Exhibit 10.30

 

 

FIFTH AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT

dated as of June 28, 2007

by and among

 

THE CHILDREN’S PLACE RETAIL STORES, INC.,

and

EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO

as Borrowers,

 

THE FINANCIAL INSTITUTIONS NAMED HEREIN,

as Lenders,

and

WELLS FARGO RETAIL FINANCE, LLC,

as Agent

WACHOVIA CAPITAL FINANCE CORPORATION (NEW ENGLAND),

 

as Documentation Agent

and

LASALLE RETAIL FINANCE, A DIVISION OF LASALLE BUSINESS CREDIT, LLC

as Co-Agent

 

 

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TABLE OF CONTENTS

 

 

 

Page(s)

 

 

 

 

1.

DEFINITIONS AND CONSTRUCTION

 

1

 

 

 

 

 

 

1.1

Definitions

 

1

 

1.2

Accounting Terms

 

21

 

1.3

Code

 

21

 

1.4

Construction

 

21

 

1.5

Schedules and Exhibits

 

22

 

 

 

 

 

2.

LOAN AND TERMS OF PAYMENT

 

22

 

 

 

 

 

2.1

Revolving Advances

 

22

 

2.2

Letters of Credit

 

29

 

2.3

Intentionally Omitted

 

32

 

2.4

Intentionally Omitted

 

32

 

2.5

Payments

 

32

 

2.6

Overadvances

 

35

 

2.7

Interest and Letter of Credit Fees: Rates, Payments, and Calculations

 

35

 

2.8

Collection of Accounts

 

37

 

2.9

Crediting Payments; Application of Collections

 

37

 

2.10

Designated Account

 

37

 

2.11

Maintenance of Loan Account; Statements of Obligations

 

38

 

2.12

Fees

 

38

 

2.13

LIBOR Rate Loans

 

39

 

2.14

Illegality

 

40

 

2.15

Requirements of Law

 

40

 

2.16

Indemnity

 

42

 

2.17

Joint and Several Liability of Borrowers

 

42

 

2.18

Increase in Maximum Amount and Commitments

 

45

 

 

 

 

 

3.

CONDITIONS; TERM OF AGREEMENT

 

46

 

 

 

 

 

 

3.1

Conditions Precedent to the Initial Advance and the Initial Letter of Credit

 

46

 

3.2

Conditions Precedent to all Advances and all Letters of Credit

 

47

 

3.3

Intentionally Omitted

 

48

 

3.4

Term

 

48

 

3.5

Effect of Termination

 

48

 

3.6

Early Termination by Borrowers

 

48

 

 

 

 

 

4.

CREATION OF SECURITY INTEREST

 

49

 

 

 

 

 

 

4.1

Grant of Security Interests

 

49

 

4.2

Negotiable Collateral

 

49

 

4.3

Collection of Accounts, General Intangibles, and Negotiable Collateral

 

49

 

4.4

Delivery of Additional Documentation Required

 

49

 

4.5

Power of Attorney

 

50

 

4.6

Right to Inspect

 

50

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5.

REPRESENTATIONS AND WARRANTIES

 

50

 

 

 

 

 

5.1

No Encumbrances

 

50

 

5.2

Eligible Accounts

 

50

 

5.3

Eligible Inventory

 

51

 

5.4

Equipment

 

51

 

5.5

Location of Inventory and Equipment

 

51

 

5.6

Inventory Records

 

51

 

5.7

Location of Chief Executive Office; FEIN

 

51

 

5.8

Due Organization and Qualification; Subsidiaries

 

51

 

5.9

Due Authorization; No Conflict

 

52

 

5.10

Litigation

 

52

 

5.11

No Material Adverse Change

 

52

 

5.12

Fraudulent Transfer

 

52

 

5.13

Employee Benefits

 

53

 

5.14

Environmental Condition

 

53

 

 

 

 

 

6.

AFFIRMATIVE COVENANTS

 

53

 

 

 

 

 

 

6.1

Accounting System and Schedules

 

53

 

6.2

Financial Statements, Reports, Certificates

 

54

 

6.3

Tax Returns

 

55

 

6.4

Borrowing Base Certificate

 

55

 

6.5

Store Openings and Closings and Rents Reports

 

55

 

6.6

Title to Equipment

 

55

 

6.7

Maintenance of Equipment

 

56

 

6.8

Taxes

 

56

 

6.9

Insurance

 

56

 

6.10

No Setoffs or Counterclaims

 

56

 

6.11

Location of Inventory and Equipment

 

57

 

6.12

Compliance with Laws

 

57

 

6.13

Employee Benefits

 

57

 

6.14

Leases

 

58

 

6.15

Restatement of Financial Statements

 

58

 

 

 

 

 

7.

NEGATIVE COVENANTS

 

58

 

 

 

 

 

 

7.1

Indebtedness

 

58

 

7.2

Liens

 

59

 

7.3

Restrictions on Fundamental Changes

 

59

 

7.4

Disposal of Assets

 

60

 

7.5

Change Name

 

60

 

7.6

Guarantee

 

60

 

7.7

Nature of Business

 

60

 

7.8

Prepayments and Amendments

 

60

 

7.9

Change of Control

 

61

 

7.10

Consignments

 

61

 

7.11

Distributions

 

61

 

7.12

Accounting Methods

 

61

 

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7.13

Advances, Investments and Loans

 

61

 

7.14

Transactions with Affiliates

 

62

 

7.15

Suspension

 

63

 

7.16

Use of Proceeds

 

63

 

7.17

Change in Location of Chief Executive Office; Inventory and Equipment with
Bailees

 

63

 

7.18

No Prohibited Transactions Under ERISA

 

63

 

7.19

Financial Covenants

 

64

 

 

 

 

 

8.

EVENTS OF DEFAULT

 

66

 

 

 

 

9.

THE LENDER GROUP’S RIGHTS AND REMEDIES

 

67

 

 

 

 

 

 

9.1

Rights and Remedies

 

67

 

9.2

Remedies Cumulative

 

69

 

 

 

 

 

10.

TAXES AND EXPENSES

 

69

 

 

 

 

11.

WAIVERS; INDEMNIFICATION.

 

70

 

 

 

 

 

 

11.1

Demand; Protest; etc.

 

70

 

11.2

The Lender Group’s Liability for Collateral

 

70

 

11.3

Indemnification

 

70

 

 

 

 

 

12.

NOTICES

 

71

 

 

 

 

13.

CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER

 

72

 

 

 

 

14.

DESTRUCTION OF BORROWERS’ DOCUMENTS

 

72

 

 

 

 

15.

ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS

 

73

 

 

 

 

 

 

15.1

Assignments and Participations

 

73

 

15.2

Successors

 

75

 

 

 

 

16.

AMENDMENTS; WAIVERS

 

75

 

 

 

 

 

 

16.1

Amendments and Waivers

 

75

 

16.2

Replacement of Non-Consenting Lenders

 

77

 

16.3

No Waivers; Cumulative Remedies

 

77

 

 

 

 

 

17.

AGENT; THE LENDER GROUP

 

77

 

 

 

 

 

17.1

Appointment and Authorization of Agent

 

77

 

17.2

Delegation of Duties

 

78

 

17.3

Liability of Agent-Related Persons

 

79

 

17.4

Reliance by Agent

 

79

 

17.5

Notice of Default or Event of Default

 

79

 

17.6

Credit Decision

 

80

 

17.7

Costs and Expenses; Indemnification

 

80

 

17.8

Agent in Individual Capacity

 

81

 

17.9

Successor Agent

 

81

 

17.10

Withholding Tax

 

82

 

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17.11

Collateral Matters

 

83

 

17.12

Restrictions on Actions by Lenders; Sharing of Payments

 

84

 

17.13

Agency for Perfection

 

85

 

17.14

Payments by Agent to the Lenders

 

85

 

17.15

Concerning the Collateral and Related Loan Documents

 

85

 

17.16

Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders;
Other Reports and Information

 

85

 

17.17

Several Obligations; No Liability

 

86

 

17.18

Documentation Agent; Co-Agent

 

87

 

 

 

 

 

18.

GENERAL PROVISIONS

 

87

 

 

 

 

 

 

18.1

Effectiveness

 

87

 

18.2

Section Headings

 

87

 

18.3

Interpretation

 

87

 

18.4

Severability of Provisions

 

87

 

18.5

Counterparts; Telefacsimile Execution

 

88

 

18.6

Revival and Reinstatement of Obligations

 

88

 

18.7

Integration

 

88

 

18.8

Parent as Agent for Borrowers

 

88

 

18.9

Acknowledgment and Restatement of Existing Loan Agreement

 

89

 

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SCHEDULES AND EXHIBITS

Schedule C-1

 

Commitments on Closing Date

 

 

Schedule E-1

 

Eligible Inventory Locations

 

 

Schedule P-1

 

Permitted Liens

 

 

Schedule 3.1

 

Collateral Access Agreements

 

 

Schedule 5.8

 

Subsidiaries

 

 

Schedule 5.10

 

Litigation

 

 

Schedule 5.13

 

ERISA Benefit Plans

 

 

Schedule 5.14

 

Environmental Condition

 

 

Schedule 6.11

 

Location of Inventory and Equipment

 

 

Schedule 7.1

 

Indebtedness

 

 

Schedule 7.13(f)

 

Intercompany Indebtedness

 

 

Schedule 18.9(e)(i)

 

L/C Demand Facility Letters of Credit

 

 

Schedule 18.9(e)(ii)

 

L/Cs Remaining under Fifth Amended and Restated Loan and Security Agreement

 

 

 

 

 

 

 

Exhibit A-1

 

Form of Assignment and Acceptance

 

 

Exhibit B-1

 

Business Plan for Fiscal Year Ending on or about January 31, 2008

 

 

Exhibit C-1

 

Form of Compliance Certificate

 

 

Exhibit D-1

 

Form of Borrowing Base Certificate

 

 

Exhibit E-1

 

Form of Customs Broker Agreement

 

 

Exhibit F-1

 

Form of Collateral Access Agreement for Alabama Sale-Leaseback Transaction

 

 

Exhibit G-1

 

Form of Collateral Access Agreement for Alabama Capital Lease

 

 

 

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FIFTH AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

THIS FIFTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”),
is entered into this 28th day of June, 2007, among THE CHILDREN’S PLACE RETAIL
STORES, INC., a Delaware corporation (“Parent”) and each of Parent’s
Subsidiaries identified on the signature pages hereof (such Subsidiaries,
together with Parent, are referred to hereinafter each individually as a
“Borrower”, and individually and collectively, jointly and severally, as the
“Borrowers”), with each of its chief executive office located at 915 Secaucus
Road, Secaucus, New Jersey 07094, on the one hand, and the financial
institutions listed on the signature pages hereof (such financial institutions,
together with their respective successors and assigns, are referred to
hereinafter each individually as a “Lender” and collectively as the “Lenders”),
and WELLS FARGO RETAIL FINANCE, LLC, a Delaware limited liability company, as
Agent, WACHOVIA CAPITAL FINANCE CORPORATION (NEW ENGLAND), a Massachusetts
corporation, as Documentation Agent, and LASALLE RETAIL FINANCE, A DIVISION OF
LASALLE BUSINESS CREDIT, LLC, as Co-Agent, on the other hand.

RECITALS

A.                                   Parent and Wells Fargo Retail Finance, LLC
and certain other Lenders are parties to that certain Fourth Amended and
Restated Loan and Security Agreement effective as of October 31, 2004 (as
amended, the “Existing Loan Agreement”).

B.                                     Borrowers, Agent, Documentation Agent,
and Lenders desire to amend and restate in its entirety the Existing Loan
Agreement.

The parties agree that the Existing Loan Agreement is amended and restated as
follows:

1.                                      DEFINITIONS AND CONSTRUCTION.

1.1                               Definitions.  As used in this Agreement, the
following terms shall have the following definitions:

“Account Debtor” means any Person who is or who may become obligated under, with
respect to, or on account of, an Account.

“Accounts” means all currently existing and hereafter arising accounts, contract
rights, Revolving Accounts, and all other forms of obligations owing to any
Borrower arising out of the sale or lease of goods or the rendition of services
by any Borrower, irrespective of whether earned by performance, and any and all
credit insurance, guaranties, or security therefor.

