Inventories, Appraisals, and Audits.    82     6.10.   Additional
Financial Information.    83     6.11.   Financial Performance Covenants.    83
ARTICLE 7 - Use Of Collateral:    86     7.1.   Use of Inventory Collateral.   
86     7.2.   Inventory Quality    86     7.3.   Adjustments and Allowances   
86     7.4.   Validity of Accounts.    86     7.5.   Notification to Account
Debtors    87 ARTICLE 8 - Cash Management. Payment of Liabilities:    87    
8.1.   Depository Accounts.    87     8.2.   Credit Card Receipts.    88    
8.3.   The Concentration, Blocked, and Operating Accounts .    88     8.4.  
Proceeds and Collections .    88     8.5.   Payment of Liabilities.    89    
8.6.   The Operating Account    90 ARTICLE 9 - GRANT OF SECURITY INTEREST:    91
    9.1.   Grant of Security Interest    91     9.2.   Extent and Duration of
Security Interest; Notice.    92 ARTICLE 10 - Collateral Agent As
Attorney-in-fact:    92     10.1.   Appointment as Attorney-In-Fact    92    
10.2.   No Obligation to Act    93 ARTICLE 11 - Events of Default:    94    
11.1.   Failure to Pay the Revolving Credit or the Tranche B Loan    94    
11.2.   Failure To Make Other Payments    94     11.3.   Failure to Perform
Covenant or Liability (No Grace Period)    94     11.4.   Financial Reporting
Requirements    94     11.5.   Failure to Perform Covenant or Liability (Grace
Period)    95     11.6.   Tranche B Loan Action Event Acceleration.    95    
11.7.   Misrepresentation    95     11.8.   Acceleration of Other Debt; Breach
of Lease    95     11.9.   Default Under Other Agreements    96     11.10.  
Uninsured Casualty Loss    96     11.11.   Attachment; Judgment; Restraint of
Business.    96     11.12.   Canton Mortgage Default    96     11.13.  
Indictment - Forfeiture    96     11.14.   Challenge to Loan Documents.    96  
  11.15.   Change in Control    97     11.16.   Business Failure    97

 

(iv)

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    11.17.   Bankruptcy    97     11.18.   Termination of Business    97    
11.19.   Payment of Other Indebtedness    97     11.20.   Default by Guarantor;
Termination of Guaranty    98     11.21.   Material Adverse Change.    98
ARTICLE 12 - RIGHTS AND REMEDIES UPON DEFAULT:    98     12.1.   Acceleration.
   98     12.2.   Rights of Enforcement.    98     12.3.   Sale of Collateral.
   99     12.4.   Occupation of Business Location    100     12.5.   Grant of
Nonexclusive License    100     12.6.   Assembly of Collateral    100     12.7.
  Rights and Remedies    100 ARTICLE 13 - Revolving Credit Fundings and
Distributions:    101     13.1.   Revolving Credit Funding Procedures.    101  
  13.2.   SwingLine Loans.    101     13.3.   Administrative Agent’s Covering of
Fundings:    102     13.4.   Ordinary Course Distributions: Revolving Credit   
104     13.5.   Ordinary Course Distributions: The Tranche B Loan    105 ARTICLE
14 - Acceleration and Liquidation:    106     14.1.   Acceleration Notices.   
106     14.2.   Mandatory Acceleration Right of The Tranche B Lender.    106    
14.3.   Acceleration    107     14.4.   Initiation of Liquidation.    107    
14.5.   Actions At and Following Initiation of Liquidation.    107     14.6.  
Collateral Agent’s Conduct of Liquidation.    108     14.7.   Distribution of
Liquidation Proceeds.    108     14.8.   Relative Priorities To Proceeds of
Liquidation.    109 ARTICLE 15 - THE AGENTS:    110     15.1.   Appointment of
The Agents.    110     15.2.   Responsibilities of Agents.    110     15.3.  
Concerning Distributions By the Agents.    112     15.4.   Dispute Resolution.
   112     15.5.   Distributions of Notices and of Documents.    112     15.6.  
Confidential Information.    113     15.7.   Reliance by Agents    113     15.8.
  Non-Reliance on Agents and Other Lenders.    114     15.9.   Indemnification
   114     15.10.   Resignation of Agent.    115 ARTICLE 16 - Action By Agents -
Consents - Amendments - Waivers:    115     16.1.   Administration of Credit
Facilities.    115

 

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    16.2.   Actions Requiring or On Direction of Majority Lenders    116    
16.3.   Actions Requiring or On Direction of SuperMajority Revolving Credit
Lenders    116     16.4.   Action Requiring Certain Consent    117     16.5.  
Actions Requiring or Directed By Unanimous Consent    118     16.6.   Actions
Requiring SwingLine Lender Consent    120     16.7.   Actions Requiring Tranche
B Lender Consent    120     16.8.   Actions Requiring Agents’ Consent.    120  
  16.9.   Miscellaneous Actions.    120     16.10.   Actions Requiring
Borrowers’ Representative’s Consent.    121     16.11.   NonConsenting Revolving
Credit Lender.    121     16.12.   The BuyOut.    122 ARTICLE 17 - Assignments
By Lenders:    123     17.1.   Assignments and Assumptions.    123     17.2.  
Assignment Procedures    124     17.3.   Effect of Assignment.    124 ARTICLE 18
- Notices:    125     18.1.   Notice Addresses    125     18.2.   Notice Given.
   126     18.3.   Wire Instructions    127 ARTICLE 19 - Term:    127     19.1.
  Termination of Revolving Credit    127     19.2.   Actions On Termination.   
127 ARTICLE 20 - General:    128     20.1.   Protection of Collateral    128    
20.2.   Publicity    128     20.3.   Successors and Assigns    128     20.4.  
Severability    128     20.5.   Amendments. Course of Dealing.    129     20.6.
  Power of Attorney    129     20.7.   Application of Proceeds    129     20.8.
  Increased Costs    130     20.9.   Costs and Expenses Of Agents and Lenders.
   130     20.10.   Copies and Facsimiles    131     20.11.   Massachusetts Law
   131     20.12.   Indemnification    131     20.13.   Rules of Construction   
132     20.14.   Intent.    133     20.15.   Participations    134     20.16.  
Right of Set-Off    134     20.17.   Pledges To Federal Reserve Banks.    134  
  20.18.   Maximum Interest Rate    134     20.19.   Waivers.    134

 

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EXHIBITS

 

1.0(a)   :    Casual Male Companies 1.0(b)   :    Designs Inc. Companies 1.0(b)
  :    Guarantors 1.1   :    Permitted Encumbrances 2.8   :    SwingLine Note
2.10   :    Revolving Credit Note 2.23   :    Revolving Credit Lenders’
Commitments 3.2   :    Tranche B Note 4.10(b)   :    Existing Defaults under
Material Contracts 5.2   :    Loan Parties’ Information 5.3   :    Trade Names
5.4(b)   :    Exceptions to Property Rights 5.5   :    Locations, Leases, and
Landlords 5.7(b)   :    Consigned Inventory 5.7(c)(ii)   :    Equipment Usage
Agreement 5.9   :    Insurance Policies 5.11   :    Capital Leases 5.13(a)   :
   Labor Relations 5.19   :    Litigation 5.28(b)   :    Contingent Obligations
6.4   :    Borrowing Base Certificate 6.5   :    Weekly and Monthly Financial
Reporting Requirements 8.1   :    DDA’s 8.2   :    Credit Card Arrangements 17.1
  :    Assignment / Assumption

 

(vii)

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FOURTH AMENDED AND RESTATED     LOAN AND SECURITY AGREEMENT   Fleet Retail Group
Inc.     Administrative and Collateral Agent

 

October 29, 2004

 

THIS FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the “Agreement”)
is made amongst

 

Fleet Retail Group, Inc. (formerly known as Fleet Retail Finance Inc.) (in such
capacity, the “Administrative Agent”), a Delaware corporation with offices at 40
Broad Street, Boston, Massachusetts 02109, as Administrative Agent for the
benefit of (i) the Collateral Agent, (ii) the “Revolving Credit Lenders” who
are, at present, those financial institutions identified on the signature pages
of this Agreement and any Person who becomes a “Revolving Credit Lender” in
accordance with the provisions of this Agreement, (iii) the Tranche B Lender;
and (iv) other Secured Parties.

 

and

 

Fleet Retail Group, Inc. (formerly known as Fleet Retail Finance Inc.) (in such
capacity, the “Collateral Agent”), a Delaware corporation with offices at 40
Broad Street, Boston, Massachusetts 02109, as Collateral Agent for the benefit
of (i) the Administrative Agent, (ii) the Revolving Credit Lenders, (iii) the
Tranche B Lender, and (iv) other Secured Parties.

 

and

 

The Revolving Credit Lenders;

 

and

 

Fleet Retail Group, Inc. (in such capacity, with any successor or assign, the
“Tranche B Lender”), a Delaware corporation with offices at 40 Broad Street,
Boston, Massachusetts 02109,

 

and

 

Casual Male Retail Group, Inc. ( in such capacity, the “Borrowers’
Representative”), a Delaware corporation with its principal executive offices at
555 Turnpike Street, Canton, Massachusetts 02021, as agent for Casual Male
Retail Group, Inc., and Designs Apparel, Inc. (individually, a “Borrower” and
collectively, the “Borrowers”).

 

WHEREAS, on May 14, 2002, Designs, Inc ( now known as Casual Male Retail Group,
Inc.), the Borrowers, Administrative Agent, Collateral Agent, Revolving Credit
Lenders, and

 

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Back Bay Capital Funding LLC (“Back Bay”) entered into a Third Amended and
Restated Loan and Security Agreement (as amended and in effect, the “Original
Agreement”), pursuant to which, among other things, the Revolving Credit Lenders
agreed to make Revolving Loans to the Borrowers and Back Bay agreed to make a
Tranche B Loan to the Borrowers;

 

WHEREAS, the Tranche B Loan to Back Bay has been paid in full;

 

WHEREAS, Casual Male Retail Group, Inc., through various of its Subsidiaries
including its newly formed subsidiary, Casual Male RBT, LLC, contemporaneously
herewith is acquiring certain of the assets of Rochester Big and Tall Clothing,
Inc.;

 

WHEREAS, the Borrowers have requested that the Agent and Revolving Credit
Lenders amend the Original Agreement in certain respects in order to, among
other thing, add a new Tranche B Lender, add Casual Male RBT, LLC as a
Guarantor, and otherwise amend the Original Agreement;

 

WHEREAS, the Agent and Revolving Credit Lenders are willing to amend the
Original Agreement on the terms set forth herein; and

 

WHEREAS, the parties hereto desire to amend and restate the Original Agreement
in its entirety.

 

NOW THEREFORE, the Agent, Revolving Credit Lenders, and Borrowers hereby agree
that the Original Agreement shall be amended and restated in its entirety as
follows:

 

WITNESSETH:

 

ARTICLE 1 - DEFINITIONS:

 

As used herein, the following terms have the following meanings or are defined
in the section of this Agreement so indicated:

 

“Acceleration”: The making of demand or declaration that any indebtedness, not
otherwise due and payable, is due and payable. Derivations of the word
“Acceleration” (such as “Accelerate”) are used with like meaning in this
Agreement.

 

“Acceleration Notice”: Written notice as follows:

 

(a) From the Administrative Agent to the Collateral Agent and the Revolving
Credit Lenders, as provided in Section 14.1(a).

 

(b) From the SuperMajority Revolving Credit Lenders to the Administrative Agent,
as provided in Section 14.1(b).

 

(c) From the Tranche B Lender to the Administrative Agent, as provided in
Section 14.2(c).

 

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“Account Debtor”: Has the meaning given that term in the UCC.

 

“Accounts” and “Accounts Receivable” include, without limitation, “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; energy provided or to
be provided; for the use or hire of a vessel; arising out of the use of a credit
or charge card or information contained on or used with that card; winnings in a
lottery or other game of chance; and also all Inventory which gave rise thereto,
and all rights associated with such Inventory, including the right of stoppage
in transit; all reclaimed, returned, rejected or repossessed Inventory (if any)
the sale of which gave rise to any Account.

 

“ACH”: Automated clearing house.

 

“Acquisition”: The purchase or other acquisition, by a Loan Party (no matter how
structured in one transaction or in a series of transactions), of: (a) equity
interests in any other Person which would constitute or which results in a
Change in Control of such other Person (as if such Person were Casual Male, as
used in the definition of “Change of Control”), or (b) such of the assets of any
Person as would permit a Loan Party to operate one or more retail locations of
such Person or to conduct other business operations with such assets (provided,
however, none of the following shall constitute an “Acquisition”: purchases of
inventory in the ordinary course of a Loan Party’s business; purchases, leases
or other acquisitions of Equipment in the ordinary course of a Loan Party’s
business; and Capital Expenditures permitted hereunder).

 

“Additional Commitment Lender”: Defined in Section 2.24

 

“Administrative Agent”: Defined in the Preamble.

 

“Administrative Agent’s Cover”: Defined in Section 13.3(c)(i).

 

“Administrative Agent’s Fee”: Defined in Section 2.14.

 

“Affiliate”: The following:

 

(a) With respect to any two Persons, a relationship in which (i) one holds,
directly or indirectly, not less than twenty five percent (25%) of the capital
stock, beneficial interests, partnership interests, or other equity interests of
the other; or (ii) one has, directly or indirectly, the right, under ordinary
circumstances, to vote for the election of a majority of the directors (or other
body or Person who has those powers customarily vested in a board of directors
of a corporation); or (iii) not less than twenty five percent (25%) of their
respective ownership is directly or indirectly held by the same third Person.

 

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(b) Any Person which: is a parent, brother-sister or Subsidiary of a Loan Party;
could have such enterprise’s tax returns or financial statements consolidated
with that Loan Party’s; could be a member of the same controlled group of
corporations (within the meaning of Section 1563(a)(1), (2) and (3) of the
Internal Revenue Code of 1986, as amended from time to time) of which any Loan
Party is a member; or controls or is controlled by any Loan Party.

 

“Agent”: When not preceded by “Administrative” or “Collateral”, the term “Agent”
refers collectively and individually to the Administrative Agent and the
Collateral Agent.

 

“Agents’ Rights and Remedies”: Defined in Section 12.7.

 

“Applicable Inventory Advance Rate”: The following rates for the following
periods:

 

RATE

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PERIOD

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85%

   December 16 through April 14 of each year

90%

   April 15 through June 15 of each year

85%

   June 16 through September 30 of each year

90%

   October 1 through December 15 of each year

 

“Applicable Law”: As to any Person: (i) All statutes, rules, regulations,
orders, or other requirements having the force of law and (ii) all court orders
and injunctions, arbitrator’s decisions, and/or similar rulings, in each
instance ((i) and (ii)) of or by any federal, state, municipal, and other
governmental authority, or court, tribunal, panel, or other body which has or
claims 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”: The following percentages for Base Margin Loans and Libor
Loans based upon the following criteria:

 

LEVEL

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   AVERAGE EXCESS AVAILABILITY

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   LIBOR
MARGIN

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    BASE
MARGIN

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     Less Than

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   Equal to Or
Greater Than

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I

          $ 35,000,000    1.75 %   0.00 %

II

   $ 35,000,000    $ 20,000,000    2.00 %   0.00 %

III

   $ 20,000,000    $ 12,500,000    2.25 %   0.00 %

IV

   $ 12,500,000           2.50 %   .25 %

 

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The Applicable Margin shall be adjusted quarterly on the first day of each
calendar quarter based upon the average Excess Availability during the prior
quarter. Upon the occurrence of an Event of Default and for so long as such
Event of Default continues in existence, the Applicable Margin may, at the
option of the Administrative Agent, be immediately increased to the percentages
set forth in Level IV (even if the Excess Availability requirements for another
Level have been met) and interest shall be determined in the manner set forth in
Section 2.12(f).

 

“Appraised Inventory Liquidation Value”: The product of (a) (i) the Retail of
Eligible Inventory (net of Inventory Reserves) of the Casual Male Companies plus
(ii) the Retail of Eligible Inventory (net of Inventory Reserves) of RBT, plus
(iii) the Cost of Eligible Inventory (net of Inventory Reserves) of the Designs,
Inc. Companies multiplied by (b) that percentage, determined from the then most
recent appraisal of the Loan Parties’ Inventory undertaken at the request of the
Administrative Agent, to reflect the appraiser’s estimate of the net recovery on
the Loan Parties’ Inventory in the event of an in-store liquidation of that
Inventory.

 

“Assignee Revolving Credit Lender”: Defined in Section 17.1(a).

 

“Assigning Revolving Credit Lender”: Defined in Section 17.1(a).

 

“Assignment and Acceptance”: Defined in Section 17.2.

 

“Availability”: The least of (a), (b), or (c), where:

 

(a) is the result of

 

  (i) The Revolving Credit Ceiling

 

Minus

 

  (ii) The aggregate unpaid balance of the Loan Account

 

Minus

 

  (iii) The aggregate undrawn Stated Amount of all then outstanding L/Cs (less
the amount of any cash collateral held by any Agent or Lender in respect of such
L/Cs).

 

(b) is the result of

 

  (i) The Borrowing Base

 

Minus

 

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  (ii) The aggregate unpaid balance of the Loan Account

 

Minus

 

  (iii) The aggregate undrawn Stated Amount of all then outstanding L/Cs (less
the amount of any cash collateral held by any Agent or Lender in respect of such
L/Cs).

 

Minus

 

  (iv) The aggregate of the Availability Reserves.

 

(c) is the result of

 

  (i) The Tranche B Borrowing Base

 

Minus

 

  (ii) The aggregate unpaid balance of the Loan Account

 

Minus

 

  (iii) The aggregate undrawn Stated Amount of all then outstanding L/Cs (less
the amount of any cash collateral held by any Agent or Lender in respect of such
L/Cs).

 

Minus

 

  (iv) The aggregate of the Availability Reserves.

 

Minus

 

  (v) The then unpaid principal balance of the Tranche B Loan and all accrued
but unpaid interest thereon.

 

“Availability Reserves”: 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 Collateral Agent’s 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 the
following:

 

  (i) Rent (but only if a landlord’s waiver, acceptable to the Administrative
Agent, has not been received by the Administrative Agent).

 

  (ii) Customer Credit Liabilities.

 

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  (iii) Taxes and other governmental charges, including, ad valorem, personal
property, and other taxes which might have priority over the Collateral
Interests of the Collateral Agent in the Collateral.

 

  (iv) L/C Landing Costs.

 

“Bankruptcy Breach”: The occurrence of any Event of Default described in any of
Sections 11.16, 11.17 and 11.18.

 

“Bankruptcy Code”: Title 11, U.S.C., as amended from time to time.

 

“Base”: The Base Rate announced from time to time by Fleet National Bank (or any
successor in interest to Fleet National Bank). In the event that said bank (or
any such successor) ceases to announce such a rate, “Base” shall refer to that
rate or index announced or published from time to time as the Administrative
Agent, in good faith, designates as the functional equivalent to said Base Rate.
Any change in “Base” shall be effective, for purposes of the calculation of
interest due hereunder, when such change is made effective generally by the bank
on whose rate or index “Base” is being set.

 

“Base Margin”: As determined from the definition of Applicable Margin.

 

“Base Margin Loan”: Each Revolving Credit Loan while bearing interest at the
Base Margin Rate.

 

“Base Margin Rate”: The aggregate of Base plus the then applicable Base Margin.

 

“Blocked Account”: Any deposit account, including, without limitation, any DDA,
over which one or more of the Agents exercise control pursuant to a Blocked
Account Agreement.

 

“Blocked Account Agreement”: An agreement, in form satisfactory to the
Administrative Agent, which recognizes the Collateral Agent’s Collateral
Interest in the contents of the deposit account which is the subject of such
agreement and provides that such contents shall be transferred only to the
Concentration Account or as otherwise instructed by the Collateral Agent.

 

“Borrower” and “Borrowers”: Defined in the Preamble.

 

“Borrowers’ Representative”: Defined in the Preamble.

 

“Borrowing Base”: The aggregate of the following:

 

(a) The lesser of

 

(i) The (x) product of the Retail of Eligible Inventory (net of Inventory
Reserves) of the Casual Male Companies multiplied by the

 

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Revolving Credit Casual Male Companies Inventory Advance Rate; and (y) product
of the Cost of Eligible Inventory (net of Inventory Reserves) of the Designs,
Inc. Companies multiplied by the Revolving Credit Designs, Inc. Companies
Inventory Advance Rate; and (z) product of the Retail of Eligible Inventory of
RBT multiplied by the Revolving Credit RBT Inventory Advance Rate; or

 

(ii) The Applicable Inventory Advance Rate multiplied by the Appraised Inventory
Liquidation Value.

 

Plus

 

(b) The face amount of Eligible Credit Card Receivables multiplied by the Credit
Card Advance Rate.

 

Plus

 

(c) The face amount of Eligible Receivables (net of Receivables Reserves)
multiplied by the Receivables Advance Rate.

 

“Borrowing Base Certificate”: Is defined in Section 6.4.

 

“Business Day”: Any day other than (a) a Saturday or Sunday; (b) any day on
which banks in Boston, Massachusetts generally are not open to the general
public for the purpose of conducting commercial banking business; or (c) a day
on which the principal office of the Administrative Agent is not open to the
general public to conduct business.

 

“Business Plan”: The Loan Parties’ business plan dated October 19, 2004, as
updated from time to time by the Borrowers’ Representative pursuant to this
Agreement.

 

“BuyOut”: The consummation of a transaction described in Section 16.12.

 

“Canton Mortgage”: The mortgage made by JBAK Canton Realty, Inc., to The Chase
Manhattan Bank, dated as of December 30, 1996, encumbering the Canton Warehouse.

 

“Canton Warehouse”: That certain real property located at 555 Turnpike Street,
Canton, Massachusetts 02021.

 

“Capital Expenditures”: The expenditure of funds or the incurrence of
liabilities which may be capitalized in accordance with GAAP.

 

“Capital Lease”: Any lease which may be capitalized in accordance with GAAP.

 

“Casual Male”: Casual Male Retail Group, Inc.

 

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“Casual Male Corp.”: Casual Male Corp.

 

“Casual Male Companies”: The Persons listed on EXHIBIT 1.0(a) annexed hereto.

 

“Change in Control”: The occurrence of any of the following:

 

(a) The acquisition, by any group of persons (within the meaning of the
Securities Exchange Act of 1934, as amended) or by any Person, of beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission) of 25% or more of the issued and outstanding capital stock of Casual
Male having the right, under ordinary circumstances, to vote for the election of
directors of Casual Male.

 

(b) At any time, (a) occupation of a majority of the seats (other than vacant
seats) on the board of directors of Casual Male by Persons who were neither (i)
nominated by the board of directors of Casual Male nor (ii) appointed by
directors so nominated.

 

(c) The persons who are directors of Casual Male as of the Closing Date cease,
for any reason other than death, disability, or resignation in the ordinary
course (and not in connection with a proxy contest or similar occurrence), to
constitute a majority of the board of directors of Casual Male.

 

(d) The failure by Casual Male (i) to own directly 100% of the issued and
outstanding capital stock of Designs Apparel, Inc. and RBT or (ii) to own,
directly or indirectly, (A) 100% of the issued and outstanding capital stock or
membership interests of all other Loan Parties other than LP Innovations, Inc.
and (B) 80% of the issued and outstanding capital stock of LP Innovations, Inc.

 

“Chattel Paper”: Has the meaning given that term in the UCC.

 

“Closing Date”: October 29, 2004.

 

“Collateral”: Defined in Section 9.1.

 

“Collateral Agent”: Defined in the Preamble.

 

“Collateral Interest”: Any interest in property to secure an obligation,
including, without limitation, a security interest, mortgage, and deed of trust.

 

“Commitment Increase”: Defined in Section 2.24

 

“Commitment Increase Date”: Defined in Section 2.24

 

“Concentration Account”: Defined in Section 8.3.

 

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“Consent”: Actual consent given by the Lender from whom such consent is sought;
or the passage of seven (7) Business Days from receipt of written notice to a
Lender from an Agent of a proposed course of action to be followed by an Agent
without such Lender’s giving that Agent written notice of that Lender’s
objection to such course of action, provided that all Agents may rely on such
passage of time as consent by a Lender only if such written notice states that
consent will be deemed effective if no objection is received within such time
period.

 

“Consolidated”: When used to modify a financial term, test, statement, or
report, 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 the Loan Parties.

 

“Convertible Notes”: The 5% Convertible Senior Subordinated Notes due January 1,
2024 issued pursuant to the Indenture in the aggregate principal amount of
Seventy-Five Million ($75,000,000.00) Dollars (subject to an increase in an
amount up to One Hundred Million ($100,000,000.00) Dollars.

 

“Cost”: The lower of

 

(a) the calculated cost of purchases, as determined from invoices received by
Design Apparel, Inc., its purchase journal or stock ledger, based upon its
accounting practices, known to the Administrative Agent, which practices are in
effect on the date on which this Agreement was executed; or

 

(b) the lowest ticketed or promoted price at which the subject inventory is
offered to the public by any Loan Party, after all mark-downs (whether or not
such price is then reflected on a Loan Party’s accounting system).

 

“Cost” does not include inventory capitalization costs or other non-purchase
price charges used in a Loan Party’s calculation of cost of goods sold (other
than freight, which may be capitalized consistent with GAAP and such Loan
Party’s prior practices).

 

“Costs of Collection”: Includes, without limitation, all reasonable attorneys’
fees and reasonable out-of-pocket expenses incurred by any Agent’s attorneys or
the Tranche B Lender’s attorneys, and all reasonable out-of-pocket costs
incurred by any Agent or the Tranche B Lender in the administration of the
Liabilities and/or the Loan Documents, including, without limitation, reasonable
costs and expenses associated with travel on behalf of any Agent or the Tranche
B Lender, where such costs and expenses are directly or indirectly related to or
in respect of any Agent’s or the Tranche B Lender’s: administration and
management of the Liabilities; negotiation, documentation, and amendment of any
Loan Document; or efforts to preserve, protect, collect, or enforce the
Collateral, the Liabilities,

 

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and/or the Agents’ Rights and Remedies and/or any of the rights and remedies of
any Agent or the Tranche B Lender against or in respect of any guarantor or
other person liable in respect of the Liabilities (whether or not suit is
instituted in connection with such efforts). “Costs of Collection” also includes
the reasonable fees and expenses of Lenders’ Special Counsel and the Tranche B
Lender’s counsel. The Costs of Collection are Liabilities, and at the
Administrative Agent’s option may bear interest at the then effective Base
Margin Rate.

 

“Credit Card Advance Rate”: 85%

 

“Customer Credit Liability”: Gift certificates, gift cards, customer deposits,
merchandise credits, layaway obligations, discounts, credits and similar items
earned by customers in respect of frequent shopping programs, and similar
liabilities of any Loan Party to its retail customers and prospective customers.

 

“DDA”: Any store level checking, demand daily depository account or other bank
or like account maintained by any Loan Party for the purpose of depositing store
receipts and paying de minimis store level expenses, as to which the applicable
bank or depository has received notification of the Collateral Agent’s
Collateral Interest in such account, including, on the date of this Agreement,
the accounts listed on EXHIBIT 8.1 hereto, but excluding, however, any Exempt
DDA.

 

“Default”: Any occurrence, circumstance, or state of facts with respect to a
Loan Party which (a) is an Event of Default; or (b) would become an Event of
Default if any requisite notice were given and/or any requisite period of time
were to run and such occurrence, circumstance, or state of facts were not cured
within any applicable grace period.

 

“Delinquent Revolving Credit Lender”: Defined in Section 13.3(c).

 

“Deposit Account”: Has the meaning given that term in the UCC.

 

“DesiCand”: DesiCand Inc., a Delaware corporation wholly-owned by Casual Male.

 

“DesiCand License Agreement”: The Retail Store License Agreement dated January
9, 2002 between Candie’s, Inc. and Casual Male, as in effect on the Closing
Date.

 

“Designs, Inc. Companies”: The Persons listed on EXHIBIT 1.0(b) annexed hereto.

 

“Design Stores”: Any store operated by any one of the Designs, Inc. Companies.

 

“Documents”: Has the meaning given that term in the UCC.

 

“Documents of Title”: Has the meaning given that term in the UCC.

 

“ECKO”: ECKO. Complex, LLC d/b/a Ecko Unltd.

 

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“ECKO Joint Venture”: The joint venture between ECKO and Designs, Inc. referred
to in the Letter of Intent between ECKO and Designs, Inc. dated February 18,
2002.

 

“EBITDA”: Earnings before interest, taxes, depreciation and amortization, each
as determined in accordance with GAAP.

 

“Eligible Assignee”: With respect to an assignee of a Revolving Credit Lender or
the Tranche B Lender: a bank, insurance company, or company engaged in the
business of making commercial loans having a combined capital and surplus in
excess of $300 Million or any Affiliate of any Revolving Credit Lender, or any
Person to whom a Revolving Credit Lender assigns its rights and obligations
under this Agreement as part of a programmed assignment and transfer of such
Revolving Credit Lender’s rights in and to a material portion of such Revolving
Credit Lender’s portfolio of asset based credit facilities.

 

“Eligible Credit Card Receivables”: Under five (5) Business Day Accounts due on
a non-recourse basis from major credit card processors (which, if due on account
of a private label credit card program, are deemed in the discretion of the
Administrative Agent to be eligible).

 

“Eligible In-Transit Inventory”: “Eligible In-Transit Inventory “ will be
calculated at 75% of (i) the Retail value of such of the Inventory of the Casual
Male Companies and RBT and (ii) the Cost of such of the Inventory of the
Designs, Inc. Companies (in each case, without duplication as to Eligible
Inventory and Eligible In-Transit Inventory ), in each case in which title has
passed to a Loan Party and which is then being shipped from a foreign location
for receipt, within 45 days, at a warehouse of one of the Loan Parties, provided
that

 

(a) Such Inventory is of such types, character, qualities and quantities (net of
Inventory Reserves) as the Administrative Agent in its discretion from time to
time determines to be eligible for borrowing;

 

(b) If applicable, the documents which relate to such shipment names the
Collateral Agent as consignee of the subject Inventory and the Collateral Agent
has control over the documents which evidence ownership of the subject Inventory
(such as by the providing to the Collateral Agent of a Customs Brokers Agreement
in form reasonably satisfactory to the Collateral Agent); and

 

(c) The Collateral Agent has a first priority perfected security interest in
such Inventory.

 

“Eligible Inventory”: The following (without duplication):

 

(a) Such of the Loan Parties’ Inventory, at such locations, and of such types,
character, qualities and quantities, as the Administrative

 

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Agent, in its sole discretion from time to time determines to be acceptable for
borrowing, as to which Inventory, the Collateral Agent has a perfected security
interest which is prior and superior to all security interests, claims, and
encumbrances.

 

(b) Eligible L/C Inventory.

 

(c) Eligible In-Transit Inventory.

 

Without limiting the foregoing, “Eligible Inventory” shall not include (i)
direct shipment inventory; (ii) inventory which cannot be sold including,
without limitation, any non-merchandise inventory (such as labels, bags, and
packaging materials, etc.); (iii) “dummy warehouse inventory”; (iv) damaged
goods, return to vendor merchandise, packaways, consigned inventory, samples and
other similar categories; (v) inventory which is the subject of a store closing,
liquidation, going-out-of-business or similar sale, as to which in each case,
any Loan Party has received an initial payment of the guaranteed price from the
Person conducting the sale; and (vi) inventory in locations outside the United
States or Canada (except for Eligible L/C Inventory) and in locations in the
United States or Canada not under any Loan Party’s control (unless waivers
acceptable to the Agents are obtained).

 

“Eligible L/C Inventory”: “Eligible L/C Inventory” will be calculated at 75% of
(i) the Retail value of such of the Inventory of the Casual Male Companies and
RBT and (ii) the Cost of such of the Inventory of the Designs, Inc. Companies
(in each case, without duplication as to Eligible Inventory and Eligible
In-Transit Inventory ), in each case the purchase of which is supported by a
documentary L/C then having an initial expiry of forty-five (45) or less days,
provided that

 

(a) Such Inventory is of such types, character, qualities and quantities (net of
Inventory Reserves) as the Administrative Agent in its discretion from time to
time determines to be eligible for borrowing; and

 

(b) The documentary L/C supporting such purchase names the Collateral Agent as
consignee of the subject Inventory and the Collateral Agent has control over the
documents which evidence ownership of the subject Inventory (such as by the
providing to the Collateral Agent of a Customs Brokers Agreement in form
reasonably satisfactory to the Collateral Agent).

 

“Eligible Receivables”: Such of the Loan Parties’ Accounts and accounts
receivable as arise in the ordinary course of the Loan Parties’ business
(without duplication of Eligible Credit Card Receivables) for goods sold and/or
services rendered by the Loan Parties’ to corporate customers, which Accounts
and accounts receivable have been determined by the Administrative Agent to be
satisfactory and have been earned by performance and are owed to the Loan
Parties by such of the Loan Parties’ corporate Account Debtors as the
Administrative Agent determines to be satisfactory, in the Administrative
Agent’s discretion in each instance.

 

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“Employee Benefit Plan”: As defined in ERISA.

 

“Encumbrance”: A Collateral Interest or agreement to create or grant a
Collateral Interest; the interest of a lessor under a Capital Lease, conditional
sale or other title retention agreement; sale of accounts receivable or chattel
paper; or other arrangement pursuant to which any Person is entitled to any
preference or priority with respect to the property or assets of another Person
or the income or profits of such other Person; and each of the foregoing whether
consensual or non-consensual and whether arising by way of agreement, operation
of law, legal process or otherwise.

 

“End Date”: The date upon which all of the following conditions are met: (a) all
Liabilities (other than continuing representations, warranties and indemnity
obligations) have been paid in full; (b) all obligations of any Lender to make
loans and advances and to provide other financial accommodations to the
Borrowers hereunder shall have been irrevocably terminated; and (c) the
arrangements regarding L/Cs described in Section 19.2(b) have been made.

 

“Environmental Laws”: All of the following:

 

(a) Applicable Law which regulates or relates to, or imposes any standard of
conduct or liability on account of or in respect to environmental protection
matters, including, without limitation, Hazardous Materials, as are now or
hereafter in effect.

 

(b) The common law relating to damage to Persons or property from Hazardous
Materials.

 

“Equipment”: Includes, without limitation, “equipment” as defined in the UCC,
and also all furniture, store fixtures, motor vehicles, rolling stock,
machinery, office equipment, plant equipment, tools, dies, molds, and other
goods, property, and assets which are used and/or were purchased for use in the
operation or furtherance of a Person’s business, and any and all accessions or
additions thereto, and substitutions therefor.

 

“ERISA”: The Employee Retirement Income Security Act of 1974, as amended.

 

“ERISA Affiliate”: Any Person which is under common control with a Loan Party
within the meaning of Section 4001 of ERISA or is part of a group which includes
any Loan Party and which would be treated as a single employer under Section 414
of the Internal Revenue Code of 1986, as amended.

 

“Events of Default”: Defined in Article 11. An “Event of Default” shall be
deemed to have occurred and to be continuing unless and until that Event of
Default has been duly waived by the requisite Lenders or by the Administrative
Agent, as applicable.

 

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“Excess Availability”: The result of (a) Availability minus (b) all then past
due obligations of the Loan Parties including accounts payable which are beyond
customary trade terms and rent obligations which are beyond applicable grace
periods.

 

“Exempt DDA”: A depository account maintained by any Loan Party, the only
contents of which may be transfers from the Operating Account and actually used
solely (i) for petty cash purposes; or (ii) for payroll.

 

“Farm Products”: Has the meaning given that term in the UCC.

 

“Fee Letter”: Collectively, the letters, each dated October 29, 2004, between
(i) Borrowers’ Representative and the Administrative Agent and (ii) Borrowers’
Representative and the Tranche B Lender, as each such letter may from time to
time be amended.

 

“Financial Covenant Breach”: The breach of any of the financial performance
covenants provided for in Section 6.11.

 

“Fiscal”: When followed by “month” or “quarter”, it refers to the relevant
fiscal period based on the Loan Parties’ fiscal year and accounting conventions
(e.g. reference to the Loan Parties’ “Fiscal June, 2004” is to the Loan Parties’
fiscal month of June in the calendar year 2003). When followed by reference to a
specific year, it refers to the fiscal year which ends in a month of the year to
which reference is being made (e.g. if the Loan Parties’ fiscal year ends in
January 2004 reference to that year would be to the Loan Parties’ “Fiscal
2004”).

 

“5% Subordinated Note”: Collectively, (i) the Designs, Inc. 5% Subordinated Note
due April 26, 2007 in the original principal amount of $1,000,000 made by
Designs, Inc. to the Kellwood Company, and (ii) the Designs, Inc. 5%
Subordinated Note due April 26, 2007 in the original principal amount of
$10,000,000 made by Designs, Inc. to the Kellwood Company.

 

“Fixtures”: Has the meaning given that term in the UCC.

 

“FRG”: Fleet Retail Group, Inc. and its Affiliates.

 

“GAAP”: Principles which are 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, provided, however, in the event of a Material Accounting
Change, then unless otherwise specifically agreed to by the Administrative
Agent, (a) the Loan Parties’ compliance with the financial performance covenants
imposed pursuant to Section 6.11 shall be determined as if such Material

 

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Accounting Change had not taken place and (b) the Borrowers’ Representative
shall include, with its monthly, quarterly, and annual financial statements a
schedule, certified by the Borrowers’ Representative’s chief financial officer,
on which the effect of such Material Accounting Change on that statement shall
be described.

