EXHIBIT 10.1

Execution Version

Those portions of the Schedules to this

Agreement marked with an [*] have been omitted

pursuant to a request for confidential treatment

and have been filed separately with the SEC.

Confidential Treatment Requested Under 17

C.F.R. §§ 200.80(b)(4) and 230.24b-2

 

 

 

 

LOGO [g833367ex10_1cov.jpg]

CREDIT AGREEMENT

dated as of

December 2, 2014

among

AMERICAN EAGLE OUTFITTERS, INC.,

as the Company

The Subsidiaries from time to time party hereto,

as U.S. Subsidiary Borrowers

AMERICAN EAGLE OUTFITTERS CANADA CORPORATION,

and the other Subsidiaries from time to time party hereto,

as Canadian Borrowers

The other LOAN PARTIES party hereto

The LENDERS Party Hereto

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

J.P. MORGAN SECURITIES LLC, HSBC BANK USA, N.A., and PNC BANK, NATIONAL

ASSOCIATION,

as Joint Bookrunners and Joint Lead Arrangers

HSBC BANK USA, N.A., and PNC BANK, NATIONAL ASSOCIATION,

as Co-Syndication Agents

BANK OF AMERICA N.A., WELLS FARGO BANK, NATIONAL ASSOCIATION, and ROYAL

BANK OF CANADA,

as Co-Documentation Agents

 

 

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I

 

Definitions

     1   

SECTION 1.01.

 

Defined Terms

     1   

SECTION 1.02.

 

Classification of Loans and Borrowings

     60   

SECTION 1.03.

 

Terms Generally

     61   

SECTION 1.04.

 

Accounting Terms; GAAP

     62   

SECTION 1.05.

 

Pro Forma Adjustments for Acquisitions and Dispositions

     63   

SECTION 1.06.

 

Status of Obligations

     63   

SECTION 1.07.

 

Exchange Rates; Currency Equivalents

     63   

ARTICLE II

 

The Credits

     64   

SECTION 2.01.

 

Commitments

     64   

SECTION 2.02.

 

Loans and Borrowings

     64   

SECTION 2.03.

 

Requests for Borrowings

     65   

SECTION 2.04.

 

Protective Advances

     66   

SECTION 2.05.

 

Swingline Loans and Overadvances

     67   

SECTION 2.06.

 

Letters of Credit

     69   

SECTION 2.07.

 

Funding of Borrowings

     74   

SECTION 2.08.

 

Interest Elections

     75   

SECTION 2.09.

 

Termination and Reduction of Commitments; Increase in Commitments

     76   

SECTION 2.10.

 

Repayment and Amortization of Loans; Evidence of Debt

     78   

SECTION 2.11.

 

Prepayment of Loans

     79   

SECTION 2.12.

 

Fees

     80   

SECTION 2.13.

 

Interest

     81   

SECTION 2.14.

 

Alternate Rate of Interest

     82   

SECTION 2.15.

 

Increased Costs

     83   

SECTION 2.16.

 

Break Funding Payments

     84   

SECTION 2.17.

 

Withholding of Taxes; Gross-Up

     85   

SECTION 2.18.

 

Payments Generally; Allocation of Proceeds; Sharing of Set-offs

     89   

SECTION 2.19.

 

Mitigation Obligations; Replacement of Lenders

     92   

SECTION 2.20.

 

Defaulting Lenders

     93   

 

i

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 2.21.

 

Returned Payments

     95   

SECTION 2.22.

 

Banking Services and Swap Agreements

     95   

ARTICLE III

 

Representations and Warranties

     95   

SECTION 3.01.

 

Organization; Powers

     95   

SECTION 3.02.

 

Authorization; Enforceability

     95   

SECTION 3.03.

 

Governmental Approvals; No Conflicts

     96   

SECTION 3.04.

 

Financial Condition; No Material Adverse Change

     96   

SECTION 3.05.

 

Properties

     96   

SECTION 3.06.

 

Litigation and Environmental Matters

     97   

SECTION 3.07.

 

Compliance with Laws and Agreements; No Default

     97   

SECTION 3.08.

 

Investment Company Status

     97   

SECTION 3.09.

 

Taxes

     97   

SECTION 3.10.

 

ERISA; Labor Matters; Canadian Pension Plans and Canadian Benefit Plans

     98   

SECTION 3.11.

 

Disclosure

     99   

SECTION 3.12.

 

[Reserved]

     99   

SECTION 3.13.

 

Solvency

     99   

SECTION 3.14.

 

Insurance

     100   

SECTION 3.15.

 

Capitalization and Subsidiaries

     101   

SECTION 3.16.

 

Security Interest in Collateral

     101   

SECTION 3.17.

 

Federal Reserve Regulations

     101   

SECTION 3.18.

 

[Reserved]

     101   

SECTION 3.19.

 

Anti-Corruption Laws and Sanctions

     101   

SECTION 3.20.

 

Common Enterprise

     102   

SECTION 3.21.

 

Credit Card Agreements

     102   

ARTICLE IV

 

Conditions

     102   

SECTION 4.01.

 

Effective Date

     102   

SECTION 4.02.

 

Each Credit Event

     105   

ARTICLE V

 

Affirmative Covenants

     106   

SECTION 5.01.

 

Financial Statements; Borrowing Base and Other Information

     106   

 

ii

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 5.02.

 

Notices of Material Events

     110   

SECTION 5.03.

 

Existence; Conduct of Business

     112   

SECTION 5.04.

 

Payment of Obligations

     112   

SECTION 5.05.

 

Maintenance of Properties

     112   

SECTION 5.06.

 

Books and Records; Inspection Rights

     112   

SECTION 5.07.

 

Compliance with Laws and Material Contractual Obligations

     113   

SECTION 5.08.

 

Use of Proceeds

     113   

SECTION 5.09.

 

[Reserved]

     113   

SECTION 5.10.

 

Insurance

     113   

SECTION 5.11.

 

Casualty and Condemnation

     114   

SECTION 5.12.

 

Appraisals

     115   

SECTION 5.13.

 

Depository Banks; Withdrawals from Borrowing Base Deposit Accounts

     115   

SECTION 5.14.

 

Additional Collateral; Further Assurances

     116   

SECTION 5.15.

 

Designation of Subsidiaries

     116   

SECTION 5.16.

 

Environmental Laws

     117   

SECTION 5.17.

 

Canadian Pension Plans and Canadian Benefit Plans

     117   

SECTION 5.18.

 

Post-Closing Covenants

     117   

ARTICLE VI

 

Negative Covenants

     118   

SECTION 6.01.

 

Indebtedness

     118   

SECTION 6.02.

 

Liens

     121   

SECTION 6.03.

 

Fundamental Changes; Changes in Name, Location

     123   

SECTION 6.04.

 

Investments, Loans, Advances, Guarantees and Acquisitions

     124   

SECTION 6.05.

 

Asset Sales

     126   

SECTION 6.06.

 

Sale and Leaseback Transactions

     128   

SECTION 6.07.

 

Swap Agreements

     128   

SECTION 6.08.

 

Restricted Payments; Certain Payments of Indebtedness

     128   

SECTION 6.09.

 

Transactions with Affiliates

     129   

SECTION 6.10.

 

Restrictive Agreements

     130   

 

iii

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 6.11.

 

Amendment of Material Documents

     130   

SECTION 6.12.

 

Fixed Charge Coverage Ratio

     131   

SECTION 6.13.

 

Canadian Pension Plans

     131   

ARTICLE VII

 

Events of Default

     131   

ARTICLE VIII

 

The Administrative Agent

     135   

SECTION 8.01.

 

Appointment

     135   

SECTION 8.02.

 

Rights as a Lender

     136   

SECTION 8.03.

 

Duties and Obligations

     137   

SECTION 8.04.

 

Reliance

     137   

SECTION 8.05.

 

Actions through Sub-Agents

     137   

SECTION 8.06.

 

Resignation

     138   

SECTION 8.07.

 

Non-Reliance

     139   

SECTION 8.08.

 

Other Agency Titles

     140   

SECTION 8.09.

 

Not Partners or Co-Venturers; Administrative Agent as Representative of the
Secured Parties

     140   

SECTION 8.10.

 

Flood Laws

     140   

ARTICLE IX

 

Miscellaneous

     140   

SECTION 9.01.

 

Notices

     140   

SECTION 9.02.

 

Waivers; Amendments

     143   

SECTION 9.03.

 

Expenses; Indemnity; Damage Waiver

     146   

SECTION 9.04.

 

Successors and Assigns

     149   

SECTION 9.05.

 

Survival

     153   

SECTION 9.06.

 

Counterparts; Integration; Effectiveness; Electronic Execution

     153   

SECTION 9.07.

 

Severability

     154   

SECTION 9.08.

 

Right of Setoff

     154   

SECTION 9.09.

 

Governing Law; Jurisdiction; Consent to Service of Process

     154   

SECTION 9.10.

 

WAIVER OF JURY TRIAL

     155   

SECTION 9.11.

 

Headings

     155   

SECTION 9.12.

 

Confidentiality

     155   

SECTION 9.13.

 

Several Obligations; Nonreliance; Violation of Law

     156   

 

iv

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 9.14.

 

USA PATRIOT Act; Canadian AML Legislation

     157   

SECTION 9.15.

 

Canadian Anti-Money Laundering Legislation

     157   

SECTION 9.16.

 

Disclosure

     157   

SECTION 9.17.

 

Appointment for Perfection

     158   

SECTION 9.18.

 

Interest Rate Limitation

     158   

SECTION 9.19.

 

No Advisory or Fiduciary Responsibility

     158   

SECTION 9.20.

 

Authorization to Distribute Certain Materials to Public-Siders

     159   

SECTION 9.21.

 

Obligations of Foreign Subsidiaries

     159   

SECTION 9.22.

 

Judgment Currency

     159   

SECTION 9.23.

 

Waiver of Immunity

     160   

SECTION 9.24.

 

Process Agent

     160   

SECTION 9.25.

 

Termination and Release of Collateral

     160   

ARTICLE X

 

U.S. Loan Guaranty

     161   

SECTION 10.01.

 

Guaranty

     161   

SECTION 10.02.

 

Guaranty of Payment

     162   

SECTION 10.03.

 

No Discharge or Diminishment of Loan Guaranty

     162   

SECTION 10.04.

 

Defenses Waived

     163   

SECTION 10.05.

 

Rights of Subrogation

     163   

SECTION 10.06.

 

Reinstatement; Stay of Acceleration

     163   

SECTION 10.07.

 

Information

     164   

SECTION 10.08.

 

Termination

     164   

SECTION 10.09.

 

Taxes

     164   

SECTION 10.10.

 

Maximum Liability

     164   

SECTION 10.11.

 

Contribution

     164   

SECTION 10.12.

 

Liability Cumulative

     165   

SECTION 10.13.

 

Keepwell

     165   

ARTICLE XI

 

Canadian Loan Guaranty

     166   

SECTION 11.01.

 

Guaranty

     166   

SECTION 11.02.

 

Guarantee of Payment

     166   

 

v

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 11.03.

 

No Discharge or Diminishment of Canadian Guaranty

     167   

SECTION 11.04.

 

Defenses Waived

     167   

SECTION 11.05.

 

Rights of Subrogation

     168   

SECTION 11.06.

 

Reinstatement; Stay of Acceleration

     168   

SECTION 11.07.

 

Information

     168   

SECTION 11.08.

 

Maximum Canadian Liability

     168   

SECTION 11.09.

 

Contribution

     169   

SECTION 11.10.

 

Liability Cumulative

     170   

ARTICLE XII

 

The Borrower Representative

     170   

SECTION 12.01.

 

Appointment; Nature of Relationship

     170   

SECTION 12.02.

 

Powers

     170   

SECTION 12.03.

 

Employment of Agents

     170   

SECTION 12.04.

 

Notices

     170   

SECTION 12.05.

 

Successor Borrower Representative

     171   

SECTION 12.06.

 

Execution of Loan Documents; Borrowing Base Certificate

     171   

SECTION 12.07.

 

Reporting

     171   

 

vi

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SCHEDULES:

 

Commitment Schedule Schedule 1.01(a)    –    Eligible Real Property Schedule
1.01(b)    –    Existing Letters of Credit Schedule 1.01(g)    –    Eligible
Real Property Deliverables and Performance Schedule 3.06    –    Disclosed
Matters Schedule 3.10    –    Canadian Benefit Plans and Canadian Pension Plans
Schedule 3.15    –    Capitalization and Subsidiaries Schedule 5.18    –   
Post-Closing Matters Schedule 6.01    –    Existing Indebtedness Schedule 6.02
   –    Existing Liens Schedule 6.04    –    Existing Investments Schedule 6.10
   –    Existing Restrictions Schedule 9.01    –    Foreign Currency Notice
Address

EXHIBITS:

 

Exhibit A    –    Form of Assignment and Assumption Exhibit B    –    Form of
Borrowing Base Certificate Exhibit C    –    Form of Borrowing Request Exhibit D
   –    Form of Compliance Certificate Exhibit E    –    Form of Interest
Election Request Exhibit F    –    Joinder Agreement Exhibit G-1    –    U.S.
Tax Certificate (For Foreign Lenders that are not Partnerships for U.S. Federal
Income Tax Purposes) Exhibit G-2    –    U.S. Tax Certificate (For Foreign
Participants that are not Partnerships for U.S. Federal Income Tax Purposes)
Exhibit G-3    –    U.S. Tax Certificate (For Foreign Participants that are
Partnerships for U.S. Federal Income Tax Purposes) Exhibit G-4    –    U.S. Tax
Certificate (For Foreign Lenders that are Partnerships for U.S. Federal Income
Tax Purposes)

 

vii

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CREDIT AGREEMENT dated as of December 2, 2014, among AMERICAN EAGLE OUTFITTERS,
INC., a Delaware corporation (the “Company”), each of the U.S. Subsidiary
Borrowers from time to time party hereto, each of the Canadian Borrowers from
time to time party hereto, the other Loan Parties party hereto, the Lenders
party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, bear interest at a rate determined
by reference to the Alternate Base Rate.

“Account” means an “Account” as defined in Article 9 of the UCC or the PPSA, as
applicable.

“Account Debtor” means any Person that is or may become obligated to any Loan
Party under, with respect to or on account of an Account or Credit Card Account.

“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Effective Date, by which any Loan Party or
Restricted Subsidiary (a) acquires any going business or all or substantially
all of the assets of any Person, whether through purchase of assets, merger or
otherwise or (b) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the Equity Interests of a Person which has ordinary voting
power for the election of directors or other similar management personnel of a
Person (other than Equity Interests having such power only by reason of the
happening of a contingency) or a majority of the outstanding Equity Interests of
a Person.

“Adjusted Leverage Ratio” means, at any date, the ratio of (a) the sum of
(i) Total Funded Indebtedness on such date plus (ii) Rent Liability as of such
date minus (iii) the aggregate amount of unrestricted cash and cash equivalents
of the Company and its Subsidiaries that would be reflected on a consolidated
balance sheet of the Company and its Subsidiaries in accordance with GAAP on
such date (other than the cash proceeds of any Indebtedness being incurred on
such date) in excess of $50,000,000, to (b) EBITDAR for the period of four
(4) consecutive fiscal quarters ended on such date (or, if such date is not the
last day of a fiscal quarter, ended on the last day of the fiscal quarter most
recently ended prior to such date).

“Adjusted LIBO Rate” means, with respect to any LIBOR Borrowing for any Interest
Period or for any ABR Borrowing, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.

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

“Administrative Agent” means JPMCB, in its capacity as administrative agent
hereunder and under the other Loan Documents, and including any of its
Affiliates (including, without limitation, J.P. Morgan Europe Limited)
performing any of the functions of the Administrative Agent at any time, and
their successors in such capacity as provided in Article VIII.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the specified Person.

“Agency Site” means the Intralinks or another electronic platform site
established by the Administrative Agent to administer this Agreement.

“Agreement” means this Credit Agreement, as amended, restated, supplemented or
otherwise modified from time to time.

“Aggregate Borrowing Base” means, as of any date of determination, an amount
equal to (a) the U.S. Borrowing Base as of such date plus (b) the lesser of
(i) the Canadian Sublimit and (ii) the Canadian Borrowing Base as of such date.

“Aggregate Canadian Revolving Exposure” means, at any time, the aggregate
Canadian Revolving Exposure of all the Lenders at such time.

“Aggregate Commitments” means, at any time, the aggregate Commitments of all
Lenders.

“Aggregate Credit Exposure” means, at any time, the aggregate Revolving Exposure
of all the Lenders at such time.

“Aggregate U.S. Revolving Exposure” means, at any time, the aggregate U.S.
Revolving Exposure of all the Lenders at such time.

“ALTA” means the American Land Title Association.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus  1⁄2 of 1% and (c) the Adjusted LIBO Rate for a
one month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at
approximately 11:00 a.m. London time on such day (without any rounding). Any
change in the Alternate Base Rate due to a change in the Prime Rate, the Federal
Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate, respectively. If the Alternate Base
Rate is being used as an alternate rate of interest pursuant to Section 2.14
hereof,

 

2

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then the Alternate Base Rate shall be the greater of clause (a) and (b) above
and shall be determined without reference to clause (c) above.

“Alternative Currency” means any currency other than U.S. Dollars, Sterling,
Euros or Canadian Dollars.

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to any Borrower or its Subsidiaries from time to time
concerning or relating to bribery or corruption.

“Applicable Percentage” means, with respect to any Lender, a percentage equal to
a fraction the numerator of which is such Lender’s Commitment and the
denominator of which is the Aggregate Commitments provided that, if the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon such Lender’s share of the Aggregate Credit Exposure at
that time); provided that, in accordance with Section 2.20, so long as any
Lender shall be a Defaulting Lender, such Defaulting Lender’s Commitment shall
be disregarded in the calculations in this definition.

“Applicable Rate” means, for any day, with respect to any Loan, the applicable
rate per annum set forth below under the caption “ABR/Canadian Prime Rate
Margin” or “LIBOR/CDOR/EURIBOR Margin”, as the case may be, based upon the daily
average Gross Availability (the “Average Gross Availability”) for the fiscal
quarter of the Company ending on the most recent Determination Date (as defined
below) and the Adjusted Leverage Ratio as of the most recent Determination Date,
provided that until the delivery to the Administrative Agent, pursuant to
Section 5.01, of the Company’s consolidated financial information for the
Company’s first fiscal quarter ending after the Effective Date, the “Applicable
Rate” shall be the applicable rate per annum set forth below in Level I and Tier
I:

 

3

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

          Tier I     Tier II             Adjusted Leverage
Ratio £ 4.0 to 1.0     Adjusted Leverage
Ratio > 4.0 to 1.0  

Level

  

Average Gross Availability

  

LIBOR /
CDOR/
EURIBOR
Margin

   

ABR/
Canadian
Prime
Rate
Margin

   

LIBOR /
CDOR/
EURIBOR
Margin

   

ABR/
Canadian
Prime
Rate
Margin

 

I

  

³ 66% of the Aggregate Commitments

     1.25 %      0.25 %      1.50 %      0.50 % 

II

  

< 66% of the Aggregate Commitments but ³ 33% of the Aggregate Commitments

     1.375 %      0.375 %      1.625 %      0.625 % 

III

  

< 33% of the Aggregate Commitments

     1.50 %      0.50 %      1.75 %      0.75 % 

For purposes of the foregoing, (a) the Applicable Rate shall be determined as of
the end of each fiscal quarter of the Company (each a “Determination Date”)
based upon the Borrowing Base Certificate delivered with respect to such
Determination Date and the Company’s annual or quarterly consolidated financial
statements delivered pursuant to Section 5.01 with respect to the fiscal quarter
ending on such Determination Date and (b) each change in the Applicable Rate
resulting from a change in the Average Gross Availability or the Adjusted
Leverage Ratio shall be effective during the period commencing on and including
the date of delivery to the Administrative Agent of the consolidated financial
statements for the most recent Determination Date and ending on the date
immediately preceding the effective date of the next such change; provided that
(x) if the Borrowers shall fail to deliver any Borrowing Base Certificate with
respect to any Determination Date as and when due, at the option of the
Administrative Agent or at the request of the Required Lenders, Average Gross
Availability shall be deemed to be in Level III during the period from the
expiration of the time for delivery thereof until the date five (5) days after
such Borrowing Base Certificate is delivered, and (y) if the Borrowers shall
fail to deliver the annual or quarterly consolidated financial statements
required to be delivered by it pursuant to Section 5.01 with respect to any
Determination Date as and when due, at the option of the Administrative Agent or
at the request of the Required Lenders, the Adjusted Leverage Ratio shall be
deemed to be in Tier II during the period from the expiration of the time for
delivery thereof until such consolidated financial statements are delivered.

 

4

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If any financial statements or Borrowing Base Certificate shall prove to have
been inaccurate (regardless of whether any Revolving Commitments are in effect
or any amounts are outstanding hereunder when such inaccuracy is discovered),
and such inaccuracy shall have resulted in the payment or accrual of any
interest or fees at rates lower than those that would have been paid or accrued
for any period, then the applicable Borrowers shall pay to the Administrative
Agent, for distribution to the Lenders or Issuing Banks (or former Lenders or
Issuing Banks) as their interests may appear, the interest and fees that would
have accrued and would have been required to be paid but were not accrued or
paid as a result of such inaccuracy.

“Applicable Trigger Amount” means, with respect to any test of Availability
hereunder by reference to the Applicable Trigger Amount at a specified Level,
the following:

 

Level

       

Maximum Credit
Amount

  

Aggregate
Commitments

   Floor  

I

  

Greatest of:

   10.0% of the Maximum Credit Amount    8.0% of the Aggregate Commitments    $
20,000,000   

II

  

Greatest of:

   12.5% of the Maximum Credit Amount    9.5% of the Aggregate Commitments    $
23,800,000   

III

  

Greatest of:

   15.0% of the Maximum Credit Amount    12.0% of the Aggregate Commitments    $
30,000,000   

IV

  

Greatest of:

   20.0% of the Maximum Credit Amount    17.0% of the Aggregate Commitments    $
42,500,000   

“Approved Fund” has the meaning assigned to such term in Section 9.04.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

“Availability” means, at any time, an amount equal to the lesser of (a) the
Aggregate Commitments minus the Aggregate Credit Exposure, and (b) the sum of
(i) an amount equal to (A) the U.S. Borrowing Base minus (B) the Aggregate U.S.
Revolving Exposure minus (C) the Canadian Over-Usage Amount, plus (ii) an amount
not less than zero but otherwise equal to (A) the lesser of (1) the Canadian
Borrowing Base and (2) the Canadian Sublimit, minus (B) the Aggregate Canadian
Revolving Exposure.

 

5

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“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.

“Available Commitment” means, at any time, the Aggregate Commitments minus the
Aggregate Credit Exposure (calculated, with respect to any Defaulting Lender, as
if such Defaulting Lender had funded its Applicable Percentage of all
outstanding Borrowings).

“Banking Services” means (a) each and any of the following bank services
provided to any Loan Party or its Subsidiaries by any Lender or any of its
Affiliates: (i) credit cards for commercial customers (including, without
limitation, “commercial credit cards” and purchasing cards), (ii) stored value
cards, (iii) merchant processing services, (iv) treasury management services
(including, without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network
services), and (iv) foreign exchange and currency management services, and
(b) letters of credit issued under any Specified L/C Facility for so long as the
issuer thereof is a Lender or an Affiliate of a Lender.

“Banking Services Obligations” means any and all obligations of the Loan Parties
and their Subsidiaries, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.

“Banking Services/Swap Reserves” means, in respect of a specified Banking
Service Obligation or Swap Agreement Obligation, all reserves, if any, that the
Borrower Representative and the applicable provider of such Banking Service
Obligation or Swap Agreement Obligation agree shall be established with respect
thereto, to the extent the Administrative Agent receives a written notice of
such Banking Service Obligations or Swap Agreement Obligations in accordance
with Section 2.22 specifying the amount of such agreed reserves.

“Bankruptcy Code” means title 11 of the United States Code, as amended.

“Bankruptcy Event” means, with respect to any Person, when such Person becomes
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
interim receiver, monitor, conservator, trustee, administrator, custodian,
assignee for the benefit of creditors or similar Person charged with the
reorganization or liquidation of its business, appointed for it, or, in the good
faith determination of the Administrative Agent, has taken any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any such proceeding or appointment, provided that a Bankruptcy Event shall not
result solely by virtue of any ownership interest, or the acquisition of any
ownership interest, in such Person by a Governmental Authority or
instrumentality thereof, unless such ownership interest results in or provides
such Person with immunity from the jurisdiction of courts within the United
States or from the enforcement of judgments or writs of attachment on its assets
or permits such Person (or such Governmental Authority or instrumentality), to
reject, repudiate, disavow or disaffirm any contracts or agreements made by such
Person.

“Beneficial Owner” means, with respect to any U.S. Federal withholding Tax, the
beneficial owner, for U.S. Federal income tax purposes, to whom such Tax
relates.

“BIA” means the Bankruptcy and Insolvency Act (Canada), as amended.

 

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“Billing Statement” has the meaning assigned to such term in Section 2.18(g).

“Board” means the Board of Governors of the Federal Reserve System of the U.S.

“Borrower” or “Borrowers” means, individually or collectively, the U.S.
Borrowers and the Canadian Borrowers.

“Borrower Representative” has the meaning assigned to such term in
Section 12.01.

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of LIBOR Loans, CDOR Loans and
EURIBOR Loans, as to which a single Interest Period is in effect, (b) a
Swingline Loan, (c) a Protective Advance and (d) an Overadvance.

“Borrowing Base” means, individually and collectively as the context may
require, the U.S. Borrowing Base and the Canadian Borrowing Base.

“Borrowing Base Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Borrower Representative, in
substantially the form of Exhibit B (with such changes thereto as may be
required by the Administrative Agent in its Permitted Discretion from time to
time to reflect the components of and reserves against the Borrowing Base as
provided for hereunder) or another form that is acceptable to the Administrative
Agent in its Permitted Discretion.

“Borrowing Base Deposit Account” has the meaning set forth in the definition of
“Eligible Cash/Cash Equivalents.”

“Borrowing Base Reporting Date” means (a) during any period that is not an
Increased Reporting Period, 15 Business Days after each of (i) the end of each
fiscal quarter of the Company and (ii) the end of each fiscal month in which any
Revolving Loans were outstanding or the LC Exposure was at any time $40,000,000
or more, and (b) during any Increased Reporting Period, four (4) Business Days
after the end of each week.

“Borrowing Request” means a request by the Borrower Representative for a
Borrowing in accordance with Section 2.03, which shall be, in the case of any
such written request, in the form of Exhibit C or any other form approved by the
Administrative Agent.

“Burdensome Restrictions” means any consensual encumbrance or restriction of the
type described in clause (a) or (b) of Section 6.10.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that (a) when used in connection with a LIBOR Loan in
any currency, the term “Business Day” shall also exclude any day on which banks
are not open for dealings in deposits in such currency in the London interbank
market, (b) when used in connection with a EURIBOR Loan, the term “Business Day”
shall also exclude any day on which the TARGET payment system is not open for
the settlement of payments in Euros, (c) when used in connection with a CDOR
Loan, an ABR Loan to a Canadian Borrower or a Canadian Prime Rate Loan
(including

 

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any Swingline Loan denominated in Canadian Dollars), the term “Business Day”
shall also exclude any day on which banks are authorized or required by law to
remain closed in Toronto or London.

“Canada” means the country of Canada and any province or territory thereof.

“Canadian Benefit Plan” means any material plan, fund, program, or policy,
whether oral or written, formal or informal, funded or unfunded, insured or
uninsured, providing employee benefits, including such medical, hospital care,
dental, sickness, accident, disability, life insurance, pension, retirement or
savings benefits, under which any Loan Party or any Subsidiary of any Loan Party
has any liability with respect to any employee or former employee, but excluding
any Canadian Pension Plans and excluding any stock option or share purchase plan
that is an employee benefit plan that is required to be registered under any
applicable Canadian federal or provincial employee benefit legislation, whether
or not registered under any such laws, which is, or has been, maintained or
contributed to by, or to which there is or may be an obligation to contribute
by, a Loan Party or Subsidiary operating in Canada in respect of any Person’s
employment in Canada with such Loan Party or Subsidiary.

“Canadian Blocked Person” means any Person that is a “politically exposed
foreign person” or “terrorist group” or similar person whose property or
interests in property are blocked or subject to blocking pursuant to, or as
described in, any Canadian Economic Sanctions and Export Control Laws.

“Canadian Borrowers” means, collectively (a) American Eagle Outfitters Canada
Corporation, and (b) each Canadian Subsidiary of the Company that becomes a
party to this Agreement as a “Canadian Borrower” following the Effective Date
pursuant to Section 5.14, in each case, until such time as such Canadian
Subsidiary is released from its obligations under the Loan Documents in
accordance with this Agreement.

“Canadian Borrowing Base” means, at any time, the sum of:

(a) the amount of Eligible Cash/Cash Equivalents of the Canadian Loan Parties at
such time; plus

(b) the product of (i) 85% multiplied by (ii) the Eligible Trade Accounts of the
Canadian Loan Parties at such time, plus

(c) the product of (i) 90% multiplied by (ii) the Eligible Credit Card Accounts
of the Canadian Loan Parties at such time, plus

(d) the product of 90% multiplied by the Net Orderly Liquidation Value
percentage identified in the most recent inventory appraisal ordered and
received by the Administrative Agent multiplied by the Canadian Loan Parties’
Eligible Inventory (other than Eligible LC Inventory and Eligible In-Transit
Inventory) at such time, valued at the lower of average cost or market,
determined utilizing the retail method, as appropriate, or such other method
approved in writing by the Administrative Agent at the request of the Borrower
Representative (the amount resulting from the foregoing calculation, the
“Canadian Inventory Availability”), plus

 

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(e) the lesser of (i) ten percent (10%) of Canadian Inventory Availability or
(ii) (1) the product of 90% multiplied by the Net Orderly Liquidation Value
percentage identified in the most recent inventory appraisal ordered and
received by the Administrative Agent multiplied by the Canadian Loan Parties’
Eligible In-Transit Inventory and Eligible LC Inventory at such time, valued at
the lower of average cost or market, determined utilizing the retail method, as
appropriate, or such other method approved in writing by the Administrative
Agent at the request of the Borrower Representative minus (2) Reserves for
in-transit delivery, minus

(f) applicable Reserves.

Subject to the provisions hereof expressly permitting the Administrative Agent
to adjust Reserves, the Canadian Borrowing Base at any time shall be determined
by reference to the most recent Borrowing Base Certificate delivered to the
Administrative Agent pursuant to Section 5.01(g) (or, prior to the first such
delivery, delivered to the Administrative Agent pursuant to Section 4.01(m)).

“Canadian Collateral” means any and all property of any Canadian Loan Party
covered by the Collateral Documents and any and all other property of any
Canadian Loan Party, now existing or hereafter acquired, that may at any time be
or become subject to a security interest or Lien in favor of the Administrative
Agent to secure the Canadian Secured Obligations.

“Canadian Defined Benefit Plan” means a Canadian Pension Plan, which contains a
“defined benefit provision,” as defined in subsection 147.1(1) of the ITA.

“Canadian Dollars” and “Cdn$” means dollars in the lawful currency of Canada.

“Canadian Economic Sanctions and Export Control Laws” means any Canadian laws,
regulations or orders governing transactions in controlled goods or technologies
or dealings with countries, entities, organizations, or individuals subject to
economic sanctions and similar measures.

“Canadian Guaranteed Obligation” has the meaning assigned to such term in
Section 11.01.

“Canadian Guarantor” means each Subsidiary of a Canadian Borrower that is listed
on the signature pages hereto as a Canadian Guarantor or that becomes a party
hereto as a Canadian Guarantor pursuant to Section 5.14, in each case, until
such Subsidiary’s Canadian Guaranty is released in accordance herewith.

“Canadian Guaranty” means Article XI of this Agreement.

“Canadian Loan Parties” means, individually and collectively as the context may
require, the Canadian Borrowers and the Canadian Guarantors.

“Canadian Loans” means, individually and collectively as the context may
require, the Canadian Revolving Loans and the Canadian Swingline Loans.

 

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“Canadian MEPP” means any plan that is a multi-employer pension plan as defined
under the applicable pension standards legislation.

“Canadian Obligated Party” has the meaning set forth in Section 11.02.

“Canadian Obligations” means all unpaid principal of and accrued and unpaid
interest on the Canadian Loans to the Canadian Borrowers, all accrued and unpaid
fees and all expenses, reimbursements (including pursuant to Section 2.06(a)),
indemnities and other obligations of the Canadian Loan Parties to the Lenders or
to any Lender, the Administrative Agent or any indemnified party arising under
the Loan Documents (including guarantee obligations and interest, costs, fees
and other amounts accruing during the pendency of any proceeding under any
Insolvency Laws, regardless of whether allowed or allowable in such proceeding).

“Canadian Overadvance” means any Overadvance made to or for the benefit of a
Canadian Borrower.

“Canadian Over-Usage Amount” means, as of any date of determination, an amount
not less than zero but otherwise equal to the amount (if any) by which the
Aggregate Canadian Revolving Exposure on such date exceeds the Canadian
Borrowing Base as of such date.

“Canadian Pension Plans” means any plan, program or arrangement that is a
pension plan that is required to be registered under any applicable Canadian
federal or provincial pension legislation, whether or not registered under any
such laws, which is, or has been, maintained or contributed to by, or to which
there is or may be an obligation to contribute by, a Loan Party or Subsidiary
operating in Canada in respect of any Person’s employment in Canada with such
Loan Party or Subsidiary, other than any Canadian MEPP or plans established by
statute, which shall include the Canada Pension Plan maintained by the
government of Canada and the Quebec Pension Plan maintained by the Province of
Quebec.

“Canadian Prime Rate” means on any day, the greater of (a) the annual rate of
interest announced from time to time by JPMorgan Chase Bank, N.A. Toronto Branch
as being its reference rate then in effect for determining interest rates on
Canadian Dollar-denominated commercial loans made by it in Canada and which it
refers to as its prime rate (or its equivalent or analogous rate) and (b) the
yearly rate of interest to which the CDOR Rate for a one-month term in effect
from time to time is equivalent plus 1.00% per annum.

“Canadian Prime Rate Loan” or “Canadian Prime Rate Borrowing” means a Loan or
Borrowing, respectively, denominated in Canadian Dollars the rate of interest
applicable to which is based upon the Canadian Prime Rate.

“Canadian Protective Advance” means a Protective Advance made to, on behalf of
or in respect of a Canadian Borrower.

“Canadian Revolving Exposure” means, with respect to any Lender at any time, the
sum of (a) the outstanding principal amount of such Lender’s Canadian Revolving
Loans and Canadian Swingline Exposure at such time, plus (b) an amount equal to
its Applicable Percentage of the aggregate principal amount of Canadian
Overadvances and Canadian Protective Advances outstanding at such time.

 

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“Canadian Revolving Loan” means a Revolving Loan made by the Lenders to any
Canadian Borrower.

“Canadian Secured Obligations” means all Canadian Obligations together with all
(a) Banking Services Obligations of the Canadian Loan Parties and (b) Swap
Agreement Obligations of the Canadian Loan Parties owing to one or more
Qualified Counterparties; provided that Excluded Swap Obligations with respect
to any Loan Party shall not be Canadian Secured Obligations of such Loan Party.

“Canadian Security Agreements” means each of the Canadian Security Agreement and
the Deed of Movable Hypothec, dated as of the Effective Date, among the Canadian
Loan Parties and the Administrative Agent, and, as the context requires, any
other pledge or security agreement or deed of hypothec entered into, after the
Effective Date by any other Canadian Loan Party (as required by this Agreement
or any other Loan Document), as the same may be amended, restated, supplemented
or otherwise modified from time to time.

“Canadian Sublimit” means $40,000,000.

“Canadian Subsidiary” means any Subsidiary of the Company that has been formed
or is organized under the laws of Canada or any province or territory thereof.

“Canadian Swingline Exposure” means, at any time, the aggregate Dollar Amount of
all outstanding Canadian Swingline Loans at such time. The Canadian Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the
total Canadian Swingline Exposure at such time.

“Canadian Swingline Loan” means a Swingline Loan made to a Canadian Borrower.

“Capital Expenditures” means, without duplication, any expenditure or commitment
to expend money for any purchase or other acquisition of any asset which would
be classified as a fixed or capital asset on a consolidated balance sheet of the
Company and its Subsidiaries prepared in accordance with GAAP.

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Collateralize” has the meaning assigned to such term in Section in
Section 2.06(j). Derivatives of such term have corresponding meanings.

“Cash Equivalents” means:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the U.S. or Canada (or by any agency thereof
to the extent such

 

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obligations are backed by the full faith and credit of the U.S. or Canada), in
each case maturing within two years from the date of acquisition thereof;

(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof each having, at such date of acquisition, a rating of at
least A-2 or P-2 from either S&P or Moody’s (or, if at any time neither S&P nor
Moody’s shall be rating such obligations, then the highest rating from such
other nationally recognized rating services acceptable to the Administrative
Agent);

(c) investments in certificates of deposit, bankers’ acceptances and time
deposits maturing within 90 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the U.S., Canada or any State or province thereof which has a combined
capital and surplus and undivided profits of not less than $250,000,000;

(d) repurchase agreements for securities described in clause (a) above and
entered into with any Lender or any commercial bank satisfying the criteria
described in clause (c) above;

(e) money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940,
(ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of
at least $5,000,000,000;

(f) marketable direct obligations issued by any state of the U.S., or by the
Canadian federal government, or any province, commonwealth or territory of
Canada, or any political subdivision of any such state, province, commonwealth
or territory or any public instrumentality thereof, in each case maturing within
two years after the date of acquisition thereof and, at the time of acquisition,
in each case having the highest rate obtainable from either S&P or Moody’s (or,
if at any time neither S&P nor Moody’s shall be rating such obligations, then
the highest rating from such other nationally recognized rating services
acceptable to the Administrative Agent), and in the case of any Foreign
Subsidiary, other short-term investments that are (i) analogous to the
foregoing, (ii) comparable credit quality and (iii) customarily used by
companies in the jurisdiction of such Foreign Subsidiary for cash management
purposes;

(g) overnight investments with any Lender or any commercial bank satisfying the
criteria described in clause (c) above; and

(h) other readily marketable instruments issued or sold by any Lender or any
commercial bank satisfying the criteria described in clause (c) above.

“Casualty” has the meaning assigned to such term in Section 5.11.

“CCAA” means the Companies’ Creditors Arrangement Act (Canada), as amended.

“CDOR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the CDOR Rate.

 

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“CDOR Rate” means, for the relevant Interest Period, the Canadian Dollar deposit
offered rate which, in turn means on any day the annual rate of interest
determined with reference to the arithmetic average of the discount rate
quotations of all institutions listed in respect of the relevant Interest Period
for Canadian Dollar-denominated bankers’ acceptances displayed and identified as
such on the “Reuters Screen CDOR Page” as defined in the International Swaps and
Derivatives Association Inc. definitions, as modified and amended from time to
time, as of 10:00 a.m. Toronto local time on such day and, if such day is not a
Business Day, then on the immediately preceding Business Day (as adjusted by the
Administrative Agent after 10:00 a.m. Toronto local time to reflect any error in
the posted rate of interest or in the posted average annual rate of interest);
provided that if such rates are not available on the Reuters Screen CDOR Page on
any particular day, then the Canadian deposit offered rate component of such
rate on that day shall be calculated as the cost of funds quoted by the
Administrative Agent to raise Canadian Dollars for the applicable Interest
Period as of 10:00 a.m. Toronto local time on such day for commercial loans or
other extensions of credit to businesses of comparable credit risk; or if such
day is not a Business Day, then as quoted by JPMorgan Chase Bank, N.A. Toronto
Branch on the immediately preceding Business Day; provided further that if the
CDOR Rate for any Interest Period shall be less than zero, such rate shall be
deemed to be zero for the purposes of this Agreement.

“CFC” means each Person that is a “controlled foreign corporation” within the
meaning of Section 957(a) of the Code.

“CFC Holdco” means a Domestic Subsidiary with no material assets other than
equity interests of one or more Foreign Subsidiaries that are CFCs.

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof), of Equity Interests representing
more than 50% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of the Company; or (b) an event or series of
events by which a majority of the seats (other than vacant seats) on the board
of directors of the Company become occupied by Persons who were neither
(i) nominated by the board of directors of the Company nor (ii) appointed by
directors so nominated.

“Change in Law” means the occurrence after the date of this Agreement (or, with
respect to any Lender, such later date on which such Lender becomes a party to
this Agreement) of any of the following: (a) the adoption or taking effect of
any law, rule, regulation or treaty; (b) any change in any law, rule, regulation
or treaty or in the administration, interpretation or application thereof by any
Governmental Authority; or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline, requirement or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement;
provided that notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines, requirements or directives thereunder or issued in connection
therewith or in the implementation thereof, and (y) all requests, rules,
guidelines, requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking

 

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Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted, issued or implemented.

“Charges” has the meaning assigned to such term in Section 9.17.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are U.S. Revolving Loans or
Canadian Revolving Loans.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Collateral” means any and all property owned, leased or operated by a Person
covered by the Collateral Documents and any and all other property of any Loan
Party, now existing or hereafter acquired, that may at any time be, become or be
intended to be, subject to a security interest or Lien in favor of the
Administrative Agent, on behalf of itself and the Lenders and other Secured
Parties, to secure the U.S. Secured Obligations or the Canadian Secured
Obligations.

“Collateral Access Agreement” has the meaning assigned to such term in the U.S.
Security Agreement or Canadian Security Agreement, as applicable.

“Collateral and Guaranty Requirement” means, at any time, the requirement that:

(a) the Administrative Agent shall have received from the Company and each
Designated Subsidiary either (i) (A) in the case of the Company and each
Designated Subsidiary that is a Domestic Subsidiary, a counterpart of this
Agreement and the U.S. Security Agreement, duly executed and delivered on behalf
of such Person or (B) in the case of each Designated Subsidiary that is a
Canadian Subsidiary, a counterpart of this Agreement and the Canadian Security
Agreement, duly executed and delivered on behalf of such Person, or (ii) in the
case of any Person that becomes a Designated Subsidiary after the Effective
Date, (A) a Joinder Agreement, duly executed and delivered on behalf of such
Person, and (B) instruments in the form or forms specified in the applicable
Security Agreement under which such Person becomes a party to the applicable
Security Agreement, duly executed and delivered on behalf of such Person,
together with such certificates, documents and opinions with respect to such
Designated Subsidiary as may reasonably be requested by the Administrative
Agent;

(b) The Administrative Agent shall have received all Deposit Account Control
Agreements, Securities Account Control Agreements and other Collateral Documents
required to be provided to it hereunder or under the applicable Security
Agreement;

(c) all documents and instruments, including UCC financing statements, PPSA
registrations and recordations of deeds of hypothec required by the Collateral
Documents or this Agreement with the priority required by the Collateral
Documents shall have been filed, registered or recorded or delivered to the
Administrative Agent for filing, registration or recording; and

 

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(d) each Loan Party shall have obtained all material consents and approvals
required in connection with the execution and delivery of all Collateral
Documents to which it is a party and the performance of its obligations
thereunder.

Notwithstanding the foregoing, any Designated Subsidiary formed or acquired
after the Effective Date shall not be required to comply with the foregoing
requirements prior to the time specified in Section 5.14. The foregoing
definition shall not require the creation or perfection of pledges of or
security interests in, or legal opinions or other deliverables with respect to,
particular assets of the Loan Parties, or the provision of Guarantees by any
Subsidiary, if and for so long as the Administrative Agent, in consultation with
the Company, determines that the cost of creating or perfecting such pledges or
security interests in such assets, or obtaining legal opinions or other
deliverables in respect of such assets, or providing such Guarantees, shall be
excessive in view of the benefits to be obtained by the Lenders therefrom. The
Administrative Agent may in its sole discretion grant extensions of time for the
creation and perfection of security interests in, or the delivery of legal
opinions or other deliverables with respect to, particular assets or the
provision of any Guarantee by any Subsidiary (including extensions beyond the
Effective Date or in connection with assets acquired, or Subsidiaries formed or
acquired, after the Effective Date) where it determines that such action cannot
be accomplished without unreasonable effort or expense by the time or times at
which it would otherwise be required to be accomplished by this Agreement or the
Collateral Documents. Notwithstanding the foregoing, no action required to be
taken by any Person to effect compliance by the Administrative Agent and the
Lenders with any applicable Requirement of Law shall be deemed to cause
unreasonable effort or expense hereunder.

“Collateral Documents” means, collectively, the Security Agreements, the
Mortgages, any Intercreditor Agreement, any deposit account control agreement,
any securities account control agreement, and any other agreements, instruments
and documents executed in connection with this Agreement that are intended to
create, perfect or evidence Liens to secure the Obligations, including, without
limitation, all other security agreements, pledge agreements, mortgages, deeds
of trust, the Guarantees contained in this Agreement or any joinder or
supplement hereto or any other Guaranty of all or any portion of the
Obligations, subordination agreements, pledges, and collateral assignments,
whether theretofore, now or hereafter executed by any Borrower or any of its
Subsidiaries and delivered to the Administrative Agent.

“Commercial LC Exposure” means, at any time, the sum of (a) the aggregate
undrawn Dollar Amount of all outstanding commercial Letters of Credit plus
(b) the aggregate Dollar Amount of all LC Disbursements relating to commercial
Letters of Credit that have not yet been reimbursed by or on behalf of the
Borrowers. The Commercial LC Exposure of an Issuing Bank (in its capacity as
such) shall be the Commercial LC Exposure in respect of commercial Letters of
Credit issued by such Issuing Bank. The Commercial LC Exposure of any Lender at
any time shall be its Applicable Percentage of the aggregate Commercial LC
Exposure at such time.

“Commitment” means, with respect to each Lender, the commitment, if any, of such
Lender to make Revolving Loans and to acquire participations in Letters of
Credit, Overadvances, Protective Advances and Swingline Loans hereunder,
expressed as an amount representing the maximum aggregate permitted amount of
such Lender’s Revolving Exposure hereunder, as such commitment may be reduced or
increased from time to time pursuant to (a)

 

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Section 2.09 and (b) assignments by or to such Lender pursuant to Section 9.04.
The initial amount of each Lender’s Commitment is set forth on the Commitment
Schedule, or in the Assignment and Assumption pursuant to which such Lender
shall have assumed its Commitment, as applicable. The initial aggregate amount
of all of the Lenders’ Commitments is $400,000,000.

“Commitment Schedule” means the Schedule attached hereto identified as such.

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

“Communications” has the meaning assigned to such term in Section 9.01(d).

“Company” means American Eagle Outfitters, Inc., a Delaware corporation.

“Compliance Certificate” means a certificate executed by a Financial Officer of
the Borrower Representative in substantially the form of Exhibit D.

“Concentration Account” means (a) with respect to the U.S. Loan Parties, a
“Concentration Account” as defined in the U.S. Security Agreement, and (b) with
respect to the Canadian Loan Parties, a “Concentration Account” as defined in
the Canadian Security Agreement.

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

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Controlled Disbursement Account” means any account of any Borrower maintained
with the Lender as a zero balance, cash management account pursuant to and under
any agreement between a Borrower and the Lender, as modified and amended from
time to time, and through which all disbursements of a Borrower, any Loan Party
and any Designated Subsidiary of a Borrower are made and settled on a daily
basis with no uninvested balance remaining overnight.

“Credit Card Accounts” means any “payment intangibles,” as defined in the UCC or
PPSA, receivables or other rights to payment of a monetary obligation due to any
Loan Party from a credit card issuer or a credit card processor in connection
with purchases of Inventory of such Loan Party in the ordinary course of
business on (a) credit cards issued by Visa, MasterCard, American Express,
Discover, each of their respective Affiliates, and any other credit card issuers
that are reasonably acceptable to the Administrative Agent, (b) private label
credit cards of any Loan Party issued under non-recourse arrangements
substantially similar to those in effect on the Effective Date or (c) debit
cards and mall cards issued by issuers or providers that are reasonably
acceptable to the Administrative Agent, in each case, which have been earned by

 

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performance by such Loan Party but not yet paid to such Loan Party by such
credit card issuer or credit card processor.

“Credit Card Agreement” means any agreement between a Loan Party, on the one
hand, and a credit card issuer or a credit card processor (including any credit
card processor that processes purchases of Inventory from a Loan Party through
debit cards or mall cards), on the other hand relating to any Credit Card
Account included or intended to be included in the Borrowing Base.

“Credit Card Notifications” means each Credit Card Notification, in form and
substance reasonably satisfactory to the Administrative Agent, executed by one
or more Loan Parties and delivered by such Loan Parties to credit card issuers
or credit card processors that are party to any Credit Card Agreement.

“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline
Lender or any other Lender.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or
Swingline Loans or (iii) pay over to any Credit Party any other amount required
to be paid by it hereunder, unless, in the case of clause (i) above, such Lender
notifies the Administrative Agent in writing that such failure is the result of
such Lender’s good faith determination that a condition precedent to funding
(specifically identified and including the particular Default, if any) has not
been satisfied; (b) has notified any Borrower or any Credit Party in writing, or
has made a public statement, to the effect that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including the particular Default, if any) to funding a Loan under
this Agreement cannot be satisfied) or generally under other agreements in which
it commits to extend credit, (c) has failed, within three Business Days after
request by a Credit Party, acting in good faith, to provide a certification in
writing from an authorized officer of such Lender that it will comply with its
obligations (and is financially able to meet such obligations) to fund
prospective Loans and participations in then outstanding Letters of Credit and
Swingline Loans under this Agreement, provided that such Lender shall cease to
be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s
receipt of such certification in form and substance satisfactory to it and the
Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

“Designated Currency” means, in relation to any Loan or Borrowing, any currency
(a) that is freely transferable and convertible into U.S. Dollars in the London
interbank market, (b) for which LIBO Rates can be determined by reference to the
applicable Reuters screen as provided in the definition of “LIBO Rate” and
(c) that has been designated by the Administrative Agent as a Designated
Currency at the request of the Borrower Representative and with the consent of
each Lender.

 

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“Designated Subsidiary” means each Subsidiary other than any Excluded
Subsidiary.

“Disclosed Matters” means the actions, suits, proceedings and environmental
matters disclosed in Schedule 3.06.

“Disqualified Stock” means any Equity Interests which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, or
requires the payment of any cash dividend or any other scheduled payment
constituting a return of capital, in each case at any time on or prior to the
first anniversary of the Maturity Date, or (b) is convertible into or
exchangeable (unless at the sole option of the issuer thereof) for (i) cash,
(ii) debt securities or (iii) any Equity Interests referred to in (a) above, in
each case at any time prior to the first anniversary of the Maturity Date.
Notwithstanding the foregoing, any Equity Interests that would constitute
Disqualified Stock solely because holders of the Equity Interests have the right
to require the issuer of such Equity Interests to repurchase such Equity
Interests upon the occurrence of a change of control or an asset sale will not
constitute Disqualified Stock if the terms of such Equity Interests provide that
the issuer may not repurchase or redeem any such Equity Interests pursuant to
such provisions unless such repurchase or redemption is permitted under the
terms of this Agreement.

“Dollar Amount” means (a) with regard to any Obligation or calculation
denominated in U.S. Dollars, the amount thereof, and (b) with regard to any
Obligation or calculation denominated in any other currency, the amount of U.S.
Dollars which is equivalent to the amount so expressed in such currency at the
Spot Rate on the relevant date of determination.

“Document” has the meaning assigned to such term in each Security Agreement, as
applicable.

“Domestic Subsidiary” means a Subsidiary organized under the laws of a
jurisdiction located in the U.S.

“Dominion Period” means (a) any period during which any Event of Default has
occurred and is continuing or (b) any period (i) commencing at any time when
Availability shall be less than the Applicable Trigger Amount (Level I), and
(ii) ending when Availability shall have been greater than the Applicable
Trigger Amount (Level I) for a period of 30 consecutive days; provided that no
more than two (2) Dominion Periods may end in any consecutive twelve (12) month
period.

“EBITDA” means, for any period, for the Company and its Subsidiaries on a
consolidated basis, an amount equal to Net Income for such period, plus

(a) the following without duplication and to the extent deducted in calculating
such Net Income:

(i) Interest Expense for such period;

 

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(ii) the provision for Federal, state, local and foreign income taxes (excluding
Federal, state, local and foreign income tax credits of the Company) payable by
the Company and its Subsidiaries for such period;

(iii) depreciation and amortization expense;

(iv) any (A) non-cash compensation charge or expense, including charges arising
from any grant of stock, stock options or other equity based awards and any
non-cash deemed finance charges in respect of any pension liabilities or other
provisions and (B) income (loss) attributable to deferred compensation plans or
trusts

(v) non-recurring non-cash charges (including asset impairment charges and
unrealized foreign currency losses, but for avoidance of doubt, excluding
non-cash charges that relates to the write-down or write-off of inventory) for
such period;

(vi) other non-recurring losses, costs, charges, or cash expenses (including
without limitation restructuring, business optimization costs, charges or
reserves (including any unusual or non-recurring operating expenses directly
attributable to the implementation of cost savings initiatives), and
non-recurring severance, relocation, consolidation, transition, integration or
other similar charges and expenses in an amount not to exceed $20,000,000 in the
aggregate for such period;

(vii) costs, fees, expenses, premiums or penalties incurred during such period
in connection with Acquisitions (whether or not consummated) and permitted asset
sales (whether or not consummated), other than asset sales effected in the
ordinary course of business;

(viii) costs, charges, or cash expenses in connection with the closing and
disposition of the Warrendale, Pennsylvania, distribution center (including, but
not limited to cost, charges and expenses relating to real estate, fixtures,
equipment, personnel, relocation and similar expenses) in an amount not to
exceed $5,000,000 in such period;

(ix) [reserved]; and

(x) costs, fees, and expenses incurred in connection with the Transactions; and
minus

(b) the following without duplication and to the extent included in calculating
such Net Income:

(i) Federal, state, local and foreign income tax credits of the Company and its
Subsidiaries for such period;

(ii) all non-recurring non-cash items increasing Net Income for such period
(including, without limitation, foreign currency gains, but excluding normal
accruals in the ordinary course of business);

 

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(iii) all non-recurring cash gains of the Company and its Subsidiaries
increasing Net income for such period;

(iv) interest income for such period; and

(v) any cash payments for such period that were deducted in determining Net
Income and added back in determining EBITDA in such testing period or a previous
testing period under clause (a)(iv) or (a)(v) above.

For purposes of calculating EBITDA (except for purposes of determining
compliance with Section 6.12) for any period in connection with the
determination of whether the Payment Conditions have been satisfied, if during
any period the Company or any Subsidiary shall have consummated a Pro Forma
Event since the first day of such period, EBITDA for such period shall be
calculated on a Pro Forma Basis after giving effect thereto.

“EBITDAR” means, for any period, for the Company and its Subsidiaries on a
consolidated basis, the sum of EBITDA plus Rentals.

“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of
the Commodity Exchange Act or any regulations promulgated thereunder and the
applicable rules issued by the Commodity Futures Trading Commission and/or the
SEC.

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Electronic Signature” means an electronic sound, symbol, or process attached
to, or associated with, a contract or other record and adopted by a Person with
the intent to sign, authenticate or accept such contract or record.

“Electronic System” means any electronic system, including email, e-fax,
Intralinks®, ClearPar® and any other Internet or extranet-based site, whether
such electronic system is owned, operated or hosted by the Administrative Agent
and the Issuing Bank and any of its respective Related Parties or any other
Person, providing for access to data protected by passcodes or other security
system.

“Eligible Cash/Cash Equivalents” means cash and Cash Equivalents balances in
U.S. Dollars or Canadian Dollars held in one or more Deposit Accounts or
Securities Accounts with the Administrative Agent subject to a blocked account
control agreement in form and substance reasonably satisfactory to the
Administrative Agent over which the Administrative Agent has sole dominion and
control, subject to the terms of Section 5.13 this Agreement (each a “Borrowing
Base Deposit Account”).