“ACH Transactions” means any cash management or related services (including the
Automated Clearing House processing of electronic funds transfers through the
direct Federal Reserve Fedline system) provided by a Bank Product Provider for
the account of Administrative Borrower or its Subsidiaries.

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“Acquisition Agreement” means that certain Acquisition Agreement dated October
19, 2004 entered into by and among Hoop Holdings, LLC, Hoop Canada Holdings,
Inc., Disney Enterprises, Inc. and Disney Credit Card Services, Inc. and The
Children’s Place Retail Stores, Inc., as guarantor.

“Adjusted LIBOR Rate” means, with respect to each Interest Period for any LIBOR
Rate Loan, the rate per annum (rounded upwards, if necessary, to the next whole
multiple of 1/16 of 1% per annum) determined by dividing (a) the LIBOR Rate for
such Interest Period by (b) a percentage equal to (i) 100% minus (ii) the
Reserve Percentage.  The Adjusted LIBOR Rate shall be adjusted on and as of the
effective day of any change in the Reserve Percentage.

“Administrative Borrower” has the meaning set forth in Section 18.8.

“Advances” means the Revolving Advances and Seasonal Advances.

“Affiliate” means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person.  For purposes of this definition, “control” as applied to any Person
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through the
ownership of voting securities, by contract, or otherwise.

“Agent” means Wells Fargo Retail, solely in its capacity as agent for the
Lenders, and shall include any successor agent.

“Agent Advance” has the meaning set forth in Section 2.1(i).

“Agent Loan” has the meaning set forth in Section 2.1(h).

“Agent-Related Persons” means Agent, together with its Affiliates, and the
officers, directors, employees, counsel, agents, and attorneys-in-fact of Agent
and such Affiliates.

“Agent’s Account” has the meaning set forth in Section 2.8.

“Agent’s Liens” means the Liens granted by Borrowers or their Subsidiaries to
Agent under this Agreement or the other Loan Documents.

“Agreement” has the meaning set forth in the preamble hereto.

“Alabama Capital Lease” means a capital lease for the inventory handling system
of the Borrowers and/or any of their Affiliates located at their distribution
center in Fort Payne, Alabama.

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“Alabama Sale-Leaseback Transaction” means the sale-leaseback of the Real
Property of Services Company situated at 1377 Airport Road, Fort Payne, Alabama,
pursuant to a lease on market terms.

“Amendment Fee” is defined in the Fee Letter.

“Applicable Prepayment Premium” means, as of any date of determination, an
amount equal to (a) at any time prior to June 28, 2008, 0.50% times the sum of
the Maximum Amount, and (b) at all times on or after June 28, 2008, there shall
not be any prepayment premium.

“Assignee” has the meaning set forth in Section 15.1.

“Assignment and Acceptance” has the meaning set forth in Section 15.1(a) and
shall be in the form of Exhibit A-1.

“Authorized Person” means any officer or other authorized employee of a
Borrower.

“Availability” means, as of the date of determination, the result (so long as
such result is a positive number) of (a) the lesser of (i) the Borrowing Base or
(ii) the Maximum Amount, plus (b) Qualified Cash, minus (c) the Revolving
Facility Usage, minus (d) the Seasonal Overadvance Facility Usage.

“Average Excess Availability” means, for the subject period, the aggregate of
the amount of Availability on each day in the subject period, divided by the
number of days in the subject period.

“Average Unused Portion of Maximum Amount” means, as of any date of
determination, (a) an amount equal to the Maximum Amount, less (b) the average
Daily Balance of Obligations that were outstanding during the immediately
preceding month.

“Bank Product” means any financial accommodation extended to Administrative
Borrower or its Subsidiaries by a Bank Product Provider (other than pursuant to
this Agreement) including but not limited to: (a) credit cards, (b) credit card
processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions,
(f) cash management, including controlled disbursement, accounts or services, or
(g) transactions under Hedge Agreements.

“Bank Product Agreements” means those agreements entered into from time to time
by Administrative Borrower or its Subsidiaries with a Bank Product Provider in
connection with the obtaining of any of the Bank Products.

“Bank Product Obligations” means all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by Administrative Borrower
or its Subsidiaries to any Bank Product Provider pursuant to or evidenced by the
Bank Product Agreements and irrespective of whether for the payment of money,
whether direct or

3

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indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all such amounts that Administrative Borrower
or its Subsidiaries are obligated to reimburse to Agent or any member of the
Lender Group as a result of Agent or such member of the Lender Group purchasing
participations from, or executing indemnities or reimbursement obligations to, a
Bank Product Provider with respect to the Bank Products provided by such Bank
Product Provider to Administrative Borrower or its Subsidiaries.

“Bank Product Provider” means the Agent, the Lenders, Wells Fargo Bank, National
Association, or any of their respective Affiliates.

“Bank Product Reserve” means, as of any date of determination, the amount of
reserves that Agent has established (based upon the Bank Product Providers’
reasonable determination of the credit exposure in respect of the Bank Products)
in respect of Bank Products then provided or outstanding.

“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. § 101 et
seq.), as amended, and any successor statute.

“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of
ERISA) for which any Borrower, any Subsidiary of any Borrower, or any ERISA
Affiliate has been an “employer” (as defined in Section 3(5) of ERISA) within
the past six years.

“Books” means all of Administrative Borrower’s and its Subsidiaries books and
records including: ledgers; records indicating, summarizing, or evidencing any
Borrower’s properties or assets (including the Collateral) or liabilities; all
information relating to any Borrower’s business operations or financial
condition; and all computer programs, disk or tape files, printouts, runs, or
other computer prepared information.

“Borrower” and “Borrowers” have the respective meanings set forth in the
preamble to this Agreement.

“Borrowing” means a borrowing hereunder consisting of Advances made on the same
day by the Lenders, or by Agent in the case of an Agent Loan or an Agent
Advance.

“Borrowing Base” has the meaning set forth in Section 2.1(a).

“Borrowing Base Certificate” is defined in Section 6.4.

“Business Day” means (a) any day that is not a Saturday, Sunday, or a day on
which banks in Boston, Massachusetts, are required or permitted to be closed,
and (b) with respect to all notices, determinations, fundings and payments in
connection with the LIBOR Rate or LIBOR Rate Loans, any day that is a Business
Day pursuant to clause (a) above and that is also a day on which trading in
Dollars is carried on by and between banks in the London interbank market.

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“Business Plan” means (a) Parent’s and its Subsidiaries’ business plan for the
Fiscal Year ending on or about January 31, 2008 attached hereto as Exhibit B-1,
together with any amendment, modification, or revision to such business plan
approved by Agent, and (b) the Parent’s and its Subsidiaries’ business plan for
each subsequent Fiscal Year provided by Administrative Borrower to Agent in
accordance with the terms of Section 6.2 hereof, together with any amendment,
modification, or revision to any such business plan approved by Agent.

“Canadian Letter of Credit” means any Letter of Credit caused to be issued
pursuant to this Agreement by Parent or Services Company for the purchase of
inventory by Children’s Place Canada, which shall be issued in Dollars.

“Capital Expenditures” means the expenditure of funds or the incurrence of
liabilities which may be capitalized in accordance with GAAP, as then in effect
as of the date of any relevant determination.  If at any time a change in GAAP
or accounting method is implemented by the Borrowers which would be applicable
to accounting periods ending subsequent to February 3, 2007, the testing of
compliance by the Borrowers with any financial performance covenant relating to
Capital Expenditures shall be made as if no such accounting change in GAAP or
accounting method had been made (other than any such accounting change
specifically mentioned herein and taken into account in the setting of any such
covenant).

“Change of Control” shall be deemed to have occurred at such time as Parent’s
existing shareholders cease to be the “beneficial owners” (as defined in Rule
13d-3 under the Securities Exchange Act of 1934), directly or indirectly, of
more than 25% of the total voting power of all classes of stock then outstanding
of Parent normally entitled to vote in the election of directors.

“Children’s Place Canada” means The Children’s Place (Canada), LP, an Ontario
limited partnership.

“Closing Date” means June 28, 2007.

“Code” means the Massachusetts Uniform Commercial Code.

“Collateral” means each of the following:

(a)                                  the Accounts,

(b)                                 the Books,

(c)                                  the Equipment,

(d)                                 the General Intangibles,

(e)                                  the Inventory,

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(f)                                    the Investment Property,

(g)                                 the Negotiable Collateral,

(h)                                 any money, or other assets of any Borrower
that now or hereafter come into the possession, custody, or control of the
Lender Group, and

(i)                                     the proceeds and products, whether
tangible or intangible, of any of the foregoing, including proceeds of insurance
covering any or all of the Collateral, and any and all Accounts, Books,
Equipment, General Intangibles, Inventory, Investment Property, Negotiable
Collateral, money, deposit accounts, or other tangible or intangible property
resulting from the sale, exchange, collection, or other disposition of any of
the foregoing, or any portion thereof or interest therein, and the proceeds
thereof.

“Collateral” expressly excludes any share of stock, membership interest, or
other ownership interest in and to Hoop Holdings, LLC, Hoop Retail Stores, LLC,
Hoop Canada Holdings, Inc. or Hoop Canada, Inc.

“Collateral Access Agreement” means a landlord waiver, mortgagee waiver, bailee
letter, or acknowledgment agreement of any warehouseman, processor, lessor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in the Equipment or Inventory, in each case, in form and
substance reasonably satisfactory to Agent.

“Collections” means all cash, checks, notes, instruments, and other items of
payment (including, insurance proceeds, proceeds of cash sales, rental proceeds,
and tax refunds).

“Commercial Letter of Credit” means any Letter of Credit issued pursuant to this
Agreement for the purpose of providing the primary payment mechanism in
connection with the purchase of Inventory.

“Commitment” means, at any time with respect to a Lender, the principal amount
set forth beside such Lender’s name under the heading “Commitment” on
Schedule C-1 or on the signature page of the Assignment and Acceptance pursuant
to which such Lender became a Lender hereunder in accordance with the provisions
of Section 15.1, as such Commitment may be adjusted from time to time in
accordance with the provisions of Section 15.1 and “Commitments” means,
collectively, the aggregate amount of the commitments of all of the Lenders.

“Commitment Increase” is defined in Section 2.18.

“Commitment Increase Date” is defined in Section 2.18.

“Commitment Increase Fee” is defined in the Fee Letter.

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“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 and delivered by the chief accounting officer of Parent to Agent.

“Consolidated” means, when used to modify a financial term, test, statement, or
report of a Person, the application or preparation of such term, test, statement
or report (as applicable) based upon the consolidation, in accordance with GAAP,
of the financial condition or operating results of such Person and its
Subsidiaries.

“Consolidated EBITDA” means, at any date of determination, an amount equal to
the Consolidated Net Income of the Loan Parties on a Consolidated basis for the
most recently completed Measurement Period, plus (a) the following to the extent
deducted in calculating such Consolidated Net Income: (i) Consolidated Interest
Charges, (ii) the provision for Federal, state, local and foreign income taxes,
(iii) depreciation and amortization expense and (iv) other non-recurring
expenses reducing such Consolidated Net Income which do not represent a cash
item in such period or any future period (in each case of or by the Loan Parties
for such Measurement Period), minus (b) the following to the extent included in
calculating such Consolidated Net Income: (i) Federal, state, local and foreign
income tax credits and (ii) all non-cash items increasing Consolidated Net
Income (in each case of or by the Loan Parties for such Measurement Period), all
as determined on a Consolidated basis in accordance with GAAP.

“Consolidated Interest Charges” means, for any Measurement Period, the sum of
(a) all interest, premium payments, debt discount, fees, charges and related
expenses in connection with borrowed money (including capitalized interest) or
in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, (b) all interest paid or
payable with respect to discontinued operations and (c) the portion of rent
expense with respect to such period under capital lease obligations that is
treated as interest in accordance with GAAP, in each case of or by the Loan
Parties for the most recently completed Measurement Period, all as determined on
a Consolidated basis in accordance with GAAP.