 

“General Intangibles”: Includes, without limitation, “general intangibles” as
defined in the UCC; and also all: rights to payment for credit extended;
deposits; amounts due to any Person; credit memoranda in favor of any Person;
warranty claims; tax refunds and abatements; insurance refunds and premium
rebates; all means and vehicles of investment or hedging, including, without
limitation, options, warrants, and futures contracts; records; customer lists;
telephone numbers; goodwill; causes of action; judgments; payments under any
settlement or other agreement; literary rights; rights to performance;
royalties; license and/or franchise fees; rights of admission; licenses;
franchises; license agreements, including all rights of any Person to enforce
same; permits, certificates of convenience and necessity, and similar rights
granted by any governmental authority; patents, patent applications, patents
pending, and other intellectual property; internet addresses and domain names;
developmental ideas and concepts; proprietary processes; blueprints, drawings,
designs, diagrams, plans, reports, and charts; catalogs; manuals; technical
data; computer software programs (including the source and object codes
therefor), computer records, computer software, rights of access to computer
record service bureaus, service bureau computer contracts, and computer data;
tapes, disks, semi-conductors chips and printouts; trade secrets rights,
copyrights, mask work rights and interests, and derivative works and interests;
user, technical reference, and other manuals and materials; trade names,
trademarks, service marks, and all goodwill relating thereto; applications for
registration of the foregoing; and all other general intangible property of any
Person in the nature of intellectual property; proposals; cost estimates, and
reproductions on paper, or otherwise, of any and all concepts or ideas, and any
matter related to, or connected with, the design, development, manufacture,
sale, marketing, leasing, or use of any or all property produced, sold, or
leased, by any or credit extended or services performed, by any Person, whether
intended for an individual customer or the general business of any Person, or
used or useful in connection with research by any Person.

 

“Goods”: Has the meaning given that term in the UCC, and also includes all
things movable when a Collateral Interest therein attaches and also all computer
programs embedded in goods and any supporting information provided in connection
with a transaction relating to the program if (i) the program is associated with
the goods in such manner that it customarily is considered part of the goods or
(ii) by becoming the owner of the goods, a Person acquires a right to use the
program in connection with the goods.

 

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“Guarantor” and “Guarantors”: Each Person named on EXHIBIT 1.1(c) annexed hereto
individually, and the Persons named on EXHIBIT 1.1(c)annexed hereto,
collectively.

 

“Guarantor Agreement”: Each instrument and document executed by a Guarantor of
the Liabilities to evidence or secure the Guarantor’s guaranty thereof.

 

“Guarantor Default”: Default or breach or the occurrence of any event of default
under any Guarantor Agreement.

 

“Hazardous Materials”: Any (a) substance which is defined or regulated as a
hazardous material in or under any Environmental Law and (b) oil in any physical
state.

 

“Hedge Agreement” means any and all transactions, agreements or documents now
existing or hereafter entered into, which provides for an interest rate, credit,
commodity or equity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross currency rate swap, currency option, or any
combination of, or option with respect to, these or similar transactions, for
the purpose of hedging the Borrowers’ exposure to fluctuations in interest or
exchange rates, loan, credit exchange, security or currency valuations or
commodity prices and not for speculative purposes.

 

“Hedge Exposure” means, on any Business Day, the amount, if any, estimated by
the Lender or its Affiliate which is party to a Hedge Agreement with a Loan
Party in good faith and in a commercially reasonable manner (for which
calculations and computations will be provided to such Loan Party at its
request) pursuant to methodology set forth in the applicable Hedge Agreement,
which would be payable to such Lender or its Affiliate if the Hedge Agreement
were terminated as of such Business Day as a result of an event of default (as
defined in the Hedge Agreement) with respect to the Loan Party and a payment
were due thereunder to the Lender or its Affiliate.

 

“Indebtedness”: All indebtedness and obligations of or assumed by any Person on
account of or with respect to any of the following:

 

(a) In respect of money borrowed (including any indebtedness which is
non-recourse to the credit of such Person but which is secured by an Encumbrance
on any asset of such Person) whether or not evidenced by a promissory note,
bond, debenture or other written obligation to pay money.

 

(b) In connection with any letter of credit or acceptance transaction
(including, without limitation, the face amount of all letters of credit and
acceptances issued for the account of such Person or reimbursement on account of
which such Person would be obligated).

 

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(c) In connection with the sale or discount of accounts receivable or chattel
paper of such Person.

 

(d) On account of deposits or advances (but not including any liabilities with
respect to Customer Credit Liabilities including gift cards, gift certificates,
merchandise credits and/or frequent shopper or other consumer loyalty programs).

 

(e) As lessee under Capital Leases.

 

(f) In connection with any sale and leaseback transaction.

 

“Indebtedness” of any Person also includes:

 

(x) Indebtedness of others secured by an Encumbrance on any asset of such
Person, whether or not such Indebtedness is assumed by such Person.

 

(y) Any guaranty, endorsement, suretyship or other undertaking pursuant to which
that Person may be liable on account of any obligation of any third party other
than on account of the endorsement of checks and other items in the ordinary
course.

 

(z) The Indebtedness of a partnership or joint venture for which such Person is
liable as a general partner or joint venturer.

 

“Indemnified Person”: Defined in Section 20.12.

 

“Indenture”: the Indenture dated as of November 18, 2003 with respect to the 5%
Convertible Senior Subordinated Notes Due January 1, 2024

 

“Instruments”: Has the meaning given that term in the UCC.

 

“Interest Payment Date”: With reference to:

 

Each Libor Loan: The last day of the Interest Period relating thereto (and on
the last day of the third month for any such loan which has a six (6) month or
twelve (12) month Interest Period); the Termination Date; and the End Date.

 

Each Base Margin Loan: The first day of each month; the Termination Date; and
the End Date.

 

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“Interest Period”: The following:

 

(a) With respect to each Libor Loan: Subject to Subsection (c), below, the
period commencing on the date of the making or continuation of, or conversion
to, the subject Libor Loan and ending one, two, three, six, or twelve months
thereafter, as the Borrowers’ Representative may elect by notice (pursuant to
Section 2.6) to the Administrative Agent.

 

(b) With respect to each Base Margin Loan: Subject to Subsection (c), below, the
period commencing on the date of the making or continuation of or conversion to
such Base Margin Loan and ending on that date (i) as of which the subject Base
Margin Loan is converted to a Libor Loan, as the Borrowers’ Representative may
elect by notice (pursuant to Section 2.6) to the Administrative Agent, or (ii)
on which the subject Base Margin Loan is paid by the Borrowers.

 

(c) The setting of Interest Periods is in all instances subject to the
following:

 

(i) Any Interest Period for a Base Margin Loan which would otherwise end on a
day which is not a Business Day shall be extended to the next succeeding
Business Day.

 

(ii) Any Interest Period for a Libor Loan which would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business
Day, unless that succeeding Business Day is in the next calendar month, in which
event such Interest Period shall end on the last Business Day of the month
during which the Interest Period ends.

 

(iii) Subject to Subsection (iv), below, any Interest Period applicable to a
Libor Loan, which Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month during which such Interest
Period ends, shall end on the last Business Day of the month during which that
Interest Period ends.

 

(iv) Any Interest Period which would otherwise end after the Termination Date
shall end on the Termination Date.

 

(v) The number of Interest Periods in effect at any one time is subject to
Section 2.12(d) hereof.

 

“Inventory”: Includes, without limitation, “inventory” as defined in the UCC and
also all: (a) Goods which are leased by a Person as lessor; are held by a Person
for sale or lease or to be furnished under a contract of service; are furnished
by a Person under a contract of service; or consist of raw materials, work in
process, or materials used or consumed in a business; (b) Goods of said
description in transit; (c) Goods of said description which are returned,
repossessed and rejected; (d)

 

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packaging, advertising, and shipping materials related to any of the foregoing;
(e) all names, marks, and General Intangibles affixed or to be affixed or
associated thereto; and (f) Documents and Documents of Title which represent any
of the foregoing.

 

“Inventory Purchase Agreement”: The Inventory Purchase Agreement dated as of
even date hereof by and between Designs Apparel, Inc. and the other Loan
Parties.

 

“Inventory Reserves”: 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 affecting 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 the following:

 

  (i) Obsolescence (based upon Inventory on hand beyond a given number of days).

 

  (ii) Seasonality.

 

  (iii) Shrinkage.

 

  (iv) Imbalance.

 

  (v) Change in Inventory character.

 

  (vi) Change in Inventory composition

 

  (vii) Change in Inventory mix.

 

  (viii) Point of sale markdowns and, to the extent not reflected in Retail,
permanent markdowns

 

  (ix) Retail markons and markups inconsistent with prior period practice and
performance; industry standards; current business plans; or advertising calendar
and planned advertising events.

 

  (x) Consigned Inventory.

 

“Investment Property”: Has the meaning given that term in the UCC.

 

“Issuer”: Fleet National Bank and any successor to Fleet National Bank.

 

“L/C”: Any letter of credit, the issuance of which is procured by the
Administrative Agent for the account of any Borrower and any acceptance made on
account of such letter of credit.

 

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“L/C Landing Costs”: To the extent not included in the Stated Amount of an L/C,
customs, duty, freight, and other out-of-pocket costs and expenses which will be
expended to “land” the Inventory, the purchase of which is supported by such
L/C.

 

“Lease”: Any lease or other agreement, no matter how styled or structured,
pursuant to which a Loan Party is entitled to the use or occupancy of any space.

 

“Leasehold Interest”: Any interest of a Loan Party as lessee under any Lease.

 

“Leasehold Proceeds”: Any proceeds of the sale or other disposition of a
Leasehold Interest.

 

“Lender”: Collectively and each individually, each Revolving Credit Lender and
the Tranche B Lender.

 

“Lenders’ Special Counsel”: Collectively, (i) a single counsel selected by
Revolving Credit Lenders holding more than 51% of the Loan Commitments (other
than any Loan Commitments held by Delinquent Revolving Credit Lenders) following
the occurrence of an Event of Default to represent their interests in connection
with the enforcement, attempted enforcement, or preservation of any rights and
remedies under this, or any other Loan Document, (ii) a single counsel selected
by the Tranche B Lender to represent the interests of the Tranche B Lender in
connection with the preparation, negotiation, administration, enforcement,
attempted enforcement, or preservation of any rights and remedies under this, or
any other Loan Document.

 

“Letter-of-Credit Right”: Has the meaning given that term in the UCC and also
refers to any right to payment or performance under any letter of credit,
whether or not the beneficiary has demanded or is at the time entitled to demand
payment or performance.

 

“Liabilities”: (a) Any and all direct and indirect liabilities, debts, and
obligations of each Borrower to any Agent, any Lender, or any Secured Party,
each of every kind, nature, and description owing on account of this Agreement
or any other Loan Document, whether now existing or hereafter arising under this
Agreement or under any of the other Loan Documents, including, without
limitation, the following:

 

(i) Each obligation to repay any loan, advance, indebtedness, note, obligation,
overdraft, or amount now or hereafter owing by any Borrower to any Agent or any
Lender (including all future advances whether or not made pursuant to a
commitment by any Agent or any Lender), whether or not any of such are
liquidated, unliquidated, primary, secondary, secured, unsecured, direct,
indirect, absolute, contingent, or of any other type, nature, or description, or
by reason of any cause of action which any Agent or any Lender may hold against
any Borrower.

 

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(ii) All notes and other obligations of each Borrower now or hereafter assigned
to or held by any Agent or any Lender, each of every kind, nature, and
description

 

(iii) All debts, liabilities and obligations now or hereafter arising from or in
connection any and all Hedge Agreements, including but not limited any Hedge
Exposure.

 

(iv) All interest, fees, and charges and other amounts which may be charged by
any Agent or any Lender to any Borrower and/or which may be due from any
Borrower to any Agent or any Lender from time to time.

 

(v) All costs and expenses incurred or paid by any Agent in respect of any
agreement between any Borrower and any Agent or instrument furnished by any
Borrower to any Agent (including, without limitation, Costs of Collection,
reasonable attorneys’ fees, and all court and litigation costs and expenses).

 

(vi) Any and all covenants of each Borrower to or with any Agent or any Lender
and any and all obligations of each Borrower to act or to refrain from acting in
accordance with any agreement between that Borrower and any Agent or any Lender
or instrument furnished by that Borrower to any Agent or any Lender.

 

(vii) Each of the foregoing as if each reference to “any Agent or any Lender”
were to each Affiliate of the Administrative Agent.

 

(b) Any and all direct or indirect liabilities, debts, and obligations of each
Borrower to any Agent or any Affiliate of any Agent, each of every kind, nature,
and description owing on account of any service or accommodation provided to, or
for the account of any Borrower pursuant to this or any other Loan Document,
including cash management services and the issuances of L/C’s.

 

“Libor Business Day”: Any day which is both a Business Day and a day on which
the principal interbank market for Libor deposits in London in which Fleet
National Bank participates is open for dealings in United States Dollar
deposits.

 

“Libor Loan”: Any Revolving Credit Loan which bears interest at a Libor Rate.

 

“Libor Margin”: As determined from the definition of Applicable Margin.

 

“Libor Offer Rate”: That rate of interest (rounded upwards, if necessary, to the
next 1/100 of 1%) determined by the Administrative Agent in good faith to be the
highest prevailing rate per annum at which deposits on U.S. Dollars are offered
to Fleet National Bank, by first-class banks in the London interbank market in
which Fleet National Bank participates at or about 10:00 AM (Boston Time) two
(2)

 

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Libor Business Days before the first day of the Interest Period for the subject
Libor Loan, for a deposit approximately in the amount of the subject loan for a
period of time approximately equal to such Interest Period.

 

“Libor Rate”: That per annum rate which is the aggregate of the Libor Offer Rate
plus the Libor Margin except that, in the event that the Administrative Agent
determines in good faith that any Revolving Credit Lender may be subject to the
Reserve Percentage, the “Libor Rate” shall mean, with respect to any Libor Loans
then outstanding (from the date on which that Reserve Percentage first became
applicable to such loans), and with respect to all Libor Loans thereafter made
so long as any Lender is subject to the Reserve Percentage, an interest rate per
annum equal the sum of (a) plus (b), where:

 

(a) is the decimal equivalent of the following fraction:

 

   

Libor Offer Rate

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

        1 minus Reserve Percentage    

 

(b) is the applicable Libor Margin.

 

“Liquidation”: The exercise, by the Collateral Agent, of those rights accorded
to the Collateral Agent under the Loan Documents as a creditor of the Loan
Parties following and on account of the occurrence of an Event of Default
looking towards the realization on the Collateral. Derivations of the word
“Liquidation” (such as “Liquidate”) are used with like meaning in this
Agreement.

 

“Loan Account”: Is defined in Section 2.9.

 

“Loan Commitment”: With respect to each Revolving Credit Lender, that respective
Revolving Credit Lender’s Revolving Credit Dollar Commitment. With respect to
the Tranche B Lender, the then unpaid principal balance of the Tranche B Loan.

 

“Loan Documents”: This Agreement, each instrument and document executed as
contemplated by the Original Agreement and by Article 5, below, and each other
instrument or document from time to time executed and/or delivered in connection
with the arrangements contemplated hereby or in connection with any transaction
with the Administrative Agent or the Collateral Agent or any Affiliate of the
Administrative Agent or the Collateral Agent, including, without limitation, any
transaction which arises out of any cash management, depository, investment,
letter of credit, interest rate protection, or equipment leasing services
provided by the Administrative Agent or the Collateral Agent or any Affiliate of
the Administrative Agent or the Collateral Agent, as each may be amended from
time to time.

 

“Loan Party and Loan Parties”: Each Borrower and each Guarantor.

 

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“Majority Lenders”: Lenders (other than Delinquent Revolving Credit Lenders)
holding 51% or more of the Loan Commitments (other than any Loan Commitments
held by Delinquent Revolving Credit Lenders).

 

“Majority Revolving Credit Lenders”: Revolving Credit Lenders (other than
Delinquent Revolving Credit Lenders) holding 51% or more the Loan Commitments
which support the Revolving Credit (other than such Loan Commitments held by a
Delinquent Revolving Credit Lender).

 

“Material Accounting Change”: Any change in GAAP applicable to accounting
periods subsequent to the Loan Parties’ Fiscal year most recently completed
prior to the execution of this Agreement, which change has a material effect on
the Loan Parties’ Consolidated financial condition or operating results, as
reflected on financial statements and reports prepared by or for the Loan
Parties, when compared with such condition or results as if such change had not
taken place or where preparation of the Loan Parties’ statements and reports in
compliance with such change results in the breach of a financial performance
covenant imposed pursuant to Section 6.11 where such a breach would not have
occurred if such change had not taken place or visa versa.

 

“Maturity Date”: October 29, 2007.

 

“Minimum Excess Availability Breach”: The failure of the Borrowers at any time
to comply with the provisions of Section 6.11(a).

 

“Nominee”: A business entity (such as a corporation or limited partnership)
formed by the Collateral Agent to own or manage any Post Foreclosure Asset.

 

“NonConsenting Lender”: Defined in Section 16.11.

 

“Operating Account”: Defined in Section 8.3.

 

“Original Agreement:”: Defined in the Preamble.

 

“OverLoan”: A loan, advance, or providing of credit support (such as the
issuance of any L/C) to the extent that, immediately after its having been made,
Availability is less than zero.

 

“Participant”: Is defined in Section 20.15, hereof.

 

“Payment Intangible”: Has the meaning given that term in the UCC and also refers
to any general intangible under which the Account Debtor’s primary obligation is
a monetary obligation.

 

“Permitted Acquisition”: An Acquisition complying with the following:

 

(A) Such Acquisition shall be of assets ancillary, incidental or necessary to
the retail sale of apparel and related activities, or of 100% of the stock of a
corporation whose assets consist substantially of such assets, or through the
merger of such a corporation with a Loan Party (with a Loan Party as the
surviving corporation), or with a Subsidiary of a Loan Party where, after giving
effect to such merger, such corporation becomes a wholly-owned Subsidiary of a
Loan Party;

 

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(B) If such Acquisition includes the acquisition of assets by, or the merger of,
a Loan Party, there shall have been no change in the identity of the president,
chief financial officer or any executive vice president of such Loan Party as a
consequence of such acquisition, or if there has been such a change, the
Administrative Agent shall have consented in writing to such change in identity
within thirty (30) days thereafter (which consent shall not be unreasonably
withheld or delayed); and

 

(C) If a new Subsidiary is formed or acquired as a result of such Acquisition,
such Subsidiary shall execute documentation, reasonably satisfactory in form and
substance to the Administrative Agent, guarantying payment and performance of
the Liabilities and granting a first lien, subject only to Permitted
Encumbrances, in its assets in favor of the Collateral Agent, for the ratable
benefit of the Lenders.

 

“Permitted Asset Disposition”: The following:

 

(a) A sale or other disposition of the assets of any Loan Party (other than as
specified in clauses (b), (c) and (d) of this definition), not in the ordinary
course, so long as the following conditions are satisfied:

 

(i) The sale, liquidation or other disposition of Inventory at any locations
from which a Loan Party determines to cease the conduct of its business, (x)
shall be on terms satisfactory to the Administrative Agent and (y)
notwithstanding the Administrative Agent’s furnishing of any such consent, the
Administrative Agent may, in the exercise of its reasonable discretion, impose
Inventory Reserves as a result of the occurrence of any such sale, liquidation,
or disposition;

 

(ii) The aggregate of all such sales or other dispositions of assets during the
term of this Agreement shall not exceed five percent (5%) of the value of all
assets of Casual Male as of the Closing Date;

 

(iii) Each such sale or other disposition shall be for fair consideration in an
arm’s length transaction; and

 

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(iv) On the date on which any sale or other disposition of assets is
consummated, no Default shall have occurred and be continuing or will occur as a
result of such consummation.

 

(b) The sale, spin-off or other disposition of LP Innovations, Inc. and its
ownership interests in Securex, on terms reasonably satisfactory to the
Administrative Agent. The Administrative Agent shall execute and deliver such
releases as shall be reasonably requested in order for such disposition to be
consummated.

 

(d) The sale of any Collateral located in any Designs Store, provided that the
conditions set forth in (a)(i), (iii) and (iv), above, are satisfied.

 

“Permitted Encumbrances”: The following:

 

(a) Encumbrances described on EXHIBIT 1.1 hereto.

 

(b) Encumbrances on properties to secure taxes, assessments and other government
charges or claims for labor, material or supplies in respect of obligations not
then overdue; deposits or pledges made in connection with, or to secure payment
of, workmen’s compensation, unemployment insurance, old age pensions or other
social security obligations; Encumbrances on property hereafter acquired (either
in connection with purchase money encumbrances, rental purchase agreements,
including Capital Leases, or conditional sale or other title retention
agreements), which are restricted to the property so acquired and do not secure
Indebtedness exceeding the fair value (at the time of acquisition) thereof;
Encumbrances of carriers, warehousemen, mechanics and materialmen, and other
like Encumbrances in existence less than 90 days from the date of creation
thereof in respect of obligations not overdue; and Encumbrances on properties
consisting of easements, rights of way, zoning restrictions, restrictions on the
use of real property and defects and irregularities in the title thereto,
landlord’s or lessor’s Encumbrances under leases to which any Loan Party is a
party, and other minor Encumbrances or encumbrances none of which interferes
materially with the use of the property affected in the ordinary conduct of the
business of the Loan Parties, which defects do not individually or in the
aggregate have a materially adverse effect on the business of any Loan Party
individually or of the Loan Parties as a whole or which are being actively
contested in good faith by appropriate proceedings as to which the Loan Parties
have established reasonable reserves, it being understood, however, that the
filing of a tax lien which includes any Inventory or Accounts does not
constitute a “Permitted Encumbrance”, even if being so contested.

 

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“Permitted Indebtedness”: The following Indebtedness:

 

  (a) Indebtedness on account of the Revolving Credit.

 

  (b) Indebtedness on account of the Tranche B Loan.

 

  (c) Indebtedness on account of the Subordinated Indebtedness, or Indebtedness
on account of refinancing of the Subordinated Indebtedness, which Indebtedness
is on similar terms as the existing Subordinated Indebtedness, is subordinate to
the payment of the Liabilities upon terms acceptable to the Administrative Agent
in its reasonable discretion, and is otherwise acceptable to the Administrative
Agent in its reasonable discretion.

 

  (d) Indebtedness on account of the Convertible Notes, or Indebtedness on
account of refinancing of the Convertible Notes, which Indebtedness is on
similar terms as the Indenture, is subordinate to the payment of the
Liabilities, and is otherwise acceptable to the Administrative Agent in its
reasonable discretion.

 

  (e) Rochester Indebtedness.

 

  (f) Capital Leases and purchase money Indebtedness secured by Permitted
Encumbrances.

 

  (g) Indebtedness assumed in connection with Permitted Acquisitions pursuant to
Section 5.21 (it being understood that the principal amount so assumed shall be
deemed part of the purchase price of any such Permitted Acquisition) and any
refinancing or replacement thereof on terms and conditions (including, without
limitation, interest rate and providing that, in any event, the principal amount
thereof shall not exceed that outstanding on the date of refinance or
replacement) at least as favorable as those being refinanced or replaced.

 

  (h) Intercompany Indebtedness permitted under Section 5.22.

 

  (i) Indebtedness arising with respect to any Hedge Agreement.

 

“Permitted Investments”: Any or all of the following:

 

(a) marketable direct full faith and credit obligations of, or marketable
obligations guaranteed by, the United States of America; provided that such
securities, as a group, may not, on the date of determination, have a remaining
weighted average maturity of more than five years;

 

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(b) marketable direct full faith and credit obligations of States of the United
States or of political subdivisions or agencies; provided that such securities,
as a group, may not, on the date of determination, have a remaining weighted
average maturity of more than five years; and provided, further, that such
obligations carry a rating of “A” or better by a Rating Service;

 

(c) certificates of deposit and bankers acceptances maturing within one year
after the acquisition thereof issued by (i) Fleet National Bank; (ii) Bank of
America, N.A.; or (iii) any commercial bank organized under the laws of the
United States of America or of any political subdivision thereof the long term
obligations of which are rated “A” or better by a Rating Service;

 

(d) Eurodollar certificates of deposit maturing within one year after the
acquisition thereof issued by any commercial bank having combined capital,
surplus and undivided profits of at least $1 billion; and

 

(e) tax-exempt bonds or notes which have a remaining maturity at the time of
purchase of no more than five years issued by any State of the United States or
the District of Columbia, or any political subdivision thereof; provided, that
such obligations carry a rating of “A” or better by a Rating Service.

 

“Permitted Overhead Contributions”: Rent under the Lease Agreement, dated
December 11, 1996, by and between JBAK Canton, or its assigns, as landlord, and
JBI, or its assigns, as tenant, with respect to the Canton Warehouse.

 

“Permitted Protective OverAdvance” Is defined in Section 16.3(a).

 

“Person”: Any natural person, and any corporation, limited liability company,
trust, partnership, joint venture, or other enterprise or entity.

 

“Post Foreclosure Asset”: All or any part of the Collateral, ownership of which
is acquired by the Collateral Agent or a Nominee on account of the “bidding in”
at a disposition as part of a Liquidation or by reason of a “deed in lieu” type
of transaction.

 

“Proceeds”: Includes, without limitation, “Proceeds” as defined in the UCC and
each type of property described in Section 9.19.1 hereof.

 

“Pro-Rata”: A proportional distribution based upon a Lender’s percentage claim
to the overall aggregate amount being distributed.

 

“Protective OverAdvances”: Revolving Credit Loans which are OverLoans, but as to
which each of the following conditions is satisfied: (a) the Revolving Credit
Ceiling is not exceeded; (b) when aggregated with all other Protective

 

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OverAdvances, such Revolving Credit Loans do not aggregate more than 5% of the
aggregate of the Borrowing Base; and (c) such Revolving Credit Loans are made or
undertaken in the Agents’ discretion to protect and preserve the interests of
the Lenders.

 

“RBT”: Collectively Casual Male RBT, LLC and Casual Male RBT (U.K.), LLC.

 

“Receipts”: All cash, cash equivalents, money, checks, credit card slips,
receipts and other Proceeds from any sale of the Collateral.

 

“Receivables Advance Rate”: 75%.

 

“Receivables Collateral”: That portion of the Collateral which consists of
Accounts, Accounts Receivable, General Intangibles, Chattel Paper, Instruments,
Documents of Title, Documents, Investment Property, Payment Intangibles,
Letter-of-Credit Rights, bankers’ acceptances, and all other rights to payment.

 

“Receivables Reserves”: 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 collectibility in the ordinary course
and of the creditworthiness of the applicable Account Debtor. Without limiting
the generality of the foregoing, Receivables Reserves shall include (but are not
limited to) reserves based on the following:

 

  (i) The aggregate of all accounts receivables which are more than 60 days past
invoice.

 

  (ii) The aggregate of all accounts receivable owed by any Account Debtor 25%
or more of whose accounts are more than 60 days past invoice.

 

  (iii) The aggregate of all accounts receivable which arise out of the sale by
a Loan Party of goods consigned or delivered to such Loan Party or to the
Account Debtor on sale or return terms (whether or not compliance has been made
with the applicable provisions of Article 2 of the UCC).

 

  (iv) The aggregate of all accounts receivable which arise out of any sale made
on a basis other than upon terms usual to the business of a Loan Party.

 

  (v) The aggregate of all accounts receivable which arise out of any sale made
on a “bill and hold,” dating, or delayed shipping basis.

 

  (vi) The aggregate of all accounts receivable which are owed by any Account
Debtor whose principal place of business is not within the United States, the
District of Columbia, or Canada.

 

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  (vii) The aggregate of all accounts receivable which are owed by any
Affiliate.

 

  (viii) The aggregate of all accounts receivable to the extent that the Account
Debtor holds or is entitled to any claim, counterclaim, set off, or chargeback
as determined by the Administrative Agent in its discretion.

 

  (ix) The aggregate of all accounts receivable which are evidenced by a
promissory note or other documentation evidencing modified payment terms.

 

  (x) The aggregate of all accounts receivable which are owed by any person
employed by, or a salesperson of, a Loan Party.

 

  (xi) That portion of Eligible Receivables owed by any Account Debtor which
exceed 15% of all Eligible Receivables owed by all Account Debtors.

 

“Register”: Is defined in Section 17.2(c).

 

“Requirements of Law”: As to any Person:

 

(a) Applicable Law.

 

(b) That Person’s organizational documents.

 

(c) That Person’s by-laws and/or other instruments which deal with corporate or
similar governance, as applicable.

 

“Reserve Percentage”: The decimal equivalent of that rate applicable to any
Lender under regulations issued from time to time by the Board of Governors of
the Federal Reserve System for determining the maximum reserve requirement of
Lender with respect to “Eurocurrency liabilities” as defined in such
regulations. The Reserve Percentage applicable to a particular Libor Loan shall
be based upon that in effect during the subject Interest Period, with changes in
the Reserve Percentage which take effect during such Interest Period to take
effect (and to consequently change any interest rate determined with reference
to the Reserve Percentage) if and when such change is applicable to such loans.

 

“Reserves”: The following: Receivables Reserves; Availability Reserves; and
Inventory Reserves.

 

“Retail”: As reflected in a Loan Party’s stock ledger, being the current ticket
price aggregated by SKU, except that to the extent that Eligible Inventory is
not reflected in the stock ledger, in which case “Retail” shall be determined as
tracked on such non stock ledger inventory systems of a Loan Party which are
deemed adequate for such purpose by the Administrative Agent in the exercise of
the Administrative Agent’s discretion.

 

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“Revolving Credit”: Is defined in Section 2.1.

 

“Revolving Credit Casual Male Companies Inventory Advance Rate”: The following
rates for the following periods:

 

RATE

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

  

PERIOD

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

29%    December 16 through April 14 of each year 30.6%    April 15 through June
15 of each year 29%    June 16 through September 30 of each year 30.6%   
October 1 through December 15 of each year

 

“Revolving Credit Designs, Inc. Companies Inventory Advance Rate”: The following
rates for the following periods:

 

RATE

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

  

PERIOD

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

62%    December 16 through April 14 of each year 66%    April 15 through June 15
of each year 62%    June 16 through September 30 of each year 66%    October 1
through December 15 of each year

 

“Revolving Credit RBT Inventory Advance Rate”: The following rates for the
following periods:

 

RATE

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

  

PERIOD

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

30.2%    December 16 through April 14 of each year 32%    April 15 through June
15 of each year 30.2%    June 16 through September 30 of each year 32%   
October 1 through December 15 of each year

 

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“Revolving Credit Ceiling”: $90,000,000.00 subject to increase in accordance
with Section 2.24.

 

“Revolving Credit Commitment Fee”: Defined in Section 2.13.

 

“Revolving Credit Debt”: At any time, the lesser of (a) or (b), where

 

(a) is the Revolving Credit Ceiling then in effect.

 

(b) is Indebtedness of the Borrowers on account of loans and advances under the
Revolving Credit which Indebtedness, when incurred or when Acceleration takes
place, is within amounts available to be borrowed under the Revolving Credit or
constitutes Protective OverAdvances, as reflected on the Borrowing Base
Certificate (if any) in reliance on which the subject loan or advance was made,
it being understood that, (i) in the absence of manifest computational error by
the Borrowers’ Representative, the Administrative Agent may rely on, and the
Tranche B Lender shall be bound by, the determination of such availability as
reflected on such Borrowing Base Certificate, and (ii) the status of
indebtedness as “Revolving Credit Debt” is determined without regard to any
subsequent declination in the appraised value of the Inventory or other assets
on which such availability had been so determined, and (iii) the occurrence of a
Tranche B Availability Breach, in and of itself, shall not affect the status of
indebtedness as “Revolving Credit Debt”. (For purposes of the determination of
whether a loan or advance to cover the honoring of a L/C constitutes “Revolving
Credit Debt”, the date of issuance of the subject L/C shall constitute the date
on which the subject indebtedness was incurred).

 

“Revolving Credit Dollar Commitment”: As to each Revolving Credit Lender, the
amount set forth on EXHIBIT 2.23, annexed hereto (as such amounts may change in
accordance with the provisions of this Agreement).

 

“Revolving Credit Early Termination Fee”: Defined in Section 2.16.

 

“Revolving Credit Fees”: The Unused Line Fee, Revolving Credit Commitment Fee,
Revolving Credit Early Termination Fee, fees for L/C’s which are specifically
for the account of the Revolving Credit Lenders and all other fees (such as a
fee (if any) on account of the execution of an amendment of a Loan Document)
payable by any Borrower in respect of the Revolving Credit other than any amount
payable to an Agent as reimbursement for any cost or expense incurred by that
Agent on account of the discharge of that Agent’s duties under the Loan
Documents.

 

“Revolving Credit Lenders”: Each Revolving Credit Lender to which reference is
made in the Preamble and any other Person who becomes a “Revolving Credit
Lender” in accordance with the provisions of this Agreement.

 

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“Revolving Credit Loans”: Loans made under the Revolving Credit, except that
where the term “Revolving Credit Loan” is used with reference to available
interest rates applicable to the loans under the Revolving Credit, it refers to
so much of the unpaid principal balance of the Loan Account as bears the same
rate of interest for the same Interest Period. (See Section 2.12(c)).

 

“Revolving Credit Note”: Is defined in Section 2.10.

 

“Revolving Credit Obligations”: The aggregate of the Borrowers’ liabilities,
obligations, and indebtedness of any character on account of or in respect to
the Revolving Credit.

 

“Revolving Credit Percentage Commitment”: As to each Revolving Credit Lender,
the amount set forth on EXHIBIT 2.23, annexed hereto (as such amounts may change
in accordance with the provisions of this Agreement).

 

“Rochester Acquisition”: The acquisition by Casual Male and certain of its
Affiliates of substantially all of the assets of Rochester Big and Tall in
accordance with the terms of the Rochester Acquisition Agreement.

 

“Rochester Acquisition Agreement”: The Asset Purchase Agreement dated as of
August 18,2004 among Rochester Big and Tall and certain of its Affiliates and
Casual Male and certain of its Affiliates, as amended through the date of this
Agreement.

 

“Rochester Big and Tall”: Rochester Big and Tall Clothing, Inc.

 

“Rochester Indebtedness”: Indebtedness under Section 2.5.3 of the Rochester
Acquisition Agreement.

 

“SEC”: The Securities and Exchange Commission.

 

“Secured Parties”: Collectively and each individually, the Lenders, the Agent,
and FRG.

 

“Securex”: Securex LLC, a Delaware limited liability company.

 

“Standstill Period”: A 15 consecutive day period initiated by written notice by
the Tranche B Lender to the Administrative Agent, in accordance with Section
14.2(a), after the occurrence of a Tranche B Loan Action Event (other than a
Bankruptcy Breach).

 

“Stated Amount”: The maximum amount for which an L/C may be honored.

“Store”: Each location at which a Loan Party regularly offers Inventory for sale
to the public.

 

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“Subordinated Indebtedness”: Includes (i) the Indebtedness evidenced by the 5%
Subordinated Note; and (ii) the Indebtedness evidenced by the Convertible Notes.

 

“Subordination Agreements”: The several Subordinated Agreements between the
holders of the 5% Subordinated Note, on the one hand, and FRG, as agent for the
Lenders, and the Borrowers, on the other hand, each dated as of May 14, 2002.

 

“Subscription Agreement”: Collectively, the Designs, Inc. Subscription Agreement
for Common Stock dated as of April 26, 2002 between Designs, Inc. and the
purchasers named therein and the Designs, Inc. Subscription Agreement for
Preferred Stock dated as of April 26, 2002 between Designs, Inc. and the
purchasers named therein.

 

“Subsidiary”: With respect to any Person, any corporation, partnership or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons performing
similar functions are at the time directly or indirectly owned by such Person.

 

“SuperMajority Lenders”: Lenders (other than Delinquent Revolving Credit
Lenders) holding 66 2/3% or more of the Loan Commitments (other than Loan
Commitments held by a Delinquent Revolving Credit Lender).

 

“SuperMajority Revolving Credit Lenders”: Revolving Credit Lenders (other than
Delinquent Revolving Credit Lenders) holding 66 2/3% or more of the Loan
Commitments which support the Revolving Credit (other than such Loan Commitments
held by a Delinquent Revolving Credit Lender).

 

“Supporting Obligation”: Has the meaning given that term in UCC and also refers
to a Letter-of-Credit Right or secondary obligation which supports the payment
or performance of an Account, Chattel Paper, a Document, a General Intangible,
an Instrument, or Investment Property.

 

“SwingLine”: The facility pursuant to which the SwingLine Lender may advance
Revolving Credit Loans aggregating up to the SwingLine Loan Ceiling.

 

“SwingLine Lender”: FRG.

 

“SwingLine Loan Ceiling”: $15,000,000.

 

“SwingLine Loans”: Defined in Section 2.8.

 

“Termination Date”: The earliest of (a) the Maturity Date; or (b) the
Administrative Agent’s notice to the Borrowers’ Representative setting the
Termination Date on account of the occurrence of any Event of Default; or (c) a
date, irrevocable written notice of which is provided by the Borrowers’
Representative to the Administrative Agent, which is at least ninety (90) days
after the date of such written notice.

 

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“Tranche B Amortization Payment”: Defined in Section 3.3(a)

 

“Tranche B Applicable Inventory Advance Rate”: The following rates for the
following periods:

 

RATE

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

  

PERIOD

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

95%    December 16 through April 14 of each year 100%    April 15 through June
15 of each year 95%    June 16 through September 30 of each year 100%    October
1 through December 15 of each year

 

“Tranche B Availability Breach”: A condition in which the aggregate of the
following is equal to or less than zero:

 

(a) The Tranche B Borrowing Base,

 

Minus

 

(b) The aggregate unpaid balance of the Loan Account,

 

Minus

 

(c) The aggregate undrawn Stated Amount of all then outstanding L/Cs (less the
amount of any cash collateral held by any Agent or Lender in respect of such
L/Cs),

 

Minus

 

(d) The then unpaid principal balance of the Tranche B Loan and all accrued but
unpaid interest thereon,

 

Minus

(e) The aggregate of the Availability Reserves.

 

“Tranche B Borrowing Base”: The aggregate of the following:

 

(a) For the Casual Male Companies, the lesser of

 

  (i) The product of the Retail of Eligible Inventory (net of Inventory
Reserves) of the Casual Male Companies multiplied by the Tranche B Casual Male
Companies Inventory Advance Rate, and

 

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  (ii) Tranche B Applicable Inventory Advance Rate of the Appraised Inventory
Liquidation Value of the Inventory of the Casual Male Companies.