“Eligible Credit Card Accounts” means at the time of any determination thereof,
each Credit Card Account of a Loan Party that at the time of creation and
continuing to the time of such determination is not ineligible for inclusion in
the calculation of the Borrowing Base pursuant to any of clauses (a) through
(p) below. Without limiting the foregoing, to qualify as an Eligible Credit Card
Account, such Credit Card Account shall indicate no Person other than a Loan
Party as payee or remittance party. In determining the amount to be so included,
the face

 

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amount of a Credit Card Account shall be reduced by, without duplication, to the
extent not reflected in such face amount or reflected in a Reserve, (i) the
amount of all accrued and actual fees and charges due to the credit card issuer
or credit card processor by any Loan Party or Subsidiary, discounts, claims,
credits or credits pending, promotional program allowances, price adjustments,
finance charges or other allowances (including any amount that a Loan Party may
be obligated to rebate to a customer, a credit card issuer or credit card
processor pursuant to the terms of any agreement or understanding), and (ii) the
aggregate amount of all cash received in respect of such Credit Card Account but
not yet applied by the Loan Parties to reduce the amount of such Credit Card
Account. Any Credit Card Account included within any of the following categories
shall not constitute an Eligible Credit Card Account:

(a) which is not earned or does not represent the bona fide amount due to a Loan
Party from a credit card processor or a credit card issuer that originated in
the ordinary course of business of the applicable Loan Party;

(b) which is not owned by a Loan Party or to which a Loan Party does not have
good title;

(c) in which the payee of such Credit Card Account is a Person other than a Loan
Party;

(d) which does not constitute an “Account” (as defined in the UCC or the PPSA)
or a “payment intangible” (as defined in the UCC or the PPSA);

(e) which has been outstanding for more than five (5) Business Days (or, in the
case of American Express, ten (10) Business Days) from the date of sale;

(f) with respect to which the applicable credit card issuer, credit card
processor or debit card or mall card issuer or provider has (i) applied for,
suffered, or consented to the appointment of any receiver, interim receiver,
custodian, trustee, monitor, administrator, sequestrator or liquidator of its
assets, (ii) has had possession of all or a material part of its property taken
by any receiver, interim receiver, custodian, trustee, monitor, administrator,
sequestrator or liquidator, (iii) filed, or had filed against it (but only so
long as any such involuntary filing has not been stayed or vacated), any request
or petition for liquidation, reorganization, arrangement, adjustment of debts,
adjudication as bankrupt, winding-up, or voluntary or involuntary case under any
Insolvency Law, (iv) has admitted in writing its inability, or is generally
unable to, pay its debts as they become due, (v) become insolvent or (vi) ceased
operation of its business;

(g) which is not a valid, legally enforceable obligation of the applicable
credit card issuer or credit card processor with respect thereto;

(h) which is not subject to a duly perfected first priority security interest in
favor of the Administrative Agent (for the benefit of the Secured Parties);

(i) which is subject to any Lien, other than (i) a Lien in favor of the
Administrative Agent (for the benefit of the Secured Parties), (ii) any
Permitted Encumbrances contemplated by the applicable processor agreements and
for which appropriate Reserves (as determined by the

 

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Administrative Agent in its Permitted Discretion) have been established,
(iii) Liens in respect of Prior Claims that are unregistered and secure amounts
that are not yet due and payable and (iv) Liens securing Permitted Term Loan
Indebtedness that are subject to an Intercreditor Agreement and which do not
have priority over the Lien in favor of the Administrative Agent;

(j) with respect to which (i) the applicable Loan Party has failed to comply in
all material respects with its obligations under the Credit Card Agreements
related thereto, or (ii) (A) any covenant has been breached or (B) any
representation or warranty is not true in all material respects, in each case to
the extent contained in this Agreement, the applicable Security Agreement or in
the Credit Card Agreements relating to such Credit Card Account; provided that
each such representation and warranty shall be true and correct in all respects
to the extent already qualified by a materiality standard;

(k) which is subject to risk of set-off, recoupment, non-collection or not being
processed due to unpaid and/or accrued credit card processor fee balances, to
the extent of the lesser of the balance of the applicable Credit Card Account or
the unpaid credit card processor fees;

(l) which is evidenced by “chattel paper” or an “instrument” of any kind unless
such “chattel paper” or “instrument” is in the possession of the Administrative
Agent, and to the extent necessary or appropriate, endorsed to the
Administrative Agent;

(m) which the Administrative Agent in its Permitted Discretion determines may
not be paid by reason of the applicable credit card processor’s, credit card
issuer’s or debit card or mall card issuer’s or provider’s inability to pay;

(n) which represents a deposit or partial payment in connection with the
purchase of Inventory of such Loan Party;

(o) which is not subject to a Credit Card Notification; or

(p) which does not meet such other eligibility criteria for Credit Card Accounts
as the Administrative Agent in its Permitted Discretion may determine from time
to time; provided, however, that the Administrative Agent shall not add any
additional eligibility criteria (or amend any then-existing eligibility criteria
to make the same more restrictive) without giving at least four (4) Business
Days’ prior notice to the Borrower Representative; provided further that, if
after the delivery of such notice the Borrower Representative notifies the
Administrative Agent that it desires to discuss the changes described therein,
then the Administrative Agent will discuss such changes with the Borrower
Representative, provided that nothing in this proviso shall obligate the
Administrative Agent to eliminate, reduce, or delay any such changes.

“Eligible In-Transit Inventory” means, as of the date of determination thereof,
without duplication, Inventory of a Loan Party that, except as otherwise agreed
by the Administrative Agent in its Permitted Discretion, meets each of the
following criteria:

(a) the Administrative Agent shall have received (1) a true and correct copy of
the bill of lading and other shipping documents for such Inventory and
(2) evidence of satisfactory

 

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casualty insurance naming the Administrative Agent as lender loss payee and
otherwise covering such risks as the Administrative Agent may reasonably
request,

(b) if the bill of lading is non-negotiable, the inventory must be in transit
within the U.S. or Canada, and the Administrative Agent shall have received, if
requested, a duly executed Collateral Access Agreement, in form and substance
satisfactory to the Administrative Agent, from the applicable customs broker,
freight forwarder or carrier for such Inventory,

(c) except as otherwise approved in writing by the Administrative Agent, if the
bill of lading is negotiable, the inventory must be in transit from outside the
U.S. or Canada, and the Administrative Agent shall have received
(1) confirmation that the bill is issued in the name of such Loan Party and
consigned to the order of the Administrative Agent, and a reasonably acceptable
agreement has been executed with such Loan Party’s customs broker, in which the
customs broker agrees that it holds the negotiable bill as agent for the
Administrative Agent and has agreed to follow the instructions of the
Administrative Agent in respect of the Inventory, and (2) confirmation that such
Loan Party has paid for the goods or the payment obligations are assured by a
Letter of Credit or a commercial letter of credit,

(d) the common carrier is not an Affiliate of the applicable vendor or supplier,

(e) the customs broker is not an Affiliate of any Loan Party,

(f) such Inventory has not been in-transit for more than 45 days from the date
such Inventory first became Eligible Inventory, and

(g) such Inventory satisfies all of the criteria for Eligible Inventory (except
the criteria in clause (g) of the definition of “Eligible Inventory”).

“Eligible Inventory” means, as of the date of determination thereof, without
duplication, items of Inventory of a Loan Party that are finished goods
inventory, merchantable and readily saleable in the ordinary course of such Loan
Party’s business, in each case that is not excluded as ineligible by virtue of
one or more of the criteria set forth below. Eligible Inventory shall not
include any Inventory:

(a) which is not subject to a first priority perfected Lien in favor of the
Administrative Agent (for the benefit of the Secured Parties) and, in the case
of any Inventory located in any province or territory of Canada, with respect to
which the Administrative Agent has not received a perfection opinion
satisfactory to the Administrative Agent;

(b) which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent (for the benefit of the Secured Parties), (ii) a Permitted
Encumbrance which does not have priority over the Lien in favor of the
Administrative Agent (for the benefit of the Secured Parties), (iii) Liens in
respect of Prior Claims that are unregistered and secure amounts that are not
yet due and payable, and (iv) Liens securing Permitted Term Loan Indebtedness
that are subject to an Intercreditor Agreement and which do not have priority
over the Lien in favor of the Administrative Agent;

 

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(c) which is unmerchantable, defective, used, unfit for sale, unacceptable due
to age, type, category and/or quantity or which was not able to be valued under
any appraisal conducted from time to time;

(d) with respect to which any covenant, representation or warranty contained in
this Agreement or in any Security Agreement has been breached or is not true in
any material respect (or with respect to any representation or warranty that is
already qualified by materiality, such representation and warranty is untrue)
and which does not conform in all material respects to all standards imposed by
any Governmental Authority;

(e) in which any Person other than such Loan Party shall (i) have any direct or
indirect ownership, interest or title or (ii) be indicated on any purchase order
or invoice with respect to such Inventory as having or purporting to have an
interest therein;

(f) which is not finished goods or which constitutes packaging and shipping
material, manufacturing supplies, samples, prototypes, displays or display
items, bill-and-hold or ship-in-place goods, goods that are returned or marked
for return, repossessed goods, defective or damaged goods, goods held on
consignment, or goods which are not of a type held for sale in the ordinary
course of business (for the avoidance of doubt, sales in the ordinary course of
business includes clearance sales);

(g) which (i) is not located in the U.S. or, solely in the case of Inventory of
a Canadian Loan Party, Canada, or (ii) is In-Transit Inventory;

(h) which is located at any location that is not an operating retail store
location, temporary storage locations under the exclusive control of a Loan
Party, or distribution center owned or leased by a Loan Party or third party
warehouse that has been disclosed to the Administrative Agent, other than
(x) Inventory in transit between any of the foregoing locations, and
(y) Eligible In-Transit Inventory;

(i) which is located in any location leased by such Loan Party (other than any
retail store of such Loan Party located in a jurisdiction that does not provide
for a common law or statutory landlord’s lien on the personal property of
tenants that would be prior or superior to the Liens of the Administrative
Agent) unless (i) the lessor has delivered to the Administrative Agent a
Collateral Access Agreement or (ii) a Rent Reserve has been established by the
Administrative Agent in its Permitted Discretion;

(j) which is (A) located in any third party warehouse or is in the possession of
a bailee (other than a third party processor) unless (i) such warehouseman or
bailee has delivered to the Administrative Agent a Collateral Access Agreement
and such other documentation as the Administrative Agent may require or (ii) an
appropriate Reserve has been established by the Administrative Agent in its
Permitted Discretion, provided that up to $10,000,000 at any one time of such
Inventory described in this clause (A) and not meeting the requirements of the
preceding subclauses (i) and (ii) may be included as Eligible Inventory to the
extent such Inventory is being held for not more than 60 days in a warehouse
pending delivery to a retail store upon the initial opening thereof (including
the initial opening after the renovation or

 

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remodeling of a store), or (B) evidenced by a negotiable Document (other than
bills of lading to the extent permitted pursuant to clause (g) above);

(k) which is being processed offsite at a third party location or outside
processor, or is in-transit to or from such third party location or outside
processor;

(l) which is the subject of a consignment by such Loan Party as consignor;

(m) which contains or bears any intellectual property rights licensed to such
Loan Party unless the Administrative Agent is satisfied that it may sell or
otherwise dispose of such Inventory without (i) infringing the rights of such
licensor, (ii) violating any contract with such licensor, or (iii) incurring any
liability with respect to payment of royalties other than royalties incurred
pursuant to sale of such Inventory under the current licensing agreement;

(n) which is not reflected in a current perpetual inventory report of such Loan
Party (unless such Inventory is reflected in a report to the Administrative
Agent as “in transit” Inventory or Eligible LC Inventory);

(o) for which reclamation rights have been asserted by the seller;

(p) which does not meet such other eligibility criteria for Inventory as the
Administrative Agent in its Permitted Discretion may determine from time to
time; provided, however, that the Administrative Agent shall not add any
additional eligibility criteria (or amend any then-existing eligibility criteria
to make the same more restrictive) without giving at least four (4) Business
Days’ prior notice to the Borrower Representative; provided further that, if
after the delivery of such notice the Borrower Representative notifies the
Administrative Agent that it desires to discuss the changes described therein,
then the Administrative Agent will discuss such changes with the Borrower
Representative, provided that nothing in this proviso shall obligate the
Administrative Agent to eliminate, reduce, or delay any such changes; or

(q) which has been designated or demanded to be returned to or retained by the
applicable vendor or which has been recognized as damaged or off quality by the
applicable Loan Party;

provided further that in determining the value of the Eligible Inventory, such
value shall be reduced by, without duplication of amounts already accounted for
in determining such value, any amounts representing (i) vendor rebates;
(ii) costs included in Inventory relating to advertising; (iii) a shrink
reserve; and (iv) the unreconciled discrepancy between the general inventory
ledger and the perpetual inventory ledger, to the extent the general inventory
ledger reflects less Inventory than the perpetual inventory ledger.

“Eligible LC Inventory” means, at any time, the value of the undrawn face amount
of issued commercial Letters of Credit that (a) supports the purchase price of
Inventory in-transit that would be Eligible In-Transit Inventory but for the
fact that the Loan Parties have not paid for such Inventory and (b) has an
expiry within 90 days after the date of initial issuance of such commercial
Letter of Credit, which value shall be subject to reduction based on eligibility
criteria with respect to any such Inventory or Letter of Credit as the
Administrative Agent in its Permitted Discretion may determine from time to
time; provided, however, that the

 

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Administrative Agent shall not add any additional eligibility criteria (or amend
any then-existing eligibility criteria to make the same more restrictive)
without giving at least four (4) Business Days’ prior notice to the Borrower
Representative; provided further that, if after the delivery of such notice the
Borrower Representative notifies the Administrative Agent that it desires to
discuss the changes described therein, then the Administrative Agent will
discuss such changes with the Borrower Representative, provided that nothing in
this proviso shall obligate the Administrative Agent to eliminate, reduce, or
delay any such changes.

“Eligible Real Property” means each identified real property listed on Schedule
1.01(a) so long as:

(a) a U.S. Borrower has fee simple ownership of such real property free and
clear of all Liens other than Permitted Encumbrances and junior Liens securing
Permitted Term Loan Indebtedness;

(b) no covenant, representation or warranty contained in this Agreement or the
Mortgages with respect to such real property has been breached or is not true in
all material respects (or, to extent qualified by materiality, in not true in
all respects);

(c) the Administrative Agent has, for the benefit of the Secured Parties, a
perfected first priority Lien on such real property, including without
limitation through the filing of a Mortgage with respect thereto;

(d) such real property is and remains adequately protected by (i) fully-paid
valid title insurance with endorsements and in amounts that are acceptable to
the Administrative Agent as of the Effective Date, insuring that the
Administrative Agent, for the benefit of the Lenders and the other Secured
Parties, shall have a perfected first priority Lien on such real property,
evidence of which shall have been provided in form and substance satisfactory to
the Administrative Agent, and (ii) casualty insurance as required hereunder;

(e) if such real property is located in any area that has been designated by the
Federal Emergency Management Agency as a “Special Flood Hazard Area”, the
applicable Borrower has purchased and maintains flood insurance thereon in
amounts reasonably satisfactory to the Administrative Agent and in any event in
compliance with applicable law, including the Flood Disaster Protection Act of
1973, as amended;

(f) no Material Event has occurred with respect thereto unless, in lieu of
excluding such real property from the Borrowing Base the Administrative Agent
has, in its Permitted Discretion, imposed a Reserve; provided that, with respect
to any such real property with respect to which a Material Event has occurred
and has, as a result, been excluded from the Borrowing Base (such real property,
a “Subject Property”), such Subject Property may be later redesignated by the
Borrower Representative as Eligible Real Property upon satisfaction of certain
conditions satisfactory to the Administrative Agent, which may include any or
all of the following conditions: (i) at the time of such redesignation, no
Default or Event of Default has occurred and is continuing; (ii) the Borrower
Representative notifies the Administrative Agent that the applicable Borrower
intends to repair, refurbish, restore, replace or rebuild such Subject Property
and such repair, refurbishment, restoration, replacement, or rebuilding occurs
within 180 days

 

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after the applicable occurrence of the Material Event with respect thereto or
such longer period as the Administrative Agent shall agree; (iii) such Subject
Real Property otherwise constitutes Eligible Real Property under the other
clauses of this definition; and (iv) upon completion of such repair,
refurbishment, restoration, replacement, or rebuilding, the Administrative Agent
shall have received (A) an appraisal with respect to such Subject Property in
form and substance satisfactory to the Administrative Agent, which appraisal
shall be at the sole cost and expense of the Loan Parties and shall not count
against the number of appraisals able to be performed at the Loan Parties’
expense set forth in Section 5.12 and (B) all other documents and deliverables
similar to those originally provided on or about the Effective Date with respect
to such Subject Property as requested by the Administrative Agent, all of which
shall be in form and substance satisfactory to the Administrative Agent. In the
event such Subject Property becomes Eligible Real Property following a Material
Event as provided in this clause (f), the Administrative Agent and the Borrower
shall be permitted to amend the definition of “Real Property Component”, in a
manner satisfactory to the Administrative Agent and the Borrower, but without
the consent of any Lender, solely for the purposes of including such Subject
Property as Eligible Real Property; and

(g) the Administrative Agent has received with respect to such real property all
of the documents, instruments, agreements and other items specified, and in the
respective form required, and the applicable U.S. Borrower(s) shall have
rendered all of the performance required, and in the form or pursuant to any
other standard of conduct or delivery, set forth on Schedule 1.01(g), all of
which must be satisfied on or before February 2, 2015 (or such later date as may
be approved in writing by the Administrative Agent), for such real property to
constitute Eligible Real Property.

“Eligible Trade Accounts” means, at any time, each Account (other than a Credit
Card Account) of a Loan Party that satisfies the following criteria at the time
of creation and continues to meet the same at the time of such determination:
such Account (i) has been earned by performance and represents the bona fide
amounts due to a Loan Party and in each case is originated in the ordinary
course of business of such Loan Party, and (ii) in each case is not ineligible
for inclusion in the calculation of the applicable Borrowing Base pursuant to
any of clauses (a) through (z) below. Without limiting the foregoing, to qualify
as an Eligible Trade Account, such Account shall indicate no Person other than a
Loan Party as payee or remittance party. Any Account included within any of the
following categories shall not constitute an Eligible Trade Account:

(a) which is not subject to a first priority perfected security interest in
favor of the Administrative Agent (for the benefit of the Secured Parties);

(b) which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent, (ii) a Permitted Encumbrance which does not have priority
over the Lien in favor of the Administrative Agent, (iii) Liens in respect of
Prior Claims that are unregistered and that secure amounts that are not yet due
and payable and (iv) Liens securing Permitted Term Loan Indebtedness that are
subject to an Intercreditor Agreement and which do not have priority over the
Lien in favor of the Administrative Agent;

 

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(c) (i) with respect to which the scheduled due date is more than 90 days after
the date of the original invoice therefor, (ii) which is unpaid more than 90
days after the date of the original invoice therefor or more than 60 days after
the original due date therefor (in determining the aggregate amount from the
same Account Debtor that is unpaid hereunder there shall be excluded the amount
of any net credit balances relating to Accounts due from such Account Debtor
which are unpaid more than 90 days after the date of the original invoice
therefor or more than 60 days after the original due date therefor) (iii) which
has been written off the books of such Loan Party or otherwise designated as
uncollectible;

(d) which is owing by an Account Debtor for which more than 50% of the Accounts
owing from such Account Debtor and its Affiliates are ineligible pursuant to
clause (c) above;

(e) which is owing by an Account Debtor to the extent the aggregate amount of
Accounts owing from such Account Debtor and its Affiliates to all Loan Parties
exceeds 25% of the aggregate amount of Eligible Trade Accounts of all Loan
Parties;

(f) with respect to which any covenant, representation or warranty contained in
this Agreement or in any Security Agreement has been breached or is not true in
all material respects (or, to the extent qualified by materiality, in all
respects);

(g) which (i) does not arise from the sale of Inventory in the ordinary course
of business, (ii) is not evidenced by an invoice or other documentation (the
form of which is reasonably satisfactory to the Administrative Agent) which has
been sent to the Account Debtor, (iii) represents a progress billing, (iv) is
contingent upon such Loan Party’s completion of any further performance,
(v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale
on approval, consignment, cash-on-delivery or any other repurchase or return
basis or (vi) relates to payments of interest;

(h) for which the goods giving rise to such Account have not been shipped to the
Account Debtor or for which the services giving rise to such Account have not
been performed by such Loan Party or if such Account was invoiced more than
once;

(i) with respect to which any check or other instrument of payment has been
returned uncollected for any reason;

(j) which is owed by an Account Debtor which has (i) applied for, suffered, or
consented to the appointment of any receiver, custodian, trustee, or liquidator
of its assets, (ii) had possession of all or a material part of its property
taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had
filed against it, any request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or
voluntary or involuntary case under any Insolvency Laws (other than
post-petition accounts payable of an Account Debtor that is a
debtor-in-possession under the Bankruptcy Code and reasonably acceptable to the
Administrative Agent), (iv) admitted in writing its inability, or is generally
unable to, pay its debts as they become due, (v) become insolvent, or
(vi) ceased operation of its business;

(k) which is owed by any Account Debtor which has sold all or substantially all
of its assets;

 

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(l) which is owed by an Account Debtor which (i) does not maintain its chief
executive office in the U.S., or Canada or (ii) is not organized under
applicable law of the U.S., any state of the U.S. or the District of Columbia,
Canada, or any province or territory of Canada unless, in any such case, such
Account is backed by a Letter of Credit acceptable to the Administrative Agent
which is in the possession of, and is directly drawable by, the Administrative
Agent, provided that the Administrative Agent may make up to $5,000,000 of such
Accounts eligible in its Permitted Discretion;

(m) which is owed in any currency other than U.S. Dollars or Canadian Dollars;

(n) which is owed by (i) any Governmental Authority of any country other than
the U.S. or Canada unless such Account is backed by a Letter of Credit
acceptable to the Administrative Agent which is in the possession of, and is
directly drawable by, the Administrative Agent, or (ii) any Governmental
Authority of the U.S. or Canada, or any department, agency, public corporation,
or instrumentality thereof, unless the Financial Administration Act (Canada), as
amended (or the equivalent law of any province of Canada, if any, in the case of
a Governmental Authority of such province) or the Federal Assignment of Claims
Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.),
as applicable, and any other steps necessary to perfect the Lien of the
Administrative Agent in such Account have been complied with to the
Administrative Agent’s satisfaction;

(o) which is owed by any Affiliate of any Loan Party or any employee, officer,
director, agent or stockholder of any Loan Party or any of its Affiliates;

(p) which, for any Account Debtor, exceeds a credit limit determined by the
Administrative Agent in its Permitted Discretion, to the extent of such excess;

(q) which is owed by an Account Debtor or any Affiliate of such Account Debtor
to which any Loan Party is indebted, but only to the extent of such
indebtedness, or is subject to any security, deposit, progress payment,
retainage or other similar advance made by or for the benefit of an Account
Debtor, in each case to the extent thereof;

(r) which is subject to any counterclaim, deduction, defense, setoff or dispute
but only to the extent of any such counterclaim, deduction, defense, setoff or
dispute;

(s) which is evidenced by any promissory note, chattel paper or instrument;

(t) which is owed by an Account Debtor located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit such Loan Party to seek judicial enforcement in such
jurisdiction of payment of such Account, unless such Loan Party has filed such
report or qualified to do business in such jurisdiction;

(u) with respect to which such Loan Party has made any agreement with the
Account Debtor for any reduction thereof, other than discounts and adjustments
given in the ordinary course of business but only to the extent of any such
reduction, or any Account which was partially paid and such Loan Party created a
new receivable for the unpaid portion of such Account;

 

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(v) which does not comply in all material respects with the requirements of all
applicable laws and regulations, whether Federal (U.S. or Canadian), state,
provincial or local, including without limitation the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;

(w) which is for goods that have been sold under a purchase order or pursuant to
the terms of a contract or other agreement or understanding (written or oral)
that indicates or purports that any Person other than such Loan Party has or has
had an ownership interest in such goods, or which indicates any party other than
such Loan Party as payee or remittance party;

(x) which was created on cash on delivery terms; or

(y) which the Administrative Agent determines in its Permitted Discretion may
not be paid by reason of the Account Debtor’s inability to pay

(z) which does not meet such other eligibility criteria for Accounts as the
Administrative Agent in its Permitted Discretion may determine from time to
time; provided, however, that the Administrative Agent shall not add any
additional eligibility criteria (or amend any then-existing eligibility criteria
to make the same more restrictive) without giving at least four (4) Business
Days’ prior notice to the Borrower Representative; provided further that, if
after the delivery of such notice the Borrower Representative notifies the
Administrative Agent that it desires to discuss the changes described therein,
then the Administrative Agent will discuss such changes with the Borrower
Representative, provided that nothing in this proviso shall obligate the
Administrative Agent to eliminate, reduce, or delay any such changes.

In determining the amount of an Eligible Trade Account of a Loan Party, the face
amount of an Account may, in the Administrative Agent’s Permitted Discretion, be
reduced by, without duplication, to the extent not reflected in such face
amount, (i) the amount of all accrued and actual discounts, claims, credits or
credits pending, promotional program allowances, price adjustments or finance
charges (including any amount that such Loan Party may be obligated to rebate to
an Account Debtor pursuant to the terms of any agreement or understanding
(written or oral)) and (ii) the aggregate amount of all cash received in respect
of such Account but not yet applied by such Loan Party to reduce the amount of
such Account.

“Environment” shall mean any surface water, groundwater, drinking water supply,
land surface or subsurface strata or ambient air.

“Environmental Indemnity” shall mean each environmental indemnity made by each
Loan Party with respect to Eligible Real Property, in each case in form and
substance reasonably satisfactory to the Administrative Agent.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, and
all binding orders, decrees, judgments, injunctions, notices or agreements
passed, adopted, issued, promulgated or entered into by any Governmental
Authority, relating to protection of the environment, preservation or
reclamation of natural resources, the management, Release or threatened Release
of any Hazardous Material or to health and safety matters to the extent related
to exposure to Hazardous Materials.

 

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“Environmental Liability” means (i) any obligation or responsibility to comply
with the terms of any order, decree, injunction, claim, notice or obligation of
an agreement (including an Environmental Indemnity); or (ii) any obligation or
responsibility for damages, costs of environmental investigations or
remediation, fines, or penalties of any Borrower or Subsidiary resulting from or
based upon (a) a violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) any exposure to any Hazardous Materials resulting in physical
injury or property damage or a claim of such injury or property damage, (d) the
Release or threatened Release of any Hazardous Materials into the environment or
(e) any contract, agreement or other consensual arrangement pursuant to which
liability is assumed by or imposed upon any Borrower or Subsidiary with respect
to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any of the
foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with a Loan Party, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the failure to
satisfy the “minimum funding standard” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by any Loan Party or any ERISA Affiliate of any liability under
Title IV of ERISA with respect to the termination or partial termination of any
Plan; (e) the receipt by any Loan Party or any ERISA Affiliate from the PBGC of
any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (f) the incurrence by any Loan Party or any
ERISA Affiliate of any liability with respect to the withdrawal or partial
withdrawal of any Loan Party or any ERISA Affiliate from any Multiemployer Plan;
or (g) the receipt by any Loan Party or any ERISA Affiliate of any notice, or
the receipt by any Multiemployer Plan from any Loan Party or any ERISA Affiliate
of any notice, concerning the imposition upon any Loan Party or any ERISA
Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.

“EURIBO Rate” means, with respect to any EURIBOR Borrowing for any Interest
Period, the applicable Screen Rate as of the Specified Time on the Quotation
Day.

 

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“EURIBOR”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, is bearing interest at a rate
determined by reference to the EURIBO Rate.

“Euro” or “€” means the single currency of the Participating Member States.

“European Union” means the region comprised of member states of the European
Union pursuant to the Treaty on the European Union.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excluded Account” has the meaning assigned to such term in the applicable
Security Agreement.

“Excluded Asset” has the meaning assigned to such term in the applicable
Security Agreement.

“Excluded Subsidiary” means each (a) Unrestricted Subsidiary, (b) Immaterial
Subsidiary (unless such Subsidiary becomes a Restricted Subsidiary), (c) solely
with respect to the U.S. Obligations, Domestic Subsidiary that is a Subsidiary
of a CFC, (d) CFC (other than a Canadian Loan Party or a Canadian Subsidiary of
a Canadian Loan Party) or CFC Holdco, (e) Subsidiary that is prohibited by
applicable law, rule or regulation or by any contractual obligation existing on
the Effective Date or existing at the time of acquisition thereof after the
Effective Date, in each case from guaranteeing the U.S. Obligations or Canadian
Obligations, as applicable, or that would require governmental (including
regulatory) consent, approval, license or authorization to provide a guarantee
unless such consent, approval, license or authorization has been received, or,
solely with respect to the U.S. Obligations, that would result in an adverse Tax
consequence to the Company or one of its Subsidiaries (including as a result of
the operation of Section 956 of the Code or any similar Requirement of Law or
regulation in any applicable jurisdiction) because of providing a guarantee as
reasonably determined by the Company and the Administrative Agent; provided that
(x) any Domestic Subsidiary of the Company that is a guarantor under any
Permitted Term Loan Indebtedness or (y) any other Subsidiary of the Company that
guarantees the obligations under any Permitted Term Loan Indebtedness shall
become a Guarantor hereunder, and (f) any other Subsidiary with respect to
which, in the reasonable judgment of the Administrative Agent (confirmed in
writing by notice to the Company), the cost or other consequences of becoming a
Guarantor shall be excessive in view of the benefits to be obtained by the
Lenders therefrom.

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure for any reason to constitute an
ECP at the time the Guarantee of such Guarantor or the grant of such security
interest becomes or would become effective with respect to such Swap Obligation.
If a Swap Obligation arises under a master agreement governing more than one
swap, such exclusion shall apply only to the portion of such

 

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Swap Obligation that is attributable to swaps for which such Guarantee or
security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes; (b) in the case of a Lender, U.S. Federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan, Letter of Credit or
Commitment pursuant to a law in effect on the date on which (i) such Lender
acquires such interest in the Loan, Letter of Credit or Commitment (other than
pursuant to an assignment request by the Borrowers under Section 2.19(b)) or
(ii) such Lender changes its lending office, except in each case to the extent
that, pursuant to Section 2.17, amounts with respect to such Taxes were payable
either to such Lender’s assignor immediately before such Lender acquired the
applicable interest in a Loan or Commitment or to such Lender immediately before
it changed its lending office; (c) Taxes attributable to such Recipient’s
failure to comply with Section 2.17(f); and (d) any U.S. Federal withholding
Taxes imposed under FATCA.

“Existing Letters of Credit” means each of the letters of credit described on
Schedule 1.01(b).

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreement entered into
pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

“Financial Officer” means the chief financial and administrative officer; senior
vice president, general counsel; chief financial officer; vice president,
controller; vice president, financial planning and analysis / treasury; senior
director treasury; treasurer or controller of the Borrower Representative, and
solely for purposes of certifying information as required in this Agreement, any
of the other individual designated in writing to the Administrative Agent by an
existing Financial Officer of a Loan Party as an authorized signatory of any
certificate or other document to be delivered hereunder.

 

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“Fixed Charge Coverage Ratio” means, at any date, the ratio of (a) the sum of
(i) EBITDAR minus (ii) the unfinanced portion of Capital Expenditures (excluding
replacement Capital Expenditures made (x) with the proceeds of insurance or
(y) in anticipation of the receipt of insurance proceeds (an “Insurance
Anticipation Capital Expenditure”), to the extent that the anticipated insurance
proceeds are actually received within 180 days after the date of such Insurance
Anticipation Capital Expenditure, and otherwise the amount of such Insurance
Anticipation Capital Expenditure (if no insurance proceeds are timely received)
or the excess of such Insurance Anticipation Capital Expenditure (if insurance
proceeds are timely received but in an amount less than such Insurance
Anticipation Capital Expenditure) over the related insurance proceeds received
shall be deemed to be part of the unfinanced portion of Capital Expenditures in
the fiscal quarter in which such 180-day period expires) to (b) Fixed Charges,
all calculated for the period of four (4) consecutive fiscal quarters ended on
such date (or, if such date is not the last day of a fiscal quarter, ended on
the last day of the fiscal quarter most recently ended prior to such date).

“Fixed Charges” means, for any period, without duplication, cash Interest
Expense, plus Rentals, plus scheduled principal payments on Indebtedness
actually made, plus expenses for taxes paid in cash, plus Restricted Payments
paid in cash (other than Restricted Payments permitted to be made under
Section 6.08(a)(ii)), plus the principal portion of scheduled Capital Lease
Obligation payments actually made, all calculated on a consolidated basis for
the Company and its Subsidiaries for such period in accordance with GAAP.

“Flood Laws” has the meaning assigned to such term in Section 8.10.

“Foreign Currency Sublimit” means an amount equal to $50,000,000.

“Foreign Lender” means (a) if a Borrower is a U.S. Person, a Lender, with
respect to such Borrower, that is not a U.S. Person, and (b) if a Borrower is
not a U.S. Person, a Lender, with respect to such Borrower, that is resident or
organized under the laws of a jurisdiction other than that in which such
Borrower is resident for tax purposes.

“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

“Funding Accounts” means the deposit account(s) of the Borrowers to which the
Administrative Agent or the Swingline Lender is authorized by the Borrowers (or
by the Borrower Representative on their behalf) to transfer the proceeds of any
Borrowings requested or authorized pursuant to this Agreement.

“GAAP” means generally accepted accounting principles in the U.S., consistently
applied.

“Gift Card Reserve” means, at any time, the sum of (a) 50% of the aggregate
remaining amount at such time of outstanding gift certificates and gift cards
sold, and merchandise credits issued, by the Loan Parties, in each case
entitling the holder thereof to use all or a portion of the certificate, gift
card or credit to pay all or a portion of the purchase price of Inventory and
(b) 100% of the aggregate amount at such time of outstanding customer deposits
entitling the holder thereof to use all or a portion of such deposit to pay all
or a portion of the purchase price of Inventory.

 

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“Governmental Authority” means the government of the United States of America,
Canada, any other nation or any political subdivision thereof, whether
provincial, territorial, state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government (including any supra-national body
exercising such powers or functions, such as the European Union or the European
Central Bank).

“Gross Availability” means, as of any date of determination, (a) the sum of
(i) the U.S. Borrowing Base as of such date, plus (ii) the Canadian Borrowing
Base as of such date, minus (b) the Aggregate Credit Exposure as of such date.

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include (i) warranties
or indemnities made in trade contracts, asset sale agreements, acquisition
agreements, commitment letters, engagement letters and brokerage and deposit
agreements in the ordinary course of business, and warranties and indemnities to
lenders in any documents evidencing Indebtedness permitted pursuant to
Section 6.01 with respect to the guarantor, (ii) any indemnities made in
connection with liability of a Person’s directors, officers and employees in
their capacities as such as permitted by applicable law, and (iii) any
contingent liability arising from the endorsement of negotiable or other
instruments for deposit or collection in the ordinary course of business, and
(iv) any continuing liability of the Company or its Subsidiaries as a lessee
under a lease after such lease has been assigned or subleased by such Person.

“Guaranteed Obligations” means U.S. Guaranteed Obligations or Canadian
Guaranteed Obligations, as the context requires.

“Guarantors” means all U.S. Guarantors and Canadian Guarantors.

“Hazardous Material” means: (a) any substance, material, or waste that is
included within the definitions of “hazardous substances,” “hazardous
materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic
waste,” or words of similar import in any Environmental Law; (b) those
substances listed as hazardous substances by the United States Department of
Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) (40
C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or
waste that is (i) petroleum, petroleum derivative or fraction, or a petroleum
by-product, (ii) asbestos or asbestos-containing material, (iii) polychlorinated
biphenyls, (iv) ozone depleting substances, (v) radon, or (vi) a

 

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pesticide, herbicide, or other substance regulated under the Federal
Insecticide, Fungicide and Rodentide Act (“FIFRA”), 7 U.S.C. §136 et seq.

“HSBC” means HSBC USA, N.A.

“IFRS” means the International Financial Reporting Standards set by the
International Accounting Standards Board (or the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants or the SEC, as
the case may be) or any successor thereto, as in effect from time to time.

“Immaterial Subsidiary” shall mean any Subsidiary (other than a Borrower)
designated by the Borrower Representative to the Administrative Agent as an
“Immaterial Subsidiary” and that meets each of the following criteria as of the
last day of the most recent fiscal quarter for which financial statements have
been delivered to the Administrative Agent pursuant to Sections 5.01(a) or (b):
(a) such Subsidiary and its Subsidiaries accounted for less than (x) 2.5% of
Total Assets at such date and (y) 2.5% of the consolidated revenues of the
Company and its Subsidiaries for the most recent four fiscal quarter period
ending on such date, and (b) all Immaterial Subsidiaries and their respective
Subsidiaries accounted for less than (x) 5.0% of Total Assets at such date and
(y) 5.0% of the consolidated revenues of the Company and its Subsidiaries for
the most recent four fiscal quarter period ending on such date; provided, that
no Subsidiary shall be or be designated as an “Immaterial Subsidiary” if such
Subsidiary has provided a Guaranty of, or pledged any Collateral as security
for, any Permitted Term Loan Indebtedness.

“Increased Reporting Period” means any period (a) commencing on the date when
Availability is less than the Applicable Trigger Amount (Level II) and
(b) ending on the date when Availability shall have been equal to or greater
than the Applicable Trigger Amount (Level II) for a period of 90 consecutive
days.

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes, loan agreements or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of property
or services, (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed (but only to the extent of
the lesser of such Indebtedness and the fair market value of such secured
property if such Indebtedness has not been assumed by such Person), (g) all
Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty, (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances, (k) obligations under any liquidated earn-out,
(l) any other Off-Balance Sheet Liability, (m) obligations, whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions
therefor), under (i) any and all Swap Agreements, and (ii) any and all

 

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cancellations, buy backs, reversals, terminations or assignments of any Swap
Agreement transaction, and (n) obligations, contingent or otherwise, with
respect to Disqualified Stock; provided, however, the term “Indebtedness” shall
not include (1) trade accounts or accounts payable, accrued expenses and
liabilities incurred and customer deposits received, in each instance, in the
ordinary course of business and not constituting indebtedness for borrowed money
or evidenced by notes or other instruments, (2) capital stock (other than
Disqualified Stock) and surplus earned, (3) deferred compensation payable to
directors, officers or employees of the Company or any Subsidiary, and (4) any
purchase price adjustment or earnout incurred in connection with an Acquisition,
except to the extent that the amount payable pursuant to such purchase price
adjustment or earnout is, or becomes, reasonably determinable. The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

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

“Indemnitee” has the meaning assigned to such term in Section 9.03(b).

“Ineligible Institution” has the meaning assigned to such term in
Section 9.04(b).

“Information” has the meaning assigned to such term in Section 9.12.

“Insolvency Laws” means each of the Bankruptcy Code, the BIA, the CCAA, the
Winding-Up and Restructuring Act (Canada), in each case as amended, and any
other applicable state, provincial, territorial or federal bankruptcy laws, each
as now and hereafter in effect, any successors to such statutes and any other
applicable insolvency or other similar law of any jurisdiction, including any
corporate law of any jurisdiction permitting a debtor to obtain a stay or a
compromise of the claims of its creditors against it and including any rules and
regulations pursuant thereto.

“Intercreditor Agreement” means any intercreditor agreement, by and among the
Administrative Agent and the collateral agents or other representatives for the
holders of Permitted Term Loan Indebtedness, and acknowledged by the Loan
Parties, in form and substance reasonably satisfactory to the Administrative
Agent.

“Interest Election Request” means a request by the Borrower Representative to
convert or continue a Borrowing in accordance with Section 2.08, which shall be,
in the case of any such written request, in the form of Exhibit E or any other
form approved by the Administrative Agent.

“Interest Expense” means, for any period, total interest expense (including that
attributable to Capital Lease Obligations) for such period with respect to all
outstanding Indebtedness (including all commissions, discounts and other fees
and charges owed by the Company or any Subsidiary with respect to letters of
credit and bankers’ acceptances and net costs under Swap Agreements in respect
of interest rates to the extent such net costs are allocable

 

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to such period in accordance with GAAP), calculated on a consolidated basis for
the Company and its Subsidiaries for such period in accordance with GAAP.

“Interest Payment Date” means (a) with respect to any ABR Loan or Canadian Prime
Rate Loan (other than a Swingline Loan), the first Business Day of each calendar
quarter and the Maturity Date, (b) with respect to any LIBOR Loan, CDOR Loan or
EURIBOR Loan, the last day of the Interest Period applicable to the Borrowing of
which such Loan is a part and, in the case of a LIBOR Borrowing, CDOR Borrowing
or EURIBOR Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period,
(c) with respect to any Swingline Loan, the day that such Swingline Loan is
required to be repaid and (d) the Maturity Date.

“Interest Period” means, with respect to any LIBOR Borrowing, CDOR Borrowing or
EURIBOR Borrowing, the period commencing on the date of such Borrowing and
ending on the numerically corresponding day in the calendar month that is one,
two, three or six months (or, with consent of each Lender, 12 months)
thereafter, as the Borrower Representative may elect; provided that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

“Interpolated Screen Rate” means, with respect to any LIBOR Borrowing
denominated in any currency (other than U.S. Dollars) or any EURIBOR Borrowing,
in each case for any Interest Period, a rate per annum which results from
interpolating on a linear basis between (a) the applicable Screen Rate for the
longest maturity for which a Screen Rate is available that is shorter than such
Interest Period and (b) the applicable Screen Rate for the shortest maturity for
which a Screen Rate is available that is longer than such Interest Period, in
each case as of the Specified Time on the Quotation Day.

“In-Transit Inventory” means Inventory of a Loan Party which is in transit with
a common carrier from vendors or suppliers of the Loan Party.

“Inventory” has the meaning assigned to such term in each Security Agreement, as
applicable.

“Investment Policy” means the investment policies of the Company as approved by
the Company’s board of directors and in effect from time to time.

“IRS” means the United States Internal Revenue Service.

“Issuing Bank” means (a) JPMCB, in its capacity as the issuer of Letters of
Credit hereunder, (b) PNC, (c) HSBC, and (d) any other Lender from time to time
designated by the

 

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Borrower as an Issuing Bank, with the consent of such Lender and upon notice to
the Administrative Agent, in which case the term “Issuing Bank” shall mean JPMCB
and each such Lender, individually or collectively as the context shall require
and their respective successors in such capacity as provided in Section 2.06(i).
The Issuing Bank may, in its discretion, arrange for one or more Letters of
Credit to be issued by its Affiliates, in which case the term “Issuing Bank”
shall include any such Affiliate with respect to Letters of Credit issued by
such Affiliate (it being agreed that such Issuing Bank shall, or shall cause
such Affiliate to, comply with the requirements of Section 2.06 with respect to
such Letters of Credit). At any time there is more than one Issuing Bank, all
singular references to the Issuing Bank shall mean any Issuing Bank, either
Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the applicable
Letter of Credit, or both (or all) Issuing Banks, as the context may require.

“ITA” means the Income Tax Act (Canada), as amended.

“Joinder Agreement” means a Joinder Agreement in substantially the form of
Exhibit F.

“JPMCB” means JPMorgan Chase Bank, N.A., a national banking association, and
shall include its branches, as applicable, and its successors.

“LC Collateral Account” has the meaning assigned to such term in
Section 2.06(j).

“LC Designated Currency” means (a) Canadian Dollars, (b) with respect to Letters
of Credit issued by JPMCB or its Affiliates in their capacity as Issuing Bank,
Pesos, or (c) any other lawful currency (other than U.S. Dollars) acceptable to
the Administrative Agent and the applicable Issuing Bank which are, in the case
of this clause (c), freely transferable and convertible into U.S. Dollars and
freely available to the applicable Issuing Bank.

“LC Disbursement” means any payment made by an Issuing Bank pursuant to a Letter
of Credit.

“LC Exposure” means, at any time, the sum of the Commercial LC Exposure and the
Standby LC Exposure.

“LC Fees” has the meaning assigned to such term in Section 2.12(b).

“LC Individual Sublimit” means, with respect to any Issuing Bank, an amount
equal to (a) with respect to Commercial Letters of Credit and Standby Letters of
Credit issued by the Issuing Banks as of the Effective Date, the respective
amounts set forth on the Commitment Schedule, and (b) with respect to Commercial
Letters of Credit and Standby Letters of Credit issued by any other Issuing
Bank, the amount agreed to by the Issuing Bank and the Borrower Representative
upon notice to the Administrative Agent, in each case, as such amount may be
increased for an Issuing Bank as agreed to by such Issuing Bank and the Borrower
Representative upon notice to the Administrative Agent.

“Lenders” means the Persons listed on the Commitment Schedule and any other
Person that shall have become a Lender hereunder pursuant to Section 2.09 or an
Assignment and Assumption, other than any such Person that ceases to be a Lender
hereunder pursuant to an

 

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Assignment and Assumption. Unless the context otherwise requires, the term
“Lenders” includes the Swingline Lender and the Issuing Bank.

“Letters of Credit” means the letters of credit issued pursuant to this
Agreement, and the term “Letter of Credit” means any one of them or each of them
singularly, as the context may require; for the avoidance of doubt, letters of
credit issued under a Specified L/C Facility shall not constitute Letters of
Credit.

“LIBO Rate” means, with respect to any LIBOR Borrowing denominated in any
currency for any Interest Period, the applicable Screen Rate as of the Specified
Time on the Quotation Day.

“LIBOR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBO Rate or the LIBO Rate.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

“Loan Documents” means, collectively, this Agreement, any promissory notes
issued pursuant to this Agreement, any Letter of Credit applications, the
Collateral Documents, the Loan Guaranty, each environmental indemnity agreement,
each Compliance Certificate, each fee letter, and all other agreements,
instruments, documents and certificates identified in Section 4.01, and each
certificate delivered from time to time in connection with the foregoing and all
other documents identified therein as a Loan Document, in each case executed and
delivered to, or in favor of, the Administrative Agent or any Lender and
including all consents, whether heretofore, now or hereafter executed by or on
behalf of any Loan Party, and delivered to the Administrative Agent or any
Lender in connection with this Agreement or the transactions contemplated hereby
(excluding any agreement entered into or in connection with any transaction
arising out of any Specified L/C Facility, any other Banking Services or any
Swap Agreement Obligations). Any reference in this Agreement or any other Loan
Document to a Loan Document shall include all amendments, restatements,
supplements or other modifications thereto, and shall refer to this Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.

“Loan Guaranty” means the U.S. Guaranty and the Canadian Guaranty.

“Loan Parties” means, collectively, the Borrowers and the Guarantors and any
other Person who becomes a party to this Agreement pursuant to a Joinder
Agreement and their successors and assigns, and the term “Loan Party” shall mean
any one of them or all of them individually, as the context may require.

“Loans” means the loans and advances made by the Lenders or the Administrative
Agent pursuant to this Agreement, including Swingline Loans, Overadvances and
Protective Advances.

 

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“Local Time” means (a) with respect to a Loan or Borrowing denominated in U.S.
Dollars or any Letter of Credit, New York City time, (b) with respect to a Loan
or Borrowing denominated in Sterling, Euros or an Alternative Currency, London
time and (c) with respect to a Borrowing denominated in Canadian Dollars,
Toronto time.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, or financial condition of the Company and its Restricted
Subsidiaries taken as a whole, (b) the ability of the Loan Parties, taken as a
whole, to perform any of their obligations under the Loan Documents, (c) the
Collateral, or the Administrative Agent’s Liens (on behalf of itself and other
Secured Parties) on the Collateral or the priority of such Liens, or (d) the
rights or remedies available to the Administrative Agent, the Issuing Banks or
the Lenders under any of the Loan Documents.

“Material Event” means, with respect to any Real Estate subject to a Mortgage
(a) any portion thereof (the loss of which shall have, in the Permitted
Discretion of the Administrative Agent, a material and adverse impact on the
use, operation or value of thereof) has been damaged by a Casualty or taken
through a Taking, either temporarily or permanently, or (b) any waste,
impairment, deterioration or abandonment of such Real Estate has occurred (which
shall have, in the Permitted Discretion of the Administrative Agent, a material
and adverse impact on the use, operation or value of thereof) other than as a
result of (i) ordinary wear and tear and (ii) depreciation in accordance with
GAAP.

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Company and its Restricted Subsidiaries in an aggregate principal
amount exceeding $40,000,000. For purposes of determining Material Indebtedness,
the “principal amount” of the obligations of the Company or any Restricted
Subsidiary in respect of any Swap Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Company or
such Restricted Subsidiary would be required to pay if such Swap Agreement were
terminated at such time.

“Maturity Date” means December 2, 2019, or any earlier date on which the
Commitments are reduced to zero or otherwise terminated pursuant to the terms
hereof.

“Maximum Credit Amount” means the lesser of (a) the Aggregate Commitments and
(b) the Aggregate Borrowing Base.

“Maximum Rate” has the meaning assigned to such term in Section 9.17.

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgage” means any mortgage, deed of trust or other agreement which conveys or
evidences a Lien in favor of the Administrative Agent, for the benefit of the
Administrative Agent and the other Secured Parties, on real property of a Loan
Party, including any amendment, restatement, modification or supplement thereto.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

 

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“Net Income” means, for any period, the consolidated net income (or loss) of the
Company and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP ; provided that there shall be excluded (a) extraordinary gains and
extraordinary losses, (b) the income (or deficit) of any Person accrued prior to
the date it becomes a Subsidiary or is merged into or consolidated with the
Company or any of its Subsidiaries, (c) the income (or deficit) of any Person
(other than a Subsidiary) in which the Company or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by the Company or such Subsidiary in the form of dividends or similar
distributions, (d) the undistributed earnings of any Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any contractual
obligation (other than under any Loan Document) or Requirement of Law applicable
to such Subsidiary and (e) any cancellation of Indebtedness income.

“Net Orderly Liquidation Value” means, with respect to Inventory of any Person,
the orderly liquidation value thereof as determined in a manner acceptable to
the Administrative Agent by an appraiser reasonably acceptable to the
Administrative Agent, net of all costs of liquidation thereof.

“Net Proceeds” means, with respect to any Casualty, Taking, sale, transfer,
disposition or similar event in respect of Collateral, (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a Casualty, insurance
proceeds and (iii) in the case of a Taking or similar event, condemnation awards
and similar payments, minus (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a Casualty or a Taking or similar proceeding), the amount of all payments
required to be made as a result of such event to repay Indebtedness (other than
Loans) that is secured by a Lien in such asset that is not Collateral or is
senior to the Liens securing the Secured Obligations or, other than with respect
to assets that are Collateral in which the Administrative Agent has a first
priority Lien, otherwise subject to mandatory prepayment as a result of such
event and (iii) the amount of all taxes paid (or reasonably estimated to be
payable) and the amount of any reserves established to fund contingent
liabilities reasonably estimated to be payable, in each case during the year
that such event occurred or the next succeeding year and that are directly
attributable to such event (as determined reasonably and in good faith by a
Financial Officer of the Borrower Representative).

“Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(d).

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

“Obligated Party” means a U.S. Obligated Party or a Canadian Obligated Party, as
the context requires.

“Obligations” means, individually and collectively as the content may require,
the U.S. Obligations and the Canadian Obligations.

 

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“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person, or (c) any obligation
or liability under an agreement for the use or possession of property (including
sale and leaseback transactions), in each case, creating obligations that do not
appear on the balance sheet of such Person but which, upon the application of
any insolvency or debtor relief laws to such Person, would be characterized as
the indebtedness of such Person (without regard to accounting treatment).

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

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.19).

“Overadvance” has the meaning assigned to such term in Section 2.05(b).

“Parent” means, with respect to any Lender, any Person as to which such Lender
is, directly or indirectly, a subsidiary.

“Participant” has the meaning assigned to such term in Section 9.04(c).

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

“Participating Member State” means any member state of the European Communities
that adopts or has adopted (and has not ceased to adopt) the euro as its lawful
currency in accordance with legislation of the European Community relating to
Economic and Monetary Union.

“Payment Conditions” means, at any applicable time of determination with respect
to a specified transaction, event, or payment, that (a) no Default or Event
Default then exists or would arise as a result of the entering into of such
transaction, the occurrence of such event, or the making of such payment, and
(b) (i) immediately prior to such transaction, the occurrence of such event, or
such payment and (ii) on a Pro Forma Basis and, with respect to the calculation
of Availability, at all times during the Pro Forma Period (Payment Conditions),
after giving effect

 

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to such transaction, the occurrence of such event, or payment and any incurrence
or repayment of Indebtedness in connection therewith, either clause (A) or
(B) below is satisfied:

(A) Availability is greater than the Applicable Trigger Amount (Level IV); or

(B) (I) Availability is greater than the Applicable Trigger Amount (Level III),
and (II) the Fixed Charge Coverage Ratio for the most recently ended four fiscal
quarter period for which financial statements have been, or have been required
to be, delivered to the Administrative Agent pursuant to Section 5.01(a) or
(b) is at least 1.1 to 1.0;

provided that, in each case, the Borrower Representative shall have delivered to
the Administrative Agent an updated Borrowing Base Certificate, a reasonably
detailed calculation of such Availability and projections for the Pro Forma
Period (Payment Conditions) with respect thereto, and, if applicable, the Fixed
Charge Coverage Ratio.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

“Permitted Acquisition” means any Acquisition by the Company or any Restricted
Subsidiary in a transaction that satisfies each of the following requirements:

(a) such Acquisition is not a hostile or contested acquisition;

(b) the business acquired in connection with such Acquisition is not engaged,
directly or indirectly, in any line of business other than the businesses in
which the Loan Parties are engaged on the Effective Date and any business
activities that are reasonably similar, related, complementary or incidental
thereto;

(c) both before and after giving effect to such Acquisition and the Loans (if
any) requested to be made in connection therewith, each of the representations
and warranties in the Loan Documents is true and correct in all material
respects (except that any representation or warranty which by its terms is made
as of a specified date shall be true and correct in all material respects only
as of such specified date, and any representation or warranty which is subject
to any materiality qualifier shall be required to be true and correct in all
respects) and no Default exists, will exist, or would result therefrom;

(d) other than with respect to Immaterial Acquisitions (as defined in clause
(j) below), as soon as available, but not less than 15 days prior to such
Acquisition (or such shorter period as the Administrative Agent may agree), the
Borrower Representative has provided the Administrative Agent (i) notice of such
Acquisition and (ii) a copy of all business and financial information reasonably
requested by the Administrative Agent;

(e) if the Accounts, Credit Card Accounts or Inventory acquired in connection
with such Acquisition are proposed to be included in the determination of the
Borrowing Base, the Administrative Agent shall have conducted an audit and field
examination or appraisal of such Accounts, Credit Card Accounts and Inventory,
the results of which shall be satisfactory to the Administrative Agent;

 

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(f) if such Acquisition is an acquisition of Equity Interests, such Acquisition
will not result in any violation of Regulation U;

(g) if such Acquisition involves a merger or a consolidation involving a
Borrower or any other Loan Party, such Borrower or such Loan Party, as
applicable, shall be the surviving entity;

(h) no Loan Party shall, as a result of or in connection with any such
Acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, pension or other matters) that could
reasonably be expected to have a Material Adverse Effect; provided, however,
that if any pension liabilities are assumed or incurred under any Canadian
Pension Plan, prior written notice of same shall be provided to the
Administrative Agent;

(i) other than with respect to Immaterial Acquisitions (as defined in clause
(j) below), the Borrower Representative shall have delivered to the
Administrative Agent the final executed material documentation relating to such
Acquisition within 10 days following the consummation thereof; and

(j) either (i) the Loan Parties shall have satisfied the Payment Conditions
before and immediately after giving effect to such Acquisition or (ii) the total
consideration paid or payable (including, without limitation, any earn-outs
(calculated, for purposes of this definition only, at the time of incurrence as
the aggregate amount reasonably expected to be paid by any Loan Party or its
Subsidiaries in connection with such earn-out, as determined by such Loan Party
in its reasonable business judgment) with respect to, and all Indebtedness and
other liabilities assumed in connection with, such Acquisition shall not exceed
$5,000,000 (Acquisitions described in this clause (j)(ii), “Immaterial
Acquisitions”).

“Permitted Discretion” means a determination made by the Administrative Agent in
the exercise of its reasonable (from the perspective of a secured asset-based
lender) credit judgment, exercised in good faith in accordance with customary
business practices in the retail industry.