“Consolidated Net Income” means, as of any date of determination, the net income
of the Loan Parties for the most recently completed Measurement Period, all as
determined on a Consolidated basis in accordance with GAAP, provided, however,
that there shall be excluded (a) extraordinary gains and extraordinary losses
for such Measurement Period, (b) the income (or loss) of such Person during such
Measurement Period in which any other Person has a joint interest, except to the
extent of the amount of cash dividends or other distributions actually paid in
cash to such Person during such period, (c) the income (or loss) of such Person
during such Measurement Period and accrued prior to the date it becomes a
Subsidiary of a Person or any of such Person’s Subsidiaries or is merged into or
consolidated with a Person or any of its Subsidiaries or that Person’s assets
are acquired by such Person or any of its Subsidiaries, and (d) the income of
any direct or indirect Subsidiary of a Person to the extent that the declaration
or payment of dividends or similar distributions by that Subsidiary of that
income is not at the time permitted by operation of the terms of its Governing
Documents or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation

7

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applicable to that Subsidiary, except that the Parent’s equity in any net loss
of any such Subsidiary for such Measurement Period shall be included in
determining Consolidated Net Income.

“Daily Balance” means, with respect to each day during the term of this
Agreement, the amount of an Obligation owed at the end of such day.

“deems itself insecure” means that the Person deems itself insecure in
accordance with the provisions of Section 1-208 of the Code.

“Default” means an event, condition, or default that, with the giving of notice,
the passage of time, or both, would be an Event of Default.

“Defaulting Lender” has the meaning set forth in Section 2.1(g)(ii).

“Defaulting Lenders Rate” means the Reference Rate for the first three days from
and after the date the relevant payment is due and thereafter at the interest
rate then applicable to Advances.

“Designated Account” means account number 20-3024941126-6 of Administrative
Borrower maintained with Administrative Borrower’s Designated Account Bank, or
such other deposit account of Administrative Borrower (located within the United
States) which has been designated, in writing and from time to time, by
Administrative Borrower to Agent.

“Designated Account Bank” means Wachovia National Bank, whose office is located
at 100 Fidelity Plaza, North Brunswick, New Jersey 08905 and whose ABA number is
021200025.

“Disney License Agreement” means that certain License and Conduct of Business
Agreement dated as of November 21, 2004 by and among certain subsidiaries of the
Borrowers and TDS Franchising, LLC, as modified by that certain letter agreement
dated as of June 6, 2007 by and among the Parent, Hoop Retail Stores, LLC, Hoop
Canada, Inc. and TDS Franchising, LLC, and as further amended, modified,
supplemented or restated and in effect from time to time.

“Disney Stores Transaction” means the transaction, as a totality, comprised of
the acquisition by Hoop Holdings, LLC and Hoop Canada Holdings, Inc. of the
ownership interests in, and business and assets of, The Disney Store, LLC and
The Disney Store (Canada) Ltd., as more particularly set forth in the
Acquisition Agreement.

“Documentation Agent” means Wachovia Capital Finance Corporation (New England),
a Massachusetts corporation, solely in its capacity as Documentation Agent.

“Dollars or $” means United States dollars.

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“Eligible Accounts” means under Five (5) business day accounts due on a
non-recourse basis from major credit card processors (which, if due on account
of a private label credit card program, are deemed in the discretion of the
Agent to be eligible).

“Eligible Inventory” means Inventory consisting of first quality finished goods
held for sale in the ordinary course of the Borrowers’ business (other than
inventory of Children’s Place Canada), that is reasonably acceptable to Agent in
all respects, that is located at a Borrower’s premises identified on Schedule
E-1 or that is in transit to a Borrower if: (a) title to such Inventory has been
transferred to such Borrower, (b) the Inventory is insured to Agent’s reasonable
satisfaction and (c) documentation regarding such Inventory is reasonably
acceptable to Agent, and such Inventory strictly complies with all of Borrowers’
representations and warranties to the Lender Group.  If Eligible Inventory is in
transit to a Borrower and has been acquired pursuant to a Letter of Credit, the
Letter of Credit must have been drawn upon.  Eligible Inventory shall not
include slow moving Inventory (as determined in Agent’s reasonable business
judgment based upon industry practices), or obsolete items, restrictive or
custom items, raw materials, work-in-process, components that are not part of
finished goods, spare parts, packaging and shipping materials, supplies used or
consumed in a Borrower’s business, Inventory subject to a security interest or
lien in favor of any third Person, bill and hold goods, Inventory that is not
subject to Agent’s perfected security interests, defective goods (except for
minor defects that do not affect saleability), “seconds,” and Inventory acquired
on consignment.

“Eligible Transferee” means (a) a commercial bank organized under the laws of
the United States, or any state thereof, and having total assets in excess of
$5,000,000,000, or the asset based lending Affiliate of such bank, (b) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of any such country, and having total assets in excess of
$5,000,000,000, or the asset based lending Affiliate of such bank; provided that
such bank is acting through a branch or agency located in the United States, (c)
a finance company, insurance or other financial institution, or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having total assets in excess of
$500,000,000, (d) any Affiliate (other than individuals) of an existing Lender,
and (e) any other Person approved by Agent and Parent.

“Equipment” means all of Borrowers’ present and hereafter acquired machinery,
machine tools, motors, equipment, furniture, furnishings, fixtures, vehicles
(including motor vehicles and trailers), tools, parts, goods (other than
consumer goods, farm products, or Inventory), wherever located, including,
(a) any interest of any Borrower in any of the foregoing, and (b) all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing.

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“ERISA” means the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§
1000 et seq., amendments thereto, successor statutes, and regulations or
guidance promulgated thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
which, within the meaning of Section 414 of the IRC, is:  (i) under common
control with any Borrower; (ii) treated, together with any Borrower, as a single
employer; (iii) treated as a member of an affiliated service group of which any
Borrower is also treated as a member; or (iv) is otherwise aggregated with any
Borrower for purposes of the employee benefits requirements listed in IRC
Section 414(m)(4).

“ERISA Event” means (a) a Reportable Event with respect to any Benefit Plan or
Multiemployer Plan, (b) the withdrawal of any Borrower, any of its Subsidiaries
or ERISA Affiliates from a Benefit Plan during a plan year in which it was a
“substantial employer” (as defined in Section 4001(a)(2) of ERISA), (c) the
providing of notice of intent to terminate a Benefit Plan in a distress
termination (as described in Section 4041(c) of ERISA), (d) the institution by
the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan, (e)
any event or condition (i) that provides a basis under Section 4042(a)(1), (2),
or (3) of ERISA for the termination of, or the appointment of a trustee to
administer, any Benefit Plan or Multiemployer Plan, or (ii) that may result in
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, (f) the
partial or complete withdrawal within the meaning of Sections 4203 and 4205 of
ERISA, of any Borrower, any of its Subsidiaries or ERISA Affiliates from a
Multiemployer Plan, or (g) providing any security to any Plan under Section
401(a)(29) of the IRC by any Borrower or its Subsidiaries or any of their ERISA
Affiliates.

“Event of Default” has the meaning set forth in Section 8.

“Existing Loan Agreement” has the meaning set forth in the recitals to this
Agreement.

“Fee Letter” means that certain Fee Letter dated as of even date herewith
entered into by and between the Agent and the Borrowers, as amended and in
effect from time to time.

“FEIN” means Federal Employer Identification Number.

“Fiscal Month” means months computed on the retail basis of four weeks, five
weeks and four weeks per fiscal quarter.

“Fiscal Year” means a retail year ending on the Saturday closest to January 31.

“Funding Date” means the date on which a Borrowing occurs.

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied.

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“General Intangibles” means all of Borrowers’ present and future general
intangibles and other personal property (including contract rights, rights
arising under common law, statutes, or regulations, choses or things in action,
goodwill, patents, trade names, copyrights, blueprints, drawings, purchase
orders, customer lists, monies due or recoverable from pension funds, route
lists, rights to payment and other rights under any royalty or licensing
agreements, infringement claims, computer programs, information contained on
computer disks or tapes, literature, reports, catalogs, deposit accounts,
insurance premium rebates, tax refunds, and tax refund claims), other than
goods, Accounts, and Negotiable Collateral.

“Governing Documents” means the certificate or articles of incorporation,
by-laws, or other organizational or governing documents of any Person.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

“Guaranties” means those certain Guaranties executed by Guarantors in favor of
Agent and Lenders.

“Guarantors” means, as of the Closing Date, Twin Brook, thechildrensplace.com,
inc., The Children’s Place Canada Holdings, Inc. and The Children’s Place
(Virginia), LLC.

“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any applicable laws or regulations as
“hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic
substances,” or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP
toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.

“Hedge Agreement” means any and all agreements, or documents now existing or
hereafter entered into by Administrative Borrower or its Subsidiaries that
provide for an interest rate, credit, commodity or equity swap, cap, floor,
collar, forward foreign exchange transaction, currency swap, cross currency rate
swap, currency option, or any combination of, or option with respect to, these
or similar transactions, for the purpose of hedging Administrative Borrower’s or
its Subsidiaries’ exposure to fluctuations in interest or exchange rates, loan,
credit exchange, security or currency valuations or commodity prices.

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“Increased Maximum Amount” is defined in Section 2.18.

“Indebtedness” means as to all of Borrowers (a) all obligations for borrowed
money, (b) all obligations evidenced by bonds, debentures, notes, or other
similar instruments and all reimbursement or other obligations in respect of
letters of credit, bankers acceptances, interest rate swaps, or other financial
products, (c) all obligations as a lessee under capital leases, (d) all
obligations or liabilities of others secured by a Lien on any asset of a Person
or its Subsidiaries, irrespective of whether such obligation or liability is
assumed, (e) all obligations to pay the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business and repayable in
accordance with customary trade practices), (f) all obligations owing under
Hedge Agreements, and (g) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (f) above.

“Indemnified Liabilities” has the meaning set forth in Section 11.3.

“Indemnified Person” has the meaning set forth in Section 11.3.

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other bankruptcy or
insolvency law, assignments for the benefit of creditors, formal or informal
moratoria, compositions, extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar relief.

“Intercompany Services Agreement” means that certain Intercompany Services
Agreement, dated as of November 21, 2004 among The Disney Store, LLC, The Disney
Store (Canada) Ltd. and Services Company, as amended, supplemented, modified
and/or restated and in effect from time to time.

“Interest Period” means, for any LIBOR Rate Loan, the period commencing on the
Business Day such LIBOR Rate Loan is disbursed or continued, or on the Business
Day on which a Reference Rate Loan is converted to such LIBOR Rate Loan, and
ending on the date that is one, two or three months thereafter, as selected by
Administrative Borrower and notified to Agent as provided in Sections 2.13(a)
and (b).

“Inventory” means all present and future inventory (other than inventory of
Children’s Place Canada) in which any Borrower has any interest, including goods
held for sale or lease or to be furnished under a contract of service and all of
any Borrower’s present and future raw materials, work in process, finished
goods, and packing and shipping materials, wherever located.

“Inventory Reserves” means reserves (determined from time to time by Agent in
its discretion) for (a) the estimated costs relating to unpaid freight charges,
warehousing or storage charges, taxes, duties, and other similar unpaid costs
associated with the

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acquisition of Eligible Inventory that is in transit to a Borrower, plus (b) the
estimated reclamation claims of unpaid sellers of Inventory sold to Borrowers.

“Investment Property” means all of Borrowers’ presently existing and hereafter
acquired or arising investment property (as that term is defined in Section
9-102 of the Code).

“IRC” means the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.

“L/C” means a letter of credit issued for the account of Parent or Services
Company pursuant to this Agreement.

“L/C Demand Facility” means that certain $60,000,000 letter of credit facility
established by Wells Fargo Retail Finance, LLC and certain other financial
institutions providing for the issuance of commercial letters of credit for the
account of the Borrowers pursuant to the terms of the L/C Demand Facility Letter
of Credit Agreement.

“L/C Demand Facility Letter of Credit” means any letter of credit issued
pursuant to the L/C Demand Facility Letter of Credit Agreement for the purpose
of providing the primary payment mechanism in connection with the purchase of
inventory.