 

Plus

 

(b) For the Designs, Inc. Companies, the lesser of

 

  (i) The Cost of Eligible Inventory (net of Inventory Reserves) of the Designs,
Inc. Companies multiplied by the Tranche B Designs, Inc. Companies Inventory
Advance Rate ; or

 

  (ii) Tranche B Applicable Inventory Advance Rate of the Appraised Inventory
Liquidation Value of the Inventory of the Designs, Inc. Companies

 

Plus

 

(c) For RBT, the lesser of

 

  (i) The product of the Retail of Eligible Inventory (net of Inventory
Reserves) of RBT multiplied by the Tranche B RBT Inventory Advance Rate, and

 

  (ii) Tranche B Applicable Inventory Advance Rate of the Appraised Inventory
Liquidation Value of the Inventory of RBT.

 

Plus

 

(d) The face amount of Eligible Credit Card Receivables multiplied by the Credit
Card Advance Rate.

 

Plus

 

(e) The face amount of Eligible Receivables (net of Receivables Reserves)
multiplied by the Receivables Advance Rate.

 

“Tranche B Casual Male Companies Inventory Advance Rate”: The following rates
for the following periods:

 

RATE

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

  

PERIOD

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

32.4%    December 16 through April 14 of each year 34.1%    April 15 through
June 15 of each year 32.4%    June 16 through September 30 of each year 34.1%   
October 1 through December 15 of each year

 

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“Tranche B Commitment Fee”: As defined in the Tranche B Fee Letter.

 

“Tranche B Designs, Inc. Division Inventory Advance Rate”: The following rates
for the following periods:

 

RATE

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

  

PERIOD

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

69.3%    December 16 through April 14 of each year 72.9%    April 15 through
June 15 of each year 69.3%    June 16 through September 30 of each year 72.9%   
October 1 through December 15 of each year

 

“Tranche B Fees”: The Tranche B Commitment Fee and all other fees (such as a fee
(if any) on account of the execution of an amendment of any Loan Document)
payable by any Borrower in respect of the Tranche B Loan other than any amount
payable to an Agent as reimbursement for any cost or expense incurred by that
Agent on account of the discharge of that Agent’s duties under the Loan
Documents.

 

“Tranche B Interest Payment Date”: Defined in Section 3.4(c).

 

“Tranche B Interest Rate”: Defined in Section 3.4(a).

 

“Tranche B Lender”: Defined in the Preamble.

 

“Tranche B Loan “: Defined in Section 3.1.

 

“Tranche B Loan Action Event”: The occurrence of any of the following: a Tranche
B Availability Breach; a Financial Covenant Breach; a Bankruptcy Breach; or a
Tranche B Payment Breach.

 

“Tranche B Note”: Defined in Section 3.2.

 

“Tranche B Payment Breach”: The failure by the Borrowers to have made any
payment on account of the Borrowers’ Liabilities to the Tranche B Lender under
the Loan Documents prior to expiry of any grace period applicable to such
payment.

 

“Tranche B Loan Prepayment Conditions”: The following:

 

(a) The subject prepayment is made after October 29, 2005.

 

37

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(b) Excess Availability, for each of the 45 days prior to the making of such
prepayment, is not less than $40,000,000.

 

(c) Immediately after, and giving effect to such prepayment, Excess Availability
is not less than $30,000,000.

 

(d) EBITDA for the 12 months immediately prior to such prepayment is not less
than 80% of EBITDA for such period projected in the Business Plan.

 

(e) No more than fifteen days prior to such prepayment, the Borrowers’
Representative has provided the Administrative Agent with a forecast for the
then next succeeding 12 month period which reflects that Excess Availability
will never be less than $30,000,000.

 

(f) On the date on which such prepayment is made and immediately after giving
effect to such prepayment, no Default shall have occurred and be continuing.

 

“Tranche B RBT Inventory Advance Rate”: The following rates for the following
periods:

 

RATE

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

  

PERIOD

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

33.7%    December 16 through April 14 of each year 35.5%    April 15 through
June 15 of each year 33.7%    June 16 through September 30 of each year 35.5%   
October 1 through December 15 of each year

 

“Transfer”: Wire transfer pursuant to the wire transfer system maintained by the
Board of Governors of the Federal Reserve Board, or as otherwise may be agreed
to from time to time by the Administrative Agent making such Transfer and the
subject Revolving Credit Lender. Wire instructions may be changed in the same
manner that Notice Addresses may be changed (Section 18.1), except that no
change of the wire instructions for Transfers to any Revolving Credit Lender
shall be effective without the consent of the Administrative Agent.

 

“UCC”: The Uniform Commercial Code as in effect from time to time in
Massachusetts.

 

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“Unanimous Consent”: Consent of Lenders (other than Delinquent Revolving Credit
Lenders) holding 100% of the Loan Commitments (other than Loan Commitments held
by a Delinquent Revolving Credit Lender).

 

“Unused Line Fee”: Is defined in Section 2.15.

 

ARTICLE 2 - The Revolving Credit:

 

2.1. Establishment of Revolving Credit.

 

(a) The Revolving Credit Lenders hereby establish a revolving line of credit
(the “Revolving Credit”) in the Borrowers’ favor pursuant to which each
Revolving Credit Lender, subject to, and in accordance with, this Agreement,
acting through the Administrative Agent, shall make loans and advances and
otherwise provide financial accommodations to and for the account of the
Borrowers as provided herein.

 

(b) Loans, advances, and financial accommodations under the Revolving Credit
shall be subject to Availability. The Borrowing Base and Availability shall be
determined by the Administrative Agent by reference to Borrowing Base
Certificates furnished as provided in Section 6.4, below, and shall be subject
to the following:

 

(i) Such determination shall take into account such Reserves as the
Administrative Agent may determine as being applicable thereto.

 

(ii) The Retail of Eligible Inventory will be calculated in a manner consistent
with current tracking practices, based on stock ledger inventory at Retail, and
the Cost of Eligible Inventory will be calculated in a manner consistent with
current tracking practices, based on stock ledger inventory at Cost.

 

(c) The commitment of each Revolving Credit Lender to provide such loans,
advances, and financial accommodations is subject to Section 2.23.

 

(d) The proceeds of borrowings under the Revolving Credit shall be used solely
as follows:

 

  (i) For the Rochester Acquisition.

 

  (ii) For the Borrowers’ working capital needs and general corporate purposes.

 

  (iii) For advances by the Borrowers to Guarantors to finance the purchases by
Guarantors of Inventory pursuant to the Inventory Purchase Agreement and to
permit such Guarantors to pay ordinary course operating expenses (including,
without limitation, rent, utilities and taxes).

 

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(iv) For Capital Expenditures to the extent permitted by this Agreement.

 

2.2. ADVANCES IN EXCESS OF BORROWING BASE (OVERLOANS).

 

(a) No Revolving Credit Lender has any obligation to make any loan or advance,
or otherwise to provide any credit to or for the benefit of the Borrowers where
the result of such loan, advance, or credit is an OverLoan.

 

(b) The Revolving Credit Lenders’ obligations, among themselves, are subject to
Section 13.3(a) (which relates to each Revolving Credit Lender’s making amounts
available to the Administrative Agent) and to Section 16.3(a) (which relates to
Protective OverAdvances).

 

(c) The Revolving Credit Lenders’ providing of an OverLoan on any one occasion
does not affect the obligations of each Borrower hereunder (including each
Borrower’s obligation to immediately repay any amount which otherwise
constitutes an OverLoan) nor obligate the Revolving Credit Lenders to do so on
any other occasion.

 

2.3. INITIAL RESERVES. CHANGES TO RESERVES.

 

(a) At the execution of this Agreement, the only Reserves are as reflected on
the Borrowing Base Certificate, a specimen of which is annexed hereto as EXHIBIT
6.4.

 

(b) The Administrative Agent shall provide not less than seven (7) days prior
notice to the Borrowers’ Representative of the establishment of any Reserve
(other than those established at the execution of this Agreement) except that
the following may be undertaken without such prior notice:

 

(i) a change to the amount of a then existing Reserve (as distinguished from a
change by which such Reserve is measured or determined), which change reflects
the Administrative Agent’s reasonable determination of changed circumstances
(e.g. the amount of the Reserve for Customer Credit Liability will change based
on the aggregate of Customer Credit Liability at any one time); and

 

(ii) the creation of, or a change to an existing, Reserve on account of
circumstances which the Administrative Agent determines as having a material
adverse change on the maintenance of loan to collateral values.

 

2.4. RISKS OF VALUE OF COLLATERAL. The Administrative Agent’s reference to a
given asset in connection with the making of loans, credits, and advances and
the providing of financial accommodations under the Revolving Credit and/or the
monitoring of compliance with the provisions hereof shall not be deemed a
determination by the Administrative Agent or any Revolving Credit Lender
relative to the actual value of the asset in question. All risks concerning the
value of the Collateral are and remain upon the Borrowers. All Collateral
secures the prompt, punctual, and faithful performance of the Liabilities
whether or not relied upon by the Administrative Agent in connection with the
making of loans, credits, and advances and the providing of financial
accommodations under the Revolving Credit.

 

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2.5. COMMITMENT TO MAKE REVOLVING CREDIT LOANS AND SUPPORT LETTERS OF CREDIT.
Subject to the provisions of this Agreement, the Revolving Credit Lenders shall
make a loan or advance under the Revolving Credit and the Administrative Agent
shall cause L/C’s to be issued for the account of the Borrowers’ Representative,
in each instance if duly and timely requested by the Borrowers’ Representative
as provided herein provided that:

 

(a) No OverLoan is then outstanding and none will result therefrom.

 

(b) No Default has occurred and is continuing or will occur as a result of the
borrowing of such loan or advance or the issuance of such L/C.

 

2.6. REVOLVING CREDIT LOAN REQUESTS.

 

(a) Requests for loans and advances under the Revolving Credit or for the
continuance or conversion of an interest rate applicable to a Revolving Credit
Loan may be requested by the Borrowers’ Representative in such manner as may
from time to time be reasonably acceptable to the Administrative Agent.

 

(b) Subject to the provisions of this Agreement, the Borrowers’ Representative
may request a Revolving Credit Loan and elect an interest rate and Interest
Period to be applicable to that Revolving Credit Loan by giving notice to the
Administrative Agent by no later than the following:

 

(i) If such Revolving Credit Loan is to be or is to be converted to a Base
Margin Loan: By 1:00PM on the Business Day prior to the Business Day on which
the subject Revolving Credit Loan is to be made or is to be so converted. Base
Margin Loans requested by the Borrowers’ Representative, other than those
resulting from the conversion of a Libor Loan, shall not be less than
$10,000.00.

 

(ii) If such Revolving Credit Loan is to be, or is to be continued as, or
converted to, a Libor Loan: By 1:00PM three (3) Libor Business Days before the
commencement of any new Interest Period or the end of the then applicable
Interest Period. Libor Loans and conversions to Libor Loans shall each be not
less than $1,000,000.00 and in increments of $100,000.00 in excess of such
minimum.

 

(iii) Any Libor Loan which matures while a Default has occurred and is
continuing shall be converted, at the option of the Administrative Agent, to a
Base Margin Loan notwithstanding any notice from the Borrowers’ Representative
that such Loan is to be continued as a Libor Loan.

 

(c) Any request for a Revolving Credit Loan or for the continuance or conversion
of an interest rate applicable to a Revolving Credit Loan which is made after
the applicable deadline therefore, as set forth above, shall be deemed to have
been made at the opening of business on the then next Business Day or Libor
Business Day, as applicable. Each request for a Revolving Credit Loan or for the
conversion of a Revolving Credit Loan shall be made in such manner as may from
time to time be acceptable to the Administrative Agent.

 

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(d) The Borrowers’ Representative may request that the Administrative Agent
cause the issuance by the Issuer of L/C’s for the account of a Borrower as
provided in Section 2.18.

 

(e) The Administrative Agent may rely on any request for a loan or advance, or
other financial accommodation under the Revolving Credit which the
Administrative Agent, in good faith, believes to have been made by a Person duly
authorized to act on behalf of the Borrowers’ Representative and may decline to
make any such requested loan or advance, or issuance, or to provide any such
financial accommodation pending the Administrative Agent’s being furnished with
such documentation concerning that Person’s authority to act as reasonably may
be satisfactory to the Administrative Agent.

 

(f) A request by the Borrowers’ Representative for a loan or advance, or other
financial accommodation under the Revolving Credit shall be irrevocable and
shall constitute certification by each Borrower that as of the date of such
request, each of the following is true and correct:

 

(i) There has been no material adverse change in the Loan Parties’ financial
condition (taken as a whole) from the most recent financial information
furnished Administrative Agent or any Lender pursuant to this Agreement.

 

(ii) Each representation, not relating to a specific date, which is made herein
or in any of the Loan Documents is then true and correct in all material
respects as of and as if made on the date of such request (except (A) to the
extent of changes resulting from transactions contemplated or permitted by this
Agreement or the other Loan Documents and changes occurring in the ordinary
course of business which singly or in the aggregate are not materially adverse
and (B) to the extent that such representations and warranties expressly relate
to a then earlier date).

 

(iii) Unless accompanied by the Certificate of the Borrowers’ Representative’s
Chief Executive Officer, President, or Chief Financial Officer describing (in
reasonable detail) the facts and circumstances thereof and the steps (if any)
being taken to remedy such condition, no Default has occurred and is continuing.

 

(g) If, at any time or from time to time, a Default shall occur:

 

(i) The Administrative Agent may suspend the Revolving Credit immediately, in
which event, neither the Administrative Agent nor any Revolving Credit Lender
shall be obligated during such suspension, to make any loan or advance, or to
provide any financial accommodation hereunder or to seek the issuance of any
L/C.

 

(ii) The Administrative Agent may suspend the right of the Borrowers’
Representative to request any Libor Loan or to convert any Base Margin Loan to a
Libor Loan.

 

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2.7. MAKING OF REVOLVING CREDIT LOANS.

 

(a) A loan or advance under the Revolving Credit shall be made by the transfer
of the proceeds of such loan or advance to the Operating Account or as otherwise
instructed by the Borrowers’ Representative.

 

(b) A loan or advance shall be deemed to have been made under the Revolving
Credit (and the Borrowers shall be indebted to the Administrative Agent and the
Revolving Credit Lenders for the amount thereof immediately) at the following:

 

(i) The Administrative Agent’s initiation of the transfer of the proceeds of
such loan or advance in accordance with the Borrowers’ Representative’s
instructions (if such loan or advance is of funds requested by the Borrowers’
Representative).

 

(ii) The charging of the amount of such loan to the Loan Account (in all other
circumstances).

 

(c) There shall not be any recourse to or liability of any Agent or any Lender
on account of:

 

(i) Any delay, beyond the reasonable control of the Agents and the Revolving
Credit Lenders, in the making of any loan or advance requested under the
Revolving Credit.

 

(ii) Any delay, beyond the reasonable control of the Agents and the Revolving
Credit Lenders, by any bank or other depository institution in treating the
proceeds of any such loan or advance as collected funds.

 

(iii) Any delay in the receipt, and/or any loss, of funds which constitute a
loan or advance under the Revolving Credit, the wire transfer of which was
properly initiated by the Administrative Agent in accordance with wire
instructions provided to the Administrative Agent by the Borrowers’
Representative.

 

2.8. SWINGLINE LOANS.

 

(a) For ease of administration, Base Margin Loans may be made by the SwingLine
Lender (in the aggregate, the “SwingLine Loans”) in accordance with the
procedures set forth in this Agreement for the making of loans and advances
under the Revolving Credit. The unpaid principal balance of the SwingLine Loans
shall not at any one time be in excess of the SwingLine Loan Ceiling.

 

(b) The aggregate unpaid principal balance of SwingLine Loans shall bear
interest at the rate applicable to Base Margin Loans and shall be repayable as a
loan under the Revolving Credit.

 

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(c) The Borrowers’ obligation to repay SwingLine Loans shall be evidenced by a
Note in the form of EXHIBIT 2.8, annexed hereto, executed by the Borrowers, and
payable to the SwingLine Lender. Neither the original nor a copy of that Note
shall be required, however, to establish or prove any Liability. The Borrowers
shall execute a replacement of any SwingLine Note which has been lost,
mutilated, or destroyed thereof and deliver such replacement to the SwingLine
Lender.

 

(d) For all purposes of this Loan Agreement, the SwingLine Loans and the
Borrowers’ obligations to the SwingLine Lender constitute Revolving Credit Loans
and are secured as “Liabilities”.

 

(e) SwingLine Loans may be subject to periodic settlement with the Revolving
Credit Lenders as provided in this Agreement.

 

2.9. THE LOAN ACCOUNT.

 

(a) An account (“Loan Account”) shall be opened on the books of the
Administrative Agent in which a record shall be kept of all loans and advances
made under the Revolving Credit.

 

(b) The Administrative Agent shall also keep a record (either in the Loan
Account or elsewhere, as the Administrative Agent may from time to time elect)
of all interest, fees, service charges, costs, expenses, and other debits owed
to the Administrative Agent and each Lender on account of the Liabilities and of
all credits against such amounts so owed.

 

(c) All credits against the Liabilities shall be conditional upon final payment
to the Administrative Agent for the account of each Lender of the items giving
rise to such credits. The amount of any item credited against the Liabilities
which is charged back against the Administrative Agent or any Lender for any
reason or is not so paid shall be a Liability and, if arising under the
Revolving Credit, shall be added to the Loan Account, whether or not the item so
charged back or not so paid is returned.

 

(d) Except as otherwise provided herein, all fees, service charges, costs, and
expenses for which any Borrower is obligated hereunder are payable on demand. In
the determination of Availability, the Administrative Agent may deem fees,
service charges, accrued interest, and other payments which will be due and
payable between the date of such determination and the first day of the then
next succeeding month as having been advanced under the Revolving Credit whether
or not such amounts are then due and payable.

 

(e) The Administrative Agent, without the request of the Borrowers’
Representative, may advance under the Revolving Credit any interest, fee,
service charge, or other payment to which any Agent or any Lender is entitled
from any Borrower pursuant hereto and may charge the same to the Loan Account
notwithstanding that an OverLoan may result thereby. Such action on the part of
the Administrative Agent shall not constitute a waiver of the Administrative
Agent’s rights and each Borrower’s obligations under Section 2.11(b). Any amount
which is added to the principal balance of the Loan Account as provided in this
Section 2.9(e) shall bear interest at the interest rate then and thereafter
applicable to Base Margin Loans.

 

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(f) In the absence of manifest error, a statement rendered by the Administrative
Agent or any Lender to the Borrowers’ Representative concerning the Liabilities
shall be considered correct and accepted by each Borrower and shall be
conclusively binding upon each Borrower unless the Borrowers’ Representative
provides the Administrative Agent with written objection thereto within thirty
(30) days from the mailing of such statement, which written objection shall
indicate, with particularity, the reason for such objection. In the absence of
manifest error, the Loan Account and the Administrative Agent’s books and
records concerning the loan arrangement contemplated herein and the Liabilities
shall be prima facie evidence and proof of the items described therein.

 

2.10. THE REVOLVING CREDIT NOTES. The Borrowers’ obligation to repay loans and
advances under the Revolving Credit, with interest as provided herein, shall be
evidenced by notes (each, a “Revolving Credit Note”) in the form of EXHIBIT
2.10, annexed hereto, executed by each Borrower, one payable to each Revolving
Credit Lender. Neither the original nor a copy of any Revolving Credit Note
shall be required, however, to establish or prove any Liability. Upon the
Borrowers’ Representative’s being provided with an affidavit, from the
Administrative Agent to the effect that any Revolving Credit Note has been lost,
mutilated, or destroyed, the Borrowers shall execute a replacement thereof and
deliver such replacement to the Administrative Agent.

 

2.11. PAYMENT OF THE LOAN ACCOUNT.

 

(a) The Borrowers may repay all or any portion of the principal balance of the
Loan Account from time to time until the Termination Date. Unless the Borrowers’
Representative otherwise advises the Administrative Agent, such payments shall
be applied first to Base Margin Loans and only then to Libor Loans.

 

(b) The Borrowers, without notice or demand from the Administrative Agent or any
Revolving Credit Lender, shall pay the Administrative Agent that amount, from
time to time, which is necessary so that there is no OverLoan outstanding.

 

(c) The Borrowers shall repay the then entire unpaid balance of the Loan Account
and all other Liabilities on the Termination Date.

 

(d) The Administrative Agent shall endeavor to cause the application of payments
(if any), pursuant to Sections 2.11(a) and 2.11(b) against Libor Loans then
outstanding in such manner as results in the least cost to the Borrowers, but
shall not have any affirmative obligation to do so nor liability on account of
the Administrative Agent’s failure to have done so. In no event shall action or
inaction taken by the Administrative Agent excuse any Borrower from any
indemnification obligation under Section 2.11(e).

 

(e) The Borrowers shall indemnify the Administrative Agent and each Revolving
Credit Lender and hold the Administrative Agent and each Revolving Credit Lender
harmless from and against any loss, cost or expense (including loss of
anticipated profits and amounts payable by the Administrative Agent or such
Revolving Credit Lender on account of “breakage fees” (so-called)) which the
Administrative Agent or such Revolving Credit Lender

 

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may sustain or incur (including, without limitation, by virtue of acceleration
after the occurrence of any Event of Default) as a consequence of the following:

 

(i) Default by any Borrower in payment of the principal amount of or any
interest on any Libor Loan as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Revolving Credit Lender
in order to maintain its Libor Loans.

 

(ii) Default by any Borrower in making a borrowing or conversion after the
Borrowers’ Representative has given (or is deemed to have given) a request for a
Revolving Credit Loan or a request to convert a Revolving Credit Loan from one
applicable interest rate to another.

 

(iii) The making of any payment on a Libor Loan or the making of any conversion
of any such Loan to a Base Margin Loan on a day that is not the last day of the
applicable Interest Period with respect thereto.

 

2.12. INTEREST ON REVOLVING CREDIT LOANS.

 

(a) Each Revolving Credit Loan shall bear interest at the Base Margin Rate
unless timely notice is given (as provided in Section 2.6) that the subject
Revolving Credit Loan (or a portion thereof) is, or is to be converted to, a
Libor Loan.

 

(b) Each Revolving Credit Loan which consists of a Libor Loan shall bear
interest at the applicable Libor Rate.

 

(c) Subject to, and in accordance with, the provisions of this Agreement, the
Borrowers’ Representative may cause all or a part of the unpaid principal
balance of the Loan Account to bear interest at the Base Margin Rate or the
Libor Rate as specified from time to time by notice to the Administrative Agent.
For ease of reference and administration, each part of the Loan Account which
bears interest at the same interest and for the same Interest Period is referred
to herein as if it were a separate “Revolving Credit Loan”.

 

(d) The Borrowers’ Representative shall not select, renew, or convert any
interest rate for a Revolving Credit Loan such that, in addition to interest at
the Base Margin Rate, there are more than seven (7) Libor Rates applicable to
the Revolving Credit Loans at any one time.

 

(e) The Borrowers shall pay accrued and unpaid interest on each Revolving Credit
Loan in arrears as follows:

 

(i) On the applicable Interest Payment Date for that Revolving Credit Loan.

 

(ii) On the Termination Date and on the End Date.

 

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(iii) Following the occurrence of any Event of Default, with such frequency as
may be determined by the Administrative Agent.

 

(f) Following the occurrence of any Event of Default (and whether or not the
Administrative Agent exercises the Administrative Agent’s rights on account
thereof), all Revolving Credit Loans shall bear interest, at the option of the
Administrative Agent or at the instruction of the SuperMajority Revolving Credit
Lenders, at a rate which is the aggregate of the rate applicable to Base Margin
Loans plus three percent (3%) per annum.

 

2.13. REVOLVING CREDIT COMMITMENT FEE. In consideration of the commitment to
make loans and advances to the Borrowers under the Revolving Credit, and to
maintain sufficient funds available for such purpose, there has been earned by
FRG and the Borrowers shall pay the “Revolving Credit Commitment Fee” (so
referred to herein) to the Administrative Agent in the amount and payable as
provided in the Fee Letter.

 

2.14. ADMINISTRATIVE AGENT’S FEE. In addition to any other fee or expense to be
paid by the Borrowers on account of the Revolving Credit, the Borrowers shall
pay the Administrative Agent the “Administrative Agent’s Fee” at the times and
in the amounts as set forth in the Fee Letter.

 

2.15. UNUSED LINE FEE. In addition to any other fee to be paid by the Borrowers
on account of the Revolving Credit, the Borrowers shall pay the Administrative
Agent the “Unused Line Fee” (so referred to herein) of (i) 0.25% per annum for
any quarter during which average Excess Availability is greater than
$20,000,000.000 or (ii) 0.375% per annum for any quarter during which average
Excess Availability is less than or equal to $20,000,000.00 of the average
difference, during the quarter just ended (or relevant period with respect to
the payment being made on the Termination Date) between the Revolving Credit
Ceiling and the aggregate of the unpaid principal balance of the Loan Account
and the undrawn Stated Amount of L/C’s outstanding during the relevant period.
The Unused Line Fee shall be paid in arrears, on the first day of each quarter
after the execution of this Agreement and on the Termination Date.

 

2.16. REVOLVING CREDIT EARLY TERMINATION FEE.

 

(a) In the event that the Termination Date occurs, for any reason (whether by
virtue of Acceleration or otherwise), prior to the date one year prior to the
Maturity Date, then except as provided in Section 2.16(b), the Borrowers shall
pay the Administrative Agent, for the Pro-Rata account of the Revolving Credit
Lenders, the “Revolving Credit Early Termination Fee” (so referred to herein)
consisting of (i) one and one-half percent (1 1/2%) of the Revolving Credit
Ceiling in effect as of the date of this Agreement if the Termination Date shall
occur at any time prior to the first anniversary of the Closing Date and (i) one
percent (1%) of the Revolving Credit Ceiling in effect as of the date of this
Agreement if the Termination Date shall occur at any time after the first
anniversary of the Closing Date and prior to one year prior to the Maturity
Date.

 

(b) No Revolving Credit Early Termination Fee shall be due and payable in the
event of the early termination of the Revolving Credit in connection with a
refinancing of the

 

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Revolving Credit which is agented or provided by FRG or any Affiliate of FRG, it
being understood that neither FRG nor any affiliate of FRG has agreed to provide
any such refinancing.

 

2.17. AGENTS’ AND LENDERS’ DISCRETION.

 

(a) Each reference in the Loan Documents to the exercise of discretion,
reasonable discretion, or the like by any Agent or any Lender shall be to such
Person’s reasonable exercise of its judgment, in good faith (which shall be
rebuttably presumed), based upon such Person’s consideration of any such factors
as that Agent or that Lender, taking into account information of which that
Person then has actual knowledge, reasonably believes:

 

(i) Will or reasonably could be expected to affect, in more than a de minimis
manner, the value of the Collateral, the enforceability of the Collateral
Agent’s Collateral Interests therein, or the amount which the Collateral Agent
would likely realize therefrom (taking into account delays which may possibly be
encountered in the Collateral Agent’s realizing upon the Collateral and likely
Costs of Collection).

 

(ii) Indicates that any report or financial information delivered to any Agent
or any Lender by or on behalf of any Loan Party is incomplete, inaccurate, or
misleading in any material manner or was not prepared in accordance with the
requirements of this Agreement.

 

(iii) That a Default has occurred and is continuing.

 

(b) In the exercise of such judgment, each Agent or each Lender reasonably also
may take into account any of the following factors:

 

(i) Those included in, or tested by, the definitions of “Eligible Accounts” and
“Eligible Inventory”.

 

(ii) The current financial and business climate of the industry in which each
Loan Party competes (having regard for that Loan Party’s position in that
industry).

 

(iii) General macroeconomic conditions which have a material effect on the Loan
Parties’ cost structure.

 

(iv) Material changes in or to the mix of the Borrowers’ Inventory.

 

(v) Seasonality with respect to the Borrowers’ Inventory and patterns of retail
sales.

 

(vi) Such other factors as each Agent and each Lender reasonably determine as
having a material bearing on credit risks associated with the providing of loans
and financial accommodations to the Borrowers.

 

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(c) The burden of establishing the failure of any Agent or any Lender to have
acted in a reasonable manner in such Person’s exercise of such discretion shall
be the Loan Parties’ and may be made only by clear and convincing evidence.

 

2.18. PROCEDURES FOR ISSUANCE OF L/C’s.

 

(a) The Borrowers’ Representative may request that the Administrative Agent
cause the issuance by the Issuer of L/C’s for the account of a Borrower. Each
such request shall be in such manner as may from time to time be reasonably
acceptable to the Administrative Agent.

 

(b) The Administrative Agent will endeavor to cause the issuance of any L/C so
requested by the Borrowers’ Representative, provided that, at the time that the
request is made, the Revolving Credit has not been suspended as provided in
Section 2.6(g) and if so issued:

 

(i) The aggregate Stated Amount of all L/C’s then outstanding, does not exceed
$20,000,000.

 

(ii) The expiry of the L/C is not later than the earlier of thirty (30) days
prior to the Maturity Date or the following:

 

  (A) Standby’s: One (1) year from initial issuance.

 

  (B) Documentaries: one hundred (100) days from issuance.

 

(iii) If the expiry of an L/C is later than the Maturity Date, it is 103% cash
collateralized at its issuance.

 

(iv) An OverLoan will not result from the issuance of the subject L/C.

 

(c) Each Borrower shall execute such documentation to apply for and support the
issuance of an L/C as may be required by the Issuer.

 

(d) There shall not be any recourse to, nor liability of, any Agent or any
Lender on account of

 

(i) Any delay or refusal by an Issuer to issue an L/C;

 

(ii) Any action or inaction of an Issuer on account of or in respect to, any L/C
except where there is a specific finding in a judicial proceeding (in which the
Administrative Agent has had an opportunity to be heard), from which finding no
further appeal is available, that the subject action or omission to act had been
in actual bad faith or grossly negligent or constituted willful misconduct.

 

(e) The Borrowers shall reimburse the Issuer for the amount of any honoring of a
drawing under an L/C on the same day on which such honoring takes place. The

 

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Administrative Agent, without the request of any Borrower, may advance under the
Revolving Credit (and charge to the Loan Account) the amount of any honoring of
any L/C and other amount for which any Borrower, the Issuer, or the Revolving
Credit Lenders become obligated on account of, or in respect to, any L/C. Such
advance shall be made whether or not any Default has occurred and is continuing
or such advance would result in an OverLoan. Such action shall not constitute a
waiver of the Administrative Agent’s rights under Section 2.11(b) hereof.

 

2.19. FEES FOR L/C’s.

 

(a) The Borrowers shall pay to the Administrative Agent the following per annum
fees on account of L/C’s, the issuance of which had been procured by the
Administrative Agent monthly in arrears, and on the Termination Date and on the
End Date based on the weighted average Stated Amount of L/C’s outstanding during
the period in respect of which such fee is being paid except that, following the
occurrence and during the continuance of any Event of Default (and whether or
not the Administrative Agent exercises the Administrative Agent’s rights on
account thereof), such fees, at the option of the Administrative Agent or the
direction of the SuperMajority Revolving Credit Lenders, shall be the respective
aggregate of those set forth below plus three percent (3%) per annum.

 

(i) Documentaries: The Libor Margin then in effect minus 50 basis points.

 

(ii) Standbys: The Libor Margin then in effect.

 

(b) In addition to the fee to be paid as provided in Subsection 2.19(a) above,
the Borrowers shall pay to the Administrative Agent (or to the Issuer, if so
requested by Administrative Agent), on demand, all customary issuance,
processing, negotiation, amendment, and administrative fees and other amounts
charged by the Issuer on account of, or in respect to, any L/C.

 

(c) If any change in Applicable Law shall either:

 

(i) impose, modify or deem applicable any reserve, special deposit or similar
requirements against letters of credit heretofore or hereafter issued by any
Issuer or with respect to which any Revolving Credit Lender or any Issuer has an
obligation to lend to fund drawings under any L/C; or

 

(ii) impose on any Issuer any other condition or requirements relating to any
such letters of credit;

 

and the result of any event referred to in Section 2.19(c)(i) or 2.19(c)(ii),
above, shall be to increase the cost to any Revolving Credit Lender or to any
Issuer of issuing or maintaining any L/C (which increase in cost shall be the
result of such Issuer’s reasonable allocation among that Revolving Credit
Lender’s or Issuer’s letter of credit customers of the aggregate of such cost
increases resulting from such events), then, upon demand by the Administrative
Agent and delivery by the Administrative Agent to the Borrowers’ Representative
of a certificate of an officer of the subject Revolving Credit Lender or the
subject Issuer describing such change in

 

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law, executive order, regulation, directive, or interpretation thereof, its
effect on such Revolving Credit Lender or such Issuer, and the basis for
determining such increased costs and their allocation, the Borrowers shall
immediately pay to the Administrative Agent, from time to time as specified by
the Administrative Agent, such amounts as shall be sufficient to compensate the
subject Revolving Credit Lender or the subject Issuer for such increased cost.
In the absence of manifest error, any Revolving Credit Lender’s or any Issuer’s
determination of costs incurred under Sections 2.19(c)(i) or 2.19(c)(ii), above,
and the allocation, if any, of such costs among the Borrowers and other letter
of credit customers of such Revolving Credit Lender or such Issuer, if done in
good faith and made on an equitable basis and in accordance with such officer’s
certificate, shall be conclusive and binding on the Borrowers.

 

2.20. CONCERNING L/CS.

 

(a) None of the Issuer, the Issuer’s correspondents, any Lender, any Agent, or
any advising, negotiating, or paying bank with respect to any L/C shall be
responsible in any way for:

 

(i) The performance by any beneficiary under any L/C of that beneficiary’s
obligations to any Borrower.

 

(ii) The form, sufficiency, correctness, genuineness, authority of any person
signing; falsification; or the legal effect of; any documents called for under
any L/C if (with respect to the foregoing) such documents on their face appear
to be in order.

 

(b) The Issuer may honor, as complying with the terms of any L/C and of any
drawing thereunder, any drafts or other documents otherwise in order, but signed
or issued by an administrator, executor, conservator, trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, liquidator,
receiver, or other legal representative of the party authorized under such L/C
to draw or issue such drafts or other documents.

 

(c) Unless otherwise agreed to, in the particular instance, each Borrower hereby
authorizes any Issuer to:

 

(i) Select an advising bank, if any.

 

(ii) Select a paying bank, if any.

 

(iii) Select a negotiating bank, if any.

 

(d) All directions, correspondence, and funds transfers relating to any L/C are
at the risk of the Borrowers. The Issuer shall have discharged the Issuer’s
obligations under any L/C which, or the drawing under which, includes payment
instructions, by the initiation of the method of payment called for in, and in
accordance with, such instructions (or by any other commercially reasonable and
comparable method). None of the Agent, the Lenders, or the Issuer shall have any
responsibility for any inaccuracy, interruption, error, or delay in transmission
or delivery by post, telegraph or cable, or for any inaccuracy of translation.

 

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(e) Each Agent’s, each Lender’s and the Issuer’s rights, powers, privileges and
immunities specified in or arising under this Agreement are in addition to any
heretofore or at any time hereafter otherwise created or arising, whether by
statute or rule of law or contract.

 

(f) Except to the extent otherwise expressly provided hereunder or agreed to in
writing by the Issuer and the Borrowers’ Representative, documentary L/C’s will
be governed by the Uniform Customs and Practice for Documentary Credits,
International Chamber of Commerce, Publication No. 500, and standby L/C’s will
be governed by International Standby Practices ISP98 (adopted by the
International Chamber of Commerce on April 6, 1998) and any respective
subsequent revisions thereof.

 

(g) The obligations of the Borrowers under this Agreement with respect to L/C’s
are absolute, unconditional, and irrevocable and shall be performed strictly in
accordance with the terms hereof under all circumstances, whatsoever including,
without limitation, the following:

 

(i) Any lack of validity or enforceability or restriction, restraint, or stay in
the enforcement of this Agreement, any L/C, or any other agreement or instrument
relating thereto.

 

(ii) Any Borrower’s consent to any amendment or waiver of, or consent to the
departure from, any L/C.

 

(iii) The existence of any claim, set-off, defense, or other right which any
Borrower may have at any time against the beneficiary of any L/C.

 

(iv) Any good faith honoring of a drawing under any L/C, which drawing possibly
could have been dishonored based upon a strict construction of the terms of the
L/C.

 

(h) Each Issuer shall be deemed to have agreed as follows:

 

(i) That any action taken or omitted by that Issuer, that Issuer’s
correspondents, or any advising, negotiating or paying bank with respect to any
L/C and the related drafts and documents, shall be done in good faith and in
compliance with foreign or domestic laws.

 

(ii) That the Borrowers shall not be required to indemnify the Issuer, the
Issuer’s correspondents, or any advising, negotiating or paying bank with
respect to any L/C for any claims, damages, losses, liabilities, costs or
expenses to the extent, caused by (x) the willful misconduct or gross negligence
of the Issuer, the Issuer’s correspondents, or any advising, negotiating or
paying bank with respect to any L/C in determining whether a request presented
under any Letter of Credit complied with the terms of such Letter of Credit or
(y) the Issuer’s failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms and conditions
of such Letter of Credit.

 

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2.21. CHANGED CIRCUMSTANCES.

 

(a) The Administrative Agent may advise the Borrowers’ Representative (in
reasonable detail as to the facts and circumstances thereof) that the
Administrative Agent has made the good faith determination (which determination,
in the absence of manifest error, shall be final and conclusive) of any of the
following:

 

(i) Adequate and fair means do not exist for ascertaining the rate for Libor
Loans .

 

(ii) The continuation of or conversion of any Revolving Credit Loan to a Libor
Loan has been made impracticable or unlawful by the occurrence of a contingency
that materially and adversely affects the applicable market or the compliance by
the Administrative Agent or any Revolving Credit Lender in good faith with any
Applicable Law.