“Permitted Encumbrances” means:

(a) Liens imposed by law for Taxes that are not yet due or are being contested
in compliance with Section 5.04;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law (other than any Lien imposed pursuant to
Section 430(k) of the Code or Section 303(k) of ERISA or a violation of
Section 436 of the Code), arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;

(c) pledges and deposits made (i) in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance, and other social
security laws or regulations, and (ii) in respect of letters of credit, bank
guarantees or similar instruments issued for the account of Company or any
Subsidiary in the ordinary course of business supporting obligations of the type
set forth in clause (i) above;

 

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(d) deposits and pledges to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;

(e) judgment Liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII;

(f) (i) easements, zoning restrictions, rights-of-way, site plan agreements,
development agreements, cross-easement or reciprocal agreements, and similar
encumbrances on real property (including, in the case of any Canadian
Subsidiary, the reservations, limitations, provisos and conditions expressed in
any original grants from the Crown) imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere with the
ordinary conduct of business of any Borrower or any Subsidiary or the ordinary
operation of such real property or (ii) title defects or irregularities with
respect to Real Estate which are of a minor nature and which in the aggregate do
not materially detract from the value of the affected property or interfere with
the ordinary conduct of business of any Borrower or any Subsidiary or the
ordinary operation of such real property;

(g) Liens arising from precautionary UCC or PPSA financing statement filings (or
similar filings under applicable law) regarding “true” operating leases or, to
the extent permitted under the Loan Documents, the consignment of goods to a
Loan Party;

(h) Liens representing any interest or title of a licensor, lessor or
sublicensor or sublessor, or a licensee, lessee or sublicensee or sublessee, in
the property subject to any lease (other than Capital Lease Obligations),
license or sublicense or concession agreement permitted by this Agreement;

(i) Liens arising in the ordinary course of business in favor of customs
brokers, custom and forwarding agents and similar Persons in respect of imported
goods and merchandise in the custody of such Persons;

(j) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods;

(k) Liens or rights of setoff against credit balances of the Company or any
Restricted Subsidiary with credit card issuers or credit card processors to
secure obligations of the Company or such Restricted Subsidiary, as the case may
be, to any such credit card issuer or credit card processor incurred in the
ordinary course of business as a result of fees and chargebacks;

(l) Bankers’ liens, rights of setoff and other similar Liens in the ordinary
course of business in favor of a bank or institution with which accounts or
deposits are maintained, liens in favor of collecting banks arising under the
UCC (or similar statutes or equivalents thereof under foreign jurisdictions,
including Canada) in the ordinary course of business, and other Liens that are
contractual rights of set-off;

 

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(m) possessory Liens in favor of brokers and dealers arising in connection with
the acquisition or disposition of Investments owned as of the Effective Date and
Cash Equivalents, provided that such liens (i) attach only to such Investments
and (ii) secure only obligations incurred in the ordinary course and arising in
connection with the acquisition or disposition of such Investments and not any
obligation in connection with margin financing;

(n) statutory Liens of landlords and lessors in respect of rent not past due
more than 60 days unless being contested in good faith pursuant to the
provisions of Section 5.04 hereof, and customary restrictions on subletting and
assignments thereof;

(o) inchoate or statutory Liens that are related to obligations incurred in the
ordinary course of business and not due or delinquent;

(p) deposits in connection with sweepstakes offerings conducted in the ordinary
course of business and consistent with past practice;

(q) Liens in favor of consignors of inventory and proceeds (other than Accounts
or Credit Card Accounts) thereof consigned by such consignors to a Borrower or a
Subsidiary thereof, in each case granted in the ordinary course of business and
with prior written consent of the Administrative Agent, which consent may, at
the Administrative Agent’s Permitted Discretion, be conditioned upon the
execution of an intercreditor agreement between the consignor and the
Administrative Agent;

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

“Permitted Term Loan Indebtedness” means Indebtedness in the form of term loans;
provided that (a) immediately before and after the issuance or incurrence
thereof, no Default or Event of Default shall have occurred and be continuing;
(b) if guaranteed, such Indebtedness shall not be guaranteed by any Person other
than the Loan Parties; (c) if such Indebtedness is secured, the Administrative
Agent and a representative acting on behalf of the holders of such Indebtedness
shall have entered into an Intercreditor Agreement; (d) if such Indebtedness is
secured by Accounts, Credit Card Accounts, or Inventory or assets related
thereto, then the Collateral hereunder and the collateral securing such
Indebtedness shall be substantially identical, with the priorities therefor set
forth in the Intercreditor Agreement; (e) such Indebtedness does not have a
scheduled maturity date prior to the date that is 91 days after the final
Maturity Date and does not contain scheduled payments (other than customary
excess cash flow prepayments) in any year in excess of 5% of the original
principal amount of such Indebtedness; (f) either (i) the Secured Leverage Ratio
before and, on a Pro Forma Basis, after giving effect to the incurrence of such
Indebtedness does not exceed 1.50 to 1.00 or (ii) after giving effect to the
incurrence of such Indebtedness the principal amount of all Permitted Term Loan
Indebtedness outstanding does not exceed $650,000,000 in the aggregate; (g) the
Payment Conditions are satisfied before and after giving effect to the
incurrence of such Indebtedness and the removal of the Real Property Component
of the Borrowing Base (if applicable); and (h) the Company shall have delivered
to the Administrative Agent a certificate of a Financial Officer, including
reasonably detailed calculations, demonstrating compliance with the conditions
above.

 

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“Person” means any natural person, corporation, limited liability company,
unlimited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity.

“Pesos” means the lawful money of the Estados Unidos Mexicanos (United Mexican
States).

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which any Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“PNC” means PNC Bank, National Association.

“PPSA” means the Personal Property Security Act (Ontario) or such other
applicable legislation in effect from time to time in such other jurisdiction in
Canada (including the Civil Code (Quebec)) for purposes of the provisions hereof
relating to perfection, effect of perfection or non-perfection or priority.

“Prime Rate” means (a) the rate of interest per annum publicly announced from
time to time by JPMCB as its prime rate in effect at its principal offices in
New York City, and (b) for the purpose of U.S. Dollar denominated Canadian
Loans, the rate of interest per annum publicly announced from time to time by
JPMorgan Chase Bank, N.A., Toronto Branch, as its U.S. “base rate” for
U.S. Dollar denominated commercial loans. Each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

“Prior Claims” means all liabilities and obligations of any Canadian Loan Party
secured by any Liens, choate or inchoate, which rank or are capable of ranking
in priority to the Liens granted to the Administrative Agent to secure the
Canadian Secured Obligations, including, (a) any such amounts due and not paid
for wages or vacation pay (including amounts protected by the Wage Earner
Protection Program Act (Canada)), amounts due and not paid under any legislation
relating to workers’ compensation or to employment insurance, all amounts
deducted or withheld and not paid and remitted when due with respect to Taxes
including amounts currently or past due and not paid for realty, municipal or
similar taxes (to the extent impacting personal or moveable property); and
(b) (i) all amounts currently or past due and not yet contributed, remitted or
paid to or under any Canadian Pension Plan or under the Canada Pension Plan, the
Quebec Pension Plan, the Pension Benefits Act (Ontario) or any similar
legislation, and (ii) any solvency deficiency or wind-up deficiency with respect
to Canadian Defined Benefit Plans that are registered in Ontario.

“Pro Forma Basis” means, as of any day of determination and for the calculation
of a specified financial ratio or financial term, the calculation thereof after
giving effect on a pro forma basis to the occurrence of any applicable Pro Forma
Event, in each case, using, for purposes of making such computation, the
consolidated financial statements of the Company and its Subsidiaries (and, to
the extent applicable, the historical financial statements of any entities or
assets acquired or to be acquired, or disposed or to be disposed), which shall
be reformulated as

 

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if such Pro Forma Event (and, in the case of any pro forma computations made
hereunder to determine whether such Pro Forma Event is permitted to be
consummated hereunder, to any other Pro Forma Event consummated since the first
day of the period covered by any component of such pro forma computation and on
or prior to the date of such computation), and any Indebtedness or other
liabilities incurred in connection with any such Pro Forma Event, had been
consummated and incurred at the beginning of such period. If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the
interest on such Indebtedness shall be calculated as if the rate in effect on
the date of determination had been the applicable rate for the entire period
(taking into account any Swap Agreement applicable to such Indebtedness if such
Swap Agreement has a remaining term in excess of 12 months).

“Pro Forma Event” means any event that requires the satisfaction of the Payment
Conditions to be permitted under this Agreement.

“Pro Forma Period (Payment Conditions)” means the period of 12 consecutive
fiscal months of the Company following date of the applicable transaction,
event, or payment made or occurring in reliance on the satisfaction of the
Payment Conditions.

“Proceeds of Crime Act” means the Proceeds of Crime (Money Laundering) and
Terrorist Finance Act (Canada), as amended.

“Projections” has the meaning assigned to such term in Section 5.01(f).

“Protective Advance” has the meaning assigned to such term in Section 2.04.

“Public-Sider” means any representative of a Lender that does not want to
receive material non-public information within the meaning of federal and state
securities laws.

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan
Party that has assets exceeding $10,000,000 at the time the relevant Loan
Guaranty or grant of the relevant security interest becomes or would become
effective with respect to such Swap Obligation or such other person as
constitutes an “eligible contract participant” under the Commodity Exchange Act
or any regulations promulgated thereunder and can cause another person to
qualify as an “eligible contract participant” at such time by entering into a
keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Qualified Counterparties” means each Administrative Agent, each Lender and each
Affiliate of a Lender.

“Quotation Day” means (a) with respect to any currency (other than Sterling or
Canadian Dollars) for any Interest Period, the day two (2) Business Days prior
to the first day of such Interest Period and (b) with respect to Sterling for
any Interest Period, the first day of such Interest Period, in each case unless
market practice differs for loans such as the applicable Loans priced by
reference to rates quoted in the Relevant Interbank Market, in which case the
Quotation Day for such currency shall be determined by the Administrative Agent
in accordance with market practice for such loans priced by reference to rates
quoted in the Relevant Interbank Market (and if quotations would normally be
given by leading banks for such loans priced by

 

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reference to rates quoted in the Relevant Interbank Market on more than one day,
the Quotation Day shall be the last of those days).

“Real Estate” shall mean all real property owned or leased by the Company and
its Restricted Subsidiaries.

“Real Property Component” means at any time of determination, with respect to
each parcel of Eligible Real Property, an amount equal to the amount for such
parcel set forth on Schedule 1.01(a) as of the time of such determination.

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender
and (c) any Issuing Bank, or any combination thereof (as the context requires).

“Refinance Indebtedness” has the meaning assigned to such term in
Section 6.01(f).

“Register” has the meaning assigned to such term in Section 9.04.

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, partners, members, trustees,
employees, agents, administrators, managers, representatives and advisors of
such Person and such Person’s Affiliates.

“Release” means any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, disposing or
dumping of any Hazardous Material into the environment.

“Relevant Interbank Market” means (a) with respect to any currency (other than
Euros or Canadian Dollars), the London interbank market, (b) with respect to
Euros, the European interbank market and (c) with respect to Canadian Dollars,
the Toronto interbank market.

“Rentals” means, for any period, for the Company and its Subsidiaries calculated
on a consolidated basis in accordance with GAAP, minimum rent, plus contingent
rent, plus rent for office space, distribution facilities, information
technology and office equipment, in each case as presented in the Company’s
public filings on form 10-K or 10-Q.

“Rent Liability” means, as of any date, the result of six (6) multiplied by the
aggregate Rentals for the most recently ended 12 consecutive month period,
calculated on a consolidated basis for the Company and its Subsidiaries for such
period in accordance with GAAP.

“Rent Reserve” means, with respect to any store, warehouse distribution center,
regional distribution center or depot where any Inventory subject to Liens
arising by operation of law is located and no Collateral Access Agreement for
such location has been obtained, a reserve equal to three (3) months’ rent at
such store, warehouse distribution center, regional distribution center or
depot.

“Report” means reports prepared by the Administrative Agent or another Person
showing the results of appraisals, field examinations or audits pertaining to
the assets of the Loan Parties from information furnished by or on behalf of the
Borrowers, after the Administrative Agent has

 

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exercised its rights of inspection pursuant to this Agreement, which Reports may
be distributed to the Lenders by the Administrative Agent.

“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders)
having Revolving Exposures and unused Commitments representing more than 50% of
the sum of the Aggregate Credit Exposure and unused Commitments at such time.

“Requirement of Law” means, with respect to any Person, (a) the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person and (b) any statute, law
(including common law), treaty, rule, regulation, code, ordinance, order,
decree, writ, judgment, injunction or determination of any arbitrator or court
or other Governmental Authority (including Environmental Laws), in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

“Reserves” means (a) without duplication of any other Reserves or items that are
otherwise addressed through eligibility criteria, any reserves which the
Administrative Agent deems necessary, in its Permitted Discretion, (i) to
reflect impediments to the Administrative Agent’s ability to realize upon the
Collateral, (ii) to reflect claims and liabilities that the Administrative Agent
determines will need to be satisfied in connection with the realization upon the
Collateral or (ii) to reflect criteria, events, conditions, contingencies or
risks which adversely affect any component of the Borrowing Base, or the assets,
business, financial performance or financial condition of any Loan Party,
including, for example, reserves for accrued and unpaid interest on the
Obligations, Rent Reserves, Gift Card Reserves, reserves for loyalty programs,
reserves for consignee’s, warehousemen’s, mortgagee’s and bailee’s charges,
reserves for dilution of Accounts or Credit Card Accounts, reserves for layaway
deposits, reserves for customs charges and shipping charges and other foreign
landing costs related to any Inventory in transit, reserves for expenses
associated with merchandise repurpose processing, reserves for contingent
liabilities of any Loan Party, reserves for uninsured losses of any Loan Party,
reserves for uninsured, underinsured, un-indemnified or under-indemnified
liabilities or potential liabilities with respect to any litigation and reserves
for taxes, fees, assessments, and other governmental charges, reserves for Prior
Claims, and reserves in connection with Material Events, and (b) Banking
Services/Swap Reserves.

The Administrative Agent may, in its Permitted Discretion and with no less than
four (4) Business Days’ prior written notice to the Borrower Representative
(other than during a Dominion Period in which case notice shall not be
required), adjust Reserves, provided that, if after the delivery of such notice
the Borrower Representative notifies the Administrative Agent that it desires to
discuss the Reserves described therein, then the Administrative Agent will
discuss such Reserves with the Borrower Representative, provided that nothing in
this proviso shall obligate the Administrative Agent to eliminate, reduce, or
delay any such Reserves.

“Responsible Officer” means the chief executive officer, president, any vice
president, any Financial Officer, or any corporate secretary. Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party
shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of

 

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such Loan Party in their capacity as an officer of such Loan Party and not in
any individual capacity.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Company or any Restricted Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests in the Company or Restricted Subsidiary
or any option, warrant or other right to acquire any such Equity Interests in
the Company or Restricted Subsidiary.

“Restricted Subsidiary” means any Subsidiary of the Company other than an
Unrestricted Subsidiary.

“Revaluation Date” means (a) with respect to any Loan denominated in Canadian
Dollars, Sterling, Euros or any Alternative Currency, each of the following:
(i) each date of a Borrowing, (ii) each date of a continuation of such Loan
pursuant to Section 2.08, (iii) the date any Borrowing Base Certificate is
delivered, and (iv) such additional dates as the Administrative Agent shall
determine or the Required Lenders shall require, and (b) with respect to any
Letter of Credit denominated in any LC Designated Currency, each of the
following: (i) each date of issuance of such Letter of Credit, (ii) each date of
an amendment of such Letter of Credit having the effect of increasing the amount
thereof (solely with respect to the increased amount), (iii) each date of any
payment by the applicable Issuing Bank under such Letter of Credit, (iv) the
date any Borrowing Base Certificate is delivered and (v) such additional dates
as the Administrative Agent or the applicable Issuing Bank shall determine or
the Required Lenders shall require.

“Revolving Exposure” means, with respect to any Lender at any time, the sum of
(a) the outstanding principal amount of such Lender’s Revolving Loans, LC
Exposure and Swingline Exposure at such time, plus (b) an amount equal to its
Applicable Percentage of the aggregate principal amount of Overadvances and
Protective Advances outstanding at such time.

“Revolving Exposure Limitations” has the meaning set forth in Section 2.01.

“Revolving Loan” means a Loan made pursuant to Section 2.01(a).

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business.

“Sale and Leaseback Transaction” has the meaning assigned to such term in
Section 6.06.

“Sanctioned Country” means, at any time, a country or territory which is the
subject or target of any Sanctions.

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State, or by the United Nations Security Council, the European Union or any EU
member state, (b) a Canadian Blocked Person, (c) any

 

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Person operating, organized or resident in a Sanctioned Country or (d) any
Person controlled by any such Person.

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time (a) by the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, (b) by the United
Nations Security Council, the European Union or Her Majesty’s Treasury of the
United Kingdom, or (c) by a government of Canada pursuant to Canadian Economic
Sanctions and Export Control Laws.

“Screen Rate” means (a) in respect of the LIBO Rate for any Interest Period, a
rate per annum equal to the London interbank offered rate as administered by the
ICE Benchmark Administration (or any other Person that takes over the
administration of such rate) for deposits in the applicable currency (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period as displayed on the Reuters screen page that displays such
rate (currently LIBOR01 or LIBOR02) (or, in the event such rate does not appear
on a page of the Reuters screen, on the appropriate page of such other
information service that publishes such rate as shall be selected by the
Administrative Agent from time to time in its reasonable discretion), and (b) in
respect of the EURIBO Rate for any Interest Period, the percentage per annum
determined by the Banking Federation of the European Union for such Interest
Period as set forth on the Reuters screen page that displays such rate
(currently EURIBOR01) (or, in the event such rate does not appear on a page of
the Reuters screen, on the appropriate page of such other information service
that publishes such rate as shall be selected by the Administrative Agent from
time to time in its reasonable discretion); provided that if the Screen Rate,
determined as provided above, would be less than zero, the Screen Rate shall for
all purposes of this Agreement be zero. If, as to any currency, no Screen Rate
shall be available for a particular Interest Period but Screen Rates shall be
available for maturities both longer and shorter than such Interest Period, than
the Screen Rate for such Interest Period shall be the Interpolated Screen Rate.

“SEC” means the Securities and Exchange Commission of the U.S.

“Secured Leverage Ratio” means, at any date, the ratio of (a) Total Funded
Indebtedness on such date that is secured by a Lien on the assets of the Company
or any of its Subsidiaries to (b) EBITDA for the period of four (4) consecutive
fiscal quarters ended on such date (or, if such date is not the last day of a
fiscal quarter, ended on the last day of the fiscal quarter most recently ended
prior to such date).

“Secured Obligations” means all U.S. Secured Obligations and Canadian Secured
Obligations.

“Secured Parties” means (a) the Administrative Agent, (b) the Lenders, (c) each
Issuing Bank, (d) Qualified Counterparties to whom any Banking Services
Obligations are owing, (e) Qualified Counterparties to whom Swap Agreement
Obligations constituting Secured Obligations hereunder are owing, (f) the
beneficiaries of each indemnification obligation undertaken by any Loan Party
under any Loan Document, and (g) the successors and assigns of each of the
foregoing.

 

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“Security Agreement” means and refers to each of the U.S. Security Agreement and
the Canadian Security Agreement.

“Settlement” has the meaning assigned to such term in Section 2.05(d).

“Settlement Date” has the meaning assigned to such term in Section 2.05(d).

“Specified Environmental Order” means that certain Consent Order and Agreement
letter dated April 16, 1998 between the Commonwealth of Pennsylvania, Department
of Environmental Protection and the Urban Redevelopment Authority of Pittsburgh.

“Specified L/C Facility” means (a) the Third Amended and Restated Continuing
Letter of Credit Agreement dated September 15, 2014 by and among The Hongkong
and Shanghai Banking Corporation Limited and the Company and certain of its
Subsidiaries, as amended, restated, supplemented or otherwise modified from time
to time, together with any refinancings, substitutions and replacements thereof
so long as the issuing bank thereunder is a Lender or an Affiliate of a Lender
hereunder, and (b) the Commercial Letter of Credit Agreement dated May 25, 2011
by the Company in favor of Wells Fargo Bank, National Association as amended,
restated, supplemented or otherwise modified from time to time, together with
any refinancings, substitutions and replacements thereof so long as the issuing
bank thereunder is a Lender or an Affiliate of a Lender hereunder.

“Specified L/C Obligations” means all obligations and liabilities of any Loan
Party or any Subsidiary under any Specified L/C Facility with respect to
commercial letters of credit issued thereunder.

“Specified Time” means (a) with respect to the LIBO Rate, 11:00 a.m., London
time and (b) with respect to the EURIBO Rate, 11:00 a.m., Brussels time.

“Spot Rate” means, on any date, as determined by the Administrative Agent, the
spot selling rate posted by Reuters on its website for the sale of the
applicable currency for U.S. Dollars at approximately 11:00 a.m., New York City
time, on such date (the “Applicable Quotation Date”); provided, that if, for any
reason, no such spot rate is being quoted, the spot selling rate shall be
determined by reference to such publicly available service for displaying
exchange rates as may be reasonably selected by the Administrative Agent, or, in
the event no such service is selected, such spot selling rate shall instead be
the rate reasonably determined by the Administrative Agent as the spot rate of
exchange in the market where its foreign currency exchange operations in respect
of the applicable currency are then being conducted, at or about 11:00 a.m., New
York City time, on the Applicable Quotation Date for the purchase of the
relevant currency for delivery two Business Days later.

“Standby LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
Dollar Amount of all standby Letters of Credit outstanding at such time plus
(b) the aggregate Dollar Amount of all LC Disbursements relating to standby
Letters of Credit that have not yet been reimbursed by or on behalf of the
Borrowers at such time. The Standby LC Exposure of an Issuing Bank (in its
capacity as such) shall be the Standby Exposure in respect of standby Letters of
Credit issued by such Issuing Bank. The Standby LC Exposure of any Lender at any
time shall be its Applicable Percentage of the aggregate Standby LC Exposure at
such time.

 

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“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentage (including any
marginal, special, emergency or supplemental reserves) established by the Board
to which the Administrative Agent is subject with respect to the Adjusted LIBO
Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D of the Board. LIBOR Loans
shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D of the Board or any comparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.

“Sterling” or “£” means the lawful currency of the United Kingdom.

“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of the Secured Obligations to
the written satisfaction of the Administrative Agent.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

“Subsidiary” means any direct or indirect subsidiary of the Company or a Loan
Party, as applicable.

“Swap Agreement” means any agreement with respect to any swap, forward, spot,
future, credit default or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrowers or the Subsidiaries shall be a Swap Agreement.

“Swap Agreement Obligations” means any and all obligations of the Loan Parties
and their Subsidiaries, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (a) any
and all Swap Agreements permitted hereunder with a

 

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Lender or an Affiliate of a Lender, and (b) any and all cancellations, buy
backs, reversals, terminations or assignments of any such Swap Agreement
transaction.

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of section 1a(47) of the Commodity Exchange Act or any rules
or regulations promulgated thereunder.

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the aggregate Swingline
Exposure at such time.

“Swingline Lender” means JPMCB, in its capacity as lender of Swingline Loans
hereunder and shall include any foreign branch or Affiliate of JPMCB who makes
Swingline Loans denominated in Canadian Dollars. Any consent required of the
Administrative Agent or the Issuing Bank shall be deemed to be required of the
Swingline Lender and any consent given by JPMCB in its capacity as
Administrative Agent or Issuing Bank shall be deemed given by JPMCB in its
capacity as Swingline Lender.

“Swingline Loan” has the meaning assigned to such term in Section 2.05(a).

“Taking” has the meaning assigned to such term in Section 5.11.

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, withholdings, (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

“Termination Event” means (a) the withdrawal of a Canadian Borrower or any other
Canadian Subsidiary from a Canadian Defined Benefit Plan which is a Canadian
MEPP during a plan year; or (b) the filing of a notice of interest to terminate
in whole or in part a Canadian Defined Benefit Plan or the filing of an
amendment with the applicable Governmental Authority which terminates a Canadian
Defined Benefit Plan, in whole or in part, or the treatment of an amendment as a
termination or partial termination of a Canadian Defined Benefit Plan; or
(c) the institution of proceedings by any Governmental Authority to terminate a
Canadian Defined Benefit Plan in whole or in part or have a replacement
administrator or trustee appointed to administer a Canadian Defined Benefit
Plan; or (d) any other event or condition or declaration or application which
might constitute grounds for the termination or winding up of a Canadian Defined
Benefit Plan, in whole or in part, or the appointment by any Governmental
Authority of a replacement administrator or trustee to administer a Canadian
Defined Benefit Plan.

“Total Assets” means, at any date of determination, the consolidated total
assets of the Company and its Subsidiaries as of the last day of the most recent
fiscal quarter of the Company for which financial statements have been delivered
pursuant to Section 5.01(a) or (b) as adjusted to give effect to any Pro Forma
Event occurring since such date.

“Total Funded Indebtedness” means, as of any date, with respect to the Company
and its Subsidiaries, determined on a consolidated basis, without duplication
(a) all obligations of such

 

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Persons for borrowed money, (b) all obligations of such Persons evidenced by
bonds, debentures, notes or similar debt instruments, (c) all obligations of
such Persons upon which interest charges are customarily paid, (d) the aggregate
amount of Capital Lease Obligations and Off-Balance Sheet Liability of such
Persons outstanding as of such date, (e) the aggregate obligations of such
Persons as an account party in respect of letters of credit or letters of
guaranty to the extent such letter of credit or letter of guaranty supports
Indebtedness, (f) all obligations of such Persons with respect to Disqualified
Stock, and (g) without duplication, all Guarantees of any of the foregoing. For
purposes of this definition, interest paid-in-kind or capitalized (including
accreted amounts thereon) shall be deemed Total Funded Indebtedness.

“Trademark” has the meaning assigned to such term in each Security Agreement, as
applicable.

“Transactions” means the execution, delivery and performance by the Loan Parties
of this Agreement and the other Loan Documents, the borrowing of Loans and other
credit extensions, the use of the proceeds thereof and the issuance of Letters
of Credit hereunder.

“Treaty on the European Union” means the Treaty of Rome of March 25, 1957, as
amended by the Single European Act 1986 and the Maastricht Treaty (signed
February 7, 1992), as amended from time to time.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate, the LIBO Rate, the CDOR Rate,
the EURIBO Rate, the Alternate Base Rate or the Canadian Prime Rate.

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or in any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.

“Unfunded Pension Liability” means, at a point in time, the excess of a Canadian
Defined Benefit Plan’s benefit liabilities, over the current value of that
Canadian Defined Benefit Plan’s assets, determined in accordance with the
assumptions used for funding the Canadian Defined Benefit Plan pursuant to
applicable laws for the applicable plan year and includes any unfunded liability
or solvency deficiency as determined for the purposes of the Pension Benefits
Act (Ontario) or other equivalent provincial legislation.

“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.

“Unrestricted Subsidiary” means any Subsidiary of the Company that is identified
as an Unrestricted Subsidiary on Schedule 3.15 as of the Effective Date and any
other Subsidiary designated by the Company as an Unrestricted Subsidiary
pursuant to Section 5.15 subsequent to the Effective Date; provided that no
Subsidiary may be, or may be designated as an Unrestricted

 

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Subsidiary unless (a) it is a CFC or CFC Holdco (other than any CFC or CFC
Holdco that is a Canadian Subsidiary) or (b) it does not have any material
liabilities, is not engaged in any business or commercial activities, does not
own any assets with a book value of more than $2,000,000 in the aggregate, it is
not obligated or liable, directly or indirectly, contingently or otherwise, in
respect of any Indebtedness in any material amount, and none of its assets are
included in the calculation of Borrowing Base immediately prior to such
Subsidiary’s being designated as an Unrestricted Subsidiary.

“U.S.” means the United States of America.

“U.S. Borrowers” means, individually and collectively as the context may
require, the Company and each U.S. Subsidiary Borrower.

“U.S. Borrowing Base” means, at any time, the sum of:

(a) the amount of Eligible Cash/Cash Equivalents of the U.S. Loan Parties at
such time; plus

(b) the product of (i) 85% multiplied by (ii) the Eligible Trade Accounts of the
U.S. Loan Parties at such time, plus

(c) the product of (i) 90% multiplied by (ii) the Eligible Credit Card Accounts
of the U.S. Loan Parties at such time, plus

(d) the product of 90% multiplied by the Net Orderly Liquidation Value
percentage identified in the most recent inventory appraisal ordered and
received by the Administrative Agent multiplied by the U.S. Loan Parties’
Eligible Inventory (other than Eligible LC Inventory and Eligible In-Transit
Inventory) at such time, valued at the lower of average cost or market,
determined utilizing the retail method, as appropriate, or such other method
approved in writing by the Administrative Agent at the request of the Borrower
Representative (the amount resulting from the foregoing calculation, the “U.S.
Inventory Availability”), plus

(e) the lesser of (i) ten percent (10%) of U.S. Inventory Availability or
(ii) (1) the product of 90% multiplied by the Net Orderly Liquidation Value
percentage identified in the most recent inventory appraisal ordered and
received by the Administrative Agent multiplied by the U.S. Loan Parties’
Eligible In-Transit Inventory and Eligible LC Inventory at such time, valued at
the lower of average cost or market, determined utilizing the retail method, as
appropriate, or such other method approved in writing by the Administrative
Agent at the request of the Borrower Representative minus (2) Reserves for
in-transit delivery, plus

(f) the Real Property Component at such time, minus

(g) applicable Reserves.

Subject to the provisions hereof expressly permitting the Administrative Agent
to adjust Reserves, the U.S. Borrowing Base at any time shall be determined by
reference to the most recent Borrowing Base Certificate delivered to the
Administrative Agent pursuant to Section

 

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5.01(g) (or, prior to the first such delivery, delivered to the Administrative
Agent pursuant to Section 4.01(m)).

“U.S. Collateral” means any and all property owned, leased or operated by a U.S.
Loan Party covered by the Collateral Documents and any and all other property of
any U.S. Loan Party, now existing or hereafter acquired, that may at any time be
or become subject to a security interest or Lien in favor of the Administrative
Agent to secure the Secured Obligations.

“U.S. Credit Exposure” means, as to any Lender at any time, the sum of (a) such
Lender’s U.S. Revolving Exposure plus (b) such Lender’s Applicable Percentage of
the aggregate amount of U.S. Overadvances and U.S. Protective Advances
outstanding.

“U.S. Dollar” or “$” means the lawful money of the United States of America.

“U.S. Guaranteed Obligations” has the meaning set forth in Section 10.01.

“U.S. Guarantor” means a means each Domestic Subsidiary of a Borrower that is
listed on the signature pages hereto as a Guarantor or that becomes a party
hereto as a Guarantor pursuant to Section 5.14, in each case, until such
Subsidiary’s U.S. Guaranty is released in accordance herewith.

“U.S. Guaranty” means Article X of this Agreement.

“U.S. Loan Parties” means the U.S. Borrowers and the U.S. Guarantors.

“U.S. Obligated Party” has the meaning set forth in Section 10.02.

“U.S. Obligations” means, with respect to the U.S. Loan Parties, all unpaid
principal of and accrued and unpaid interest on the Loans to the U.S. Borrowers,
all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements
(including pursuant to Section 2.06(a)), indemnities and other obligations of
the U.S. Loan Parties to the Lenders or to any Lender, the Administrative Agent,
any Issuing Bank or any indemnified party arising under the Loan Documents
(including including guarantee obligations and interest, costs, fees and other
amounts accruing during the pendency of any proceeding under any Insolvency
Laws, regardless of whether allowed or allowable in such proceeding) but, in
each case, excluding any obligations of the U.S. Parties in respect of the
Canadian Obligations.

“U.S. Overadvance” means any Overadvance made to or for the benefit of a U.S.
Borrower.

“U.S. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

“U.S. Protective Advance” means a Protective Advance made to, on behalf of or in
respect of a U.S. Borrower.

“U.S. Revolving Exposure” means, with respect to any Lender at any time, the sum
of (a) the outstanding principal amount of such Lender’s U.S. Revolving Loans,
LC Exposure and U.S.

 

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Swingline Exposure at such time, plus (b) an amount equal to its Applicable
Percentage of the aggregate principal amount of U.S. Overadvances and U.S.
Protective Advances outstanding at such time.

“U.S. Revolving Loan” means a Revolving Loan made by the Lenders to any U.S.
Borrower.

“U.S. Secured Obligations” means all U.S. Obligations, together with all
(a) Banking Services Obligations of the U.S. Borrowers or any Subsidiary (other
than a Canadian Loan Party) of a U.S. Borrower; and (b) Swap Agreement
Obligations of the U.S. Borrowers or any Subsidiary (other than a Canadian Loan
Party) of a U.S. Borrower; provided that Excluded Swap Obligations with respect
to any Loan Party shall not be U.S. Secured Obligations of such Loan Party.

“U.S. Security Agreement” means that certain Security Agreement, dated as of the
Effective Date, among the U.S. Loan Parties and the Administrative Agent, and,
as the context requires, any other pledge or security agreement entered into,
after the Effective Date by any other U.S. Loan Party (as required by this
Agreement or any other Loan Document), or any other Person, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

“U.S. Subsidiary Borrowers” means, collectively (i) each Domestic Subsidiary of
the Company that is a party to this Agreement as a “Borrower” on the Effective
Date and (ii) each Domestic Subsidiary of the Company that becomes a party to
this Agreement as a “Borrower” following the Effective Date pursuant to
Section 5.14, in each case, until such time as such Domestic Subsidiary is
released from its obligations under the Loan Documents in accordance with this
Agreement.

“U.S. Swingline Exposure” means, at any time, the sum of the aggregate principal
amount of all outstanding U.S. Swingline Loans at such time. The U.S. Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the
total U.S. Swingline Exposure at such time.

“U.S. Swingline Loan” means a Swingline Loan made to a U.S. Borrower.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.17(f)(ii)(B)(3).

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans and Borrowings may be classified and referred to by Class
(e.g., a “U.S.

 

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Revolving Loan” or a “U.S. Revolving Borrowing”) or by Type (e.g., a “LIBOR
Loan” or a “LIBOR Borrowing”) or by Class and Type (e.g., a “LIBOR U.S.
Revolving Loan”).

SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “law”
shall be construed as referring to all statutes, rules, regulations, codes and
other laws (including official rulings and interpretations thereunder having the
force of law or with which affected Persons customarily comply) and all
judgments, orders and decrees of all Governmental Authorities. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any definition of or reference to any statute, rule or regulation shall be
construed as referring thereto as from time to time amended, supplemented or
otherwise modified (including by succession of comparable successor laws),
(c) any reference herein to any Person shall be construed to include such
Person’s successors and assigns (subject to any restrictions on assignments set
forth herein) and, in the case of any Governmental Authority, any other
Governmental Authority that shall have succeeded to any or all functions
thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (e) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in
any definition to the phrase “at any time” or “for any period” shall refer to
the same time or period for all calculations or determinations within such
definition, and (g) the words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.

For purposes of any Collateral located in the Province of Quebec or charged by
any deed of hypothec (or any other Loan Document) and for all other purposes
pursuant to which the interpretation or construction of a Loan Document may be
subject to the laws of the Province of Quebec or a court or tribunal exercising
jurisdiction in the Province of Québec, (m) “priority” shall be deemed to
include “rank” or “prior claim”, as applicable, (n) “beneficial ownership” shall
be deemed to include “ownership”, (o) “valid leasehold interest” shall be deemed
to include “valid lease”, (p) “lease” shall be deemed to include a “contract of
leasing (crédi-bail)”, (q) “personal property” shall be deemed to include
“movable property”, (r) “real property” shall be deemed to include “immovable
property”, (s) “tangible property” shall be deemed to include “corporeal
property”, (t) “intangible property” shall be deemed to include “incorporeal
property”, (u) “security interest”, “lien” and “mortgage” shall be deemed to
include a “hypothec”, “prior claim”, “reservation of ownership” and a
“resolutory clause”, as applicable, (v) all references to filing, registering or
recording under the UCC or the PPSA shall be deemed to include publication under
the Civil Code of Québec, (w) all references to “perfection” of or “perfected”
Liens shall be deemed to include a reference to the “opposability” of such Liens
to third parties, (x) any “right of offset”, “right of setoff” or similar
expression shall be deemed to

 

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include a “right of compensation”, (y) “goods” shall be deemed to include
“corporeal movable property” other than chattel paper, documents of title,
instruments, money and securities, and (z) an “agent” shall be deemed to include
a “mandatary”.

SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if after
the date hereof there occurs (a) any change in GAAP or in the application
thereof on the operation of any provision hereof or (b) any change in the
historical accounting practices, systems or reserves relating to the components
of the Borrowing Base that is adverse to the Lenders in any material respect,
and the Borrower Representative notifies the Administrative Agent that the
Borrowers request an amendment to any provision hereof to eliminate the effect
of such change (or if the Administrative Agent notifies the Borrower
Representative that the Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given before
or after such change, then the provisions herein shall be interpreted on the
basis of GAAP as in effect and applied, or based on the historical accounting
practices, systems or reserves in effect, in each case, immediately before such
change shall have become effective until such notice shall have been withdrawn
or such provision amended in accordance herewith, and the Borrower
Representative, the Administrative Agent and the Lenders agree to negotiate in
good faith with respect to any proposed amendment to eliminate or adjust for the
effect of any such change. Notwithstanding any other provision contained herein,
all terms of an accounting or financial nature used herein shall be construed,
and all computations of amounts and ratios referred to herein shall be made
(i) without giving effect to any election under Financial Accounting Standards
Board Accounting Standards Codification 825-10-25 (or any other Accounting
Standards Codification or Financial Accounting Standard having a similar result
or effect or any successor thereto) to value any Indebtedness or other
liabilities of the Company or any Subsidiary at “fair value”, as defined
therein, (ii) without giving effect to any treatment of Indebtedness in respect
of convertible debt instruments under Financial Accounting Standards Board
Accounting Standards Codification 470-20 (or any other Accounting Standards
Codification or Financial Accounting Standard having a similar result or effect)
to value any such Indebtedness in a reduced or bifurcated manner as described
therein, and such Indebtedness shall at all times be valued at the full stated
principal amount thereof, and (iii) without giving effect to any change in GAAP
occurring after the Effective Date as a result of the adoption of any proposals
set forth in the Proposed Accounting Standards Update, Leases (Topic 840),
issued by the Financial Accounting Standards Board on August 17, 2010, or any
other proposals issued by the Financial Accounting Standards Board in connection
therewith, in each case if such change would require treating any lease (or
similar arrangement conveying the right to use) as a capital lease where such
lease (or similar arrangement) was not required to be so treated under GAAP as
in effect on the Effective Date.

The Borrower Representative may notify the Administrative Agent at any time that
it has elected to so use IFRS in lieu of GAAP and, upon any such notice,
references herein to GAAP shall thereafter be construed to mean IFRS as in
effect from time to time; provided that, to the extent that such election would
affect any financial ratio or related definition set forth in this Agreement,
(i) the Borrower Representative shall provide to the Administrative Agent
financial statements and other documents reasonably requested by the
Administrative Agent setting forth a reconciliation with respect to such ratio
or definition made before and after giving effect to such

 

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election and (ii) if the Borrower Representative, the Administrative Agent or
the Required Lenders shall so request, the Administrative Agent, the Required
Lenders and the Borrowers shall negotiate in good faith to amend such ratio or
related definition to preserve the original intent thereof in light of such
change.

SECTION 1.05. Pro Forma Adjustments for Acquisitions and Dispositions. To the
extent any Borrower or any Subsidiary makes any acquisition permitted pursuant
to Section 6.04 or disposition of assets outside the ordinary course of business
permitted by Section 6.05 during the period of four (4) fiscal quarters of the
Borrowers most recently ended, each of Adjusted Leverage Ratio, the Secured
Leverage Ratio, and the Fixed Charge Coverage Ratio, if required to be
calculated herein, shall be calculated after giving pro forma effect thereto
(including pro forma adjustments arising out of events which are directly
attributable to the acquisition or the disposition of assets, are factually
supportable and are expected to have a continuing impact, in each case as
determined on a basis consistent with Article 11 of Regulation S-X of the
Securities Act of 1933, as amended, as interpreted by the SEC, and as certified
by a Financial Officer of the Company), as if such acquisition or such
disposition (and any related incurrence, repayment or assumption of
Indebtedness) had occurred in the first day of such four-quarter period.

SECTION 1.06. Status of Obligations. In the event that any Borrower or any other
Loan Party shall at any time issue or have outstanding any Subordinated
Indebtedness, such Borrower shall take or cause such other Loan Party to take
all such actions as shall be necessary to cause the Secured Obligations to
constitute senior indebtedness (however denominated) in respect of such
Subordinated Indebtedness and to enable the Administrative Agent and the Lenders
to have and exercise any payment blockage or other remedies available or
potentially available to holders of senior indebtedness under the terms of such
Subordinated Indebtedness. Without limiting the foregoing, the Secured
Obligations are hereby designated as “senior indebtedness” and as “designated
senior indebtedness” and words of similar import under and in respect of any
indenture or other agreement or instrument under which such Subordinated
Indebtedness is outstanding and are further given all such other designations as
shall be required under the terms of any such Subordinated Indebtedness in order
that the Lenders may have and exercise any payment blockage or other remedies
available or potentially available to holders of senior indebtedness under the
terms of such Subordinated Indebtedness.

SECTION 1.07. Exchange Rates; Currency Equivalents.

(a) Without limiting the other terms of this Agreement, the calculations and
determinations under this Agreement of any amount in any currency other than
U.S. Dollars shall be deemed to refer to the Dollar Amount thereof, as the case
may be, and all Borrowing Base Certificates delivered under this Agreement shall
express such calculations or determinations in U.S. Dollars or the Dollar Amount
thereof, as the case may be. Each requisite currency translation shall be based
on the Spot Rate.

(b) For purposes of this Agreement and the other Loan Documents, the Dollar
Amount of any Borrowings, Loans, Letters of Credit and other Obligations shall
be determined in accordance with the terms of this Agreement in respect of the
most recent Revaluation Date. Such Dollar Amount shall become effective as of
such Revaluation Date for such Borrowings, Loans, Letters of Credit and other
Obligations and shall be the Dollar Amount employed in

 

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converting any amounts between the applicable currencies until the next
Revaluation Date to occur for such Borrowings, Loans, Letters of Credit and
other Obligations.

ARTICLE II

THE CREDITS

SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein,
each Lender severally agrees, from time to time during the Availability Period,
to make U.S. Revolving Loans to the U.S. Borrowers and Canadian Revolving Loans
to the Canadian Borrowers, in an aggregate principal amount that will not result
in:

(i) such Lender’s Revolving Exposure exceeding such Lender’s Commitment;

(ii) the Aggregate Credit Exposure exceeding the Aggregate Commitments;

(iii) the sum of (A) the Aggregate U.S. Revolving Exposure plus (B) the Canadian
Over-Usage Amount, exceeding the U.S. Borrowing Base;

(iv) the Aggregate Credit Exposure of all Lenders exceeding the Aggregate
Borrowing Base;

(v) the Aggregate Canadian Revolving Exposure exceeding the Canadian Sublimit;
or

(vi) the Aggregate U.S. Revolving Exposure denominated in currencies other than
U.S. Dollars exceeding the Foreign Currency Sublimit;

subject to the Administrative Agent’s authority, in its sole discretion, to make
Protective Advances and Overadvances pursuant to the terms of Sections 2.04 and
2.05. The limitations on Borrowings referred to in clauses (i) through (vi) are
referred to collectively as the “Revolving Exposure Limitations.” Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrowers may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a Swingline Loan)
shall be made as part of a Borrowing consisting of Loans of the same Class and
Type made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required. Any
Protective Advance, any Overadvance and any Swingline Loan shall be made in
accordance with the procedures set forth in Sections 2.04 and 2.05.

(b) Subject to the Foreign Currency Sublimit, all U.S. Borrowings shall be
denominated in U.S. Dollars, Sterling, Euros, Canadian Dollars or other
Designated Currencies, and all Canadian Borrowings shall be denominated in U.S.
Dollars or Canadian Dollars. Subject to Section 2.14, (i) each Borrowing that is
denominated in U.S. Dollars shall be comprised

 

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entirely of ABR Loans or LIBOR Loans as the Borrower Representative may request
in accordance herewith, provided that all Borrowings made on the Effective Date
must be made as ABR Borrowings but may be converted into LIBOR Borrowings in
accordance with Section 2.08, (ii) each Borrowing denominated in Canadian
Dollars shall be comprised entirely of either CDOR Loans or Canadian Prime Rate
Loans, (iii) each Borrowing denominated in Sterling or any Alternative Currency
shall be comprised entirely of LIBOR Loans and (iv) each Borrowing denominated
in Euros shall be comprised entirely of EURIBOR Loans. Each Swingline Loan
denominated in U.S. Dollars shall be an ABR Loan, and each Swingline Loan
denominated in Canadian Dollars shall be a Canadian Prime Rate Loan. Each Lender
at its option may make any Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the
provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate
to the same extent as to such Lender); provided, however, (i) the exercise of
such option shall be recorded in the Register in accordance with
Section 9.04(b)(iv) and such Affiliate shall have provided the tax forms
required by 2.17(f) to the Administrative Agent, and (ii) any that any exercise
of such option shall not affect the obligation of the Borrowers to repay such
Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any LIBOR Borrowing, CDOR
Borrowing or EURIBOR Borrowing, such Borrowing shall be in an aggregate amount
that is an integral multiple of 1,000,000 U.S. Dollars, Sterling, Euros,
Canadian Dollars or other Designated Currency, as applicable and not less than
1,000,000 U.S. Dollars, Sterling, Euros, Canadian Dollars or other Designated
Currency, as applicable. At the time that each ABR Revolving Borrowing or
Canadian Prime Rate Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $100,000 or Cdn$100,000, as applicable,
and not less than $1,000,000 or Cdn$1,000,000, as applicable; provided that an
ABR Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the Aggregate Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.06(e). Each
Swingline Loan shall be in an amount that is an integral multiple of $100,000 or
Cdn$100,000, as applicable and not less than $1,000,000 or Cdn$1,000,000, as
applicable. Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be, collectively, more than
a total of 15 LIBOR, CDOR and EURIBOR Borrowings outstanding.

(d) Notwithstanding any other provision of this Agreement, the Borrower
Representative shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.

SECTION 2.03. Requests for Borrowings. To request a Borrowing, the Borrower
Representative shall notify the Administrative Agent of such request either in
writing (delivered by hand, facsimile, or emailed pdf) in a form approved by the
Administrative Agent and signed by the Borrower Representative or by telephone
not later than (a) in the case of a LIBOR Borrowing, CDOR Borrowing or EURIBOR
Borrowing, 11:00 a.m., Local Time, three (3) Business Days before the date of
the proposed Borrowing or (b) in the case of an ABR Borrowing (other than a
Swingline Borrowing) or Canadian Prime Rate Borrowing (other than a Swingline
Borrowing), noon, Local Time, on the date of the proposed Borrowing; provided
that any such notice of an ABR Revolving Borrowing to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.06(e) may be given not later
than 10:00 a.m., New

 

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York time, on the date of such proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery, facsimile, or emailed pdf to the Administrative Agent of a written
Borrowing Request signed by the Borrower Representative. Each such telephonic
and written Borrowing Request shall specify the following information in
compliance with Section 2.02:

(i) the name of the applicable Borrower(s) and whether such Borrowing is a U.S.
Borrowing or Canadian Borrowing;

(ii) the currency and aggregate amount of the requested Borrowing and a
breakdown of the separate wires comprising such Borrowing;

(iii) the date of such Borrowing, which shall be a Business Day;

(iv) the Type of such Borrowing; and

(v) in the case of a LIBOR Borrowing, CDOR Borrowing or EURIBOR Borrowing, the
initial Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term “Interest Period.”

Any Borrowing Request that shall fail to specify any of the information required
by the preceding provisions of this paragraph may be rejected by the
Administrative Agent if such failure is not corrected promptly after the
Administrative Agent shall give written or telephonic notice thereof to the
Borrower Representative and, if so rejected, will be of no force or effect.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.

SECTION 2.04. Protective Advances. (a) Subject to the limitations set forth
below, the Administrative Agent is authorized by the Borrowers and the Lenders,
from time to time in the Administrative Agent’s sole discretion (but shall have
absolutely no obligation to), to make Loans to the U.S. Borrowers or the
Canadian Borrowers, as applicable, on behalf of all Lenders, which the
Administrative Agent, in its Permitted Discretion, deems necessary or desirable
(i) to preserve or protect the applicable Collateral, or any portion thereof,
(ii) to enhance the likelihood of, or maximize the amount of, repayment of the
Loans and other Obligations, or (iii) to pay any other amount chargeable to or
required to be paid by the Borrowers pursuant to the terms of this Agreement,
including payments of reimbursable expenses (including costs, fees, and expenses
as described in Section 9.03) and other sums payable under the Loan Documents
(any of such Loans are herein referred to as “Protective Advances”); provided
that (i) the aggregate principal amount of outstanding Protective Advances shall
not, at any time, exceed (x) 5% of the Aggregate Commitments then in effect or
(y) when aggregated with the aggregate outstanding principal amount of
Overadvances, 10% of the Aggregate Commitments then in effect; provided further
that no Protective Advance shall be made if after giving effect thereto, any
Lender’s Revolving Exposure shall exceed such Lender’s Commitment. Protective
Advances may be made even if the conditions precedent set forth in Section 4.02
have not been satisfied. Subject to Section 9.21, the Protective Advances shall
be secured by the Liens in favor of the Administrative Agent in and to the
applicable Collateral and shall constitute Obligations

 

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hereunder. All Protective Advances shall be ABR Borrowings or Canadian Prime
Rate Borrowings, as applicable. The Administrative Agent’s authorization to make
Protective Advances may be revoked at any time by the Required Lenders. Any such
revocation must be in writing and shall become effective prospectively upon the
Administrative Agent’s receipt thereof. At any time the making of such Revolving
Loan would not violate the Revolving Exposure Limitations and the conditions
precedent set forth in Section 4.02 have been satisfied, the Administrative
Agent may request the Lenders to make a Revolving Loan to repay a Protective
Advance. At any other time the Administrative Agent may require the Lenders to
fund their risk participations described in Section 2.04(b).

(b) Upon the making of a Protective Advance by the Administrative Agent (whether
before or after the occurrence of a Default), each Lender shall be deemed,
without further action by any party hereto, to have unconditionally and
irrevocably purchased from the Administrative Agent, without recourse or
warranty, an undivided interest and participation in such Protective Advance in
proportion to its Applicable Percentage. From and after the date, if any, on
which any Lender is required to fund its participation in any Protective Advance
purchased hereunder, the Administrative Agent shall promptly distribute to such
Lender, such Lender’s Applicable Percentage of all payments of principal and
interest and all proceeds of Collateral (subject to Section 9.21) received by
the Administrative Agent in respect of such Protective Advance.

SECTION 2.05. Swingline Loans and Overadvances.

(a) The Administrative Agent, the Swingline Lender and the Lenders agree that in
order to facilitate the administration of this Agreement and the other Loan
Documents, promptly after the Borrower Representative requests an ABR Borrowing
or Canadian Prime Rate Borrowing, the Swingline Lender may elect to have the
terms of this Section 2.05(a) apply to such Borrowing Request by advancing, on
behalf of the Lenders and in the amount requested, same day funds to the
applicable Borrowers, on the date of the applicable Borrowing to the applicable
Funding Account(s) (each such Loan made solely by the Swingline Lender pursuant
to this Section 2.05(a) is referred to in this Agreement as a “Swingline Loan”),
with settlement among them as to the Swingline Loans to take place on a periodic
basis as set forth in Section 2.05(d). Each Swingline Loan shall be subject to
all the terms and conditions applicable to other ABR Loans and Canadian Prime
Rate Loans, respectively, funded by the Lenders, except that all payments
thereon shall be payable to the Swingline Lender solely for its own account. In
addition, the Borrowers hereby authorize the Swingline Lender to, and the
Swingline Lender shall, subject to the terms and conditions set forth herein
(but without any further written notice required), not later than 2:00 p.m., New
York time, on each Business Day, make available to the Borrowers by means of a
credit to the Funding Account(s), the proceeds of a Swingline Loan to the extent
necessary to pay items to be drawn on any Controlled Disbursement Account that
Business Day; provided that, if on any Business Day there is insufficient
borrowing capacity to permit the Swingline Lender to make available to the
Borrowers a Swingline Loan in the amount necessary to pay all items to be so
drawn on any such Controlled Disbursement Account on such Business Day, then the
Borrower Representative shall be deemed to have requested an ABR Borrowing
pursuant to Section 2.03 in the amount of such deficiency to be made on such
Business Day. The aggregate Dollar Amount of Swingline Loans outstanding at any
time (a) drawn under the U.S. Borrowing Base, shall not exceed $20,000,000 and
(b) drawn under the Canadian Borrowing Base, shall not exceed $5,000,000. The
Swingline Lender shall not make

 

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any Swingline Loan if, after giving effect thereto, the Borrowers would not be
in compliance with the Revolving Exposure Limitations. All Swingline Loans in
U.S. Dollars shall be ABR Borrowings and all Swingline Loans in Canadian Dollars
shall be Canadian Prime Rate Borrowings.

(b) Any provision of this Agreement to the contrary notwithstanding, at the
request of the Borrower Representative, the Administrative Agent may in its sole
discretion (but with absolutely no obligation), make Revolving Loans to the
Borrowers, on behalf of the Lenders, in amounts that exceed Availability (any
such excess Revolving Loans are herein referred to collectively as
“Overadvances”); provided that, no Overadvance shall result in a Default due to
Borrowers’ failure to comply with Section 2.01 for so long as such Overadvance
remains outstanding in accordance with the terms of this paragraph, but solely
with respect to the amount of such Overadvance; provided, further that the
aggregate amount of outstanding Overadvances shall not, at any time, exceed
(x) 5% of the Aggregate Commitments then in effect or (y) when aggregated with
the aggregate outstanding amount of Protective Advances then outstanding, 10% of
the Aggregate Commitments then in effect; provided further that no Overadvance
shall be made if after giving effect thereto, any Lender’s Revolving Exposure
shall exceed such Lender’s Commitment. Overadvances may be made even if the
condition precedent set forth in Section 4.02(c) has not been satisfied. All
Overadvances in U.S. Dollars shall be ABR Borrowings and all Overadvances in
Canadian Dollars shall be Canadian Prime Rate Borrowings. The applicable
Borrowers shall be required to repay each Overadvance no later than the 30th day
after the date of the making thereof. The Administrative Agent’s authorization
to make Overadvances may be revoked at any time by the Required Lenders. Any
such revocation must be in writing and shall become effective prospectively upon
the Administrative Agent’s receipt thereof.

(c) Upon the making of a Swingline Loan or an Overadvance (whether before or
after the occurrence of a Default and regardless of whether a Settlement has
been requested with respect to such Swingline Loan or Overadvance), each Lender
shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the Swingline Lender or the
Administrative Agent, as the case may be, without recourse or warranty, an
undivided interest and participation in such Swingline Loan or Overadvance in
proportion to its Applicable Percentage of the Commitment. The Swingline Lender
or the Administrative Agent may, at any time, require the Lenders to fund their
participations. From and after the date, if any, on which any Lender is required
to fund its participation in any Swingline Loan or Overadvance purchased
hereunder, the Administrative Agent shall promptly distribute to such Lender,
such Lender’s Applicable Percentage of all payments of principal and interest
and all proceeds of Collateral (subject to Section 9.21) received by the
Administrative Agent in respect of such Loan.

(d) The Administrative Agent, on behalf of the Swingline Lender, shall request
settlement (a “Settlement”) with the Lenders on at least a weekly basis or on
any date that the Administrative Agent elects, by notifying the Lenders of such
requested Settlement by facsimile, telephone, or email no later than 12:00 p.m.
New York time on the date of such requested Settlement (the “Settlement Date”).
Each Lender (other than the Swingline Lender, in the case of the Swingline
Loans) shall transfer the amount of such Lender’s Applicable Percentage of the
outstanding principal amount of the applicable Loan with respect to which
Settlement is requested to the Administrative Agent, to such account of the
Administrative Agent as the

 

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Administrative Agent may designate, not later than 3:00 p.m., New York time, on
such Settlement Date. Settlements may occur during the existence of a Default
and whether or not the applicable conditions precedent set forth in Section 4.02
have then been satisfied. Such amounts transferred to the Administrative Agent
shall be applied against the amounts of the Swingline Lender’s Swingline Loans
and, together with Swingline Lender’s Applicable Percentage of such Swingline
Loan, shall constitute Revolving Loans of such Lenders, respectively. If any
such amount is not transferred to the Administrative Agent by any Lender on such
Settlement Date, the Swingline Lender shall be entitled to recover from such
Lender on demand such amount, together with interest thereon, as specified in
Section 2.07.

SECTION 2.06. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower Representative may request the
issuance of Letters of Credit denominated in U.S. Dollars or an LC Designated
Currency for its own account or for the account of another Borrower as the
applicant thereof for the support of its or any Subsidiary’s obligations, in a
form reasonably acceptable to the Administrative Agent and the Issuing Bank, at
any time and from time to time during the Availability Period. In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrowers to, or entered into by the Borrowers with,
the Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control. Each Borrower unconditionally and irrevocably
agrees that, in connection with any Letter of Credit issued for the support of
any Subsidiary’s obligations as provided in the first sentence of this
paragraph, subject to Section 9.21, such Borrower will be fully responsible for
the reimbursement of LC Disbursements in accordance with the terms hereof, the
payment of interest thereon and the payment of fees due under Section 2.12(b) to
the same extent as if it were the sole account party in respect of such Letter
of Credit (such Borrower hereby irrevocably waiving any defenses that might
otherwise be available to it as a guarantor or surety of the obligations of such
Subsidiary that is an account party in respect of any such Letter of Credit).

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower Representative shall
deliver by hand or facsimile (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank and the
Administrative Agent) to the Issuing Bank and the Administrative Agent
(reasonably in advance of, but in any event no less than three (3) Business Days
prior to the requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension (which shall be a Business Day), the
date on which such Letter of Credit is to expire (if applicable) (which shall
comply with paragraph (c) of this Section), the amount and currency of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower Representative also
shall submit a letter of credit application on the Issuing Bank’s standard form
in connection with any request for a Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if, after giving effect to such
issuance, amendment, renewal or extension (i) the Standby LC Exposure shall not
exceed $50,000,000, (ii) the Commercial LC Exposure shall not exceed
$150,000,000, (iii) the LC Exposure of any Issuing

 

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Bank shall not exceed such Issuing Bank’s LC Individual Sublimit, and (iv) the
Borrowers will be in compliance with the Revolving Exposure Limitations.