“L/C Demand Facility Letter of Credit Agreement” means that certain Letter of
Credit Agreement dated as of June 28, 2007 between, among others, the Borrowers,
the financial institutions party thereto from time to time as lenders, and Wells
Fargo Retail Finance, LLC, as Agent, as amended and in effect from time to time.

“L/C Guaranty” means a guaranty of payment with respect to letters of credit
issued by an issuing bank for the account of Parent or Services Company pursuant
to this Agreement.

“L/C Sublimit” means $100,000,000.00, unless increased in accordance with
Section 2.18 below (but in no event greater than $130,000,000.00).

“Lender” and “Lenders” have the respective meanings set forth in the preamble to
this Agreement, and shall include any other Person made a party to this
Agreement in accordance with the provisions of Section 15.1.

“Lender Group” means, individually and collectively, each of the individual
Lenders and Agent.

“Lender Group Expenses” means all:  reasonable costs or expenses (including
taxes, and insurance premiums) required to be paid by a Borrower or its
Subsidiaries under any of the Loan Documents that are paid or incurred by the
Lender Group; reasonable fees or charges paid or incurred by the Lender Group in
connection with the Lender Group’s transactions with Borrowers, including, fees
or charges for photocopying, notarization, couriers and messengers,
telecommunication, public record searches

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(including tax lien, litigation, and UCC searches and including searches with
the patent and trademark office, the copyright office, or the department of
motor vehicles), filing, recording, publication, appraisal (including periodic
Collateral appraisals); environmental audits; costs and expenses incurred by
Agent in the disbursement of funds to Borrowers (by wire transfer or otherwise);
charges paid or incurred by Agent resulting from the dishonor of checks; costs
and expenses paid or incurred by Agent to correct any default or enforce any
provision of the Loan Documents, or in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof, irrespective of
whether a sale is consummated; reasonable costs and expenses paid or incurred by
the Lender Group in examining Books; costs and expenses of third party claims or
any other suit paid or incurred by the Lender Group in enforcing or defending
the Loan Documents or in connection with the transactions contemplated by the
Loan Documents or the Lender Group’s relationship with Borrowers or any
guarantor; and the Lender Group’s reasonable attorneys fees and expenses
incurred in advising, structuring, drafting, reviewing, administering, amending,
terminating, enforcing, defending, or concerning the Loan Documents (including
attorneys fees and expenses incurred in connection with a “workout,” a
“restructuring,” or an Insolvency Proceeding concerning Borrowers or any
guarantor of the Obligations), irrespective of whether suit is brought. 
Notwithstanding anything to the contrary set forth herein, the foregoing shall
be subject to the limitations set forth in Section 2.12(e).

“Lender-Related Persons” means any Lender, together with its Affiliates, and the
officers, directors, employees, counsel, agents, and attorneys-in-fact of such
Lender and such Affiliates.

“Letter of Credit” means an L/C or an L/C Guaranty, as the context requires,
issued pursuant to this Agreement.

“LIBOR Rate” means, with respect to the Interest Period for a LIBOR Rate Loan,
the interest rate per annum (rounded upwards, if necessary, to the next whole
multiple of 1/16 of 1% per annum) at which United States dollar deposits are
offered to Wells Fargo (or its Affiliates) by major banks in the London
interbank market (or other LIBOR Rate market selected by Agent) on or about
11:00 a.m. (Boston time) two Business Days prior to the commencement of such
Interest Period in amounts comparable to the amount of the LIBOR Rate Loans
requested by and available to Borrowers in accordance with this Agreement.

“LIBOR Rate Loans” means any Advance (or any portion thereof) made or
outstanding hereunder during any period when interest on such Advance (or
portion thereof) is payable based on the Adjusted LIBOR Rate.

“LIBOR Rate Margin” means 1.00%, and commencing with July 29, 2007 and at the
end of each fiscal quarter thereafter, the following levels corresponding to the
following amounts of Average Excess Availability for the immediately preceding
fiscal quarter:

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Average Excess Availability

 

LIBOR Rate Margin

 

Greater than $40,000,000

 

1.00

%

Equal to or less than $40,000,000 and greater than $15,000,000

 

1.25

%

Less than or equal to $15,000,000

 

1.50

%

 

“Lien” means any interest in property securing an obligation owed to, or a claim
by, any Person other than the owner of the property, whether such interest shall
be based on the common law, statute, or contract, whether such interest shall be
recorded or perfected, and whether such interest shall be contingent upon the
occurrence of some future event or events or the existence of some future
circumstance or circumstances, including the lien or security interest arising
from a mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, security agreement, adverse claim or charge, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.

“Loan Account” has the meaning set forth in Section 2.11.

“Loan Documents” means this Agreement, the Bank Products Agreements, the Letters
of Credit, the Lockbox Agreements, any note or notes executed by Borrowers and
payable to the Lender Group, and any other agreement entered into, now or in the
future, in connection with this Agreement.

“Loan Parties” means, collectively, the Borrowers and the Guarantors.

“Lockbox Account” shall mean a depositary account established pursuant to one of
the Lockbox Agreements.

“Lockbox Agreements” means those certain Lockbox Operating Procedural Agreements
and those certain Depository Account Agreements, in form and substance
satisfactory to Agent, each of which is among Administrative Borrower, Agent,
and one of the Lockbox Banks.

“Lockbox Banks” means Wachovia National Bank, or any replacement bank chosen by
Borrowers and acceptable to Agent.

“Lockboxes” has the meaning set forth in Section 2.8.

“Material Adverse Change” means (a) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or condition
(financial or

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otherwise) of Borrowers and their Subsidiaries, (b) the material impairment of a
Borrower’s ability to perform its obligations under the Loan Documents to which
it is a party or of the Lender Group to enforce the Obligations or realize upon
the Collateral, (c) a material adverse effect on the value of the Collateral or
the amount that the Lender Group would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of such Collateral, or (d) a material impairment of the priority of the Lender
Group’s Liens with respect to the Collateral.

“Maturity Date” has the meaning set forth in Section 3.4.

“Maximum Amount” means (i) $100,000,000.00, unless increased in accordance with
Section 2.18 below (but in no event greater than $130,000,000.00), plus (ii)
during the Seasonal Overadvance Period, the Seasonal Overadvance Amount.

“Measurement Period” means, at any date of determination, the most recently
completed twelve Fiscal months of the Parent.

“Multiemployer Plan” means a “multiemployer plan” (as defined in Section
4001(a)(3) of ERISA) to which Parent, any of its Subsidiaries, or any ERISA
Affiliate has contributed, or was obligated to contribute, within the past six
years.

“Negotiable Collateral” means all of Borrowers’ present and future letters of
credit, notes, drafts, instruments, certificated and uncertificated securities
(including the shares of stock of Subsidiaries of Parent (other than Hoop
Holdings, LLC, Hoop Retail Stores, LLC, Hoop Canada Holdings, Inc. or Hoop
Canada, Inc.), but limited to 65% of the outstanding shares of each class of
stock of any foreign Subsidiary or any domestic Subsidiary, the sole asset of
which is the stock of one or more foreign Subsidiaries), investment property,
security entitlements, documents, personal property leases (wherein a Borrower
is the lessor), chattel paper, and Books relating to any of the foregoing.

“Non-Consenting Lender” has the meaning set forth in Section 16.1.

“NRLV” means at any time of determination thereof, the ratio, expressed as a
percentage, of the net retail liquidation value of Borrowers’ Inventory divided
by the retail value of such Inventory, all as set forth in the most recent
appraisal delivered to, and approved by Agent.

“Obligations” means (a) all loans, Advances, debts, principal, interest
(including any interest that, but for the provisions of the Bankruptcy Code,
would have accrued), contingent reimbursement obligations under any outstanding
Letters of Credit, liabilities (including all amounts charged to Borrowers’ Loan
Account pursuant hereto), obligations, fees, charges, costs, or Lender Group
Expenses (including any fees or expenses that, but for the provisions of the
Bankruptcy Code, would have accrued), lease payments, guaranties, covenants, and
duties owing by Borrowers to the Lender Group of any kind and description
(whether pursuant to or evidenced by the Loan Documents or pursuant to any other
agreement between the Lender Group and any Borrower, and irrespective of whether
for the payment of money), whether direct or indirect, absolute or

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contingent, due or to become due, now existing or hereafter arising, and
including any debt, liability, or obligation owing from any Borrower to others
that the Lender Group may have obtained by assignment or otherwise, and further
including all interest not paid when due and all Lender Group Expenses that
Borrowers are required to pay or reimburse by the Loan Documents, by law, or
otherwise, and (b) all Bank Product Obligations.  Any reference in this
Agreement or in the Loan Documents to the Obligations shall include all
extensions, modifications, renewals, or alterations thereof, both prior and
subsequent to any Insolvency Proceeding.

“Originating Lender” has the meaning set forth in Section 15.1(e).

“Overadvance” has the meaning set forth in Section 2.6.

“Parent” has the meaning set forth in the preamble of this Agreement.

“Participant” has the meaning set forth in Section 15.1(e).

“PBGC” means the Pension Benefit Guaranty Corporation as defined in Title IV of
ERISA, or any successor thereto.

“Permitted Liens” means (a) Liens held by the Lender Group, (b) Liens for unpaid
taxes that either (i) are not yet due and payable or (ii) are the subject of
Permitted Protests, (c) Liens set forth on Schedule P-1, (d) the interests of
lessors under operating leases and purchase money security interests and Liens
of lessors under capital leases to the extent that the acquisition or lease of
the underlying asset is permitted under Section 7.1 and so long as the Lien only
attaches to the asset purchased or acquired and only secures the purchase price
of the asset, (e) Liens arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in
the ordinary course of business of Borrowers and not in connection with the
borrowing of money, and which Liens either (i) are for sums not yet due and
payable, or (ii) are the subject of Permitted Protests, (f) Liens arising from
deposits made in connection with obtaining worker’s compensation or other
unemployment insurance, (g) Liens or deposits to secure performance of bids,
tenders, or leases (to the extent permitted under this Agreement), incurred in
the ordinary course of business of Borrowers and not in connection with the
borrowing of money, (h) Liens arising by reason of security for surety or appeal
bonds in the ordinary course of business of any Borrower, (i) Liens of or
resulting from any judgment or award that would not cause a Material Adverse
Change and as to which the time for the appeal or petition for rehearing of
which has not yet expired, or in respect of which any Borrower is in good faith
prosecuting an appeal or proceeding for a review, and in respect of which a stay
of execution pending such appeal or proceeding for review has been secured,
(j) with respect to any Real Property, easements, rights of way, zoning and
similar covenants and restrictions, and similar encumbrances that customarily
exist on properties of Persons engaged in similar activities and similarly
situated and that in any event do not materially interfere with or impair the
use or operation of the Collateral by Borrowers or the value of the Lender

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Group’s Lien thereon or therein, or materially interfere with the ordinary
conduct of the business of Borrowers, and (k) liens securing the L/C Demand
Facility.

“Permitted Protest” means the right of Borrowers to protest any Lien (other than
any such Lien that secures the Obligations), tax (other than payroll taxes or
taxes that are the subject of a United States federal tax lien), or rental
payment, provided that (a) a reserve with respect to such obligation is
established on the books of Borrowers in an amount that is reasonably
satisfactory to Agent, (b) any such protest is instituted and diligently
prosecuted by Borrowers in good faith, and (c) Agent is satisfied that, while
any such protest is pending, there will be no impairment of the enforceability,
validity, or priority of any of the Liens of the Lender Group in and to the
Collateral.

“Person” means and includes natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities, and governments
and agencies and political subdivisions thereof.

“Plan” means any employee benefit plan, program, or arrangement maintained or
contributed to by any Borrower or with respect to which it may incur liability.

“Pro-Rata Share” means, with respect to a Lender, a fraction (expressed as a
percentage), the numerator of which is the amount of such Lender’s Commitment
and the denominator of which is the aggregate amount of the Commitments.