 

(iii) The indices on which the interest rates for Libor Loans are based shall no
longer represent the effective cost to the Administrative Agent or any Revolving
Credit Lender for U.S. dollar deposits in the interbank market for deposits in
which it regularly participates.

 

(b) In the event that the Administrative Agent advises the Borrowers’
Representative of an occurrence described in Section 2.21(a), then, until the
Administrative Agent notifies the Borrowers’ Representative that the
circumstances giving rise to such notice no longer apply:

 

(i) The obligation of the Agent or each Revolving Credit Lender to make loans of
the type affected by such changed circumstances or to permit the Borrowers’
Representative to select the affected interest rate as otherwise applicable to
any Revolving Credit Loans shall be suspended.

 

(ii) Any notice which the Borrowers’ Representative had given the Administrative
Agent with respect to any Libor Loan, the time for action with respect to which
has not occurred prior to the Administrative Agent’s having given notice
pursuant to Section 2.21(a), shall be deemed at the option of the Administrative
Agent to not having been given.

 

2.22. DESIGNATION OF BORROWERS’ REPRESENTATIVE AS BORROWERS’ AGENT.

 

(a) Each Borrower hereby irrevocably designates and appoints the Borrowers’
Representative as that Borrower’s agent to obtain loans and advances under the
Revolving Credit, and Tranche B Loan, the proceeds of which shall be available
to each Borrower for those uses set forth in this Agreement. As the disclosed
principal for its agent, each Borrower shall be obligated to the Agents and each
Lender on account of loans and advances so made as if made directly by the
Lenders to that Borrower, notwithstanding the manner by which such loans and
advances are recorded on the books and records of the Borrowers’ Representative
and of any Borrower. In addition, each Loan Party other than the Borrowers
hereby irrevocably designates and appoints the Borrowers’ Representative as that
Loan Party’s agent to represent such Loan Party in all respects under this
Agreement and the other Loan Documents.

 

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(b) Each Borrower recognizes that credit available to it under the Revolving
Credit and the Tranche B Loan is in excess of and on better terms than it
otherwise could obtain on and for its own account and that one of the reasons
therefor is its joining in the credit facility contemplated herein with all
other Borrowers. Consequently, each Borrower hereby assumes and agrees to
discharge all Liabilities of each of the other Borrowers as if the Borrower
which is so assuming and agreeing was each of the other Borrowers.

 

(c) The Borrowers’ Representative shall act as a conduit for each Borrower
(including itself, as a “Borrower”) on whose behalf the Borrowers’
Representative has requested a Revolving Credit Loan or Tranche B Loan.

 

(d) The proceeds of each loan and advance provided under the Revolving Credit
which is requested by the Borrowers’ Representative shall be deposited into the
Operating Account or as otherwise indicated by the Borrowers’ Representative.
The Borrowers’ Representative shall cause the transfer of the proceeds thereof
to the (those) Borrower(s) on whose behalf such loan and advance was obtained.
Neither the Agent nor any Lender shall have any obligation to see to the
application of such proceeds.

 

2.23. LENDERS’ COMMITMENTS.

 

(a) Subject to Section 17.1 (which provides for assignments and assumptions of
commitments) and Section 2.24 (which provides for the increase of commitments),
each Revolving Credit Lender’s “Revolving Credit Percentage Commitment”, and
“Revolving Credit Dollar Commitment” (respectively so referred to herein) is set
forth on EXHIBIT 2.23, annexed hereto.

 

(b) The obligations of each Revolving Credit Lender are several and not joint.
No Revolving Credit Lender shall have any obligation to make any loan or advance
under the Revolving Credit in excess of either of the following:

 

(i) That Revolving Credit Lender’s Revolving Credit Percentage Commitment of the
subject loan or advance or of Availability.

 

(ii) that Revolving Credit Lender’s Revolving Credit Dollar Commitment.

 

(c) No Revolving Credit Lender shall have any liability to the Borrowers on
account of the failure of any other Revolving Credit Lender to provide any loan
or advance under the Revolving Credit nor any obligation to make up any
shortfall which may be created by such failure.

 

(d) The Revolving Credit Dollar Commitments, Revolving Credit Commitment
Percentages, and identities of the Revolving Credit Lenders (but not the
Revolving Credit Ceiling) may be changed, from time to time by the reallocation
or assignment of

 

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Revolving Credit Dollar Commitments and Revolving Credit Commitment Percentages
amongst the Revolving Credit Lenders or with other Persons who determine to
become “Revolving Credit Lenders”; provided, however unless an Event of Default
has occurred (in which event, no consent of any Borrower is required) any
assignment to a Person not then a Revolving Credit Lender shall be subject to
the prior consent of the Borrowers’ Representative (not to be unreasonably
withheld), which consent will be deemed given unless the Borrowers’
Representative provides the Administrative Agent with written objection not more
than five (5) Business Days after the Administrative Agent shall have given the
Borrowers’ Representative written notice of a proposed assignment, such notice
to state that consent will be deemed given by the Borrowers’ Representative if
written objection is not received by the Administrative Agent within such five
(5) Business Days.

 

(e) Upon written notice given the Borrowers’ Representative from time to time by
the Administrative Agent of any assignment or allocation referenced in Section
2.23(d):

 

(i) Each Borrower shall execute one or more replacement Revolving Credit Notes
to reflect such changed Revolving Credit Dollar Commitments, Revolving Credit
Commitment Percentages, and identities and shall deliver such replacement
Revolving Credit Notes to the Administrative Agent (which promptly thereafter
shall deliver to the Borrowers’ Representative the Revolving Credit Notes so
replaced) provided however, in the event that a Revolving Credit Note is to be
exchanged following its acceleration or the entry of an order for relief under
the Bankruptcy Code with respect to any Borrower, the Administrative Agent, in
lieu of causing the Borrowers to execute one or more new Revolving Credit Notes,
may issue the Administrative Agent’s Certificate confirming the resulting
Revolving Credit Dollar Commitments and Revolving Credit Percentage Commitments.

 

(ii) Such change shall be effective from the effective date specified in such
written notice and any Person added as a Revolving Credit Lender shall have all
rights, privileges, and obligations of a Revolving Credit Lender hereunder
thereafter as if such Person had been a signatory to this Agreement and any
other Loan Document to which a Revolving Credit Lender is a signatory and any
Person removed as a Revolving Credit Lender shall be relieved of any obligations
or responsibilities of a Revolving Credit Lender hereunder thereafter.

 

2.24. INCREASE OF COMMITMENTS

 

(a) So long as no Default or Event of Default exist or would arise as a result
thereof, Borrowers’ Representative shall have the right at any time, but only
one time during the term of this Agreement, to request an increase of the
Revolving Credit Ceiling and the Revolving Credit Dollar Commitments to an
amount not to exceed $110,000,000. Any such requested increase shall be first
made to all existing Revolving Credit Lenders on a pro rata basis. In the event
that any existing Revolving Credit Lender does not notify the Administrative
Agent within ten (10) Business Days from the receipt of the requested increase
that the such existing Revolving Credit Lender will increase its Revolving
Credit Dollar Commitment, and the amount of its increase, the existing Revolving
Credit Lender shall be deemed to have declined the

 

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requested increase of its Revolving Credit Dollar Commitment. To the extent that
one or more existing Revolving Credit Lenders decline to increase their
respective Revolving Credit Dollar Commitments, or decline to increase their
Revolving Credit Dollar Commitments to the amount requested by the Borrowers’
Representative, the Agent shall use reasonable efforts to arrange for other
Persons to become Revolving Credit Lenders hereunder and to issue commitments in
an amount equal to the amount of the increase in the Revolving Credit Ceiling
and Revolving Credit Dollar Commitments requested by the Borrowers’
Representative and not accepted by the existing Revolving Credit Lenders (each
such increase by either means, a “Commitment Increase”, and each such Person
issuing, or Revolving Credit Lender increasing, its Revolving Credit Dollar
Commitment, an “Additional Commitment Lender”), provided, however, that (x) no
Revolving Credit Lender shall be obligated to provide a Commitment Increase as a
result of any such request by the Borrower’ Representative, and (y) any
Additional Commitment Lender which is not an existing Revolving Credit Lender
shall be subject to the approval of the Administrative Agent and (z) nothing
contained herein shall constitute the unconditional obligation of the
Administrative Agent to provide or obtain commitments for such Commitment
Increase, as the Administrative Agent only is agreeing hereby to use its
reasonable efforts to arrange for Commitment Increases and Additional Commitment
Lenders.

 

(b) No Commitment Increase shall become effective unless and until each of the
following conditions has been satisfied:

 

(i) the Borrowers’ Representative, 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 Borrowers shall have paid such commitment fees and other compensation
to the Additional Commitment Lenders as the Borrowers’ Representative, the
Administrative Agent and each such Additional Commitment Lenders may agree;

 

(iii) the Borrowers shall have paid such arrangement fees to the Administrative
Agent as the Borrowers’ Representative and the Agent may agree;

 

(iv) to the extent requested by any Additional Commitment Lender, a Revolving
Credit Note will be issued at the Borrowers’ expense, to each such Additional
Commitment Lender, to the extent necessary to reflect the new Revolving Credit
Dollar Commitment of such Additional Commitment Lender; and

 

(v) the Borrower and the Additional Commitment Lenders shall have delivered such
other instruments, documents and agreements as the Administrative Agent may have
reasonably requested.

 

(c) The Administrative Agent shall promptly notify each Revolving Credit 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 (x) the Revolving Credit Dollar Commitments under, and for all
purposes of, this Agreement shall be increased by the aggregate amount of such
Commitment Increases, (y) EXHIBIT 2.23 shall

 

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be deemed modified, without further action, to reflect the revised Revolving
Credit Dollar Commitments and Revolving Credit Percentage Commitments of the
Revolving Credit Lenders, and (z) this Agreement shall be deemed amended,
without further action, to the extent necessary to reflect such increase in the
Revolving Credit Ceiling, such Commitment Increases, and the addition of the
Additional Commitment Lenders (if applicable).

 

(d) In connection with Commitment Increases hereunder, the Revolving Credit
Lenders and the Borrowers agree that, notwithstanding anything to the contrary
in this Agreement, the Borrowers shall, in coordination with the Administrative
Agent, (x) repay outstanding Revolving Credit Loans of certain Revolving Credit
Lenders, and obtain Revolving Credit Loans from certain other Revolving Credit
Lenders (including the Additional Commitment Lenders), but in no event in excess
of any such Revolving Credit Lender’s respective Revolving Credit Dollar
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
Revolving Credit Lenders effectively participate in each of the outstanding
Revolving Credit Loans pro rata on the basis of their respective Revolving
Credit Percentage (determined after giving effect to any Commitment Increase.

 

2.25. REFERENCES TO ORIGINAL AGREEMENT The terms “Loan and Security Agreement,”
“this Agreement,” “Loan Agreement,” and similar references as used in the
documents, instruments and agreements executed and/or delivered in connection
with the Original Agreement, shall mean the Original Agreement as amended and
restated hereby in its entirety, and each of such documents, instruments and
agreements is hereby so amended. Except as specifically agreed herein or in any
of the Loan Documents executed concurrently herewith, each of the Loan Documents
executed and delivered in connection with the Original Agreement is hereby
ratified and confirmed and shall remain in full force and effect in accordance
with its terms. Without limitation of the foregoing, the Loan Parties hereby
confirm that the Collateral Interests granted under the Original Agreement and
each other applicable Loan Document continue to secure all of the Liabilities.

 

ARTICLE 3 - The Tranche B Loan:

 

3.1. THE TRANCHE B LOAN.

 

(a) Subject to satisfaction of the conditions precedent set forth in Article 4
on the Closing Date, the Borrowers shall borrow from the Tranche B Lender and
the Tranche B Lender shall lend to the Borrowers the sum of $7,500,000.00 (the
“Tranche B Loan”), repayable with interest as provided herein.

 

(b) The proceeds of the Tranche B Loan shall be used solely for the Rochester
Acquisition.

 

3.2. THE TRANCHE B NOTE. The obligation to repay the Tranche B Loan, with
interest as provided herein, shall be evidenced by a note (the “Tranche B Note”)
in the form of EXHIBIT 3.2, annexed hereto, executed by the Borrowers. Neither
the original nor a copy of the Tranche B Note shall be required, however, to
establish or prove any Liability. Upon the

 

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Borrowers’ Representative’s receipt of an affidavit from the Administrative
Agent to the effect that the Tranche B Note has been lost, mutilated, or
destroyed, the Borrowers shall execute a replacement thereof and deliver such
replacement to the Tranche B Lender.

 

3.3. PAYMENT OF PRINCIPAL OF THE TRANCHE B LOAN.

 

(a) Provided at the time and after giving effect to the proposed payment, Excess
Availability is greater than $12,500,000.00, the Borrowers shall make to the
Administrative Agent for the account of the Tranche B Lender the following
payments on or before the dates specified (the “Tranche B Amortization
Payment”), such payments to be applied to the unpaid principal balance of the
Tranche B Loan:

 

Date

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

   Payment

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

October 29, 2005    $1,875,000.00 October 29, 2006    $1,875,000.00

 

(b) Except as specifically set forth in Section 3.3(a) with respect to the
Tranche B Amortization Payment, the Borrowers may not prepay all or any portion
of the principal balance of the Tranche B Loan prior to the Maturity Date or
Acceleration unless each of the Tranche B Loan Prepayment Conditions is
satisfied in connection with such prepayment; provided, however, that
notwithstanding the foregoing, so long as no Default shall have occurred and be
continuing on the date on which such prepayment is made and immediately after
giving effect to such prepayment, the Tranche B Loan may be prepaid without
satisfaction of the Tranche B Loan Prepayment Conditions if the sole source of
funds for such prepayment shall be proceeds from the sale of equity in Casual
Male on terms and conditions and subject to execution of documentation
satisfactory to the Administrative Agent. Subject to satisfaction of the Tranche
B Loan Prepayment Conditions or the exception described in the preceding
sentence, any prepayment of the Tranche B Loan shall be without penalty or
premium.

 

(c) If any portion of the Tranche B Loan is paid prior to the Maturity Date for
any reason, other than the Tranche B Amortization Payment (whether following
satisfaction of the Tranche B Loan Prepayment Conditions, Acceleration, or
otherwise), all such prepayments in a minimum amount of $2,000,000. and in
increments in excess thereof of $500,000.

 

(d) The Borrowers shall repay the then entire unpaid balance of the Tranche B
Loan and all accrued and unpaid interest thereon on the Termination Date.

 

3.4. INTEREST ON THE TRANCHE B LOAN.

 

(a) The unpaid principal balance of the Tranche B Loan shall bear interest,
until repaid, at the rate of LIBOR +5% per annum (the “Tranche B Interest
Rate”).

 

(b) In the event of the amendment of any interest rate which is or which may be
applicable to the unpaid principal balance of the Revolving Credit, the Tranche
B Interest

 

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Rate shall be increased by a like amount (e.g. if the Base Margin Rate is
increased by one-quarter of one percent per annum or the Libor Rate is increased
by 25 basis points, the Tranche B Interest Rate shall likewise be increased by
one-quarter of one percent per annum).

 

(c) Following the occurrence of any Event of Default (and whether or not
Acceleration has taken place), at the direction of the Tranche B Lender,
interest shall accrue and shall be payable on the unpaid principal balance of
the Tranche B Loan at the aggregate of the Tranche B Interest Rate then in
effect plus four percent (4%) per annum.

 

(d) The Borrowers shall pay accrued and unpaid interest on the unpaid principal
balance of the Tranche B Loan as follows:

 

(i) Monthly on the last date of each month;

 

(ii) On the Termination Date and on the End Date; and

 

(iii) Following the occurrence of an Event of Default, with such frequency as
may be determined by the Tranche B Lender.

 

3.5. PAYMENTS ON ACCOUNT OF TRANCHE B LOAN. The Borrowers authorize the
Administrative Agent to determine and to pay over directly to the Tranche B
Lender any and all amounts due and payable from time to time under or on account
of the Tranche B Loan as advances under the Revolving Credit it being
understood, however, that the authorization of the Administrative Agent provided
in this Section 3.5 shall not excuse the Borrowers from fulfilling their
obligations to the Tranche B Lender on account of the Tranche B Loan nor place
any obligation on the Administrative Agent to do so. The Administrative Agent
shall provide prompt advice to the Borrowers’ Representative of any amount which
is so paid over by the Administrative Agent to the Tranche B Lender pursuant to
this Section 3.5. The Tranche B Lender shall refund to the Administrative Agent
any overpayment which may have been made pursuant to this Section 3.5. The
Borrowers shall not be entitled to any credit, rebate or repayment of any fee
previously earned by the Tranche B Lender pursuant to this Agreement
notwithstanding any termination of this Agreement or suspension or termination
of the Administrative Agent’s and any Lender’s respective obligation to make
loans and advances hereunder.

 

ARTICLE 4 - CONDITIONS PRECEDENT:

 

As a condition to the effectiveness of this Agreement, the establishment of the
Revolving Credit, the making of the first loan under the Revolving Credit, and
the making of the Tranche B Loan, each of the documents respectively described
in Sections 4.1 through and including 4.5, (each in form and substance
satisfactory to the Administrative Agent and the Tranche B Lender) shall have
been delivered to the Administrative Agent, and the conditions respectively
described in Sections 4.6 through and including 4.13, shall have been satisfied:

 

4.1. DUE DILIGENCE.

 

(a) Certificates of good standing for each Loan Party, respectively issued by
the Secretary of State for the state in which that Loan Party is organized.

 

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(b) Certificates of due qualification, in good standing, issued by the
Secretary(ies) of State of each State in which the nature of a Loan Party’s
business conducted or assets owned could require such qualification.

 

(c) Certificates of each Loan Party’s clerk or secretary, as applicable, of the
due adoption, continued effectiveness, and setting forth the texts of, each
resolution adopted in connection with the establishment of the loan arrangement
contemplated by the Loan Documents and attesting to the true signatures of each
Person authorized as a signatory to any of the Loan Documents.

 

4.2. OPINION. One or more reasonable and customary opinions of counsel to the
Loan Parties

 

4.3. ADDITIONAL DOCUMENTS. Such additional instruments and documents as the
Administrative Agent or its counsel or the Tranche B Lender reasonably may
require or request, including, without limitation, written instructions to the
Administrative Agent to apply the proceeds of the Tranche B Loan and the first
funding under the Revolving Credit to the Rochester Acquisition.

 

4.4. OFFICERS’ CERTIFICATES. Certificates executed by (a) either the President
or the Chief Executive Officer and (b) the Chief Financial Officer of the
Borrowers’ Representative and stating that the representations and warranties
made by the Loan Parties to the Agents and the Lenders in the Loan Documents are
true and complete in all material respects as of the date of such Certificate,
and that no event has occurred which is or which, solely with the giving of
notice or passage of time (or both) would be an Event of Default.

 

4.5. ROCHESTER ACQUISITION. The Administrative Agent shall have received (i) a
fully executed copy of the Rochester Acquisition Agreement, together with all
exhibits and schedules thereto and all other agreements, documents and
instruments executed and delivered in accordance therewith, each certified by an
officer of the Borrowers’ Representative as being true and correct copies
thereof; (ii) evidence that the Rochester Acquisition Agreement is in full force
and effect, all filings, consents and approvals required by applicable law for
consummation of the Rochester Acquisition shall have been obtained and shall be
effective and that the Rochester Acquisition shall be consummated
contemporaneously with the making of the first Revolving Credit Loan and the
making of the Tranche B Loan; (iii) evidence that all assets acquired pursuant
to the Rochester Acquisition Agreement are free and clear of any lien, claim,
and encumbrance, other than the liens granted to the Lenders pursuant to this
Agreement and Permitted Encumbrances.

 

4.6. REPRESENTATIONS AND WARRANTIES. Each of the representations made by or on
behalf of each Loan Party in this Agreement or in any of the other Loan
Documents or in any other report, statement, document, or paper provided by or
on behalf of each Loan Party shall be true and complete in all material respects
as of the date as of which such representation or warranty was made.

 

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4.7. MINIMUM DAY ONE EXCESS AVAILABILITY. After giving effect to the first
funding under the Revolving Credit, the making of the Tranche B Loan, and the
issuance of any L/Cs, Excess Availability shall not be less than $20,000,000.

 

4.8. ALL FEES AND EXPENSES PAID. All fees due at or immediately after the first
funding under the Revolving Credit and the making of the Tranche B Loan, and all
costs and expenses incurred by the Administrative Agent, the Collateral Agent
and the Tranche B Lender in connection with the establishment of the credit
facility contemplated hereby (including the reasonable fees and expenses of
counsel to the Administrative Agent, the Collateral Agent and the Tranche B
Lender), shall have been paid in full.

 

4.9. COLLATERAL, ETC.

 

(a) Each document (including, without limitation, Uniform Commercial Code
financing statements) required by law or requested by the Administrative Agent
to be filed, registered or recorded in order to create in favor of the
Collateral Agent a first priority perfected security interest in the Collateral
shall have been properly filed, registered or recorded in each jurisdiction
where required and the Collateral Agent shall have a first priority perfected
security interest in the Collateral, subject only to Permitted Encumbrances.

 

(b) All accounts payable of the Loan Parties shall be within invoice terms
(subject only to good faith disputes).

 

(c) The Inventory Purchase Agreement shall have been executed and delivered by
all the Loan Parties, shall be in full force and effect and shall be
satisfactory to the Administrative Agent.

 

4.10. No Default.

 

(a) No Default shall have occurred and be continuing.

 

(b) Except as specifically set forth on EXHIBIT 4.10(b), no default shall have
occurred and be continuing under any material contract or other agreement to
which any Loan Party is a party.

 

4.11. Financial Statements; Legal Due Diligence; No Adverse Change.

 

(a) The Administrative Agent shall be satisfied that all financial statements
and projections delivered to it fairly present the Consolidated business and
financial condition of the Borrowers and their Consolidated Subsidiaries.

 

(b) No event shall have occurred or failed to occur, which occurrence or failure
is or could have a materially adverse effect upon any Loan Party’s financial
condition when compared with the financial condition of such Loan Party as
reflected in its most recent interim management prepared financial statements,
annual report(s), public filings and projections provided to the Administrative
Agent or any Lender.

 

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(c) Counsel to the Administrative Agent shall have completed its legal due
diligence (including, without limitation, with respect to the RBT Acquisition)
with results reasonably satisfactory to the Administrative Agent and such
counsel.

 

(d) The Administrative Agent and the Tranche B Lender shall be satisfied that no
information or materials supplied by or on behalf of the Loan Parties contain
material misstatements or omissions which could be materially misleading.

 

(e) The Administrative Agent and the Tranche B Lender shall be satisfied that no
materially adverse change in any governmental regulations or policies affecting
any Loan Party or Agent shall have occurred.

 

4.12. NO LITIGATION. The Administrative Agent and its counsel shall have
received evidence satisfactory to each that there are no actions, suits or
proceedings at law or in equity or by or before any governmental instrumentality
or other agency or regulatory authority now pending or threatened against any
Loan Party the result of which is reasonably likely to have a material adverse
effect on the RBT Acquisition or on such Loan Party or its businesses or assets.

 

4.13. BENEFIT OF CONDITIONS PRECEDENT. The conditions set forth in this Article
4 are for the sole benefit of each Agent and each Lender and may be waived by
the Administrative Agent and the Tranche B Lender, in whole or in part, without
prejudice to any Agent or any Lender.

 

No document shall be deemed delivered to the Administrative Agent, the
Collateral Agent, the Tranche B Lender or any Revolving Credit Lender until
received and accepted by the Administrative Agent at its offices in Boston,
Massachusetts. Under no circumstances shall this Agreement take effect until
executed and accepted by the Administrative Agent at said offices.

 

ARTICLE 5 - GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES:

 

To induce each Lender to establish the credit facilities contemplated herein and
to induce the Revolving Credit Lenders to provide loans and advances under the
Revolving Credit (each of which loans shall be deemed to have been made in
reliance thereupon) and to induce the Tranche B Lender to make the Tranche B
Loan, respectively, as contemplated hereby, the Loan Parties, in addition to all
other representations, warranties, and covenants made by any Loan Party in any
other Loan Document, make those representations, warranties, and covenants
included in this Agreement.

 

5.1. PAYMENT AND PERFORMANCE OF LIABILITIES. The Borrowers shall pay each
payment Liability when due (or when demanded, if payable on demand) and shall
promptly, punctually, and faithfully perform each other Liability.

 

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5.2. DUE ORGANIZATION. AUTHORIZATION. NO CONFLICTS.

 

(a) Each Loan Party presently is and hereafter shall remain in good standing
under the laws of the State in which it is organized, as set forth in the
Preamble and is and shall hereafter remain duly qualified and in good standing
in every other State in which, by reason of the nature or location of such Loan
Party’s assets or operation of such Loan Party’s business, such qualification is
necessary, except where the failure to so qualify could not reasonably be
expected to have a material adverse effect on the business or assets of that
Loan Party.

 

(b) Each Loan Party’s respective organizational identification number assigned
to it by the State of its organization and its respective federal employer
identification number is stated on EXHIBIT 5.2, annexed hereto.

 

(c) No Loan Party shall change its State of organization; any organizational
identification number assigned to that Loan Party by that State; or that Loan
Party’s federal taxpayer identification number on less than sixty (60) days
prior written notice (in reasonable detail) to the Administrative Agent.

 

(d) Each Affiliate of the Loan Parties is listed on EXHIBIT 5.2. The Borrowers’
Representative shall provide the Administrative Agent with prior written notice
of any entity’s becoming or ceasing to be an Affiliate.

 

(e) Each Loan Party has all requisite power and authority to execute and deliver
all Loan Documents to which that Loan Party is a party and has and will
hereafter retain all requisite power to perform all Liabilities.

 

(f) The execution and delivery by each Loan Party of each Loan Document to which
it is a party; each Loan Party’s consummation of the transactions contemplated
by such Loan Documents (including, without limitation, the creation of
Collateral Interests by that Loan Party to secure the Liabilities); each Loan
Party’s performance under those of the Loan Documents to which it is a party;
the borrowings hereunder; and the use of the proceeds thereof:

 

(i) Have been duly authorized by all necessary action.

 

(ii) Do not, and will not, contravene in any material respect any provision of
any Requirement of Law or obligation of that Loan Party, where such
contravention would have a material adverse effect on that Loan Party.

 

(iii) Will not result in the creation or imposition of, or the obligation to
create or impose, any Encumbrance upon any assets of that Loan Party pursuant to
any Requirement of Law or obligation, except pursuant to or as permitted by the
Loan Documents.

 

(g) The Loan Documents have been duly executed and delivered by each Loan Party
and are the legal, valid and binding obligations of each Loan Party, enforceable
against each Loan Party in accordance with their respective terms, except as
such enforceability may be subject to limitations on the rights and remedies of
secured creditors generally imposed under bankruptcy or insolvency law and that
the availability of equitable relief is subject to the discretion of the court
from which such relief is sought.

 

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5.3. TRADE NAMES.

 

(a) EXHIBIT 5.3, annexed hereto, is a listing of:

 

(i) All names under which any Loan Party conducted its business during the five
(5) years preceding the date of this Agreement.

 

(ii) All Persons with whom any Loan Party consolidated or merged, or from whom
any Loan Party acquired in a single transaction or in a series of related
transactions substantially all of such Person’s assets, in each case during the
five (5) years preceding the date of this Agreement.

 

(b) The Borrowers’ Representative will provide the Administrative Agent with not
less than twenty-one (21) days prior written notice (with reasonable
particularity) of any change to any Loan Party’s name from that under which that
Loan Party is conducting its business at the execution of this Agreement and
will not effect such change unless each Loan Party is then in compliance with
all provisions of this Agreement.

 

5.4. INFRASTRUCTURE.

 

(a) Each Loan Party has and will maintain a sufficient infrastructure to conduct
its business as presently conducted and as contemplated to be conducted
following its execution of this Agreement.

 

(b) To the Borrowers’ knowledge, except as set forth in EXHIBIT 5.4(b), each
Loan Party owns and possesses, or has the right to use (and will hereafter own,
possess, or have such right to use) all patents, industrial designs, trademarks,
trade names, trade styles, brand names, service marks, logos, copyrights, trade
secrets, know-how, confidential information, and other intellectual or
proprietary property of any third Person necessary for that Loan Party’s conduct
of that Loan Party’s business except where the failure to own, possess, or have
such right or use will not have more than a de minimis adverse effect on any
Loan Party.

 

(c) To the Borrowers’ knowledge, the conduct by each Loan Party of that Loan
Party’s business does not presently infringe (nor will any Loan Party conduct
its business in the future so as to infringe) the patents, industrial designs,
trademarks, trade names, trade styles, brand names, service marks, logos,
copyrights, trade secrets, know-how, confidential information, or other
intellectual or proprietary property of any third Person except where such
infringement will not have no more than a de minimis adverse effect on that Loan
Party.

 

5.5. LOCATIONS.

 

(a) The Collateral, and the books, records, and papers of the Loan Parties
pertaining thereto, are kept and maintained solely at the following locations:

 

(i) The Borrowers’ Representative’s chief executive offices which are at 555
Turnpike Street, Canton, Massachusetts 02021.

 

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(ii) Those locations which are listed on EXHIBIT 5.5, annexed hereto, which
EXHIBIT includes, with respect to each such location, the name and address of
the landlord on the Lease which covers such location (or an indication that a
Loan Party owns the subject location) and of all service bureaus with which any
such records are maintained and the names and addresses of each Loan Party’s
landlord(s).

 

(b) No Loan Party shall remove any of the Collateral from said chief executive
office or those locations listed on EXHIBIT 5.5 except for the following
purposes:

 

(i) To accomplish sales of Inventory in the ordinary course of business or sales
permitted by Section 5.14(d).

 

(ii) To move Inventory from one such location to another such location.

 

(iii) To utilize such of the Collateral as is removed from such locations in the
ordinary course of business (such as motor vehicles).

 

(c) Except where caused by a force majeure or as otherwise agreed by the
Administrative Agent, and except with respect to the locations referred to in
Section 5.14(d) as to which five (5) days notice shall be deemed sufficient, no
Loan Party shall cease the conduct of business at any of its present or future
Stores for more than fifteen (15) consecutive days without first furnishing the
Administrative Agent with not less than thirty (30) days (or such lesser period
as the Administrative Agent may agree) prior written notice thereof.

 

5.6. STORES.

 

(a) No Loan Party is or may commit to or become legally obligated to open
additional Stores where such commitment, obligation, or opening is prohibited
by, or would result in a breach of, this Agreement.

 

(b) Except for in-transit Inventory, no tangible personal property of any Loan
Party (beyond a de minimis amount of such property) is in the care or custody of
any third party or stored or entrusted with a bailee or other third party other
than as otherwise consented to in writing by the Administrative Agent.

 

5.7. TITLE TO ASSETS.

 

(a) The Loan Parties are, and shall hereafter remain, the owners of the
Collateral free and clear of all Encumbrances with the exceptions of the
following:

 

(i) Encumbrances in favor of the Collateral Agent.

 

(ii) Permitted Encumbrances.

 

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(b) Except as disclosed on EXHIBIT 5.7(b), annexed hereto, the Loan Parties do
not have possession of any property on consignment to the Loan Parties and will
not have possession of property on consignment hereafter.

 

(c) No Loan Party shall acquire or obtain the right to use any Equipment in
which any third party has an interest, except for:

 

(i) Equipment which is merely incidental to the conduct of that Loan Party’s
business; or

 

(ii) Equipment, the acquisition or right to use of which has been consented to
by the Administrative Agent, which consent may be conditioned solely upon the
Administrative Agent’s receipt of an agreement, substantially in the form of
EXHIBIT 5.7(c)(ii), annexed hereto with the third party which has an interest in
such Equipment; or

 

(iii) Equipment subject to Leases, Capital Leases or licenses otherwise
permitted hereunder.

 

(d) No Affiliate (other than a Loan Party) which is owned, directly or
indirectly, by a Loan Party has, and none will acquire, any assets other than
assets of nominal value, unless (i) such acquisition of assets is not prohibited
by another provision of this Agreement and (ii) the ownership interests of such
Affiliate shall have been pledged to the Collateral Agent for the benefit of the
Lenders as their interests may appear and the Collateral Agent has a first
priority, perfected security interest in such ownership interests.

 

5.8. INDEBTEDNESS.

 

(a) The Loan Parties do not, and shall not hereafter, have any Indebtedness with
the exception of Permitted Indebtedness and shall not make, directly or
indirectly, any payment or other distribution (whether in cash, securities or
other property) of or in respect of principal of or interest on any Indebtedness
except Permitted Indebtedness; provided, however, that the Loan Parties will not
make, directly or indirectly, any payment or other distribution (whether in
cash, securities or other property) of or in respect of the Rochester
Indebtedness or principal of or interest on any Subordinated Indebtedness except
for the following:

 

(i) with respect to the 5% Subordinated Note, (x) regularly scheduled payments
of interest and (y) commencing with May 14, 2003, regularly scheduled payments
of principal (the aggregate of principal payments during any twelve month period
not in any event to exceed $3,000,000), so long as in the case of any payment
under clause (x) or (y), as of the date of such payment, and after giving effect
thereto, there exists no Default; and

 

(ii) with respect to the Rochester Indebtedness the amount of the contingent
purchase price, if any, as and when due pursuant to Section 2.5.3 of the
Rochester Acquisition Agreement so long as on the date of any such payment, and
after giving effect thereto,(x) there exist no Default; and (y) Excess
Availability is greater than $12,500,000.00;

 

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(iii) with respect to the Convertible Notes regularly scheduled payments of
interest so long as of the date of such payment, and after giving effect
thereto, there exists no Default.

 

The terms and conditions (including without limitation, the payment terms
thereunder (including, without limitation, the timing thereof)) of the Rochester
Acquisition Agreement, the Convertible Notes, the Indenture, the 5% Subordinated
Note, and Subordination Agreements may not be amended, modified or supplemented
in any respect without the prior written consent of the Administrative Agent,
SuperMajority Revolving Credit Lenders and the Tranche B Lender.

 

5.9. INSURANCE.

 

(a) EXHIBIT 5.9, annexed hereto, is a schedule of all insurance policies owned
by the Loan Parties or under which any Loan Party is the named insured. Each of
such policies is in full force and effect. Neither the issuer of any such policy
nor any Loan Party is in default or violation of any such policy.

 

(b) The Loan Parties shall have and maintain at all times insurance covering
such risks, in such amounts, containing such terms, in such form, for such
periods, and written by such companies as may be satisfactory to the
Administrative Agent.

 

(c) All insurance carried by the Loan Parties shall provide for a minimum of
thirty (30) days’ prior written notice of cancellation to the Administrative
Agent and all such insurance which covers the Collateral shall include an
endorsement in favor of the Agents, which endorsement shall provide that the
insurance, to the extent of the Agent’s respective interest therein, shall not
be impaired or invalidated, in whole or in part, by reason of any act or neglect
of any Loan Party or by the failure of any Loan Party to comply with any
warranty or condition of the policy, and shall not include an endorsement in
favor of any other Person except for endorsements naming one or more of the
sellers under the Casual Male Acquisition Agreement as additional insureds to
the extent required or contemplated by such Casual Male Acquisition Agreement.

 

(d) The coverage reflected on EXHIBIT 5.9 presently satisfies the foregoing
requirements, it being recognized by each Loan Party, however, that such
requirements may hereafter be modified as required by the Administrative Agent
in its reasonable discretion to reflect changing circumstances.

 

(e) The Borrowers’ Representative shall furnish the Administrative Agent from
time to time with certificates or other evidence satisfactory to the
Administrative Agent regarding compliance by the Loan Parties with the foregoing
requirements.

 

(f) In the event of the failure by the Loan Parties to maintain insurance as
required herein, the Administrative Agent, at its option, may obtain such
insurance, provided, however, the Administrative Agent’s obtaining of such
insurance shall not constitute a cure or waiver of any Event of Default
occasioned by the Loan Parties’ failure to have maintained such insurance.

 

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5.10. LICENSES. Each license, distributorship, franchise, and similar agreement
issued to, or to which any Loan Party is a party, is in full force and effect,
except where the failure thereof to be in full force and effect could not
reasonably be expected to have a material adverse effect on the Loan Parties.
Neither the Borrowers nor, to the best knowledge of the Borrowers, any other
party to any such license or agreement is in default or violation thereof. No
Loan Party has received any notice or threat of cancellation of any such license
or agreement.

 

5.11. LEASES. EXHIBIT 5.11, annexed hereto, is a schedule of all presently
effective Capital Leases. Exhibit 5.5 includes a list of all other presently
effective Leases. Each of such Leases and Capital Leases is in full force and
effect. Neither the Borrower nor, to the best knowledge of the Borrowers, any
other party to any such Lease or Capital Lease is in default or violation of any
such Lease or Capital Lease and no Loan Party has received notice or a threat of
cancellation of any such Lease or Capital Lease. Each Loan Party hereby
authorizes the Administrative Agent at any time and from time to time, with the
consent of the Borrowers’ Representative and at any time following the
occurrence of an Event of Default, to contact any of the Loan Parties’
respective landlords in order to confirm the Loan Parties’ continued compliance
with the terms and conditions of the Lease(s) between the subject Loan Party and
that landlord and to discuss such issues, concerning the subject Loan Party’s
occupancy under such Lease(s), as the Administrative Agent may determine.

 

5.12. REQUIREMENTS OF LAW. Each Loan Party is in compliance with, and shall
hereafter comply with and use its assets in compliance with, all Requirements of
Law except where the failure of such compliance will not have more than a de
minimis adverse effect on the Loan Party’s business. No Loan Party has received
any notice of any violation of any Requirement of Law (other than of a violation
which has no more than a de minimis adverse effect on the Loan Party’s business
or assets), which violation has not been cured or otherwise remedied.

 

5.13. LABOR RELATIONS.

 

(a) Except as disclosed on EXHIBIT 5.13(a), annexed hereto, no Loan Party is
presently a party to any collective bargaining or other labor contract.