(c) Expiration Date. Each Letter of Credit shall expire (or be subject to
termination or non-renewal by notice from the applicable Issuing Bank to the
beneficiary thereof) at or prior to the close of business on the earlier of
(i) the date one year after the date of the issuance of such Letter of Credit
(or, in the case of any renewal or extension thereof, including, without
limitation, any automatic renewal provision, one year after such renewal or
extension) and (ii) the date that is five (5) Business Days prior to the
Maturity Date (or such later date as to which the Administrative Agent may
agree) unless in the case of this subclause (ii) such Letter of Credit is Cash
Collateralized on or prior to the date of issuance thereof. Any Letter of Credit
may provide by its terms that it may be automatically extended for additional
successive one year periods on terms reasonably acceptable to the applicable
Issuing Bank. Any Letter of Credit providing for automatic extension shall be
extended upon the then current expiration date without any further action by any
Person unless the applicable Issuing Bank shall have given notice to the
applicable beneficiary (with a copy to the Borrower Representative) of the
election by such Issuing Bank not to extend such Letter of Credit, such notice
to be given not fewer than 30 days prior to the then current expiration date of
such Letter of Credit; provided that no Letter of Credit may be extended
automatically or otherwise beyond the date that is five (5) Business Days prior
to the Maturity Date unless such Letter of Credit is Cash Collateralized on or
prior to the date of such extension. Any Cash Collateral provided to the
Administrative Agent by a Loan Party to secure any such Letters of Credit
pursuant to this Section 2.06, Section 2.20, or otherwise pursuant to this
Agreement shall constitute Eligible Cash/Cash Equivalents subject to the
requirements of the definition thereof.

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants
to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay in U.S. Dollars to the
Administrative Agent, for the account of the Issuing Bank, such Lender’s
Applicable Percentage of the Dollar Amount of each LC Disbursement made by the
Issuing Bank and not reimbursed by the Borrowers on the date due as provided in
paragraph (e) of this Section, or of any reimbursement payment required to be
refunded to the Borrowers for any reason. Each Lender acknowledges and agrees
that its obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.

(e) Reimbursement. If an Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the U.S. Borrowers shall reimburse such LC Disbursement
by paying to the Administrative Agent in U.S. Dollars an amount equal to the
Dollar Amount of such LC Disbursement (i) not later than 3:00 p.m., New York
time, on the date that such LC Disbursement is made, if the Borrower
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Disbursement prior to 10:00 a.m., New York time, on such date, or, (ii) if such
notice has not been received by the Borrower Representative prior to such time
on such date, then not later than 12:00 noon, New York time, on (A) the Business
Day that the Borrower Representative receives such notice, if such notice is
received prior to 10:00 a.m., New York time, on the day of receipt, or (B) the
Business Day immediately following the day that the Borrower Representative
receives such notice, if such notice is not received prior to such time on the
day of receipt; provided that the Borrower Representative may, subject to the
conditions to borrowing set forth herein, request in accordance with
Section 2.03 or 2.05 that such payment be financed with an ABR U.S. Revolving
Borrowing or Swingline Loan in an equivalent amount and, to the extent so
financed, the U.S. Borrowers’ obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan. If the U.S. Borrowers fail to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the amount of the payment then due from the U.S. Borrowers in respect thereof
and such Lender’s Applicable Percentage thereof. Promptly following receipt of
such notice, each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the U.S. Borrowers in U.S. Dollars in an
amount equal to the Dollar Amount of such payment due, in the same manner as
provided in Section 2.07 with respect to Loans made by such Lender (and
Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the
Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank
the amounts so received by it from the Lenders. Promptly following receipt by
the Administrative Agent of any payment from the U.S. Borrowers pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the
applicable Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse an Issuing Bank for any LC Disbursement
(other than the funding of Revolving Loans or a Swingline Loan as contemplated
above) shall not constitute a Loan and shall not relieve the U.S. Borrowers of
their obligation to reimburse such LC Disbursement.

(f) Obligations Absolute. The U.S. Borrowers’ joint and several obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein or herein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) any payment by the Issuing Bank under
a Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrowers’ obligations
hereunder. None of the Administrative Agent, the Lenders, any Issuing Bank or
any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing

 

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thereunder), any error in interpretation of technical terms or any consequence
arising from causes beyond the control of such Issuing Bank; provided that the
foregoing shall not be construed to excuse an Issuing Bank from liability to the
Borrowers to the extent of any direct damages (as opposed to special, indirect,
consequential or punitive damages, claims in respect of which are hereby waived
by the Borrowers to the extent permitted by applicable law) suffered by any
Borrower that are caused by such Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence, willful misconduct, or bad faith on the part
of an Issuing Bank (as finally determined by a court of competent jurisdiction),
such Issuing Bank shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and
make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.

(g) Disbursement Procedures. Each Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. Each Issuing Bank shall promptly notify the
Administrative Agent and the applicable Borrower by telephone (confirmed by
facsimile) of such demand for payment and whether such Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the U.S. Borrowers of their
obligation to reimburse such Issuing Bank and the Lenders with respect to any
such LC Disbursement.

(h) Interim Interest. If an Issuing Bank shall make any LC Disbursement, then,
unless the U.S. Borrowers shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid Dollar Amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the U.S. Borrowers reimburse such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans and
such interest shall be payable on the date when such reimbursement is due;
provided that, if the U.S. Borrowers fail to reimburse such LC Disbursement when
due pursuant to paragraph (e) of this Section, then Section 2.13(g) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing
Bank shall be for the account of such Lender to the extent of such payment.

(i) Replacement of an Issuing Bank. Any Issuing Bank may be replaced at any time
by written agreement among the Borrower Representative, the Administrative Agent
(such consent not to be unreasonably withheld or delayed), the replaced Issuing
Bank and the successor Issuing Bank. The Administrative Agent shall notify the
Lenders of any such replacement of an Issuing Bank. At the time any such
replacement shall become effective, the U.S. Borrowers shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b). From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of an
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Agreement with respect to Letters of Credit to be issued thereafter and
(ii) references herein to the term “Issuing Bank” shall be deemed to refer to
such successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the replacement of
an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit then outstanding and
issued by it prior to such replacement, but shall not be required to issue
additional Letters of Credit.

(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower Representative receives notice
from the Administrative Agent or the Required Lenders demanding the deposit of
cash collateral pursuant to this paragraph, the U.S. Borrowers shall Cash
Collateralize all Letters of Credit; provided that the obligation to Cash
Collateralize all Letters of Credit shall become effective immediately, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to any Borrower described in clause (h) or (i) of Article VII. For
the purposes of this Agreement, “Cash Collateralize” shall mean, with respect to
any Letter of Credit, the deposit in U.S. Dollars in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders (the “LC Collateral Account”), an amount in cash equal to
(i) 103% of the amount of the LC Exposure in respect of such Letter of Credit
issued and outstanding on such date plus accrued and unpaid interest thereon,
plus (ii) 12% of the amount of the LC Exposure in respect of Letters of Credit
issued and outstanding in any LC Designated Currency on such date, plus accrued
and unpaid interest thereon. Such deposit shall be held by the Administrative
Agent as collateral for the payment and performance of the Secured Obligations.
The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over the LC Collateral Account and the U.S.
Borrowers hereby grant the Administrative Agent a security interest in the LC
Collateral Account. Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole discretion of
the Administrative Agent and at the U.S. Borrowers’ risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in the LC Collateral Account. Moneys in the LC
Collateral Account shall be applied by the Administrative Agent to reimburse the
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the U.S. Borrowers for the LC Exposure at such time
or, if the maturity of the Loans has been accelerated (but subject to the
consent of the Required Lenders), be applied to satisfy other Secured
Obligations. If the U.S. Borrowers are required to Cash Collateralize Letters of
Credit solely as a result of the occurrence of an Event of Default, the cash
collateral (to the extent not applied as aforesaid) shall be returned to the
U.S. Borrowers within three (3) Business Days after all such Events of Default
have been waived as confirmed in writing by the Administrative Agent.

(k) Issuing Bank Reports to the Administrative Agent. Unless otherwise agreed by
the Administrative Agent, each Issuing Bank shall, in addition to its
notification obligations set forth elsewhere in this Section, report in writing
to the Administrative Agent (i) periodic activity (for such period or recurrent
periods as shall be requested by the Administrative Agent) in respect of Letters
of Credit issued by such Issuing Bank, including all issuances, extensions,
amendments and renewals, all expirations and cancelations and all disbursements
and reimbursements, (ii) reasonably prior to the time that such Issuing Bank
issues, amends, renews

 

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or extends any Letter of Credit, the date of such issuance, amendment, renewal
or extension, and the stated amount of the Letters of Credit issued, amended,
renewed or extended by it and outstanding after giving effect to such issuance,
amendment, renewal or extension (and whether the amounts thereof shall have
changed), (iii) on each Business Day on which such Issuing Bank makes any LC
Disbursement, the date and amount of such LC Disbursement, (iv) on any Business
Day on which any U.S. Borrower fails to reimburse an LC Disbursement required to
be reimbursed to such Issuing Bank on such day, the date of such failure and the
amount of such LC Disbursement, and (v) on any other Business Day, such other
information as the Administrative Agent shall reasonably request as to the
Letters of Credit issued by such Issuing Bank.

(l) LC Exposure Determination. For all purposes of this Agreement, the amount of
a Letter of Credit that, by its terms or the terms of any document related
thereto, provides for one or more automatic increases in the stated amount
thereof shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated
amount is in effect at the time of determination.

(m) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or
is for the account of, a Subsidiary, the U.S. Borrowers shall be obligated to
reimburse the applicable Issuing Bank hereunder for any and all drawings under
such Letter of Credit. Each U.S. Borrower hereby acknowledges that the issuance
of Letters of Credit requested by such U.S. Borrower for the account of
Subsidiaries inures to the benefit of such U.S. Borrower, and that such U.S.
Borrower’s business derives substantial benefits from the businesses of such
Subsidiaries.

(n) Existing Letters of Credit. Each Existing Letter of Credit shall be deemed
to be a Letter of Credit issued for the account of the U.S. Borrowers on the
Effective Date for all purposes hereof and of the other Loan Documents (whether
or not a U.S. Borrower was the applicant with respect thereto or otherwise
responsible for reimbursement obligations with respect thereto prior to the
Effective Date), and no issuance or similar fees (as distinguished from ongoing
participation or fronting fees) will be required in connection with the deemed
issuance of the Existing Letters of Credit on the Effective Date.

SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each Loan to be
made by such Lender hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 p.m., Local Time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders in an amount equal to such Lender’s Applicable Percentage. The
Administrative Agent will make such Loans available to the applicable Borrower
by promptly crediting the amounts so received, in like funds, to the applicable
Funding Account; provided that ABR Revolving Loans made to finance the
reimbursement of (i) an LC Disbursement as provided in Section 2.06(e) shall be
remitted by the Administrative Agent to the applicable Issuing Bank and (ii) a
Protective Advance shall be retained by the Administrative Agent.

(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with

 

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paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the applicable Borrower a corresponding amount. In such event, if a
Lender has not in fact made its share of the applicable Borrowing available to
the Administrative Agent, then the applicable Lender and the applicable
Borrowers severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the applicable Borrower to but
excluding the date of payment to the Administrative Agent, at (i) in the case of
such Lender, the rate reasonably determined by the Administrative Agent to be
the cost to it of funding such amount or (ii) in the case of the Borrowers, the
interest rate applicable to ABR Loans or Canadian Prime Rate Loans, as
applicable. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in such Borrowing.

SECTION 2.08. Interest Elections. (a) Each Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a LIBOR
Borrowing, CDOR Borrowing or EURIBOR Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the Borrower
Representative may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a LIBOR Borrowing, CDOR Borrowing or
EURIBOR Borrowing, may elect Interest Periods therefor, all as provided in this
Section. The Borrower Representative may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Swingline Borrowings,
Overadvances or Protective Advances, which may not be converted or continued.

(b) To make an election pursuant to this Section, the Borrower Representative
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrowers
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
facsimile to the Administrative Agent of a written Interest Election Request in
a form approved by the Administrative Agent and signed by the Borrower
Representative. Notwithstanding any other provision of this Section, a Borrower
shall not be permitted to change the currency of any Borrowing.

(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:

(i) the name of the applicable Borrower and the Borrowing to which such Interest
Election Request applies and, if different options are being elected with
respect to different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified pursuant
to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

 

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(iii) the Type of Borrowing; and

(iv) if the resulting Borrowing is a LIBOR Borrowing, CDOR Borrowing or EURIBOR
Borrowing, the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition of the
term “Interest Period”.

If any such Interest Election Request requests a LIBOR Borrowing, CDOR Borrowing
or EURIBOR Borrowing, but does not specify an Interest Period, then the
Borrowers shall be deemed to have selected an Interest Period of one month’s
duration.

(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

(e) If the Borrower Representative fails to deliver a timely Interest Election
Request with respect to a LIBOR Borrowing, CDOR Borrowing or EURIBOR Borrowing
prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period
(i) in the case of a LIBOR Borrowing denominated in U.S. Dollars, such Borrowing
shall be converted to an ABR Borrowing, (ii) in the case of a CDOR Borrowing,
such Borrowing shall be converted to a Canadian Prime Rate Borrowing and
(iii) in the case of any other LIBOR Borrowing or a EURIBOR Borrowing, such
Borrowing shall become due and payable on the last day of such Interest Period.

(f) Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower Representative (provided that no such
notice shall be required in the case of an Event of Default under clause (h) or
(i) of Article VII), then, so long as an Event of Default is continuing (i) no
outstanding Borrowing denominated in U.S. Dollars may be converted to or
continued as a LIBOR Borrowing and no outstanding Borrowing may be converted to
or continued as a CDOR Borrowing, and (ii) unless repaid (A) each LIBOR
Borrowing denominated in U.S. Dollars shall be converted to an ABR Borrowing at
the end of the Interest Period applicable thereto, and (B) each CDOR Borrowing
shall be converted to a Canadian Prime Rate Borrowing at the end of the Interest
Period applicable thereto.

SECTION 2.09. Termination and Reduction of Commitments; Increase in Commitments.
(a) Unless previously terminated the Commitments shall terminate on the Maturity
Date.

(b) The Borrowers may at any time terminate the Commitments upon (i) the payment
in full of all outstanding Loans, together with accrued and unpaid interest
thereon and on any LC Exposure, (ii) the cancellation and return of all
outstanding Letters of Credit (or alternatively, with respect to each such
Letter of Credit, the Cash Collateralization (or at the discretion of the
Administrative Agent a back-up standby letter of credit satisfactory to the
Administrative Agent and the Issuing Bank) of all outstanding Letters of Credit,
(iii) the payment in full of the accrued and unpaid fees, and (iv) the payment
in full of all reimbursable expenses and other Obligations, together with
accrued and unpaid interest thereon.

 

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(c) The Borrowers may from time to time reduce the Commitments; provided that
(i) each reduction of the Commitments shall be in an amount that is an integral
multiple of $5,000,000 and (ii) the Borrowers shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the
Revolving Loans in accordance with Section 2.11, the Borrowers would not be in
compliance with the Revolving Exposure Limitations.

(d) The Borrower Representative shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) or (c) of
this Section at least three (3) Business Days prior to the effective date of
such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower Representative pursuant to this Section shall be irrevocable; provided
that a notice of termination of the Commitments delivered by the Borrower
Representative may state that such notice is conditioned upon the effectiveness
of other credit facilities, in which case such notice may be revoked by the
Borrower Representative (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.

(e) The Borrowers shall have the right to increase the Commitments by obtaining
additional Commitments, either from one or more of the Lenders or another
lending institution provided that (i) any such request for an increase shall be
in a minimum amount of $10,000,000, (ii) the aggregate amount of all additional
Commitments obtained under this clause (e) shall not exceed $150,000,000,
(iii) the Administrative Agent and the Issuing Bank have approved the identity
of any such new Lender, such approvals not to be unreasonably withheld or
delayed, (iv) any such new Lender assumes all of the rights and obligations of a
“Lender” hereunder, and (v) the procedure described in Section 2.09(f) have been
satisfied. Nothing contained in this Section 2.09 shall constitute, or otherwise
be deemed to be, a commitment on the part of any Lender to increase its
Commitment hereunder at any time.

(f) Any amendment hereto for such an increase or addition shall be in form and
substance satisfactory to the Administrative Agent and shall only require the
written signatures of the Administrative Agent, the Borrowers and each Lender
being added or increasing its Commitment, subject only to the approval of the
Required Lenders if any such increase or addition would cause the Commitments to
exceed $550,000,000. As a condition precedent to such an increase or addition,
the Borrowers shall deliver to the Administrative Agent (i) a certificate of
each Loan Party signed by an authorized officer of such Loan Party
(A) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (B) in the case of the Borrowers,
certifying that, before and after giving effect to such increase or addition,
(1) the representations and warranties contained in Article III and the other
Loan Documents are true and correct in all material respects (except that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date, and that any representation or warranty which is subject to
any materiality qualifier shall be required to be true and correct in all
respects) and (2) no Default exists, and (ii) legal opinions and documents
consistent with those delivered on the Effective Date, to the extent reasonably
requested by the Administrative Agent.

 

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(g) On the effective date of any such increase or addition, (i) any Lender
increasing (or, in the case of any newly added Lender, extending) its Commitment
shall make available to the Administrative Agent such amounts in immediately
available funds as the Administrative Agent shall determine, for the benefit of
the other Lenders, as being required in order to cause, after giving effect to
such increase or addition and the use of such amounts to make payments to such
other Lenders, each Lender’s portion of the outstanding Revolving Loans of all
the Lenders to equal its revised Applicable Percentage of such outstanding
Revolving Loans, and the Administrative Agent shall make such other adjustments
among the Lenders with respect to the Revolving Loans then outstanding and
amounts of principal, interest, commitment fees and other amounts paid or
payable with respect thereto as shall be necessary, in the opinion of the
Administrative Agent, in order to effect such reallocation and (ii) the
Borrowers shall be deemed to have repaid and reborrowed all outstanding
Revolving Loans as of the date of any increase (or addition) in the Commitments
(with such reborrowing to consist of the Types of Revolving Loans, with related
Interest Periods if applicable, specified in a notice delivered by the Borrower
Representative, in accordance with the requirements of Section 2.03). The deemed
payments made pursuant to clause (ii) of the immediately preceding sentence
shall be accompanied by payment of all accrued interest on the amount prepaid
and, in respect of each LIBOR Loan, CDOR Loan and EURIBOR Loan, shall be subject
to indemnification by the Borrowers pursuant to the provisions of Section 2.16
if the deemed payment occurs other than on the last day of the related Interest
Periods. Within a reasonable time after the effective date of any increase or
addition, the Administrative Agent shall, and is hereby authorized and directed
to, revise the Commitment Schedule to reflect such increase or addition and
shall distribute such revised Commitment Schedule to each of the Lenders and the
Borrower Representative, whereupon such revised Commitment Schedule shall
replace the old Commitment Schedule and become part of this Agreement.

SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt. (a) Subject
to Section 9.21, the Borrowers hereby unconditionally promise to pay (i) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan on the Maturity Date, (ii) to the Administrative
Agent the then unpaid amount of each Protective Advance on the earlier of the
Maturity Date and demand by the Administrative Agent, and (iii) to the
Administrative Agent the then unpaid principal amount of each Overadvance on the
earlier of the Maturity Date and the 30th day after such Overadvance is made.

(b) On each Business Day during any Dominion Period, the Administrative Agent
shall apply all funds credited to a Concentration Account of the U.S. Borrowers
on such Business Day or the immediately preceding Business Day (at the
discretion of the Administrative Agent, whether or not immediately available),
first, to prepay any U.S. Protective Advances and U.S. Overadvance that may be
outstanding, second, to prepay the U.S. Revolving Loans and U.S. Swingline
Loans, third [reserved], fourth, to prepay any Canadian Protective Advance and
Canadian Overadvance that may be outstanding, fifth, to prepay any Canadian
Revolving Loans and Canadian Swingline Loans, and sixth, as the Borrower
Representative may direct. The Administrative Agent shall apply all funds
credited to a Concentration Account of the Canadian Loan Parties on such
Business Day or the immediately preceding Business Day in the order specified in
subclauses fourth through sixth above.

 

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(c) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the Indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

(d) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrowers to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.

(e) The entries made in the accounts maintained pursuant to paragraph (c) or
(d) of this Section shall be prima facie evidence of the existence and amounts
of the obligations recorded therein; provided that the failure of any Lender or
the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement.

(f) Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrowers shall prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in a form
approved by the Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

SECTION 2.11. Prepayment of Loans. (a) The Borrowers shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject
to prior notice in accordance with paragraph (c) of this Section and, if
applicable, payment of any break funding expenses under Section 2.16.

(b) Except for Overadvances permitted under Section 2.05, in the event and on
each occasion that the Borrowers are not in compliance with the Revolving
Exposure Limitations (including following any Revaluation Date), the Canadian
Borrowers and the U.S. Borrowers shall, subject to Section 9.21, severally
prepay the Revolving Loans and/or Swingline Loans (or, if no such Loans are
outstanding, Cash Collateralize outstanding Letters of Credit) of such
Borrower(s) in an aggregate amount that, after giving effect to such prepayments
or Cash Collateralization the Borrowers shall be in compliance with the
Revolving Exposure Limitations.

(c) The Borrower Representative shall notify the Administrative Agent (and, in
the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by facsimile) of any prepayment hereunder not later than (i) 11:00
p.m., New York time, (A) in the case of prepayment of a LIBOR Borrowing, CDOR
Borrowing or EURIBOR Borrowing, three (3) Business Days before the date of
prepayment, or (B) in the case of prepayment of an ABR Borrowing or Canadian
Prime Rate Borrowing, on the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each

 

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Borrowing or portion thereof to be prepaid; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.09, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.09. Promptly following receipt of any such notice relating to a
Revolving Borrowing, the Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any Revolving Borrowing shall be in
an amount that would be permitted in the case of an advance of a Revolving
Borrowing of the same Type as provided in Section 2.02 and shall be the same
currency as the Revolving Borrowing being repaid. Each prepayment of a Revolving
Borrowing shall be applied ratably to the Revolving Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by (i) accrued interest to
the extent required by Section 2.13 and (ii) break funding payments, if any,
pursuant to Section 2.16.

SECTION 2.12. Fees.

(a) The U.S. Borrowers agree to pay to the Administrative Agent for the ratable
account of each Lender a commitment fee, which shall accrue at the rate of
0.25% per annum on the average daily amount of the Available Commitment during
the period from and including the Effective Date to but excluding the date on
which the Commitments terminate. Accrued commitment fees shall be payable in
arrears on the first Business Day of each January, April, July and October and
on the date on which the Commitments terminate, commencing on the first such
date to occur after the date hereof. All commitment fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of
days elapsed, (including the first day but excluding the last day).

(b) The Borrowers agree to pay (i) to the Administrative Agent for the account
of each Lender a participation fee with respect to its participations in Letters
of Credit, at a per annum rate equal to (A) with respect to Standby LC Exposure,
the same Applicable Rate used to determine the interest rate applicable to LIBOR
Loans on the average daily amount of such Lender’s Standby LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements),
and (B) with respect to Commercial LC Exposure, 0.50% less than the Applicable
Rate used to determine the interest rate applicable to LIBOR Loans on the
average daily amount of such Lender’s Commercial LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements), in each case
during the period from and including the Effective Date to but excluding the
later of the date on which such Lender’s Commitment terminates and the date on
which such Lender ceases to have any LC Exposure (the fees described in this
clause (i), “LC Fees”), and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate of 0.125% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) attributable to Letters of Credit issued by the Issuing Bank
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Commitments and the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees and
commissions with respect to the issuance, amendment, cancellation, negotiation,
transfer, presentment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued
through and including the last day of each calendar quarter shall be payable on
the first Business Day of each January, April, July and October following such
last day, commencing on the first such date to occur after the Effective Date;
provided that all such fees shall be payable on the date on which the
Commitments terminate and

 

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any such fees accruing after the date on which the Commitments terminate shall
be payable on demand. Any other fees payable to the Issuing Bank pursuant to
this paragraph shall be payable within 30 days after demand. All participation
fees and fronting fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).

(c) The Borrowers agree to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Borrowers and the Administrative Agent.

(d) All fees payable hereunder shall be paid on the dates due and shall be paid
in U.S. Dollars, in immediately available funds, to the Administrative Agent (or
to an Issuing Bank, in the case of fees payable to it) for distribution, in the
case of commitment fees and participation fees, to the Lenders.

(e) Upon payment, such fees in this Section 2.12 shall not be refundable under
any circumstances, absent manifest error in calculation.

SECTION 2.13. Interest.

(a) The Loans comprising each ABR Borrowing (including each Swingline Loan
denominated in U.S. Dollars) shall bear interest at the Alternate Base Rate plus
the Applicable Rate.

(b) The Revolving Loans comprising each LIBOR Borrowing shall bear interest at
(i) in the case of a Borrowing denominated in U.S. Dollars, the Adjusted LIBO
Rate and (ii) in the case of a Borrowing denominated in a currency other than
U.S. Dollars, the LIBO Rate, in each case for the Interest Period in effect for
such Borrowing, plus the Applicable Rate.

(c) The Revolving Loans comprising each CDOR Borrowing shall bear interest at
the CDOR Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.

(d) The Revolving Loans comprising each EURIBOR Borrowing shall bear interest at
the EURIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.

(e) The Loans comprising each Canadian Prime Rate Borrowing (including Swingline
Loans denominated in Canadian Dollars) shall bear interest at the Canadian Prime
Rate plus the Applicable Rate.

(f) Each Protective Advance and each Overadvance shall (i) if denominated in
U.S. Dollars, bear interest at the Alternate Base Rate plus the Applicable Rate
plus 2%, and (ii) if denominated in Canadian Dollars, bear interest at the
Canadian Prime Rate plus the Applicable Rate plus 2%.

(g) Notwithstanding the foregoing, upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent or the Required
Lenders may, at their option, by notice to the Borrower Representative, declare
that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable
to such Loans as provided in the preceding paragraphs of this

 

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Section or (ii) in the case of any other amount outstanding hereunder, such
amount shall accrue at 2% plus the rate applicable to such fee or other
obligation as provided hereunder; provided, that (x) the default rate of
interest set forth in this clause (g) shall apply automatically and without
notice to the Borrower Representative upon the occurrence and during the
continuance of any Event of Default under clauses (a), (h) or (i) of Article VII
and (y) application of the default rate of interest pursuant to this clause
(g) may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 9.02 requiring the consent of “each Lender affected
thereby” for reductions in interest rates.

(h) Accrued interest on each Loan (for ABR Loans and Canadian Prime Rate Loans,
accrued through the last day of the prior calendar month) shall be payable in
arrears on each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (g) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan or Canadian Prime
Rate Loan prior to the end of the Availability Period), accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any LIBOR
Loan, CDOR Loan or EURIBOR Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion.

(i) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate or the
Canadian Prime Rate shall be computed on the basis of a year of 365 days (or 366
days in a leap year) and interest computed by reference to Sterling shall be
computed on the basis of a year of 365 days, and in each case shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day). The applicable Adjusted LIBO Rate, LIBO Rate, CDOR Rate, EURIBO Rate,
Alternate Base Rate or Canadian Prime Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error. For the purposes of the Interest Act (Canada), the yearly rate of
interest to which any rate calculated on the basis of a period of time different
from the actual number of days in the year (360 days, for example) is equivalent
is the stated rate multiplied by the actual number of days in the year (365 or
366, as applicable) and divided by the number of days in the shorter period (360
days, in the example).

SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a LIBOR Borrowing, a CDOR Borrowing or a EURIBOR Borrowing
in any currency:

(a) the Administrative Agent determines (which determination shall be conclusive
and binding absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, LIBO Rate, CDOR Rate or EURIBO
Rate, as the case may be, for such currency or in respect of a Loan in such
currency for such Interest Period; or

(b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate, LIBO Rate, CDOR Rate or EURIBO Rate, as the case may be, for
such currency or in respect of a Loan in such currency for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining the Loans included in such Borrowing for such Interest Period;

 

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then the Administrative Agent shall give notice thereof to the Borrower
Representative and the Lenders by electronic communication as provided in
Section 9.01 as promptly as practicable thereafter and, until the Administrative
Agent notifies the Borrower Representative and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, an affected LIBOR Borrowing, CDOR Borrowing or
a EURIBOR Borrowing, as the case may be, shall be ineffective, (ii) any affected
LIBOR Borrowing, CDOR Borrowing or EURIBOR Borrowing that is requested to be
continued shall (A) if denominated in U.S. Dollars, be continued as an ABR
Borrowing, (B) if denominated in Canadian Dollars, be continued as a Canadian
Prime Rate Borrowing, or (C) otherwise, be repaid on the last day of the then
current Interest Period applicable thereto and (iii) any Borrowing Request for
an affected LIBOR Borrowing, CDOR Borrowing or a EURIBOR Borrowing shall (A) if
denominated in U.S. Dollars, be deemed a request for an ABR Borrowing, (B) if
denominated in Canadian Dollars, be deemed a request for a Canadian Prime Rate
Borrowing or (C) otherwise, be ineffective.

SECTION 2.15. Increased Costs. (a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, liquidity or
similar requirement (including any compulsory loan requirement, insurance charge
or other assessment) against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or the Issuing Bank;

(ii) impose on any Lender or the Issuing Bank or the London interbank market any
other condition, cost or expense (other than Taxes) affecting this Agreement or
Loans made by such Lender or any Letter of Credit or participation therein; or

(iii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, continuing, converting into or
maintaining any Loan (or of maintaining its obligation to make any such Loan) or
to increase the cost to such Lender, the Issuing Bank or such other Recipient of
participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender, the Issuing Bank or
such other Recipient hereunder (whether of principal, interest or otherwise),
then the applicable Borrowers will pay to such Lender, the Issuing Bank or such
other Recipient, as the case may be, such additional amount or amounts as will
compensate such Lender, the Issuing Bank or such other Recipient, as the case
may be, for such additional costs incurred or reduction suffered.

(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on
the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement, the Commitment of, or the Loans made by, or
participations in Letters of Credit or Swingline Loans held by, such Lender,

 

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or the Letters of Credit issued by the Issuing Bank, to a level below that which
such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s or the Issuing Bank’s policies and the policies of
such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy and liquidity), then from time to time the Borrowers will pay to such
Lender or the Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank or such Lender’s or
the Issuing Bank’s holding company for any such reduction suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower Representative accompanied by a
certificate setting forth in reasonable detail any amount or amounts and upon
such delivery of such items, shall be conclusive absent manifest error. The
Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 30 days after receipt
thereof.

(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation; provided that
the Borrowers shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 180 days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies the Borrower Representative of the Change in Law giving
rise to such increased costs or reductions and of such Lender’s or the Issuing
Bank’s intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof.

SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any LIBOR Loan, CDOR Loan or EURIBOR Loan other than on the last
day of an Interest Period applicable thereto (including as a result of an Event
of Default or as a result of any prepayment pursuant to Section 2.11), (b) the
conversion of any LIBOR Loan, CDOR Loan or EURIBOR Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any LIBOR Loan, CDOR Loan or EURIBOR Loan on the
date specified in any notice delivered pursuant hereto (regardless of whether
such notice may be revoked under Section 2.09(d) and is revoked in accordance
therewith), or (d) the assignment of any LIBOR Loan, CDOR Loan or EURIBOR Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower Representative pursuant to Section 2.19 or 9.02(d),
then, in any such event, the Borrowers shall compensate each Lender for the
loss, cost and expense (excluding any loss of margin or profit therefrom)
attributable to such event. Such loss, cost or expense to any Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any,
of (i) with respect to a LIBOR Loan, CDOR Loan or EURIBOR Loan, the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate, the CDOR Rate or the EURIBO Rate,
as the case may be, that would have been applicable to such Loan (but not
including the Applicable Rate, margin or profit applicable thereto), for the
period from the date of such event to the last day of the then current Interest
Period therefor (or, in the

 

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case of a failure to borrow, convert or continue, for the period that would have
been the Interest Period for such Loan), over (ii) the amount of interest that
would accrue on such principal amount for such period at the interest rate which
such Lender would bid were it to bid, at the commencement of such period, for
deposits in the applicable currency of a comparable amount and period from other
banks in the London, European or Canadian interbank market. A certificate of any
Lender setting forth in reasonable detail any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower Representative and upon delivery of such items shall be conclusive
absent manifest error. The Borrowers shall pay such Lender the amount shown as
due on any such certificate within 30 days after receipt thereof.

SECTION 2.17. Withholding of Taxes; Gross-Up.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Loan Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable law. If
any applicable law (as determined in the good faith discretion of an applicable
withholding agent) requires the deduction or withholding of any Tax from any
such payment by a withholding agent, then the applicable withholding agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with applicable law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 2.17) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(b) Payment of Other Taxes by the Borrowers. The Loan Parties shall timely pay
to the relevant Governmental Authority in accordance with applicable law, or at
the option of the Administrative Agent timely reimburse it for, Other Taxes.

(c) Evidence of Payment. As soon as practicable after any payment of Taxes by
any Loan Party to a Governmental Authority pursuant to this Section 2.17, such
Loan Party shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

(d) Indemnification by the Loan Parties. Subject in all cases to Section 9.21,
the Loan Parties shall jointly and severally indemnify each Recipient, within 10
days after demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section) payable in a liquidated amount or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate setting forth in
reasonable detail the amount of such payment or liability delivered to any Loan
Party by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

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(e) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Loan Parties to do
so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 9.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to such Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

(f) Status of Lenders. (i) Any Lender that is entitled to an exemption from or
reduction of withholding Tax with respect to payments made under any Loan
Document shall deliver to the Borrower Representative and the Administrative
Agent, at the time or times reasonably requested by the Borrower Representative
or the Administrative Agent and at the time or times prescribed by applicable
law, such properly completed and executed documentation reasonably requested by
the Borrower Representative or the Administrative Agent or prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate of withholding. In addition, any Lender, if reasonably requested
by the Borrower Representative or the Administrative Agent, shall deliver such
other documentation prescribed by applicable law or reasonably requested by the
Borrower Representative or the Administrative Agent as will enable the Borrowers
or the Administrative Agent to determine whether or not such Lender is subject
to backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii) Without limiting the generality of the foregoing, in the event that any
Borrower is a U.S. Person,

(A) any Lender that is a U.S. Person shall deliver to the Borrower
Representative and the Administrative Agent on or prior to the date on which
such Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower Representative or the
Administrative Agent), executed originals of IRS Form W-9 (or successor form)
certifying that such Lender is exempt from U.S. Federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower Representative and the Administrative Agent (in such

 

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number of copies as shall be requested by the recipient) on or prior to the date
on which such Foreign Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the reasonable request of the Borrower
Representative or the Administrative Agent), whichever of the following is
applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN or
W-8BEN-E, as applicable (or successor form), establishing an exemption from, or
reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of
such tax treaty and (y) with respect to any other applicable payments under any
Loan Document, IRS Form W-8BEN or W-8BEN-E, as applicable (or successor form),
establishing an exemption from, or reduction of, U.S. Federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

(2) in the case of a Foreign Lender claiming that its extension of credit will
generate U.S. effectively connected income, executed originals of IRS Form
W-8ECI (or successor form);

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit G-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of
the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and
(y) executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable (or
successor form); or

(4) to the extent a Foreign Lender is not the Beneficial Owner, executed
originals of IRS Form W-8IMY (or successor form), accompanied by IRS Form W-8ECI
(or successor form), IRS Form W-8BEN or W-8BEN-E, as applicable (or successor
form), a U.S. Tax Compliance Certificate substantially in the form of Exhibit
G-2 or Exhibit G-3, IRS Form W-9 (or successor form), and/or other certification
documents from each Beneficial Owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit G-4 on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower Representative and the Administrative Agent (in such

 

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number of copies as shall be requested by the recipient) on or prior to the date
on which such Foreign Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the reasonable request of the Borrower
Representative or the Administrative Agent), executed originals of any other
form prescribed by applicable law as a basis for claiming exemption from or a
reduction in U.S. Federal withholding Tax, duly completed, together with such
supplementary documentation as may be prescribed by applicable law to permit the
Borrowers or the Administrative Agent to determine the withholding or deduction
required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower Representative and the Administrative Agent at the
time or times prescribed by law and at such time or times reasonably requested
by the Borrower Representative or the Administrative Agent such documentation
prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower Representative or the Administrative Agent
as may be necessary for the Borrowers and the Administrative Agent to comply
with their obligations under FATCA and to determine that such Lender has
complied with such Lender’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this clause
(D), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower Representative and the
Administrative Agent in writing of its legal inability to do so.

(g) Treatment of Certain Refunds. If any party determines in its sole discretion
exercised in good faith that it has received a refund of any Taxes as to which
it has been indemnified pursuant to this Section 2.17 (including by the payment
of additional amounts pursuant to this Section 2.17), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section 2.17 with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (g) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (g), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (g) the payment
of which would place the indemnified party in a less favorable net after-Tax
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have been in if the Tax subject to indemnification and giving rise to such
refund had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts giving rise to such refund had
never been paid. This paragraph (g) shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

(h) Survival. Each party’s obligations under this Section 2.17 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

(i) Defined Terms. For purposes of this Section 2.17, the term “Lender” includes
any Issuing Bank and the term “applicable law” includes FATCA.

SECTION 2.18. Payments Generally; Allocation of Proceeds; Sharing of Set-offs.
(a) The Borrowers shall make each payment required to be made by them hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 3:00
p.m., New York time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at 277 Park Avenue, New York, New York, or as otherwise directed by
the Administrative Agent, except payments to be made directly to an Issuing Bank
or Swingline Lender as expressly provided herein and except that payments
pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder of principal or interest in respect of any Loan shall,
except as otherwise expressly provided herein, be made in the currency of such
Loan and all payments in respect of LC Disbursements and all other payments
hereunder and under each other Loan Document shall be made in U.S. Dollars.

(b) Any proceeds of Collateral received by the Administrative Agent (i) not
constituting either (A) a specific payment of principal, interest, fees or other
sum payable under the Loan Documents (which shall be applied as specified by the
Borrowers) or (B) amounts to be applied from a Concentration Account or a
Borrowing Base Deposit Account during a Dominion Period (which shall be applied
in accordance with Section 2.10(b)) or (ii) after an Event of Default has
occurred and is continuing and the Administrative Agent so elects or the
Required Lenders so direct, shall be applied ratably first, to pay any fees,
indemnities, or expense reimbursements including amounts then due to the
Administrative Agent and the Issuing Banks from the Borrowers (other than in
connection with Banking Services Obligations or Swap Agreement Obligations),
second, to pay any fees or expense reimbursements then due to the Lenders from
the Borrowers (other than in connection with Banking Services Obligations or

 

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Swap Agreement Obligations), third, to pay interest due in respect of the
Overadvances and Protective Advances, fourth, to pay the principal of the
Overadvances and Protective Advances, fifth, to pay interest then due and
payable on the Loans (other than the Overadvances and Protective Advances)
ratably, sixth, to prepay principal on the Loans (other than the Overadvances
and Protective Advances) and unreimbursed LC Disbursements ratably, seventh, to
Cash Collateralize all outstanding Letters of Credit, eighth, ratably to the
payment of any amounts owing with respect to Banking Services Obligations (other
than Specified L/C Obligations) and Swap Agreement Obligations for which Banking
Services/Swap Reserves have been established but only up to the amount of such
Banking Services/Swap Reserves, ninth, to payment of any amounts owing with
respect to Banking Services Obligations (other than Specified L/C Obligations)
and Swap Agreement Obligations not paid pursuant to clause eighth above up to
and including the amount most recently provided to the Administrative Agent
pursuant to Section 2.22, tenth, to the payment of any other Secured Obligation
(other than Specified L/C Obligations), and eleventh, to payment or cash
collateralization of all Specified L/C Obligations up to and including the
amount most recently provided to the Administrative Agent pursuant to
Section 2.22; provided that any amounts received from any U.S. Collateral or any
U.S. Loan Party shall be applied, first, in the order provided above in clauses
first through seventh to all amounts constituting U.S. Secured Obligations,
second, in the order provided above in clauses first through seventh to the
Canadian Secured Obligations, third, in the order provided above in clauses
eighth through eleventh to all amounts constituting U.S. Secured Obligations and
fourth in the order provided above in clauses eighth through eleventh to the
Canadian Secured Obligations and (ii) any such application of proceeds from any
Canadian Collateral or any Canadian Loan Party shall be made solely in respect
of Canadian Secured Obligations. Notwithstanding the foregoing, amounts received
from any Loan Party shall not be applied to any Excluded Swap Obligation of such
Loan Party. Notwithstanding anything to the contrary contained in this
Agreement, unless so directed by the Borrower Representative, or unless an Event
of Default is in existence, neither the Administrative Agent nor any Lender
shall apply any payment which it receives to any LIBOR Loan of a Class, except
(a) on the expiration date of the Interest Period applicable thereto or (b) in
the event, and only to the extent, that there are no outstanding ABR Loans or
Canadian Prime Rate Loans, respectively, and, in any such event, the Borrowers
shall pay the break funding payment required in accordance with Section 2.16.
The Administrative Agent and the Lenders shall have the continuing and exclusive
right to apply and reverse and reapply any and all such proceeds and payments to
any portion of the Secured Obligations.

(c) At the election of the Administrative Agent, all payments of principal,
interest, LC Disbursements, fees, premiums, reasonable and documented
reimbursable expenses (including, without limitation, all reimbursement for
fees, costs and expenses pursuant to Section 9.03), and other sums payable under
the Loan Documents, may be paid from the proceeds of Borrowings made hereunder
whether made following a request by the Borrower Representative pursuant to
Section 2.03 or a deemed request as provided in this Section, provided that, in
the case of any deemed request (other than a payment of principal, interest, LC
Disbursements, and fees due under this Agreement), the Administrative Agent
shall have provided the Borrower Representative prior written notice that such
sums are due and payable, the amount thereof and the date payment is requested
to be made, and provided further that no amount from any Canadian Loan Party
shall be applied to pay any U.S. Secured Obligations. Each Borrower hereby
irrevocably authorizes the Administrative Agent to make a Borrowing for the
purpose of

 

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paying each payment referred to in the preceding sentence on or after the date
any of the same becomes due and payable and agrees that all such amounts charged
shall constitute Loans (including Swingline Loans and Overadvances, but such a
Borrowing may only constitute a Protective Advance if it is to reimburse costs,
fees and expenses as described in Section 9.03) and that all such Borrowings
shall be deemed to have been requested pursuant to Section 2.03, 2.04 or 2.05,
as applicable.

(d) If, except as otherwise expressly provided herein, any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans or participations in
LC Disbursements resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other similarly situated Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and participations in LC Disbursements and Swingline
Loans of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by all such Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and participations in LC Disbursements and Swingline Loans; provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrowers pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements or Swingline Loans to any assignee or
participant, other than to the Borrowers or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may, subject to Section 9.08, exercise against such
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.

(e) Unless the Administrative Agent shall have received notice from the Borrower
Representative prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrowers will not make such payment, the Administrative
Agent may assume that the Borrowers have made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the Borrowers have not in fact made such payment, then each of the Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.

(f) If any Lender shall fail to make any payment required to be made by it
hereunder, then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision

 

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hereof), (i) apply any amounts thereafter received by the Administrative Agent
for the account of such Lender to satisfy such Lender’s obligations hereunder
until all such unsatisfied obligations are fully paid and/or (ii) hold any such
amounts in a segregated account as cash collateral for, and application to, any
future funding obligations of such Lender hereunder. Application of amounts
pursuant to (i) and (ii) above shall be made in any order determined by the
Administrative Agent in its discretion.

(g) The Administrative Agent may from time to time provide the Borrowers with
billing statements or invoices with respect to any of the Secured Obligations
(the “Billing Statements”). The Administrative Agent is under no duty or
obligation to provide Billing Statements, which, if provided, will be solely for
the Borrowers’ convenience. The Billing Statements may contain estimates of the
amounts owed during the relevant billing period, whether of principal, interest,
fees or other Secured Obligations. If the Borrowers pay the full amount
indicated on a Billing Statement on or before the due date indicated on such
Billing Statement, the Borrowers shall not be in default; provided, that
acceptance by the Administrative Agent, on behalf of the Lenders, of any payment
that is less than the payment due at that time shall not constitute a waiver of
the Administrative Agent’s or the Lenders’ right to receive payment in full at
another time.

SECTION 2.19. Mitigation Obligations; Replacement of Lenders.

(a) If any Lender requests compensation under Section 2.15, or if the Borrowers
are required to pay any Indemnified Taxes or additional amounts to any Lender or
any Governmental Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.

(b) If any Lender requests compensation under Section 2.15, or if the Borrowers
are required to pay any Indemnified Taxes or additional amounts to any Lender or
any Governmental Authority for the account of any Lender pursuant to
Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrowers
may, at their sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights (other than its existing rights to
payments pursuant to Section 2.15 or 2.17) and obligations under this Agreement
and other Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment);
provided that (i) if the assignee is not already a Lender, the Borrowers shall
have received the prior written consent of the Administrative Agent (and in
circumstances where its consent would be required under Section 9.04, the
Issuing Bank and the Swingline Lender), which consent shall not unreasonably be
withheld or delayed, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and funded participations in LC
Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such

 

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outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.15 or payments required
to be made pursuant to Section 2.17, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrowers to require
such assignment and delegation cease to apply.

SECTION 2.20. Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

(a) fees shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.12(a);

(b) such Defaulting Lender shall not have the right to vote on any issue on
which voting is required (other than to the extent expressly provided in
Section 9.02(b)) and the Commitment and Revolving Exposure of such Defaulting
Lender shall not be included in determining whether the Required Lenders have
taken or may take any action hereunder (including any consent to any amendment,
waiver or other modification pursuant to Section 9.02) or under any other Loan
Document; provided, that, except as otherwise provided in Section 9.02, this
clause (b) shall not apply to the vote of a Defaulting Lender in the case of an
amendment, waiver or other modification requiring the consent of such Lender or
each Lender directly affected thereby;

(c) if any Swingline Exposure or LC Exposure exists at the time a Lender becomes
a Defaulting Lender then:

(i) all or any part of the Swingline Exposure and LC Exposure of such Defaulting
Lender shall be reallocated among the non-Defaulting Lenders in accordance with
their respective Applicable Percentages but only to the extent that (x) the
conditions set forth in Section 4.02 are satisfied at the time of such
reallocation (and, unless the Borrower Representative shall have otherwise
notified the Administrative Agent at such time, the Borrowers shall be deemed to
have represented and warranted that such conditions are satisfied at such time)
and (y) the sum of all non-Defaulting Lenders’ Revolving Exposures plus such
Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total
of all non-Defaulting Lenders’ Commitments;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, then within one (1) Business Day following notice by the
Administrative Agent (x) first, the U.S. Borrowers or Canadian Borrowers, as
applicable, shall prepay such U.S. Swingline Exposure and Canadian Exposure,
respectively, and (y) second, the U.S. Borrowers shall Cash Collateralize, for
the benefit of the Issuing Bank, the U.S. Borrowers’ obligations corresponding
to such Defaulting Lender’s LC Exposure (after giving effect to any partial
reallocation pursuant to clause (i) above) for so long as such LC Exposure is
outstanding (and such Cash Collateral shall constitute Eligible Cash/Cash
Equivalents to the extent such Cash Collateral satisfies the definition
thereof);

 

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(iii) if the U.S. Borrowers Cash Collateralize any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (ii) above, the Borrowers shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is Cash Collateralized;

(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
clause (i) above, then the fees payable to the Lenders pursuant to Sections
2.12(a) and 2.12(b) shall be adjusted in accordance with such non-Defaulting
Lenders’ Applicable Percentages; and

(v) if all or any portion of such Defaulting Lender’s LC Exposure is neither
reallocated nor Cash Collateralized pursuant to clause (i) or (ii) above, then,
without prejudice to any rights or remedies of the Issuing Bank or any other
Lender hereunder, all letter of credit fees payable under Section 2.12(b) with
respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing
Bank until and to the extent that such LC Exposure is reallocated and/or Cash
Collateralized; and

(d) so long as such Lender is a Defaulting Lender, the Swingline Lender shall
not be required to fund any Swingline Loan and no Issuing Bank shall be required
to issue, amend, renew, extend or increase any Letter of Credit, unless it is
satisfied that the related exposure and such Defaulting Lender’s then
outstanding LC Exposure will be 100% covered by the Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrowers
in accordance with Section 2.20(c), and participating interests in any such
newly made Swingline Loan or newly issued or increased Letter of Credit shall be
allocated among non-Defaulting Lenders in a manner consistent with
Section 2.20(c)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to the Parent of any Lender shall occur
following the date hereof and for so long as such event shall continue or
(ii) the Swingline Lender or the Issuing Bank has a good faith belief that any
Lender has defaulted in fulfilling its obligations under one or more other
agreements in which such Lender commits to extend credit, the Swingline Lender
shall not be required to fund any Swingline Loan and the Issuing Bank shall not
be required to issue, amend or increase any Letter of Credit, unless the
Swingline Lender or the Issuing Bank, as the case may be, shall have entered
into arrangements with the Borrowers or such Lender, satisfactory to the
Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to
it in respect of such Lender hereunder.

In the event that each of the Administrative Agent, the Borrowers, the Issuing
Bank and the Swingline Lender agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect
the inclusion of such Lender’s Commitment and on the date of such readjustment
such Lender shall purchase at par such of the Loans of the other Lenders (other
than Swingline Loans) as the Administrative Agent shall determine may be
necessary in order for such Lender to hold such Loans in accordance with its
Applicable Percentage.

 

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SECTION 2.21. Returned Payments. If after receipt of any payment which is
applied to the payment of all or any part of the Obligations (including a
payment effected through exercise of a right of setoff), the Administrative
Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible setoff, or a diversion of trust funds, or for any
other reason (including pursuant to any settlement entered into by the
Administrative Agent or such Lender in its discretion), then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Administrative Agent or such Lender. The provisions of this
Section 2.21 shall be and remain effective notwithstanding any contrary action
which may have been taken by the Administrative Agent or any Lender in reliance
upon such payment or application of proceeds. The provisions of this
Section 2.21 shall survive the termination of this Agreement.

SECTION 2.22. Banking Services and Swap Agreements. Each Lender or Affiliate
thereof providing Banking Services for, or having Swap Agreements with, any Loan
Party or any Subsidiary of a Loan Party shall deliver to the Administrative
Agent, promptly after entering into such Banking Services or Swap Agreements,
written notice setting forth the aggregate amount of all Banking Services
Obligations and Swap Agreement Obligations of such Loan Party or Subsidiary
thereof to such Lender or Affiliate (whether matured or unmatured, absolute or
contingent). In addition, each such Lender or Affiliate thereof shall deliver to
the Administrative Agent, from time to time after a significant change therein
or upon a request therefor, a summary of the amounts due or to become due in
respect of such Banking Services Obligations and Swap Agreement Obligations. The
most recent information provided to the Administrative Agent shall be used in
determining the amounts to be applied in respect of such Banking Services
Obligations and/or Swap Agreement Obligations pursuant to Section 2.18(b).

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Loan Party represents and warrants to the Lenders that:

SECTION 3.01. Organization; Powers. Each Loan Party and each Restricted
Subsidiary is duly organized, validly existing and (to the extent the concept is
applicable in such jurisdiction and, in the case of any Restricted Subsidiary
other than any Loan Party, except where the failure to be so, individually or in
the aggregate, would not reasonably be expected to result in a Material Adverse
Effect) in good standing under the laws of the jurisdiction of its organization,
has all requisite power and authority to carry on its business as now conducted
and, except where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, is qualified
to do business and is in good standing in every jurisdiction where such
qualification is required.

SECTION 3.02. Authorization; Enforceability. The Transactions are within each
Loan Party’s organizational powers and have been duly authorized by all
necessary organizational actions and, if required, actions by equity holders.
Each Loan Document to which each Loan Party is a party has been duly executed
and delivered by such Loan Party and constitutes a legal,

 

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valid and binding obligation of such Loan Party, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.

SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect and except for filings necessary to perfect
Liens created pursuant to the Loan Documents, (b) will not violate any
Requirement of Law applicable to any Loan Party or any Subsidiary, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon any Loan Party or any Subsidiary or the assets of any
Loan Party or any Subsidiary, or give rise to a right thereunder to require any
payment to be made by any Loan Party or any of its Subsidiaries, except to the
extent such violation, default, or payment, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, and
(d) will not result in the creation or imposition of any Lien on any asset of
any Loan Party or any Subsidiary, except Liens created pursuant to the Loan
Documents.

SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The Company
has heretofore furnished to the Lenders its consolidated balance sheet and
statements of income, stockholders equity and cash flows (i) as of and for the
fiscal year ended February 1, 2014, reported on by Ernst & Young, independent
public accountants, and (ii) as of and for the fiscal quarter and the portion of
the fiscal year ended August 2, 2014, certified by its chief financial officer.
Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Company and
its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes in the case of the statements referred to in clause
(ii) above.

(b) No event, change or condition has occurred that has had, or could reasonably
be expected to have, a Material Adverse Effect, since February 1, 2014.

SECTION 3.05. Properties. (a) As of the Effective Date, Schedule E of each
Security Agreement sets forth the address of each parcel of real property that
is owned or leased by any Loan Party party thereto. Each of such leases and
subleases of each Loan Party is valid and enforceable in accordance with its
terms and is in full force and effect, and no default by any party to any such
lease or sublease exists, except to the extent the failure of the foregoing to
be true could not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect. Each of the Loan Parties and each of its
Restricted Subsidiaries has good and indefeasible title to, or valid leasehold
interests in, all of its material real and personal property, free of all Liens
other than those permitted by Section 6.02.

(b) (i) Each Loan Party and each Restricted Subsidiary owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property necessary to its business as currently conducted, and, except to the
extent such infringement would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect, the use thereof by each
Loan Party and each Restricted Subsidiary does not infringe in any respect

 

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upon the rights of any other Person; and (ii) each Loan Party’s and each
Restricted Subsidiary’s rights thereto are not subject to any licensing
agreement or similar arrangement (other than (A) restrictions relating to
software licenses that may limit such Loan Party’s ability to transfer or assign
any such agreement to a third party and (B) licensing agreements or similar
agreements that do not materially impair the ability of the Administrative Agent
or the Lenders to avail themselves of their rights of disposal and other rights
granted under the Collateral Documents in respect of Inventory).

SECTION 3.06. Litigation and Environmental Matters. (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of any Loan Party, threatened against any
Loan Party or any Restricted Subsidiary (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
any Loan Document or the Transactions.

(b) Except for the Disclosed Matters and any other matters that, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, no Loan Party or any Restricted Subsidiary (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
incurred an Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) has knowledge of any
Environmental Liability.

SECTION 3.07. Compliance with Laws and Agreements; No Default. Except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, each Loan Party and each
Restricted Subsidiary is in compliance with (i) all Requirement of Law
applicable to it or its property and (ii) all indentures, agreements and other
instruments binding upon it or its property. No Event of Default has occurred
and is continuing.

SECTION 3.08. Investment Company Status. No Loan Party or any Restricted
Subsidiary is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.

SECTION 3.09. Taxes. Each Loan Party and each Restricted Subsidiary has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which such Loan Party or such Restricted Subsidiary, as
applicable, has set aside on its books adequate reserves in accordance with GAAP
or (b) to the extent that the failure to do so could not be expected to result
in a Material Adverse Effect. No tax liens or claims are being presently
asserted with respect to any delinquent Taxes that could reasonably be expected
to have a Material Adverse Effect. Each Loan Party and each of its respective
Restricted Subsidiaries has withheld all employee withholdings and has made all
employer contributions to be withheld and made by it pursuant to applicable law
on account of the Canadian Pension Plans and the Canada Benefit Plans,
employment insurance and employee income taxes, except where the failure to do
so,

 

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individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect.

SECTION 3.10. ERISA; Labor Matters; Canadian Pension Plans and Canadian Benefit
Plans.

(a) Except as could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, (i) no ERISA Event has
occurred or is reasonably expected to occur, (ii) neither any Loan Party nor any
ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA and (iii) on the Effective Date, the present
value of all accumulated benefit obligations under each Plan that is subject to
Title IV of ERISA (based on the assumptions used for purposes of Statement of
Accounting Standards Topic No. 715) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed the fair value of the
assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans that are subject to Title IV of ERISA
(based on the assumptions used for purposes of Statement of Accounting Standards
Topic No. 715) did not, as of the date or dates of the most recent financial
statements reflecting such amounts, exceed the fair value of the assets of all
such underfunded Plans.