“Qualified Cash” means, as of any date of determination, the amount of
unrestricted cash of the Borrowers that is (a) deposited in an account of the
Borrowers maintained with the Agent, which account is subject to a valid,
enforceable and first priority perfected security interest in favor of the Agent
pursuant to a control agreement, in form and substance satisfactory to the
Agent, providing that, among other things, no amounts may be withdrawn or
disbursed from the account to any Person without the prior written consent of
the Agent, and (b) not subject to any Lien, except in favor of the Agent.

“Real Property” means any estates or interests in real property now owned or
hereafter acquired by any Borrower.

“Reference Rate” the rate of interest announced within Wells Fargo at its
principal office in San Francisco as its “prime rate”, with the understanding
that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the
lowest of such rates) and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as Wells Fargo may designate.

“Reference Rate Loans” means any advance (or portion thereof) made or
outstanding hereunder during any period when interest on such Advance is payable
based on the Reference Rate.

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“Reportable Event” means any of the events described in Section 4043(c) of ERISA
or the regulations thereunder other than a Reportable Event as to which the
provision of 30 days notice to the PBGC is waived under applicable regulations.

“Required Lenders” means, at any time, Lenders whose Pro Rata Shares aggregate
50.1% or more of the Commitments; provided, however, that in connection with the
providing of consent for (i) payment by the Borrowers of any of their
indemnification obligations to the Walt Disney Companies, as set forth in
Section 7.16, below, Required Lenders shall mean Lenders whose Pro Rata Shares
aggregate 66 2/3% or more of the Commitments, and (ii) postponement of the time
for repayment of the Seasonal Overadvance Facility, Required Lenders shall mean
all of the Lenders, unanimously.

“Requirement of Law” means, as to any Person:  (a) (i) all statutes and
regulations and (ii) court orders and injunctions, arbitrators’ decisions,
and/or similar rulings, in each instance by any Governmental Authority or
arbitrator applicable to or binding upon such Person or any of such Person’s
property or to which such Person or any of such Person’s property is subject;
and (b) that Person’s organizational documents, by-laws and/or other instruments
which deal with corporate or similar governance, as applicable.

“Reserve Percentage” for any Interest Period means, as of the date of
determination thereof, the maximum percentage (rounded upward, if necessary to
the nearest 1/100th of 1%), as determined by Agent (or its Affiliates) in
accordance with its (or their) usual procedures (which determination shall be
conclusive in the absence of manifest error), that is in effect on such date as
prescribed by the Board of Governors of the Federal Reserve System for
determining the reserve requirements (including supplemental, marginal, and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as “eurocurrency liabilities”) having a term equal to such Interest
Period by Agent or its Affiliates.

“Retiree Health Plan” means an “employee welfare benefit plan” within the
meaning of Section 3(1) of ERISA that provides benefits to individuals after
termination of their employment, other than as required by Section 601 of ERISA.

“Revolving Accounts” means any Account arising from an agreement to extend
credit on an ongoing basis through the use of a device such as a credit card or
the like, whether or not subject to regulation under Federal Reserve Board
Regulation Z, or any state statute or regulation on truth-in-lending.

“Revolving Advances” has the meaning set forth in Section 2.1(a).

“Revolving Facility Usage” means, as of any date of determination, the aggregate
amount of Revolving Advances and undrawn or unreimbursed Letters of Credit
outstanding.

“Seasonal Advances” has the meaning set forth in Section 2.1(b).

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“Seasonal Overadvance Amount” means up to $20,000,000.00 at any one time
outstanding.

“Seasonal Overadvance Conditions” means, at the time of any request for a
Seasonal Advance under the Seasonal Overadvance Facility, that (a) no Default or
Event of Default then exists or would arise as a result of the making of such
Seasonal Advance, and (b) the Loan Parties’ Consolidated EBITDA, on a trailing
twelve (12) month basis based upon the most recent financial statements
furnished, and as projected on a pro-forma basis for the remainder of the
Seasonal Overadvance Period then in effect, will be equal to or greater than
$130,000,000.00.  Simultaneously with any request for a Seasonal Advance under
the Seasonal Overadvance Facility, the Borrowers shall deliver to the Agent
evidence of satisfaction of the conditions contained in clause (b) above on a
basis reasonably satisfactory to the Agent.

“Seasonal Overadvance Facility” means a permanent facility to be maintained by
the Lenders for the benefit of the Borrowers during the Seasonal Overadvance
Period in an amount up to the Seasonal Overadvance Amount, as set forth in
Section 2.1(b).  Advances under the Seasonal Overadvance Facility shall be
available to the Borrowers if, and only if, the Borrowers have satisfied the
Seasonal Overadvance Conditions.

“Seasonal Overadvance Facility Usage” means, as of any date of determination,
the aggregate amount of Seasonal Advances outstanding.

“Seasonal Overadvance Period” means the period from July 1st through October
31st of each year during the term of this Agreement.

“Services Company” means The Children’s Place Services Company, LLC, a Delaware
limited liability company.

“Settlement” has the meaning set forth in Section 2.1(j)(i).

“Settlement Date” has the meaning set forth in Section 2.1(j)(i).

“Solvent” means, with respect to any Person on a particular date, that on such
date (a) at fair valuations, all of the properties and assets of such Person are
greater than the sum of the debts, including contingent liabilities, of such
Person, (b) the present fair salable value of the properties and assets of such
Person is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured, (c)
such Person is able to realize upon its properties and assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts beyond such Person’s ability to pay
as such debts mature, and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s properties and assets would constitute unreasonably small capital
after giving due consideration to the prevailing practices in the industry in
which such Person is engaged.  In computing the amount of contingent liabilities
at any time, it is intended that such liabilities will be computed at the

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amount that, in light of all the facts and circumstances existing at such time,
represents the amount that reasonably can be expected to become an actual or
matured liability.

“Stock Option Issue” shall have the meaning set forth in that certain letter
agreement dated as of December 20, 2006, as amended and in effect from time to
time.

“Subsidiary” of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the shares of stock or other ownership interests having ordinary voting
power to elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity.

“Twin Brook” means Twin Brook Insurance Co., Inc., a New York captive insurance
company.

“Voidable Transfer” has the meaning set forth in Section 18.6.

“Walt Disney Companies” means TDS Franchising, LLC, a California limited
liability company; Disney Enterprises, Inc., a Delaware corporation; and Disney
Credit Card Services, Inc., a California corporation.

“Wells Fargo” means Wells Fargo Bank, National Association.

“Wells Fargo Retail” means Wells Fargo Retail Finance, LLC, a Delaware limited
liability company.

1.2                               Accounting Terms.  All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.  When
used herein, the term “financial statements” shall include the notes and
schedules thereto.  Whenever the term “Borrowers or Parent” is used in respect
of a financial covenant or a related definition, it shall be understood to mean
Parent and its Subsidiaries on a consolidated basis unless the context clearly
requires otherwise.

1.3                               Code.  Any terms used in this Agreement that
are defined in the Code shall be construed and defined as set forth in the Code
unless otherwise defined herein.

1.4                               Construction.  Unless the context of this
Agreement clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term “including” is
not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.”  The words “hereof,”
“herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to
this Agreement as a whole and not to any particular provision of this
Agreement.  An Event of Default shall “continue” or be “continuing” until such
Event of Default has been waived in writing by the requisite members of the
Lender Group.  Any reference herein to the repayment in full of the Obligations
shall mean the repayment in full in cash of all Obligations other than
contingent indemnification Obligations and other than any Bank Product
Obligations that, at such time, are allowed by the applicable Bank Product
Provider to remain outstanding and are not required to be repaid or cash
collateralized pursuant to the provisions of this Agreement.  Section,
subsection, clause,

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schedule, and exhibit references are to this Agreement unless otherwise
specified.  Any reference in this Agreement or in the Loan Documents to this
Agreement or any of the Loan Documents shall include all alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, and supplements, thereto and thereof, as applicable.

1.5                               Schedules and Exhibits.  All of the schedules
and exhibits attached to this Agreement shall be deemed incorporated herein by
reference.

2.                                      LOAN AND TERMS OF PAYMENT.

2.1                               REVOLVING ADVANCES.

(A)                                  AMOUNTS.  SUBJECT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT, EACH LENDER AGREES TO MAKE ADVANCES (“REVOLVING
ADVANCES”) TO THE BORROWERS IN AN AMOUNT AT ANY ONE TIME OUTSTANDING NOT TO
EXCEED SUCH LENDER’S PRO RATA SHARE OF AN AMOUNT EQUAL TO THE LESSER OF (I) THE
MAXIMUM AMOUNT (OTHER THAN WITH RESPECT TO THE SEASONAL OVERADVANCE AMOUNT) LESS
THE SUM OF (A) THE PRINCIPAL BALANCE OF ALL REVOLVING ADVANCES THEN OUTSTANDING
AND (B) THE AGGREGATE AMOUNT OF ALL UNDRAWN OR UNREIMBURSED LETTERS OF CREDIT,
OR (II) THE BORROWING BASE LESS THE SUM OF (A) THE PRINCIPAL BALANCE OF ALL
REVOLVING ADVANCES THEN OUTSTANDING AND (B) THE AGGREGATE AMOUNT OF ALL UNDRAWN
OR UNREIMBURSED LETTERS OF CREDIT.  FOR PURPOSES OF THIS AGREEMENT, “BORROWING
BASE” AS OF ANY DATE OF DETERMINATION, SHALL MEAN THE RESULT OF:

(I)                                     90% OF ELIGIBLE ACCOUNTS, PLUS

(II)                                  30% OF THE RETAIL VALUE OF BORROWERS’
ELIGIBLE INVENTORY, NOT TO EXCEED 90% OF THE NRLV OF BORROWERS’ GROSS INVENTORY
FOR MONTHS OTHER THAN JUNE THROUGH NOVEMBER OF EACH YEAR AND 95% OF THE NRLV OF
BORROWERS’ GROSS INVENTORY FOR THE MONTHS OF JUNE THROUGH NOVEMBER OF EACH YEAR;
PLUS

(III)                               AN AMOUNT EQUAL TO 70% OF THE BORROWERS’
COST OF INVENTORY TO BE ACQUIRED PURSUANT TO OUTSTANDING COMMERCIAL LETTERS OF
CREDIT (EXCEPT THAT INVENTORY ACQUIRED PURSUANT TO CANADIAN LETTERS OF CREDIT
SHALL NOT BE INCLUDED IN THIS SECTION).  SUCH COMMERCIAL LETTERS OF CREDIT MUST
NOT ALLOW PARTIAL DRAWS UNLESS SUCH DRAWS ARE FOR FINISHED GOODS INVENTORY
CONCURRENTLY TRANSFERRED TO A BORROWER, AND DRAWS THEREUNDER MUST REQUIRE
DOCUMENTATION REFLECTING THE TRANSFER OF TITLE TO SUCH BORROWER (IN FORM AND
SUBSTANCE SATISFACTORY TO AGENT) OF FIRST QUALITY FINISHED GOODS INVENTORY
CONFORMING TO SUCH BORROWER’S CONTRACT WITH THE SELLER; LESS

(IV)                              THE AGGREGATE AMOUNT OF RESERVES, IF ANY,
ESTABLISHED BY AGENT UNDER SECTIONS 2.1(C), 6.14 AND 10.

(B)                                 SEASONAL OVERADVANCE FACILITY.  SUBJECT TO
THE TERMS AND CONDITIONS OF THIS AGREEMENT, IN ADDITION TO THE REVOLVING
ADVANCES TO BE MADE PURSUANT TO SECTION 2.1(A), ABOVE, THE LENDERS AGREE TO MAKE
ADVANCES (“SEASONAL ADVANCES”) (ON A PRO RATA BASIS IN ACCORDANCE WITH SCHEDULE
C-1), TO THE BORROWERS IN AN AMOUNT AT ANY ONE TIME OUTSTANDING NOT TO EXCEED AN
AMOUNT EQUAL TO THE SEASONAL OVERADVANCE AMOUNT LESS THE AGGREGATE AMOUNT OF ALL
SEASONAL ADVANCES OUTSTANDING UNDER THE SEASONAL OVERADVANCE FACILITY.

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(I)                                     THE SEASONAL OVERADVANCE FACILITY SHALL
BE IN PLACE, EFFECTIVE, AND AVAILABLE TO THE BORROWERS FOR THE MAKING OF
SEASONAL ADVANCES THEREUNDER DURING THE SEASONAL OVERADVANCE PERIOD.