 

(b) There is not presently pending and, to any Loan Party’s knowledge, there is
not threatened any of the following:

 

(i) Any strike, slowdown, picketing, work stoppage, or material employee
grievance process.

 

(ii) Any proceeding against or affecting any Loan Party relating to the alleged
violation of any Applicable Law pertaining to labor relations or before National
Labor Relations Board, the Equal Employment Opportunity Commission, or any
comparable governmental body, organizational activity, or other labor or
employment dispute against or affecting any Loan Party, which, if determined
adversely to that Loan Party could have more than a de minimis adverse effect on
that Loan Party.

 

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(iii) Any lockout of any employees by any Loan Party (and no such action is
contemplated by any Loan Party).

 

(iv) Any application for the certification of a collective bargaining agent.

 

(c) To the knowledge of the Borrowers’ Representative and each Loan Party, no
material event has occurred or circumstance exists which could provide the basis
for any work stoppage or other labor dispute.

 

(d) Each Loan Party:

 

(i) Has complied in all material respects with all Applicable Law relating to
employment, equal employment opportunity, nondiscrimination, immigration, wages,
hours, benefits, collective bargaining, the payment of social security and
similar taxes, occupational safety and health, and plant closing.

 

(ii) Is not liable for the payment of more than a de minimis amount of
compensation, damages, taxes, fines, penalties, or other amounts, however
designated, for that Loan Party’s failure to comply with any Applicable Law
referenced in Section 5.13(d)(i).

 

5.14. MAINTAIN PROPERTIES. The Loan Parties shall:

 

(a) Keep the Collateral in good order and repair (ordinary reasonable wear and
tear and insured casualty excepted).

 

(b) Not suffer or cause the waste or destruction of any material part of the
Collateral.

 

(c) Not use any of the Collateral in violation of any policy of insurance
thereon.

 

(d) Not sell, lease, or otherwise dispose of any of the Collateral, other than
the following:

 

(i) The sale of Inventory in compliance with this Agreement.

 

(ii) The disposal of Equipment which is obsolete, worn out, or damaged beyond
repair, which Equipment is replaced to the extent necessary to preserve or
improve the operating efficiency of any Loan Party.

 

(iii) The turning over to the Administrative Agent of all Receipts as provided
herein.

 

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(iv) Permitted Asset Dispositions.

 

5.15. TAXES.

 

(a) The Loan Parties, in compliance with all Applicable Law, have properly filed
the Loan Party’s tax returns due to be filed up to the date of this Agreement.
All federal and state taxes and other amounts in the nature of taxes for which
any Loan Party is liable or obligated are presently due and payable without
penalty; or have been paid or settled.

 

(b) The Loan Parties shall: pay, as they become due and payable, all taxes and
unemployment contributions and other charges of any kind or nature levied,
assessed or claimed against any Loan Party or the Collateral by any Person whose
claim could result in an Encumbrance upon any asset of any Loan Party or by any
governmental authority; properly exercise any trust responsibilities imposed
upon any Loan Party by reason of withholding from employees’ pay or by reason of
any Loan Party’s receipt of sales tax or other funds for the account of any
third party; timely make all contributions and other payments as may be required
pursuant to any Employee Benefit Plan now or hereafter established by any Loan
Party; and timely file all tax and other returns and other reports with each
governmental authority to whom any Loan Party is obligated to so file except
where failure to file could not reasonably be expected to have a material
adverse effect provided however, nothing included in this Section 5.15(b) shall
prevent the Loan Parties from contesting, in good faith and by appropriate
proceedings, any tax liability claimed against any Loan Party, but only provided
that and so long as no tax lien is filed with respect thereto.

 

(c) At its option, with prior notice to the Borrowers’ Representative, the
Administrative Agent may pay any tax, charge levied, assessed, or claimed upon
any Loan Party or the Collateral by any Person, or entity or governmental
authority, and make any payments on account of any Loan Party’s Employee Benefit
Plan as the Administrative Agent, in the Administrative Agent’s discretion, may
deem necessary or desirable, to protect the Agents’ Rights and Remedies.

 

5.16. NO MARGIN STOCK. No Loan Party is engaged in the business of extending
credit for the purpose of purchasing or carrying any margin stock (within the
meaning of Regulations U, T, and X of the Board of Governors of the Federal
Reserve System of the United States). No part of the proceeds of any borrowing
hereunder will be used at any time to purchase or carry any such margin stock or
to extend credit to others for the purpose of purchasing or carrying any such
margin stock.

 

5.17. ERISA.

 

(a) Neither any Loan Party nor any ERISA Affiliate has ever:

 

(i) Violated or failed to be in full compliance with any Employee Benefit Plan
maintained by any Loan Party.

 

(ii) Failed timely to file all reports and filings required by ERISA to be filed
by any Loan Party.

 

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(iii) Engaged in any nonexempt “prohibited transactions” or “reportable events”
(respectively as described in ERISA).

 

(iv) Engaged in, or committed, any act such that a tax or penalty could be
imposed upon any Loan Party on account thereof pursuant to ERISA.

 

(v) Accumulated any material cumulative funding deficiency within the meaning of
ERISA.

 

(vi) Terminated any Employee Benefit Plan such that a lien could be asserted
against any assets of any Loan Party on account thereof pursuant to ERISA.

 

(vii) Been a member of, contributed to, or had any obligation under any Employee
Benefit Plan which is a multiemployer plan within the meaning of Section 4001(a)
of ERISA.

 

(b) Neither any Loan Party nor any ERISA Affiliate shall ever engage in any
action of the type described in Section 5.17(a).

 

5.18. HAZARDOUS MATERIALS.

 

(a) No Loan Party has ever: (i) been legally responsible for any release or
threat of release of any Hazardous Material or (ii) received notification of the
incurrence of any expense in connection with the assessment, containment, or
removal of any Hazardous Material for which that Loan Party would be
responsible.

 

(b) Each Loan Party shall: (i) dispose of any Hazardous Material only in
compliance with all Environmental Laws and (ii) have possession of any Hazardous
Material only in the ordinary course of that Loan Party’s business and in
compliance with all Environmental Laws.

 

5.19. LITIGATION. Except as described in EXHIBIT 5.19, annexed hereto, there is
not presently pending or to the knowledge of the Borrowers, threatened in
writing, by or against any Loan Party, any suit, action, proceeding, or
investigation which if determined adversely to such Loan Party, would have a
material adverse effect upon the Loan Parties’ financial condition or the
ability of the Loan Parties to conduct their business as such business is
presently conducted or is contemplated to be conducted in the foreseeable
future.

 

5.20. DIVIDENDS. INVESTMENTS. ENTITY ACTION. No Loan Party shall:

 

(a) Pay any cash dividend or make any other distribution in respect of any class
of their respective capital stock or other ownership interests, other than
payments to another Loan Party.

 

(b) Redeem, retire, purchase, or acquire any of Casual Male’s capital stock.

 

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(c) Invest in or purchase any stock or securities or other ownership interests,
or rights to purchase any such stock or securities or other ownership interests,
of any corporation or other Person, except for

 

(i) Permitted Investments,

 

(ii) capital stock or other ownership interests of LP Innovations, Inc. and
wholly owned direct or indirect Subsidiaries (in existence on the Closing Date)
of the Loan Parties,

 

(iii) investments in the ECKO Joint Venture evidenced by a note due from the
ECKO Joint Venture to Casual Male in an amount not in excess of $5,500,000.00,
and

 

(iv) Permitted Acquisitions, and subject to the provisions of Section 5.21(d),
investments in new wholly owned Subsidiaries formed in connection with any such
Permitted Acquisition.

 

(d) Merge or consolidate or be merged or consolidated with or into any other
corporation or other entity; provided that nothing in this Agreement shall
prevent any Loan Party from merging into any other Loan Party.

 

(e) Consolidate any of that Loan Party’s operations with those of any other
corporation or other entity other than another Loan Party.

 

(f) Subordinate any debts or obligations owed to that Loan Party by any third
party to any other debts owed by such third party to any other Person.

 

(g) Engage in any interest rate swaps, caps, or similar activities, or any
hedging activities, other than in the ordinary course and conduct of that Loan
Party’s business and then only with a Lender or any Affiliate of a Lender.

 

5.21. PERMITTED ACQUISITIONS. The Loan Parties may make Permitted Acquisitions
without the consent of the Agent or the Lenders; provided that:

 

(a) Not less than fifteen (15) days prior written notice (with reasonable
particularity as to the facts and circumstances in respect of which such notice
is being given) of such Permitted Acquisition is given to the Administrative
Agent.

 

(b) The aggregate purchase price (exclusive of the portion of the purchase price
paid for with capital stock of the Loan Parties) of all such Permitted
Acquisitions undertaken from and after the Closing Date is not greater than
$5,000,000.

 

(c) No Event of Default then exists or would result from any such Permitted
Acquisition.

 

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(d) With respect, to and in the event of any Permitted Acquisition which
consists of, or results in the creation of, a Subsidiary, the Administrative
Agent shall be provided with such Subsidiary’s Guarantor Agreement (in form and
substance satisfactory to the Administrative Agent), which Guarantor Agreement
shall be secured by first perfected security interests and liens on
substantially all of the assets of such Subsidiary, subject to the same
limitations set forth in Section 9.1 hereof and subject to Permitted
Encumbrances.

 

(e) The Agent and the Lenders shall have no obligation to include any Inventory
acquired in such Permitted Acquisition (or Inventory of a similar type and
nature acquired after the Permitted Acquisition) as Eligible Inventory.

 

5.22. LOANS. The Loan Parties shall not make any loans to, nor acquire the
Indebtedness of, any Person, provided, however, the foregoing does not prohibit
any of the following:

 

(a) Subject to such conditions respectively as apply thereto, the making of
Permitted Investments.

 

(b) Advance payments made to a Loan Party’s suppliers in the ordinary course.

 

(c) Advances to a Loan Party’s officers, employees, and salespersons with
respect to reasonable expenses to be incurred by such officers, employees, and
salespersons for the benefit of a Loan Party, which expenses are properly
substantiated by the person seeking such advance and properly reimbursable by a
Loan Party.

 

(d) Loans to a Loan Party’s officers and employees not exceeding $400,000 in the
aggregate at any one time outstanding, provided that each such loan is for a
term of not more than 90 days from the date on which it is made and is paid
within such 90-day period; provided that, all amounts due on account of loans
permitted under this clause (d) shall constitute Collateral and shall be pledged
to the Collateral Agent for the benefit of the Lenders; and

 

(e) Advances to contractors for the construction or renovation of stores,
buildings or improvements for use in the business of a Loan Party.

 

(f) Loans by Casual Male to LP Innovations, Inc. not to exceed $5,000,000 in the
aggregate during the term of this Agreement, so long as in each case such
intercompany loans shall be evidenced by, and subject to, such documentation
(including, without limitation, notes and pledge agreements) as the Collateral
Agent may require, and no Default shall have occurred and be continuing on the
date of any such loan.

 

(g) Loans by Casual Male or Designs Apparel, Inc. to Guarantors to finance the
purchases by Guarantors of Inventory pursuant to the Inventory Purchase
Agreement and to permit such Guarantors to pay ordinary course operating
expenses (including, without limitation, rent, utilities and taxes) so long as
in each case such intercompany loans shall be evidenced by, and subject to, such
documentation (including, without limitation, notes and pledge agreements) as
the Collateral Agent may require.

 

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5.23. RESTRICTIONS ON SALE OF COLLATERAL; LICENSE AGREEMENTS. To the Loan
Parties’ knowledge, the Loan Parties are not, and shall not become, party to any
agreement or understanding which limits, impairs, or otherwise restricts the
ability of the Collateral Agent to freely sell and dispose of any of the
Collateral (including, without limitation, any repurchase agreements, rights of
first refusal or other agreements which limit or condition the time, manner,
place or price for the sale or disposition of the Collateral), other than
certain Trademark License Agreements with Levi Strauss & Co. dated November 1,
1991 and November 15, 1996. The Loan Parties shall not effect or permit any
material change or amendment to the terms of such License Agreements which would
impose further restrictions to the Collateral Agent’s disposition of the
Collateral or would shorten the term of such License Agreements, other than as
contemplated in the Amendment and Distribution Agreement dated as of October 31,
1998 by and among Designs JV Corp., LDJV, Inc. and The Designs/OLS Partnership.

 

5.24. PROTECTION OF ASSETS. The Administrative Agent, in the Administrative
Agent’s discretion, from time to time, may discharge any tax or Encumbrance on
any of the Collateral, or take any other action which the Administrative Agent
may deem necessary or desirable to repair, insure, maintain, preserve, collect,
or realize upon any of the Collateral. The Administrative Agent shall not have
any obligation to undertake any of the foregoing and shall have no liability on
account of any action so undertaken except where there is a specific finding in
a judicial proceeding (in which the Administrative Agent has had an opportunity
to be heard), from which finding no further appeal is available, that the
Administrative Agent had acted in actual bad faith or in a grossly negligent
manner. The Loan Parties shall pay to the Administrative Agent, on demand, or
the Administrative Agent, in its discretion, may add to the Loan Account, all
amounts paid or incurred by the Administrative Agent pursuant to this Section
5.24.

 

5.25. LINE OF BUSINESS.

 

(a) Except as provided in Sections 5.20, 5.23 and 5.25(c), no Loan Party shall
engage in any business other than the business in which it is currently engaged
or plans to be engaged, as reflected in the Business Plan, or a business
reasonably related thereto (the conduct of which reasonably related business is
reflected in the Business Plan), provided that the foregoing shall not prohibit
the expansion or contraction of a Loan Party’s business so long as the Loan
Parties are still engaged solely in the retail sale of apparel, footwear and
related accessories and other activities, ancillary, incidental or necessary
thereto, and such expansion or contraction is otherwise permitted under other
Sections of this Agreement.

 

(b) The Loan Parties, with the prior written notice to the Administrative Agent
in each instance, may license the use of up to 5% of the selling space of any
Store (measured in terms of square feet) for the operation of certain
departments of their Stores by third parties.

 

(c) The Loan Parties, with the prior written consent of the Administrative Agent
(as to which, see Section 5.25(c)(i)), may (x) license the use of more than 5%
of the selling space of any Store (measured in terms of square feet) for the
operation of certain

 

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departments by third parties and (y) franchise to others the right to operate
comparable Stores, it being understood that:

 

(i) The Administrative Agent’s determination to consent to the Loan Parties’
activities described in Section 5.25(c) may be conditioned on the Administrative
Agent’s being satisfied that the secured position of the Collateral Agent, and
the Agents’ Rights and Remedies, would not be adversely affected by such
restructuring and that such restructuring does not place any material additional
administrative burdens on the Agents.

 

(ii) The Administrative Agent may provide such consent pursuant to this Section
5.25(c) on its own authority and without obtaining the Consent of the Majority
Lenders.

 

(iii) The Administrative Agent may condition its providing of such consent
pursuant to this Section 5.25(c) on the Consent of the Majority Lenders.

 

5.26. AFFILIATE TRANSACTIONS. No Loan Party shall make any payment, nor give any
value, to any Affiliate except for:

 

(a) Goods and services actually purchased by that Loan Party from, or sold by
that Loan Party to, such Affiliate for a price and on terms which shall

 

(i) be competitive and fully deductible as an “ordinary and necessary business
expense” and/or fully depreciable under the Internal Revenue Code of 1986 and
the Treasury Regulations, each as amended; and

 

(ii) be no less favorable to that Loan Party than those which would have been
charged and imposed in an arms length transaction.

 

(b) Permitted Overhead Contributions. It is hereby agreed that Permitted
Overhead Contributions shall be deemed to include lease payments under any
amendment to or replacement of the Lease Agreement referred to in the definition
of Permitted Overhead Contributions provided that such lease amendment or
replacement is on terms and conditions satisfactory to the Administrative Agent.

 

5.27. FURTHER ASSURANCES.

 

(a) No Loan Party is the owner of, nor has it any interest in, any property or
asset which, immediately upon the satisfaction of the conditions precedent to
the effectiveness of the credit facility contemplated hereby (Article 4) and the
proper filing of Uniform Commercial Code Financing Statements and delivery of
any Collateral in which a security interest must be perfected by possession,
will not be subject to a perfected Collateral Interest in favor of the
Collateral Agent (subject only to Permitted Encumbrances) to secure the
Liabilities.

 

(b) Except as otherwise permitted by this Agreement, no Loan Party will
hereafter acquire any asset or any interest in property which is not,
immediately upon such acquisition, subject to such a perfected Collateral
Interest in favor of the Collateral Agent to secure the Liabilities (subject
only to Permitted Encumbrances).

 

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(c) Each Loan Party shall execute and deliver to the Administrative Agent such
instruments, documents, and papers, and shall do all such things from time to
time hereafter as the Administrative Agent reasonably may request, to carry into
effect the provisions and intent of this Agreement; to protect and perfect the
Collateral Agent’s Collateral Interests in the Collateral; and to comply with
all applicable statutes and laws, and facilitate the collection of the
Receivables Collateral. Each Loan Party shall execute all such instruments as
may be required by the Administrative Agent with respect to the recordation
and/or perfection of the Collateral Interests created or contemplated herein.

 

(d) Each Loan Party hereby designates the Collateral Agent as and for that Loan
Party’s true and lawful attorney, with full power of substitution, to sign and
file any financing statements in order to perfect or protect the Collateral
Agent’s Collateral Interests in the Collateral.

 

(e) This Agreement constitutes an authenticated record which authorizes the
Collateral Agent to file such financing statements as the Collateral Agent
determines as appropriate to perfect or protect the Agent’s Collateral Interests
created hereby.

 

(f) A carbon, photographic, or other reproduction of this Agreement or of any
financing statement or other instrument executed pursuant to this Section 5.27
shall be sufficient for filing to perfect the security interests granted herein.

 

5.28. ADEQUACY OF DISCLOSURE.

 

(a) All financial statements furnished to each Agent and each Lender by each
Loan Party have been prepared in accordance with GAAP consistently applied and
present fairly the condition of the Loan Parties at the date(s) thereof and the
results of operations and cash flows for the period(s) covered (provided
however, that unaudited financial statements are subject to normal year end
adjustments and to the absence of footnotes). There has been no change in the
Consolidated financial condition, results of operations, or cash flows of the
Loan Parties since the date(s) of the most recent financial statements delivered
to the Administrative Agent, as supplemented by the Business Plan, other than
changes in the ordinary course of business, which changes have not been
materially adverse, either singularly or in the aggregate.

 

(b) Except as set forth on EXHIBIT 5.28(b), annexed hereto, no Loan Party has
any contingent obligations or obligation under any Lease or Capital Lease which
is not noted in the Loan Parties’ Consolidated financial statements furnished to
each Agent and each Lender prior to the execution of this Agreement other than
obligations which are entered into in the ordinary course of business since the
date of such financial statement.

 

(c) No document, instrument, agreement, or paper now or hereafter given to any
Agent and any Lender by or on behalf of each Loan Party or any guarantor of the
Liabilities in connection with the execution of this Agreement by each Agent and
each Lender (except for any projections provided by or on behalf of any Loan
Party) contains or will contain any untrue statement of a material fact or omits
or will omit to state a material fact necessary in order to make the statements
therein not misleading.

 

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5.29. NO RESTRICTIONS ON LIABILITIES. No Loan Party shall enter into or directly
or indirectly become subject to any agreement which prohibits or restricts, in
any manner, any Loan Party’s:

 

(a) Creation of, and granting of Collateral Interests in favor of the Collateral
Agent.

 

(b) Incurrence of Liabilities.

 

5.30. OTHER COVENANTS. No Loan Party shall indirectly do or cause to be done any
act which, if done directly by that Loan Party, would breach any covenant
contained in this Agreement.

 

5.31. INVENTORY PURCHASING. Any Person which at any time becomes a Loan Party
shall become party to, and shall at all times comply with the terms and
conditions set forth in, the Inventory Purchase Agreement including, without
limitation, the obligation of each Loan Party (other than Designs Apparel, Inc.)
to purchase of all of its Inventory exclusively from Designs Apparel, Inc. The
Inventory Purchase Agreement may not be amended, modified or supplemented,
except for the addition of Loan Parties, or terminated without the prior written
consent of the Administrative Agent.

 

ARTICLE 6 - FINANCIAL REPORTING AND PERFORMANCE COVENANTS:

 

6.1. MAINTAIN RECORDS. The Loan Parties shall:

 

(a) At all times, keep proper books of account, in which full, true, and
accurate entries shall be made of all of the Loan Parties’ financial
transactions, all in accordance with GAAP applied consistently with prior
periods to fairly reflect the Consolidated financial condition of the Loan
Parties at the close of, and its results of operations for, the periods in
question.

 

(b) Timely provide the Administrative Agent with those financial reports,
statements, and schedules required by this Article 6 or otherwise, each of which
reports, statements and schedules shall be prepared, to the extent applicable,
in accordance with GAAP applied consistently with prior periods to fairly
reflect the Consolidated financial condition of the Loan Parties at the close
of, and the results of operations for, the period(s) covered therein.

 

(c) At all times, keep accurate current records of the Collateral including,
without limitation, accurate current stock, cost, and sales records of its
Inventory, accurately and sufficiently itemizing and describing the kinds,
types, and quantities of Inventory and the cost and selling prices thereof.

 

(d) At all times, retain Ernst & Young, LLP or such other independent certified
public accountants who are reasonably satisfactory to the Administrative Agent
and

 

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instruct such accountants to fully cooperate with, and be available to, the
Administrative Agent 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.

 

(e) Not change any Loan Party’s Fiscal year.

 

6.2. ACCESS TO RECORDS.

 

(a) Each Loan Party shall accord the Administrative Agent with reasonable access
on reasonable notice during customary business hours from time to time as the
Administrative Agent reasonably may require to all properties owned by or over
which any Loan Party has control. The Administrative Agent shall have the right
during customary business hours on reasonable notice, and each Loan Party will
permit the Administrative Agent from time to time as Administrative Agent
reasonably may request, to examine, inspect, copy, and make extracts from any
and all of the Loan Parties’ books, records, electronically stored data, papers,
and files. Each Loan Party shall make all of that Loan Party’s copying
facilities available to the Administrative Agent.

 

(b) Each Loan Party hereby authorizes the Administrative Agent during customary
business hours on reasonable notice to:

 

(i) Inspect, copy, duplicate, review, cause to be reduced to hard copy, run off,
draw off, and otherwise use any and all computer or electronically stored
information or data which relates to any Loan Party, or any service bureau,
contractor, accountant, or other person, and directs any such service bureau,
contractor, accountant, or other person fully to cooperate with the
Administrative Agent with respect thereto.

 

(ii) Verify at any time the Collateral or any portion thereof, including
verification with Account Debtors, and/or with each Loan Party’s computer
billing companies, collection agencies, and accountants and to sign the name of
each Loan Party on any notice to each Loan Party’s Account Debtors or
verification of the Collateral.

 

(c) The Borrowers’ Representative, on reasonable request from time to time from
the Administrative Agent, will make representatives of management available from
time to time to discuss the Loan Parties’ operating results and other related
matters with the Administrative Agent.

 

(d) The Administrative Agent from time to time may designate one or more
representatives to exercise the Administrative Agent’s rights under this Section
6.2 as fully as if the Administrative Agent were doing so.

 

(e) The Tranche B Lender and its participants, likewise shall have those rights
accorded to the Administrative Agent under this Section 6.2.

 

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6.3. PROMPT NOTICE TO ADMINISTRATIVE AGENT.

 

(a) The Borrowers’ Representative shall provide the Administrative Agent with
written notice promptly upon its becoming aware of the occurrence of any of the
following events, which written notice shall be with reasonable particularity as
to the facts and circumstances in respect of which such notice is being given:

 

(i) Any material adverse change in the business affairs of any Loan Party.

 

(ii) Any change in the executive officers of any Loan Party.

 

(iii) Any ceasing of the Loan Parties’ making of payments, in the ordinary
course, to any of its creditors, on account of obligations aggregating in excess
of $180,000.00 (including the ceasing of the making of such payments on account
of a dispute with the subject creditor).

 

(iv) Any failure by a Loan Party to pay rent at any of the Loan Parties’
locations which rent in the aggregate exceeds $180,000.00, which failure
continues for more than ten (10) days following the day on which such rent first
came due.

 

(v) Any Default.

 

(vi) Any intention on the part of a Loan Party to discharge that Loan Party’s
present independent accountants or any withdrawal or resignation by such
independent accountants from their acting in such capacity (as to which, see
Subsection 6.1(d)).

 

(vii) Any litigation which, if determined adversely to a Loan Party, would have
a material adverse effect on the financial condition of that Loan Party.

 

(b) The Borrowers’ Representative shall:

 

(i) Add the Administrative Agent as an addressee on all mailing lists maintained
by or for any Loan Party.

 

(ii) At the request of the Administrative Agent provide the Administrative Agent
with a copy of the results of any physical or cycle count of a Loan Party’s
Inventory.

 

(iii) Provide the Administrative Agent, when received by any Loan Party, with a
copy of any management letter or similar communications from any accountant of
that Loan Party.

 

(iv) Provide the Administrative Agent with copies of all filings by each Loan
Party with the Securities and Exchange Commission, when so filed, and when
received, copies of all correspondence from the SEC, other than routine
non-substantive general communications from the SEC.

 

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(v) Provide the Administrative Agent with written notice of any intended bulk
sale, liquidation, or other disposition of assets of any Loan Party at least ten
(10) Business Days prior to the consummation of such sale or disposition, or
commencement of such liquidation and a detailed summary of the net proceeds
expected to be received therefrom, provided that nothing in this Section is
intended to be, or shall be deemed to be, a waiver of any restriction on such
disposition of assets set forth elsewhere in this Agreement including without
limitation Section 5.14 .

 

(vi) Provide the Administrative Agent, when so distributed, with copies of any
materials distributed to the shareholders of Casual Male and each of the other
Loan Parties (qua such shareholders).

 

6.4. BORROWING BASE CERTIFICATE. The Borrowers’ Representative shall provide the
Administrative Agent by 11:30 a.m., daily, with a Borrowing Base Certificate (in
the form of EXHIBIT 6.4 annexed hereto, as such form may be revised from time to
time by the Administrative Agent, the “Borrowing Base Certificate”). Such
Certificate may be sent to the Administrative Agent by facsimile transmission,
provided that the original thereof is forwarded to the Administrative Agent on
the date of such transmission.

 

6.5. WEEKLY AND MONTHLY REPORTS. The Borrowers’ Representative shall provide the
Administrative Agent with those financial statements and reports described in
EXHIBIT 6.5.

 

6.6. QUARTERLY REPORTS. Quarterly, within fifty (50) days following the end of
each Fiscal quarter of the Loan Parties, the Borrowers’ Representative shall
provide the Administrative Agent with the following:

 

(a) An original counterpart of a management prepared Consolidated and
consolidating financial statement of the Loan Parties for the period from the
beginning of the Loan Parties’ then current Fiscal year through the end of the
subject quarter, with comparative information for the same period of the
previous Fiscal year, which statement shall include, at a minimum, a balance
sheet, income statement, cash flows and a schedule of consolidation, as well as
a comparison of same store sales and operating results for the corresponding
quarter of the then immediately previous year and to the year-to-date period and
to the Business Plan or updated forecast.

 

(b) The officer’s compliance certificate described in Section 6.8.

 

6.7. ANNUAL REPORTS.

 

(a) Commencing with the Loan Parties’ Fiscal 2004, and annually thereafter,
within ninety-five (95) days following the end of the Loan Parties’ Fiscal year,
the Borrowers’ Representative shall furnish the Administrative Agent with the
following:

 

(i) An original signed counterpart of the Loan Parties’ annual Consolidated
financial statement (with consolidating schedules), which statement shall have
been prepared by, and bear the unqualified opinion of, the Loan Parties’
independent certified public accountants (i.e. said statement shall be
“certified” by such accountants). Such annual statement shall include, at a
minimum (with comparative information for the then prior Fiscal year, a balance
sheet, income statement, statement of changes in shareholders’ equity, and cash
flows.

 

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(ii) The following Consolidated and consolidating financial statements for the
Loan Parties for the prior Fiscal year (each prepared by the Loan Parties’
independent accountants): Balance sheet, income statement, statement of changes
in stockholders’ equity and cash flow.

 

(b) No later than the earlier of fifteen (15) days prior to the end of each
Fiscal year of the Loan Parties or the date on which such accountants commence
their work on the preparation of the Loan Parties’ annual financial statement,
the Borrowers’ Representative shall give written notice to such accountants
(with a copy of such notice, when sent, to the Administrative Agent), that:

 

(i) Such annual financial statement will be delivered by the Borrowers’
Representative to the Administrative Agent (for subsequent distribution to each
Lender).

 

(ii) Among other things, it is the intention of each Loan Party, in its
engagement of such accountants, to satisfy the financial reporting requirements
set forth in this Article 7.

 

(iii) The Borrowers’ Representative has been advised that the Administrative
Agent and each Lender)

 

will rely thereon with respect to the administration of, and transactions under,
the credit facility contemplated by this Agreement.

 

(c) Each annual financial statement shall be accompanied by such accountant’s
Certificate indicating that, in conducting the audit for such annual statement,
nothing came to the attention of such accountants to believe that such Loan
Party is in Default (or that if the Loan Party is in Default, the facts and
circumstances thereof).

 

6.8. OFFICERS’ CERTIFICATES. The Borrowers’ Representative shall cause the
Borrowers’ Representative’s Chief Executive Officer, its President or its Chief
Financial Officer of the Borrowers’ Representative, in each instance, to provide
such Person’s Certificate with those monthly, quarterly, and annual statements
to be furnished pursuant to this Agreement, which Certificate shall:

 

(a) Indicate that the subject financial statement was prepared in accordance
with GAAP consistently applied and presents fairly the Consolidated financial
condition of the

 

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Loan Parties at the close of, and the results of the Loan Parties’ operations
and cash flows for, the period(s) covered thereby, subject, however to the
following:

 

(i) Usual year end adjustments (this exception shall not be included in the
Certificate which accompanies the Loan Parties’ annual financial statement).

 

(ii) Material Accounting Changes (in which event, such Certificate shall include
a schedule (in reasonable detail) of the effect of each such Material Accounting
Change) not previously specifically taken into account in the determination of
the financial performance covenant(s) imposed pursuant to Section 6.11.

 

(b) Indicate either that (i) no Default has occurred and is continuing, or (ii)
if a Default has occurred and is continuing, its nature (in reasonable detail)
and the steps (if any) being taken or contemplated by the Loan Parties to be
taken on account thereof.

 

(c) Include calculations concerning the Loan Parties’ compliance (or failure to
comply) at the date of the subject statement with each of the financial
performance covenants included in Section 6.11 hereof.

 

6.9. INVENTORIES, APPRAISALS, AND AUDITS.

 

(a) The Administrative Agent and the Tranche B Lender may observe each inventory
and any cycle count of the Collateral which is undertaken on behalf of any Loan
Party. The Loan Parties shall conduct not less than one physical inventory, per
Store and per warehouse, per Fiscal year. The Administrative Agent does not
contemplate undertaking or requiring any additional physical inventories by or
of the Loan Parties, provided, however, the Administrative Agent may do so if a
Default has occurred and is continuing.

 

(i) On the Administrative Agent’s request, the Borrowers’ Representative shall
provide the Administrative Agent with a copy of the preliminary results of each
such inventory (as well as of any other physical inventory undertaken by any
Loan Party) within ten (10) days following the completion of such inventory.

 

(ii) The Borrowers’ Representative, within thirty (30) days following the
completion of such inventory, shall provide the Administrative Agent with a
reconciliation of the results of each such inventory (as well as of any other
physical inventory undertaken by any Loan Party) and shall post such results to
the Loan Parties’ stock ledger and, as applicable to the Loan Parties’ other
financial books and records.

 

(iii) The Administrative Agent, in its discretion, if a Default has occurred and
is continuing, may cause such additional inventories to be taken as the
Administrative Agent determines (each, at the expense of the Loan Parties)

 

(b) The Administrative Agent may obtain appraisals of the Collateral, from time
to time (in all events, at the Loan Parties’ expense) conducted by such
appraisers as are satisfactory to the Administrative Agent. As of the Closing
Date, the Administrative Agent contemplates obtaining (and at the request of the
Tranche B Lender shall obtain) four (4)

 

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appraisals (in all events, at the Loan Parties’ expense) of the Loan Parties’
Inventory during any twelve (12) month period during which this Agreement is in
effect, each conducted by such appraisers as are satisfactory to the
Administrative Agent. In addition, following the occurrence of an Event of
Default, the Administrative Agent may cause additional such appraisals to be
undertaken (in each event, at the Loan Parties’ expense).

 

(c) The Administrative Agent contemplates conducting (and at the request of the
Tranche B Lender shall conduct) four (4) commercial finance audits (in each
event, at the Loan Parties’ expense) of the Loan Parties’ books and records
during any twelve (12) month period during which this Agreement is in effect. In
addition, following the occurrence of an Event of Default, the Administrative
Agent may cause additional such audits to be undertaken (in each event, at the
Loan Parties’ expense).

 

6.10. ADDITIONAL FINANCIAL INFORMATION.

 

(a) In addition to all other information required to be provided pursuant to
this Article 6, the Borrowers’ Representative promptly shall provide the
Administrative Agent with such other and additional information concerning the
Loan Parties (and any guarantor of the Liabilities), the Collateral, the
operation of the Loan Parties’ business, and the Loan Parties’ financial
condition, including original counterparts of financial reports and statements,
as the Administrative Agent reasonably may from time to time request, in its own
discretion or upon the reasonable request of the Tranche B Lender.

 

(b) The Borrowers’ Representative may provide the Administrative Agent, from
time to time hereafter, with updated forecasts of the Loan Parties’ anticipated
performance and operating results.

 

(c) In all events, the Borrowers’ Representative, by no later than thirty (30)
days prior the end of each Fiscal year, shall furnish the Administrative Agent
with an updated and extended forecast (which shall include, on a month-by-month
basis, balance sheets, income statements, and statements of cash flow, as well
as of all components of the Borrowing Base as of the end of each month) through
the end of the succeeding Fiscal year.

 

(d) Each Loan Party recognizes that all appraisals, inventories, analyses,
financial information, and other materials which the Administrative Agent may
obtain, develop, or receive with respect to the Loan Parties are confidential to
the Administrative Agent and that, except as otherwise provided herein, no Loan
Party is entitled to receipt of any of such appraisals, inventories, analyses,
financial information, and other materials, nor copies or extracts thereof or
therefrom.

 

6.11. FINANCIAL PERFORMANCE COVENANTS.

 

(a) The Loan Parties shall maintain at all times Excess Availability of not less
than the lesser of: (i) $6,000,000, and (ii) 8.5% of the Borrowing Base.

 

(b) The Loan Parties shall not incur Capital Expenditures in excess of the
amounts set forth below for the Fiscal years indicated:

 

(i) Fiscal year ending January 29, 2005, to be greater than $20,000,000.

 

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(ii) Fiscal year ending January 29, 2006, to be greater than $20,000,000.

 

(iii) Fiscal year ending January 29, 2007, to be greater than $20,000,000.

 

(iv) Period from January 30, 2007, through the Maturity Date, to be greater than
$16,000,000.00.

 

Notwithstanding the foregoing, any amount set forth in clauses (i) through (iii)
which is not committed or spent in such Fiscal year may be carried over for
Capital Expenditures during the next Fiscal year.

 

(c) In the event that the Loan Parties’ Excess Availability is less than the
aggregate of (A) $12,500,000.00, and (B) the Excess Availability requirement
pursuant to Section 6.11(a) above, the Loan Parties shall maintain minimum
EBITDA in the amounts set forth below as of the end of each Fiscal month
indicated:

 

(i) $25,500,000 as of October, 2004;

 

(ii) 19,700,000 as of November, 2004;

 

(iii) $23,100,000 as of December, 2004;

 

(iv) $24,500,000 as of January, 2005;

 

(v) $22,000,000 as of February, 2005;

 

(vi) $25,500,000 as of March, 2005;

 

(vii) $27,800,000 as of April, 2005;

 

(viii) $29,200,000 as of May, 2005;

 

(ix) $31,600,000 as of June, 2005;

 

(x) $31,800,000 as of July, 2005;

 

(xi) $32,800,000 as of August, 2005;

 

(xii) $33,700,000 as of September, 2005;

 

(xiii) $34,600,000 as of October, 2005;

 

(xiv) $34,800,000 as of November, 2005;

 

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(xv) $34,800,000 as of December, 2005;

 

(xvi) $34,900,000 as of January, 2006;

 

(xvii) $35,700,000 as of February, 2006;

 

(xviii) $36,590,000 as of March, 2006;

 

(xix) $37,500,000 as of April, 2006;

 

(xx) $38,200,000 as of May, 2006;

 

(xxi) $38,900,000 as of June, 2006;

 

(xxii) $39,300,000 as of July, 2006;

 

(xxiii) $39,400,000 as of August, 2006;

 

(xxiv) $40,000,000 as of September, 2006;

 

(xxv) $40,600,000 as of October, 2006;

 

(xxvi) $41,800,000 as of November, 2006;

 

(xxvii) $43,600,000 as of December, 2006;

 

(xxviii) $44,300,000 as of January, 2007; and

 

(xxix) $42,000,000 for each fiscal month thereafter.

 

EBITDA will be tested as of the end of any Fiscal monthly period on the basis of
the twelve (12) months then ended; provided, however, that to the extent that
the Loan Parties’ Excess Availability as of the end of any Fiscal month exceeds
the sum of (A) $12,500,000 plus (B) the Excess Availability requirement pursuant
to Section 6.11(a), the Loan Parties shall have no minimum EBITDA requirement
pursuant to this Section 6.11(c) as of the end of such Fiscal month.

 

The Administrative Agent may determine the Loan Parties’ compliance with such
covenants based upon financial reports and statements provided by the Borrowers’
Representative to the Administrative Agent (whether or not such financial
reports and statements are required to be furnished pursuant to this Agreement)
as well as by reference to interim financial information provided to, or
developed by, the Administrative Agent.