(b) Except as could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, (i) there are no strikes,
lockouts, slowdowns or any other labor disputes against Company or any
Restricted Subsidiary pending or, to the knowledge of Company, threatened,
(ii) the hours worked by and payments made to employees of Company and the
Restricted Subsidiaries have not been in violation of the Fair Labor Standards
Act of 1938, the Employee Standards Act (Ontario) or any other applicable
federal, state, provincial, territorial, local or foreign law dealing with such
matters and (iii) all payments due from Company or any Restricted Subsidiary, or
for which any claim may be made against Company or any Restricted Subsidiary, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of Company or such
Subsidiary to the extent required by GAAP. The consummation of the Transactions
do not give rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to which Company or
any Restricted Subsidiary is bound.

(c) Schedule 3.10 lists as of the Effective Date all Canadian Benefit Plans and
Canadian Pension Plans currently maintained or contributed to by the Loan
Parties and their Subsidiaries. Except as could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect, as of
the Effective Date, the Canadian Pension Plans are duly registered under the ITA
and all other applicable laws which require registration. Except as could not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect, (i) each Loan Party and each of their Subsidiaries has
complied with and performed all of its obligations under and in respect of the
Canadian Pension Plans and Canadian Benefit Plans under the terms thereof, any
funding agreements and all applicable laws (including any fiduciary, funding,
investment and administration obligations), (ii) all employer and employee
payments, contributions or premiums to be remitted, paid to or in respect of
each Canadian Pension Plan or Canadian Benefit Plan have been paid in a timely
fashion in accordance with the terms thereof, any funding agreement and all
applicable laws, and (iii) there have been no improper withdrawals or
applications of the assets of the Canadian Pension Plans

 

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or the Canadian Benefit Plans. To the knowledge of the Borrower Representative,
no facts or circumstances have occurred or existed that could result, or be
reasonably anticipated to result, in the declaration of a termination of any
Canadian Pension Plan by any Governmental Authority under applicable laws. No
promises of benefit improvements under the Canadian Pension Plans or the
Canadian Benefit Plans have been made except where such improvement could not be
reasonably expected to have a Material Adverse Effect, and, in any event, no
such improvements will result in a solvency deficiency or going concern unfunded
liability in the affected Canadian Pension Plans which could be reasonably
expected to have a Material Adverse Effect. The pension fund under each Canadian
Pension Plan is exempt from the payment of any income tax and there are no
material taxes, penalties or interest owing in respect of any such pension fund.
All material reports and disclosures relating to the Canadian Pension Plans
required by such plans and any Requirement of Law to be filed or distributed
have been filed or distributed. No Canadian Benefit Plans (other than any
applicable Canadian MEPP) provide for benefits beyond retirement or other
termination of service to employees or former employees or to the beneficiaries
or dependents of such employees. There are no outstanding disputes concerning
the assets of the Canadian Pension Plans or the Canadian Benefit Plans which
could be reasonably expected to have a Material Adverse Effect. Each of the
Canadian Pension Plans is fully funded on both a going concern and on a solvency
basis (using actuarial methods and assumptions which are consistent with the
valuations last filed with the applicable Governmental Authorities and which are
consistent with generally accepted actuarial principles) and no Termination
Event has occurred.

SECTION 3.11. Disclosure. The Loan Parties have disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which any Loan
Party or any Restricted Subsidiary is subject, and all other matters known to
it, that, as of the Effective Date, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. All reports,
financial statements, certificates or other information furnished by or on
behalf of any Loan Party or any Restricted Subsidiary to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement or any
other Loan Document (as modified or supplemented by other information so
furnished) other than projections, other forward-looking information and
information of a general economic or industry specific nature, when taken as a
whole, do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein not
materially misleading in light of the circumstances under which such statements
were made; provided that, with respect to projected financial information, the
Loan Parties represent only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time delivered and, if
such projected financial information was delivered prior to the Effective Date,
as of the Effective Date (it being understood that projections are subject to
inherent uncertainties and contingencies which may be outside the control of any
Loan Party and that no assurance can be given that such projected financial
information will be realized).

SECTION 3.12. [Reserved].

SECTION 3.13. Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Effective Date, (i) the fair value of the assets of
the Company and its Restricted Subsidiaries, on a consolidated basis, at a fair
valuation, will exceed its debts and liabilities, subordinated, contingent or
otherwise; (ii) the present fair saleable value of the property of the

 

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Company and its Restricted Subsidiaries, on a consolidated basis, will be
greater than the amount that will be required to pay the probable liability of
their debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; (iii) the Company
and its Restricted Subsidiaries, on a consolidated basis, will be able to pay
their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (iv) the Company and its
Restricted Subsidiaries, on a consolidated basis, will not have unreasonably
small capital with which to conduct the business in which they are engaged as
such business is now conducted and is proposed to be conducted after the
Effective Date. The determination of the foregoing shall take into account all
properties and liabilities of the Company and its Restricted Subsidiaries
regardless of whether, or the amount at which, any such property or liability is
included on a balance sheet of any such Person prepared in accordance with GAAP,
including properties such as contingent contribution or subrogation rights,
business prospects, distribution channels and goodwill.

(b) No Loan Party intends to, nor will permit any Restricted Subsidiary to, and
no Loan Party believes that it or any Restricted Subsidiary will, incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it or any such Restricted
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Restricted Subsidiary.

(c) Immediately after the consummation of the Transactions to occur on the
Effective Date, with respect to each Canadian Loan Party, (i) each Canadian Loan
Party’s property is sufficient, if disposed of at a fairly conducted sale under
legal process, to enable payment of all its obligations, due and accruing due;
(ii) each Canadian Loan Party will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities generally
become due; (iii) each Canadian Loan Party has not ceased paying its current
obligations in the ordinary course of business as they generally become due, and
(iv) for greater certainty, each Canadian Loan Party is not an “insolvency
person” as such term is defined in the BIA.

In respect of each of the foregoing, the determination of the sum of properties
at a fair valuation or the present fair saleable value of properties shall be
made on a going concern basis. In computing the amount of contingent or
unrealized properties or contingent or unliquidated liabilities at any time,
such properties and liabilities will be computed at the amounts which, in light
of all the facts and circumstances existing at such time, represent the amount
that reasonably can be expected to become realized properties or matured
liabilities, as applicable. In computing the amount that would be required to
pay a Person’s probable liability on its existing debts as they become absolute
and matured, reasonable valuation techniques, including a present value
analysis, shall be applied using such rates over such periods as are appropriate
under the circumstances, and it is understood that, in appropriate
circumstances, the present value of contingent liabilities may be zero.

SECTION 3.14. Insurance. Exhibit G to each Security Agreement sets forth a
description of all insurance maintained by or on behalf of the Loan Parties
party thereto and their Restricted Subsidiaries as of the Effective Date. As of
the Effective Date, no premiums in respect of such insurance are overdue. Each
Loan Party maintains, and has caused each Restricted Subsidiary to maintain,
with financially sound and reputable insurance companies,

 

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insurance on all their real and personal property in such amounts, subject to
such deductibles and self-insurance retentions and covering such properties and
risks as are adequate.

SECTION 3.15. Capitalization and Subsidiaries. Schedule 3.15 sets forth, as of
the Effective Date, the name, type of organization and jurisdiction of
organization of, and the percentage of each class of Equity Interests owned by
the Company or any Subsidiary in each Subsidiary. All of the issued and
outstanding Equity Interests in each Subsidiary owned by any Loan Party have
been (to the extent such concepts are relevant with respect to such Equity
Interests) duly authorized and validly issued and are fully paid and
non-assessable (except as such rights may arise under mandatory provisions of
applicable statutory law that may not be waived and not as a result of any
rights contained in organizational documents). Additionally, Schedule 3.15 sets
forth whether any such Subsidiary is a Restricted Subsidiary or an Unrestricted
Subsidiary as of the Effective Date.

SECTION 3.16. Security Interest in Collateral. The provisions of this Agreement
and the other Loan Documents create legal and valid Liens on the Collateral
granted by (a) the U.S. Loan Parties in favor of the Administrative Agent (for
the benefit of the Secured Parties), securing the Secured Obligations and
(b) the Canadian Loan Parties in favor of the Administrative Agent (for the
benefit of the Secured Parties), securing the Canadian Secured Obligations,
constitute perfected and continuing Liens on the Collateral (to the extent such
Liens can be perfected by possession, by filing a UCC financing statement, a
PPSA financing statement, a registration in Quebec or equivalent under each
applicable jurisdiction, by recording a Mortgage in the appropriate
jurisdiction, or by a control agreement), securing the applicable Secured
Obligations, enforceable against the applicable Loan Party and having priority
over all other Liens on the Collateral except in the case of (x) Liens permitted
by Section 6.02, to the extent any such Liens would have priority over the Liens
in favor of the Administrative Agent pursuant to any applicable law or an
agreement permitted hereunder, (y) Liens perfected only by possession (including
possession of any certificate of title) to the extent the Administrative Agent
has not obtained or does not maintain possession of such Collateral and
(z) Liens perfected only by control, filing or recording to the extent that
Administrative Agent has not obtained control or has not recorded such lien.

SECTION 3.17. Federal Reserve Regulations. No part of the proceeds of any Loan
or Letter of Credit has been used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X.

SECTION 3.18. [Reserved].

SECTION 3.19. Anti-Corruption Laws and Sanctions. The Company has implemented
and maintains in effect policies and procedures designed to ensure compliance by
each Loan Party, its Subsidiaries and their respective directors, officers,
employees and agents with Anti-Corruption Laws and applicable Sanctions, and the
Company, its Subsidiaries and their respective officers and, to the knowledge of
Company, its directors, employees, and agents, are in compliance with
Anti-Corruption Laws and applicable Sanctions in all material respects. None of
(a) the Company, any Subsidiary or and their respective officers, or (b) to the
knowledge of any such Loan Party or Subsidiary, any of their respective
directors, officers or employees any agent of such Loan Party or any Subsidiary
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connection with or benefit from the credit facility established hereby, is a
Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds,
Transaction or other transaction contemplated by this Agreement or the other
Loan Documents will violate Anti-Corruption Laws or applicable Sanctions.

SECTION 3.20. Common Enterprise. The successful operation and condition of each
of the Loan Parties is dependent on the continued successful performance of the
functions of the group of the Loan Parties as a whole and the successful
operation of each of the Loan Parties is dependent on the successful performance
and operation of each other Loan Party. Each Loan Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
(i) successful operations of each of the other Loan Parties and (ii) the credit
extended by the Lenders to the Borrowers hereunder, both in their separate
capacities and as members of the group of companies. Each Loan Party has
determined that execution, delivery, and performance of this Agreement and any
other Loan Documents to be executed by such Loan Party is within its purpose, in
furtherance of its direct and/or indirect business interests, will be of direct
and/or indirect benefit to such Loan Party, and is in its best interest.

SECTION 3.21. Credit Card Agreements. All Credit Card Agreements relating to
Eligible Credit Card Accounts are in full force and effect, currently binding
upon each Loan Party that is a party thereto and, to the knowledge of the Loan
Parties, binding upon other parties thereto in accordance with their terms. The
Loan Parties are in compliance in all material respects with each such Credit
Card Agreement.

ARTICLE IV

CONDITIONS

SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):

(a) Credit Agreement and Other Loan Documents. The Administrative Agent (or its
counsel) shall have received (i) from each party hereto either (A) a counterpart
of this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include facsimile or other
electronic transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement, and (ii) either (A) a
counterpart of each other Loan Document signed on behalf of each party thereto
or (B) written evidence satisfactory to the Administrative Agent (which may
include facsimile or other electronic transmission of a signed signature page
thereof) that each such party has signed a counterpart of such Loan Document.

(b) Opinions. The Administrative Agent shall have received a written opinion of
(i) Porter, Wright, Morris & Arthur LLP, counsel to the Loan Parties’ (together
with (x) where not covered by such opinion, opinions of local counsel where each
U.S. Loan Party is organized and (y) any real estate related opinions separately
described herein), and (ii) Osler, Hoskin & Harcourt LLP, Canadian counsel to
the Canadian Loan Parties, together with, where not covered

 

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by such opinion, opinions of provincial counsel where each Canadian Loan Party
is organized and such other opinions as the Administrative Agent shall require,
in each case addressed to the Administrative Agent, the Issuing Bank and the
Lenders and in form and substance reasonably satisfactory to the Administrative
Agent and its counsel.

(c) Financial Statements and Projections. The Lenders shall have received
(i) audited consolidated financial statements for the two most recent fiscal
years of the Company ended prior to the Effective Date, (ii) unaudited interim
consolidated financial statements of each fiscal quarter ended after the date of
the latest applicable financial statements delivered pursuant to clause (i) of
this paragraph as to which such financial statements are available, (iii) the
Company’s most recent projected income statement, and cash flows through the end
of the Company’s fiscal year ending January 2018 (prepared on a quarterly basis
through January 31, 2016 and on an annual basis thereafter), and (iv) the
projected Borrowing Base on a monthly basis through January 31, 2015 and
quarterly thereafter through the end of the Company’s fiscal year ending January
2016.

(d) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of
each Loan Party, dated the Effective Date and executed by its Secretary or
Assistant Secretary, which shall (A) certify the resolutions of its Board of
Directors, members or other body authorizing the execution, delivery and
performance of the Loan Documents to which it is a party, (B) identify by name
and title and bear the signatures of the Responsible Officers of such Loan Party
authorized to sign the Loan Documents to which it is a party, and (C) contain
appropriate attachments, including the certificate or articles of incorporation
or organization of each Loan Party certified by the relevant authority of the
jurisdiction of organization of such Loan Party and a true and correct copy of
its by-laws or operating, management or partnership agreement, and (ii) a good
standing certificate for each Loan Party from its jurisdiction of organization
or the substantive equivalent available in the jurisdiction of organization for
each Loan Party from the appropriate governmental officer in such jurisdiction.

(e) Collateral and Guaranty Requirement. Subject to Section 5.18, the Collateral
and Guaranty Requirement shall have been satisfied with respect to all
Designated Subsidiaries as of the Effective Date.

(f) No Default Certificate. The Administrative Agent shall have received a
certificate, signed by a Responsible Officer of the Borrower Representative,
dated as of the Effective Date (i) stating that no Default has occurred and is
continuing, (ii) stating that the representations and warranties contained in
Article III are true and correct as of such date, and (iii) certifying any other
factual matters as may be reasonably requested by the Administrative Agent.

(g) Fees. The Lenders and the Administrative Agent shall have received all fees
required to be paid, and all expenses for which invoices have been presented
(including the reasonable and documented fees and expenses of legal counsel), on
or before the Effective Date.

(h) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each jurisdiction where the Loan Parties are organized and
where the assets

 

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of the Loan Parties are located, and such search shall reveal no Liens on any of
the assets of the Loan Parties except for Liens permitted by Section 6.02 or
subject to satisfactory estoppel letters discharged on or prior to the Effective
Date pursuant to a pay-off letter or other documentation satisfactory to the
Administrative Agent.

(i) Pay-Off Letter. The Administrative Agent shall have received satisfactory
pay-off letters for all existing Indebtedness to be repaid from the proceeds of
the initial Borrowing, confirming that all Liens upon any of the property of the
Loan Parties constituting Collateral will be terminated concurrently with such
payment and all letters of credit issued or guaranteed as part of such
Indebtedness shall have been cash collateralized or supported by a Letter of
Credit.

(j) Control Agreements. Subject to Section 5.18, the Administrative Agent shall
have received each Deposit Account Control Agreement and Securities Account
Control Agreement required to be provided pursuant to the Security Agreements.

(k) Credit Card Notifications. The Administrative Agent shall have received
copies of duly executed Credit Card Notifications with respect to all Eligible
Credit Card Accounts.

(l) Solvency. The Administrative Agent shall have received a solvency
certificate from a Financial Officer of the Company.

(m) Borrowing Base Certificate. The Administrative Agent shall have received a
Borrowing Base Certificate which calculates the U.S. Borrowing Base and the
Canadian Borrowing Base as of the end of the fiscal quarter immediately
preceding the Effective Date.

(n) Closing Availability. After giving effect to all Borrowings to be made on
the Effective Date, the issuance of any Letters of Credit on the Effective Date
and the payment of all fees and expenses due hereunder, and with all of the Loan
Parties’ indebtedness, liabilities, and obligations current, Availability shall
not be less than $250,000,000.

(o) Filings, Registrations and Recordings. Each document (including any UCC or
PPSA financing statement) required by the Collateral Documents or under law or
reasonably requested by the Administrative Agent to be filed, registered or
recorded in order to create in favor of the Administrative Agent, for the
benefit of itself, the Lenders and the other Secured Parties, a perfected Lien
on the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section 6.02),
shall be in proper form for filing, registration or recordation.

(p) [Reserved.]

(q) Insurance. The Administrative Agent shall have received evidence of
insurance coverage in form, scope, and substance reasonably satisfactory to the
Administrative Agent and otherwise in compliance with the terms of Section 5.10
hereof and Section 4.10 of the Security Agreement.

(r) Letter of Credit Application. If a Letter of Credit is requested to be
issued on the Effective Date, the Administrative Agent shall have received a
properly completed letter of credit application (whether standalone or pursuant
to a master agreement, as applicable).

 

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(s) Tax Withholding. The Administrative Agent shall have received a properly
completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party.

(t) Corporate Structure. The corporate structure, capital structure and other
material debt instruments, material accounts and governing documents of the
Borrowers and their Subsidiaries shall be acceptable to the Administrative Agent
in its Permitted Discretion.

(u) Field Examination. The Administrative Agent or its designee shall have
conducted a field examination of the Loan Parties’ Accounts, Credit Card
Accounts, Inventory and related working capital matters and of the Loan Parties’
related data processing and other systems, the results of which shall be
satisfactory to the Administrative Agent in its Permitted Discretion.

(v) Legal Due Diligence. The Administrative Agent and its counsel shall have
completed all legal due diligence, the results of which shall be satisfactory to
Administrative Agent in its Permitted Discretion.

(w) Inventory Appraisal(s). The Administrative Agent shall have received an
appraisal of the Loan Parties’ Inventory from one or more firms reasonably
satisfactory to the Administrative Agent, which appraisal shall be satisfactory
to the Administrative Agent in its Permitted Discretion.

(x) USA PATRIOT Act, Etc. The Administrative Agent and the Lenders shall have
received all documentation and other information required by bank regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the USA PATRIOT Act and Proceeds of Crime Act,
for each Loan Party.

The Administrative Agent shall notify the Borrowers, the Lenders and the Issuing
Bank of the Effective Date, and such notice shall be conclusive and binding.

SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions:

(a) The representations and warranties of the Loan Parties set forth in the Loan
Documents shall be true and correct in all material respects with the same
effect as though made on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable (it being understood and agreed that any representation or warranty
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date, and that
any representation or warranty which is subject to any materiality qualifier
shall be required to be true and correct in all respects);

(b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default or Event of Default shall have occurred and be
continuing; and

 

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(c) After giving effect to any Borrowing or the issuance, amendment, renewal or
extension of any Letter of Credit, the Borrowers shall be in compliance with the
Revolving Exposure Limitations.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrowers on the date thereof as to the matters specified in paragraphs (a),
(b), and (c) of this Section.

Notwithstanding the failure to satisfy the conditions precedent set forth in
paragraphs (a) or (b) of this Section, unless otherwise directed by the Required
Lenders, the Administrative Agent may, but shall have no obligation to, continue
to make Loans, and an Issuing Bank may, but shall have no obligation to, issue,
amend, renew or extend, or cause to be issued, amended, renewed or extended, any
Letter of Credit for the ratable account and risk of the Lenders from time to
time if the Administrative Agent believes that making such Loans or issuing,
amending, renewing or extending, or causing the issuance, amendment, renewal or
extension of, any such Letter of Credit is in the best interests of the Lenders.

ARTICLE V

AFFIRMATIVE COVENANTS

Until the Commitments shall have expired or been terminated and the principal of
and interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document (other than contingent or indemnity obligations for which no
claim has been made) shall have been paid in full and all Letters of Credit
shall have expired or have been Cash Collateralized pursuant to the terms
hereof, or terminated, in each case without any pending draw, and all LC
Disbursements shall have been reimbursed, each Loan Party executing this
Agreement covenants and agrees, jointly and severally with all of the other Loan
Parties, with the Lenders that:

SECTION 5.01. Financial Statements; Borrowing Base and Other Information. The
Borrower Representative will furnish to the Administrative Agent, for
distribution to each Lender:

(a) within 90 days after the end of each fiscal year of the Company, its audited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported
on by independent public accountants of recognized national standing (without a
“going concern” or like qualification, or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, accompanied by any management letter prepared by said
accountants; provided that the requirements of this clause (a) shall be deemed
to have been satisfied if the Administrative Agent has been furnished with a
consolidated annual report for the Company and its Subsidiaries containing the
foregoing information on form 10-K in the time period specified above in this
clause (a);

 

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(b) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Company, its consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of such fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by a Financial Officer of the Company as
presenting fairly in all material respects the financial condition and results
of operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes; provided that the requirements
of this clause (b) shall be deemed to have been satisfied if the Administrative
Agent has been furnished with a quarterly report for the Company and its
Subsidiaries containing the foregoing information on form 10-Q in the time
period specified above in this clause (b);

(c) During any Increased Reporting Period, within 30 days after the end of each
fiscal month of the Company, its consolidated balance sheet and related
statements of operations and cash flows as of the end of and for such fiscal
month and the then elapsed portion of the fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or periods of
(or, in the case of the balance sheet, as of the end of) the previous fiscal
year, all certified by a Financial Officer of the Company as presenting fairly
in all material respects the financial condition and results of operations of
the Company and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;

(d) concurrently with any delivery of financial statements under clause (a),
(b) or (c) above, a Compliance Certificate, which shall (i) when delivered
concurrently with the delivery of the financial statements delivered under
clause (b) or (c), certify that such financial statements present fairly in all
material respects the financial condition and results of operations of the
Company and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes, (ii) certify as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (iii) set forth reasonably
detailed calculations of the Fixed Charge Coverage Ratio (whether or not
required to be tested pursuant to Section 6.12) and, if applicable,
demonstrating compliance with Section 6.12, and (iv) state whether any change in
GAAP or in the application thereof has occurred since the date of the audited
financial statements referred to in Section 3.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate, (v) describe whether, since the later of the
Effective Date and the date of the last Compliance Certificate, any Loan Party
shall have (A) changed its name as it appears in official filings in the state
or province of incorporation or organization, (B) changed its chief executive
office, (C) changed the type of entity that it is, (D) change its organization
identification number, if any, issued by its state or province of incorporation
or other organization, or (E) changed its state or province of incorporation or
organization;

(e) [Reserved];

(f) no later than 60 days after the end of each fiscal year of the Company, a
copy of the plan and forecast (including a projected consolidated balance sheet,
income statement and

 

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cash flow statement) of the Company for each quarter of such fiscal year (the
“Projections”) in form reasonably satisfactory to the Administrative Agent (it
being understood that the Company’s customary format consistent with the format
delivered to the Administrative Agent in connection with the Effective Date will
be satisfactory);

(g) on or before each Borrowing Base Reporting Date, a Borrowing Base
Certificate setting forth a computation of the Borrowing Base as of the most
recently ended fiscal quarter, fiscal month or week, as applicable, to which
such Borrowing Base Reporting Date relates, together with supporting information
and any additional reports with respect to the Borrowing Base that the
Administrative Agent may reasonably request; and the Real Property Component of
the Borrowing Base shall be updated immediately upon any Real Estate ceasing to
be Eligible Real Property;

(h) on or before each Borrowing Base Reporting Date, the following information
as of the most recently ended fiscal quarter, fiscal month or week, as
applicable, to which such Borrowing Base Reporting Date relates, all delivered
electronically in a text formatted file in form reasonably acceptable to the
Administrative Agent:

(i) (A) to the extent Eligible Trade Accounts are included in the Borrowing Base
as of such date, a reasonably detailed aging of the Loan Parties’ Accounts, in a
form reasonably acceptable to the Administrative Agent, and (B) a reasonably
detailed aging of the Loan Parties’ Credit Card Accounts, in a form reasonably
acceptable to the Administrative Agent;

(ii) a schedule detailing the Loan Parties’ Inventory, in form satisfactory to
the Administrative Agent;

(iii) a worksheet of calculations prepared by the Loan Parties to determine
Eligible Credit Card Accounts, Eligible Trade Accounts and Eligible Inventory,
such worksheets detailing the Credit Card Accounts, Accounts and Inventory
excluded from Eligible Credit Card Accounts, Eligible Trade Accounts and
Eligible Inventory and the reason for such exclusion;

(iv) a reconciliation of the Loan Parties’ Credit Card Accounts, Accounts and
Inventory between (A) the amounts shown in the Loan Parties’ general ledger and
financial statements and the reports delivered pursuant to clauses (i) and
(ii) above and (B) the amounts and dates shown in the reports delivered pursuant
to clauses (i) and (ii) above and the Borrowing Base Certificate delivered
pursuant to clause (g) above as of such date;

(v) if there are Eligible Trade Accounts included in the Borrowing Base, a
schedule of the Loan Parties’ accounts payable as of the month then ended,
delivered electronically in a text formatted file in a form reasonably
acceptable to the Administrative Agent; and

(vi) such other information as the Administrative Agent may from time to time
reasonably request.

 

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(i) concurrent with any field exam permitted under Section 5.06 (or at such
other times as agreed upon by the Administrative Agent and the Company), the
Borrower Representative shall provide notice to the Administrative Agent of any
removal or addition of any credit card issuer or credit card processor to the
extent that (i) in the case of a removal, Credit Card Accounts of such credit
card issuer or credit card processor were included in any previous Borrowing
Base or (ii) in the case of an addition, the Borrower Representative desires to
include the Credit Card Accounts of such credit card issuer or credit card
processor in the Borrowing Base, and concurrently with any such notice of an
addition, the Company shall provide to the Administrative Agent (A) evidence
reasonably satisfactory to the Administrative Agent that a Credit Card
Notification shall have been delivered to such credit card issuer or credit card
processor, (B) a true and complete copy of each Credit Card Agreement with
respect thereto, together with all material amendments, waivers and other
modifications thereto, and (C) such other information with respect thereto as
may be reasonably requested by the Administrative Agent; for the avoidance of
doubt, unless otherwise agreed by the Administrative Agent, no Credit Card
Accounts of an added credit card issuer or credit card processor may be included
in the Borrowing Base until a field exam with respect thereto has been
completed;

(j) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Company or
any Subsidiary with the SEC or any Canadian federal or provincial securities
commission, or with any national securities exchange, or distributed by the
Company to its shareholders generally, as the case may be;

(k) (A) promptly after any request therefor by the Administrative Agent or any
Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that
any Loan Party or any ERISA Affiliate may request with respect to any
Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA
that any Loan Party or any ERISA Affiliate may request with respect to any
Multiemployer Plan; provided that if a Loan Party or any ERISA Affiliate has not
requested such documents or notices from the administrator or sponsor of the
applicable Multiemployer Plan and is eligible to request such documents or
notices, the applicable Loan Party or the applicable ERISA Affiliate shall
promptly make a request for such documents and notices from such administrator
or sponsor and shall provide copies of such documents and notices promptly after
receipt thereof and (B) promptly after the filing thereof with any Governmental
Authority, a copy of each actuarial valuation report and, upon request of the
Administrative Agent, Annual Information Return in respect of any Canadian
Benefit Plan (other than a Canadian MEPP) or a Canadian Pension Plan;

(l) (i) where an actuarial report on a Canadian Defined Benefit Plan discloses a
solvency or wind-up deficiency, on a quarterly basis thereafter whenever and for
so long as a solvency or wind-up deficiency exists promptly following the end of
each fiscal quarter of a Canadian Borrower, a summary actuarial update for such
Canadian Defined Benefit Plan, which summary update shall reflect the updated
value of the assets of the Canadian Defined Benefit Plan and discount rates at
the end of the quarter to which the summary relates but otherwise utilizing the
facts and assumptions set forth in the most recently delivered actuarial report,
and (ii) when requested by the Administrative Agent, the most recent defined
benefit Canadian Defined Benefit Plan financial statements;

 

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(m) within five (5) Business Days after a Responsible Officer of the Borrower
Representative has knowledge of the production or the receipt by a Loan Party
thereof, copies of (i) any material environmental reports produced by or on
behalf of any Loan Party or Restricted Subsidiary or (ii) any notice received or
sent by any Loan Party or Restricted Subsidiary with respect to the Specified
Environmental Order; and

(n) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of any Loan Party or
any Restricted Subsidiary, or compliance with the terms of this Agreement, as
the Administrative Agent or any Lender may reasonably request.

The Borrower Representative shall be deemed to have furnished to the
Administrative Agent the financial statements and certificates required to be
delivered pursuant to Sections 5.01(a) and (b) and the reports and other
material required by Section 5.01(j) upon (i) the filing of such financial
statements or material by the Company through the SEC’s EDGAR system (or any
successor electronic gathering system) or the publication by the Company of such
financial statements on its website, so long as such system or website is
publicly available; provided that, at the request of the Administrative Agent or
any Lender, the Borrower Representative shall promptly deliver electronic or
paper copies of such filings together all accompanying exhibits, attachments,
calculations, or other supporting documentation included with such filing.

SECTION 5.02. Notices of Material Events. The Borrower Representative will
furnish to the Administrative Agent prompt (but in any event within any time
period after such Responsible Officer has such knowledge that may be specified
below) written notice of the following:

(a) within two (2) Business Days after knowledge by a Responsible Officer of the
Borrower Representative of the occurrence of any Default or Event of Default;

(b) within two (2) Business Days after knowledge by a Responsible Officer of the
Borrower Representative of the receipt by any Loan Party or any Subsidiary of
any notice of any investigation by a Governmental Authority or any litigation or
proceeding commenced or threatened against any Loan Party or any Subsidiary
that, individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect;

(c) within five (5) Business Days after knowledge by a Responsible Officer of
the Borrower Representative of the occurrence of (i) any Casualty or Taking with
respect to Collateral having a value in the amount of $10,000,000 or more,
whether or not covered by insurance, and (ii) any Casualty, Taking, or other
Material Event with respect to Eligible Real Property, whether or not covered by
insurance;

(d) within ten (10) Business Days after knowledge by a Responsible Officer of
the Borrower Representative of the receipt by any Loan Party or Restricted
Subsidiary thereof, any default notice received under or with respect to any
leased location or public warehouse where Collateral in the amount of
$10,000,000 or more is located;

 

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(e) after knowledge by a Responsible Officer of the Borrower Representative of
the occurrence of any ERISA Event that results, or could reasonably be expected
to result in, a Material Adverse Effect;

(f) after knowledge by a Responsible Officer of the Borrower Representative of
(i) any default in, or breach of, a Canadian Defined Benefit Plan; (ii) any
action or inaction of a plan sponsor or administrator that could lead to a
Termination Event; (iii) receipt of any notice from, or any action of, any
Governmental Authority that that could lead to a Termination Event; (iv) copies
of all actuarial valuations conducted for all Canadian Defined Benefit Plans;
and (v) the existence of any Unfunded Pension Liability in any Canadian Defined
Benefit Plans; which, for each of clause (i)-(v), results, or could reasonably
be expected to result in, a Material Adverse Effect;

(g) within five (5) Business Days after knowledge by a Responsible Officer of
the Borrower Representative of the occurrence of any default or event of default
under a Specified L/C Facility or any other event that requires, or enables any
issuing bank under the Specified L/C Facility to require, the Company or any of
its Subsidiaries to provide cash collateral for all or any portion of any
Specified L/C Obligations;

(h) within five (5) Business Days after knowledge by a Responsible Officer of
the Borrower Representative of the occurrence of any default or event of default
under any Permitted Term Loan Indebtedness or receipt of any notice asserting a
default or event of default thereunder (together with a copy of such notice);

(i) (A) within five (5) Business Days after knowledge by a Responsible Officer
of the Borrower Representative (1) of the occurrence of any default or event of
default by any Person under any Credit Card Agreement relating to Credit Cards
Accounts contained in the Borrowing Base, (2) the establishment of, or receipt
by any Loan Party of a notice of any proposed establishment of, a reserve or
reserve account (or similar concept), whether in the form of an actual deposit
account, book entry or otherwise, in connection with any Credit Card Agreement
for the purposes of securing all or any portion of any Loan Party’s existing or
potential obligations to the applicable credit card issuer or processor under
such Credit Card Agreement, or (3) that any credit card issuer, credit card
processor or debit card or mall card issuer or provider with respect to Credit
Card Accounts ceases to meet the requirements of clause (f) of the definition of
“Eligible Credit Card Accounts” and (B) on and at the time of submission to the
Administrative Agent of the Borrowing Base Certificate after a Responsible
Officer of the Borrower Representative has knowledge that any Loan Party has
entered into a material amendment, waiver or other modification of a Credit Card
Agreement applicable to any Credit Card Account included in the Borrowing Base;

(j) within five (5) Business Days after knowledge by a Responsible Officer of
the Borrower Representative of the filing of any Lien with respect to any
delinquent Taxes in excess of $2,000,000; and

(k) promptly after knowledge by a Responsible Officer of the Borrower
Representative of any other development that results, or could reasonably be
expected to result in, a Material Adverse Effect.

 

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Each notice delivered under this Section shall be accompanied by a statement of
a Responsible Officer of the Borrower Representative setting forth the details
of the event or development requiring such notice and any action taken or
proposed to be taken with respect thereto.

SECTION 5.03. Existence; Conduct of Business. Each Loan Party will, and will
cause each Restricted Subsidiary to do or cause to be done all things reasonably
necessary to preserve, renew and keep in full force and effect (i) its legal
existence and (ii) except to the extent failure to do so could not, individually
or in the aggregate, be reasonably expected to have a Material Adverse Effect,
the rights, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual property rights, licenses and permits with respect
to the conduct of its business, and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is conducted, provided
that the foregoing shall not prohibit any merger, consolidation, liquidation,
dissolution, disposition or other transaction permitted under Section 6.03 or
Section 6.05.

SECTION 5.04. Payment of Obligations. Each Loan Party will, and will cause each
Restricted Subsidiary to, pay or discharge all of its respective Material
Indebtedness and all other material liabilities and obligations, including
Taxes, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) such Loan Party or Restricted Subsidiary has set
aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.

SECTION 5.05. Maintenance of Properties. Each Loan Party will, and will cause
each Restricted Subsidiary to, keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted and except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

SECTION 5.06. Books and Records; Inspection Rights. Each Loan Party will, and
will cause each Subsidiary to, (a) keep proper books of record and account in
which full, true and correct (in all material respects) entries are made of all
dealings and transactions in relation to its business and activities and
(b) permit any representatives designated by the Administrative Agent (including
employees of the Administrative Agent or any consultants, accountants, and
agents retained by the Administrative Agent), as and when determined by the
Administrative Agent, upon reasonable prior notice and during reasonable hours,
to visit and inspect its properties, to conduct at such Loan Party’s premises
field examinations of such Loan Party’s assets, liabilities, books and records,
including examining and making extracts from its books and records,
environmental assessment reports and Phase I or Phase II studies, and to discuss
its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested
(it being understood and expected that such examinations shall be limited to one
per calendar year unless an Event of Default has occurred and is continuing or
Availability is at any time during such calendar year less than the Applicable
Trigger Amount (Level IV)); provided, however, that, so long as at all times
during any calendar year no Revolving Loans are outstanding and the LC Exposure
is less than $40,000,000, the Loan Parties shall not be required to pay the fees
and expenses of the Administrative Agent and such professionals with respect to
any such examinations and

 

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evaluations conducted during such calendar year, otherwise, unless an Event of
Default has occurred and is continuing, only one such field examination per
calendar year shall be at the expense of the Loan Parties, provided further that
one additional field examination per calendar year may be done at the expense of
the Loan Parties if Availability is at any time during such calendar year less
than the Applicable Trigger Amount (Level IV). For the avoidance of doubt, all
such examinations and evaluations conducted during an Event of Default shall be
at the expense of the Loan Parties. Each Loan Party acknowledges that the
Administrative Agent, after exercising its rights of inspection, may prepare and
distribute to the Lenders certain Reports pertaining to such Loan Party’s assets
for internal use by the Administrative Agent and the Lenders.

SECTION 5.07. Compliance with Laws and Material Contractual Obligations. Each
Loan Party will, and will cause each Restricted Subsidiary to, (i) comply with
all Requirements of Law applicable to it or its property (including without
limitation Environmental Laws) except, where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect and (ii) perform in all material respects its obligations under
material agreements to which it is a party, except (A) where the validity or
amount thereof is being contested in good faith by appropriate proceedings, or
(B) where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. The Company will
maintain in effect and enforce policies and procedures designed to ensure
compliance by the Company, its Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions.

SECTION 5.08. Use of Proceeds.

(a) The proceeds of the Loans and the Letters of Credit will be used only for
general corporate purposes and working capital needs of the Loan Parties
(including for Investments, Capital Expenditures and Restricted Payments)
subject to the restrictions otherwise set forth in this Agreement. No part of
the proceeds of any Loan and no Letter of Credit will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X.

(b) No Borrower will request any Borrowing or Letter of Credit, and no Borrower
shall, directly or indirectly, use the proceeds of any Borrowing or Letter of
Credit, or lend, contribute or otherwise make available such proceeds to any
Subsidiary or other Person, (a) in furtherance of an offer, payment, promise to
pay, or authorization of the payment or giving of money, or anything else of
value, to any Person in violation of any Anti-Corruption Laws, (b) for the
purpose of funding, financing or facilitating any activities, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country, or
(c) in any manner that would result in the violation of any Sanctions applicable
to any party hereto.

SECTION 5.09. [Reserved].

SECTION 5.10. Insurance.

(a) Each Loan Party will, and will cause each Restricted Subsidiary to, maintain
with financially sound and reputable carriers having a financial strength rating
of at least A- by A.M.

 

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Best Company (i) insurance in such amounts (with no greater risk retention) and
against such risks (including, without limitation: loss or damage by fire and
loss in transit; theft, burglary, pilferage, larceny, embezzlement, and other
criminal activities; business interruption; and general liability) and such
other hazards, as is customarily maintained by companies of established repute
engaged in the same or similar businesses operating in the same or similar
locations and (ii) all insurance required pursuant to the Collateral Documents.
The Borrowers will furnish to the Lenders, upon request of the Administrative
Agent, information in reasonable detail as to the insurance so maintained. All
insurance policies required in this clause shall name the Administrative Agent
(for the benefit of the Administrative Agent and the Secured Parties) as an
additional insured, as applicable, and with respect to casualty policies
covering Collateral, as mortgagee or as lender loss payee, as applicable, and
shall contain lender loss payable clauses or mortgagee clauses, as applicable,
through endorsements in form and substance reasonably satisfactory to the
Administrative Agent.

(b) In the event any Real Estate that is subject to a Mortgage is located in any
area that has been designated by the Federal Emergency Management Agency as a
“Special Flood Hazard Area,” such Grantor shall purchase and maintain flood
insurance on such Real Estate. The amount of flood insurance required by this
Section shall be in an amount equal to the greater of (i) the lesser of the
total Commitment or the total replacement cost value of the improvements and
(ii) the amount necessary to comply with applicable law, including the Flood
Disaster Protection Act of 1973 and other Flood Laws.

SECTION 5.11. Casualty and Condemnation. In respect of any loss or damage to the
Collateral resulting from fire, vandalism, malicious mischief or any other
casualty or physical harm (a “Casualty”) or any exercise of the power of
condemnation or eminent domain or similar action relating to the Collateral or
any transfer by private sale in lieu thereof (a “Taking”), in each case, which
affects a material portion of the Inventory included in the Borrowing Base or
any portion of the Real Estate subject to a Mortgage, the Borrower
Representative will and will cause each applicable Loan Party to comply in all
respects with the provisions of this Section 5.11 to ensure that the Net
Proceeds of any such Casualty or Taking, whether in the form of insurance
proceeds, condemnation awards or otherwise, are collected and applied in
accordance with the following provisions:

(a) Notice of any Casualty or Taking that affects a material portion of the
Inventory included in the Borrowing Base or any portion of the Real Estate
subject to a Mortgage shall be provided pursuant to Section 5.02(c). Except
during the existence of an Event of Default, the Company or such Loan Party may
adjust, settle and compromise any such insurance claim or any proposed
condemnation award and shall, subject to Section 5.11(b) below, collect the Net
Proceeds thereof and have the right to repair, refurbish, restore, replace or
rebuild any asset affected by such Casualty or Taking, as applicable, subject to
the provisions contained in the definition of “Eligible Real Property.” The
Company and such Loan Party will in good faith file and prosecute all claims
necessary to obtain any such Net Proceeds. If the Company or such Loan Party
fails, as determined in the reasonable judgment of the Administrative Agent, to
proceed with diligence to effect settlement with insurers or collection of any
such Net Proceeds, or if an Event of Default exists, then the Administrative
Agent may appear in any such proceedings and negotiations and effect such
settlement and such collection of any Net Proceeds, the Borrower Representative
and the applicable Loan Party each hereby authorizes

 

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the Administrative Agent, at its option, to adjust, settle, compromise and
collect any Net Proceeds under any insurance with respect to such Collateral and
any Net Proceeds pursuant to any Casualty or Taking with respect to such
Collateral, and each such Loan Party hereby irrevocably appoints the
Administrative Agent as its attorney-in-fact, coupled with an interest, for such
purposes.

(b) If any Loan Party or Subsidiary receives any such Net Proceeds of Collateral
in excess of $2,000,000 in respect of a Casualty or Taking, such Loan Party
shall receive such Net Proceeds as the Administrative Agent’s trustee, and shall
immediately deposit all such Net Proceeds into a Concentration Account, which
Net Proceeds shall then be applied or utilized in accordance with the applicable
provisions of this Agreement.

SECTION 5.12. Appraisals. On an annual basis, at the Administrative Agent’s
request, the Borrower Representative will provide the Administrative Agent with
appraisals or updates thereof of the Loan Parties’ Inventory from an appraiser
selected and engaged by the Administrative Agent, and prepared on a basis
satisfactory to the Administrative Agent, such appraisals and updates to
include, without limitation, information required by any applicable Requirement
of Law; provided, however, that, so long as at all times during any calendar
year no Revolving Loans are outstanding and the LC Exposure is less than
$40,000,000, the Loan Parties shall not be required to pay the fees and expenses
with respect to any such appraisals conducted during such calendar year,
otherwise, if no Event of Default has occurred and is continuing, only one such
appraisal of Inventory per calendar year shall be at the expense of the Loan
Parties, provided further that (x) one additional appraisal of Inventory per
calendar year shall be at the expense of the Loan Parties if Availability is at
any time during such calendar year less than the Applicable Trigger Amount
(Level IV), and (y) in addition to the foregoing, an additional appraisal of
Inventory shall be at the expense of the Loan Parties if requested by the
Administrative Agent in connection with a change in the Loan Parties’ inventory
costing methodology following the Effective Date. For the avoidance of doubt,
all such appraisals conducted during an Event of Default shall be at the expense
of the Loan Parties.

SECTION 5.13. Depository Banks; Withdrawals from Borrowing Base Deposit
Accounts.

(a) The Loan Parties will maintain with the Administrative Agent or one or more
Lenders acceptable to the Administrative Agent in its Permitted Discretion as
their principal depository bank, including for the maintenance of operating,
administrative, cash management, collection activity, and other Deposit Accounts
for the conduct of their business; provided that the Loan Parties shall not be
required to satisfy the foregoing requirement with respect to any Deposit
Account (i) that is an Excluded Account or an Excluded Asset or (ii) with
respect to which the applicable Loan Parties have entered into a Deposit Account
Control Agreement in accordance with the applicable Security Agreement and
Section 5.14, as applicable, in favor of the Administrative Agent.

(b) No Loan Party shall be entitled to withdraw any funds from any Borrowing
Base Deposit Account unless (i) the Borrower Representative shall have delivered
to the Administrative Agent an updated Borrowing Base Certificate demonstrating
that after giving effect to such withdrawal, the Revolving Exposure Limitations
shall be complied with (and, after

 

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any such withdrawal, the cash or Cash Equivalents withdrawn shall thereafter be
excluded for purposes of calculating the applicable Borrowing Base), (ii) no
Default or Event of Default exists or will exist immediately after giving effect
to such withdrawal, and (iii) the Borrower Representative shall have delivered
to the Administrative Agent evidence satisfactory to the Administrative Agent
that the foregoing conditions in this clause (b) will be satisfied.

SECTION 5.14. Additional Collateral; Further Assurances. (a) Subject to
applicable law, each Borrower and each Loan Party will cause each Designated
Subsidiary formed or acquired after the date of this Agreement or that becomes a
Designated Subsidiary after the Effective Date in accordance with the terms of
this Agreement within 60 days (in each case, as such time may be extended in the
Administrative Agent’s sole discretion) to become a Borrower or a Guarantor
pursuant to a Joinder Agreement and take all such further actions (including the
filing and recording of financing statements, fixture filings, and other
documents) that are required under the Collateral Documents or this Agreement to
cause the Collateral and Guaranty Requirement to be satisfied with respect to
such Designated Subsidiary. Upon execution and delivery thereof, each such
Person (i) shall automatically become a Borrower or Guarantor, as applicable
hereunder and thereupon shall have all of the rights, benefits, duties, and
obligations in such capacity under the Loan Documents and (ii) will grant Liens
to the Administrative Agent, for the benefit of the Administrative Agent and the
applicable Secured Parties, in any property of such Loan Party which constitutes
Collateral, under the applicable Security Agreement.

(b) The Loan Parties will execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
and other documents) which may be required by any Requirement of Law or which
the Administrative Agent may, from time to time, reasonably request, to cause
the Collateral and Guaranty Requirement to be and remain satisfied at all times.
The Loan Parties also agree to provide to the Administrative Agent, from time to
time upon reasonable request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Collateral Documents.

SECTION 5.15. Designation of Subsidiaries. Subject to the limitations in the
definition of Unrestricted Subsidiary, the Company may at any time designate any
Restricted Subsidiary of the Company (other than any Borrower or, to the extent
any assets thereof are included in the Borrowing Base, any other Loan Party) as
an Unrestricted Subsidiary or any Unrestricted Subsidiary as a Restricted
Subsidiary; provided that (a) immediately before and after such designation, no
Default or Event of Default shall have occurred and be continuing, (b) on Pro
Forma Basis, the Payment Conditions shall be satisfied, and (c) no Restricted
Subsidiary may be designated as an Unrestricted Subsidiary if (i), after such
designation, it is a “restricted subsidiary” under any Permitted Term Loan
Indebtedness or Subordinated Debt or (ii) any Restricted Subsidiary would be a
Subsidiary of such Unrestricted Subsidiary. The designation of any Restricted
Subsidiary as an Unrestricted Subsidiary after the Effective Date shall
constitute an Investment by the Company therein at the date of designation in an
amount equal to the fair market value of the Company or its Restricted
Subsidiaries’ (as applicable) Investments therein as determined in good faith by
the Borrower Representative. The designation of any Unrestricted Subsidiary as
an Restricted Subsidiary after the Effective Date shall constitute at the

 

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time of designation the incurrence of any Indebtedness or Liens of such
Restricted Subsidiary existing at such time.

SECTION 5.16. Environmental Laws.

(a) Except where the failure to do so would not reasonably be expected to have
Material Adverse Effect, the Company and each Restricted Subsidiary shall
(i) conduct its operations and keep and maintain all of its real property in
compliance with all Environmental Laws; (ii) obtain and renew all environmental
permits necessary for its operations and properties; and (iii) implement any and
all investigation, remediation, removal and response actions that are necessary
to maintain the value and marketability of the Real Estate that is subject to a
Mortgage or to otherwise comply with Environmental Laws pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Materials into, on, at, under, above or from any of its
Real Estate, provided, however, that neither a Loan Party nor any of its
Restricted Subsidiaries shall be required to undertake any such cleanup,
removal, remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and adequate reserves
have been set aside and are being maintained by the Loan Parties with respect to
such circumstances in accordance with GAAP.

(b) Without limiting the foregoing, the Loan Parties and their Restricted
Subsidiaries shall comply with the Specified Environmental Order, unless any
failure to so comply or perform could not reasonably be expected to have a
Material Adverse Effect.

SECTION 5.17. Canadian Pension Plans and Canadian Benefit Plans.

(a) For each existing, or hereafter adopted, Canadian Pension Plan and Canadian
Benefit Plan, each Loan Party will, and will cause each Restricted Subsidiary
to, in a timely fashion comply with and perform in all material respects all of
its obligations under and in respect of such Canadian Pension Plan or Canadian
Benefit Plan, including under any funding agreements and all applicable laws
(including any fiduciary, funding, investment and administration obligations),
unless any failure to so comply or perform could not reasonably be expected to
have a Material Adverse Effect.

(b) All employer or employee payments, contributions or premiums required to be
remitted, paid to or in respect of each Canadian Pension Plan or Canadian
Benefit Plan shall be paid or remitted by each Loan Party and each Restricted
Subsidiary of each Loan Party in a timely fashion in accordance with the terms
thereof, any funding agreements and all applicable laws, unless any failure to
so could not reasonably be expected to have a Material Adverse Effect.

SECTION 5.18. Post-Closing Covenants. The Loan Parties will execute and deliver
the documents and complete the tasks set forth on Schedule 5.18, in each case
within the time limits specified on such schedule (or such longer period as the
Administrative Agent may agree in its sole discretion).

 

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ARTICLE VI

NEGATIVE COVENANTS

Until the Commitments shall have expired or been terminated and the principal of
and interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document (other than contingent or indemnity obligations for which no
claim has been made) shall have been paid in full and all Letters of Credit
shall have expired or have been Cash Collateralized pursuant to the terms
hereof, or terminated, in each case without any pending draw, and all LC
Disbursements shall have been reimbursed, each Loan Party executing this
Agreement covenants and agrees, jointly and severally with all of the other Loan
Parties, with the Lenders that:

SECTION 6.01. Indebtedness. No Loan Party will, nor will it permit any
Restricted Subsidiary to, create, incur, assume or suffer to exist any
Indebtedness, except:

(a) (i) the Secured Obligations (other than Specified L/C Obligations) and
(ii) Specified L/C Obligations or any other trade letter of credit facilities in
addition thereto on substantially similar terms as determined by the
Administrative Agent in its reasonable judgment, so long as, in each case, the
aggregate undrawn amount of all letters of credit issued thereunder plus the
aggregate amount of all drawn and unreimbursed obligations with respect to all
letters of credit thereunder does not exceed $155,000,000;

(b) Indebtedness existing on the date hereof set forth in Schedule 6.01, and any
extension, renewal, refinancing or replacement of any such Indebtedness in
accordance with clause (f) hereof;

(c) Indebtedness of the Company owed to any Subsidiary and of any Restricted
Subsidiary owed to the Company or to any other Subsidiary; provided that (A) any
such Indebtedness owing by (x) a Loan Party to a Subsidiary that is not a Loan
Party and (y) any Canadian Loan Party to a U.S. Loan Party shall, in each case,
be unsecured and on terms customary for intercompany Indebtedness, and (B) any
such Indebtedness shall be incurred in compliance with Section 6.04(1) or
Section 6.04(2)(c);

(d) Guarantees by any Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of any Borrower or any other Subsidiary, provided
that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01,
(ii) Guarantees by any Loan Party of Indebtedness of any Subsidiary that is not
a Loan Party shall be subject to Section 6.04 and (iii) Guarantees permitted
under this clause (d) shall be subordinated to the Secured Obligations on the
same terms as the Indebtedness so Guaranteed is subordinated to the Secured
Obligations;

(e) Indebtedness of any Borrower or any Restricted Subsidiary incurred to
finance or reimburse any Borrower or Restricted Subsidiary for the acquisition,
construction or improvement of any fixed or capital assets (whether or not
constituting purchase money Indebtedness), including Capital Lease Obligations
and any Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition thereof,
and extensions, renewals and replacements of any such Indebtedness in

 

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accordance with clause (f) below; provided that (i) such Indebtedness is
incurred prior to or within 270 days after such acquisition or the completion of
such construction or improvement and the principal amount of such Indebtedness
does not exceed the cost of acquiring, constructing or improving such fixed or
capital assets, and (ii) the aggregate principal amount of Indebtedness
permitted by this clause (e) together with any Refinance Indebtedness in respect
thereof permitted by clause (f) below, shall not exceed $100,000,000 at any time
outstanding;

(f) Indebtedness which represents amendments, restatements, supplements,
extensions, renewals, refinancing or replacements (such Indebtedness being so
amended, restated, supplemented, extended, renewed, refinanced or replaced being
referred to herein as the “Refinance Indebtedness”) of any of the Indebtedness
described in clauses (b), (e), and (m) hereof (such Indebtedness being referred
to herein as the “Original Indebtedness”); provided that (i) such Refinance
Indebtedness does not increase the principal amount (including any accreted or
capitalized amount thereon) of the Original Indebtedness, (ii) any Liens
securing such Refinance Indebtedness are not extended to any additional property
of any Loan Party or any Restricted Subsidiary, and (iii) if such Original
Indebtedness was subordinated in right of payment to any of the Secured
Obligations, then the terms and conditions of such Refinance Indebtedness must
include subordination terms and conditions that are at least as favorable to the
Administrative Agent and the Lenders as those that were applicable to such
Original Indebtedness;

(g) Indebtedness owed to any Person providing workers’ compensation, retirement,
health, disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;

(h) Indebtedness of any Loan Party in respect of performance bonds, bid bonds,
appeal bonds, surety bonds and similar obligations, in each case provided in the
ordinary course of business;

(i) Indebtedness in respect of netting services, overdraft protections and
otherwise in connection with deposit and checking accounts, in each case, in the
ordinary course of business;

(j) Indebtedness in the form of bona fide purchase price adjustments or
earn-outs incurred in connection with any Permitted Acquisition or other
Investment permitted by Section 6.04;

(k) Indebtedness in the form of Swap Agreements permitted under Section 6.07;

(l) Permitted Term Loan Indebtedness;

(m) Indebtedness of any Person that becomes a Restricted Subsidiary after the
date hereof; provided that such Indebtedness exists at the time such Person
becomes a Restricted Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Restricted Subsidiary;

(n) Indebtedness incurred under leases of real property in respect of tenant
improvements;

 

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(o) other Indebtedness in an aggregate principal amount not to exceed
$50,000,000 at any time outstanding;

(p) obligations under any agreement governing the provision of treasury or cash
management services, including deposit accounts, overnight draft, credit cards,
debit cards, p-cards (including purchasing cards and commercial cards), funds
transfer, automated clearinghouse, zero balance accounts, returned check
concentration, controlled disbursement, lockbox, account reconciliation and
reporting and other cash management services;

(q) Indebtedness incurred for the construction, development or acquisition or
improvement of, or to finance or to refinance, any real estate (other than real
estate subject to a Mortgage) owned or leased by any Loan Party (including
therein any Indebtedness incurred in connection with sale-leaseback transactions
permitted hereunder and any Off-Balance Sheet Liabilities), provided that, if
reasonably requested by the Administrative Agent, the Loan Parties shall use
commercially reasonable efforts to cause the holders of such Indebtedness and
the lessors under any sale-leaseback transaction to enter into a Collateral
Access Agreement on terms reasonably satisfactory to the Administrative Agent;

(r) Indebtedness with respect to the deferred purchase price for any Permitted
Acquisition, provided that such Indebtedness is subordinated to the Secured
Obligations on terms reasonably acceptable to the Administrative Agent;

(s) unsecured Indebtedness or Subordinated Indebtedness not otherwise
specifically described herein, in each case, with a maturity date and an average
life to maturity that is at least six (6) months following the Maturity Date and
that does not require amortization or prepayments prior to the Maturity Date;

(t) Indebtedness described in and secured by Liens permitted by Sections 6.02(n)
or (o);

(u) Indebtedness by any Loan Party incurred in connection with any standby
letter of credit facility or bank guarantee program in conjunction with
obligations of any Foreign Subsidiary in an aggregate principal amount not to
exceed $5,000,000 at any time outstanding;

(v) Indebtedness consisting of financing transportation spectrum services,
including, without limitation, advances of transportation payable services
(including any such services constituting a Banking Service hereunder), in each
case, in the ordinary course of business and consistent with past practices; and

(w) Indebtedness consisting of supply chain finance services provided by third
parties to or on behalf of a Loan Party or Restricted Subsidiary including,
without limitation, trade payable services and accounts receivable purchases by
any such third party from the suppliers of any such Loan Party or Restricted
Subsidiary.

Anything in this Section 6.01 to the contrary notwithstanding, (A) Specified L/C
Obligations may only be created, incurred, assumed or exist pursuant to
Section 6.01(a)(ii) and (B) Permitted Term Loan Indebtedness may only be
created, incurred, assumed or exist pursuant to Section 6.01(l).