(II)                                  ADVANCES UNDER THE SEASONAL OVERADVANCE
FACILITY SHALL BE MADE UPON REQUEST BY THE BORROWERS, IN ACCORDANCE WITH SECTION
2.1(E), BELOW, AND SHALL BE AVAILABLE IN UP TO FOUR (4) TRANCHES, IN THE MINIMUM
AMOUNT OF $5,000,000.00 EACH.

(III)                               SEASONAL ADVANCES UNDER THE SEASONAL
OVERADVANCE FACILITY SHALL BE SECURED BY THE COLLATERAL AND SHALL CONSTITUTE
ADVANCES AND OBLIGATIONS HEREUNDER.

(IV)                              ALL OBLIGATIONS OUTSTANDING UNDER THE SEASONAL
OVERADVANCE FACILITY SHALL BE PAID IN FULL IN IMMEDIATELY AVAILABLE FUNDS,
WITHOUT DEMAND, NOTICE, OR PROTEST, ON OR BEFORE 5:00 P.M. (BOSTON TIME) ON THE
LAST DAY OF THE SEASONAL OVERADVANCE PERIOD THEN IN EFFECT.

(C)                                  RESERVES.  ANYTHING TO THE CONTRARY IN THIS
SECTION 2.1 NOTWITHSTANDING, THE AGENT MAY (I) REDUCE THE ADVANCE RATES BASED
UPON ELIGIBLE ACCOUNTS AND ELIGIBLE INVENTORY WITHOUT DECLARING AN EVENT OF
DEFAULT IF IT DETERMINES IN ITS REASONABLE BUSINESS JUDGMENT THAT THERE HAS
OCCURRED A MATERIAL ADVERSE CHANGE; AND (II) ESTABLISH RESERVES (INCLUDING
INVENTORY RESERVES) AGAINST THE BORROWING BASE IN SUCH AMOUNTS AS AGENT IN ITS
REASONABLE JUDGMENT (FROM THE PERSPECTIVE OF AN ASSET-BASED LENDER) SHALL DEEM
NECESSARY OR APPROPRIATE, INCLUDING RESERVES ON ACCOUNT OF (Y) SUMS THAT
BORROWERS ARE REQUIRED TO PAY (SUCH AS TAXES, ASSESSMENTS, INSURANCE PREMIUMS,
OR, IN THE CASE OF LEASED ASSETS, RENTS OR OTHER AMOUNTS PAYABLE UNDER SUCH
LEASES) AND HAS FAILED TO PAY UNDER ANY SECTION OF THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND (Z) WITHOUT DUPLICATION OF THE FOREGOING, AMOUNTS OWING BY
BORROWERS TO ANY PERSON TO THE EXTENT SECURED BY A LIEN ON, OR TRUST OVER, ANY
OF THE COLLATERAL, WHICH LIEN OR TRUST, IN THE REASONABLE DETERMINATION OF AGENT
(FROM THE PERSPECTIVE OF AN ASSET-BASED LENDER), WOULD BE LIKELY TO HAVE A
PRIORITY SUPERIOR TO THE LIENS OF AGENT (SUCH AS LANDLORD LIENS, AD VALOREM
TAXES, OR SALES TAXES WHERE GIVEN PRIORITY UNDER APPLICABLE LAW) IN AND TO SUCH
ITEM OF THE COLLATERAL.  WITHOUT LIMITING THE FOREGOING, UPON THE EARLIER OF (I)
THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THE L/C DEMAND FACILITY OR (II) THE
TERMINATION DATE OF THE L/C DEMAND FACILITY (AS DEFINED THEREIN), THE AGENT MAY,
AND AT THE REQUEST OF THE AGENT UNDER THE L/C DEMAND FACILITY WILL, ESTABLISH
RESERVES AGAINST THE BORROWING BASE IN AN AMOUNT UP TO THE UNDRAWN AND
UNREIMBURSED AMOUNT OF ALL L/C DEMAND FACILITY LETTERS OF CREDIT THEN
OUTSTANDING UNDER THE L/C DEMAND FACILITY; PROVIDED, HOWEVER, THAT THE AGENT
SHALL NOT ESTABLISH SUCH RESERVES IF AND TO THE EXTENT THAT THE BORROWERS HAVE
PROVIDED CASH COLLATERAL OR OTHER SECURITY FOR SUCH L/C DEMAND FACILITY LETTERS
OF CREDIT IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF SECTION 2.6 OF THE L/C
DEMAND FACILITY LETTER OF CREDIT AGREEMENT.

(D)                                 REVOLVING NATURE.  AMOUNTS BORROWED PURSUANT
TO THIS SECTION 2.1 MAY BE REPAID AND, SUBJECT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, REBORROWED AT ANY TIME DURING THE TERM OF THIS AGREEMENT.

(E)                                  PROCEDURE FOR BORROWING.  EACH BORROWING
SHALL BE MADE UPON ADMINISTRATIVE BORROWER’S IRREVOCABLE REQUEST THEREFOR
DELIVERED TO AGENT (WHICH NOTICE MUST BE

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RECEIVED BY AGENT (I) NO LATER THAN 2:00 P.M. (BOSTON TIME) ON THE FUNDING DATE,
IF SUCH ADVANCE IS FOR $20,000,000 OR LESS, OR (II) NO LATER THAN 2:00 P.M.
(BOSTON TIME) (A) THREE BUSINESS DAYS PRIOR TO THE FUNDING DATE OF ANY BORROWING
OF, CONVERSION TO, OR CONTINUATION OF, LIBOR RATE LOANS, AND (B) ONE BUSINESS
DAY PRIOR TO THE REQUESTED FUNDING DATE OF ANY BORROWING OF REFERENCE RATE
LOANS, IF SUCH ADVANCE IS FOR MORE THAN $20,000,000) SPECIFYING (I) THE AMOUNT
OF THE BORROWING; AND (II) THE REQUESTED FUNDING DATE, WHICH SHALL BE A BUSINESS
DAY.

(F)                                    AGENT’S ELECTION.  PROMPTLY AFTER RECEIPT
OF A REQUEST FOR A BORROWING PURSUANT TO SECTION 2.1(E) IN EXCESS OF
$20,000,000, THE AGENT SHALL ELECT, IN ITS DISCRETION, (I) TO HAVE THE TERMS OF
SECTION 2.1(G) APPLY TO SUCH REQUESTED BORROWING, OR (II) TO MAKE AN AGENT LOAN
PURSUANT TO THE TERMS OF SECTION 2.1(H) IN THE AMOUNT OF THE REQUESTED
BORROWING.  ANY REQUESTED BORROWING OF $20,000,000 OR LESS SHALL BE MADE AS AN
AGENT LOAN PURSUANT TO THE TERMS OF SECTION 2.1(H).

(G)                                 MAKING OF ADVANCES.

(I)                                     IN THE EVENT THAT AGENT SHALL ELECT TO
HAVE THE TERMS OF THIS SECTION 2.1(G) APPLY TO A REQUESTED BORROWING IN EXCESS
OF $20,000,000 AS DESCRIBED IN SECTION 2.1(F), THEN PROMPTLY AFTER RECEIPT OF A
REQUEST FOR A BORROWING PURSUANT TO SECTION 2.1(E), AGENT SHALL NOTIFY THE
LENDERS, NOT LATER THAN 4:00 P.M. (BOSTON TIME) ON THE BUSINESS DAY ON WHICH
SUCH REQUEST FOR BORROWING PURSUANT TO SECTION 2.1(E) IS RECEIVED BY AGENT, BY
TELEPHONE AND PROMPTLY FOLLOWED BY TELECOPY, OR OTHER SIMILAR FORM OF
TRANSMISSION, OF THE REQUESTED BORROWING.  EACH LENDER SHALL MAKE THE AMOUNT OF
SUCH LENDER’S PRO RATA SHARE OF THE REQUESTED BORROWING AVAILABLE TO THE AGENT
IN SAME DAY FUNDS, TO SUCH ACCOUNT OF THE AGENT AS THE AGENT MAY DESIGNATE, NOT
LATER THAN 2:00 P.M. (BOSTON TIME) ON THE FUNDING DATE APPLICABLE THERETO. 
AFTER THE AGENT’S RECEIPT OF THE PROCEEDS OF SUCH ADVANCES, UPON SATISFACTION OF
THE APPLICABLE CONDITIONS PRECEDENT SET FORTH IN SECTIONS 3.1 AND 3.2, THE AGENT
SHALL MAKE THE PROCEEDS OF SUCH ADVANCES AVAILABLE TO BORROWERS ON THE
APPLICABLE FUNDING DATE BY TRANSFERRING SAME DAY FUNDS EQUAL TO THE PROCEEDS OF
SUCH ADVANCES RECEIVED BY THE AGENT TO THE DESIGNATED ACCOUNT; PROVIDED,
HOWEVER, THAT, SUBJECT TO THE PROVISIONS OF SECTION 2.1(M), THE AGENT SHALL NOT
REQUEST ANY LENDER TO MAKE, AND NO LENDER SHALL HAVE THE OBLIGATION TO MAKE, ANY
ADVANCE IF THE AGENT SHALL HAVE RECEIVED WRITTEN NOTICE FROM ANY LENDER, OR
OTHERWISE HAS ACTUAL KNOWLEDGE, THAT (A) ONE OR MORE OF THE APPLICABLE
CONDITIONS PRECEDENT SET FORTH IN SECTIONS 3.1 OR 3.2 WILL NOT BE SATISFIED ON
THE REQUESTED FUNDING DATE FOR THE APPLICABLE BORROWING, OR (B) THE REQUESTED
BORROWING WOULD EXCEED THE AVAILABILITY ON SUCH FUNDING DATE.

(II)                                  UNLESS AGENT RECEIVES NOTICE FROM A LENDER
ON OR PRIOR TO THE CLOSING DATE OR, WITH RESPECT TO ANY BORROWING AFTER THE
CLOSING DATE, AT LEAST ONE BUSINESS DAY PRIOR TO THE DATE OF SUCH BORROWING,
THAT SUCH LENDER WILL NOT MAKE AVAILABLE AS AND WHEN REQUIRED HEREUNDER TO AGENT
FOR THE ACCOUNT OF BORROWERS THE AMOUNT OF THAT LENDER’S PRO RATA SHARE OF THE
BORROWING, AGENT MAY ASSUME THAT EACH LENDER HAS MADE OR WILL MAKE SUCH AMOUNT
AVAILABLE TO AGENT IN IMMEDIATELY AVAILABLE FUNDS ON THE FUNDING DATE AND AGENT
MAY (BUT SHALL NOT BE SO REQUIRED), IN RELIANCE UPON SUCH ASSUMPTION, MAKE
AVAILABLE TO BORROWERS ON SUCH DATE A CORRESPONDING AMOUNT.  IF AND TO THE
EXTENT ANY LENDER SHALL NOT HAVE MADE ITS FULL AMOUNT AVAILABLE TO AGENT IN
IMMEDIATELY AVAILABLE FUNDS AND AGENT IN SUCH CIRCUMSTANCES HAS MADE AVAILABLE
TO BORROWERS SUCH AMOUNT, THAT LENDER SHALL ON THE BUSINESS DAY FOLLOWING SUCH

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FUNDING DATE MAKE SUCH AMOUNT AVAILABLE TO AGENT, TOGETHER WITH INTEREST AT THE
DEFAULTING LENDERS RATE FOR EACH DAY DURING SUCH PERIOD.  A NOTICE FROM AGENT
SUBMITTED TO ANY LENDER WITH RESPECT TO AMOUNTS OWING UNDER THIS SUBSECTION
SHALL BE CONCLUSIVE, ABSENT MANIFEST ERROR.  IF SUCH AMOUNT IS PAID TO AGENT
SUCH PAYMENT TO AGENT SHALL CONSTITUTE SUCH LENDER’S ADVANCE ON THE DATE OF
BORROWING FOR ALL PURPOSES OF THIS AGREEMENT.  IF SUCH AMOUNT IS NOT PAID TO
AGENT ON THE BUSINESS DAY FOLLOWING THE FUNDING DATE, AGENT WILL NOTIFY
ADMINISTRATIVE BORROWER OF SUCH FAILURE TO FUND AND, UPON DEMAND BY AGENT,
BORROWERS SHALL PAY SUCH AMOUNT TO AGENT FOR AGENT’S ACCOUNT, TOGETHER WITH
INTEREST THEREON FOR EACH DAY ELAPSED SINCE THE DATE OF SUCH BORROWING, AT A
RATE PER ANNUM EQUAL TO THE INTEREST RATE APPLICABLE AT THE TIME TO THE ADVANCES
COMPOSING SUCH BORROWING.  THE FAILURE OF ANY LENDER TO MAKE ANY ADVANCE ON ANY
FUNDING DATE SHALL NOT RELIEVE ANY OTHER LENDER OF ANY OBLIGATION HEREUNDER TO
MAKE AN ADVANCE ON SUCH FUNDING DATE, BUT NO LENDER SHALL BE RESPONSIBLE FOR THE
FAILURE OF ANY OTHER LENDER TO MAKE THE ADVANCE TO BE MADE BY SUCH OTHER LENDER
ON ANY FUNDING DATE.  ANY LENDER THAT FAILS TO MAKE ANY ADVANCE THAT IT IS
REQUIRED TO MAKE HEREUNDER ON ANY FUNDING DATE AND THAT HAS NOT CURED SUCH
FAILURE BY MAKING SUCH ADVANCE WITHIN ONE BUSINESS DAY AFTER WRITTEN DEMAND UPON
IT BY AGENT TO DO SO, SHALL CONSTITUTE A “DEFAULTING LENDER” FOR PURPOSES OF
THIS AGREEMENT UNTIL SUCH ADVANCE IS MADE.