 

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ARTICLE 7 - USE OF COLLATERAL:

 

7.1. Use of Inventory Collateral.

 

(a) No Loan Party shall engage in any of the following with respect to its
Inventory:

 

(i) Any sale other than for fair consideration in the conduct of the Loan
Parties’ business in the ordinary course.

 

(ii) Sales or other dispositions to creditors.

 

(iii) Sales or other dispositions in bulk.

 

(iv) Sales of any Collateral in breach of any provision of this Agreement.

 

(b) No sale of Inventory shall be on consignment, approval, or under any other
circumstances such that, with the exception of the Loan Parties’ customary
return policy applicable to the return of Inventory purchased by the Loan
Parties’ retail customers in the ordinary course, such Inventory may be returned
to a Loan Party without the consent of the Administrative Agent.

 

7.2. INVENTORY QUALITY. All Inventory now owned or hereafter acquired by a Loan
Party is and will be of good and merchantable quality and free from defects
(other than defects within customary trade tolerances), other than Inventory
owned or acquired for outlet stores, which in the ordinary course sell
manufacturer’s overruns, discontinued lines, and irregulars.

 

7.3. ADJUSTMENTS AND ALLOWANCES. Each Loan Party may grant such allowances or
other adjustments to that Loan Party’s Account Debtors (exclusive of extending
the time for payment of any material Account or Account Receivable, which shall
not be done without first obtaining the Administrative Agent’s prior written
consent in each instance) as that Loan Party may reasonably deem to accord with
sound business practice, provided, however, at any time that a Default has
occurred and is continuing, the authority granted the Loan Parties pursuant to
this Section 7.3 may be limited or terminated by the Administrative Agent at any
time in the Administrative Agent’s discretion.

 

7.4. VALIDITY OF ACCOUNTS.

 

(a) The amount of each Account shown on the books, records, and invoices of the
Loan Parties represented as owing by each Account Debtor is and will be the
correct amount actually owing by such Account Debtor and shall have been fully
earned by performance by the Loan Parties.

 

(b) The Administrative Agent from time to time may verify the Receivables
Collateral directly with the Loan Parties’ Account Debtors, such verification to
be undertaken in keeping with commercially reasonable commercial lending
standards.

 

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(c) The Loan Parties have no knowledge of any impairment of the validity or
collectibility of any of the Accounts and shall notify the Administrative Agent
of any such fact immediately after the Loan Parties become aware of any such
impairment.

 

(d) No Loan Party shall post any bond to secure any Loan Party’s performance
under any agreement to which any Loan Party is a party nor cause any surety,
guarantor, or other third party obligee to become liable to perform any
obligation of any Loan Party (other than to the Administrative Agent) in the
event of any Loan Party’s failure to so perform.

 

7.5. NOTIFICATION TO ACCOUNT DEBTORS. The Administrative Agent shall have the
right at any time that an Event of Default has occurred to notify any of the
Loan Parties’ Account Debtors to make payment directly to the Administrative
Agent and to collect all amounts due on account of the Collateral.

 

ARTICLE 8 - Cash Management. Payment of Liabilities:

 

8.1. DEPOSITORY ACCOUNTS.

 

(a) Annexed hereto as EXHIBIT 8.1 is a Schedule of all present DDA’s, which
Schedule includes, with respect to each depository (i) the name and address of
that depository; (ii) the account number(s) of the account(s) maintained with
such depository; and (iii) a contact person at such depository.

 

(b) The Borrowers’ Representative shall deliver to the Administrative Agent, as
a condition to the effectiveness of this Agreement:

 

(i) Notifications (in a form satisfactory to the Administrative Agent) executed
on behalf of the relevant Loan Party to each depository institution with which
any DDA (other than any Exempt DDA and the Operating Account ) is maintained of
the Collateral Agent’s Collateral Interest in such DDA.

 

(ii) A Blocked Account Agreement with any depository institution at which:

 

(A) Both a DDA (other than the Operating Account) and the Operating Account are
maintained.

 

(B) A deposit account other than solely a DDA is maintained.

 

(iii) An agreement (generally referred to as a “Blocked Account Agreement”), in
form satisfactory to the Administrative Agent, with each depository institution
at which a Blocked Account is maintained.

 

(c) No Loan Party will establish any DDA hereafter unless, contemporaneously
with such establishment, the Borrowers’ Representative provides a notification
of the Collateral Agent’s Collateral Interest in such DDA, no Loan Party will
establish any deposit account other than a DDA or Exempt DDA, unless the
Borrowers’ Representative provides the Administrative Agent with a Blocked
Account Agreement.

 

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8.2. CREDIT CARD RECEIPTS.

 

(a) Annexed hereto as EXHIBIT 8.2, is a Schedule which describes all
arrangements to which each Loan Party is a party with respect to the payment to
such Loan Party of the proceeds of all credit card charges for sales by such
Loan Party.

 

(b) The Borrowers’ Representative shall deliver to the Administrative Agent, as
a condition to the effectiveness of this Agreement, notification, executed on
behalf of the relevant Loan Party, to each of such Loan Party’s credit card
clearinghouses and processors (in form satisfactory to the Administrative Agent
), which notice provides that payment of all credit card charges submitted by
any Loan Party to that clearinghouse or processor and any other amount payable
to any Loan Party by such clearinghouse or processor shall be directed to the
Concentration Account or as otherwise designated from time to time by the
Administrative Agent. No Loan Party shall change such direction or designation
except upon and with the prior written consent of the Administrative Agent .

 

8.3. THE CONCENTRATION, BLOCKED, AND OPERATING ACCOUNTS .

 

(a) The following checking accounts have been or will be established (and are so
referred to herein):

 

(i) The “Concentration Account” (so referred to herein): Established by the
Administrative Agent with Fleet National Bank.

 

(ii) The “Blocked Account” (so referred to herein): Established by the
Borrowers’ Representative with Fleet National Bank.

 

(iii) The “Operating Account” (so referred to herein): Established by the
Borrowers’ Representative with Fleet National Bank.

 

(b) The contents of each DDA and of the Blocked Account constitutes Collateral
and Proceeds of Collateral. The contents of the Concentration Account
constitutes the Administrative Agent’s property.

 

(c) The Loan Parties shall pay all fees and charges of, and maintain such
impressed balances as may be required by the depository in which any account is
opened as required hereby (even if such account is opened by and/or is the
property of the Administrative Agent).

 

8.4. PROCEEDS AND COLLECTIONS .

 

(a) All Receipts and all other cash proceeds of any sale or other disposition of
any of each Loan Party’s assets:

 

(i) Constitute Collateral and proceeds of Collateral.

 

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(ii) Shall be held in trust by the Loan Parties for the Administrative Agent.

 

(iii) Shall not be commingled with any of any Loan Party’s other funds.

 

(iv) Shall be deposited and/or transferred only to the Blocked Account or the
Concentration Account or DDAs which are swept on a periodic basis to a Blocked
Account or the Concentration Account.

 

(b) The Borrowers’ Representative shall cause by ACH or wire transfer to the
Blocked Account or the Concentration Account, no less frequently than daily (and
whether or not there is then an outstanding balance in the Loan Account) the
following:

 

(i) The entire contents (net of any minimum required balance not in any event to
exceed $2500) of each DDA (but excluding any Exempt DDA).

 

(ii) The proceeds of all credit card charges not otherwise provided for pursuant
hereto.

 

Telephone advice (confirmed by written notice) shall be provided to the
Administrative Agent on each Business Day on which any such transfer is made.

 

(c) The Borrowers’ Representative shall cause by ACH or wire transfer to the
Concentration Account, no less frequently than daily (and whether or not any
Liabilities are then outstanding), of the entire ledger balance (net of any
minimum required balance not in any event to exceed $2500) of the Blocked
Account.

 

(d) In the event that, notwithstanding the provisions of this Section 8.4, any
Loan Party receives or otherwise has dominion and control of any Receipts, or
any other proceeds or collections of any Collateral, such Receipts, proceeds,
and collections shall be held in trust by that Loan Party for the Administrative
Agent and shall not be commingled with any of that Loan Party’s other funds or
deposited in any account of any Loan Party other than as instructed by the
Administrative Agent.

 

8.5. PAYMENT OF LIABILITIES.

 

(a) On each Business Day, the Administrative Agent shall apply the then
collected balance of the Concentration Account (net of fees charged, and of such
impressed balances as may be required by the bank at which the Concentration
Account is maintained) first, against the SwingLine Loans (if any), and second,
against the unpaid balance of the Loan Account and all other Liabilities, other
than principal and interest on the Tranche B Loan; provided, however, for
purposes of the calculation of interest on the unpaid principal balance of the
Loan Account, such payment shall be deemed to have been made one (1) Business
Day after such transfer, and further provided that until the occurrence, and
during the continuance, of an

 

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Event of Default, unless the Borrower Representative otherwise instructs the
Administrative Agent, the balance of the Concentration Account shall not be
applied to any LIBOR Loans until the end of the applicable Interest Period
therefor.

 

(b) The following rules shall apply to deposits and payments under and pursuant
to this Section 8.5:

 

(i) Funds shall be deemed to have been deposited to the Concentration Account on
the Business Day on which deposited, provided that notice of such deposit is
delivered to the Administrative Agent by 2:00PM on that Business Day.

 

(ii) Funds paid to the Administrative Agent, other than by deposit to the
Concentration Account, shall be deemed to have been received on the Business Day
when they are good and collected funds, provided that notice of such payment is
delivered to the Administrative Agent by 2:00PM on that Business Day.

 

(iii) If notice of a deposit to the Concentration Account (Section 8.5(b)(i)) or
payment (Section 8.5(b)(ii)) is not delivered to the Administrative Agent until
after 2:00PM on a Business Day, such deposit or payment shall be deemed to have
been made at 9:00AM on the then next Business Day.

 

(iv) All deposits to the Concentration Account and other payments to the
Administrative Agent are subject to clearance and collection.

 

(c) The Administrative Agent shall transfer to the Operating Account any surplus
in the Concentration Account remaining after the application towards the
Liabilities referred to in Section 8.5(a) above (less those amount which are to
be netted out, as provided therein) provided, however, in the event that

 

(i) a Default has occurred and is continuing; and

 

(ii) either

 

(A) one or more L/C’s are then outstanding; or

 

(B) there is any amount unpaid on account of the Tranche B Loan,

 

then the Administrative Agent may establish a funded reserve of up to (x) 110%
of the aggregate of the Stated Amounts of such L/C’s plus (y) amounts unpaid on
account of the Tranche B Loan. Such funded reserve shall either be (i) returned
to the Borrowers’ Representative at such time that no Default has occurred and
is continuing or (ii) applied towards the Liabilities following Acceleration.

 

8.6. THE OPERATING ACCOUNT. Except as otherwise specifically provided in, or
permitted by, this Agreement, all checks shall be drawn by the Borrowers’
Representative upon, and other disbursements shall be made by the Borrowers’
Representative solely from, the Operating Account.

 

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ARTICLE 9 - GRANT OF SECURITY INTEREST:

 

9.1. GRANTOF SECURITY INTEREST. To secure the Borrowers’ prompt, punctual, and
faithful performance of all and each of the Liabilities, each Borrower hereby
grants to the Collateral Agent, for the benefit of the Secured Parties as their
interests may appear herein, a continuing security interest in and to, and
assigns to the Collateral Agent, for the benefit of the Secured Parties as their
interests may appear herein the following, and each item thereof, whether now
owned or now due, or in which that Borrower has an interest, or hereafter
acquired, arising, or to become due, or in which that Borrower obtains an
interest, and all products, Proceeds, substitutions, and accessions of or to any
of the following (all of which, together with any other property in which the
Collateral Agent may in the future be granted a security interest, is referred
to herein as the “Collateral”; any of the following terms not defined in this
Agreement shall have the meanings attributed thereto in the UCC):

 

(a) All Accounts and accounts receivable.

 

(b) All Inventory.

 

(c) All General Intangibles.

 

(d) All Equipment.

 

(e) All Goods.

 

(f) All Farm Products.

 

(g) All Fixtures.

 

(h) All Chattel Paper.

 

(i) All Letter-of-Credit Rights.

 

(j) All Payment Intangibles.

 

(k) All Supporting Obligations.

 

(l) All books, records, and information relating to the Collateral and/or to the
operation of each Borrower’s business, and all rights of access to such books,
records, and information, and all property in which such books, records, and
information are stored, recorded, and maintained.

 

(m) All Leasehold Interests.

 

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(n) All Investment Property, Instruments, Documents, Deposit Accounts, money,
policies and certificates of insurance, deposits, impressed accounts,
compensating balances, cash, or other property.

 

(o) Commercial Tort Claims

 

(p) All insurance proceeds, refunds, and premium rebates, including, without
limitation, proceeds of fire and credit insurance, whether any of such proceeds,
refunds, and premium rebates arise out of any of the foregoing (9.1(a) through
9.1(n)) or otherwise.

 

(q) All liens, guaranties, rights, remedies, and privileges pertaining to any of
the foregoing (9.1(a) through 9.1(p)), including the right of stoppage in
transit.

 

Notwithstanding anything in this Agreement to the contrary, with respect to each
item of Collateral constituting Equipment subject to a Capital Lease, or
constituting an agreement, license, permit or other instrument of a Borrower,
such item shall be subject to the security interest created hereby only to the
extent that the granting of such security interest, under the terms of such
Capital Lease, agreement, license, permit or other instrument, or as provided by
law, does not cause any default under or termination of such Capital Lease,
agreement, license, permit or other instrument or the loss of any material right
of a Borrower thereunder; provided, however, that in no event shall the
foregoing be construed to exclude from the security interest created by this
Agreement, proceeds or products of any such Capital Lease, agreement, license,
permit or other instrument of a Borrower or any accounts receivable or the right
to payments due or to become due a Borrower under any such agreement or other
instrument.

 

9.2. EXTENT AND DURATION OF SECURITY INTEREST; NOTICE.

 

(a) The security interest created and granted herein is in addition to, and
supplemental of, any security interest previously granted by any Borrower to the
Collateral Agent and shall continue in full force and effect applicable to all
Liabilities until both (a) all Liabilities have been paid and/or satisfied in
full and (b) the security interest created herein is specifically terminated in
writing by a duly authorized officer of the Collateral Agent.

 

(b) It is intended that the Collateral Interests created herein extend to and
cover all assets of each Borrower.

 

(c) If a Borrower shall at any time acquire a Commercial Tort Claim, the
Borrowers’ Representative shall promptly notify the Administrative Agent in
writing of the details thereof and the Borrower shall take such actions as the
Collateral Agent shall request in order to grant to the Collateral Agent, for
the benefit of the Lenders as their interests may appear herein, a perfected and
first priority security interest therein and in the Proceeds thereof.

 

ARTICLE 10 - Collateral Agent As Attorney-In-Fact:

 

10.1. APPOINTMENTAS ATTORNEY-IN-FACT. Each Borrower hereby irrevocably
constitutes and appoints the Collateral Agent as that (acting through any of its
officers) Borrower’s true and lawful attorney, with full power of substitution,
following the occurrence of

 

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an Event of Default, to convert the Collateral into cash at the sole risk, cost,
and expense of that Borrower, but for the sole benefit of the Agents and the
Secured Parties. The rights and powers granted the Collateral Agent by this
appointment include but are not limited to the right and power to:

 

(a) Prosecute, defend, compromise, or release any action relating to the
Collateral.

 

(b) Sign change of address forms to change the address to which each Borrower’s
mail is to be sent to such address as the Collateral Agent shall designate;
receive and open each Borrower’s mail; remove any Receivables Collateral and
Proceeds of Collateral therefrom and turn over the balance of such mail either
to the Borrowers’ Representative or to any trustee in bankruptcy or receiver of
the Borrowers’ Representative, or other legal representative of a Borrower whom
the Collateral Agent determines to be the appropriate person to whom to so turn
over such mail.

 

(c) Endorse the name of the relevant Borrower in favor of the Collateral Agent
upon any and all checks, drafts, notes, acceptances, or other items or
instruments; sign and endorse the name of the relevant Borrower on, and receive
as secured party, any of the Collateral, any invoices, schedules of Collateral,
freight or express receipts, or bills of lading, storage receipts, warehouse
receipts, or other documents of title respectively relating to the Collateral.

 

(d) Sign the name of the relevant Borrower on any notice to that Borrower’s
Account Debtors or verification of the Receivables Collateral; sign the relevant
Borrower’s name on any Proof of Claim in Bankruptcy against Account Debtors, and
on notices of lien, claims of mechanic’s liens, or assignments or releases of
mechanic’s liens securing the Accounts.

 

(e) Take all such action as may be necessary to obtain the payment of any letter
of credit and/or banker’s acceptance of which any Borrower is a beneficiary.

 

(f) Repair, manufacture, assemble, complete, package, deliver, alter or supply
goods, if any, necessary to fulfill in whole or in part the purchase order of
any customer of each Borrower.

 

(g) Use, license or transfer any or all General Intangibles of each Borrower.

 

10.2. NO OBLIGATION TO ACT. The Collateral Agent shall not be obligated to do
any of the acts or to exercise any of the powers authorized by Section 10.1
herein, but if the Collateral Agent elects to do any such act or to exercise any
of such powers, it shall not be accountable for more than it actually receives
as a result of such exercise of power, and shall not be responsible to any
Borrower for any act or omission to act except for any act or omission to act as
to which there is a final determination made in a judicial proceeding (in which
proceeding the Collateral Agent has had an opportunity to be heard) which
determination includes a specific finding that the subject act or omission to
act had been grossly negligent or in actual bad faith or constituted willful
misconduct.

 

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ARTICLE 11 - EVENTS OF DEFAULT:

 

The occurrence of any event described in this Article 11 respectively shall
constitute an “Event of Default” herein. The occurrence of any Event of Default
shall also constitute, without notice or demand, a default under all other
agreements between any Agent and any Lender and any Loan Party and instruments
and papers heretofore, now, or hereafter given any Agent and any Lender by any
Loan Party.

 

11.1. FAILURE TO PAY THE REVOLVING CREDIT OR THE TRANCHE B LOAN The failure by
any Loan Party to pay when due any principal of, interest on, or fees in respect
of, the Revolving Credit or the Tranche B Loan.

 

11.2. FAILURE TO MAKE OTHER PAYMENTS. The failure by any Loan Party to pay
within five (5) Business Days when due (or upon demand, if payable on demand)
any payment Liability other than any payment liability on account of the
principal of, or interest on, or fees in respect of, the Revolving Credit or the
Tranche B Loan.

 

11.3. FAILURE TO PERFORM COVENANT OR LIABILITY (NO GRACE PERIOD). The failure by
any Loan Party to promptly, punctually, faithfully and timely perform,
discharge, or comply with any covenant or Liability not otherwise described in
Section 11.1 or Section 11.2 hereof, and included in any of the following
provisions hereof:

 

Section

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

  

Relates to:

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

5.2(c)

   State of Organization, State Identification Number and Taxpayer
Identification Number

5.3(b)

   Notice of Name Change

5.5

   Location of Collateral

5.7(a)

   Title to Assets

5.8

   Indebtedness

5.9

   Insurance Policies

5.20, 5.21

   Dividends, Investments and Other Entity Actions

5.26

   Affiliate Transactions

5.27

   Further Assurances

6.11

   Minimum Excess Availability and Capital Expenditures

7.1

   Use of Inventory Collateral

Article 8

   Cash Management (except if the failure to comply is as a result of force
majeure or through no fault of the Loan Parties)

 

11.4. FINANCIAL REPORTING REQUIREMENTS. The failure by any Loan Party to
promptly, punctually, faithfully and timely perform, discharge, or comply with
the financial reporting requirements included in Article 6, subject, however, to
the following limited number of grace periods applicable to certain of those
requirements:

 

REPORT / STATEMENT

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

   REQUIRED
BY
SECTION

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

  

GRACE PERIOD

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

  

NUMBER OF GRACE

PERIODS

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

Borrowing Base Certificates

   6.4    One Business Day    Three per Fiscal Quarter

Weekly Report

   6.5    Two Business Days    Six in any 12 months

Monthly Report (15 Days)

   6.5    Three Business Days    Three in any 12 months

Monthly Reports (30 Days)

   6.5    Three Business Days    Three in any 12 months

 

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11.5. FAILURE TO PERFORM COVENANT OR LIABILITY (GRACE PERIOD). The failure by
any Loan Party, within fifteen (15) days following the earlier of any Loan
Party’s knowledge of a breach of any covenant or Liability not described in any
of Sections 11.1, 11.2, 11.3, or 11.4, or of the Borrowers’ Representative’s
receipt of written notice from the Administrative Agent of the breach of any
such covenants or Liabilities.

 

11.6. TRANCHE B LOAN ACTION EVENT ACCELERATION.

 

(a) The occurrence of any Tranche B Loan Action Event.

 

(b) The Administrative Agent’s receipt of an Acceleration Notice pursuant to
Section 14.2.

 

11.7. MISREPRESENTATION. The determination by the Administrative Agent that any
representation or warranty at any time made by any Loan Party to any Agent or
any Lender was not true or complete in all material respects when given;
provided, however, that for purposes of this Section 11.7, any representation or
warranty made by the Loan Parties in reliance on representations and warranties
made by Rochester Big and Tall and certain of its Subsidiaries in the Rochester
Acquisition Agreement shall be deemed to have been made to the Loan Parties’
knowledge; and, provided further, that if any such representation or warranty is
deemed repeated by the Loan Parties under the terms of this Agreement on and
after October 29, 2004, and such representation and warranty was not true or
complete in all material respects when given, and the Loan Parties have failed
to correct such representation or warranty by providing revised schedules or
exhibits, or otherwise, in each case to the Administrative Agent’s satisfaction,
then the foregoing proviso shall be of no effect.

 

11.8. ACCELERATION OF OTHER DEBT; BREACH OF LEASE. The occurrence of any event
such that any Indebtedness of any Loan Party in excess of $1,000,000.00 to any
creditor other than the Agent or any Lender could be accelerated (provided, that
an event of default under the 12% Subordinated Note (or any Note Purchase
Agreement under which such Subordinated Note is issued) caused solely by a
breach of a representation or warranty shall not be an Event of Default
hereunder) or, without the consent of a Loan Party, Leases with aggregate
monthly rents of at least $500,000.00 could be terminated prior to the stated
termination date thereof (whether or not the subject creditor or lessor takes
any action on account of such occurrence).

 

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11.9. DEFAULT UNDER OTHER AGREEMENTS. The occurrence of any breach or default
under any agreement between the Agent or any Lender and any Loan Party or
instrument or paper given the Agent or any Lender by any Loan Party not
constituting a Loan Document, whether such agreement, instrument, or paper now
exists or hereafter arises, with respect to Indebtedness in excess of
$1,000,000.00 (notwithstanding that the Agent or the subject Lender may not have
exercised its rights upon default under any such other agreement, instrument or
paper).

 

11.10. UNINSURED CASUALTY LOSS. The occurrence of any uninsured loss, theft,
damage, or destruction of or to any material portion of the Collateral.

 

11.11. ATTACHMENT; JUDGMENT; RESTRAINT OF BUSINESS.

 

(a) The service of process upon any Agent or any Lender or any Participant of a
court order or order of any other applicable governmental authority attaching,
by trustee, mesne, or other process, any funds of any Loan Party on deposit
with, or assets of any Loan Party in the possession of, that Agent or that
Lender or such Participant.

 

(b) The entry of judgments against any Loan Party, to the extent not covered by
insurance (subject to a reasonable deductible) aggregating more than $750,000,
which judgments are not satisfied (if a money judgment) or appealed from (with
execution or similar process stayed) within thirty (30) days of entry.

 

(c) The entry of any order or the imposition of any other process having the
force of law, the effect of which is to restrain in any material way the conduct
by any Loan Party of its business in the ordinary course.

 

11.12. CANTON MORTGAGE DEFAULT. The (i) acceleration of any Indebtedness which
is secured by the Canton Warehouse or (ii) the failure of the Loan Parties to
cause the proceeds of any refinancing or replacement of the Canton Mortgage,
and/or any second mortgage on the Canton Warehouse, in each case in excess of
the principal outstanding under the Canton Mortgage on the Closing Date, to be
applied immediately upon receipt thereof to repayment of the Revolving Credit
Obligations.

 

11.13. INDICTMENT - FORFEITURE. 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 more than a de minimis
part of the property of that Loan Party and/or the imposition of any stay or
other order, the effect of which could be to restrain in any material way the
conduct by any Loan Party of its business in the ordinary course.

 

11.14. CHALLENGE TO LOAN DOCUMENTS.

 

(a) Any challenge by or on behalf of the Borrowers’ Representative, 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.

 

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(b) Any determination by any court or any other judicial or government authority
that any Loan Document is not enforceable strictly in accordance with the
subject Loan Document’s terms or which voids, avoids, limits, or otherwise
adversely affects any security interest created by any Loan Document or any
payment made pursuant thereto.

 

11.15. CHANGE IN CONTROL. Any Change in Control.

 

11.16. BUSINESS FAILURE. Any act by, against or relating to any Loan Party, or
its property or assets, which act constitutes the determination by any Loan
Party to initiate or acquiesce to: a program of partial or total
self-liquidation; an application for, consent to, or sufferance of the
appointment of a receiver, trustee, or other person, pursuant to court action or
otherwise, with respect to all or any part of any Loan Party’s property; the
granting of any trust mortgage or execution of an assignment for the benefit of
the creditors of any Loan Party; any other voluntary or involuntary liquidation
or extension of debt agreement for any Loan Party; the offering by, or entering
into by, any Loan Party of any composition, extension, or any other arrangement
seeking relief from or extension of the debts of any Loan Party; or the
initiation of any judicial or non-judicial proceeding or agreement by, against,
or including any Loan Party which seeks or intends to accomplish a
reorganization or arrangement with creditors; and/or the initiation by or on
behalf of any Loan Party of the liquidation or winding up of all or any part of
any Loan Party’s business or operations.

 

11.17. BANKRUPTCY. The failure by any Loan Party to generally pay the debts of
that Loan Party as they mature; adjudication of bankruptcy or insolvency
relative to any Loan Party; the entry of an order for relief or similar order
with respect to any Loan Party in any proceeding pursuant to the Bankruptcy Code
or any other federal bankruptcy law; the filing of any complaint, application,
or petition by any Loan Party initiating any matter in which any Loan Party is
or may be granted any relief from the debts of that Loan Party pursuant to the
Bankruptcy Code or any other insolvency statute or procedure; the filing of any
complaint, application, or petition against any Loan Party initiating any matter
in which that Loan Party is or may be granted any relief from the debts of that
Loan Party pursuant to the Bankruptcy Code or any other insolvency statute or
procedure, which complaint, application, or petition is not timely contested in
good faith by that Loan Party by appropriate proceedings or, if so contested, is
not dismissed within ninety (90) days of when filed.

 

11.18. TERMINATION OF BUSINESS. Unless subject to the prior written consent of
the Agent, the determination of the Loan Parties, whether by vote of the Loan
Parties’ board of directors or otherwise to: suspend the operation of the Loan
Parties’ business in the ordinary course, liquidate all or a material portion of
the Loan Parties’ assets or Stores, or employ an agent or other third party to
conduct any so-called store closing, store liquidation or
“Going-Out-Of-Business” sales (other than in connection with a Permitted Asset
Disposition).

 

11.19. PAYMENT OF OTHER INDEBTEDNESS. The Loan Parties shall prepay or discharge
any Indebtedness prior to its maturity date except as expressly permitted
hereunder.

 

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11.20. DEFAULT BY GUARANTOR; TERMINATION OF GUARANTY. The occurrence of any
Guarantor Default and/or the termination or attempted termination of any
Guaranty Agreement by any Person.

 

11.21. MATERIAL ADVERSE CHANGE. An event shall have occurred or failed to occur,
which occurrence or failure is or could have a materially adverse effect upon
the financial condition of Casual Male and its Subsidiaries when compared with
such financial condition as of July 30, 2004.

 

ARTICLE 12 - RIGHTS AND REMEDIES UPON DEFAULT:

 

12.1. ACCELERATION. Upon the occurrence of any Event of Default, the
Administrative Agent may (and on the issuance of Acceleration Notice(s)
requisite to the causing of Acceleration, the Administrative Agent shall)
declare all Indebtedness of the Loan Parties to the Lenders to be immediately
due and payable and may exercise all of the Administrative Agent’s Rights and
Remedies (and the Collateral Agent may likewise exercise all of its rights and
remedies upon default) as the Administrative Agent from time to time thereafter
determines as appropriate.

 

12.2. RIGHTS OF ENFORCEMENT. The Collateral Agent shall have all of the rights
and remedies of a secured party upon default under the UCC, in addition to which
the Collateral Agent shall have all and each of the following rights and
remedies:

 

(a) To give notice to any bank at which any DDA or Blocked Account is maintained
and in which Proceeds of Collateral are deposited, to turn over such Proceeds
directly to the Collateral Agent.

 

(b) To give notice to any customs broker of any of the Loan Parties to follow
the instructions of the Collateral Agent as provided in any written agreement or
undertaking of such broker in favor of the Collateral Agent.

 

(c) To collect the Receivables Collateral with or without the taking of
possession of any of the Collateral.

 

(d) To take possession of all or any portion of the Collateral.

 

(e) To sell, lease, or otherwise dispose of any or all of the Collateral, in its
then condition or following such preparation or processing as the Collateral
Agent deems advisable and with or without the taking of possession of any of the
Collateral.

 

(f) Subject to the terms of store leases and provisions of applicable law, to
conduct one or more going out of business sales which include the sale or other
disposition of the Collateral.

 

(g) To apply the Receivables Collateral or the Proceeds of the Collateral
towards (but not necessarily in complete satisfaction of) the Liabilities.

 

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(h) To exercise all or any of the rights, remedies, powers, privileges, and
discretions under all or any of the Loan Documents.

 

12.3. SALE OF COLLATERAL.

 

(a) Any sale or other disposition of the Collateral may be at public or private
sale upon such terms and in such manner as the Collateral Agent deems advisable,
having due regard to compliance with any statute or regulation which might
affect, limit, or apply to the Collateral Agent’s disposition of the Collateral.

 

(b) The Collateral Agent, in the exercise of the Collateral Agent’s rights and
remedies upon default, may, subject to the terms of store leases and provisions
of applicable law, conduct, or may require the Loan Parties to conduct, one or
more going out of business sales, in the Collateral Agent’s own right or by one
or more agents and contractors. Subject to the terms of store leases such
sale(s) may be conducted upon any premises owned, leased, or occupied by any
Loan Party. Subject to applicable law, the Collateral Agent and any such agent
or contractor, in conjunction with any such sale, may augment the Inventory with
other goods (all of which other goods shall remain the sole property of the
Collateral Agent or such agent or contractor). The Borrowers shall have no
responsibility or liability for any such augmented inventory. Any amounts
realized from the sale of such goods which constitute augmentations to the
Inventory (net of an allocable share of the costs and reasonable expenses
incurred in their disposition) shall be the sole property of the Collateral
Agent or such agent or contractor and neither any Loan Party nor any Person
claiming under or in right of any Loan Party shall have any interest therein.
The proceeds of any such going out of business sale which is conducted by a Loan
Party at the request of the Collateral Agent shall be first applied to the
direct costs of such sale.

 

(c) Unless the Collateral is perishable or threatens to decline speedily in
value, or is of a type customarily sold on a recognized market (in which event
the Collateral Agent shall provide the Borrowers’ Representative such notice as
may be practicable under the circumstances), the Collateral Agent shall give the
Borrowers’ Representative at least ten (10) days prior written notice of the
date, time, and place of any proposed public sale, and of the date after which
any private sale or other disposition of the Collateral may be made. Each
Borrower agrees that such written notice shall satisfy all requirements for
notice to that Borrower which are imposed under the UCC or other applicable law
with respect to the exercise of the Collateral Agent’s rights and remedies upon
default.

 

(d) The Collateral Agent, the Administrative Agent, and any Lender may purchase
the Collateral, or any portion of it at any sale held under this Article.

 

(e) If any of the Collateral is sold, leased, or otherwise disposed of by the
Collateral Agent on credit, the Liabilities shall not be deemed to have been
reduced as a result thereof unless and until payment is finally received thereon
by the Collateral Agent.

 

(f) The Collateral Agent shall turn over to the Administrative Agent the
proceeds of the exercise by the Collateral Agent of its rights and remedies
under this Article 12. The Administrative Agent shall apply the proceeds of the
Collateral Agent’s exercise of its rights and remedies upon default pursuant to
this Article 12 in accordance with Sections 14.7 and 14.8.

 

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12.4. OCCUPATION OF BUSINESS LOCATION. In connection with the Collateral Agent’s
exercise of the Collateral Agent’s rights under this Article 12, the Collateral
Agent may enter upon, occupy, and use any premises owned or occupied by each
Loan Party, and may exclude each Loan Party from such premises or portion
thereof as may have been so entered upon, occupied, or used by the Collateral
Agent. The Collateral Agent shall not be required to remove any of the
Collateral from any such premises upon the Collateral Agent’s taking possession
thereof, and may render any Collateral unusable to the Loan Parties. In no event
shall the Collateral Agent be liable to any Loan Party for use or occupancy by
the Collateral Agent of any premises pursuant to this Article 12, nor for any
charge (such as wages for any Loan Party’s employees and utilities) incurred in
connection with the Collateral Agent’s exercise of the Collateral Agent’s Rights
and Remedies.

 

12.5. GRANT OF NONEXCLUSIVE LICENSE. Except to the extent prohibited by a
Borrower’s contractual obligations, which prohibition has been disclosed to the
Administrative Agent, each Borrower hereby grants to the Collateral Agent a
royalty free, nonexclusive and irrevocable license to use, apply, and affix any
trademark, trade name, logo, or the like in which any Borrower now or hereafter
has rights, such license being with respect to the Collateral Agent’s exercise
of the rights hereunder including, without limitation, in connection with any
completion of the manufacture of Inventory or sale or other disposition of
Inventory.

 

12.6. ASSEMBLY OF COLLATERAL. The Collateral Agent may require any Borrower to
assemble the Collateral and make it available to the Collateral Agent at the
Loan Parties’ sole risk and expense at a place or places which are reasonably
convenient to both the Collateral Agent and the Borrowers’ Representative.

 

12.7. RIGHTS AND REMEDIES. The rights, remedies, powers, privileges, and
discretions of the Administrative Agent hereunder (herein, the “Agents’ Rights
and Remedies”) shall be cumulative and not exclusive of any rights or remedies
which it would otherwise have. No delay or omission by an Agent in exercising or
enforcing any of the Agents’ Rights and Remedies shall operate as, or
constitute, a waiver thereof. No waiver by an Agent of any Event of Default or
of any default under any other agreement shall operate as a waiver of any other
default hereunder or under any other agreement. No single or partial exercise of
any of the Agents’ Rights or Remedies, and no express or implied agreement or
transaction of whatever nature entered into between any Agent and any person, at
any time, shall preclude the other or further exercise of the Agents’ Rights and
Remedies. No waiver by any Agent of any of the Agents’ Rights and Remedies on
any one occasion shall be deemed a waiver on any subsequent occasion, nor shall
it be deemed a continuing waiver. The Agents’ Rights and Remedies may be
exercised at such time or times and in such order of preference as the Agents
may determine. The Agents’ Rights and Remedies may be exercised without resort
or regard to any other source of satisfaction of the Liabilities.

 

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ARTICLE 13 - Revolving Credit Fundings and Distributions:

 

13.1. REVOLVING CREDIT FUNDING PROCEDURES.

 

(a) The Agent shall advise each Revolving Credit Lender, no later than 2:00PM on
a date on which any Revolving Credit Loan (other than a SwingLine Loan) is to be
made, that such Revolving Credit Loan is to be made. Such advice, in each
instance, may be by telephone or facsimile transmission, provided that if such
advice is by telephone, it shall be confirmed in writing. Advice of a Revolving
Credit Loan shall include the amount of and interest rate applicable to the
subject Revolving Credit Loan.

 

(b) Subject to that Revolving Credit Lender’s Revolving Credit Dollar
Commitment, each Revolving Credit Lender, by no later than the end of business
on the day on which the subject Revolving Credit Loan is to be made, shall
Transfer that Revolving Credit Lender’s Revolving Credit Percentage Commitment
of the subject Revolving Credit Loan to the Administrative Agent.

 

13.2. SWINGLINE LOANS.

 

(a) In the event that, when a Revolving Credit Loan is requested, the aggregate
unpaid balance of the SwingLine Loan is less than the SwingLine Loan Ceiling,
then the SwingLine Lender may advise the Administrative Agent that the SwingLine
Lender has determined to include up to the amount of the requested Revolving
Credit Loan as part of the SwingLine Loan. In such event, the SwingLine Lender
shall Transfer the amount of the requested Revolving Credit Loan to the
Administrative Agent.

 

(b) The SwingLine Loan shall be converted to a Revolving Credit Loan in which
all Revolving Credit Lenders participate as follows:

 

(i) At any time and from time to time, the SwingLine Lender may advise the
Administrative Agent that all, or any part, of the SwingLine Loan is to be
converted to a Revolving Credit Loan in which all Revolving Credit Lenders
participate, provided that if the Administrative Agent is not so advised by the
SwingLine Lender, then all SwingLine Loans shall be converted no less frequently
than weekly to Revolving Credit Loans in which all Revolving Credit Lenders
participate.

 

(ii) At the initiation of a Liquidation, the then entire unpaid principal
balance of the SwingLine Loan shall be converted to a Revolving Credit Loan in
which all Revolving Credit Lenders participate.

 

In either such event, the Administrative Agent shall advise each Revolving
Credit Lender of such conversion as if, and with the same effect as if, such
conversion were the making of a Revolving Credit Loan as provided in Section
14.1.

 

(c) The SwingLine Lender, in separate capacities, may also be one or more
Agents, a Revolving Credit Lender or the Tranche B Lender.