 

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SECTION 6.02. Liens. No Loan Party will, nor will it permit any Restricted
Subsidiary to, create, incur, assume or permit to exist any Lien on any
property, asset, income or revenue (including Accounts) now owned or hereafter
acquired by it, or rights in respect of any thereof, except:

(a) Liens in favor of the Administrative Agent created pursuant to any Loan
Document;

(b) Permitted Encumbrances;

(c) any Lien on any property or asset of any Borrower or any Restricted
Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided
that (i) such Lien shall not apply to any other property or asset of such
Borrower or Restricted Subsidiary or any other Borrower or Restricted Subsidiary
and (ii) such Lien shall secure only those obligations which it secures on the
date hereof, and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;

(d) Liens on fixed or capital assets acquired, constructed or improved by any
Borrower or any Restricted Subsidiary; provided that (i) such Liens secure
Indebtedness permitted by clause (e) of Section 6.01, (ii) such Liens and the
Indebtedness secured thereby are incurred prior to or within 270 days after such
acquisition or the completion of such construction or improvement, (iii) such
Liens shall not apply to any other property or assets of such Borrower or
Restricted Subsidiary or any other Borrower or Restricted Subsidiary, and
(iv) the Indebtedness secured thereby does not exceed the cost of the property
being acquired on the date of acquisition;

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

(f) (i) Liens of a collecting bank arising in the ordinary course of business
under Section 4-208 of the UCC in effect in the relevant jurisdiction covering
only the items being collected upon and (ii) Liens in favor of securities
intermediaries, rights of setoff or similar rights and remedies as to deposit
accounts or securities accounts or other funds maintained with depository
institutions or securities intermediary;

(g) Liens arising out of Sale and Leaseback Transactions permitted by
Section 6.06;

(h) Liens securing Permitted Term Loan Indebtedness; provided that, if any such
Liens apply to Collateral, then such Liens must be subject to an Intercreditor
Agreement;

 

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(i) Liens granted by a Restricted Subsidiary that is not a Loan Party in favor
of any Borrower or another Loan Party in respect of Indebtedness owed by such
Restricted Subsidiary;

(j) Liens arising in connection with the sale or transfer of any Equity
Interests or other assets in a transaction permitted under Section 6.05,
customary rights and restrictions contained in agreements relating to such sale
or transfer pending the completion thereof;

(k) in the case of (i) any Restricted Subsidiary that is not a wholly-owned
Restricted Subsidiary or (ii) the Equity Interests in any Person that is not a
Restricted Subsidiary, any encumbrance or restriction, including any put and
call arrangements, related to Equity Interests in such Restricted Subsidiary or
such other Person set forth in the organizational documents of such Restricted
Subsidiary or such other Person or any related joint venture, shareholders’ or
similar agreement;

(l) Liens solely on any cash earnest money deposits, escrow arrangements or
similar arrangements made by the Company or any Restricted Subsidiary in
connection with any letter of intent or purchase agreement for a Permitted
Acquisition or other transaction permitted hereunder;

(m) other Liens securing Indebtedness or other obligations in an aggregate
principal amount not to exceed $20,000,000 at any time outstanding (it being
understood that in the event any such Liens extend to Accounts, Credit Card
Accounts, Inventory or Real Property, such Accounts, Credit Card Accounts,
Inventory or Real Property, to the extent otherwise included therein, will not
constitute or will cease to be Eligible Trade Accounts, Eligible Credit Card
Accounts, Eligible Inventory, or Eligible Real Property, as applicable);

(n) Liens in favor of landlords on leasehold improvements financed by allowances
or advances pursuant to lease arrangements in the ordinary course of business;

(o) Liens in favor of insurance companies or their affiliates on the unearned
portion of the premium financed in connection with insurance premium financing
in the ordinary course of business;

(p) customary Liens on Documents and goods relating thereto in transit to (but
not located in) the United States or Canada from a location outside of the
United States or Canada in import documents granted in respect of any commercial
or trade letter of credit issued under a Specified L/C Facility, provided that
any Inventory subject to such Liens shall not constitute Eligible Inventory or
Eligible LC Inventory;

(q) Liens on Real Estate, provided that such Liens only secure Indebtedness
permitted by clause (q) of Section 6.01; and

(r) Liens on motor vehicles, aircraft, avionics, vessels and property related
thereto and other property the subject of certificates of title or other
certificates of registration and operation, provided that the Indebtedness
secured by any such Lien does not exceed the cost of such motor vehicle,
aircraft, avionic, vessel or other property, as applicable.

 

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Notwithstanding the foregoing, (A) none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Loan Party’s (1) Accounts or Credit
Card Accounts, other than those permitted under clauses (a) and (k) of the
definition of Permitted Encumbrances and clauses (a) and (h) above and
(2) Inventory, other than those permitted under clauses (a), (b), (i), (j) of
the definition of Permitted Encumbrances and clauses (a), (h) and (p) above and
(B) none of the Specified L/C Obligations may be cash collateralized by cash
owned by any Loan Party or Restricted Subsidiary unless such cash collateral
constitutes Collateral hereunder for the benefit of all of the Secured Parties
in accordance with the terms of the Loan Documents.

SECTION 6.03. Fundamental Changes; Changes in Name, Location. (a) No Loan Party
will, nor will it permit any Restricted Subsidiary to, merge into or consolidate
or amalgamate with any other Person, or permit any other Person to merge into or
consolidate or amalgamate with it, or liquidate or dissolve, except that, if at
the time thereof and immediately after giving effect thereto no Default or Event
of Default shall have occurred and be continuing (i) any Subsidiary (that is not
a Borrower) of any Borrower may merge into a Borrower in a transaction in which
such Borrower is the surviving or continuing entity, (ii) any Person (other than
the Company) may merge into, amalgamate with or consolidate with any Restricted
Subsidiary in a transaction in which the surviving or continuing entity is a
Restricted Subsidiary and, in the case of a transaction involving a Borrower,
the surviving or continuing entity is a Borrower, and, in the case of a
transaction involving a Loan Party, the surviving or continuing entity is a Loan
Party; provided that, in all circumstances, if the Loan Party merging,
consolidating or amalgamating with any other Person is (A) a U.S. Loan Party
then surviving or continuing entity must be domiciled in U.S. or (B) a Canadian
Loan Party then surviving or continuing entity must be domiciled in Canada,
(iii) any Restricted Subsidiary may merge into, amalgamate with or consolidate
with any Person (other than the Company) in a transaction permitted under
Section 6.05 in which, after giving effect to such transaction, the surviving or
continuing entity is not a Restricted Subsidiary; and (iv) any Restricted
Subsidiary may liquidate or dissolve if the Company determines in good faith
that such liquidation or dissolution is in the best interests of the Company and
is not materially disadvantageous to the Lenders, provided that any Loan Party
may only liquidate or dissolve into another Loan Party; provided that, in each
case, any such merger, amalgamation or consolidation in involving a Person that
is not a wholly owned Restricted Subsidiary immediately prior to such merger,
amalgamation or consolidation shall not be permitted unless it is also permitted
by Section 6.04.

(b) No Loan Party will, nor will it permit any Restricted Subsidiary to, engage
to any material extent in any business other than businesses of the type
conducted by the Borrowers and their Restricted Subsidiaries on the date hereof
and businesses reasonably similar, related, complementary or incidental thereto.

(c) No Loan Party shall (a) change its name as it appears in official filings in
the state or province of incorporation or organization, (b) change its chief
executive office, (c) change the type of entity that it is, (d) change its
organization identification number, if any, issued by its state or province of
incorporation or other organization, or (e) change its state or province of
incorporation or organization, in each case, unless the Administrative Agent
shall have received at least thirty (30) days prior written notice of such
change and the Administrative Agent shall have acknowledged in writing that
either (1) such change will not adversely affect the validity, perfection or
priority of the Administrative Agent’s security interest in the Collateral, or
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reasonable action requested by the Administrative Agent in connection therewith
has been completed or taken (including any action to continue the perfection of
any Liens in favor of the Administrative Agent, on behalf of the Secured
Parties, in any Collateral).

(d) No Loan Party shall change its fiscal year from the basis in effect on the
Effective Date without having first provided to the Administrative Agent thirty
(30) days’ prior written notice thereof.

(e) No Loan Party will change the accounting basis upon which its financial
statements are prepared, other than immaterial changes to comply with changes in
GAAP, without having first provided to the Administrative Agent thirty
(30) days’ prior written notice thereof; it being acknowledged that with respect
to calculations of the applicable Borrowing Base such change must be approved in
writing by the Administrative Agent.

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. No Loan
Party will, nor will it permit any Restricted Subsidiary to, purchase, hold or
acquire (including pursuant to any merger with any Person that was not a Loan
Party and a wholly-owned Subsidiary prior to such merger) any evidences of
Indebtedness or Equity Interests or other securities (including any option,
warrant or other right to acquire any of the foregoing), make or permit to exist
any loans or advances to, Guarantee any obligations of, or make or permit to
exist any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit (whether through purchase of
assets, merger or otherwise), or enter into any other Acquisition (each of the
foregoing, an “Investment”), except that (1) if the Payment Conditions are
satisfied before and immediately after giving effect to such Investment (other
than Investments that are Acquisitions), then such Investment shall be permitted
(it being understood that no Investment made when the Payment Conditions are
satisfied shall be included in the calculation of any items in clauses
(2)(a) through (q) below) and (2) if the Payment Conditions are not satisfied
before or immediately after giving effect to each such Investment or such
Investment is an Acquisition, the following Investments shall be permitted:

(a) Investments in (i) cash, (ii) Cash Equivalents, (iii) marketable direct
obligations issued by any state of the U.S., or by the Canadian federal
government, or any province, commonwealth or territory of Canada, or any
political subdivision of any such state, province, commonwealth or territory or
any public instrumentality thereof, in each case maturing within two years after
the date of acquisition thereof and, at the time of acquisition, in each case
having a rating from either S&P or Moody’s of AA/Aa2 or better, respectively
(or, if at any time neither S&P nor Moody’s shall be rating such obligations,
then an equivalent or better rating from such other nationally recognized rating
services acceptable to the Administrative Agent), and in the case of any Foreign
Subsidiary, other short-term investments that are (A) analogous to the
foregoing, (B) comparable credit quality and (C) customarily used by companies
in the jurisdiction of such Foreign Subsidiary for cash management purposes,
(iv) U.S. Dollar denominated fixed or floating rate notes and foreign currency
denominated fixed or floating rate notes, in each case maturing within one year
after such date and having, at the time of the acquisition thereof, a rating of
at least A or A-1 from S&P or the equivalent thereof from another nationally
recognized rating agency, (v) variable rate demand notes with interest reset
period and related put at par at 7-day intervals and having, at the time of the
acquisition thereof, a rating of

 

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at least AA from S&P or the equivalent thereof from another nationally
recognized rating agency, and (vi) asset-backed securities of auto and credit
card receivables issuers carrying an S&P rating of AAA or better;

(b) Investments in existence on the date hereof and described in Schedule 6.04;

(c) Investments by the Company and the Restricted Subsidiaries in their
respective Subsidiaries; provided that the aggregate amount of such Investments
by (x) the Loan Parties in Subsidiaries that are not Loan Parties and (y) the
U.S. Loan Parties in Canadian Loan Parties, shall not exceed $20,000,000 at any
time outstanding (in each case determined without regard to any write-downs or
write-offs);

(d) [reserved];

(e) [reserved];

(f) loans or advances made by a Loan Party or a Restricted Subsidiary to its
employees, officers, or directors on an arm’s-length basis in the ordinary
course of business consistent with past practices for travel and entertainment
expenses, relocation costs and similar purposes;

(g) accounts receivable, notes payable, or stock or other securities issued by
Account Debtors to a Loan Party pursuant to negotiated agreements with respect
to settlement of such Account Debtor’s Accounts obligations in the ordinary
course of business, consistent with past practices, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled Account
Debtors to the extent reasonably necessary in order to prevent or limit loss or
received in connection with the bankruptcy or reorganization of customers or
suppliers, or settlement of disputes with suppliers, in each case in the
ordinary course of business;

(h) Investments in the form of Swap Agreements permitted by Section 6.07;

(i) Investments of any Person existing at the time such Person becomes a
Restricted Subsidiary of a Borrower or consolidates or merges with a Borrower or
any of the Restricted Subsidiaries (including in connection with a Permitted
Acquisition) so long as such investments were not made in contemplation of such
Person becoming a Restricted Subsidiary or of such merger;

(j) Investments made as a result of receipt of non-cash consideration from a
sale, transfer or other disposition of assets permitted under Section 6.05;

(k) Investments constituting deposits described in clauses (c) and (d) of the
definition of the term “Permitted Encumbrances”;

(l) Permitted Acquisitions;

(m) [Intentionally Omitted];

 

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(n) deposits, prepayments, advances and other credits to suppliers, vendors,
customers, lessors and landlords or in connection with marketing promotions,
such as sweepstakes, in each instance, made in the ordinary course of business;

(o) Investments the sole payment for which is common stock of the Company and do
not constitute Indebtedness;

(p) any indemnity, purchase price adjustment, earnout or similar obligation
payable to the Company or any of its Restricted Subsidiaries arising pursuant to
a Permitted Acquisition or a disposition permitted under Section 6.05 to the
extent permitted by this Agreement;

(q) so long as no Default or Event of Default has occurred and is continuing
before or after giving effect to such Investments, other Investments in an
aggregate amount not to exceed $25,000,000 at any time outstanding; and

(r) Investments (excluding Acquisitions) made pursuant to the Company’s
Investment Policy.

For the purposes of this Section 6.04, any unreimbursed payment by the Company
or any Restricted Subsidiary for goods or services delivered to any Restricted
Subsidiary shall be deemed to be an Investment in such Restricted Subsidiary.

SECTION 6.05. Asset Sales. No Loan Party will, nor will it permit any Restricted
Subsidiary to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it or any assignment (whether
non-recourse, recourse, or otherwise) of income or revenue (including Accounts),
nor will any Loan Party permit any Restricted Subsidiary to issue any additional
Equity Interest in such Restricted Subsidiary (other than to another Borrower or
another Restricted Subsidiary in compliance with Section 6.04 and other than
directors’ qualifying shares and other nominal amounts of Equity Interests that
are required to be held by other Persons under applicable law), excluding
therefrom the payment of advances, customer deposits, trade payables and other
accrued expenses and liabilities incurred in the ordinary course of business,
and the transfer and sale of Cash Equivalents and other marketable securities,
except:

(a) (i) sales of inventory in the ordinary course of business, (ii) sales,
transfers and other dispositions of used, damaged, surplus, obsolete, or
outmoded, or not useful machinery, equipment or other fixed assets in the
ordinary course of business, including without limitation in connection with
remodels and closings, and (iii) bulk sales of inventory in an amount not to
exceed in any fiscal year 2% of Total Assets (the calculation of Total Assets
for each such fiscal year to be based on Total Assets as of the last day of the
immediately preceding fiscal year);

(b) sales, transfers, leases and other dispositions to the Company or any
Restricted Subsidiary; provided that any such sales, transfers, leases or other
dispositions involving (x) a Loan Party and a Restricted Subsidiary that is not
a Loan Party or (y) a U.S. Loan Party and a Canadian Loan Party shall be made in
compliance with Sections 6.04(c) and 6.09;

 

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(c) the sale or discount of accounts receivable arising in the ordinary course
of business, but only in connection with the compromise or collection thereof
and not in connection with any financing transaction;

(d) Sale and Leaseback Transactions permitted by Section 6.06;

(e) dispositions resulting from any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of any Borrower or any Subsidiary;

(f) leases or subleases of real property (other than Eligible Real Property)
granted by the Company or any Restricted Subsidiary to third Persons not
interfering in any material respect with the business of the Company or any
Restricted Subsidiary, including, without limitation, retail store lease
assignments and surrenders;

(g) other dispositions of assets (other than of the type included in the
Borrowing Base) of the Company and its Restricted Subsidiaries not otherwise
permitted under this Section 6.05, provided that before and after giving effect
to such disposition, the Payment Conditions are satisfied;

(h) other dispositions of assets (whether or not of the type included in the
Borrowing Base) of the Company and its Restricted Subsidiaries not otherwise
permitted under this Section 6.05 in an aggregate amount not to exceed
$10,000,000 during the term of this Agreement;

(i) the sale, transfer or other disposition of patents, trademarks, copyrights
and other intellectual property or the granting of franchises and similar
rights, in each case (i) in the ordinary course of business, including pursuant
to non-exclusive licenses of intellectual property; provided that no such sale,
transfer or other disposition shall adversely affect in any material respect the
fair value of any Eligible Inventory or the ability of the Administrative Agent
to dispose of or otherwise realize upon any Eligible Inventory after an Event of
Default, or (ii) which, in the reasonable judgment of the Company or any
Subsidiary, are determined to be uneconomical, negligible or obsolete in the
conduct of business;

(j) Restricted Payments permitted by Section 6.08;

(k) dispositions of equipment or real property (other than Eligible Real
Property included in the Borrowing Base) to the extent that (i) such property is
exchanged for credit against the purchase price of similar replacement property
or (ii) the proceeds of such disposition are reasonably promptly applied to the
purchase price of similar replacement property;

(l) as long as no Event of Default then exists or would arise therefrom, sales
of real property (other than Eligible Real Property included in the Borrowing
Base) of any Loan Party or Restricted Subsidiary (or sales of any Person or
Persons created to hold such real property or the Equity Interests in such
Person or Persons);

(m) sales of the Warrendale, Pennsylvania, campus or any part thereof and
related equipment;

 

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(n) licenses for the conduct of licensed departments in the ordinary course of
business; provided that (i) the Administrative Agent shall have received not
less than ten (10) Business Days’ prior written notice of the granting of such
license and (ii), with respect to the Loan Parties’ stores and if requested by
the Administrative Agent, the Administrative Agent shall have entered into an
intercreditor agreement with the Person operating such licensed department on
terms and conditions reasonably satisfactory to the Administrative Agent;

provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by paragraphs (a)(ii), (b), (f), (i), (j), or
(k) above) shall be made for fair value and for at least 75% cash consideration
(or, in the case of a sale, transfer, lease or other disposition of assets
included in the Borrowing Base, 100% cash consideration).

SECTION 6.06. Sale and Leaseback Transactions. No Loan Party will, nor will it
permit any Restricted Subsidiary to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred (a “Sale and Leaseback Transaction”), except for any such sale of
any fixed or capital assets (other than Eligible Real Property included in the
Borrowing Base) by any Borrower or any Restricted Subsidiary that is made for
cash consideration in an amount not less than the fair value of such fixed or
capital asset.

SECTION 6.07. Swap Agreements. No Loan Party will, nor will it permit any
Restricted Subsidiary to, enter into any Swap Agreement, other than Swap
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which a Loan Party or a Restricted Subsidiary is exposed in the conduct
of its business or the management of its liabilities and not for speculative
purposes.

SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.

(a) No Loan Party will, nor will it permit any Restricted Subsidiary to, declare
or make, or agree to declare or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except:

(i) the Company may declare and pay dividends with respect to its Equity
Interests payable solely in common stock;

(ii) any Restricted Subsidiary may declare and pay dividends or make other
distributions with respect to its Equity Interests, or make other Restricted
Payments in respect of its Equity Interests, in each case ratably to the holders
of such Equity Interests (or, if not ratably, on a basis more favorable to the
Company and the Restricted Subsidiaries);

(iii) the Company may repurchase Equity Interests upon the exercise of stock
options, deferred stock units and restricted shares to the extent such Equity
Interests represent a portion of the exercise price of such stock options,
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(iv) the Company may make cash payments in lieu of the issuance of fractional
shares representing insignificant interests in the Company in connection with
the exercise of warrants, options or other securities convertible into or
exchangeable for shares of common stock in the Company; and

(v) the Company may declare and make Restricted Payments so long as before and
immediately after giving effect to such Restricted Payments the Payment
Conditions are satisfied.

(b) No Loan Party will, nor will it permit any Restricted Subsidiary to, make or
agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of
or interest on any Indebtedness, or any payment or other distribution (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Indebtedness, except:

(i) payment of Indebtedness created under the Loan Documents;

(ii) payment of regularly scheduled interest and principal payments or
reimbursement obligations under letters of credit, in each case, as and when due
in respect of any Indebtedness, other than payments in respect of the
Subordinated Indebtedness prohibited by the subordination provisions thereof;

(iii) refinancings of Indebtedness to the extent permitted by Section 6.01;

(iv) payment of secured Indebtedness that becomes due as a result of (A) any
voluntary sale or transfer of any assets (other than assets included in any
Borrowing Base) securing such Indebtedness or (B) any casualty or condemnation
proceeding (including a disposition in lieu thereof) of any assets (other than
assets included in any Borrowing Base) securing such Indebtedness;

(v) payments of or in respect of Indebtedness solely by issuance of the common
stock of the Company;

(vi) payments of intercompany Indebtedness owed to any Loan Party;

(vii) other payments of or in respect of Indebtedness; provided that at the time
of and immediately after giving effect thereto the Payment Conditions have been
satisfied; and

(viii) prepayments of any Indebtedness permitted under Section 6.01 (other than
pursuant to any of subsections (h), (l) or (s) thereof), not to exceed
$5,000,000 in any fiscal year.

SECTION 6.09. Transactions with Affiliates. No Loan Party will, nor will it
permit any Restricted Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions that (i) are in the ordinary course

 

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of business and (ii) are at prices and on terms and conditions not less
favorable to such Loan Party or such Restricted Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties, (b) transactions
between or among any Loan Parties not involving any other Affiliate, (c) any
Investment permitted by Section 6.04, (d) any Indebtedness permitted under
Section 6.01, provided that Indebtedness owed to non-Loan Parties must be on
terms and conditions not less favorable to such Loan Party than could be
obtained on an arm’s-length basis from unrelated third parties, (e) any
Restricted Payment permitted by Section 6.08, (f) loans or advances to employees
permitted under Section 6.04, (g) the payment of reasonable fees to directors of
any Borrower or any Restricted Subsidiary who are not employees of such Borrower
or Restricted Subsidiary, and compensation and employee benefit arrangements
paid to, and indemnities provided for the benefit of, directors, officers or
employees of the Borrowers or their Restricted Subsidiaries in the ordinary
course of business, (h) any issuances of securities or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment agreements, stock options and stock ownership plans approved by a
Borrower’s board of directors.

SECTION 6.10. Restrictive Agreements. No Loan Party will, nor will it permit any
Restricted Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement (other than this Agreement, any other
Loan Document, or any agreement governing Permitted Term Loan Indebtedness) that
prohibits, restricts or imposes any condition upon (a) the ability of such Loan
Party or any Restricted Subsidiary to create, incur or permit to exist any Lien
(i) upon the Collateral or (ii) other than this Agreement, any other Loan
Document, any agreement governing Permitted Term Loan Indebtedness or any other
Indebtedness incurred pursuant to Section 6.01(s) upon any of its property or
assets in favor of the Administrative Agent or the Secured Parties or, subject
to the terms of any Intercreditor Agreement, any Person refinancing or otherwise
replacing all or any portion of the Secured Obligations, or (b) the ability of
any Restricted Subsidiary to pay dividends or other distributions with respect
to any of its Equity Interests or to make or repay loans or advances to any
Borrower or any other Restricted Subsidiary or to Guarantee the Secured
Obligations (or, subject to the terms of any Intercreditor Agreement, any
obligations refinancing or otherwise replacing all or any portion of the Secured
Obligations) of any Borrower or any other Restricted Subsidiary; provided that
in respect of clauses (a) and (b) above (i) the foregoing shall not apply to
restrictions and conditions imposed by any Requirement of Law, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.10, (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment thereof.

SECTION 6.11. Amendment of Material Documents. No Loan Party will, nor will it
permit any Restricted Subsidiary to, amend, modify or waive any of its rights
under (a) its certificate or articles of incorporation or organization, by-laws,
operating, management or partnership agreement or other organizational documents
if such amendments, modifications, or waivers, individually or in the aggregate,
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Adverse Effect, (b) Material Indebtedness (other than Permitted Term Loan
Indebtedness), other than on account of any refinancing thereof otherwise
permitted hereunder, in each case to the extent that such amendment,
modification or waiver would result in a Default or Event of Default under any
of the Loan Documents, or otherwise would be reasonably expected to have a
Material Adverse Effect, or (c) Permitted Term Loan Indebtedness, except as
permitted by the applicable Intercreditor Agreement with respect thereto.

SECTION 6.12. Fixed Charge Coverage Ratio. The Company will not permit the Fixed
Charge Coverage Ratio, as of the end of any fiscal quarter, commencing with the
fiscal quarter ending immediately preceding the date on which Availability is
less than the Applicable Trigger Amount (Level I), to be less than 1.0 to 1.0.
Once such covenant is in effect, compliance with the covenant will be
discontinued: (i) on the first date thereafter that (A) no Default or Event of
Default exists and (B) Availability is greater than or equal to the Applicable
Trigger Amount (Level I) for a period of 90 consecutive days and (ii) no more
than once in any period of 12 consecutive months.

SECTION 6.13. Canadian Pension Plans. The Loan Parties shall not (a) contribute
to or assume an obligation to contribute to any Canadian Defined Benefit Plan,
without the prior written consent of the Administrative Agent (consent not to be
unreasonably withheld), or (b) acquire an interest in any Person (other than
pursuant to a Permitted Acquisition) if such Person sponsors, maintains or
contributes to, or at any time in the five-year period preceding such
acquisition has sponsored, maintained, or contributed to a Canadian Defined
Benefit Plan, without the prior written consent of the Administrative Agent
(consent not to be unreasonably withheld).

ARTICLE VII

EVENTS OF DEFAULT

If any of the following events (“Events of Default”) shall occur:

(a) the Borrowers shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise; or

(b) the Borrowers shall fail to pay (i) any interest on any Loan or LC Fee when
and as the same shall become due and payable, and such failure shall continue
unremedied for a period of five (5) Business Days or (ii) any fee or any other
amount (other than any fee or other amount referred to in clause (a) or (b)(i)
of this Article) payable under this Agreement or any other Loan Document, when
and as the same shall become due and payable, and such failure shall continue
unremedied for a period of five (5) Business Days after the earlier of the
knowledge of a Responsible Officer of the Borrower Representative of such breach
or notice thereof from the Administrative Agent (which notice will be given upon
the request of any Lender); or

(c) any representation or warranty made or deemed made by or on behalf of any
Loan Party or any Restricted Subsidiary in, or in connection with, this
Agreement or any other Loan Document or any amendment or modification hereof or
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thereunder, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with this Agreement or any other Loan
Document or any amendment or modification hereof or thereof or waiver hereunder
or thereunder, shall prove to have been materially incorrect when made or deemed
made (it being understood and agreed that any representation or warranty which
is subject to any materiality qualifier shall be required to be true and correct
in all respects); or

(d) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s
existence), 5.08, 5.18 or in Article VI of this Agreement; or

(e) any Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement or any other Loan Document (other than
those which constitute an Event of Default under another Section of this
Article), and such failure shall continue unremedied for a period of (i) five
(5) days after the earlier of the knowledge of a Responsible Officer of the
Borrower Representative of such breach or notice thereof from the Administrative
Agent (which notice will be given at the request of any Lender) if such breach
relates to terms or provisions of Section 5.01, 5.02 (other than
Section 5.02(a)), 5.03 through 5.07, 5.10, 5.11 or 5.13 of this Agreement,
Article VII of the U.S. Security Agreement or Article VII of the Canadian
Security Agreement, or (ii) 30 days after the earlier of the knowledge of a
Responsible Officer of the Borrower Representative of such breach or notice
thereof from the Administrative Agent (which notice will be given at the request
of any Lender) if such breach relates to terms or provisions of any other
Section of this Agreement or any other Loan Document; or

(f) so long as the following failure is unremedied or is not waived by the
holders of such Indebtedness, in each case, prior to the termination of the
Aggregate Commitments or acceleration of the Loans pursuant to this Article VII,
any Loan Party or Restricted Subsidiary shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Material
Indebtedness (other than Specified L/C Obligations) or Permitted Term Loan
Indebtedness, when and as the same shall become due and payable; or

(g) so long as the following events or conditions are unremedied or are not
waived by the holders of such Indebtedness, in each case, prior to the
termination of the Aggregate Commitments or acceleration of the Loans pursuant
to this Article VII, (i) any event or condition occurs that results in any
Material Indebtedness (other than Specified L/C Obligations) or Permitted Term
Loan Indebtedness of any Loan Party or Restricted Subsidiary becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving
of notice, the lapse of time or both) the holder or holders of any Material
Indebtedness (other than Specified L/C Obligations) or Permitted Term Loan
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness or Permitted Term Loan Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; provided that this clause (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness to the extent such sale or
transfer is permitted by Section 6.05, and (ii) any event or condition occurs
that results in Specified L/C Obligations that constitute Indebtedness of any
Loan Party or Restricted Subsidiary being cash collateralized by any Person, or
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collateralized by any Person, in each case, in an amount in excess of
$40,000,000 in the aggregate; or

(h) (i) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (A) liquidation, reorganization or other relief in
respect of a Loan Party or Restricted Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or other Insolvency Laws now or hereafter in effect or
(B) the appointment of a receiver, interim receiver, monitor, trustee,
custodian, sequestrator, conservator or similar official for any Loan Party or
Restricted Subsidiary or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for sixty (60) days
or an order or decree approving or ordering any of the foregoing shall be
entered or (ii) any involuntary case or proceeding (including the filing of any
notice of intention in respect thereof) is commenced against any Canadian Loan
Party or any Subsidiary of any Canadian Loan Party under any Insolvency Law, any
incorporation law or other applicable law in any jurisdiction in respect of
(A) its bankruptcy, liquidation, winding-up, dissolution or suspension of
general operations, or (B) the composition, rescheduling, reorganization,
arrangement or readjustment of, or other relief from, or stay of proceedings to
enforce, some or all of its debts or obligations; or

(i) any Loan Party or Restricted Subsidiary shall (i) voluntarily commence any
proceeding or proposal or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or other Insolvency Laws now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver, interim receiver, monitor,
trustee, custodian, sequestrator, conservator or similar official for such Loan
Party or Restricted Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
foregoing; or

(j) any Loan Party or Restricted Subsidiary shall become unable, admit in
writing its inability, or publicly declare its intention not to, or fail
generally to pay its debts as they become due; or

(k) (i) one or more judgments for the payment of money in an aggregate amount in
excess of $35,000,000 (to the extent not covered by independent third-party
insurance as to which the insurer has been notified of such judgment and has not
denied coverage) shall be rendered against any Loan Party, any Restricted
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of any Loan Party or Restricted Subsidiary to enforce any
such judgment; or (ii) any Loan Party or Restricted Subsidiary shall fail within
30 days to discharge one or more non-monetary judgments or orders which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, which judgments or orders, in any such case, are not
stayed on appeal or otherwise being appropriately contested in good faith by
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(l) (i) an ERISA Event shall have occurred that, in the reasonable opinion of
the Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect,
or (ii) a Termination Event shall occur; or there is an appointment by the
appropriate Governmental Authority of a replacement administrator to administer
any Canadian Defined Benefit Plan; or if any Canadian Defined Benefit Plan shall
be terminated or a replacement administrator is appointed; or if the Canadian
Borrower or any other Canadian Subsidiary is in default with respect to payments
to a Canadian Defined Benefit Plan; or Canadian Borrower or any other Canadian
Subsidiary completely or partially withdraws from a Canadian Defined Benefit
Plan which is a multi-employer pension plan, as defined under the applicable
pension standards legislation; or any Lien arises (save for contribution amounts
not yet due) in connection with any Canadian Defined Benefit Plan, in each case
when taken together with all other events set forth in this clause (ii) that
have occurred, in the opinion of the Required Lenders, could reasonably be
expected to result in a Material Adverse Effect; or

(m) a Change in Control shall occur; or

(n) [Reserved]; or

(o) the Loan Party shall fail to remain in full force or effect or any action
shall be taken to discontinue or to assert the invalidity or unenforceability of
the Loan Guaranty, or any Loan Party shall deny that it has any further
liability under the Loan Guaranty to which it is a party, or shall give notice
to such effect, including, but not limited to notice of termination delivered
pursuant to Section 10.08, except where due to such Loan Party’s permitted
liquidation or dissolution under the terms of this Agreement; or

(p) except as permitted by the terms of any Collateral Document, (i) any
Collateral Document shall for any reason fail to create a valid security
interest in any material portion of the Collateral purported to be covered
thereby and such Collateral shall be a material portion of the Collateral taken
as a whole, or (ii) for any reason, other than as a result of the gross
negligence or willful misconduct of the Administrative Agent, the Liens pursuant
to the Loan Documents, any Lien securing any Secured Obligation shall cease to
be a perfected, first priority Lien, subject to any applicable Permitted
Encumbrances; or

(q) any Collateral Document covering a material portion of the Collateral or
this Agreement, or any material provision of such Collateral Document or this
Agreement, for any reason ceases to be valid, binding and enforceable in
accordance with its terms (or any Loan Party shall challenge the enforceability
of this Agreement or any Collateral Document or shall assert in writing, or
engage in any action that evidences its assertion, that any provision of any of
Agreement or any Collateral Document has ceased to be or otherwise is not valid,
binding and enforceable in accordance with its terms); or

(r) (i) the subordination provisions of the documents evidencing or governing
any Subordinated Indebtedness in excess of the principal sum of $10,000,000 or
provisions of any Intercreditor Agreement (such provisions being referred to as
the “Intercreditor Provisions”), shall, in whole or in part, terminate, cease to
be effective or cease to be legally valid, binding and enforceable against any
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Loan Party shall, directly or indirectly, disavow or contest in any manner
(A) the effectiveness, validity or enforceability of such Intercreditor
Provisions, (B) that the Intercreditor Provisions exist for the benefit of the
Secured Parties, or (C) in the case of Subordinated Indebtedness, that all
payments of principal of or premium and interest on the applicable Subordinated
Indebtedness, or realized from the liquidation of any property of any Loan
Party, shall be subject to any of the Intercreditor Provisions;

then, and in every such Event of Default (other than an Event of Default with
respect to the Loan Parties described in clause (h) or (i) of this Article), and
at any time thereafter during the continuance of such Event of Default, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower Representative, take either or both of the following
actions, at the same or different times: (i) terminate the Commitments,
whereupon the Commitments shall terminate immediately, and (ii) declare the
Loans then outstanding to be due and payable in whole (or in part, but ratably
as among the Classes of Loans and the Loans of each Class at the time
outstanding, in which case any principal not so declared to be due and payable
may thereafter be declared to be due and payable), whereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Loan Parties accrued
hereunder, shall become due and payable immediately, in each case without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Loan Parties; and in the case of any event with respect to
the Loan Parties described in clause (h) or (i) of this Article, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Loan Parties accrued hereunder, shall automatically become due and payable, in
each case without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Loan Parties. Upon the occurrence and during
the continuance of an Event of Default, the Administrative Agent may, and at the
request of the Required Lenders shall, increase the rate of interest applicable
to the Loans and other Obligations to the extent set forth in this Agreement and
exercise any rights and remedies provided to the Administrative Agent under the
Loan Documents or at law or equity, including all remedies provided under the
UCC or the PPSA, as applicable.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

SECTION 8.01. Appointment. Each of the Lenders, on behalf of itself and any of
its Affiliates that are Secured Parties and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf, including execution of the other Loan
Documents, and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto. In addition, to the extent required under
the laws of any jurisdiction other than the U.S., each of the Lenders and the
Issuing Bank hereby grants to the Administrative Agent any required powers of
attorney to execute any Collateral Document governed by the laws of such
jurisdiction on such Lender’s or Issuing Bank’s behalf. The provisions of this
Article are solely for the benefit of the Administrative Agent and the Lenders
(including the Swingline Lender and the Issuing Bank), and the Loan Parties
shall not have rights as a third party beneficiary of any of such provisions. It
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understood and agreed that the use of the term “agent” as used herein or in any
other Loan Documents (or any similar term) with reference to the Administrative
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting parties.

For the purposes of the grant of security by any Borrowers or any other Loan
Party pursuant to the laws of the Province of Quebec, each of the Lenders, on
behalf of itself and any of its Affiliates that are Secured Parties and the
Issuing Banks hereby irrevocably appoints and authorizes the Administrative
Agent to act as the person holding the power of attorney (i.e. “fondé de
pouvoir”) (in such capacity, the “Attorney”) of the Secured Parties and the
holders of any bond, debenture or other title of indebtedness issued by any Loan
Party, as contemplated under Article 2692 of the Civil Code of Québec, and to
enter into, to take and to hold on their behalf, and for their benefit, any
hypothec granted by any Loan Party in favour of the Attorney, and to exercise
such powers and duties that are conferred upon the Attorney under any applicable
deed of hypothec. Moreover, without prejudice to such appointment and
authorization to act as the person holding the power of attorney as aforesaid,
each of the Lenders, on behalf of itself and any of its Affiliates that are
Secured Parties, and the Issuing Banks hereby irrevocably appoints and
authorizes the Administrative Agent (in such capacity, the “Custodian”) to act
as agent and custodian for and on behalf of the Secured Parties to hold and be
the sole registered holder of any bond or debenture which may be issued under
any deed of hypothec, the whole notwithstanding Section 32 of An Act respecting
the special powers of legal persons (Quebec) or any other applicable law, and to
execute all related documents. Each of the Attorney and the Custodian shall:
(a) have the sole and exclusive right and authority to exercise, except as may
be otherwise specifically restricted by the terms hereof, all rights and
remedies given to the Attorney and the Custodian (as applicable) pursuant to any
deed of hypothec, pledge agreement, applicable laws or otherwise, (b) benefit
from and be subject to all provisions hereof with respect to the Administrative
Agent mutatis mutandis, including, without limitation, all such provisions with
respect to the liability or responsibility to and indemnification by the
Lenders, and (c) be entitled to delegate from time to time any of its powers or
duties under any deed of hypothec, or pledge agreement on such terms and
conditions as it may determine from time to time. Any person who becomes a
Lender or an Issuing Bank hereunder shall, by its execution of an Assignment and
Assumption, be deemed to have consented to and confirmed: (i) the Attorney as
the person holding the power of attorney as aforesaid and to have ratified, as
of the date it becomes a Lender or an Issuing Bank hereunder, all actions taken
by the Attorney in such capacity, and (ii) the Custodian as the agent and
custodian as aforesaid and to have ratified, as of the date it becomes a Lender,
all actions taken by the Custodian in such capacity. The substitution of the
Administrative Agent pursuant to the provisions of this Article VIII shall also
constitute the substitution of the Attorney and the Custodian whereupon the
relevant parties shall execute all documents required under the laws of the
Province of Quebec to give effect to the substitution of the Attorney and the
Custodian.

SECTION 8.02. Rights as a Lender. The bank serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
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Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with any Loan Party or any Subsidiary or any Affiliate thereof
as if it were not the Administrative Agent hereunder.

SECTION 8.03. Duties and Obligations. The Administrative Agent shall not have
any duties or obligations except those expressly set forth in the Loan
Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Administrative Agent is
required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and, (c) except as expressly set
forth in the Loan Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to any Loan Party or any Subsidiary that is communicated to or obtained
by the bank serving as Administrative Agent or any of its Affiliates in any
capacity. The Administrative Agent shall not be liable for any action taken or
not taken by it with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own gross
negligence or willful misconduct as determined by a final nonappealable judgment
of a court of competent jurisdiction. The Administrative Agent shall be deemed
not to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Borrower Representative or a Lender,
and the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or in connection with any Loan
Document, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, (v) the creation, perfection or
priority of Liens on the Collateral or the existence of the Collateral, or
(vi) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.

SECTION 8.04. Reliance. The Administrative Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrowers), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

SECTION 8.05. Actions through Sub-Agents. The Administrative Agent may perform
any and all of its duties and exercise its rights and powers by or through any
one or more sub-agents appointed by the Administrative Agent. The Administrative
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agent may perform any and all of its duties and exercise its rights and powers
through their respective Related Parties, including through its Toronto or
London branches as applicable. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as the Administrative Agent.

SECTION 8.06. Resignation. Subject to the appointment and acceptance of a
successor Administrative Agent as provided in this paragraph, the Administrative
Agent may resign at any time by notifying the Lenders, the Issuing Bank and the
Borrower Representative. Upon any such resignation, the Required Lenders shall
have the right, in consultation with the Borrower Representative and with the
consent of the Borrower Representative (unless an Event of Default shall have
occurred and be continuing or unless such successor is an existing Lender), to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by its
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. The fees payable by
the Borrowers to a successor Administrative Agent shall be the same as those
payable to its predecessor, unless otherwise agreed by the Borrowers and such
successor. Notwithstanding the foregoing, in the event no successor
Administrative Agent shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its intent to resign, the retiring Administrative Agent may give notice of
the effectiveness of its resignation to the Lenders, the Issuing Banks and the
Borrowers, whereupon, on the date of effectiveness of such resignation stated in
such notice, (a) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents, provided
that, solely for purposes of maintaining any security interest granted to the
Administrative Agent under any Collateral Document for the benefit of the
Secured Parties, the retiring Administrative Agent shall continue to be vested
with such security interest as collateral agent for the benefit of the Secured
Parties and, in the case of any Collateral in the possession of the
Administrative Agent, shall continue to hold such Collateral, in each case until
such time as a successor Administrative Agent is appointed and accepts such
appointment in accordance with this paragraph (it being understood and agreed
that the retiring Administrative Agent shall have no duty or obligation to take
any further action under any Collateral Document, including any action required
to maintain the perfection of any such security interest), and (b) the Required
Lenders shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, provided that
(i) all payments required to be made hereunder or under any other Loan Document
to the Administrative Agent for the account of any Person other than the
Administrative Agent shall be made directly to such Person and (ii) all notices
and other communications required or contemplated to be given or made to the
Administrative Agent shall also directly be given or made to each Lender and
each Issuing Bank. Following the effectiveness of the Administrative Agent’s
resignation from its capacity as such, the provisions of this Article,
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Section 9.03, as well as any exculpatory, reimbursement and indemnification
provisions set forth in any other Loan Document, shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent and in respect
of the matters referred to in the proviso under clause (a) above.

SECTION 8.07. Non-Reliance.

(a) Each Lender acknowledges and agrees that the extensions of credit made
hereunder are commercial loans and letters of credit and not investments in a
business enterprise or securities. Each Lender further represents that it is
engaged in making, acquiring or holding commercial loans in the ordinary course
of its business and has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement as a Lender, and to make, acquire or hold
Loans hereunder. Each Lender shall, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information (which may contain material, non-public information within the
meaning of the United States securities laws concerning the Borrowers and their
Affiliates) as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document, any related agreement or any document furnished
hereunder or thereunder and in deciding whether or to the extent to which it
will continue as a Lender or assign or otherwise transfer its rights, interests
and obligations hereunder.

(b) Each Lender hereby agrees that (i) it has requested a copy of each Report
prepared by or on behalf of the Administrative Agent; (ii) the Administrative
Agent (A) makes no representation or warranty, express or implied, as to the
completeness or accuracy of any Report or any of the information contained
therein or any inaccuracy or omission contained in or relating to a Report and
(B) shall not be liable for any information contained in any Report; (iii) the
Reports are not comprehensive audits or examinations, and that any Person
performing any field examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Loan Parties’
books and records, as well as on representations of the Loan Parties’ personnel
and that the Administrative Agent undertakes no obligation to update, correct or
supplement the Reports; (iv) it will keep all Reports confidential and strictly
for its internal use, not share the Report with any Loan Party or any other
Person except as otherwise permitted pursuant to this Agreement; and (v) without
limiting the generality of any other indemnification provision contained in this
Agreement, (A) it will hold the Administrative Agent and any such other Person
preparing a Report harmless from any action the indemnifying Lender may take or
conclusion the indemnifying Lender may reach or draw from any Report in
connection with any extension of credit that the indemnifying Lender has made or
may make to the Borrower, or the indemnifying Lender’s participation in, or the
indemnifying Lender’s purchase of, a Loan or Loans; and (B) it will pay and
protect, and indemnify, defend, and hold the Administrative Agent and any such
other Person preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses, and other amounts (including reasonable
attorneys’ fees) incurred by the Administrative Agent or any such other Person
as the direct or indirect result of any third parties who might obtain all or
part of any Report through the indemnifying Lender.

 

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SECTION 8.08. Other Agency Titles. The joint bookrunners and joint lead
arrangers, co-syndication agents, and co-documentation agents shall not have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Lenders as such. Without limiting the
foregoing, none of such Lenders shall have or be deemed to have a fiduciary
relationship with any Lender. Each Lender hereby makes the same acknowledgments
with respect to the relevant Lenders in their respective capacities as joint
bookrunners and joint lead arrangers, co-syndication agents, and
co-documentation agents, as applicable, as it makes with respect to the
Administrative Agent in the preceding paragraph.

SECTION 8.09. Not Partners or Co-Venturers; Administrative Agent as
Representative of the Secured Parties. (a) The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Administrative Agent)
authorized to act for, any other Lender. The Administrative Agent shall have the
exclusive right on behalf of the Lenders to enforce the payment of the principal
of and interest on any Loan after the date such principal or interest has become
due and payable pursuant to the terms of this Agreement.

(b) In its capacity, the Administrative Agent is a “representative” of the
Secured Parties within the meaning of the term “secured party” as defined in the
New York Uniform Commercial Code. Each Lender authorizes the Administrative
Agent to enter into each of the Collateral Documents to which it is a party and
to take all action contemplated by such documents. Each Lender agrees that no
Secured Party (other than the Administrative Agent) shall have the right
individually to seek to realize upon the security granted by any Collateral
Document, it being understood and agreed that such rights and remedies may be
exercised solely by the Administrative Agent for the benefit of the Secured
Parties upon the terms of the Collateral Documents. In the event that any
Collateral is hereafter pledged by any Person as collateral security for the
Secured Obligations, the Administrative Agent is hereby authorized, and hereby
granted a power of attorney, to execute and deliver on behalf of the Secured
Parties any Loan Documents necessary or appropriate to grant and perfect a Lien
on such Collateral in favor of the Administrative Agent on behalf of the Secured
Parties.

SECTION 8.10. Flood Laws. JPMCB has adopted internal policies and procedures
that address requirements placed on federally regulated lenders under the
National Flood Insurance Reform Act of 1994 and related legislation (the “Flood
Laws”). JPMCB, as administrative agent or collateral agent on a syndicated
facility, will post on the applicable electronic platform (or otherwise
distribute to each Lender in the syndicate) documents that it receives in
connection with the Flood Laws. However, JPMCB reminds each Lender and
Participant in the facility that, pursuant to the Flood Laws, each federally
regulated Lender (whether acting as a Lender or Participant in the facility) is
responsible for assuring its own compliance with the flood insurance
requirements.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone or otherwise, all
notices and other communications

 

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provided for herein shall be in writing and shall be delivered by Electronic
Systems (and subject in each case to paragraph (b) below) or by hand or
overnight courier service, mailed by certified or registered mail or sent by
facsimile, as follows:

 

  (i) if to any Loan Party, to the Borrower Representative at:

American Eagle Outfitters, Inc.

77 Hot Metal Street

Pittsburgh, PA 15203

Attention: Mary Boland, Chief Financial and Administrative Officer

Facsimile No: 724-779-7889

Email: bolandm@ae.com

With copies to:

American Eagle Outfitters, Inc.

77 Hot Metal Street

Pittsburgh, PA 15203

Attention: Charles Sandel, General Counsel

Facsimile No: 724-779-8140

Email: sandelc@ae.com

and

Porter, Wright, Morris & Arthur LLP

41 South High Street

Columbus, OH 43215

Attention: Timothy E. Grady

Facsimile No: 614-227-2100

Email: tgrady@porterwright.com

 

  (ii) if to the Administrative Agent, the Issuing Bank or the Swingline Lender,
to JPMorgan Chase Bank, N.A. at:

JPMorgan Chase Bank, N.A.

277 Park Avenue, 22nd Floor

New York, NY 10172

Attention: Account Executive – American Eagle Outfitters

Facsimile No: 646-534-2288

Email: dan.bueno@chase.com

 

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With copies to:

Jones Day

1420 Peachtree Street, N.E.

Suite 800

Atlanta, GA 30309

Attention: Bruce Moorhead

Office No: 404-581-8254

Facsimile No: 404-581-8330

Email: bmoorhead@jonesday.com

 

  (iii) in addition to notices pursuant to clause (ii) above, with respect to
any Borrowing in any currency (other than U.S. Dollars), to the Persons at the
address or facsimile number set forth on Schedule 9.01.

 

  (iv) if to any other Lender, to it at its address or facsimile number set
forth in its Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received, (ii) sent by facsimile shall be deemed to have been given
when sent, provided that if not given during normal business hours of the
recipient, such notice or communication shall be deemed to have been given at
the opening of business on the next Business Day of the recipient, or
(iii) delivered through Electronic Systems to the extent provided in paragraph
(b) below shall be effective as provided in such paragraph.

(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by Electronic Systems pursuant to procedures approved by the
Administrative Agent. Each of the Administrative Agent and the Borrower
Representative (on behalf of the Loan Parties) may, in its discretion, agree to
accept notices and other communications to it hereunder by Electronic Systems
pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications. In the case of notices
from the Borrower Representative to the Administrative Agent, such acceptable
and approved Electronic Systems include email to the Administrative Agent at the
email addresses identified above or as otherwise designated in writing pursuant
to Section 9.01(c) below. All such notices and other communications (i) sent to
an email address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return email or other written
acknowledgement), provided that if not given during the normal business hours of
the recipient, shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient, at its email address as described in the foregoing
clause (i), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses
(i) and (ii) above, if such notice, email or other communication is not sent
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been sent at the opening of business on the next
Business Day of the recipient.

 

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(c) Any party hereto may change its address, facsimile number or email address
for notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.

(d) Electronic Systems.

(i) Each Loan Party agrees that the Administrative Agent may, but shall not be
obligated to, make Communications (as defined below) available to the Issuing
Bank and the other Lenders by posting the Communications on Debt Domain,
Intralinks, Syndtrak, ClearPar or a substantially similar Electronic System.

(ii) Any Electronic System used by the Administrative Agent is provided “as is”
and “as available.” The Agent Parties (as defined below) do not warrant the
adequacy of such Electronic Systems and expressly disclaim liability for errors
or omissions in the Communications. No warranty of any kind, express, implied or
statutory, including any warranty of merchantability, fitness for a particular
purpose, non-infringement of third-party rights or freedom from viruses or other
code defects, is made by any Agent Party in connection with the Communications
or any Electronic System. In no event shall the Administrative Agent or any of
its Related Parties (collectively, the “Agent Parties”) have any liability to
the Borrowers or the other Loan Parties, any Lender, the Issuing Bank or any
other Person or entity for damages of any kind, including direct or indirect,
special, incidental or consequential damages, losses or expenses (whether in
tort, contract or otherwise) arising out of any Borrower’s, any Loan Party’s or
the Administrative Agent’s transmission of communications through an Electronic
System. “Communications” means, collectively, any notice, demand, communication,
information, document or other material provided by or on behalf of any Loan
Party pursuant to any Loan Document or the transactions contemplated therein
which is distributed by the Administrative Agent, any Lender or the Issuing Bank
by means of electronic communications pursuant to this Section, including
through an Electronic System.

SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders
hereunder and under any other Loan Document are cumulative and are not exclusive
of any rights or remedies that they would otherwise have. No waiver of any
provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.

 

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(b) Except as provided in the first sentence of Section 2.09(f) (with respect to
any commitment increase), neither this Agreement nor any other Loan Document nor
any provision hereof or thereof may be waived, amended or modified except (x) in
the case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders or (y) in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, with the consent of the Required Lenders; provided that no such
agreement shall (i) increase the Commitment of any Lender without the written
consent of such Lender (including any such Lender that is a Defaulting Lender),
(ii) reduce or forgive the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce or forgive any interest or fees
payable hereunder, without the written consent of each Lender (including any
such Lender that is a Defaulting Lender) directly affected thereby (except
(1) in connection with the waiver of applicability of any post-default increase
in interest rates, which waiver shall be effective with the consent of the
Required Lenders and (2) that any amendment or modification of defined terms
used in the determination of the Adjusted Leverage Ratio or the Borrowing Base
shall not constitute a reduction in the rate of interest or fees for purposes of
this clause (ii)), (iii) postpone any scheduled date of payment of the principal
amount of any Loan or LC Disbursement, or any date for the payment of any
interest, fees or other Obligations payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment, without the written consent of each Lender (including any
such Lender that is a Defaulting Lender) directly affected thereby (except
(1) in connection with the waiver of applicability of any post-default increase
in interest rates, which waiver shall be effective with the consent of the
Required Lenders and (2) that any amendment or modification of defined terms
used in the determination of the Adjusted Leverage Ratio or the Borrowing Base
shall not constitute a reduction in the rate of interest or fees for purposes of
this clause (iii)), (iv) change Section 2.18(b) or (d) in a manner that would
alter the manner in which payments are shared, without the written consent of
each Lender (other than any Defaulting Lender), (v) increase the advance rates
set forth in the definition of Borrowing Base or add new categories of eligible
assets, without the written consent of each Lender (other than any Defaulting
Lender), (vi) change any of the provisions of this Section or the definition of
“Required Lenders” or any other provision of any Loan Document specifying the
number or percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (other than any Defaulting Lender) directly
affected thereby, (vii) change Section 2.20, without the consent of each Lender
(other than any Defaulting Lender), (viii) release any Borrower from the
Obligations or Loan Party from its obligation under its Loan Guaranty (except as
otherwise permitted herein or in the other Loan Documents), without the written
consent of each Lender (other than any Defaulting Lender), or (ix) except as
provided in clause (c) of this Section or in any Collateral Document, release
all or substantially all of the Collateral, without the written consent of each
Lender (other than any Defaulting Lender); provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, any Issuing Bank or the Swingline Lender hereunder without
the prior written consent of the Administrative Agent, such Issuing Bank or the
Swingline Lender, as the case may be (it being understood that any amendment to
Section 2.20 shall require the consent of the Administrative Agent, the Issuing
Banks and the Swingline Lender). The Administrative Agent may also amend the
Commitment Schedule to reflect assignments entered into pursuant to

 

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Section 9.04, and this Agreement may be amended without any additional consents
to provide for increased Commitments in the manner contemplated by Section 2.09.

(c) The Secured Parties hereby irrevocably authorize the Administrative Agent,
at its option and in its sole discretion, (i) to release any Liens granted to
the Administrative Agent by the Loan Parties on any Collateral (A) upon the
termination of all the Commitments, payment and satisfaction in full in cash of
all Obligations (other than Unliquidated Obligations) and the Cash
Collateralization (or, at the discretion of the Administrative Agent, the
providing of a back up standby letter of credit satisfactory to the
Administrative Agent and the Issuing Banks) of all outstanding Letters of
Credit, (B) constituting property being sold or disposed of if the Loan Party
disposing of such property certifies to the Administrative Agent that the sale
or disposition is made in compliance with the terms of this Agreement (and the
Administrative Agent may rely conclusively on any such certificate, without
further inquiry), and to the extent that the property being sold or disposed of
constitutes 100% of the Equity Interest of a Subsidiary, the Administrative
Agent is authorized to release any Loan Guaranty provided by such Subsidiary,
(C) constituting property leased to a Loan Party under a lease which has expired
or been terminated in a transaction not prohibited under this Agreement, (D) as
required to effect any sale or other disposition of such Collateral in
connection with any exercise of remedies of the Administrative Agent and the
Lenders pursuant to Article VII, and (E) constituting property of a Loan Party
that is being released as a Loan Party as provided below, and (ii) to release
any Loan Guaranty provided by any U.S. Loan Party or Canadian Loan Party that is
(A) dissolved pursuant to Section 6.03(a)(iv) in connection with a voluntary
liquidation or dissolution thereof permitted by such Section, (B) upon the
disposition of all of the outstanding Equity Interests of a Subsidiary of the
Borrower (other than a Canadian Borrower) to a Person other than a Borrower or a
Restricted Subsidiary in a transaction permitted by Section 6.05, (C) upon the
designation of such Subsidiary as an Unrestricted Subsidiary in compliance with
Section 5.15 or (D) in the case of the Canadian Loan Parties, upon any release
of all the Canadian Collateral pursuant to clause (i)(A) above and, in
connection therewith, to release any Liens granted to the Administrative Agent
by such Subsidiary on any Collateral, if the Company certifies to the
Administrative Agent that such liquidation or dissolution is made in compliance
with the terms of this Agreement (and the Administrative Agent may rely
conclusively on any such certificate, without further inquiry). The Lenders and
the Issuing Banks hereby further irrevocably authorize the Administrative Agent
to release or subordinate, as applicable, any Liens with respect to real
property or other term priority collateral in connection with the incurrence of
Permitted Term Loan Indebtedness as follows: (x) if the Permitted Term Loan
Indebtedness is secured by real property but not secured by any Accounts, Credit
Card Accounts, or Inventory, the Administrative Agent shall release the Liens
with respect to real property, and (y) if the Permitted Term Loan Indebtedness
is secured by any Accounts, Credit Card Accounts, or Inventory, the
Administrative Agent shall subordinate its Liens on real property pursuant to an
Intercreditor Agreement. Subject to compliance by the Loan Parties and the
holders of such Permitted Term Loan Indebtedness with the terms and conditions
required to be satisfied in connection with the incurrence of such Permitted
Term Loan Indebtedness, the Administrative Agent agrees to release such Liens or
subordinate such Liens as set forth in the immediately preceding sentence; for
the avoidance of doubt, nothing in this sentence shall authorize the
Administrative Agent to release or subordinate any Lien on assets of the type
included in the Borrowing Base (other than real property) or assets related
thereto described in any Security Agreement as of the date hereof. Any such
release shall not in any manner discharge, affect, or

 

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impair the Obligations or any Liens (other than those expressly being released)
upon (or obligations of the Loan Parties in respect of) all interests retained
by the Loan Parties, including the proceeds of any sale, all of which shall
continue to constitute part of the Collateral.