(III)                               AGENT SHALL NOT BE OBLIGATED TO TRANSFER TO
A DEFAULTING LENDER ANY PAYMENTS MADE BY BORROWERS TO AGENT FOR THE DEFAULTING
LENDER’S BENEFIT; NOR SHALL A DEFAULTING LENDER BE ENTITLED TO THE SHARING OF
ANY PAYMENTS HEREUNDER.  AMOUNTS PAYABLE TO A DEFAULTING LENDER SHALL INSTEAD BE
PAID TO OR RETAINED BY AGENT.  AGENT MAY HOLD AND, IN ITS DISCRETION, RE-LEND TO
BORROWERS THE AMOUNT OF ALL SUCH PAYMENTS RECEIVED OR RETAINED BY IT FOR THE
ACCOUNT OF SUCH DEFAULTING LENDER.  SOLELY FOR THE PURPOSES OF VOTING OR
CONSENTING TO MATTERS WITH RESPECT TO THE LOAN DOCUMENTS AND DETERMINING PRO
RATA SHARES, SUCH DEFAULTING LENDER SHALL BE DEEMED NOT TO BE A “LENDER” AND
SUCH DEFAULTING LENDER’S COMMITMENT SHALL BE DEEMED TO BE ZERO.  THIS SECTION
SHALL REMAIN EFFECTIVE WITH RESPECT TO SUCH DEFAULTING LENDER UNTIL (A) THE
OBLIGATIONS UNDER THIS AGREEMENT SHALL HAVE BEEN DECLARED OR SHALL HAVE BECOME
IMMEDIATELY DUE AND PAYABLE OR (B) THE REQUISITE NON-DEFAULTING LENDERS, AGENT,
AND BORROWERS SHALL HAVE WAIVED SUCH DEFAULTING LENDER’S DEFAULT IN WRITING. 
THE OPERATION OF THIS SECTION SHALL NOT BE CONSTRUED TO INCREASE OR OTHERWISE
AFFECT THE COMMITMENT OF ANY NON-DEFAULTING LENDER, OR RELIEVE OR EXCUSE THE
PERFORMANCE BY BORROWERS OF THEIR DUTIES AND OBLIGATIONS HEREUNDER.

(H)                                 MAKING OF AGENT LOANS.

(I)                                     IN THE EVENT THE AGENT SHALL ELECT TO
HAVE THE TERMS OF THIS SECTION 2.1(H) APPLY TO A REQUESTED BORROWING IN EXCESS
OF $20,000,000 AS DESCRIBED IN SECTION 2.1(F) OR IN THE EVENT OF ANY REQUESTED
BORROWING OF $20,000,000 OR LESS, AGENT SHALL MAKE AN ADVANCE IN THE AMOUNT OF
SUCH BORROWING (ANY SUCH ADVANCE MADE SOLELY BY AGENT PURSUANT TO THIS
SECTION 2.1(H) BEING REFERRED TO AS AN “AGENT LOAN” AND SUCH ADVANCES BEING
REFERRED TO COLLECTIVELY AS “AGENT LOANS”) AVAILABLE TO BORROWERS ON THE FUNDING
DATE APPLICABLE THERETO BY TRANSFERRING SAME DAY FUNDS TO ADMINISTRATIVE
BORROWER’S DESIGNATED ACCOUNT.  EACH AGENT LOAN IS AN ADVANCE HEREUNDER AND
SHALL BE SUBJECT TO ALL THE TERMS AND CONDITIONS APPLICABLE TO OTHER ADVANCES,
EXCEPT THAT ALL PAYMENTS THEREON SHALL BE PAYABLE TO AGENT SOLELY FOR ITS OWN
ACCOUNT (AND FOR THE ACCOUNT OF THE HOLDER OF ANY PARTICIPATION INTEREST WITH
RESPECT TO SUCH ADVANCE).  SUBJECT TO THE PROVISIONS OF SECTION 2.1(M), THE
AGENT SHALL NOT MAKE ANY AGENT

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LOAN IF THE AGENT SHALL HAVE RECEIVED WRITTEN NOTICE FROM ANY LENDER, OR
OTHERWISE HAS ACTUAL KNOWLEDGE, THAT (I) ONE OR MORE OF THE APPLICABLE
CONDITIONS PRECEDENT SET FORTH IN SECTIONS 3.1 OR 3.2 WILL NOT BE SATISFIED ON
THE REQUESTED FUNDING DATE FOR THE APPLICABLE BORROWING, OR (II) THE REQUESTED
BORROWING WOULD EXCEED THE AVAILABILITY ON SUCH FUNDING DATE.  AGENT SHALL NOT
OTHERWISE BE REQUIRED TO DETERMINE WHETHER THE APPLICABLE CONDITIONS PRECEDENT
SET FORTH IN SECTIONS 3.1 OR 3.2 HAVE BEEN SATISFIED ON THE FUNDING DATE
APPLICABLE THERETO PRIOR TO MAKING, IN ITS SOLE DISCRETION, ANY AGENT LOAN.

(II)                                  THE AGENT LOANS SHALL BE SECURED BY THE
COLLATERAL AND SHALL CONSTITUTE ADVANCES AND OBLIGATIONS HEREUNDER, AND SHALL
BEAR INTEREST AT THE RATE APPLICABLE FROM TIME TO TIME TO OBLIGATIONS PURSUANT
TO SECTION 2.7.

(I)                                     AGENT ADVANCES.

(I)                                     AGENT HEREBY IS AUTHORIZED BY BORROWERS
AND THE LENDERS, FROM TIME TO TIME IN AGENT’S SOLE DISCRETION, (1) AFTER THE
OCCURRENCE OF A DEFAULT OR AN EVENT OF DEFAULT (BUT WITHOUT CONSTITUTING A
WAIVER OF SUCH DEFAULT OR EVENT OF DEFAULT), OR (2) AT ANY TIME THAT ANY OF THE
OTHER APPLICABLE CONDITIONS PRECEDENT SET FORTH IN SECTION 3.1 OR 3.2 HAVE NOT
BEEN SATISFIED, TO MAKE ADVANCES TO BORROWERS ON BEHALF OF THE LENDERS WHICH
AGENT, IN ITS REASONABLE BUSINESS JUDGMENT, DEEMS NECESSARY OR DESIRABLE (A) TO
PRESERVE OR PROTECT THE COLLATERAL, OR ANY PORTION THEREOF (OTHER THAN THE BANK
PRODUCT OBLIGATIONS), (B) TO ENHANCE THE LIKELIHOOD OF, OR MAXIMIZE THE AMOUNT
OF, REPAYMENT OF THE OBLIGATIONS, OR (C) TO PAY ANY OTHER AMOUNT CHARGEABLE TO
BORROWERS PURSUANT TO THE TERMS OF THIS AGREEMENT, INCLUDING LENDER GROUP
EXPENSES AND THE COSTS, FEES, AND EXPENSES DESCRIBED IN SECTION 10 (ANY OF THE
ADVANCES DESCRIBED IN THIS SECTION 2.1(I) BEING HEREINAFTER REFERRED TO AS
“AGENT ADVANCES”); PROVIDED THAT AGENT SHALL NOT MAKE ANY AGENT ADVANCES TO
BORROWERS WITHOUT THE CONSENT OF ALL OF THE LENDERS IF THE AMOUNT THEREOF WOULD
EXCEED $20,000,000 IN THE AGGREGATE AT ANY ONE TIME; AND PROVIDED FURTHER THAT
IN NO EVENT SHALL AGENT MAKE ANY AGENT ADVANCE IF, AFTER GIVING EFFECT THERETO,
THE OUTSTANDING REVOLVING FACILITY USAGE (EXCEPT FOR AND EXCLUDING AMOUNTS
CHARGED TO THE APPLICABLE LOAN ACCOUNT FOR INTEREST, FEES, OR LENDER GROUP
EXPENSES) WOULD EXCEED THE MAXIMUM AMOUNT.

(II)                                  AGENT ADVANCES SHALL BE REPAYABLE ON
DEMAND AND SECURED BY THE COLLATERAL, SHALL CONSTITUTE ADVANCES AND OBLIGATIONS
HEREUNDER, AND SHALL BEAR INTEREST AT THE RATE APPLICABLE FROM TIME TO TIME TO
THE OBLIGATIONS PURSUANT TO SECTION 2.7.

(J)                                     SETTLEMENT.  IT IS AGREED THAT EACH
LENDER’S FUNDED PORTION OF THE ADVANCES IS INTENDED BY THE LENDERS TO BE EQUAL
AT ALL TIMES TO SUCH LENDER’S PRO RATA SHARE OF THE OUTSTANDING ADVANCES.  SUCH
AGREEMENT NOTWITHSTANDING, THE AGENT AND THE LENDERS AGREE (WHICH AGREEMENT
SHALL NOT BE FOR THE BENEFIT OF OR ENFORCEABLE BY BORROWERS) THAT IN ORDER TO
FACILITATE THE ADMINISTRATION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
SETTLEMENT AMONG THEM AS TO THE ADVANCES, THE AGENT LOANS, AND THE AGENT
ADVANCES SHALL TAKE PLACE ON A PERIODIC BASIS IN ACCORDANCE WITH THE FOLLOWING
PROVISIONS:

(I)                                     THE AGENT SHALL REQUEST SETTLEMENT
(“SETTLEMENT”) WITH THE LENDERS ON A WEEKLY BASIS, OR ON A MORE FREQUENT BASIS
IF SO DETERMINED BY THE AGENT, (1) FOR ITSELF, WITH