 

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(d) The SwingLine Lender, in its capacity as SwingLine Lender, is not a
“Revolving Credit Lender” for any of the following purposes:

 

(i) Except as otherwise specifically provided in the relevant Section, any
distribution pursuant to Section 14.8.

 

(ii) Determination of whether the requisite holders of Loan Commitments have
Consented to action requiring such Consent.

 

13.3. ADMINISTRATIVE AGENT’S COVERING OF FUNDINGS:

 

(a) Each Revolving Credit Lender shall make available to the Administrative
Agent, as provided herein, that Revolving Credit Lender’s Revolving Credit
Percentage Commitment of the following:

 

(i) Each Revolving Credit Loan, up to the maximum amount of that Revolving
Credit Lender’s Revolving Credit Dollar Commitment of the Revolving Credit
Loans.

 

(ii) Up to the maximum amount of that Revolving Credit Lender’s Revolving Credit
Dollar Commitment of each L/C Drawing (to the extent that such L/C Drawing is
not “covered” by a Revolving Credit Loan as provided herein).

 

(b) In all circumstances, the Administrative Agent may:

 

(i) Assume that each Revolving Credit Lender, subject to Section 13.3(a), timely
shall make available to the Administrative Agent that Revolving Credit Lender’s
Revolving Credit Percentage Commitment of each Revolving Credit Loan, notice of
which is provided pursuant to Section 13.1 and shall make available, to the
extent not “covered” by a Revolving Credit Loan, that Revolving Credit Lender’s
Revolving Credit Percentage Commitment of any honoring of an L/C.

 

(ii) In reliance upon such assumption, make available the corresponding amount
to the Loan Parties.

 

(iii) Assume that each Revolving Credit Lender timely shall pay, and shall make
available, to the Administrative Agent all other amounts which that Revolving
Credit Lender is obligated to so pay and/or make available hereunder or under
any of the other Loan Documents.

 

(c) In the event that, in reliance upon any of such assumptions, the
Administrative Agent makes available a Revolving Credit Lender’s Revolving
Credit Percentage Commitment of one or more Revolving Credit Loans, or any other
amount to be made available hereunder or under any of the other Loan Documents,
which amount a Revolving Credit Lender (a “Delinquent Revolving Credit Lender”)
fails to provide to the Administrative Agent within One (1) Business Day of
written notice of such failure, then:

 

(i) The amount which had been made available by the Administrative Agent is an “
Administrative Agent’s Cover” (and is so referred to herein).

 

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(ii) All interest paid by the Loan Parties on account of the Revolving Credit
Loan or coverage of the subject L/C Drawing which consist of the Administrative
Agent’s Cover shall be retained by the Administrative Agent until the
Administrative Agent’s Cover, with interest, has been paid.

 

(iii) The Delinquent Revolving Credit Lender shall pay to the Administrative
Agent, on demand, interest at a rate equal to the prevailing federal funds rate
on any Administrative Agent’s Cover in respect of that Delinquent Revolving
Credit Lender

 

(iv) The Administrative Agent shall have succeeded to all rights to payment to
which the Delinquent Revolving Credit Lender otherwise would have been entitled
hereunder in respect of those amounts paid by or in respect of the Loan Parties
on account of the Administrative Agent’s Cover together with interest until it
is repaid. Such payments shall be deemed made first towards the amounts in
respect of which the Administrative Agent’s Cover was provided and only then
towards amounts in which the Delinquent Revolving Credit Lender is then
participating. For purposes of distributions to be made pursuant to Section
13.4(a) (which relates to ordinary course distributions) or Section 14.7 (which
relates to distributions of proceeds of a Liquidation) below, amounts shall be
deemed distributable to a Delinquent Revolving Credit Lender (and consequently,
to the Administrative Agent to the extent to which the Administrative Agent is
then entitled) at the highest level of distribution (if applicable) at which the
Delinquent Revolving Credit Lender would otherwise have been entitled to a
distribution.

 

(v) Subject to Subsection 13.3(c)(iv) the Delinquent Revolving Credit Lender
shall be entitled to receive any payments from the Loan Parties to which the
Delinquent Revolving Credit Lender is then entitled, provided however there
shall be deducted from such amount and retained by the Administrative Agent any
interest to which the Administrative Agent is then entitled on account of
Subsection 13.3(c)(ii) above.

 

(d) A Delinquent Revolving Credit Lender shall not be relieved of any obligation
of such Delinquent Revolving Credit Lender hereunder (all and each of which
shall constitute continuing obligations on the part of any Delinquent Revolving
Credit Lender).

 

(e) A Delinquent Revolving Credit Lender may cure its status as a Delinquent
Revolving Credit Lender by paying the Administrative Agent the aggregate of the
following:

 

(i) The Administrative Agent’s Cover (to the extent not previously repaid by the
Loan Parties and retained by the Administrative Agent in accordance with
Subsection 13.3(c)(iv), above) with respect to that Delinquent Revolving Credit
Lender.

 

Plus

 

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(ii) The aggregate of the amount payable under Subsection 13.3(c)(iii), above
(which relates to interest to be paid by that Delinquent Revolving Credit
Lender).

 

Plus

 

(iii) All such costs and expenses as may be incurred by the Administrative Agent
in the enforcement of the Administrative Agent’s rights against such Delinquent
Revolving Credit Lender.

 

13.4. ORDINARY COURSE DISTRIBUTIONS: REVOLVING CREDIT. (This Section 13.4
applies unless the provisions of Section 14.7 (which relates to distributions in
the event of a Liquidation) become operative).

 

(a) Weekly, on such day as may be set from time to time by the Administrative
Agent (or more frequently at the Administrative Agent’s option), the
Administrative Agent and each Revolving Credit Lender shall settle up on amounts
advanced under the Revolving Credit and collected funds received in the
Concentration Account.

 

(b) The Administrative Agent shall distribute to the SwingLine Lender and to
each Revolving Credit Lender such Person’s respective Pro-Rata share of interest
payments on the Revolving Credit Loans when actually received and collected by
the Administrative Agent (excluding the one Business Day for settlement provided
for in 8.5(a) which shall be for the account of the Administrative Agent only).
For purposes of calculating interest due to a Revolving Credit Lender, that
Revolving Credit Lender shall be entitled to receive interest on the actual
amount contributed by that Revolving Credit Lender towards the principal balance
of the Revolving Credit Loans outstanding during the applicable period covered
by the interest payment made by the Loan Parties. Any net principal reductions
to the Revolving Credit Loans received by the Administrative Agent in accordance
with the Loan Documents during such period shall not reduce such actual amount
so contributed, for purposes of calculation of interest due to that Revolving
Credit Lender, until the Administrative Agent has distributed to that Revolving
Credit Lender its Pro-Rata share thereof.

 

(c) The Administrative Agent shall distribute fees paid on account of the
Revolving Credit, as follows:

 

(i) L/C Fee (Section 2.19(a)): Pro-Rata to the Revolving Credit Lenders.

 

(ii) Unused Line Fee (Section 2.15): Pro-Rata to the Revolving Credit Lenders.

 

(iii) Revolving Credit Early Termination Fee (Section 2.16) : Pro-Rata to the
Revolving Credit Lenders.

 

(iv) Revolving Credit Commitment Fee (Section 2.13) : As provided in separate
letter agreements with the respective Revolving Credit Lenders.

 

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(d) No Lender shall have any interest in or right to receive any part of the
following:

 

(i) Any interest which reflects “float” as described in the proviso included in
Section 8.5(a), all of which float shall be for the account of the
Administrative Agent only.

 

(ii) The Administrative Agent’s Monitoring Fee (Section 2.14) to be paid by the
Loan Parties to the Administrative Agent.

 

(iii) Fees described in Section 2.19(b) (which relates to fees associated with,
among other things, the issuance of L/C’s): Retained by the Issuer.

 

(e) No Revolving Credit Lender shall have any interest in or right to receive
any part of the Tranche B Fees.

 

(f) Any amount received by the Administrative Agent or the Collateral Agent as
reimbursement for any cost or expense (including without limitation, reasonable
attorneys’ fees) shall be distributed by the Administrative Agent to that Person
which is entitled to such reimbursement as provided in this Agreement (and if
such Person(s) is (are) the Lenders, Pro-Rata determined as of the date on which
the expense, in respect of which such reimbursement is being made, was
incurred).

 

(g) Each distribution pursuant to this Section 13.4 is subject to Section
13.3(c), above (which relates to the effect of the failure of any Revolving
Credit Lender to have Transferred to the Administrative Agent any amount which
that Revolving Credit Lender is then obligated to so Transfer pursuant to the
within Agreement).

 

13.5. ORDINARY COURSE DISTRIBUTIONS: THE TRANCHE B LOAN (This Section 13.5
applies unless the provisions of Section 14.7 (which relates to distributions in
the event of a Liquidation) become operative).

 

(a) The Administrative Agent shall distribute to the Tranche B Lender payments
on account of principal of, and interest on, the Tranche B Loan and the Tranche
B Fees as received and collected by the Administrative Agent from the Loan
Parties in accordance with the provisions of this Agreement or as made available
by the Administrative Agent as the proceeds of advances under the Revolving
Credit. As provided in Section 13.4(f), any amount received by the
Administrative Agent or the Collateral Agent as reimbursement for any cost or
expense (including without limitation, reasonable attorneys’ fees) shall be
distributed by the Administrative Agent to that Person which is entitled to such
reimbursement as provided in this Agreement (and if such Person(s) is (are) the
Lenders, Pro-Rata determined as of the date on which the expense, in respect of
which such reimbursement is being made, was incurred).

 

(b) Unless otherwise specifically agreed to in writing, the Administrative Agent
shall distribute the proceeds of a disposition of Collateral, other than in the
ordinary course, in accordance with the ordering of distributions set forth in
14.8.

 

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ARTICLE 14 - Acceleration and Liquidation:

 

14.1. ACCELERATION NOTICES.

 

(a) The Administrative Agent may give the Collateral Agent and Lenders an
Acceleration Notice at any time following the occurrence of an Event of Default.

 

(b) The SuperMajority Revolving Credit Lenders may give the Administrative Agent
an Acceleration Notice at any time following the occurrence of an Event of
Default. Such notice may be by multiple counterparts, provided that counterparts
executed by the requisite Lenders are received by the Administrative Agent
within a period of five (5) consecutive Business Days.

 

(c) The Tranche B Lender may give the Administrative Agent an Acceleration
Notice as follows:

 

(i) At any time following the occurrence of an Event of Default which occurs
after the Revolving Credit Debt has been paid in full, all L/C’s have been cash
collateralized, and there is no obligation on the Revolving Credit Lenders to
make any further loans or to provide any further financial accommodation under
the Revolving Credit.

 

(ii) At any time following the occurrence of an Event of Default which occurs
after a BuyOut by the Tranche B Lender.

 

(iii) At any time following the occurrence of a Bankruptcy Breach.

 

(iv) At any time as permitted pursuant to Section 14.2.

 

14.2. MANDATORY ACCELERATION RIGHT OF THE TRANCHE B LENDER.

 

(a) The Tranche B Lender may initiate a Standstill Period by written notice to
the Administrative Agent at any time after the occurrence of any Tranche B Loan
Action Event and may so initiate a Standstill Period on account of a separate
Tranche B Loan Action Event during the pendency of another Standstill Period
which has been initiated by it.

 

(b) After the expiry of a Standstill Period initiated upon a Tranche B Loan
Action Event, the Tranche B Lender may give the Administrative Agent and the
Collateral Agent an Acceleration Notice unless either 14.2(b)(i) or 14.2(b)(ii)
is applicable:

 

(i) Acceleration has been stayed by judicial or statutory process.

 

(ii) As applicable:

 

(A) If the relevant Tranche B Loan Action Event is a Tranche B Availability
Breach: On three (3) consecutive days during the relevant Standstill Period, no
Tranche B Availability Breach existed or occurred.

 

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(B) If the relevant Tranche B Loan Action Event is a Minimum Excess Availability
Breach: On any three (3) days during the relevant Standstill Period, no Minimum
Excess Availability Breach existed or occurred.

 

(C) If the relevant Tranche B Loan Action Event is a Tranche B Payment Breach:
All payments which are due or overdue on account of the Tranche B Loan (other
than those which would be due only if the Tranche B Loan were accelerated) are
paid prior to the expiry of the relevant Standstill Period.

 

(c) Notwithstanding the foregoing Section 14.2(b), after the expiry of more than
two Standstill Periods initiated upon the same type of Tranche B Loan Action
Event within any 45 day period, the Tranche B Lender may give the Administrative
Agent and the Collateral Agent an Acceleration Notice.

 

14.3. ACCELERATION. Unless stayed by judicial or statutory process, the
Administrative Agent shall Accelerate the Revolving Credit Obligations and the
Tranche B Loan within a commercially reasonable time following:

 

(a) The Administrative Agent’s giving of an Acceleration Notice to the
Collateral Agent and the Revolving Credit Lenders as provided in Section
14.1(a).

 

(b) The Administrative Agent’s receipt of an Acceleration Notice from the
SuperMajority Revolving Credit Lenders, in compliance with Section 14.1(b).

 

(c) The Administrative Agent’s receipt of an Acceleration Notice from the
Tranche B Lender, in compliance with Section 14.2(c).

 

14.4. INITIATION OF LIQUIDATION. Unless stayed by judicial or statutory process,
a Liquidation shall be initiated by the Collateral Agent within a commercially
reasonable time following Acceleration of the Revolving Credit Obligations and
the Tranche B Loan.

 

14.5. ACTIONS AT AND FOLLOWING INITIATION OF LIQUIDATION.

 

(a) At the initiation of a Liquidation:

 

(i) The unpaid principal balance of the SwingLine Loan (if any) shall be
converted, pursuant to Section 14.2(b)(ii), to a Revolving Credit Loan in which
all Revolving Credit Lenders participate.

 

(ii) The Administrative Agent and the Revolving Credit Lenders shall “net out”
each Revolving Credit Lender’s respective contributions towards the Revolving
Credit Loans, so that each Revolving Credit Lender holds that Revolving Credit
Lender’s Revolving Credit Percentage Commitment of the Revolving Credit Loans
and advances.

 

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(b) Following the initiation of a Liquidation, each Revolving Credit Lender
shall contribute, towards any L/C thereafter honored and not immediately
reimbursed by the Loan Parties, that Revolving Credit Lender’s Revolving Credit
Percentage Commitment of such honoring.

 

(c) Following the initiation of a Liquidation, each Revolving Credit Lender
shall contribute, towards any L/C thereafter honored and not immediately
reimbursed by the Loan Parties, that Revolving Credit Lender’s Revolving Credit
Percentage Commitment of such honoring.

 

14.6. COLLATERAL AGENT’S CONDUCT OF LIQUIDATION.

 

(a) Any Liquidation shall be conducted by the Collateral Agent in the manner
determined by it to be commercially reasonable.

 

(b) The Collateral Agent may establish one or more Nominees to “bid in” or
otherwise acquire ownership to any Post Foreclosure Asset.

 

(c) The Collateral Agent shall manage the Nominee and manage and dispose of any
Post Foreclosure Assets with a view towards the realization of the economic
benefits of the ownership of the Post Foreclosure Assets and in such regard, the
Collateral Agent and/or the Nominee may operate, repair, manage, maintain,
develop, and dispose of any Post Foreclosure Asset in such manner as the
Collateral Agent determines as appropriate under the circumstances.

 

(d) Each Agent may decline to undertake or to continue taking a course of action
or to execute an action plan (whether proposed by an Agent or a Lender) unless
indemnified Pro-Rata to that Agent’s satisfaction by the Lenders against any and
all liability and expense which may be incurred by that Agent by reason of
taking or continuing to take that course of action or action plan.

 

(e) The Administrative Agent and each Lender shall execute all such instruments
and documents not inconsistent with the provisions of this Agreement as the
Administrative Agent and/or the Nominee reasonably may request with respect to
the creation and governance of any Nominee, the conduct of the Liquidation, and
the management and disposition of any Post Foreclosure Asset.

 

14.7. DISTRIBUTION OF LIQUIDATION PROCEEDS.

 

(a) The Collateral Agent may establish one or more reasonably funded reserve
accounts into which proceeds of the conduct of any Liquidation may be deposited
in anticipation of future expenses which may be incurred by any Agent in the
exercise of rights as a secured creditor of the Loan Parties and prior claims
which the Agents anticipate may need to be paid.

 

(b) The Collateral Agent shall distribute the proceeds of any Liquidation to the
Administrative Agent.

 

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(c) The Administrative Agent shall distribute the net proceeds of Liquidation,
as distributed to the Administrative Agent by the Collateral Agent pursuant to
Section 14.7(b), in accordance with the relative priorities set forth in Section
14.8.

 

(d) Each Revolving Credit Lender, on the written request of the Administrative
Agent and/or any Nominee, not more frequently than once each month, shall
reimburse the Agents and/or any Nominee, Pro-Rata, for any cost or expense
reasonably incurred by the Agents and/or the Nominee in the conduct of a
Liquidation, which amount is not covered out of current proceeds of the
Liquidation, which reimbursement shall be paid over to and distributed by the
Administrative Agent.

 

14.8. RELATIVE PRIORITIES TO PROCEEDS OF LIQUIDATION.

 

(a) All distributions of proceeds of a Liquidation shall be net of payment over
to the Agents as reimbursement for all reasonable third party costs and expenses
incurred by the Agents and to Lenders’ Special Counsel and to any funded reserve
established pursuant to Section 14.7(a).

 

(b) The relative priorities to the proceeds of a Liquidation shall be
distributed based on the following relative priorities:

 

(i) First, to the SwingLine Lender, on account of any SwingLine Loans not
converted to Revolving Credit Loans pursuant to Section 14.5(a)(i); and then

 

(ii) Second, to the Revolving Credit Lenders (other than any Delinquent
Revolving Credit Lender) and to FRG or any of its Affiliates providing cash
management services or L/Cs to the extent of any credit exposure in connection
therewith (but excluding any fees earned on account thereof), Pro-Rata, to the
unpaid principal balance of Revolving Credit Debt and any amounts owed on
account of such cash management services and any L/Cs (including as cash
collateral for any undrawn L/Cs) and fees due to the Issuer on account thereof;
and then

 

(iii) Third, to the Revolving Credit Lenders (other than any Delinquent
Revolving Credit Lender), Pro-Rata, to accrued interest which constitutes
Revolving Credit Debt; and then

 

(iv) Fourth, to the Revolving Credit Lenders (other than any Delinquent
Revolving Credit Lender), Pro-Rata, to Revolving Credit Fees, other than the
Revolving Credit Early Termination Fee; and then

 

(v) Fifth, to any Delinquent Revolving Credit Lenders, Pro-Rata to amounts to
which such Revolving Credit Lenders otherwise would have been entitled pursuant
to Subsections 14.8(b)(ii), 14.8(b)(iii), and 14.8(b)(iv); and then

 

(vi) Sixth, to the Tranche B Lender; and then

 

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(vii) Seventh, to the Secured Parties on account of any Liabilities arising in
connection with any Hedge Agreement and then

 

(viii) Eighth, to the Revolving Credit Early Termination Fee.

 

ARTICLE 15 - THE AGENTS:

 

15.1. APPOINTMENT OF THE AGENTS.

 

(a) Each Lender appoints and designates Fleet Retail Group Inc. as the
“Administrative Agent” hereunder and under the Loan Documents.

 

(b) Each Lender appoints and designates Fleet Retail Group Inc. as the
“Collateral Agent” hereunder and under the Loan Documents.

 

(c) Each Lender authorizes each Agent:

 

(i) To execute those of the Loan Documents and all other instruments relating
thereto to which that Agent is a party.

 

(ii) To take such action on behalf of the Lenders and to exercise all such
powers as are expressly delegated to that Agent hereunder and in the Loan
Documents and all related documents, together with such other powers as are
reasonably incident thereto.

 

(d) Each Lender recognizes that Fleet Retail Group Inc. and Bank of America,
N.A. are interrelated and waives any potential claim which may be based on an
Agent’s acting in conflict of interest on account thereof. Nothing contained
herein shall be deemed to release the Agents from liability under Section
15.2(f) hereof for conduct undertaken in a grossly negligent manner, in actual
bad faith, or in willful misconduct.

 

(e) Wells Fargo Foothill, Inc. has been granted the title of “Syndication
Agent”, and National City Business Credit, Inc. and Heller Financial, Inc. have
each been granted the title of “Co-Documentation Agent” in which capacity none
shall have any rights nor any responsibilities. Any of the foregoing may resign
such position at any time by written notice to the Administrative Agent and, in
any event, shall cease to be Syndication Agent or Co-Documentation Agent, as the
case may be, contemporaneously with its ceasing to be a Revolving Credit Lender.

 

15.2. RESPONSIBILITIES OF AGENTS.

 

(a) The Administrative Agent shall have principal responsibilities for and
primary authority for the administration of the credit facilities contemplated
by this Agreement and for all matters for which the Collateral Agent is not
responsible. In all instances where the allocation of responsibility and
authority, as between the Collateral Agent and the Administrative Agent is in
doubt, the Administrative Agent shall be vested with such responsibility and
authority.

 

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(b) The Collateral Agent shall have principal responsibilities for and primary
authority for the conduct of the Liquidation and the distribution of the
proceeds of such Liquidation.

 

(c) Neither Agent shall have any duties or responsibilities to, or any fiduciary
relationship with, any Lender except for those expressly set forth in this
Agreement.

 

(d) Neither Agent nor any of its Affiliates shall be responsible to any Lender
for any of the following:

 

(i) Any recitals, statements, representations or warranties made by any Loan
Party or any other Person.

 

(ii) Any appraisals or other assessments of the assets of any Loan Party or of
any other Person responsible for or on account of the Liabilities.

 

(iii) The value, validity, effectiveness, genuineness, enforceability, or
sufficiency of the Loan Agreement, the Loan Documents or any other document
referred to or provided for therein.

 

(iv) Any failure by any Loan Party or any other Person (other than the subject
Agent) to perform its obligations under the Loan Documents.

 

(e) Each Agent may employ attorneys, accountants, and other professionals and
agents and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such attorneys, accountants, and other professionals or agents
or attorneys-in-fact selected by the subject Agent with reasonable care. No such
attorney, accountant, other professional, agent, or attorney-in-fact shall be
responsible for any action taken or omitted to be taken by any other such
Person.

 

(f) Neither Agent, nor any of its directors, officers, or employees shall be
responsible for any action taken or omitted to be taken or omitted to be taken
by any other of them in connection herewith in reliance upon advice of their
respective counsel nor, in any other event except for any action taken or
omitted to be taken as to which a final judicial determination has been or is
made (in a proceeding in which such Person has had an opportunity to be heard)
that such Person had acted in a grossly negligent manner, in actual bad faith,
or in willful misconduct.

 

(g) Neither Agent shall have any responsibility in any event for more funds than
that Agent actually receives and collects.

 

(h) The Agents, in their separate capacities as Lenders, shall have the same
rights and powers hereunder as any other Lender.

 

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15.3. CONCERNING DISTRIBUTIONS BY THE AGENTS.

 

(a) Each Agent, in that Agent’s reasonable discretion based upon that Agent’s
determination of the likelihood that additional payments will be received,
expenses incurred, and/or claims made by third parties to all or a portion of
such proceeds, may delay the distribution of any payment received on account of
the Liabilities.

 

(b) Each Agent may disburse funds prior to determining that the sums which that
Agent expects to receive have been finally and unconditionally paid to that
Agent. If and to the extent that Agent does disburse funds and it later becomes
apparent that the Agent did not then receive a payment in an amount equal to the
sum paid out, then any Lender to whom the Agent made the funds available, on
demand from the Agent, shall refund to the Administrative Agent the sum paid to
that person.

 

(c) If, in the opinion of an Agent, the distribution of any amount received by
that Agent might involve that Agent in liability, or might be prohibited hereby,
or might be questioned by any Person, then that Agent may refrain from making
distribution until that Agent’s right to make distribution has been adjudicated
by a court of competent jurisdiction.

 

(d) The proceeds of any Lender’s exercise of any right of, or in the nature of,
set-off shall be deemed, First, to the extent that a Lender is entitled to any
distribution hereunder, to constitute such distribution and Second, shall be
shared with the other Lenders as if distributed pursuant to (and shall be deemed
as distributions under) Section 14.8.

 

(e) Each Lender recognizes that the crediting of the Loan Parties with the
“proceeds” of any transaction in which a Post Foreclosure Asset is acquired is a
non-cash transaction and that, in consequence, no distribution of such
“proceeds” will be made by the Administrative Agent to any Lender.

 

(f) In the event that (x) a court of competent jurisdiction shall adjudge that
any amount received and distributed by the Administrative Agent is to be repaid
or disgorged or (y) the requisite Lenders (as provided in Section 16.4(h))
determine to effect such repayment or disgorgement, then each Lender to which
any such distribution shall have been made shall repay, to the Agent which had
made such distribution, that Lender’s Pro-Rata share of the amount so adjudged
or determined to be repaid or disgorged.

 

15.4. DISPUTE RESOLUTION. Any dispute among the Lenders and/or any Agent
concerning the interpretation, administration, or enforcement of the financing
arrangements contemplated by this or any other Loan Document or the
interpretation or administration of this or any other Loan Document which cannot
be resolved amicably shall be resolved in the United States District Court for
the District of Massachusetts, sitting in Boston or in the Superior Court of
Suffolk County, Massachusetts, to the jurisdiction of which courts each Lender
hereby submits.

 

15.5. DISTRIBUTIONS OF NOTICES AND OF DOCUMENTS. The Administrative Agent will
forward to each Lender, promptly after the Administrative Agent’s receipt
thereof, a copy of each notice or other document furnished to the Administrative
Agent pursuant to this Agreement,

 

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including monthly, quarterly, and annual financial statements received from the
Borrowers’ Representative pursuant to Article 6 of this Agreement, other than
any of the following:

 

(a) Routine communications associated with requests for Revolving Credit Loans
and/or the issuance of L/C’s.

 

(b) Routine or nonmaterial communications.

 

(c) Any notice or document required by any of the Loan Documents to be furnished
to the Lenders by the Borrowers’ Representative.

 

(d) Any notice or document of which the Administrative Agent has knowledge that
such notice or document had been forwarded to the Lenders other than by the
Administrative Agent.

 

15.6. CONFIDENTIAL INFORMATION.

 

(a) Each Lender will maintain, as confidential (other than to their respective
attorneys, agents, accountants, participants and prospective participants) all
of the following:

 

(i) Proprietary approaches, techniques, and methods of analysis which are
applied by the Administrative Agent in the administration of the credit facility
contemplated by this Agreement.

 

(ii) Proprietary forms and formats utilized by the Administrative Agent in
providing reports to the Lenders pursuant hereto, which forms or formats are not
of general currency.

 

(iii) Confidential information provided by any Loan Party pursuant to the Loan
Documents, other than any information which becomes known to the general public
through sources other than that Lender.

 

(b) Nothing included herein shall prohibit the disclosure of any such
information as may be required to be provided by judicial process or by
regulatory authorities having jurisdiction over any party to this Agreement.

 

15.7. RELIANCE BY AGENTS. Each Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, telex, or
facsimile) reasonably believed by that Agent to be genuine and correct and to
have been signed or sent by or on behalf of the proper person or persons, and
upon advice and statements of attorneys, accountants and other experts selected
by that Agent. As to any matters not expressly provided for in this Agreement,
any Loan Document, or in any other document referred to therein, that Agent
shall in all events be fully protected in acting, or in refraining from acting,
in accordance with the applicable Consent required by this Agreement.
Instructions given with the requisite Consent shall be binding on all Lenders.

 

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15.8. NON-RELIANCE ON AGENTS AND OTHER LENDERS.

 

(a) Each Lender represents to all other Lenders and to the Agents that such
Lender:

 

(i) Independently and without reliance on any representation or act by any Agent
or by any other Lender, and based on such documents and information as that
Lender has deemed appropriate, has made such Lender’s own appraisal of the
financial condition and affairs of the Loan Parties and decision to enter into
this Agreement.

 

(ii) Has relied upon that Lender’s review of the Loan Documents by that Lender
and by counsel to that Lender as that Lender deemed appropriate under the
circumstances.

 

(b) Each Lender agrees that such Lender, independently and without reliance upon
any Agent or any other Lender, and based upon such documents and information as
such Lender shall deem appropriate at the time, will continue to make such
Lender’s own appraisals of the financial condition and affairs of the Loan
Parties when determining whether to take or not to take any discretionary action
under this Agreement.

 

(c) Neither Agent in the discharge of that Agent’s duties hereunder, shall be
required to make inquiry of, or to inspect the properties or books of, any
Person.

 

(d) Except for notices, reports, and other documents and information expressly
required to be furnished to the Lenders by the Administrative Agent hereunder
(as to which, see Section 15.5), the Agents shall not have any affirmative duty
or responsibility to provide any Lender with any credit or other information
concerning any Person, which information may come into the possession of Agents
or any Affiliate of an Agent.

 

(e) Each Lender, at such Lender’s request, shall have reasonable access to all
nonprivileged documents in the possession of the Agents, which documents relate
to the Agents’ performance of their duties hereunder.

 

15.9. INDEMNIFICATION. Without limiting the liabilities of the Loan Parties
under any this or any of the other Loan Documents, each Lender shall indemnify
each Agent, Pro-Rata, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including reasonable attorneys’ fees and expenses and
other out-of-pocket expenditures) which may at any time be imposed on, incurred
by, or asserted against that Agent and in any way relating to or arising out of
this Agreement or any other Loan Document or any documents contemplated by or
referred to therein or the transactions contemplated thereby or the enforcement
of any of terms hereof or thereof or of any such other documents, provided,
however, no Lender shall be liable for any of the foregoing to the extent that
any of the foregoing arises from any action taken or omitted to be taken by the
subject Agent as to which a final judicial determination has been or is made (in
a proceeding in which the subject Agent has had an opportunity to be heard) that
the subject Agent had acted in a grossly negligent manner, in actual bad faith,
or in willful misconduct.

 

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15.10. RESIGNATION OF AGENT.

 

(a) An Agent may resign at any time by giving 60 days prior written notice
thereof to the Lenders and to the other Agent. Upon receipt of any such notice
of resignation, the SuperMajority Lenders and the Tranche B Lender shall have
the right to appoint a successor to such Agent (and if no Event of Default has
occurred, with the consent of the Borrowers’ Representative, not to be
unreasonably withheld and, in any event, deemed given by the Borrowers’
Representative if no written objection is provided by the Borrowers’
Representative to the (resigning) Agent within seven (7) Business Days notice of
such proposed appointment). If a successor Agent shall not have been so
appointed and accepted such appointment within 30 days after the giving of
notice by the resigning Agent, then the resigning Agent may appoint a successor
Agent, which shall be a financial institution having a combined capital and
surplus in excess of $500,000,000.00 (unless, after a BuyOut such Agent shall be
the Tranche B Lender in which case the foregoing capital and surplus requirement
shall not apply). The consent of the Borrowers’ Representative otherwise
required by this Section 15.10(a) shall not be required if an Event of Default
has occurred.

 

(b) Upon the acceptance of any appointment as an Agent hereunder by a successor
Agent, such successor shall thereupon succeed to, and become vested with, all
the rights, powers, privileges, and duties of the (resigning) Agent so replaced,
and the (resigning) Agent shall be discharged from the (resigning) Agent’s
duties and obligations hereunder, other than on account of any responsibility
for any action taken or omitted to be taken by the (resigning) Agent as to which
a final judicial determination has been or is made (in a proceeding in which the
(resigning) Person has had an opportunity to be heard) that such Person had
acted in a grossly negligent manner or in bad faith.

 

(c) After any retiring Agent’s resignation, the provisions of this Agreement and
of all other Loan Documents shall continue in effect for the retiring Person’s
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as an Agent.

 

ARTICLE 16 - Action By Agents - Consents - Amendments - Waivers:

 

16.1. ADMINISTRATION OF CREDIT FACILITIES.

 

(a) Except as otherwise specifically provided in this Agreement, each Agent may
take any action with respect to the credit facility contemplated by the Loan
Documents as that Agent determines to be appropriate within their respective
areas of responsibility and authority, as set forth in Sections 15.2(b) and
15.2(a), provided, however, neither Agent is under any affirmative obligation to
take any action which it is not required by this Agreement or the Loan Documents
specifically to so take.

 

(b) Except as specifically provided in the following Sections of this Agreement,
whenever a Loan Document or this Agreement provides that action may be taken or
omitted to be taken in an Agents’ discretion, that Agent shall have the sole
right to take, or refrain from taking, such action without, and notwithstanding,
any vote of the Lender:

 

ACTIONS DESCRIBED IN

SECTION

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

 

TYPE OF CONSENT REQUIRED

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

16.2

  Majority Lenders

16.3

  SuperMajority Revolving Credit Lenders

16.4

  Certain Consent

16.5

  Unanimous Consent

17.4

  Consent of SwingLine Lender

16.7

  Consent of Tranche B Lender

16.8

  Consent of the Agents

 

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(c) The rights granted to the Lenders in those sections referenced in Section
16.1(b) shall not otherwise limit or impair any Agent’s exercise of its
discretion under the Loan Documents.

 

16.2. ACTIONS REQUIRING OR ON DIRECTION OF MAJORITY LENDERS. Except as otherwise
provided in this Agreement, the Consent or direction of the Majority Lenders is
required for any amendment, waiver, or modification of any Loan Document.

 

16.3. ACTIONS REQUIRING OR ON DIRECTION OF SUPERMAJORITY REVOLVING CREDIT
LENDERS. The Consent or direction of the SuperMajority Revolving Credit Lenders
is required as follows:

 

(a) The Lenders agree that any loan or advance under the Revolving Credit which
results in a Protective OverAdvance may be made by the Administrative Agent in
its discretion without the Consent of the Lenders and that each Lender shall be
bound thereby, provided, however, the Consent or direction of the SuperMajority
Revolving Credit Lenders is required to permit a Protective OverAdvance to be
outstanding for more than 45 consecutive Business Days or more than twice in any
twelve month period. (Any Protective OverAdvance which is permitted by this
Section 16.3(a) is referred to as a “Permitted Protective OverAdvance”).

 

(b) If any Default has occurred and is continuing, the SuperMajority Revolving
Credit Lenders may direct the Administrative Agent to suspend the Revolving
Credit, whereupon, as long as a Default shall have occurred and be continuing,
the only Revolving Credit Loans which may be made are the following:

 

(i) Revolving Credit Loans made to “cover” the honoring of L/C’s.

 

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(ii) Permitted Protective OverAdvances.

 

(iii) Revolving Credit Loans made with Consent of the SuperMajority Lenders.

 

(c) If an Event of Default has occurred and not been duly waived, the
SuperMajority Revolving Credit Lenders may:

 

(i) Give the Administrative Agent an Acceleration Notice in accordance with
Section 14.1(b)

 

(ii) Direct the Administrative Agent to increase the rate of interest to the
default rate of interest as provided in, and to the extent permitted by, this
Agreement.

 

16.4. ACTION REQUIRING CERTAIN CONSENT. The following Consent shall be required
for the following actions:

 

ACTION

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

  

REQUIRED CONSENT

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

(a) Any change to the dates on which any payment of principal of the Tranche B
Loan shall be due and payable or the amount of any such payment.

   SuperMajority Revolving Credit Lenders and the Tranche B Lender

(b) Any amendment to the definition of Tranche B Loan Prepayment Conditions.

   SuperMajority Revolving Credit Lenders and the Tranche B Lender

(c) Waiver or amendment of financial performance covenants in Section 6.11

   SuperMajority Revolving Credit Lenders and the Tranche B Lender.

(d) Increase in the SwingLine Ceiling:

   SwingLine Lender and the Majority Lenders.

(e) Any increase in any Revolving Credit Lender’s Revolving Credit Dollar
Commitment or Revolving Credit Percentage Commitment (other than by reason of
the application of Section 16.11 (which deals with NonConsenting Revolving
Credit Lenders) or Section 17.1 (which deals with assignments and
participations)), it being understood that this Section 16.4(e) addresses
changes to commitments inter se and not any increase in the overall size of the
Revolving Credit.

   All Revolving Credit Lenders affected thereby other than any Delinquent
Revolving Credit Lender.

 

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ACTION

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

 

REQUIRED CONSENT

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

(f) Any forgiveness of all or any portion of any payment Liability.

  All Lenders whose payment Liability is being so forgiven (other than any
Delinquent Revolving Credit Lender, if otherwise applicable).

(g) Any decrease in any interest rate, fee or assessment payable under any of
the Loan Documents (other than any Administrative Agent’s Monitoring Fee (for
which the consent of the Administrative Agent shall also be required)) and of
any fee provided for by any Fee Letter (which may be amended by written
agreement between the Borrowers’ Representative on the one hand, and the
Administrative Agent on the other).

  All Lenders adversely affected thereby (other than any Delinquent Revolving
Credit Lender, if otherwise applicable).

(h) Disgorgement as described in Section 15.3(f).

 

If disgorgement is

By the Revolving Credit Lenders- The SuperMajority Revolving Credit Lenders.

By the Tranche B Lender - The Tranche B Lender.

 

16.5. ACTIONS REQUIRING OR DIRECTED BY UNANIMOUS CONSENT. None of the following
may take place except with Unanimous Consent:

 

(a) Any extension of the Maturity Date.

 

(b) Any release of all or substantially all of the Collateral not otherwise
required or provided for in the Loan Documents or to facilitate a Liquidation.

 

(c) Any amendment of the definition of the terms “Borrowing Base”, “Tranche B
Borrowing Base”, or “Availability” or of any definition of any component
thereof, such that more credit would be available to the Loan Parties, based on
the same assets, as would have been available to the Loan Parties immediately
prior to such amendment, it being understood, however, that:

 

(i) The foregoing shall not limit the adjustment by the Administrative Agent of
any Reserve in the Administrative Agent’s administration of the Revolving Credit
as otherwise permitted by this Agreement.