(d) If, in connection with any proposed amendment, waiver or consent requiring
the consent of “each Lender” or “each Lender affected thereby,” the consent of
the Required Lenders is obtained, but the consent of other necessary Lenders is
not obtained (any such Lender whose consent is necessary but has not been
obtained being referred to herein as a “Non-Consenting Lender”), then the
Borrowers may elect to replace a Non-Consenting Lender as a Lender party to this
Agreement, provided that, concurrently with such replacement, (i) another bank
or other entity which is reasonably satisfactory to the Borrowers, the
Administrative Agent and the Issuing Bank shall agree, as of such date, to
purchase for cash the Loans and other Obligations due to the Non-Consenting
Lender pursuant to an Assignment and Assumption and to become a Lender for all
purposes under this Agreement and to assume all obligations of the
Non-Consenting Lender to be terminated as of such date and to comply with the
requirements of clause (b) of Section 9.04, and (ii) the Borrowers shall pay to
such Non-Consenting Lender in same day funds on the day of such replacement
(1) all interest, fees and other amounts then accrued but unpaid to such
Non-Consenting Lender by the Borrowers hereunder to and including the date of
termination, including without limitation payments due to such Non-Consenting
Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on
such date rather than sold to the replacement Lender.

(e) Notwithstanding anything to the contrary herein the Administrative Agent
may, with the consent of the Borrower Representative only, amend, modify or
supplement this Agreement or any of the other Loan Documents to cure any
ambiguity, omission, mistake, defect or inconsistency.

SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) Except as otherwise
provided in this Agreement, the Loan Parties shall, jointly and severally, pay
all (i) reasonable and documented out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable and documented
fees, charges and disbursements of counsel (in each case limited to one primary
law firm and one law firm in each relevant jurisdiction, except in the case of
actual or perceived conflicts of interest, in which case, such additional
counsel for the affected persons) for the Administrative Agent, in connection
with the syndication and distribution (including, without limitation, via the
internet or through an Electronic System) of the credit facilities provided for
herein, the preparation and administration of the Loan Documents and any
amendments, modifications or waivers of the provisions of the Loan Documents
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) reasonable and documented out-of-pocket expenses incurred by
the Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and
(iii) reasonable and documented out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Bank or any Lender, including the reasonable
fees, charges and disbursements of any counsel (in each case limited to one
primary law firm and one law firm in each relevant jurisdiction, except in the
case of actual or perceived conflicts of interest, in which case, such
additional counsel for the affected persons) for the

 

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Administrative Agent, the Issuing Bank or any Lender, in connection with the
enforcement, collection or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such reasonable
and documented out-of-pocket expenses incurred during any workout, restructuring
or negotiations in respect of such Loans or Letters of Credit (in each case
limited to one primary law firm and one law firm in each relevant jurisdiction,
except in the case of actual or perceived conflicts of interest, in which case,
such additional counsel for the affected persons). Such reasonable and
documented out-of-pocket expenses being reimbursed by the Loan Parties under
this Section may include, without limiting the generality of the foregoing,
fees, costs and expenses incurred in connection with:

(i) appraisals and insurance reviews;

(ii) field examinations and the preparation of Reports based on the fees charged
by a third party retained by the Administrative Agent or the reasonable and
documented internally allocated fees for each Person employed by the
Administrative Agent with respect to each field examination;

(iii) Taxes, fees and other charges for (A) lien and title searches and title
insurance and (B) recording the Mortgages, filing financing statements and
continuations, and other actions to perfect, protect, and continue the
Administrative Agent’s Liens;

(iv) sums paid or incurred to take any action required of any Loan Party under
the Loan Documents that such Loan Party fails to pay or take; and

(v) forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining the accounts and lock boxes, and costs and expenses
of preserving and protecting the Collateral.

All of the foregoing fees, costs and expenses may be charged to the Borrowers as
Revolving Loans or to another deposit account, all as described in
Section 2.18(c).

(b) The Loan Parties, subject to Section 9.21, shall, jointly and severally,
indemnify the Administrative Agent, the Issuing Bank and each Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, penalties, incremental taxes, liabilities and related
expenses, including the reasonable and documented fees, charges and
disbursements of any counsel for any Indemnitee (in each case limited to one
primary law firm and one law firm in each relevant jurisdiction, except in the
case of actual or perceived conflicts of interest, in which case, such
additional counsel for the affected persons), incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of the Loan Documents or any agreement or instrument
contemplated thereby, the performance by the parties hereto of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii)

 

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any actual or alleged presence or Release of Hazardous Materials on or from any
property owned or operated by a Loan Party or a Subsidiary, or any Environmental
Liability related in any way to a Loan Party or a Subsidiary, (iv) the failure
of a Loan Party to deliver to the Administrative Agent the required receipts or
other required documentary evidence with respect to a payment made by a Loan
Party for Taxes pursuant to Section 2.17, or (v) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not such claim, litigation, investigation or proceeding is brought by
the Loan Parties or their respective equity holders, Affiliates, creditors or
any other third Person and whether based on contract, tort or any other theory
and regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, penalties, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence, bad faith, or willful
misconduct of such Indemnitee. This Section 9.03(b) shall not apply with respect
to Taxes other than any Taxes that represent losses or damages arising from any
non-Tax claim.

(c) To the extent that any Loan Party fails to pay any amount required to be
paid by it to the Administrative Agent (or any sub-agent thereof), the Swingline
Lender or the Issuing Bank (or any Related Party of any of the foregoing) under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent, the Swingline Lender or the Issuing Bank (or any Related
Party of any of the foregoing), as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount (it being understood that
the Loan Parties’ failure to pay any such amount shall not relieve any Loan
Party of any default in the payment thereof); provided that the unreimbursed
expense or indemnified loss, claim, damage, penalty, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent, the Swingline Lender or the Issuing Bank in its capacity
as such.

(d) To the extent permitted by applicable law, no Loan Party shall assert, and
each Loan Party hereby waives, any claim against any Indemnitee (i) for any
damages arising from the use by others of information or other materials
obtained through telecommunications, electronic or other information
transmission systems (including the Internet) or (ii) on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof; provided that, nothing in this paragraph
(d) shall relieve any Loan Party of any obligation it may have to indemnify an
Indemnitee against special, indirect, consequential or punitive damages asserted
against such Indemnitee by a third party.

(e) All amounts due under this Section shall be payable promptly after written
demand therefor.

(f) Notwithstanding the foregoing, no Canadian Loan Party shall have any
liability under this Section 9.03 for any expenses or indemnities that do not
arise from the commitments or extensions of credit to the Canadian Loan Parties,
the conduct or alleged conduct of any Canadian Loan Party, the assets of any
Canadian Loan Party, any Default or Event of Default

 

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relating to any Canadian Loan Party, any services provided to any Canadian Loan
Party or any enforcement action against any Canadian Loan Party.

SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i) no Loan
Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by any Loan Party without such consent shall be null and
void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more Persons (other than an Ineligible Institution)
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it) with
the prior written consent (such consent not to be unreasonably withheld) of:

(A) the Borrower Representative, provided that the Borrower Representative shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Administrative Agent within 10 Business Days
after having received notice thereof, and provided further that no consent of
the Borrower Representative shall be required for an assignment to a Lender, an
Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred
and is continuing, any other assignee;

(B) the Administrative Agent (such consent not to be unreasonably withheld or
delayed) shall be required for assignments in respect of the Revolving Loan if
such assignment is to a Person that is not a Lender with a Commitment in respect
of such Revolving Loan, an Affiliate of such Lender or an Approved Fund with
respect to such Lender;

(C) each Issuing Bank; and

(D) the Swingline Lender.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such

 

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assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Borrower Representative and the Administrative
Agent otherwise consent, provided that no such consent of the Borrower
Representative shall be required if an Event of Default has occurred and is
continuing;

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement
(including its obligations to fund the Loans and other products under the
Canadian Sublimit and the Foreign Currency Sublimit);

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500 and the tax forms required by Section 2.17(f); and

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Company, the other
Loan Parties and their Related Parties or their respective securities) will be
made available and who may receive such information in accordance with the
assignee’s compliance procedures and applicable laws, including Federal and
state securities laws; and

(E) each assignee Lender shall acquire and equal proportionate share (as
determined by the assigned Commitments in relation to all other Commitments of
other Lenders), either directly, or through an Affiliate or a branch, of the
Canadian Sublimit and the Foreign Currency Sublimit.

For the purposes of this Section 9.04(b), the terms “Approved Fund” and
“Ineligible Institution” have the following meanings:

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

“Ineligible Institution” means a (a) natural person, (b) a Defaulting Lender,
(c) holding company, investment vehicle or trust for, or owned and operated for
the primary benefit of, a natural person or relative(s) thereof; provided that,
such holding company, investment vehicle or trust shall not constitute an
Ineligible Institution if it (x) has not been established for the primary
purpose of acquiring any Loans or Commitments, (y) is managed by a professional
advisor, who is not such natural person or a relative thereof, having
significant experience in the business of making or purchasing commercial loans,
and (z) has assets greater than $25,000,000 and a significant part of its
activities consist of making or purchasing commercial loans and similar

 

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extensions of credit in the ordinary course of its business or (d) a Loan Party
or a Subsidiary or other Affiliate of a Loan Party.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption, the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 9.04 shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent
of the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitment of, and principal amount of and
stated interest on the Loans and LC Disbursements owing to, each Lender pursuant
to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive absent manifest error, and the Borrowers, the
Administrative Agent, the Issuing Bank and the Lenders shall treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrowers, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e),
2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation
to accept such Assignment and Assumption and record the information therein in
the Register unless and until such payment shall have been made in full,
together with all accrued interest thereon. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.

(c) Any Lender may, without the consent of the Borrowers, the Administrative
Agent, the Issuing Bank or the Swingline Lender, sell participations to one or
more banks or

 

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other entities (a “Participant”) other than an Ineligible Institution in all or
a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain
unchanged; (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations; and (C) the Borrowers, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
The Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations
therein, including the requirements under Section 2.17(f) and (g) (it being
understood that the documentation required under Section 2.17(f) shall be
delivered to the participating Lender and the information and documentation
required under Section 2.17(g) will be delivered to the Borrowers and the
Administrative Agent)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of
Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this
Section; and (B) shall not be entitled to receive any greater payment under
Section 2.15 or 2.17, with respect to any participation, than its participating
Lender would have been entitled to receive, except to the extent such
entitlement to receive a greater payment results from a Change in Law that
occurs after the Participant acquired the applicable participation.

Each Lender that sells a participation agrees, at the Borrowers’ request and
expense, to use reasonable efforts to cooperate with the Borrowers to effectuate
the provisions of Section 2.19(b) with respect to any Participant. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(c) as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the
Borrowers, maintain a register on which it enters the name and address of each
Participant and the principal amounts of (and stated interest on) each
Participant’s interest in the Loans or other obligations under this Agreement or
any other Loan Document (the “Participant Register”); provided that no Lender
shall have any obligation to disclose all or any portion of the Participant
Register (including the identity of any Participant or any information relating
to a Participant’s interest in any Commitments, Loans, Letters of Credit or its
other obligations under any Loan Document) to any Person except to the extent
that such disclosure is necessary to establish that such Commitment, Loan,
Letter of Credit or other obligation is in registered form under
Section 5f.103-1(c) of the United States Treasury Regulations. The entries in
the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary. For the avoidance of doubt, the
Administrative Agent (in its capacity as Administrative Agent) shall have no
responsibility for maintaining a Participant Register.

 

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(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any other Loan Document or any provision hereof or thereof.

SECTION 9.06. Counterparts; Integration; Effectiveness; Electronic Execution.
(a) This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof. Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

(b) Delivery of an executed counterpart of a signature page of this Agreement by
telecopy, emailed pdf or any other electronic means that reproduces an image of
the actual executed signature page shall be effective as delivery of a manually
executed counterpart of this Agreement. The words “execution,” “signed,”
“signature,” “delivery,” and words of like import in or relating to any document
to be signed in connection with this Agreement and the transactions contemplated
hereby or thereby shall be deemed to include Electronic Signatures, deliveries
or the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature,
physical delivery thereof or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National

 

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Commerce Act, the New York State Electronic Signatures and Records Act, or any
other similar state laws based on the Uniform Electronic Transactions Act.

SECTION 9.07. Severability. Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such
Lender or Affiliate to or for the credit or the account of any Loan Party
against any of and all the Secured Obligations held by such Lender, irrespective
of whether or not such Lender shall have made any demand under the Loan
Documents and although such obligations may be unmatured; provided that the
foregoing authorization shall not entitle any Lender to apply any deposits
(i) of any Canadian Loan Party to the satisfaction of any of the U.S. Secured
Obligations or (ii) to the extent that such deposit constitutes an Excluded
Asset. The applicable Lender shall notify the Borrower Representative and the
Administrative Agent of such set-off or application, provided that any failure
to give or any delay in giving such notice shall not affect the validity of any
such set-off or application under this Section. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have. NOTWITHSTANDING THE FOREGOING, NO
LENDER, NO ISSUING BANK AND NO PARTICIPANT SHALL EXERCISE ANY RIGHT OF SETOFF,
BANKER’S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY LOAN
PARTY HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE WRITTEN CONSENT OF THE
ADMINISTRATIVE AGENT.

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) The Loan Documents (other than those containing a contrary express choice of
law provision) shall be governed by and construed in accordance with the
internal laws (and not the law of conflicts) of the State of New York, but
giving effect to federal laws applicable to national banks; provided, however,
that if the laws of any jurisdiction other than New York shall govern in regard
to the validity, perfection or effect of perfection of any lien or in regard to
procedural matters affecting enforcement of any liens in collateral, such laws
of such other jurisdictions shall continue to apply to that extent.

(b) Each Loan Party hereby irrevocably and unconditionally submits, for itself
and its property, to the exclusive jurisdiction of any U.S. Federal or New York
State court sitting in New York, New York in any action or proceeding arising
out of or relating to any Loan Documents, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan

 

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Document shall affect any right that the Administrative Agent, the Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against any Loan Party or its
properties in the courts of any jurisdiction.

(c) Each Loan Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, OTHER AGENT (INCLUDING ANY
ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by any Requirement of Law or by any subpoena or similar
legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies under this Agreement or any other Loan Document or
any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to (i) any assignee of or

 

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Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Loan Parties and their obligations, (g) with the consent of the Borrower
Representative or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, the Issuing Bank or any Lender on a
non-confidential basis from a source other than any Loan Party and, as far as
such recipient is aware, has not been made available as a result of a breach of
any obligation of confidentiality of such source with respect to such
information. For the purposes of this Section, “Information” means all
information received from the Loan Parties relating to the Loan Parties or their
business, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis
prior to disclosure by the Loan Parties under circumstances in which, as far as
such recipient is aware, such information has not been made available as a
result of a breach of any obligation of confidentiality of such source with
respect to such information; provided that, in the case of information received
from the Loan Parties after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED
TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION
CONCERNING THE COMPANY, AND ITS AFFILIATES AND THEIR RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE
SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
LOAN PARTIES OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY, THE LOAN PARTIES AND
THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER
REPRESENTS TO THE LOAN PARTIES AND THE ADMINISTRATIVE AGENT THAT IT HAS
IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE
INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE
SECURITIES LAWS.

SECTION 9.13. Several Obligations; Nonreliance; Violation of Law. The respective
obligations of the Lenders hereunder are several and not joint and the failure
of any Lender to make any Loan or perform any of its obligations hereunder shall
not relieve any other Lender

 

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from any of its obligations hereunder. Each Lender hereby represents that it is
not relying on or looking to any margin stock (as defined in Regulation U of the
Board) for the repayment of the Borrowings provided for herein. Anything
contained in this Agreement to the contrary notwithstanding, neither the Issuing
Bank nor any Lender shall be obligated to extend credit to the Borrowers in
violation of any Requirement of Law.

SECTION 9.14. USA PATRIOT Act; Canadian AML Legislation. Each Lender that is
subject to the requirements of the USA PATRIOT Act hereby notifies each Loan
Party that pursuant to the requirements of the USA PATRIOT Act, it is required
to obtain, verify and record information that identifies such Loan Party, which
information includes the name and address of such Loan Party and other
information that will allow such Lender to identify such Loan Party in
accordance with the USA PATRIOT Act.

SECTION 9.15. Canadian Anti-Money Laundering Legislation.

(a) Each Loan Party acknowledges that, pursuant to the Proceeds of Crime Act and
other applicable anti-money laundering, anti-terrorist financing, government
sanction and “know your client” laws (collectively, including any guidelines or
orders thereunder, “AML Legislation”), the Lenders may be required to obtain,
verify and record information regarding the Loan Parties and their respective
directors, authorized signing officers, direct or indirect shareholders or other
Persons in control of the Loan Parties, and the transactions contemplated
hereby. Each Loan Party shall promptly provide all such information, including
supporting documentation and other evidence, as may be reasonably requested by
any Lender or any prospective assignee or participant of a Lender, the
Administrative Agent or any Issuing Bank, in order to comply with any applicable
AML Legislation, whether now or hereafter in existence.

(b) If the Administrative Agent has ascertained the identity of any Loan Party
or any authorized signatories of the Loan Parties for the purposes of applicable
AML Legislation, then the Administrative Agent:

(i) shall be deemed to have done so as an agent for each Lender, and this
Agreement shall constitute a “written agreement” in such regard between each
Lender and the Administrative Agent within the meaning of the applicable AML
Legislation; and

(ii) shall provide to each Lender copies of all information obtained in such
regard without any representation or warranty as to its accuracy or
completeness.

Notwithstanding the preceding sentence and except as may otherwise be agreed in
writing, each of the Lenders agrees that neither the Administrative Agent nor
any other Agent has any obligation to ascertain the identity of the Loan Parties
or any authorized signatories of the Loan Parties on behalf of any Lender, or to
confirm the completeness or accuracy of any information it obtains from any Loan
Party or any such authorized signatory in doing so.

SECTION 9.16. Disclosure. Each Loan Party, each Lender and the Issuing Bank
hereby acknowledges and agrees that the Administrative Agent and/or its
Affiliates from time to time may hold investments in, make other loans to or
have other relationships with any of the Loan Parties and their respective
Affiliates.

 

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SECTION 9.17. Appointment for Perfection. Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the other Secured Parties, in assets which, in
accordance with Article 9 of the UCC, the PPSA or any other applicable law can
be perfected only by possession or control. Should any Lender (other than the
Administrative Agent) obtain possession or control of any such Collateral, such
Lender shall notify the Administrative Agent thereof, and, promptly upon the
Administrative Agent’s request therefor shall deliver such Collateral to the
Administrative Agent or otherwise deal with such Collateral in accordance with
the Administrative Agent’s instructions.

SECTION 9.18. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

SECTION 9.19. No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), each Loan Party acknowledges and agrees that: (i) (A) the arranging
and other services regarding this Agreement provided by the Lenders are
arm’s-length commercial transactions between such Borrower and its Affiliates,
on the one hand, and the Lenders and their Affiliates, on the other hand,
(B) such Loan Party has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate, and (C) such Loan Party is
capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) each of the Lenders and their Affiliates is and has been
acting solely as a principal and, except as expressly agreed in writing by the
relevant parties, has not been, is not, and will not be acting as an advisor,
agent or fiduciary for such Loan Party or any of its Affiliates, or any other
Person and (B) no Lender or any of its Affiliates has any obligation to such
Loan Party or any of its Affiliates with respect to the transactions
contemplated hereby except, in the case of a Lender, those obligations expressly
set forth herein and in the other Loan Documents; and (iii) each of the Lenders
and their respective Affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of such Loan Party and its
Affiliates, and no Lender or any of its Affiliates has any obligation to
disclose any of such interests to such Loan Party or its Affiliates. To the
fullest extent permitted by law, each Loan Party hereby waives and releases any
claims that it may have against each of the Lenders and their Affiliates with
respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.

 

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SECTION 9.20. Authorization to Distribute Certain Materials to Public-Siders.

(a) If the Borrowers do not file this Agreement with the SEC, then the Borrowers
hereby authorize the Administrative Agent to distribute the execution version of
this Agreement and the Loan Documents to all Lenders, including their
Public-Siders. Each Borrower acknowledges its understanding that Public-Siders
and their firms may be trading in any of the Loan Parties’ respective securities
while in possession of the Loan Documents.

(b) Each Borrower represents and warrants that none of the information in the
Loan Documents constitutes or contains material non-public information within
the meaning of federal and state securities laws. To the extent that any of the
executed Loan Documents constitutes at any time material non-public information
within the meaning of the federal and state securities laws after the date
hereof, each Borrower agrees that it will promptly make such information
publicly available by press release or public filing with the SEC.

SECTION 9.21. Obligations of Foreign Subsidiaries. Notwithstanding anything in
this Agreement or any other Loan Document to the contrary, none of the Canadian
Loan Parties nor any other Foreign Subsidiary of the Company that is a CFC, nor
any Unrestricted Subsidiary shall be liable or in any manner responsible for, or
be deemed to have guaranteed, directly or indirectly, whether as a primary
obligor, guarantor, indemnitor, or otherwise, and none of their assets shall
secure, directly or indirectly, any obligations (including principal, interest,
fees, penalties, premiums, expenses, charges, reimbursements, indemnities or any
other U.S. Obligations) in respect of any U.S. Loan Party under this Agreement,
any other Loan Document, any document with respect to Banking Services
Obligations or Swap Agreement Obligations or any other agreement executed and/or
delivered in connection with any of the foregoing (provided that, for the
avoidance of doubt, the U.S. Loan Parties shall be jointly and severally liable
for the U.S. Obligations and the Canadian Obligations).

SECTION 9.22. Judgment Currency. If for the purpose of obtaining judgment in any
court it is necessary to convert an amount due hereunder in the currency in
which it is due (the “Original Currency”) into another currency (the “Second
Currency”), the rate of exchange applied shall be that at which, in accordance
with normal banking procedures, the Administrative Agent could purchase the
Original Currency with the Second Currency at the Spot Rate on the date two
Business Days preceding that on which judgment is given. Each Loan Party agrees
that its obligation in respect of any Original Currency due from it hereunder
shall, notwithstanding any judgment or payment in such other currency, be
discharged only to the extent that, on the Business Day following the date the
Administrative Agent receives payment of any sum so adjudged to be due hereunder
in the Second Currency, the Administrative Agent may, in accordance with normal
banking procedures, purchase, in the New York foreign exchange market, the
Original Currency with the amount of the Second Currency so paid; and if the
amount of the Original Currency so purchased or could have been so purchased is
less than the amount originally due in the Original Currency as a result of such
judgment, each Loan Party agrees as a separate obligation and notwithstanding
any such payment or judgment to indemnify the Administrative Agent against such
loss. The term “rate of exchange” in this Section means the Spot Rate at which
the Administrative Agent, in accordance with normal practices, is able on the
relevant date to purchase the Original Currency with the Second Currency, and
includes any premium and costs of exchange payable in connection with such
purchase.

 

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SECTION 9.23. Waiver of Immunity. To the extent that any Loan Party has, or
hereafter may be entitled to claim or may acquire, for itself, any Collateral or
other assets of the Loan Parties, any immunity (whether sovereign or otherwise)
from suit, jurisdiction of any court or from any legal process (whether through
service of notice, attachment prior to judgment, attachment in aid of execution
or otherwise) with respect to itself, any Collateral or any other assets of the
Loan Parties, such Loan Party hereby waives such immunity in respect of its
obligations hereunder and under any promissory notes evidencing the Loans
hereunder and any other Loan Document to the fullest extent permitted by
applicable law and, without limiting the generality of the foregoing, agrees
that the waivers set forth in this Section shall be effective to the fullest
extent now or hereafter permitted under the Foreign Sovereign Immunities Act of
1976 (as amended, and together with any successor legislation) and are, and are
intended to be, irrevocable for purposes thereof.

SECTION 9.24. Process Agent. Each Canadian Loan Party hereby irrevocably
designates and appoints the Borrower Representative, in the case of any suit,
action or proceeding brought in the United States as its designee, appointee and
agent to receive, accept and acknowledge for and on its behalf, and in respect
of its property, service of any and all legal process, summons, notices and
documents that may be served in any action or proceeding arising out of or in
connection with this Agreement or any other Loan Document. Such service may be
made by mailing (by registered or certified mail, postage prepaid) or delivering
a copy of such process to such Canadian Loan Party in care of the Borrower
Representative at the Borrower Representative’s address set forth in
Section 9.01, and each such Canadian Loan Party hereby irrevocably authorizes
and directs the Borrower Representative to accept such service on its behalf. As
an alternative method of service, each Canadian Loan Party irrevocably consents
to the service of any and all process in any such action or proceeding by the
mailing (by registered or certified mail, postage prepaid) of copies of such
process to the Borrower Representative or such Canadian Loan Party at its
address specified in Section 9.01. Each Canadian Loan Party agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

SECTION 9.25. Termination and Release of Collateral. (a) In connection with the
termination of all Commitments, payment and satisfaction in full in cash of all
Obligations (other than Unliquidated Obligations) and the Cash Collateralization
(or, at the discretion of the Administrative Agent, the providing of a back up
standby letter of credit satisfactory to the Administrative Agent and the
Issuing Banks) of all outstanding Letters of Credit, the Administrative Agent,
on behalf of the Lenders, agrees to negotiate in good faith with the Borrower
Representative, and to execute and deliver, a customary payoff letter in form
and substance reasonably satisfactory to the Administrative Agent and the
Borrower Representative, which payoff letter shall provide for, among other
things, (i) an acknowledgment of the termination of all Loan Documents, other
than any terms thereunder that expressly survive termination, (ii) delivery to
the Borrower Representative or its designee of all property pledged to the
Administrative Agent or any Lender (including without limitation stock or other
certificates, notes receivable, certificates of title, change of address forms
and other instruments) or, if applicable, lost collateral affidavits with
respect thereto, (iii) delivery to the Borrower Representative of the original
promissory notes executed in connection with the Obligations marked “CANCELLED”,
(iv) delivery to the Borrower Representative or its designee of mortgage or deed
of trust releases against any real property of any Loan Party or property
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to any title laws and other like releases, revocations of direct pay notices to
account debtors, Credit Card Notifications, releases of deposit account control
agreements, Collateral Access Agreements and similar instruments or documents,
(v) delivery to the Borrower Representative or its designee of UCC-3 termination
statements with respect to the UCC and PPSA discharge filings made by the
Administrative Agent in respect of each Loan Party, as applicable, and (vi) a
release of liability from the Loan Parties in favor of the Secured Parties.

(b) Upon the written request of the Borrower Representative, the Administrative
Agent and the Lenders agree that the Administrative Agent shall, within a
reasonable period of time after such request (but in any event, in not less than
ten (10) Business Days (or such shorter period otherwise agreed by the
Administrative Agent)) and subject to the satisfaction of the conditions below,
execute and deliver, as applicable, to the Borrower Representative or a
designated agent releases of Mortgages, deeds of trust and assignment of rents
(or other similar releases) against Real Estate of any Loan Party subject to a
Mortgage; whereupon such specified Real Estate shall cease to be Eligible Real
Property, provided that, for each such request, (x) the Borrower Representative
shall have delivered to the Administrative Agent an updated Borrowing Base
Certificate which shall include a reasonably detailed calculation of
Availability immediately before and after giving effect to the release of such
property (which shall include any financing being obtained by the Loan Parties
giving effect to such release), (y) if such release is requested in connection
with the incurrence of Permitted Term Loan Indebtedness, all conditions with
respect to such incurrence shall have first been satisfied, and (z) immediately
before and after the release of such property the Payment Conditions shall have
been satisfied and the Loan Parties shall be in compliance with the Revolving
Exposure Limitations, and the Borrower Representative shall have delivered a
certificate to the Administrative Agent certifying that each of the foregoing
conditions has been satisfied, and the Administrative Agent shall be entitled to
conclusively rely on such certificate. Any such release shall not in any manner
discharge, affect, or impair the Secured Obligations or any Liens (other than
those expressly being released) upon (or obligations of the Loan Parties in
respect of) all interests retained by the Loan Parties, including the proceeds
of any sale, all of which shall continue to constitute part of the Collateral.

ARTICLE X

U.S. LOAN GUARANTY

SECTION 10.01. Guaranty. Each U.S. Loan Party hereby agrees that it is jointly
and severally liable for, and, as a primary obligor and not merely as surety,
absolutely, unconditionally and irrevocably guarantees to the Secured Parties,
the prompt payment and performance when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, of the Secured
Obligations and all reasonable and documented costs and expenses, including,
without limitation, all court costs and attorneys’ and paralegals’ fees
(including allocated costs of in-house counsel and paralegals) and expenses paid
or incurred by the Administrative Agent, the Issuing Bank and the Lenders in
endeavoring to collect all or any part of the Secured Obligations from, or in
prosecuting any action against, any Borrower, any Loan Party or any other
guarantor of all or any part of the Secured Obligations (such costs and
expenses, together with the Secured Obligations, collectively the “U.S.
Guaranteed Obligations”; provided, however, that the definition of “U.S.
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guarantee by any U.S. Loan Party of (or grant of security interest by any U.S.
Loan Guarantor to support, as applicable) any Excluded Swap Obligations of such
U.S. Loan Party for purposes of determining any obligations of any U.S. Loan
Party). Each U.S. Loan Party further agrees that the U.S. Guaranteed Obligations
may be extended or renewed in whole or in part without notice to or further
assent from it, and that it remains bound upon its guarantee notwithstanding any
such extension or renewal. All terms of this U.S. Loan Guaranty apply to and may
be enforced by or on behalf of any domestic or foreign branch or Affiliate of
any Lender or Issuing Bank that extended any portion of the U.S. Guaranteed
Obligations.

SECTION 10.02. Guaranty of Payment. This U.S. Loan Guaranty is a guaranty of
payment and not of collection. Each U.S. Loan Party waives any right to require
the Administrative Agent, the Issuing Bank or any Lender to sue any other Loan
Party, any other guarantor of, or any other Person obligated for, all or any
part of the U.S. Guaranteed Obligations (each, a “U.S. Obligated Party”), or to
enforce its rights against any collateral securing all or any part of the U.S.
Guaranteed Obligations.

SECTION 10.03. No Discharge or Diminishment of Loan Guaranty. (a) Except as
otherwise provided for herein, the obligations of each U.S. Loan Party hereunder
are unconditional and absolute and not subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the U.S. Guaranteed Obligations), including: (i) any claim of
waiver, release, extension, renewal, settlement, surrender, alteration or
compromise of any of the U.S. Guaranteed Obligations, by operation of law or
otherwise; (ii) any change in the corporate existence, structure or ownership of
any Loan Party or any other Obligated Party liable for any of the U.S.
Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any U.S. Obligated Party or their assets or
any resulting release or discharge of any obligation of any U.S. Obligated
Party; or (iv) the existence of any claim, setoff or other rights which any U.S.
Loan Party may have at any time against any U.S. Obligated Party, the
Administrative Agent, the Issuing Bank, any Lender or any other Person, whether
in connection herewith or in any unrelated transaction.

(b) The obligations of each U.S. Loan Party hereunder are not subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of any of the U.S. Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by any U.S. Obligated Party, of the U.S.
Guaranteed Obligations or any part thereof.

(c) Further, the obligations of any U.S. Loan Party hereunder are not discharged
or impaired or otherwise affected by: (i) the failure of the Administrative
Agent, the Issuing Bank or any Lender to assert any claim or demand or to
enforce any remedy with respect to all or any part of the U.S. Guaranteed
Obligations; (ii) any waiver or modification of or supplement to any provision
of any agreement relating to the U.S. Guaranteed Obligations; (iii) any release,
non-perfection or invalidity of any indirect or direct security for the
obligations of any Loan Party for all or any part of the U.S. Guaranteed
Obligations or any obligations of any other U.S. Obligated Party liable for any
of the U.S. Guaranteed Obligations; (iv) any action or failure to act by the
Administrative Agent, the Issuing Bank or any Lender with respect to any
collateral securing any part of the U.S. Guaranteed Obligations; or (v) any
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in the payment or performance of any of the U.S. Guaranteed Obligations, or any
other circumstance, act, omission or delay that might in any manner or to any
extent vary the risk of such U.S. Loan Party or that would otherwise operate as
a discharge of any U.S. Loan Party as a matter of law or equity (other than the
indefeasible payment in full in cash of the U.S. Guaranteed Obligations).

SECTION 10.04. Defenses Waived. To the fullest extent permitted by applicable
law, each U.S. Loan Party hereby waives any defense based on or arising out of
any defense of any U.S. Loan Party or the unenforceability of all or any part of
the U.S. Guaranteed Obligations from any cause, or the cessation from any cause
of the liability of any U.S. Loan Party or any other U.S. Obligated Party, other
than the indefeasible payment in full in cash of the Guaranteed Obligations.
Without limiting the generality of the foregoing, each U.S. Loan Party
irrevocably waives acceptance hereof, presentment, demand, protest and, to the
fullest extent permitted by law, any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against any
U.S. Obligated Party or any other Person. Each U.S. Loan Party confirms that it
is not a surety under any state law and shall not raise any such law as a
defense to its obligations hereunder. The Administrative Agent may, at its
election, foreclose on any Collateral held by it by one or more judicial or
nonjudicial sales, accept an assignment of any such Collateral in lieu of
foreclosure or otherwise act or fail to act with respect to any collateral
securing all or a part of the U.S. Guaranteed Obligations, compromise or adjust
any part of the U.S. Guaranteed Obligations, make any other accommodation with
any U.S. Obligated Party or exercise any other right or remedy available to it
against any U.S. Obligated Party, without affecting or impairing in any way the
liability of such U.S. Loan Party under this U.S. Loan Guaranty except to the
extent the U.S. Guaranteed Obligations have been fully and indefeasibly paid in
cash. To the fullest extent permitted by applicable law, each U.S. Loan Party
waives any defense arising out of any such election even though that election
may operate, pursuant to applicable law, to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any U.S. Loan Party
against any U.S. Obligated Party or any security.

SECTION 10.05. Rights of Subrogation. No U.S. Loan Party will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification, that it has against any U.S. Obligated Party or
any Collateral, until the Loan Parties have fully performed all their
obligations to the Administrative Agent, the Issuing Bank, the Lenders, and the
other Secured Parties.

SECTION 10.06. Reinstatement; Stay of Acceleration. If at any time any payment
of any portion of the U.S. Guaranteed Obligations (including a payment effected
through exercise of a right of setoff) is rescinded, or must otherwise be
restored or returned upon the insolvency, bankruptcy or reorganization of any
Loan Party or otherwise (including pursuant to any settlement entered into by a
Secured Party in its discretion), each U.S. Loan Party’s obligations under this
U.S. Loan Guaranty with respect to that payment shall be reinstated at such time
as though the payment had not been made and whether or not the Administrative
Agent, the Issuing Bank, the Lenders, or the other Secured Parties are in
possession of this U.S. Loan Guaranty. If acceleration of the time for payment
of any of the U.S. Guaranteed Obligations is stayed upon the insolvency,
bankruptcy or reorganization of any Loan Party, all such amounts otherwise
subject to acceleration under the terms of any agreement relating to the U.S.
Guaranteed Obligations shall nonetheless be payable by the U.S. Loan Parties
forthwith on demand by the Administrative Agent.

 

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SECTION 10.07. Information. Each U.S. Loan Party assumes all responsibility for
being and keeping itself informed of each Loan Party’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the U.S. Guaranteed Obligations and the nature, scope and extent of the risks
that each U.S. Loan Party assumes and incurs under this U.S. Loan Guaranty, and
agrees that none of the Administrative Agent, the Issuing Bank or any Lender
shall have any duty to advise any U.S. Loan Party of information known to it
regarding those circumstances or risks.

SECTION 10.08. Termination. Each of the Lenders and the Issuing Bank may
continue to make loans or extend credit to the Borrowers based on this U.S. Loan
Guaranty until five (5) days after it receives written notice of termination
from any U.S. Loan Party of this U.S. Loan Guaranty. Notwithstanding receipt of
any such notice, each U.S. Loan Party will continue to be liable to the Lenders
for any U.S. Guaranteed Obligations created, assumed or committed to prior to
the fifth day after receipt of the notice, and all subsequent renewals,
extensions, modifications and amendments with respect to, or substitutions for,
all or any part of such U.S. Guaranteed Obligations. Nothing in this
Section 10.08 shall be deemed to constitute a waiver of, or eliminate, limit,
reduce or otherwise impair any rights or remedies the Administrative Agent or
any Lender may have in respect of, any Event of Default that shall exist under
Article VII hereof as a result of any such notice of termination.

SECTION 10.09. Taxes. The provisions of Section 2.17 shall apply mutatis
mutandis to all payments by the U.S. Loan Parties of the U.S. Guaranteed
Obligations.

SECTION 10.10. Maximum Liability. The provisions of this U.S. Guaranty are
severable, and in any action or proceeding involving any state corporate law, or
any state, federal or foreign bankruptcy, insolvency, reorganization or other
law affecting the rights of creditors generally, if the obligations of any U.S.
Loan Party under this U.S. Guaranty would otherwise be held or determined to be
avoidable, invalid or unenforceable on account of the amount of such U.S. Loan
Party’s liability under this U.S. Guaranty, then, notwithstanding any other
provision of this U.S. Guaranty to the contrary, the amount of such liability
shall, without any further action by the U.S. Loan Party or the Lenders, be
automatically limited and reduced to the highest amount that is valid and
enforceable as determined in such action or proceeding (such highest amount
determined hereunder being the relevant U.S. Loan Party’s “Maximum U.S.
Liability”). This Section with respect to the Maximum U.S. Liability of each
U.S. Loan Party is intended solely to preserve the rights of the Lenders to the
maximum extent not subject to avoidance under applicable law, and no U.S. Loan
Party nor any other Person or entity shall have any right or claim under this
Section with respect to such Maximum U.S. Liability, except to the extent
necessary so that the obligations of any U.S. Loan Party hereunder shall not be
rendered voidable under applicable law. Each U.S. Loan Party agrees that the
U.S. Guaranteed Obligations may at any time and from time to time exceed the
Maximum U.S. Liability of each U.S. Loan Party without impairing this U.S.
Guaranty or affecting the rights and remedies of the Lenders hereunder; provided
that nothing in this sentence shall be construed to increase any U.S. Loan
Party’s obligations hereunder beyond its Maximum U.S. Liability.

SECTION 10.11. Contribution. In the event any U.S. Loan Party (a “Paying U.S.
Loan Party”) shall make any payment or payments under this U.S. Guaranty or
shall suffer any loss as a result of any realization upon any collateral granted
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U.S. Guaranty, each other U.S. Loan Party (each a “Non-Paying U.S. Loan Party”)
shall contribute to such Paying U.S. Loan Party an amount equal to such
Non-Paying U.S. Loan Party’s Applicable Share of such payment or payments made,
or losses suffered, by such Paying U.S. Loan Party. For purposes of this
Section, each Non-Paying U.S. Loan Party’s “Applicable Share” with respect to
any such payment or loss by a Paying U.S. Loan Party shall be determined as of
the date on which such payment or loss was made by reference to the ratio of
(a) such Non-Paying U U.S. Loan Party’s Maximum U.S. Liability as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder) or, if such Non-Paying U.S. Loan Party’s Maximum U.S.
Liability has not been determined, the aggregate amount of all monies received
by such Non-Paying U.S. Loan Party from the other U.S. Loan Parties after the
Effective Date (whether by loan, capital infusion or by other means) to (b) the
aggregate Maximum U.S. Liability of all U.S. Loan Party hereunder (including
such Paying U.S. Loan Party) as of such date (without giving effect to any right
to receive, or obligation to make, any contribution hereunder), or to the extent
that a Maximum U.S. Liability has not been determined for any U.S. Loan Party,
the aggregate amount of all monies received by such U.S. Loan Parties from the
other Loan Parties after the Effective Date (whether by loan, capital infusion
or by other means). Nothing in this provision shall affect any U.S. Loan Party’s
several liability for the entire amount of the U.S. Guaranteed Obligations (up
to such U.S. Loan Party’s Maximum U.S. Liability). Each of the U.S. Loan Party
covenants and agrees that its right to receive any contribution under this U.S.
Guaranty from a Non-Paying U.S. Loan Party shall be subordinate and junior in
right of payment to the payment in full in cash of the U.S. Guaranteed
Obligations. This provision is for the benefit of both the Administrative Agent,
the Issuing Banks, the Lenders and the U.S. Loan Party and may be enforced by
any one, or more, or all of them in accordance with the terms hereof.

SECTION 10.12. Liability Cumulative. The liability of each Loan Party as a U.S.
Loan Party under this Article X is in addition to and shall be cumulative with
all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank
and the Lenders under this Agreement and the other Loan Documents to which such
Loan Party is a party or in respect of any obligations or liabilities of the
other Loan Parties, without any limitation as to amount, unless the instrument
or agreement evidencing or creating such other liability specifically provides
to the contrary.

SECTION 10.13. Keepwell. Each Qualified ECP Guarantor that is a U.S. Loan Party
hereby jointly and severally absolutely, unconditionally and irrevocably
undertakes to provide such funds or other support as may be needed from time to
time by each other Loan Party to honor all of its obligations under this
Guaranty in respect of a Swap Obligation (provided, however, that each such
Qualified ECP Guarantor shall only be liable under this Section 10.13 for the
maximum amount of such liability that can be hereby incurred without rendering
its obligations under this Section 10.13 or otherwise under this U.S. Loan
Guaranty voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer, and not for any greater amount). Except as otherwise
provided herein, the obligations of each such Qualified ECP Guarantor under this
Section 10.13 shall remain in full force and effect until the termination of all
Swap Obligations. Each such Qualified ECP Guarantor intends that this
Section 10.13 constitute, and this Section 10.13 shall be deemed to constitute,
a “keepwell, support, or other agreement” for the benefit of each other Loan
Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange
Act.

 

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ARTICLE XI

CANADIAN LOAN GUARANTY

SECTION 11.01. Guaranty. Each Canadian Loan Party hereby agrees that it is
jointly and severally liable for, and absolutely and unconditionally guarantees
to the Secured Parties, the prompt payment and performance when due, whether at
stated maturity, upon acceleration or otherwise, and at all times thereafter, of
the Canadian Secured Obligations and all reasonable costs and expenses,
including, without limitation, all reasonable and documented court costs and
attorneys’ fees and expenses paid or incurred by the Administrative Agent, any
Issuing Bank and any Lender in endeavoring to collect all or any part of the
Canadian Secured Obligations from, or in prosecuting any action against, the
Canadian Borrower, any Canadian Guarantor or any other guarantor of all or any
part of the Canadian Secured Obligations (such costs and expenses, together with
the Canadian Secured Obligations, collectively the “Canadian Guaranteed
Obligations”). Except as otherwise provided in Section 9.02, each Canadian Loan
Party further agrees that the Canadian Guaranteed Obligations may be extended or
renewed in whole or in part without notice to or further assent from it, and
that it remains bound upon its guarantee notwithstanding any such extension or
renewal. All terms of this Canadian Guaranty apply to and may be enforced by or
on behalf of any domestic or foreign branch or Affiliate of any Lender or
Issuing Bank that extended any portion of the Canadian Guaranteed Obligations.

SECTION 11.02. Guarantee of Payment. This Canadian Guaranty is a Guarantee of
payment and not of collection. Each Canadian Loan Party waives any right to
require the Administrative Agent, any Issuing Bank or any Lender or any other
Secured Party to sue any other Loan Party, any other guarantor, or any other
Person obligated for all or any part of the Canadian Guaranteed Obligations
(each, a “Canadian Obligated Party”), or otherwise to enforce its payment
against any collateral securing all or any part of the Canadian Guaranteed
Obligations. In addition, as an original and independent obligation under this
Canadian Guaranty, each Canadian Loan Party shall:

(a) indemnify each Canadian Obligated Party and its successors, endorsees,
transferees and assigns and keep the Canadian Obligated Parties indemnified
against all costs, losses, expenses and liabilities of whatever kind resulting
from the failure by the Loan Parties or any of them, to make due and punctual
payment of any of the Canadian Secured Obligations or resulting from any of the
Canadian Secured Obligations being or becoming void, voidable, unenforceable or
ineffective against any Loan Party (including, but without limitation, all legal
and other costs, charges and expenses incurred by each Canadian Obligated Party,
or any of them, in connection with preserving or enforcing, or attempting to
preserve or enforce, its rights under this Canadian Guaranty); and

(b) pay on demand the amount of such costs, losses, expenses and liabilities
whether or not any of the Canadian Obligated Parties has attempted to enforce
any rights against any Loan Party or any other Person or otherwise.

 

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SECTION 11.03. No Discharge or Diminishment of Canadian Guaranty.

(a) Except as otherwise provided for herein, the obligations of each Canadian
Loan Party hereunder are unconditional and absolute and not subject to any
reduction, limitation, impairment or termination for any reason (other than the
payment in full in cash of the Canadian Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal, settlement, surrender,
alteration or compromise of any of the Canadian Guaranteed Obligations, by
operation of law or otherwise; (ii) any change in the corporate existence,
structure or ownership of the Canadian Loan Party or any other Canadian
Obligated Party liable for any of the Canadian Guaranteed Obligations; (iii) any
insolvency, bankruptcy, winding-up, liquidation, reorganization or other similar
proceeding affecting any Canadian Obligated Party or their assets or any
resulting release or discharge of any obligation of any Canadian Obligated
Party; or (iv) the existence of any claim, setoff or other rights which any
Canadian Loan Party may have at any time against any Canadian Obligated Party,
the Administrative Agent, each Issuing Bank, any Lender or any other person,
whether in connection herewith or in any unrelated transactions.

(b) The obligations of each Canadian Loan Party hereunder are not subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of any of the Canadian
Guaranteed Obligations or otherwise, or any provision of applicable law or
regulation purporting to prohibit payment by any Canadian Obligated Party, of
the Canadian Guaranteed Obligations or any part thereof.

(c) Further, the obligations of any Canadian Loan Party hereunder are not
discharged or impaired or otherwise affected by: (i) the failure of the
Administrative Agent, any Issuing Bank or any Lender or any other Secured Party
to assert any claim or demand or to enforce any remedy with respect to all or
any part of the Canadian Guaranteed Obligations; (ii) any waiver or modification
of or supplement to any provision of any agreement relating to the Canadian
Guaranteed Obligations; (iii) any release, non-perfection or invalidity of any
indirect or direct security for the obligations of any Canadian Loan Party for
all or any part of the Canadian Guaranteed Obligations or any obligations of any
other Canadian Obligated Party liable for any of the Canadian Guaranteed
Obligations; (iv) any action or failure to act by the Administrative Agent, any
Issuing Bank or any Lender or any other Secured Party with respect to any
collateral securing any part of the Canadian Guaranteed Obligations; or (v) any
default, failure or delay, willful or otherwise, in the payment or performance
of any of the Canadian Guaranteed Obligations, or any other circumstance, act,
omission or delay that might in any manner or to any extent vary the risk of
such Canadian Loan Party or that would otherwise operate as a discharge of any
Canadian Loan Party as a matter of law or equity (other than the payment in full
in cash of the Canadian Guaranteed Obligations).

SECTION 11.04. Defenses Waived. To the fullest extent permitted by applicable
law, each Canadian Loan Party hereby waives any defense based on or arising out
of any defense of any Canadian Loan Party or the unenforceability of all or any
part of the Canadian Guaranteed Obligations from any cause, or the cessation
from any cause of the liability of any Canadian Loan Party, other than the
payment in full in cash of the Canadian Guaranteed Obligations. Without limiting
the generality of the foregoing, each Canadian Loan Party irrevocably waives
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by

 

167

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any Person against any Canadian Obligated Party, or any other Person. Each
Canadian Loan Party confirms that it is not a surety under any state law and
shall not raise any such law as a defense to its obligations hereunder. The
Administrative Agent may, at its election, foreclose on, or otherwise enforce
against, any Collateral held by it by one or more judicial or nonjudicial sales,
accept an assignment of any such Collateral in lieu of foreclosure or otherwise
act or fail to act with respect to any collateral securing all or a part of the
Canadian Guaranteed Obligations, compromise or adjust any part of the Canadian
Guaranteed Obligations, make any other accommodation with any Canadian Obligated
Party or exercise any other right or remedy available to it against any Canadian
Obligated Party, without affecting or impairing in any way the liability of such
Canadian Loan Party under this Canadian Guaranty except to the extent the
Canadian Guaranteed Obligations have been fully paid in cash. To the fullest
extent permitted by applicable law, each Canadian Loan Party waives any defense
arising out of any such election even though that election may operate, pursuant
to applicable law, to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Canadian Loan Party against any
Canadian Obligated Party or any security.

SECTION 11.05. Rights of Subrogation. No Canadian Loan Party will assert any
right, claim or cause of action, including, without limitation, a claim of
subrogation, contribution or indemnification, that it has against any Canadian
Obligated Party, or any Collateral, until the Loan Parties have fully performed
all their obligations to the Administrative Agent, the Issuing Banks and the
Lenders.

SECTION 11.06. Reinstatement; Stay of Acceleration. If at any time any payment
of any portion of the Canadian Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy or
reorganization of any Canadian Loan Party or otherwise, each Canadian Loan
Party’s obligations under this Canadian Guaranty with respect to that payment
shall be reinstated at such time as though the payment had not been made and
whether or not the Administrative Agent, any Issuing Bank and the Lenders or
other Secured Parties are in possession of this Canadian Guaranty. If
acceleration of the time for payment of any of the Canadian Guaranteed
Obligations is stayed upon the insolvency, bankruptcy or reorganization of any
Canadian Loan Party, all such amounts otherwise subject to acceleration under
the terms of any agreement relating to the Canadian Guaranteed Obligations shall
nonetheless be payable by the Canadian Loan Parties promptly on demand by the
Administrative Agent.

SECTION 11.07. Information. Each Canadian Loan Party assumes all responsibility
for being and keeping itself informed of the other Canadian Loan Party’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Canadian Guaranteed Obligations and the nature, scope
and extent of the risks that each Canadian Loan Party assumes and incurs under
this Canadian Guaranty, and agrees that neither the Administrative Agent, any
Issuing Bank nor any Lender shall have any duty to advise any Canadian Loan
Party of information known to it regarding those circumstances or risks.

SECTION 11.08. Maximum Canadian Liability. In any action or proceeding involving
any corporate law, or any provincial, territorial, state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Canadian Loan Party under this
Canadian Guaranty would otherwise be held or determined to be

 

168

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void, voidable, avoidable, invalid or unenforceable on account of the amount of
such Canadian Loan Party’s liability under this Canadian Guaranty, then,
notwithstanding any other provision of this Canadian Guaranty to the contrary,
the amount of such liability shall, without any further action by the Canadian
Loan Parties or the Administrative Agent, any Issuing Bank or any Lender, be
automatically limited and reduced to the highest amount that is valid and
enforceable as determined in such action or proceeding (such highest amount
determined hereunder being the relevant Canadian Loan Party’s “Maximum Canadian
Liability”). This Section with respect to the Maximum Canadian Liability of each
Canadian Loan Party is intended solely to preserve the rights of the
Administrative Agent, the Issuing Banks and the Lenders to the maximum extent
not subject to avoidance under applicable law, and no Canadian Loan Party nor
any other Person shall have any right or claim under this Section with respect
to such Maximum Canadian Liability, except to the extent necessary so that the
obligations of any Canadian Loan Party hereunder shall not be rendered voidable
under applicable law. Each Canadian Loan Party agrees that the Canadian
Guaranteed Obligations may at any time and from time to time exceed the Maximum
Canadian Liability of each Canadian Loan Party without impairing this Canadian
Guaranty or affecting the rights and remedies of the Administrative Agent, the
Issuing Banks or the Lenders hereunder, provided that, nothing in this sentence
shall be construed to increase any Canadian Loan Party’s obligations hereunder
beyond its Maximum Canadian Liability.

SECTION 11.09. Contribution. In the event any Canadian Loan Party (a “Paying
Canadian Loan Party”) shall make any payment or payments under this Canadian
Guaranty or shall suffer any loss as a result of any realization upon any
collateral granted by it to secure its obligations under this Canadian Guaranty,
each other Canadian Loan Party (each a “Non-Paying Canadian Loan Party”) shall
contribute to such Paying Canadian Loan Party an amount equal to such Non-Paying
Canadian Loan Party’s “Applicable Percentage” of such payment or payments made,
or losses suffered, by such Paying Canadian Loan Party. For purposes of this
Article XI, each Non-Paying Canadian Loan Party’s “Applicable Percentage” with
respect to any such payment or loss by a Paying Canadian Loan Party shall be
determined as of the date on which such payment or loss was made by reference to
the ratio of (i) such Non-Paying Canadian Loan Party’s Maximum Canadian
Liability as of such date (without giving effect to any right to receive, or
obligation to make, any contribution hereunder) or, if such Non-Paying Canadian
Loan Party’s Maximum Canadian Liability has not been determined, the aggregate
amount of all monies received by such Non-Paying Canadian Loan Party from the
other Canadian Loan Parties after the Effective Date (whether by loan, capital
infusion or by other means) to (ii) the aggregate Maximum Canadian Liability of
all Canadian Loan Parties hereunder (including such Paying Canadian Loan Party)
as of such date (without giving effect to any right to receive, or obligation to
make, any contribution hereunder), or to the extent that a Maximum Canadian
Liability has not been determined for any Canadian Loan Party, the aggregate
amount of all monies received by such Canadian Loan Parties from the other
Canadian Loan Parties after the Effective Date (whether by loan, capital
infusion or by other means). Nothing in this provision shall affect any Canadian
Loan Party’s several liability for the entire amount of the Canadian Guaranteed
Obligations (up to such Canadian Loan Party’s Maximum Canadian Liability). Each
of the Canadian Loan Parties covenants and agrees that its right to receive any
contribution under this Canadian Guaranty from a Non-Paying Canadian Loan Party
shall be subordinate and junior in right of payment to the payment in full in
cash of the Canadian Guaranteed Obligations. This provision is for the benefit
of all of the Administrative Agent, the Issuing Banks, the Lenders and

 

169

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the Canadian Loan Parties and may be enforced by any one, or more, or all of
them in accordance with the terms hereof.

SECTION 11.10. Liability Cumulative. The liability of each Canadian Loan Party
under this Article XI is in addition to and shall be cumulative with all
liabilities of each Canadian Loan Party to the Administrative Agent, the Issuing
Banks and the Lenders under this Agreement and the other Loan Documents to which
such Canadian Loan Party is a party or in respect of any obligations or
liabilities of the other Canadian Loan Parties, without any limitation as to
amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.

ARTICLE XII

THE BORROWER REPRESENTATIVE

SECTION 12.01. Appointment; Nature of Relationship. The Company is hereby
appointed by each of the Borrowers as its contractual representative (herein
referred to as the “Borrower Representative”) hereunder and under each other
Loan Document, and each of the Borrowers irrevocably authorizes the Borrower
Representative to act as the contractual representative of such Borrower with
the rights and duties expressly set forth herein and in the other Loan
Documents. The Borrower Representative agrees to act as such contractual
representative upon the express conditions contained in this Article XII.
Additionally, the Borrowers hereby appoint the Borrower Representative as their
agent to receive all of the proceeds of the Loans in the Funding Account(s), at
which time the Borrower Representative shall promptly disburse such Loans to the
appropriate Borrower(s), provided that, in the case of a Revolving Loan, such
amount shall not result in a violation of the Revolving Exposure Limitations.
The Administrative Agent and the Lenders, and their respective officers,
directors, agents or employees, shall not be liable to the Borrower
Representative or any Borrower for any action taken or omitted to be taken by
the Borrower Representative or the Borrowers pursuant to this Section 12.01.

SECTION 12.02. Powers. The Borrower Representative shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Borrower Representative by the terms of each thereof, together with such powers
as are reasonably incidental thereto. The Borrower Representative shall have no
implied duties to the Borrowers, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Borrower Representative.

SECTION 12.03. Employment of Agents. The Borrower Representative may execute any
of its duties as the Borrower Representative hereunder and under any other Loan
Document by or through authorized officers.

SECTION 12.04. Notices. Each Loan Party shall promptly notify the Borrower
Representative of the occurrence of any Default or Event of Default hereunder
referring to this Agreement describing such Default or Event of Default and
stating that such notice is a “notice of default”. In the event that the
Borrower Representative receives such a notice, the Borrower Representative
shall give notice thereof to the Administrative Agent and the Lenders pursuant
to

 

170

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Section 5.02. Any notice provided to the Borrower Representative hereunder shall
constitute notice to each Borrower on the date received by the Borrower
Representative.

SECTION 12.05. Successor Borrower Representative. Upon the prior written consent
of the Administrative Agent, the Borrower Representative may resign at any time,
such resignation to be effective upon the appointment of a successor Borrower
Representative. The Administrative Agent shall give prompt written notice of
such resignation to the Lenders.

SECTION 12.06. Execution of Loan Documents; Borrowing Base Certificate. The
Borrowers hereby empower and authorize the Borrower Representative, on behalf of
the Borrowers, to execute and deliver to the Administrative Agent and the
Lenders the Loan Documents and all related agreements, certificates, documents,
or instruments as shall be necessary or appropriate to effect the purposes of
the Loan Documents, including, without limitation, the Borrowing Base
Certificates and the Compliance Certificates. Each Borrower agrees that any
action taken by the Borrower Representative or the Borrowers in accordance with
the terms of this Agreement or the other Loan Documents, and the exercise by the
Borrower Representative of its powers set forth therein or herein, together with
such other powers that are reasonably incidental thereto, shall be binding upon
all of the Borrowers.

SECTION 12.07. Reporting. Each Borrower hereby agrees that such Borrower shall
furnish promptly after each fiscal month to the Borrower Representative a copy
of its Borrowing Base Certificate and any other certificate or report required
hereunder or requested by the Borrower Representative on which the Borrower
Representative shall rely to prepare the Borrowing Base Certificates and
Compliance Certificate required pursuant to the provisions of this Agreement.

(Signature Pages Follow)

 

171

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

 

BORROWERS: AMERICAN EAGLE OUTFITTERS, INC. By:  

/s/ Charles Sandel

  Name:   Charles Sandel   Title:   Senior Vice President, General Counsel AEO
MANAGEMENT CO. AE OUTFITTERS RETAIL CO. AE RETAIL WEST LLC RETAIL DISTRIBUTION
WEST LLC AEO REALTY CO LLC AE DIRECT CO. LLC BLUE STAR IMPORTS, L.P. RETAIL
DISTRIBUTION EAST LLC By:  

/s/ Charles Sandel

  Name:   Charles Sandel   Title:   Vice President and Secretary RETAIL ROYALTY
COMPANY By:  

/s/ Michael Rempell

  Name:   Michael Rempell   Title:   President AMERICAN EAGLE OUTFITTERS CANADA
CORPORATION By:  

/s/ Charles Sandel

  Name:   Charles Sandel   Title:   Vice President and Secretary

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

OTHER LOAN PARTIES: AEO INTERNATIONAL CORP. AE DISTRIBUTION CO. AE CORPORATE
SERVICES CO. AEO ISRAELI SERVICES CO. LINMAR REALTY COMPANY II LLC AE ADMIN
SERVICES CO LLC AE HOLDINGS CO. AEH HOLDING COMPANY BLUE STAR IMPORTS, LTD.
AMERICAN EAGLE CDN HOLD CO BSI IMPORTS COMPANY, LLC AEO FOREIGN HOLD CO LLC BLUE
HEART ENTERPRISES LLC By:  

/s/ Charles Sandel

  Name:   Charles Sandel   Title:   Vice President and Secretary RETAIL
LICENSING COMPANY By:  

/s/ Michael Rempell

  Name:   Michael Rempell   Title:   President AE NORTH HOLDINGS CO. By:  

/s/ Charles Sandel

  Name:   Charles Sandel   Title:   Vice President and Secretary

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

JPMORGAN CHASE BANK, N.A.,

individually as a Lender and as Administrative

Agent, an Issuing Bank and Swingline Lender

By:  

/s/ Dan Bueno

  Name:   Dan Bueno   Title:   Authorized Officer

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

JPMORGAN CHASE BANK, N.A.,

TORONTO BRANCH, individually as a Lender

By:  

/s/ Steve Voigt

  Name:   Steve Voigt   Title:   Senior Vice President

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

HSBC BANK USA, N.A., as a Lender and as a

Issuing Bank

By:  

/s/ Darren Pinsker

  Name:   Darren Pinsker   Title:   Senior Vice President

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

PNC BANK, NATIONAL ASSOCIATION, as

a Lender and as an Issuing Bank

By:  

/s/ Scott Colcombe

  Name:   Scott Colcombe   Title:   SVP

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

BANK OF AMERICA N.A., as a Lender By:  

/s/ Matthew Potter

  Name:   Matthew Potter   Title:   Vice President By:  

/s/ Sylwia Durkiewicz

  Name:   Sylwia Durkiewicz   Title:   Vice President

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

WELLS FARGO BANK, NATIONAL

ASSOCIATION, as a Lender

By:  

/s/ Ian Maccubbin

  Name:   Ian Maccubin   Title:   Assistant Vice President

WELLS FARGO CAPITAL FINANCE

CORPORATION CANADA, individually as a

Lender

By:  

/s/ David G. Phillips

  Name:   David G. Phillips   Title:   Senior Vice President, Credit Officer,
Canada

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

ROYAL BANK OF CANADA, as a Lender By:  

/s/ Edward Lynch

  Name:   Edward Lynch   Title:   Authorized Signatory By:  

/s/ Marcelle Fernandes

  Name:   Marcelle Fernandes   Title:   Authorized Signatory

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

TD BANK, N.A., as a Lender By:  

/s/ Donald Cavanagh

  Name:   Donald Cavanagh   Title:   Vice President

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

THE HUNTINGTON NATIONAL BANK, as a Lender By:  

/s/ Dennis Hatvany

  Name:   Dennis Hatvany   Title:   Senior Vice President

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

COMMITMENT SCHEDULE

 

Lender

   Commitment      LC Individual Sublimit         Standby
Letters of
Credit      Commercial
Letters of
Credit  

JPMorgan Chase Bank, N.A.

   $ 80,000,000       $ 10,000,000       $ 16,666,666.67   

HSBC Bank USA, N.A.

   $ 65,000,000       $ 10,000,000       $ 16,666,666.67   

PNC Bank, National Association

   $ 65,000,000       $ 10,000,000       $ 16,666,666.67   

Bank of America N.A

   $ 50,000,000         N/A         N/A   

Wells Fargo Bank, National Association

   $ 50,000,000         N/A         N/A   

Royal Bank of Canada

   $ 50,000,000         N/A         N/A   

TD Bank, N.A.

   $ 20,000,000         N/A         N/A   

The Huntington National Bank

   $ 20,000,000         N/A         N/A      

 

 

    

 

 

    

 

 

 

Total

   $ 400,000,000.00            

 

 

    

 

 

    

 

 

 

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

DISCLOSURE SCHEDULES TO

CREDIT AGREEMENT

Dated as of December 2, 2014

Among

AMERICAN EAGLE OUTFITTERS, INC., as the Company

The Subsidiaries from time to time party thereto,

as U.S. Subsidiary Borrowers

AMERICAN EAGLE OUTFITTERS CANADA CORPORATION,

and the other Subsidiaries from time to time party thereto,

as Canadian Borrowers

The other LOAN PARTIES party thereto

The LENDERS party thereto

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

J.P. MORGAN SECURITIES LLC, HSBC BANK USA, N.A., and

PNC BANK,

NATIONAL ASSOCIATION,

as Joint Bookrunners and Joint Lead Arrangers

HSBC BANK USA, N.A., and PNC BANK, NATIONAL ASSOCIATION,

as Co-Syndication Agents

BANK OF AMERICA N.A., WELLS FARGO BANK, NATIONAL ASSOCIATION, and

ROYAL BANK OF CANADA,

as Co-Documentation Agents

Reference is made to that certain CREDIT AGREEMENT (the “Agreement”) entered
into as of December 2, 2014, among AMERICAN EAGLE OUTFITTERS, INC. (the
“Company”), each of the U.S. Subsidiary Borrowers from time to time party
thereto, each of the Canadian Borrowers from time to time party thereto, the
other Loan Parties party thereto, the Lenders party thereto, and JPMORGAN CHASE
BANK, N.A., as Administrative Agent. Capitalized terms used herein and not
otherwise defined shall have the respective meanings assigned to such terms in
the Agreement.

These Schedules are qualified in their entirety by reference to specific
provisions of the Agreement and are not intended to constitute, and shall not be
construed as constituting, representations or warranties of the Company or any
other Loan Party, except to the extent provided in the Agreement. Inclusion of
information or references herein shall not be construed as an admission that
such information is material to any Loan Party and shall not be used as a basis
for interpreting the terms “material,” “materially,” “Material Adverse Effect,”
or any similar term or qualification in the Agreement. The introductory language
and headings to each section of these Schedules are inserted for convenience
only and shall not create a different standard for disclosure than the language
set forth in the Agreement.

 

1

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

Schedule 1.01(a)   –      Eligible Real Property Schedule 1.01(b)   –     
Existing Letters of Credit Schedule 3.06        –      Disclosed Matters
Schedule 3.10   –      Canadian Benefit Plans and Canadian Pension Plans
Schedule 3.15   –      Capitalization and Subsidiaries Schedule 6.01   –     
Existing Indebtedness Schedule 6.02   –      Existing Liens Schedule 6.04   –
     Existing Investments Schedule 6.10   –      Existing Restrictions

 

2

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

Schedule 1.01(a)

Eligible Real Property

 

     “Real Property
Component” for
19 Hot Metal, Pittsburgh,
PA 15203      “Real Property
Component” for
77 Hot Metal, Pittsburgh,
PA 15203      “Real Property
Component” for
1529 Davis Avenue,
Ottawa, KS 66067      “Real Property
Component” for
600 Oak Ridge Road,
Hazelton, PA 18202  

Initial Appraised Value

   $ 20,600,000       $ 29,300,000       $ 38,200,000       $ 65,000,000   

Date of Determination

           

On and after the Effective Date through but not including 4/30/2015

   $ 10,300,000       $ 14,700,000       $ 19,100,000       $ 32,500,000   

On and after 4/30/2015 through but not including 7/31/2015

   $ 9,900,000       $ 14,100,000       $ 18,500,000       $ 31,300,000   

On and after 7/31/2015 through but not including 10/31/2015

   $ 9,600,000       $ 13,600,000       $ 17,700,000       $ 30,100,000   

On and after 10/31/2015 through but not including 1/31/2016

   $ 9,200,000       $ 13,100,000       $ 17,000,000       $ 29,000,000   

On and after 1/31/2016 through but not including 4/30/2016

   $ 8,800,000       $ 12,500,000       $ 16,400,000       $ 27,900,000   

On and after 4/30/2016 through but not including 7/31/2016

   $ 8,500,000       $ 12,000,000       $ 15,700,000       $ 26,700,000   

On and after 7/31/2016 through but not including 10/31/2016

   $ 8,100,000       $ 11,500,000       $ 15,000,000       $ 25,500,000   

On and after 10/31/2016 through but not including 1/31/2017

   $ 7,700,000       $ 11,000,000       $ 14,300,000       $ 24,400,000   

On and after 1/31/2017 through but not including 4/30/2017

   $ 7,400,000       $ 10,500,000       $ 13,600,000       $ 23,200,000   

On and after 4/30/2017

   $ 7,200,000       $ 10,300,000       $ 13,400,000       $ 22,700,000   

 

3

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

Schedule 1.01(b)

Existing Letters of Credit

HSBC

 

Applicant

   Issue Date    Letter of Credit No.    DC Amount  

American Eagle Outfitters Inc. OBO American Eagle Mexico Retail, S. de R. L de
C.V.

   01/2013    SDCMTN563094    MXN
Peso      6,463,893.00   

American Eagle Outfitters Inc./American Eagle Mexico Retail, S. de R. L de C.V.

   02/2013    SDCMTN562936    MXN
Peso      623,896.00   

American Eagle Outfitters Inc./American Eagle Mexico Retail, S. de R. L de C.V.

   01/2013    SDCMTN562860    MXN
Peso      1,253,290.00   

PNC

 

Applicant

   Issue Date    Letter of Credit No.    DC Amount  

American Eagle Outfitters, Inc.

   2012    12501815-00-000    USD    $ 5,275,000.00   

American Eagle Outfitters, Inc.

   2012    12501814-00-000    USD    $ 2,271,013.50   

 

4

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Schedule 1.01(g)

Real Property Documentation

With respect to each parcel of real property, the Borrower shall have delivered,
or caused to be delivered, to Administrative Agent each of the following items
(except as otherwise agreed to by Administrative Agent) prior to such parcel
being included in the Borrowing Base:

 

  1. Fully executed (i) Mortgage, (ii) Assignment of Leases and Rents,
(iii) Subordination and Attornment Agreement, if required by Administrative
Agent, and (iv) Hazardous Materials Indemnity Agreement, each in form and
substance reasonably satisfactory to Administrative Agent;

 

  2. Fully-paid ALTA loan title insurance policies with endorsements in an
aggregate amount of not less than $76,600,000, with allocations among the
parcels (or any combined group thereof) acceptable to the Administrative Agent;

 

  3. Signed and sealed survey in form and substance reasonably satisfactory to
Administrative Agent, and certified to Administrative Agent, the Lenders, and
their respective successors and/or assigns, and, if necessary, a no change
affidavit, sufficient to allow the title company to issue a title insurance
policy without a survey exception and with all survey-related endorsements
required by Administrative Agent;

 

  4. All documents required by the title company in connection with the issuance
of the title insurance policy, including, without limitation, such indemnities,
affidavits and corporate documentation and a zoning compliance letter or zoning
report to the extent required by the title company in order to provide extended
survey or zoning coverage with respect to such parcel;

 

  5. Zoning report in form and substance reasonably satisfactory to
Administrative Agent, and certified to Administrative Agent, the Lenders, and
their respective successors and/or assigns;

 

  6. Legal opinion of counsels to the Loan Parties, including local counsel, in
form and substance reasonably satisfactory to Administrative Agent and addressed
to Administrative Agent and the Lenders;

 

  7. All other state-specific documents reasonably requested by Administrative
Agent, including, without limitation, any tax affidavits or other mortgage tax
documents;

 

  8. Flood zone certificate and, if applicable, evidence of flood insurance
satisfactory to Administrative Agent;

 

  9. Insurance endorsements naming Administrative Agent and the Lenders as loss
payee and mortgagee on all casualty and property insurance policies and as
additional insured on liability insurance policies, in form and substance
reasonably satisfactory to Administrative Agent; and

 

  10. Estoppel certificates executed by the Urban Redevelopment Authority of
Pittsburgh in favor of Administrative Agent and the Lenders, relating to such
parcels located in Pittsburgh, Pennsylvania, in form and substance reasonably
satisfactory to Administrative Agent.

 

5

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

Schedule 3.06

Disclosed Matters

None.

 

6

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

Schedule 3.10

Canadian Benefit Plans and Canadian Pension Plans

Canadian Benefit Plans:

Administered by Fidelity

 

•   Employee Stock Purchase Plan (ESPP)

 

•   Stock Award and Incentive Plan

Administered by Sun Life

 

•   Medical, dental, vision & life insurance

 

•   Long Term Disability

 

•   Registered Retirement Savings Plan (RRSP)

 

•   Deferred Profit Sharing Plan (DPSP)

Paid by Loan Party

 

•   Short Term Disability

 

•   Maternity Leave

 

•   Maternity Leave Top Up

 

•   Paid Sick Days

 

•   Bereavement Pay

Paid by the Government

 

•   Compassionate Care Leave

 

•   Sick Emergency Leave

Canadian Pension Plans: None

 

7

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

Those portions of this Schedule 3.15

marked with an [*] have been omitted

pursuant to a request for confidential

treatment and have been filed separately

with the SEC.

Schedule 3.15

Capitalization and Subsidiaries

 

NAME OF ENTITY

  

JURISDICTION/
TYPE OF

ENTITY

   RELATIONSHIP
TO COMPANY/
OWNER  

CLASS

OF

STOCK

   %
OWNERSHIP    

RESTRICTED/

UNRESTRICTED
SUBSIDIARY

American Eagle Outfitters, Inc.

   Delaware Corporation    N/A        N/A

AEO Management Co.

   Delaware Corporation    [*]   Common      100 %    Restricted

AEO International Corp.

   Delaware Corporation    [*]   Common      100 %    Restricted

AE Distribution Co.

   Delaware Corporation    [*]   Common      100 %    Restricted

AE Corporate Services Co.

   Delaware Corporation    [*]   Common      100 %    Restricted

AEO Israeli Services Co.

   Delaware Corporation    [*]   Common      100 %    Restricted

AE Outfitters Retail Co.

   Delaware Corporation    [*]   Common      100 %    Restricted

AE Retail West LLC

   Delaware LLC    [*]        100 %    Restricted

Retail Distribution West LLC

   Delaware LLC    [*]        100 %    Restricted

Linmar Realty Company II LLC

   Delaware LLC    [*]        100 %    Restricted

AEO Realty Co LLC

   Delaware LLC    [*]        100 %    Restricted

AE Direct Co. LLC

   Delaware LLC    [*]   Common      100 %    Restricted

AE Admin Services Co LLC

   Ohio LLC    [*]        100 %    Restricted

Blue Star Imports, L.P.

   Pennsylvania Limited Partnership    [*]       

 

 

1

 

99

% 

 

% 

  Restricted

Retail Distribution East LLC

   Delaware LLC    [*]        100 %    Restricted

 

8

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

NAME OF ENTITY

  

JURISDICTION/
TYPE OF

ENTITY

   RELATIONSHIP
TO COMPANY/
OWNER  

CLASS

OF

STOCK

   %
OWNERSHIP    

RESTRICTED/

UNRESTRICTED
SUBSIDIARY

AE North Holdings Co.

   Canadian - Nova Scotia, Unlimited Liability Company    [*]   Common      100
%    Restricted

American Eagle Outfitters Canada Corporation/ Corporation de Vetements Sport
American Eagle Canada

   Canadian - Nova Scotia, Unlimited Liability Company    [*]   Common      100
%    Restricted

AE Holdings Co.

   Delaware Corporation    [*]   Common      100 %    Restricted

AEH Holding Company

   Delaware Corporation    [*]   Common      100 %    Restricted

Blue Star Imports, Ltd.

   Delaware Corporation    [*]   Common      100 %    Restricted

American Eagle Cdn Hold Co

   Delaware Corporation    [*]   Common      100 %    Restricted

BSI Imports Company, LLC

   Delaware LLC    [*]        100 %    Restricted

AEO Foreign Hold Co LLC

   Delaware LLC    [*]        100 %    Restricted

Blue Heart Enterprises LLC

   Delaware LLC    [*]        100 %    Restricted

Retail Royalty Company

   Nevada Corporation    [*]   Common      100 %    Restricted

Retail Licensing Company

   Nevada Corporation    [*]   Common      100 %    Restricted

American Eagle NL Services Co B.V.

   Netherlands Limited Liability Company    [*]        100 %    Unrestricted

American Eagle Outfitters Asia Limited

   Hong Kong Limited Company    [*]        100 %    Unrestricted

American Eagle Outfitters Hong Kong Limited

   Hong Kong Limited Company    [*]        100 %    Unrestricted

 

9

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

NAME OF ENTITY

  

JURISDICTION/
TYPE OF

ENTITY

   RELATIONSHIP
TO COMPANY/
OWNER  

CLASS

OF

STOCK

   %
OWNERSHIP    

RESTRICTED/

UNRESTRICTED
SUBSIDIARY

American Eagle Outfitters (China) Commercial Enterprise Co., Ltd.

   Peoples Republic of China Limited Liability Company    [*]        100 %   
Unrestricted

American Eagle International Hold Co B.V.

   Netherlands Limited Liability Company    [*]        100 %    Unrestricted

American Eagle Outfitters European Hold Co C.V.

   Netherlands Limited Partnership    [*]        100 %    Unrestricted

American Eagle NL Hold Co B.V.

   Netherlands Limited Liability Company    [*]        100 %    Unrestricted

American Eagle Outfitters Holland Hold Co B.V.

   Netherlands Limited Liability Company    [*]        100 %    Unrestricted

American Eagle Outfitters Dutch Op Co B.V.

   Netherlands Limited Liability Company    [*]        100 %    Unrestricted

American Eagle Outfitters UK Limited

   United Kingdom Limited Company    [*]        100 %    Unrestricted

American Eagle Mexico, S. de R.L. de C.V.

   Mexican Limited Liability Variable Stock Company    [*]        100 %   
Unrestricted

American Eagle Mexico Imports, S. de R.L. de C.V.

   Mexican Limited Liability Variable Stock Company    [*]        100 %   
Unrestricted

American Eagle Mexico Retail, S. de R.L. de C.V.

   Mexican Limited Liability Variable Stock Company    [*]        100 %   
Unrestricted

 

10

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

NAME OF ENTITY

  

JURISDICTION/
TYPE OF

ENTITY

   RELATIONSHIP
TO COMPANY/
OWNER  

CLASS

OF

STOCK

   %
OWNERSHIP    

RESTRICTED/

UNRESTRICTED
SUBSIDIARY

American Eagle Mexico Services, S. de R.L. de C.V.

   Mexican Limited Liability Variable Stock Company    [*]        100 %   
Unrestricted

South Side Realty Co

   Delaware Corporation    [*]   Common      100 %    Unrestricted

Violet Sun Enterprises LLC

   Delaware LLC    [*]        100 %    Unrestricted

 

11

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

Schedule 5.18

Post-Closing Matters

 

1. On or before February 2, 2015 (or such later date as agreed in writing by the
Administrative Agent), the Loan Parties shall deliver to the Administrative
Agent duly executed and delivered Deposit Account Control Agreements with
respect to the Concentration Accounts of the Loan Parties maintained with Bank
of America, Wells Fargo, and The Royal Bank of Canada and such other Deposit
Accounts to the extent delivery of such Deposit Account Control Agreements is
necessary for the Loan Parties to comply with Section 7.1 of each of the
Security Agreements.

 

2. On or before February 2, 2015 (or such later date as agreed in writing by the
Administrative Agent), the Loan Parties shall deliver to the Administrative
Agent duly executed and delivered Securities Account Control Agreements with
respect to such Securities Account Control Agreements as is necessary for the
Loan Parties to comply with Section 7.1 of each of the Security Agreements.

 

12

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

Schedule 6.01

Existing Indebtedness

 

1. HSBC Affiliate Trade Facilities and Bank Guaranty Facilities:

 

  (a) Hong Kong 4,000,000 HKD Standby Facility (increasing to 6,000,000 HKD)
with The Hongkong and Shanghai Banking Corporation Limited pursuant to a
Facility Offer Letter dated 7/31/2013 with American Eagle Outfitters Hong Kong
Limited and the Limited Guaranty dated 5/28/2013 by American Eagle Outfitters,
Inc. as guarantor.

 

  (b) China 10,000,000 RMB Facility with HSBC Bank (China) Company Limited,
Shanghai Branch pursuant to a Facility Letter dated 11/25/2013 with American
Eagle Outfitters (China) Commercial Enterprise Co., Ltd and the Limited Guaranty
dated 11/25/2013 by American Eagle Outfitters, Inc. as guarantor.

 

  (c) China 500,000 USD Trade/Import Facility with HSBC Bank (China) Company
Limited, Shanghai Branch pursuant to a Facility Letter dated 11/25/2013 with
American Eagle Outfitters (China) Commercial Enterprise Co., Ltd and the Limited
Guaranty dated 11/25/2013 by American Eagle Outfitters, Inc. as guarantor.

 

2. Current Capital Leases and purchase money obligations listed below:

 

Description

Dell 246 Dell 247 Dell 251 Dell 252 Dell 256 Dell 258 Dell 260 Dell 261 Dell 265
Dell 267 LeaseNet/The Huntington National Bank (5a.3) LeaseNet/The Huntington
National Bank (6a.10) LeaseNet/The Huntington National Bank (4k.5) LeaseNet/The
Huntington National Bank (5b.6) LeaseNet/The Huntington National Bank (3p.18f)
LeaseNet/The Huntington National Bank (6a.11) LeaseNet/The Huntington National
Bank (4k.6) LeaseNet/The Huntington National Bank (5a.4) LeaseNet/The Huntington
National Bank (5b.7) LeaseNet/The Huntington National Bank (6a.12) LeaseNet/The
Huntington National Bank (7A.1) LeaseNet/The Huntington National Bank (7B)
LeaseNet/The Huntington National Bank (7B.1)

 

13

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

Description

LeaseNet/The Huntington National Bank (6A.15)

LeaseNet/The Huntington National Bank (7A)

LeaseNet/The Huntington National Bank (6a.16)

LeaseNet/The Huntington National Bank (7B.2)

LeaseNet/The Huntington National Bank (6a.17)

LeaseNet/The Huntington National Bank (6a.18)

LeaseNet/The Huntington National Bank (8a)

 

14

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

Those portions of this Schedule 6.02

marked with an [*] have been omitted

pursuant to a request for confidential

treatment and have been filed separately

with the SEC.

Schedule 6.02

Existing Liens

 

1. Liens on fixed assets, software, chattel paper, and general intangibles
relating thereto and proceeds thereof in connection with Indebtedness related to
Capital Lease Obligations and purchase money obligations set forth on Schedule
6.01.

 

2. Liens granted pursuant to the Terms and Conditions for American Express Card
Acceptance relating to the American Express Card Acceptance Agreement between
American Eagle Outfitters Inc. and Amex Bank of Canada for acceptance of
American Express Cards in Canada (the “Canadian Amex Credit Card Agreement”) on
payments owed or owing to American Eagle Outfitters Inc. or its Affiliates under
the Canadian Amex Credit Card Agreement or other agreements with Amex Bank of
Canada or its affiliates and American Eagle Outfitters Inc. and its Affiliates.

 

3. Lien on goods and documents now or hereafter in [*] possession, custody or
control or en route, pursuant to a certain Application for Credit dated
November 14, 2003.

 

4. Lien on goods and documents now or hereafter in the care, custody or control
of [*] or any company under contract with [*], whether in transit or otherwise,
pursuant to a certain [*].

 

5. Liens referenced or perfected by the following financing statements as in
effect on the date hereof:

 

  a) American Eagle Outfitters, Inc.:

 

  i. Dell Financial Services LLC – Leased computer equipment more specifically
described in UCC File No. 2061445 7 filed with the Delaware Secretary of State.

 

  ii. GE Money Bank – Private label and co-brand consumer credit card program
more specifically described in UCC File No. 2007 4670971 filed with the Delaware
Secretary of State.

 

  iii. The Huntington National Bank – Purchase Money Security Interest in the
itemized goods and property listed in filed financing statement together with
insurance refunds, goodwill, products and proceeds of or relating thereto
pursuant to UCC File No. 2014 2229359 filed with the Delaware Secretary of
State.

 

  b) AEO Management Co.:

 

  i. AE Admin Services Co LLC – Consigned gift certificates, gift cards and
related instruments pursuant to UCC File No. 2009 0744265 filed with the
Delaware Secretary of State.

 

  c) AE Outfitters Retail Co.:

 

  i. GE Money Bank – Private label and co-brand consumer credit card program
pursuant to UCC File No. 2007 4671060 filed with the Delaware Secretary of
State.

 

  ii. AE Admin Services Co LLC – Consigned gift certificates, gift cards and
related instruments pursuant to UCC File No. 2009 0743275 filed with the
Delaware Secretary of State.

 

15

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

  d) AE Retail West LLC:

 

  i. GE Money Bank – Private label and co-brand consumer credit card program
pursuant to UCC File No. 2007 4670997 filed with the Delaware Secretary of
State.

 

  ii. AE Admin Services Co LLC – Consigned gift certificates, gift cards and
related instruments pursuant to UCC File No. 2009 0743812 filed with the
Delaware Secretary of State.

 

  e) AE Direct Co. LLC:

 

  i. GE Money Bank – Private label and co-brand consumer credit card program
pursuant to UCC File No. 2007 4671144 filed with the Delaware Secretary of
State.

 

  ii. AE Admin Services Co LLC – Consigned gift certificates, gift cards and
related instruments pursuant to UCC File No. 2009 0742657 filed with the
Delaware Secretary of State.

 

  iii. M+O Services Co LLC - Consigned gift certificates, gift cards and related
instruments pursuant to UCC File No. 2009 0744646 filed with the Delaware
Secretary of State.

 

  f) Retail Royalty Company:

 

  i. Monogram Credit Card Bank of Georgia – Credit card program pursuant to UCC
File No. 0010863 filed with the Nevada Secretary of State.

 

  ii. Monogram Credit Card Bank of Georgia – Credit card program pursuant to UCC
File No. 2005019522-9 filed with the Nevada Secretary of State.

 

  iii. GE Money Bank – Private label and co-brand consumer credit card program
pursuant to UCC File No. 2007 4671144 filed with the Nevada Secretary of State.

 

  iv. AE Admin Services Co LLC – Consigned gift certificates, gift cards and
related instruments pursuant to UCC File No. 2014016097-2 filed with the Nevada
Secretary of State.

 

  g) American Eagle Outfitters Canada Corporation:

 

  i. Woodbine Truck Centre Ltd. O/A Woodbine Idealease – 2008 Ottawa 4X2 off
highway trailer mover 320860 pursuant to PPSA File No. 695442717 PPSA Ontario.
Registration No. 20140423 0952 7036 1284, Reg. 1 year. Debtor: American Eagle
Outfitters Canada Corporation

 

  ii. Dell Financial Services Canada Limited – All Dell and non-Dell computer
equipment and peripherals leased to Debtor by Secured Party pursuant to an
equipment lease, proceeds, insurance proceeds pursuant to PPSA File
No. 693395091 PPSA Ontario. Registration No. 20140127 1030 8077 4315, Reg. 3
years. Debtor: American Eagle Outfitters Canada Corporation Corporation De
Vetements Sport American Eagle Canada

 

  iii. MB Financial Bank, N.A. (was Merrimak Capital Canada Ltd.) – Equipment
leased by the Secured Party to the Debtor pursuant to PPSA File No. 693084177
PPSA Ontario. Registration No. 20140110 1708 1590 4601, Reg. 4 years. Debtor:
American Eagle Outfitters Canada Corporation/Corporation De Vetem Ents Sport
American Eagle Canada

 

  iv. Ricoh Canada Inc. – Account Schedule 9719524001 pursuant to PPSA File
No. 690607467 PPSA Ontario. Registration No. 20130926 1511 5064 1375, Reg. 4
years. Debtor: American Eagle Outfitters Canada Corporation/Corporation De Vetem
Ents Sport American Eagle Canada

 

  v. GE VFS Canada Limited Partnership – Account Schedule 8790827001 pursuant to
PPSA File No. 688577175 PPSA Ontario. Registration No. 20130712 1300 5064 9215,
Reg. 4 years. Debtor: American Eagle Outfitters Canada Corporation/Corporation
De Vetem Ents Sport American Eagle Canada

 

  vi.

Dell Financial Services Canada Limited – All Dell and non-Dell computer
equipment and peripherals leased to Debtor by Secured Party pursuant to an
equipment lease, proceeds,

 

16

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

  insurance proceeds pursuant to PPSA File No. 683677035 PPSA Ontario.
Registration No. 20121219 1432 8077 4785, Reg. 3 years. Debtor: American Eagle
Outfitters Canada Corporation/Corporation De Vetem

 

  vii. Dell Financial Services Canada Limited – All Dell and non-Dell computer
equipment and peripherals leased to Debtor by Secured Party pursuant to an
equipment lease 175507-021, proceeds, insurance proceeds pursuant to PPSA File
No. 677749545 PPSA Ontario. Registration No. 20120420 1431 8077 6585, Reg. 3
years. Debtor: American Eagle Outfitters Canada Corporation/Corporation De
Vetements Sport American Eagle Canada; American Eagle Outfitters Canada
Corporation; Corporation De Vetements Sport American Eagle Canada

 

17

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

Those portions of this Schedule 6.04

marked with an [*] have been omitted

pursuant to a request for confidential

treatment and have been filed separately

with the SEC.

Schedule 6.04

Existing Investments

 

1. Intercompany Loans:

 

Issuer (Lender)

   Beneficiary (Borrower)   Amount

[*]

   [*]   [*]

[*]

   [*]   [*]

 

2. Investments in equity interests by Loan Parties in their Subsidiaries as set
forth in Schedule 3.15.

 

3. Guaranties identified in Schedule 6.01, Item 1.

 

4. Secondarily liable in varying amounts and terms for obligations under lease
agreements for approximately 21 store leases assumed by the third party
purchaser in connection with sale of the 77kids business. The third party
purchaser has provided a stand-by letter of credit to the Company in order to
secure payment of obligations under the leases.

 

5. Guaranties of Loan Parties in connection with the Specified L/C Facility to
the extent such Specified L/C Facility is permitted by Section 6.01(a)(ii) of
the Credit Agreement.

 

6. American Eagle Outfitters, Inc.’s guaranty of the following non-Loan Party
lease obligations:

 

  a. Obligations of [*] for [*]

 

  b. Obligations of [*] for [*]

 

  c. Obligations of [*] for [*]

 

  d. Obligations of [*] for [*]

 

  e. Obligations of [*] for [*]

 

  f. Obligations of [*] for [*]

 

  g. Obligations of [*] for [*]

 

  h. Obligations of [*] for [*]

 

  i. Obligations of [*] for [*]

 

  j. Obligations of [*] for [*]

 

18

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

Schedule 6.10

Existing Restrictions

None.

 

19

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

Schedule 9.01

Foreign Currency Notices

With respect to any Borrowing in Sterling, Euros or any other Designated
Currency:

J.P. Morgan Europe Limited

Loans Agency 6th floor

25 Bank Street, Canary Wharf

London E145JP

United Kingdom

Attention: Loans Agency

Facsimile: +44 20 7777 2360

With respect to any Borrowing in Canadian Dollars:

JPMorgan Chase Bank, N.A.

10 South Dearborn, Floor L2

Chicago, IL 60603-2300

Attention: Jackie See

Facsimile: 844-235-1788

 

20

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

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended,
restated, supplemented, or otherwise modified from time to time, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any Letters of Credit, guarantees, Swingline Loans,
Protective Advances and Overadvances included in such facilities) and (ii) to
the extent permitted to be assigned under applicable law, all claims, suits,
causes of action and other rights of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned pursuant to clauses
(i) and (ii) above being referred to herein collectively as the “Assigned
Interest”). Such sale and assignment is without recourse to the Assignor and,
except as expressly provided in this Assignment and Assumption, without
representation or warranty by the Assignor.

 

1.    Assignor:      

 

   2.    Assignee:      

 

         [and is an Affiliate/Approved Fund of [identify Lender]1] 3.   
Borrowers:      

 

   4.    Administrative Agent:    JPMorgan Chase Bank, N.A., as the
administrative agent under the Credit Agreement

 

1  Select as applicable.

 

Exhibit A

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

5.    Credit Agreement:    The Credit Agreement dated as of December 2, 2014
among American Eagle Outfitters, Inc., certain of its subsidiaries from time to
time party thereto, the other Loan Parties party thereto, the Lenders party
thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent 6.    Assigned
Interest:      

 

Facility Assigned2

   Aggregate Amount of
Commitment/Loans
for all Lenders      Amount of
Commitment/Loans
Assigned      Percentage Assigned
of
Commitment/Loans3      $                    $                                  
%     $                    $                                   %     $
                   $                                   % 

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

The Assignee agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates one or more Credit
Contacts to whom all syndicate-level information (which may contain material
non-public information about the Company, the other Loan Parties and their
Related Parties or their respective securities) will be made available and who
may receive such information in accordance with the Assignee’s compliance
procedures and applicable laws, including Federal and state securities laws.

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

 

ASSIGNOR [NAME OF ASSIGNOR] By:  

 

  Title:   ASSIGNEE [NAME OF ASSIGNEE] By:  

 

  Title:  

 

2  Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. “Revolving
Commitment,” etc.)

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

 

Exhibit A

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

[Consented to and]4 Accepted:

 

JPMORGAN CHASE BANK, N.A., as [Administrative Agent, Issuing Bank and Swingline
Lender] By  

 

  Title:   [Consented to:]5 [NAME OF RELEVANT PARTY] By  

 

  Title:  

 

4  To be added only if the consent of the Administrative Agent, Issuing Bank
and/or Swingline Lender, as applicable, is required by the terms of the Credit
Agreement.

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

 

Exhibit A

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

ANNEX 1

ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

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

1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Foreign Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

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

 

Exhibit A

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

Effective Date and to the Assignee for amounts which have accrued from and after
the Effective Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Acceptance of the
terms of this Assignment and Assumption by the Assignee and the Assignor by
Electronic Signature or delivery of an executed counterpart of a signature page
of this Assignment and Assumption by any Electronic System shall be effective as
delivery of a manually executed counterpart of this Assignment and Assumption.
This Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York.

 

Exhibit A

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

EXHIBIT B

BORROWING BASE CERTIFICATE

(see attached)

 

Exhibit B

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

       LOGO [g833367ex10_1pg210.jpg]     BORROWING BASE REPORT       
AMERICAN EAGLE OUTFITTERS, INC.        In $000s               

Rpt#

Date:

Period Covered:

 

 

    Obligor Number:

                 

 

    Loan Number:

                 

COLLATERAL CATEGORY

  US BORROWING BASE     CANADA BORROWING
BASE               A/R01     INV01     INV02     RE01     A/R02     INV03    
INV04            

Description

  Credit
Card
A/R     Standard
Inventory     In-Transit
Inventory     Real
Estate     Credit
Card
A/R     Standard
Inventory     In-Transit
Inventory             1   Beginning Balance (From Previous report)              
  Please complete YELLOW area beginning 2nd borrowing base following close     
2  

Additions to Collateral (AR - Gross Sales or Inv - Purchases)

                3  

Other Additions (Add back any non-A/R cash in line 3)

                  4  

Deductions to Collateral (AR - Cash Received / Inv - COGS)

                  5  

Deductions to Collateral (AR - Discounts, Inv - Returns)

                  6  

Deductions to Collateral (Credit Memos, all)

                  7  

Other non-cash credits to A/R

                       

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

      8  

Total Ending Collateral Balance

    0        0        0          0        0        0             

 

 

   

 

 

   

 

 

     

 

 

   

 

 

   

 

 

      9  

Less Ineligible - Past Due >5 days (10 days for Amex)

                  10  

Less Ineligible - Accrued fees outstanding

                  11  

Less Ineligible - FANF fees

                  12  

Less Ineligible - Adjustment

                  13  

Less Ineligible - GL lower than In-Transit

                  14  

Less Ineligible - Other 2

                  15  

Less Ineligible - Other 3

                  16  

Less Ineligible - Other 4

                       

 

 

         

 

 

          17  

Total Ineligibles AR before Cust Concentration

    0              0                 

 

 

         

 

 

          18  

Eligible AR Subtotal before Cust Concentration

    0              0            19  

Less Ineligible - Customer Concentration

    NA              NA            20  

Eligible Accounts Receivable

    0              0            21  

Less Ineligible - Difference to general ledger

                  22  

Less Ineligible - Third Party Liquidator

                  23  

Less Ineligible - Third Party Distribution Center

                  24  

Less Ineligible - Promotional Inventory

                  25  

Less Ineligible - Misc. Locations < $500m

                  26  

Less Ineligible - Shrinkage Reserve

                  27  

Less Ineligible - Repurpose clearing

                  28  

Less Ineligible - Other 1

                  29  

Less Ineligible - Other 2

                  30  

Less Ineligible - Other 3

                  31  

Less Ineligible - Other 4

                  32  

Less Ineligible - Bangladesh in-transit reserve ineligible

                  33  

Less Ineligible - Import In-transit Reserve

                  34  

Less Ineligible - Other in-transit 1

                  35  

Less Ineligible - Other in-transit 2

                         

 

 

   

 

 

       

 

 

   

 

 

      36  

Total Ineligibles Inventory

      0        0            0        0               

 

 

   

 

 

       

 

 

   

 

 

      37  

Eligible Collateral

    0        0        0          0        0        0        38  

Advance Rate %

    90 %      90.0 %      90.0 %        90 %      90.0 %      90.0 %      39  

Applicable NOLV (See Inv Adv, NOLV, Supp tab)

                  40  

NOLV% X Inventory Advance Rate %

      0.0 %      0.0 %          0.0 %      0.0 %      41  

In-Transit Available before Reserves

        0              0        42  

Reserve - In-transit Delivery Costs

        0              0        43  

In-Transit Available before CAP

        0              0        44  

In-Transit Cap (10% of Standard Inventory)

        0              0        45  

Net Available - Borrowing Base Value

    0        0        0        0        0        0        0     

Real estate availability post-close

  

           

 

 

       

 

 

      46  

Total Collateral Availability Before Reserves

          0            0                   

 

 

       

 

 

      47  

Reserves - Gift Cards / Merchandise Credits (50%)

                  48  

Reserves - Landlord Lien (PA, VA & WA stores, Can DC)

                  49  

Reserves - Canadian sales tax reserve

                  50  

Reserves - Other 1

                  51  

Reserves - Other 2

                  52  

Reserves - Other 3

                             

 

 

       

 

 

      53  

Total Reserves

          0            0                   

 

 

       

 

 

      54  

Net Collateral Availability

          0            0        55  

Revolver Line (See Inv Adv, NOLV, Supp tab)

          400,000            40,000        56  

Maximum Borrowing Limit

          0            0        57  

Suppressed Availability

          0            0     

Other Exposures (please update):

  

 

LOAN STATUS

               

Non-JPMC Facilities

    ($000s)    58   Previous Loan Balance (From Previous Report)     0         
    0         

HSBC Facility LCs Issued

  59   Less: A.   Net Collections (Same as line 4)     0              0         

Wells Fargo Facility LC Issued

  60     B. Adjustments / Other Cr Card Refunds & Other     0              0   
     

Capital Leases Outstanding

  61   Add: A.   Request for Funds     0              0         

Other Debt Obligations

  62     B. Adjustments / Other Chargebacks     0              0            63  
New Loan Balance           0            0        64  

L/Cs - Documentary

          0            0        65  

L/Cs - Standy-by / Bankers Acceptance

          0            0                             

 

 

  66  

Other Reserve

          0            0     

Total

    0    67   Availability Not Borrowed           0            0       

Pursuant to, and in accordance with, the terms and provisions of that certain
Credit Agreement (“Agreement”), between JPMorgan Chase Bank, N.A. (“JPMorgan”),
the Loan Parties and American Eagle Outfitters, Inc. (the “Borrower”), Borrower
is executing and delivering to JPMorgan this Collateral Report accompanied by
supporting data (collectively referred to as the “Report”). Borrower warrants
and represents to JPMorgan that this Report is true and correct, and is based on
information contained in Borrower’s own financial accounting records. Borrower,
by the execution of this Report, hereby ratifies, confirms and affirms all of
the terms, conditions and provisions of the Agreement, and further certifies on
this     day of             20    , that the Borrower is in compliance with said
Agreement.

 

BORROWER NAME:

     AUTHORIZED SIGNATURE:   

American Eagle Outfitters, Inc.

 

    

 

        Name:    Title:

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

EXHIBIT C

FORM OF BORROWING REQUEST

COMPANY NAME/HEADER

 

Borrowing Request    Date:

 

JPMorgan Chase Bank, N.A.

270 Park Avenue, 44th Floor

Mail Code: NY1-K855

New York, New York 10017

Attention: [             ]

Fax: [             ]

Ladies and Gentlemen:

This Borrowing Request is furnished pursuant to Section 2.03 of that certain
Credit Agreement dated as of December 2, 2014 (as amended, restated,
supplemented, modified, renewed or extended from time to time, the “Credit
Agreement”) among American Eagle Outfitters, Inc. and certain of its
subsidiaries (collectively, the “Borrowers”), the other Loan Parties party
thereto, the Lenders party thereto, and JPMorgan Chase Bank, N.A. as
Administrative Agent for the Lenders. Unless otherwise defined herein,
capitalized terms used in this Borrowing Request have the meanings ascribed
thereto in the Credit Agreement. The Borrower represents that, as of this date,
the conditions precedent set forth in Section 4.02 of the Credit Agreement are
satisfied.

The Borrower Representative hereby notifies the Administrative Agent of its
request for the following Borrowing:

 

  (1) This Borrowing Request is being made on behalf of [INSERT APPLICABLE
BORROWER’S NAME].

 

  (2) The Borrowing shall be a              U.S. Borrowing or             
Canadian Borrowing.

 

  (3) The Borrowing shall be a [LIBOR Borrowing or CDOR Borrowing or EURIBOR
Borrowing or ABR Borrowing or Canadian Prime Rate Borrowing].

 

  (4) Borrowing Date of the Borrowing (must be a Business Day):        

 

  (5) Aggregate Amount and Currency of the Borrowing: [$][Cdn$][€][£]        

 

  (6) If a LIBOR Borrowing, CDOR Borrowing, or EURIBOR Borrowing, the duration
of Interest Period shall be:

 

Exhibit C

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

One Month  

 

     Three Months   

 

Two Months  

 

     Six Months   

 

 

Exhibit C

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

[BORROWER REPRESENTATIVE NAME] By:  

 

  Name:   Title:

 

Exhibit C

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

EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

[This form of Compliance Certificate has been prepared for convenience only, and
is not to affect, or to be taken into consideration in interpreting, the terms
of the Credit Agreement referred to below. The obligations of the Loan Parties
under the Credit Agreement are as set forth in the Credit Agreement, and nothing
in this form of Compliance Certificate shall modify such obligations or
constitute a waiver of compliance therewith in accordance with the terms of the
Credit Agreement. In the event of any conflict between the terms of this form of
Compliance Certificate and the terms of the Credit Agreement, the terms of the
Credit Agreement shall govern and control, and the terms of this form of
Compliance Certificate are to be modified accordingly.]

 

To: The Lenders party to the

Credit Agreement Described Below

This Compliance Certificate is furnished pursuant to that certain Credit
Agreement dated as of December 2, 2014 (as amended, modified, renewed or
extended from time to time, the “Agreement”) among American Eagle Outfitters,
Inc. and certain of its subsidiaries (collectively, the “Borrowers”), the other
Loan Parties party thereto, the Lenders party thereto and JPMorgan Chase Bank,
N.A., as Administrative Agent for the Lenders. Unless otherwise defined herein,
capitalized terms used in this Compliance Certificate have the meanings ascribed
thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES, ON HIS/HER BEHALF AS AN OFFICER OF BORROWER
REPRESENTATIVE AND NOT IN HIS/HER INDIVIDUAL CAPACITY, AND ON BEHALF OF THE
BORROWERS, THAT:

1. I am the duly elected [            ] of the Borrower Representative;

2. [FOR CERTIFICATE ACCOMPANYING QUARTERLY OR MONTHLY FINANCIAL STATEMENTS ONLY]
[The attached financial statements for the [quarterly/monthly] accounting period
ending on [            ] present fairly in all material respects the financial
condition and results of operations of the Borrowers and their consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;]

3. I have no knowledge of, in each case except as set forth below, (i) the
existence of any condition or event which constitutes a Default during or at the
end of the accounting period covered by the attached financial statements or as
of the date of this Certificate or (ii) any change in GAAP or in the application
thereof that has occurred since the date of the audited financial statements
referred to in Section 3.04 of the Agreement;

4. Since the later of the Effective Date and the date of the last Compliance
Certificate, no Loan Party has (i) changed its name as it appears in official
filings in the state or province of incorporation or organization, (ii) changed
its chief executive office, (iii) changed

 

Exhibit D

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

the type of entity that it is, (iv) changed its organization identification
number, if any, issued by its state or province of incorporation or other
organization, or (v) changed its state or province of incorporation or
organization;

5. Schedule I attached hereto sets forth reasonably detailed calculations of the
Fixed Charge Coverage Ratio and, if applicable, calculations setting
demonstrating compliance with Section 6.12 of the Credit Agreement; and

6. [For certificate at time of annual financial statements:] [Schedule II
attached hereto sets forth a list of all Trademarks or Trademark applications
registered in the United States material to the conduct of the Loan Parties’
business or operations that were not previously disclosed to the Administrative
Agent pursuant to a Security Agreement or pursuant an earlier Compliance
Certificate.]

Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the (i) nature of the condition or event giving rise to a Default during
or at the end of the accounting period covered by the attached financial
statements or as of the date of this Certificate, the period during which it has
existed and the action which the Borrowers have taken, are taking, or propose to
take with respect to each such condition or event or (ii) the change in GAAP or
the application thereof and the effect of such change on the attached financial
statements:

 

 

 

 

The foregoing certifications are made and delivered this      day of
             ,          .

 

 

 

  , as Borrower Representative By:  

 

  Name:  

 

  Title:  

 

 

Exhibit D

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

SCHEDULE I

Calculation of Fixed Charge Coverage Ratio and

Compliance as of             ,         

with Provision of 6.12 of the Agreement

 

Exhibit D

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

SCHEDULE II

Schedule of Trademarks and Trademark Applications

 

Exhibit D

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

EXHIBIT E

[FORM OF] INTEREST ELECTION REQUEST

[Date]

JPMorgan Chase Bank, N.A.,

as Administrative Agent

270 Park Avenue, 44th Floor

Mail Code: NY1-K855

New York, New York 10017

Attention: [             ]

Fax: [             ]

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement dated as of December 2, 2014
(as amended, restated, supplemented or otherwise modified from time to time, the
“Agreement”), among American Eagle Outfitters, Inc. and certain of its
subsidiaries (collectively, the “Borrowers”), the other Loan Parties party
thereto, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as
Administrative Agent. Capitalized terms used but not otherwise defined herein
shall have the meanings specified in the Credit Agreement.

This notice constitutes an Interest Election Request and the Borrower
Representative hereby gives you notice, pursuant to Section 2.08 of the Credit
Agreement, that it requests the conversion or continuation of [U.S.
Borrowing][Canadian Borrowing] under the Credit Agreement, and in connection
therewith the Borrower Representative specifies the following information with
respect to such Borrowing and each resulting Borrowing:

 

  (1) Borrowing to which this request applies:

 

  a. Principal Amount: [$][Cdn$][£][€]         .

 

  b. Type: [LIBOR Borrowing or CDOR Borrowing or EURIBOR Borrowing or ABR
Borrowing or Canadian Prime Rate Borrowing]

 

  c. [Interest Period: [one][two][three][six] months]29

 

  (2) Effective date of this election (must be a Business Day):
                    .

 

  (3) Resulting Borrowing(s):

 

  a. Principal Amount: [$][Cdn$][£][€]         .

 

  b. Type: [LIBOR Borrowing or CDOR Borrowing or EURIBOR Borrowing or ABR
Borrowing or Canadian Prime Rate Borrowing]

 

  c. [Interest Period: [one][two][three][six] months] 30

 

29  Applicable to LIBOR Borrowing, CDOR Borrowing, and EURIBOR Borrowing.

30  Applicable to LIBOR Borrowing, CDOR Borrowing, and EURIBOR Borrowing.

 

Exhibit E

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

[BORROWER REPRESENTATIVE NAME] By:  

 

  Name:   Title:

 

Exhibit E

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

EXHIBIT F

JOINDER AGREEMENT

THIS JOINDER AGREEMENT (this “Agreement”), dated as of             ,     ,
20    , is entered into between                                         , a
                     (the “New Subsidiary”) and JPMORGAN CHASE BANK, N.A., in
its capacity as administrative agent (the “Administrative Agent”) under that
certain Credit Agreement dated as of December 2, 2014 (as the same may be
amended, restated, supplemented, modified, extended or restated from time to
time, the “Credit Agreement”) among American Eagle Outfitters, Inc. and certain
of its subsidiaries from time to time party thereto (collectively, the
“Borrowers”), the other Loan Parties party thereto, the Lenders party thereto
and the Administrative Agent for the Lenders. All capitalized terms used herein
and not otherwise defined herein shall have the meanings set forth in the Credit
Agreement.

The New Subsidiary and the Administrative Agent, for the benefit of the Lenders,
hereby agree as follows:

1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the New Subsidiary will be deemed to be a Loan
Party under the Credit Agreement and a “Loan Guarantor” for all purposes of the
Credit Agreement and shall have all of the obligations of a [U.S.] [Canadian]
Loan Party and a [U.S.] [Canadian] Guarantor thereunder as if it had executed
the Credit Agreement. The New Subsidiary hereby ratifies, as of the date hereof,
and agrees to be bound by, all of the applicable terms, provisions and
conditions contained in the Credit Agreement, including without limitation
(a) all of the applicable representations and warranties of the Loan Parties set
forth in Article III of the Credit Agreement, (b) all of the applicable
covenants set forth in Articles V and VI of the Credit Agreement, and (c) all of
the applicable guaranty obligations set forth in [Article X] [Article XI] of the
Credit Agreement. Without limiting the generality of the foregoing terms of this
paragraph 1, the New Subsidiary, subject to the limitations set forth in
[Sections 10.10 and 10.13] [Sections 11.08 and 11.11] of the Credit Agreement,
hereby guarantees, jointly and severally with the other [U.S.] [Canadian]
Guarantors, to the Administrative Agent and the Lenders, as provided in [Article
X] [Article XI] of the Credit Agreement, the prompt payment and performance of
the [U.S.] [Canadian] Guaranteed Obligations in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in
accordance with the terms thereof and agrees that if any of the [U.S.]
[Canadian] Guaranteed Obligations are not paid or performed in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise), the New Subsidiary will, jointly and severally together with the
other [U.S.] [Canadian] Guarantors, promptly pay and perform the same, without
any demand or notice whatsoever, and that in the case of any extension of time
of payment or renewal of any of the [U.S.] [Canadian] Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
as a mandatory prepayment, by acceleration or otherwise) in accordance with the
terms of such extension or renewal.

 

Exhibit F

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

2. If required, the New Subsidiary is, simultaneously with the execution of this
Agreement, executing and delivering such Collateral Documents (and such other
documents and instruments) as requested by the Administrative Agent in
accordance with the Credit Agreement.

3. The address of the New Subsidiary for purposes of Section 9.01 of the Credit
Agreement is as follows:

 

 

 

 

 

 

 

 

 

4. The New Subsidiary hereby waives acceptance by the Administrative Agent and
the Lenders of the guaranty by the New Subsidiary upon the execution of this
Agreement by the New Subsidiary.

5. This Agreement may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original, but all of which shall
constitute one and the same instrument.

6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officer, and the Administrative Agent, for the
benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.

 

[NEW SUBSIDIARY] By:  

 

Name:  

 

Title:  

 

Acknowledged and accepted: JPMORGAN CHASE BANK, N.A., as Administrative Agent
By:  

 

Name:  

 

Title:  

 

 

Exhibit F

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

EXHIBIT G-1

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

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

Reference is hereby made to the Credit Agreement dated as of December 2, 2014
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among American Eagle Outfitters, Inc. and certain of its
subsidiaries (collectively, the “Borrowers”), the other Loan Parties party
thereto, the Lenders party thereto, and JPMorgan Chase Bank, N.A., in its
capacity as Administrative Agent for the Lenders.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to any Borrower as
described in Section 881(c)(3)(C) of the Code.

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

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

 

[NAME OF LENDER] By:  

 

  Name:   Title: Date:                    , 20[    ]

 

Exhibit G-1

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

EXHIBIT G-2

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

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

Reference is hereby made to the Credit Agreement dated as of December 2, 2014
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among American Eagle Outfitters, Inc. and certain of its
subsidiaries (collectively, the “Borrowers”), the other Loan Parties party
thereto, the Lenders party thereto, and JPMorgan Chase Bank, N.A., in its
capacity as Administrative Agent for the Lenders.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of any Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to any Borrower as described in Section 881(c)(3)(C) of the
Code.

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

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

 

[NAME OF PARTICIPANT] By:  

 

  Name:   Title: Date:                    , 20[    ]

 

Exhibit G-2

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

EXHIBIT G-3

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

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

Reference is hereby made to the Credit Agreement dated as of December 2, 2014
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among American Eagle Outfitters, Inc. and certain of its
subsidiaries (collectively, the “Borrowers”), the other Loan Parties party
thereto, the Lenders party thereto, and JPMorgan Chase Bank, N.A., in its
capacity as Administrative Agent for the Lenders.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of any
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to any Borrower as described in Section 881(c)(3)(C) of the Code.

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

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

 

[NAME OF PARTICIPANT] By:     Name:   Title: Date:                    , 20[    ]

 

Exhibit G-3

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

EXHIBIT G-4

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

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

Reference is hereby made to the Credit Agreement dated as of December 2, 2014
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”) among American Eagle Outfitters, Inc. and certain of its
subsidiaries (collectively, the “Borrowers”), the other Loan Parties party
thereto, the Lenders party thereto, and JPMorgan Chase Bank, N.A., in its
capacity as Administrative Agent for the Lenders.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to the Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of any Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to any
Borrower as described in Section 881(c)(3)(C) of the Code.

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

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

 

[NAME OF LENDER] By:     Name:   Title: Date:                    , 20[    ]

 

EXHIBIT G-4