 

(ii) The foregoing shall not prevent the Administrative Agent, in its
administration of the Revolving Credit, from restoring any component of
Borrowing Base which had been lowered by the Administrative Agent back to the
value of such component, as stated in this Agreement or to an intermediate
value.

 

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(d) Any release of any Person obligated on account of the Liabilities (except in
connection with a sale of such Person approved by the SuperMajority Lenders in
accordance with the terms of this Agreement).

 

(e) The making of any Revolving Credit Loan which, when made, exceeds
Availability and is not a Permitted Protective OverAdvance, provided, however,

 

(i) no Consent shall be required in connection with the making of any Revolving
Credit Loan to “cover” any honoring of a drawing under any L/C; and

 

(ii) each Lender recognizes that subsequent to the making of a Revolving Credit
Loan which does not constitute a Permitted Protective OverAdvance, the unpaid
principal balance of the Loan Account may exceed the Borrowing Base on account
of changed circumstances beyond the control of the Administrative Agent (such as
a drop in collateral value).

 

(f) The waiver of the obligation of the Loan Parties to reduce the unpaid
principal balance of loans under the Revolving Credit to an amount which does
not exceed a Permitted Protective OverAdvance or, subject to the time limits
included in Section 16.3(a) (which places time and frequency limits on Permitted
Protective OverAdvances).

 

(g) Any amendment of this Article 16.

 

(h) Amendment of any of the following Sections of this Agreement:

 

(i) 13.4

 

(ii) 13.5

 

(iii) 14.7

 

(iv) 14.8

 

(i) Amendment of any of the following Definitions:

 

“Appraised Inventory Liquidation Value”

“Majority Lenders”

“Majority Revolving Credit Lenders”

“Minimum Excess Availability Breach”

“Tranche B Availability Breach”

“Tranche B Payment Breach”

“Permitted Protective OverAdvance”

“Standstill Period”

“SuperMajority Lenders”

“SuperMajority Revolving Credit Lenders”

“Tranche B Loan Action Events”

“Unanimous Consent”

 

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16.6. ACTIONS REQUIRING SWINGLINE LENDER CONSENT. No action, amendment, or
waiver of compliance with, any provision of the Loan Documents or of this
Agreement which affects the SwingLine Lender may be undertaken without the
Consent of the SwingLine Lender.

 

16.7. ACTIONS REQUIRING TRANCHE B LENDER CONSENT. None of the following may be
made without the Consent of the Tranche B Lender:

 

(a) Any increase in any interest rate or fee payable to the Revolving Credit
Lenders on account of the Revolving Credit Loans in excess of 150 basis points
per annum in the aggregate.

 

(b) Any increase in any interest rate or fee payable to the Revolving Credit
Lenders on account of the Revolving Credit Loans not requiring the Consent of
the Tranche B Lender pursuant to Section 16.7(a), unless the Loan Parties agree
to increase the interest rate and fees payable to the Tranche B Lender
contemporaneously therewith by a like amount.

 

(c) Any amendment, modification, or waiver of any provision of Article 3
(entitled “The Tranche B Loan”).

 

(d) Any amendment of Sections 2.2, 11.6, 14.1(c), 14.2, 14.3(c) or 14.4.

 

(e) Amendment of any of the following Definitions:

 

“Change in Control”

“Equipment”

“Overloan”

“Protective OverAdvances

“Revolving Credit Ceiling”

“Standstill Period.”

 

16.8. ACTIONS REQUIRING AGENTS’ CONSENT.

 

(a) No action, amendment, or waiver of compliance with, any provision of the
Loan Documents or of this Agreement which affects an Agent in its capacity as an
Agent may be undertaken without the written consent of the Agents.

 

(b) No action referenced herein which affects the rights, duties, obligations,
or liabilities of an Agent shall be effective without the written consent of the
Agents.

 

16.9. MISCELLANEOUS ACTIONS.

 

(a) Notwithstanding any other provision of this Agreement, no single Lender
independently may exercise any right of action or enforcement against or with
respect to any Loan Party.

 

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(b) Each Agent shall be fully justified in failing or refusing to take action
under this Agreement or any Loan Document on behalf of any Lender unless that
Agent shall first:

 

(i) receive such clear, unambiguous, written instructions as that Agent deems
appropriate; and

 

(ii) be indemnified to that Agent’s satisfaction by the Lenders against any and
all liability and expense which may be incurred by that Agent by reason of
taking or continuing to take any such action, unless such action had been
grossly negligent, in willful misconduct, or in bad faith.

 

(c) Each Agent may establish reasonable procedures for the providing of
direction and instructions from the Lenders to that Agent, including its
reliance on multiple counterparts, facsimile transmissions, and time limits
within which such direction and instructions must be received in order to be
included in a determination of whether the requisite Loan Commitments has
provided its direction, Consent, or instructions.

 

16.10. ACTIONS REQUIRING BORROWERS’ REPRESENTATIVE’S CONSENT.

 

(a) The Borrowers’ Representative’s consent is required for any amendment of
this Agreement, except that each of the following Articles of this Agreement may
be amended without the consent of the Borrowers’ Representative:

 

Article

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

  

Title of Article

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

13    Revolving Credit Fundings and Distributions 15    The Agents

 

(b) The Borrowers’ Representative’s consent to the amendment of those provisions
referenced in Section 16.10(a) shall be deemed given unless written objection is
made, within seven (7) Business Days following the Administrative Agent’s giving
notice to the Borrowers’ Representative of the proposed amendment; and

 

(i) shall not be required following the occurrence of any Event of Default.

 

16.11. NONCONSENTING REVOLVING CREDIT LENDER.

 

(a) In the event that a Revolving Credit Lender (in this Section 16.11, a
“NonConsenting Lender”) does not provide its Consent to a proposal by the
Administrative Agent to take action which requires consent under this Article
16, then one or more Revolving Credit Lenders who provided Consent to such
action may require the assignment, without recourse and in accordance with the
procedures outlined in Section 17.1, below, of the NonConsenting Lender’s
commitment hereunder on five (5) days written notice to the Administrative Agent
and to the NonConsenting Lender.

 

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(b) At the end of such five (5) days, and provided that the NonConsenting Lender
delivers the Note held by the NonConsenting Lender to the Administrative Agent,
the Revolving Credit Lenders who have given such written notice shall Transfer
the following to the NonConsenting Lender:

 

(i) Such NonConsenting Lender’s Pro-Rata share of the principal and interest of
the Loans to the date of such assignment.

 

(ii) All fees distributable hereunder to the NonConsenting Lender to the date of
such assignment.

 

(iii) Any out-of-pocket costs and expenses for which the NonConsenting Lender is
entitled to reimbursement from the Loan Parties.

 

(c) In the event that the NonConsenting Lender fails to deliver to the
Administrative Agent the Note held by the NonConsenting Lender as provided in
Section 16.11(b), then:

 

(i) The amount otherwise to be Transferred to the NonConsenting Lender shall be
Transferred to the Administrative Agent and held by the Administrative Agent,
without interest, to be turned over to the NonConsenting Lender upon delivery of
the Note held by that NonConsenting Lender.

 

(ii) The Note held by the NonConsenting Lender shall have no force or effect
whatsoever.

 

(iii) The NonConsenting Lender shall cease to be a “Lender”.

 

(iv) The Revolving Credit Lender(s) which have Transferred the amount to the
Administrative Agent as described above shall have succeeded to all rights and
become subject to all of the obligations of the NonConsenting Lender as a
“Revolving Credit Lender”.

 

(d) In the event that more than One (1)Revolving Credit Lender wishes to require
such assignment, the NonConsenting Lender’s commitment hereunder shall be
divided among such Revolving Credit Lenders, pro-rata based upon their
respective Loan Commitments, with the Administrative Agent coordinating such
transaction.

 

(e) The Administrative Agent shall coordinate the retirement of the Note held by
the NonConsenting Lender and the issuance of Notes to those Lenders which
“take-out” such NonConsenting Lender, provided, however, no processing fee
otherwise to be paid as provided in Section 17.2(b) shall be due under such
circumstances.

 

16.12. THE BUYOUT.

 

(a) The Tranche B Lender may (but shall not be obligated to) cause the
assignment to the Tranche B Lender, or its designee, by the Revolving Credit
Lenders, of all

 

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right, title and interest in, to, arising under, or in respect of the Revolving
Credit Obligations upon five (5) Business Days prior written notice given at any
time that the Tranche B Lender has the right, under Section 14.1, to give an
Acceleration Notice.

 

(b) Such assignments shall be effected on the Business Day next following the
expiry of such five (5) Business Days by the execution, by the Revolving Credit
Lenders, of an Assignment and Assumption (in the form of EXHIBIT 17.1, annexed
hereto) in exchange for the payment, in immediately available funds, of the
amount of Revolving Credit Obligations (including the Revolving Credit Early
Termination Fee as if the same were then due and payable), providing that if the
Revolving Credit Early Termination Fee is not collected on such date by the
Tranche B Lender, then the Tranche B Lender shall use its best efforts to
collect such Revolving Credit Early Termination Fee and upon collection thereof
shall cause it to be paid in the order of priority set forth in 14.8.

 

The Tranche B Lender’s buy out right under this Section 16.12 may only be
exercised completely with respect to the entire Revolving Credit.

 

ARTICLE 17 - Assignments By Lenders:

 

17.1. ASSIGNMENTS AND ASSUMPTIONS.

 

(a) Except as provided herein, each Revolving Credit Lender (in this Section
17.1(a), an “Assigning Revolving Credit Lender”) may assign to one or more
Eligible Assignees (in this Section 17.1(a), each an “Assignee Revolving Credit
Lender”) all or a portion of that Lender’s interests, rights and obligations
under this Agreement and the Loan Documents (including all or a portion of its
Commitment) and the same portion of the Loans at the time owing to it, and of
the Note held by the Assigning Revolving Credit Lender, provided that:

 

(i) The Administrative Agent shall have given its prior written consent to such
assignment, which consent shall not be unreasonably withheld, but need not be
given if the proposed assignment would result in any Assigning Revolving Credit
Lender’s having a Dollar Commitment of less than the “minimum hold” amount
specified in Section 17.1(a)(iii).

 

(ii) Each such assignment shall be of a constant, and not a varying, percentage
of all the Assigning Revolving Credit Lender’s rights and obligations under this
Agreement.

 

(iii) Following the effectiveness of such assignment, the Assigning Revolving
Credit Lender’s Dollar Commitment (if not an assignment of all of the Assigning
Revolving Credit Lender’s Commitment) shall not be less than $10,000,000.00.

 

(iv) If no Event of Default has occurred, such assignment shall be subject to
the consent of the Borrowers’ Representative, not to be unreasonably withheld or
delayed and which consent shall be deemed given if no written objection is
received within seven (7) days of the Borrowers’ Representative’s receipt of
notice of such proposed assignment.

 

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(b) The Tranche B Lender, with prior written notice to the Administrative Agent,
may assign all or a portion of that Lender’s interests, rights and obligations
under this Agreement and the Loan Documents freely to any Person.

 

17.2. ASSIGNMENT PROCEDURES. (This Section 17.2 describes the procedures to be
followed in connection with an assignment effected pursuant to this Article 17
and permitted by Section 17.1).

 

(a) The parties to such an assignment shall execute and deliver to the
Administrative Agent, for recording in the Register, an Assignment and
Acceptance substantially in the form of EXHIBIT 17.1, annexed hereto (an
“Assignment and Acceptance”).

 

(b) The Assigning Revolving Credit Lender shall deliver to the Administrative
Agent, with such Assignment and Acceptance, the Note held by the subject
Assigning Revolving Credit Lender and the Administrative Agent’s processing fee
of $3,000.00, provided, however, no such processing fee shall be due where the
Assigning Revolving Credit Lender is one of the Lenders at the initial execution
of this Agreement.

 

(c) The Administrative Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the “Register”) for
the recordation of the names and addresses of the Lenders and of the Loan
Commitments, the Revolving Credit Percentage Commitment and Revolving Credit
Percentage Commitment of each Lender. The Register shall be available for
inspection by the Lenders at any reasonable time and from time to time upon
reasonable prior notice. In the absence of manifest error, the entries in the
Register shall be conclusive and binding on all Lenders. The Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a “Lender” hereunder for all purposes of this Agreement.

 

(d) The Assigning Revolving Credit Lender and Assignee Revolving Credit Lender,
directly between themselves, shall make all appropriate adjustments in payments
for periods prior to the effective date of an Assignment and Assumption.

 

17.3. EFFECT OF ASSIGNMENT.

 

(a) From and after the effective date specified in an Assignment and Acceptance
which has been executed, delivered, and recorded (which effective date the
Administrative Agent may delay by up to five (5) Business Days after the
delivery of such Assignment and Acceptance):

 

(i) The Assignee Revolving Credit Lender:

 

(A) Shall be a party to this Agreement and the other Loan Documents (and to any
amendments thereof) as fully as if the Assignee Revolving Credit Lender had
executed each.

 

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(B) Shall have the rights of a Lender hereunder to the extent of the Loan
Commitment, the Revolving Credit Percentage Commitment and Revolving Credit
Percentage Commitment assigned by such Assignment and Acceptance.

 

(ii) The Assigning Revolving Credit Lender shall be released from the Assigning
Revolving Credit Lender’s obligations under this Agreement and the Loan
Documents to the extent of the Commitment assigned by such Assignment and
Acceptance.

 

(iii) The Administrative Agent shall undertake to obtain and distribute
replacement Notes to the subject Assigning Revolving Credit Lender and Assignee
Revolving Credit Lender.

 

(b) By executing and delivering an Assignment and Acceptance, the parties
thereto confirm to and agree with each other and with all parties to this
Agreement as to those matters which are set forth in the subject Assignment and
Acceptance.

 

ARTICLE 18 - Notices:

 

18.1. NOTICE ADDRESSES. All notices, demands, and other communications made in
respect of any Loan Document (other than a request for a loan or advance or
other financial accommodation under the Revolving Credit) shall be made to the
following addresses, each of which may be changed upon seven (7) days written
notice to all others given by certified mail, return receipt requested:

 

If to either Agent:      Fleet Retail Group Inc.      40 Broad Street     
Boston, Massachusetts 02109      Attention:    Kathleen Dimock          
Managing Director      Fax:    617-434-4339             With a copy to:     
Riemer & Braunstein LLP      Three Center Plaza      Boston, Massachusetts 02108
     Attention:    Robert E. Paul Esquire      Fax:    617-880-3456

 

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If to the Tranche B Lender      Fleet Retail Group, Inc.      40 Broad Street  
   Boston, Massachusetts 02109      Attention:    Kathleen Dimock          
Managing Director      Fax:    617-434-4339 If to the Borrowers’ Representative
And All Loan Parties:      Casual Male Retail Group, Inc.      555 Turnpike
Street      Canton, Massachusetts 02021      Attention:    Dennis Hernreich     
     Chief Financial Officer      Fax:    781-444-8999             With a copy
to:      Greenberg Traurig LLP      One International Place      Boston,
Massachusetts 02110      Attention:    Jonathan Bell, Esquire     
Fax:    617-310-6001

 

18.2. NOTICE GIVEN.

 

(a) Except as otherwise specifically provided herein, notices shall be deemed
made and correspondence received, as follows (all times being local to the place
of delivery or receipt):

 

(i) By mail: the sooner of when actually received or three (3) days following
deposit in the United States mail, postage prepaid.

 

(ii) By recognized overnight express delivery: the Business Day following the
day when sent.

 

(iii) By hand: If delivered on a Business Day after 9:00 AM and no later than
three (3) hours prior to the close of customary business hours of the recipient,
when delivered. Otherwise, at the opening of the then next Business Day.

 

(iv) By facsimile transmission (which must include a header on which the party
sending such transmission is indicated): If sent on a Business Day after 9:00 AM
and no later than three (3) hours prior to the close of customary business hours
of the recipient, one (1) hour after being sent. Otherwise, at the opening of
the then next Business Day.

 

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(b) Rejection or refusal to accept delivery and inability to deliver because of
a changed address or Facsimile Number for which no due notice was given shall
each be deemed receipt of the notice sent.

 

18.3. WIRE INSTRUCTIONS. Subject to change in the same manner that a notice
address may be changed (as to which, see Section 18.1), wire transfers to the
Administrative Agent shall be made in accordance with the following wire
instructions:

 

    Fleet National Bank         ABA No.   011000390         Acct Name:   Fleet
Retail Group, Inc.         Acct No. :   530-39952         Reference:   [Designs,
Inc.]    

 

ARTICLE 19 - Term:

 

19.1. TERMINATION OF REVOLVING CREDIT. The Revolving Credit shall remain in
effect (subject to suspension as provided in Section 2.6(g) hereof) until the
Termination Date.

 

19.2. ACTIONS ON TERMINATION.

 

(a) On the Termination Date, the Loan Parties shall pay the Administrative Agent
(whether or not then due), in immediately available funds, all then Liabilities
including, without limitation: the following:

 

(i) The entire balance of the Loan Account (including the unpaid principal
balance of the Revolving Credit Loans, SwingLine Loan and the Tranche B Loan).

 

(ii) Any then remaining unpaid installments of the Revolving Credit Commitment
Fee.

 

(iii) Any then remaining unpaid installments of the Administrative Agent’s
Monitoring Fee.

 

(iv) Any payments due on account of the indemnification obligations included in
Section 2.11(e).

 

(v) Any accrued and unpaid Unused Line Fee.

 

(vi) Any applicable Revolving Credit Early Termination Fee.

 

(vii) All accrued and unpaid interest on the Tranche B Loan.

 

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(viii) Any then remaining unpaid installments of the Tranche B Commitment Fee.

 

(ix) All unreimbursed costs and expenses of each Agent and of Lenders’ Special
Counsel for which each Loan Party is responsible.

 

(b) On the Termination Date, the Loan Parties shall also shall make such
arrangements concerning any L/C’s then outstanding as are reasonably
satisfactory to the Administrative Agent (such as their being cash
collateralized at 103 % of their then Stated Amount).

 

(c) Until such payment (Section 19.2(a)) and arrangements concerning L/C’s
(Section 19.2(b)), all provisions of this Agreement, other than those included
in Article 2 which place any obligation on the Administrative Agent or any
Revolving Credit Lender to make any loans or advances or to provide any
financial accommodations to any Borrower and those included in Article 3 which
place any obligation on the Tranche B Lender to make any loan or advance or to
provide any financial accommodation to any Borrower, shall remain in full force
and effect until all Liabilities shall have been paid in full.

 

(d) The release by the Collateral Agent of the Collateral Interests granted the
Collateral Agent by the Loan Parties hereunder may be upon such conditions and
indemnifications as the Administrative Agent reasonably may require.

 

ARTICLE 20 - GENERAL:

 

20.1. PROTECTION OF COLLATERAL. No Agent has any duty as to the collection or
protection of the Collateral beyond the safe custody of such of the Collateral
as may come into the possession of that Agent.

 

20.2. PUBLICITY. The Agents (or either of them) and the Tranche B Lender
respectively may issue a “tombstone” notice of the establishment of the credit
facility contemplated by this Agreement and may make reference to each Loan
Party (and may utilize any logo or other distinctive symbol associated with each
Loan Party) in connection with any advertising, promotion, or marketing
undertaken by the Agents (or either of them) and/or by the Tranche B Lender.

 

20.3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Borrowers’ Representative, each Loan Party, and their respective
representatives, successors, and assigns and shall enure to the benefit of each
Agent and each Lender and their respective successors and assigns, provided,
however, no trustee or other fiduciary appointed with respect to any Loan Party
shall have any rights hereunder. In the event that any Agent or any Lender
assigns or transfers its rights under this Agreement, the assignee shall
thereupon succeed to and become vested with all rights, powers, privileges, and
duties of such assignor hereunder and such assignor shall thereupon be
discharged and relieved from its duties and obligations hereunder.

 

20.4. SEVERABILITY. Any determination that any provision of this Agreement or
any application thereof is invalid, illegal, or unenforceable in any respect in
any instance shall not affect the validity, legality, or enforceability of such
provision in any other instance, or the validity, legality, or enforceability of
any other provision of this Agreement.

 

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20.5. AMENDMENTS. COURSE OF DEALING.

 

(a) This Agreement and the other Loan Documents incorporate all discussions and
negotiations between each Loan Party and each Agent and each Lender, either
express or implied, concerning the matters included herein and in such other
instruments, any custom, usage, or course of dealings to the contrary
notwithstanding. No such discussions, negotiations, custom, usage, or course of
dealings shall limit, modify, or otherwise affect the provisions thereof. No
failure by any Agent or any Lender to give notice to the Borrowers’
Representative of any Loan Party’s having failed to observe and comply with any
warranty or covenant included in any Loan Document shall constitute a waiver of
such warranty or covenant or the amendment of the subject Loan Document.

 

(b) Each Loan Party may undertake any action otherwise prohibited hereby, and
may omit to take any action otherwise required hereby, upon and with the express
prior written consent of the Administrative Agent. Subject to Article 16, no
consent, modification, amendment, or waiver of any provision of any Loan
Document shall be effective unless executed in writing by or on behalf of the
party to be charged with such modification, amendment, or waiver (and if such
party is the Administrative Agent then by a duly authorized officer thereof).
Any modification, amendment, or waiver provided by the Administrative Agent
shall be in reliance upon all representations and warranties theretofore made to
the Administrative Agent by or on behalf of the Loan Parties (and any other
guarantor, endorser, or surety of the Liabilities) and consequently may be
rescinded in the event that any of such representations or warranties was not
true and complete in all material respects when given.

 

20.6. POWER OF ATTORNEY. In connection with all powers of attorney included in
this Agreement, each Loan Party hereby grants unto the Administrative Agent
(acting through any of its officers) full power to do any and all things
necessary or appropriate in connection with the exercise of such powers as fully
and effectually as that Loan Party might or could do, hereby ratifying all that
said attorney shall do or cause to be done by virtue of this Agreement. No power
of attorney set forth in this Agreement shall be affected by any disability or
incapacity suffered by any Loan Party and each shall survive the same. All
powers conferred upon the Administrative Agent or the Collateral Agent by this
Agreement, being coupled with an interest, shall be irrevocable until this
Agreement is terminated by a written instrument executed by a duly authorized
officer of the Administrative Agent.

 

20.7. APPLICATION OF PROCEEDS. The proceeds of any collection, sale, or
disposition of the Collateral, or of any other payments received hereunder,
shall be applied towards the Liabilities in such order and manner as the
Administrative Agent determines in its sole discretion, consistent, however,
with Sections 14.7 and 14.8 and any other applicable provisions of this
Agreement. The Loan Parties shall remain liable for any deficiency remaining
following such application.

 

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20.8. INCREASED COSTS. If, as a result of any Requirement of Law, or of the
interpretation or application thereof by any court or by any governmental or
other authority or entity charged with the administration thereof, whether or
not having the force of law, which on and after the Closing Date:

 

(a) subjects any Lender to any taxes or changes the basis of taxation, or
increases any existing taxes, on payments of principal, interest or other
amounts payable by any Loan Party to the Administrative Agent or any Lender
under this Agreement (except for taxes on the Administrative Agent or any Lender
based on net income or capital imposed by the jurisdiction in which the
principal or lending offices of the Administrative Agent or that Lender are
located);

 

(b) imposes, modifies or deems applicable any reserve, cash margin, special
deposit or similar requirements against assets held by, or deposits in or for
the account of or loans by or any other acquisition of funds by the relevant
funding office of any Lender;

 

(c) imposes on any Lender any other condition with respect to any Loan Document;
or

 

(d) imposes on any Lender a requirement to maintain or allocate capital in
relation to the Liabilities;

 

and the result of any of the foregoing, in such Lender’s reasonable opinion, is
to increase the cost to that Lender of making or maintaining any loan, advance
or financial accommodation or to reduce the income receivable by that Lender in
respect of any loan, advance or financial accommodation by an amount which that
Lender deems to be material, then upon written notice from the Administrative
Agent, from time to time, to the Borrowers’ Representative (such notice to set
out in reasonable detail the facts giving rise to and a summary calculation of
such increased cost or reduced income), the Loan Parties shall forthwith pay to
the Administrative Agent, for the benefit of the subject Revolving Credit
Lender, upon receipt of such notice, that amount which shall compensate the
subject Lender for such additional cost or reduction in income.

 

20.9. COSTS AND EXPENSES OF AGENTS AND LENDERS.

 

(a) The Loan Parties shall pay from time to time on demand all Costs of
Collection and all reasonable costs, expenses, and disbursements (including
reasonable attorneys’ fees and expenses) which are incurred by each Agent and by
the Tranche B Lender (and the respective Participants with the Tranche B Lender)
in connection with the preparation, negotiation, execution, and delivery of this
Agreement and of any other Loan Documents, and all other reasonable costs,
expenses, and disbursements which may be incurred in connection with or in
respect to the credit facility contemplated hereby or which otherwise are
incurred with respect to the Liabilities.

 

(b) The Loan Parties shall pay from time to time on demand all reasonable costs
and expenses (including reasonable attorneys’ fees and expenses) incurred by the
Lenders to Lenders’ Special Counsel.

 

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(c) Each Loan Party authorizes the Administrative Agent to pay all such fees and
expenses and in the Administrative Agent’s discretion, to add such fees and
expenses to the Loan Account.

 

(d) The undertaking on the part of each Loan Party in this Section 20.9 shall
survive payment of the Liabilities and/or any termination, release, or discharge
executed by any Agent in favor of any Loan Party, other than a termination,
release, or discharge which makes specific reference to this Section 20.9.

 

20.10. COPIES AND FACSIMILES. Each Loan Document and all documents and papers
which relates thereto which have been or may be hereinafter furnished any Agent
or any Lender may be reproduced by any Lender or by any Agent by any
photographic, microfilm, xerographic, digital imaging, or other process, and
such Person making such reproduction may destroy any document so reproduced. Any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course of
business). Any facsimile which bears proof of transmission shall be binding on
the party which or on whose behalf such transmission was initiated and likewise
shall be so admissible in evidence as if the original of such facsimile had been
delivered to the party which or on whose behalf such transmission was received.

 

20.11. MASSACHUSETTS LAW. This Agreement and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the law of The Commonwealth of Massachusetts (without regard to
the conflict of laws principles thereof).

 

20.12. INDEMNIFICATION. The Borrowers’ Representative and each Loan Party shall
indemnify, defend, and hold each Agent and each Lender and any of their
respective employees, officers, or agents (each, an “Indemnified Person”)
harmless of and from any claim brought or threatened against any Indemnified
Person by any Loan Party, any other guarantor or endorser of the Liabilities, or
any other Person (as well as from reasonable attorneys’ fees, expenses, and
disbursements in connection therewith) on account of the relationship of the
Borrowers’ Representative, the Loan Parties or of any other guarantor or
endorser of the Liabilities, including all costs, expenses, liabilities, and
damages as may be suffered by any Indemnified Person in connection with (x) the
Collateral; (y) the occurrence of any Event of Default; or (z) the exercise of
any rights or remedies under any of the Loan Documents (each of claims which may
be defended, compromised, settled, or pursued by the Indemnified Person with
counsel of the Administrative Agent’s selection, but at the expense of the
Borrowers’ Representative and the Loan Parties) other than any claim as to which
a final determination is made in a judicial proceeding (in which the
Administrative Agent and any other Indemnified Person has had an opportunity to
be heard), which determination includes a specific finding that the Indemnified
Person seeking indemnification had acted in a grossly negligent manner or in
actual bad faith or willful misconduct. This indemnification shall survive
payment of the Liabilities and/or any termination, release, or discharge
executed by the Administrative Agent in favor of the Borrowers’ Representative
and/or the Loan Parties, other than a termination, release, or discharge duly
executed on behalf of the Administrative Agent which makes specific reference to
this Section 20.12.

 

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20.13. RULES OF CONSTRUCTION. The following rules of construction shall be
applied in the interpretation, construction, and enforcement of this Agreement
and of the other Loan Documents:

 

(a) Unless otherwise specifically provided for herein, interest and any fee or
charge which is stated as a per annum percentage shall be calculated based on a
360 day year and actual days elapsed.

 

(b) Words in the singular include the plural and words in the plural include the
singular.

 

(c) Any reference, herein, to a circumstance or event’s having “more than a de
minimis adverse effect” and any similar reference is to a circumstance or event
which (x) in a well managed enterprise, would receive the active attention of
senior management with a view towards its being reversed or remedied; or (y) if
not reversed or remedied could reasonably be expected to lead to its becoming a
material adverse effect.

 

(d) Titles, headings (indicated by being underlined or shown in SMALL CAPITALS)
and any Table of Contents are solely for convenience of reference; do not
constitute a part of the instrument in which included; and do not affect such
instrument’s meaning, construction, or effect.

 

(e) The words “includes” and “including” are not limiting.

 

(f) Text which follows the words “including, without limitation” (or similar
words) is illustrative and not limitational.

 

(g) Text which is shown in italics (except for parenthesized italicized text),
shown in bold, shown IN ALL CAPITAL LETTERS, or in any combination of the
foregoing, shall be deemed to be conspicuous.

 

(h) The words “may not” are prohibitive and not permissive.

 

(i) Any reference to a Person’s “knowledge” (or words of similar import) are to
such Person’s knowledge assuming that such Person has undertaken reasonable and
diligent investigation with respect to the subject of such “knowledge” (whether
or not such investigation has actually been undertaken).

 

(j) Terms which are defined in one section of any Loan Document are used with
such definition throughout the instrument in which so defined.

 

(k) The symbol “$” refers to United States Dollars.

 

(l) Unless limited by reference to a particular Section or provision, any
reference to “herein”, “hereof”, or “within” is to the entire Loan Document in
which such reference is made.

 

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(m) References to “this Agreement” or to any other Loan Document is to the
subject instrument as amended to the date on which application of such reference
is being made.

 

(n) Except as otherwise specifically provided, all references to time are to
Boston time.

 

(o) In the determination of any notice, grace, or other period of time
prescribed or allowed hereunder:

 

(i) Unless otherwise provided (I) the day of the act, event, or default from
which the designated period of time begins to run shall not be included and the
last day of the period so computed shall be included unless such last day is not
a Business Day, in which event the last day of the relevant period shall be the
then next Business Day and (II) the period so computed shall end at 5:00 PM on
the relevant Business Day.

 

(ii) The word “from” means “from and including”.

 

(iii) The words “to” and “until” each mean “to, but excluding”.

 

(iv) The word “through” means “to and including”.

 

(p) The Loan Documents shall be construed and interpreted in a harmonious manner
and in keeping with the intentions set forth in Section 20.14 hereof, provided,
however, in the event of any inconsistency between the provisions of this
Agreement and any other Loan Document, the provisions of this Agreement shall
govern and control.

 

20.14. Intent. It is intended that:

 

(a) This Agreement take effect as a sealed instrument.

 

(b) The scope of all Collateral Interests created by any Loan Party to secure
the Liabilities be broadly construed in favor of the Administrative Agent and
that they cover all assets of each Loan Party.

 

(c) All Collateral Interests created in favor of the Collateral Agent at any
time and from time to time by any Loan Party secure all Liabilities, whether now
existing or contemplated or hereafter arising.

 

(d) All reasonable costs, expenses, and disbursements incurred by any Agent,
and, to the extent provide in Section 20.9 each Lender, in connection with such
Person’s relationship(s) with any Loan Party shall be borne by the Loan Parties.

 

(e) Unless otherwise explicitly provided herein, the Administrative Agent’s
consent to any action of any Loan Party which is prohibited unless such consent
is given may be given or refused by the Administrative Agent in its sole
discretion and without reference to Section 2.17 hereof.

 

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20.15. PARTICIPATIONS. Each Lender may sell participations to one or more
financial institutions (each, a “Participant”) in that Lender’s interests herein
provided that no such participation shall include any provision which accords
that Participant with any rights, vis a vis any Agent, with respect to any
requirement herein for approval by a requisite number or proportion of the
Lenders, but provided further, such participation, if in the Tranche B Loan, may
be on such “voting” rights between that Lender and its Participant as the two
may determine. No such sale of a participation shall relieve a Lender from that
Lender’s obligations hereunder nor obligate any Agent to any Person other than a
Lender.

 

20.16. RIGHT OF SET-OFF. Any and all deposits or other sums at any time credited
by or due to any Loan Party from any Agent or any Lender or any Participant or
from any Affiliate of any of the foregoing, and any cash, securities,
instruments or other property of any Loan Party in the possession of any of the
foregoing, whether for safekeeping or otherwise (regardless of the reason such
Person had received the same) to the extent permitted by law, shall at all times
constitute security for all Liabilities and for any and all obligations of each
Loan Party to each Agent and such Lender or any Participant or such Affiliate
and following the occurrence of an Event of Default may be applied or set off
against the Liabilities and against such obligations at any time, whether or not
such are then due and whether or not other collateral is then available to any
Agent or that Lender.

 

20.17. PLEDGES TO FEDERAL RESERVE BANKS. Nothing included in this Agreement
shall prevent or limit any Lender, to the extent that such Lender is subject to
any of the twelve Federal Reserve Banks organized under §4 of the Federal
Reserve Act (12 U.S.C. §341) from pledging all or any portion of that Lender’s
interest and rights under this Agreement, provided, however, neither such pledge
nor the enforcement thereof shall release the pledging Lender from any of its
obligations hereunder or under any of the Loan Documents.

 

20.18. MAXIMUM INTEREST RATE. Regardless of any provision of any Loan Document,
neither any Agent nor any Lender shall be entitled to contract for, charge,
receive, collect, or apply as interest on any Liability, any amount in excess of
the maximum rate imposed by Applicable Law. Any payment which is made which, if
treated as interest on a Liability would result in such interest’s exceeding
such maximum rate shall be held, to the extent of such excess, as additional
collateral for the Liabilities as if such excess were “Collateral.”

 

20.19. WAIVERS.

 

(a) The Borrowers’ Representative and each Loan Party (and all guarantors,
endorsers, and sureties of the Liabilities) make each of the waivers included in
Section 20.19(b), below, knowingly, voluntarily, and intentionally, and
understands that each Agent and each Lender, in establishing the facilities
contemplated hereby and in providing loans and other financial accommodations to
or for the account of the Loan Parties as provided herein, whether not or in the
future, is relying on such waivers.

 

(b) THE BORROWERS’ REPRESENTATIVE, EACH LOAN PARTY, AND EACH SUCH GUARANTOR,
ENDORSER, AND SURETY RESPECTIVELY WAIVES THE FOLLOWING:

 

(i) Except as otherwise specifically required hereby, notice of non-payment,
demand, presentment, protest and all forms of demand and notice, both with
respect to the Liabilities and the Collateral.

 

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(ii) Except as otherwise specifically required hereby, the right to notice
and/or hearing prior to an Agent’s exercising of that Agent’s rights upon
default.

 

(iii) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR CONTROVERSY IN WHICH ANY
AGENT OR ANY LENDER IS OR BECOMES A PARTY (WHETHER SUCH CASE OR CONTROVERSY IS
INITIATED BY OR AGAINST ANY AGENT OR ANY LENDER OR IN WHICH ANY AGENT OR ANY
LENDER IS JOINED AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF
OR IS IN RESPECT OF, ANY RELATIONSHIP AMONGST OR BETWEEN THE BORROWERS’
REPRESENTATIVE, ANY LOAN PARTY OR ANY OTHER PERSON AND THE AGENT AND EACH LENDER
LIKEWISE WAIVES THE RIGHT TO A JURY IN ANY TRIAL OF ANY SUCH CASE OR
CONTROVERSY).

 

(iv) Except for manifest error, any defense, counterclaim, set-off, recoupment,
or other basis on which the amount of any Liability, as stated on the books and
records of the Administrative Agent or any Lender, could be reduced or claimed
to be paid otherwise than in accordance with the tenor of and written terms of
such Liability.

 

(v) Any claim to consequential, special, or punitive damages.

 

[SIGNATURE PAGES FOLLOW]

 

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THE BORROWERS’ REPRESENTATIVE

CASUAL MALE RETAIL GROUP, INC. By   

 

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Name:    Dennis R. Hernreich Title:    Executive Vice President, Chief Operating
Officer, Chief Financial Officer, Treasurer and Secretary

BORROWERS

CASUAL MALE RETAIL GROUP, INC. By   

 

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

Name:    Dennis R. Hernreich Title:    Executive Vice President, Chief Operating
Officer, Chief Financial Officer, Treasurer and Secretary DESIGNS APPAREL, INC.
By   

 

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Name:    Dennis R. Hernreich Title:    Executive Vice President, Chief Operating
Officer, Chief Financial Officer, Treasurer and Secretary

 

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ADMINISTRATIVE AGENT AND

COLLATERAL AGENT

FLEET RETAIL GROUP, INC. By   

 

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Name:    Kathleen A. Dimock Title:    Managing Director TRANCHE B LENDER FLEET
RETAIL GROUP, INC. By   

 

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Name:    Kathleen A. Dimock Title:    Managing Director THE REVOLVING CREDIT
LENDERS: FLEET RETAIL GROUP, INC. By   

 

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Name:    Kathleen A. Dimock Title:    Managing Director HELLER FINANCIAL, INC.
(CO-DOCUMENTATION AGENT AND REVOLVING CREDIT LENDER) By   

 

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Name:      Title:      NATIONAL CITY BUSINESS CREDIT, INC. (CO-DOCUMENTATION
AGENT AND REVOLVING CREDIT LENDER) By   

 

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

Name:      Title:      WELLS FARGO FOOTHILL,INC. (SYNDICATION AGENT AND
REVOLVING CREDIT LENDER) By   

 

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

Name:      Title:     

 

S-2

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WELLS FARGO BUSINESS CREDIT INC. By   

 

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

Name:      Title:      THE PROVIDENT BANK By   

 

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Name:      Title:      WEBSTER BUSINESS CREDIT CORPORATION By   

 

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

Name:      Title:      LASALLE RETAIL FINANCE, a division of LaSalle Business
Credit, as Agent for Standard Federal Bank National Association By   

 

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Name:      Title:     

 

S-3