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RESPECT TO EACH AGENT LOAN AND AGENT ADVANCE, AND (2) WITH RESPECT TO
COLLECTIONS RECEIVED, AS TO EACH BY NOTIFYING THE LENDERS BY TELEPHONE AND
PROMPTLY FOLLOWED BY TELECOPY, OR OTHER SIMILAR FORM OF TRANSMISSION, OF SUCH
REQUESTED SETTLEMENT, NO LATER THAN 1:00 P.M. (BOSTON TIME) ON THE BUSINESS DAY
IMMEDIATELY PRECEDING THE DATE OF SUCH REQUESTED SETTLEMENT (THE “SETTLEMENT
DATE”).  SUCH NOTICE OF A SETTLEMENT DATE SHALL INCLUDE A SUMMARY STATEMENT OF
THE AMOUNT OF OUTSTANDING ADVANCES, AGENT LOANS, AND AGENT ADVANCES FOR THE
PERIOD SINCE THE PRIOR SETTLEMENT DATE, THE AMOUNT OF REPAYMENTS RECEIVED IN
SUCH PERIOD, AND THE AMOUNTS ALLOCATED TO EACH LENDER OF THE PRINCIPAL,
INTEREST, FEES, AND OTHER CHARGES FOR SUCH PERIOD.  SUBJECT TO THE TERMS AND
CONDITIONS CONTAINED HEREIN:  (Y) IF A LENDER’S BALANCE OF THE ADVANCES, AGENT
LOANS, AND AGENT ADVANCES EXCEEDS SUCH LENDER’S PRO RATA SHARE OF THE ADVANCES,
AGENT LOANS, AND AGENT ADVANCES AS OF A SETTLEMENT DATE, THEN AGENT SHALL BY NO
LATER THAN 1:00 P.M. (BOSTON TIME) ON THE SETTLEMENT DATE TRANSFER IN SAME DAY
FUNDS TO THE ACCOUNT OF SUCH LENDER AS LENDER MAY DESIGNATE, AN AMOUNT SUCH THAT
EACH SUCH LENDER SHALL, UPON RECEIPT OF SUCH AMOUNT, HAVE AS OF THE SETTLEMENT
DATE, ITS PRO RATA SHARE OF THE ADVANCES, AGENT LOANS, AND AGENT ADVANCES; AND
(Z) IF A LENDER’S BALANCE OF THE ADVANCES, AGENT LOANS, AND AGENT ADVANCES IS
LESS THAN SUCH LENDER’S PRO RATA SHARE OF THE ADVANCES, AGENT LOANS, AND AGENT
ADVANCES AS OF A SETTLEMENT DATE, SUCH LENDER SHALL NO LATER THAN 1:00 P.M.
(BOSTON TIME) ON THE SETTLEMENT DATE TRANSFER IN SAME DAY FUNDS TO SUCH ACCOUNT
OF THE AGENT AS THE AGENT MAY DESIGNATE, AN AMOUNT SUCH THAT EACH SUCH LENDER
SHALL, UPON TRANSFER OF SUCH AMOUNT, HAVE AS OF THE SETTLEMENT DATE, ITS PRO
RATA SHARE OF THE ADVANCES, AGENT LOANS, AND AGENT ADVANCES.  SUCH AMOUNTS MADE
AVAILABLE TO THE AGENT UNDER CLAUSE (Z) OF THE IMMEDIATELY PRECEDING SENTENCE
SHALL BE APPLIED AGAINST THE AMOUNTS OF THE APPLICABLE AGENT LOAN OR AGENT
ADVANCE AND, TOGETHER WITH THE PORTION OF SUCH AGENT LOAN OR AGENT ADVANCE
REPRESENTING EACH LENDER’S PRO RATA SHARE THEREOF, SHALL CONSTITUTE ADVANCES OF
SUCH LENDERS.  IF ANY SUCH AMOUNT IS NOT MADE AVAILABLE TO THE AGENT BY ANY
LENDER ON THE SETTLEMENT DATE APPLICABLE THERETO TO THE EXTENT REQUIRED BY THE
TERMS HEREOF, THE AGENT SHALL BE ENTITLED TO RECOVER FOR ITS ACCOUNT SUCH AMOUNT
ON DEMAND FROM SUCH LENDER TOGETHER WITH INTEREST THEREON AT THE DEFAULTING
LENDERS RATE.

(II)                                  IN DETERMINING WHETHER A LENDER’S BALANCE
OF THE ADVANCES, AGENT LOANS, AND AGENT ADVANCES IS LESS THAN, EQUAL TO, OR
GREATER THAN SUCH LENDER’S PRO RATA SHARE OF THE ADVANCES, AGENT LOANS, AND
AGENT ADVANCES AS OF A SETTLEMENT DATE, AGENT SHALL, AS PART OF THE RELEVANT
SETTLEMENT, APPLY TO SUCH BALANCE THE PORTION OF PAYMENTS ACTUALLY RECEIVED BY
AGENT WITH RESPECT TO PRINCIPAL, INTEREST, FEES PAYABLE BY BORROWERS AND
ALLOCABLE TO THE LENDERS HEREUNDER, AND PROCEEDS OF COLLATERAL.  TO THE EXTENT
THAT A NET AMOUNT IS OWED TO ANY SUCH LENDER AFTER SUCH APPLICATION, SUCH NET
AMOUNT SHALL BE DISTRIBUTED BY AGENT TO THAT LENDER AS PART OF SUCH SETTLEMENT.

(III)                               BETWEEN SETTLEMENT DATES, THE AGENT, TO THE
EXTENT NO AGENT ADVANCES OR AGENT LOANS ARE OUTSTANDING, MAY PAY OVER TO LENDERS
ANY PAYMENTS RECEIVED BY THE AGENT, WHICH IN ACCORDANCE WITH THE TERMS OF THE
AGREEMENT WOULD BE APPLIED TO THE REDUCTION OF THE ADVANCES, FOR APPLICATION TO
LENDERS’ PRO RATA SHARE OF THE ADVANCES.  IF, AS OF ANY SETTLEMENT DATE,
COLLECTIONS RECEIVED SINCE THE THEN IMMEDIATELY PRECEDING SETTLEMENT DATE HAVE
BEEN APPLIED TO LENDERS’ PRO RATA SHARE OF THE ADVANCES OTHER THAN TO AGENT
LOANS OR AGENT ADVANCES, AS PROVIDED FOR IN THE PREVIOUS SENTENCE, LENDERS SHALL
PAY TO THE AGENT FOR THE ACCOUNTS OF THE LENDERS, AND AGENT SHALL PAY TO THE
LENDERS, TO BE APPLIED TO THE OUTSTANDING

27

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ADVANCES OF SUCH LENDERS, AN AMOUNT SUCH THAT EACH LENDER SHALL, UPON RECEIPT OF
SUCH AMOUNT, HAVE, AS OF SUCH SETTLEMENT DATE, ITS PRO RATA SHARE OF THE
ADVANCES.  DURING THE PERIOD BETWEEN SETTLEMENT DATES, THE AGENT WITH RESPECT TO
AGENT LOANS AND AGENT ADVANCES, AND EACH LENDER WITH RESPECT TO THE ADVANCES
OTHER THAN AGENT LOANS AND AGENT ADVANCES, SHALL BE ENTITLED TO INTEREST AT THE
APPLICABLE RATE OR RATES PAYABLE UNDER THIS AGREEMENT ON THE DAILY AMOUNT OF
FUNDS EMPLOYED BY THE AGENT OR THE LENDERS, AS APPLICABLE.

(K)                                  NOTATION.  THE AGENT SHALL RECORD ON ITS
BOOKS THE PRINCIPAL AMOUNT OF THE ADVANCES OWING TO EACH LENDER, INCLUDING THE
AGENT LOANS AND AGENT ADVANCES OWING TO THE AGENT, AND THE INTERESTS THEREIN OF
EACH LENDER, FROM TIME TO TIME.  IN ADDITION, EACH LENDER IS AUTHORIZED, AT SUCH
LENDER’S OPTION, TO NOTE THE DATE AND AMOUNT OF EACH PAYMENT OR PREPAYMENT OF
PRINCIPAL OF SUCH LENDER’S ADVANCES IN ITS BOOKS AND RECORDS, INCLUDING COMPUTER
RECORDS, SUCH BOOKS AND RECORDS CONSTITUTING REBUTTABLY PRESUMPTIVE EVIDENCE,
ABSENT MANIFEST ERROR, OF THE ACCURACY OF THE INFORMATION CONTAINED THEREIN.

(L)                                     LENDERS’ FAILURE TO PERFORM.  ALL
ADVANCES (OTHER THAN AGENT LOANS AND AGENT ADVANCES) SHALL BE MADE BY THE
LENDERS SIMULTANEOUSLY AND IN ACCORDANCE WITH THEIR PRO RATA SHARES.  IT IS
UNDERSTOOD THAT (I) NO LENDER SHALL BE RESPONSIBLE FOR ANY FAILURE BY ANY OTHER
LENDER TO PERFORM ITS OBLIGATION TO MAKE ANY ADVANCES HEREUNDER, NOR SHALL ANY
COMMITMENT OF ANY LENDER BE INCREASED OR DECREASED AS A RESULT OF ANY FAILURE BY
ANY OTHER LENDER TO PERFORM ITS OBLIGATION TO MAKE ANY ADVANCES HEREUNDER, AND
(II) NO FAILURE BY ANY LENDER TO PERFORM ITS OBLIGATION TO MAKE ANY ADVANCES
HEREUNDER SHALL EXCUSE ANY OTHER LENDER FROM ITS OBLIGATION TO MAKE ANY ADVANCES
HEREUNDER.

(M)                               OVERADVANCES.  IN ADDITION TO ANY AGENT
ADVANCES WHICH MAY BE MADE IN ACCORDANCE WITH SECTION 2.1(I), ABOVE, THE AGENT
MAY MAKE VOLUNTARY OVERADVANCES WITHOUT THE WRITTEN CONSENT OF THE REQUIRED
LENDERS FOR AMOUNTS CHARGED TO THE APPLICABLE LOAN ACCOUNT FOR INTEREST, FEES OR
LENDER GROUP EXPENSES PURSUANT TO SECTION 2.1(I)(I)(2)(C).  IF THE CONDITIONS
FOR BORROWING UNDER SECTION 3.2(D) CANNOT BE FULFILLED, THE AGENT MAY, BUT IS
NOT OBLIGATED TO, KNOWINGLY AND INTENTIONALLY CONTINUE TO MAKE ADVANCES (WITHOUT
LIMITING THE ABILITY OF THE AGENT TO MAKE AGENT LOANS) TO BORROWERS, SUCH
FAILURE OF CONDITION NOTWITHSTANDING, SO LONG AS, AT ANY TIME, (I) THE
OUTSTANDING REVOLVING FACILITY USAGE WOULD NOT EXCEED THE BORROWING BASE FOR
MORE THAN 60 CONSECUTIVE DAYS OR MORE THAN ONCE IN ANY 180 DAY PERIOD, AND THE
MAXIMUM OUTSTANDING OVERADVANCE AMOUNT SHALL NOT EXCEED $2,000,000, WITHOUT THE
CONSENT OF ALL OF THE LENDERS, AND (II) THE OUTSTANDING REVOLVING FACILITY USAGE
(EXCEPT FOR AND EXCLUDING AMOUNTS CHARGED TO THE APPLICABLE LOAN ACCOUNT FOR
INTEREST, FEES, OR LENDER GROUP EXPENSES) DOES NOT EXCEED THE MAXIMUM AMOUNT. 
THE FOREGOING PROVISIONS ARE FOR THE SOLE AND EXCLUSIVE BENEFIT OF THE AGENT AND
THE LENDERS AND ARE NOT INTENDED TO BENEFIT BORROWERS IN ANY WAY.  THE ADVANCES
THAT ARE MADE PURSUANT TO THIS SECTION 2.1(M) SHALL BE SUBJECT TO THE SAME TERMS
AND CONDITIONS AS ANY OTHER AGENT ADVANCE OR AGENT LOAN, AS APPLICABLE, EXCEPT
THAT THE RATE OF INTEREST APPLICABLE THERETO SHALL BE THE RATES SET FORTH IN
SECTION 2.7(C)(I) WITHOUT REGARD TO THE PRESENCE OR ABSENCE OF A DEFAULT OR
EVENT OF DEFAULT.

Each Lender shall be obligated to settle with Agent as provided in
Section 2.1(j) for the amount of such Lender’s Pro Rata Share of any
Overadvances made as permitted under this Section 2.1(m).

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(N)                                 EFFECT OF BANKRUPTCY.   IF A CASE IS
COMMENCED BY OR AGAINST ANY BORROWER UNDER THE BANKRUPTCY CODE, OR OTHER STATUTE
PROVIDING FOR DEBTOR RELIEF, THEN, WITHOUT THE APPROVAL OF REQUIRED LENDERS THE
LENDER GROUP SHALL NOT MAKE ADDITIONAL LOANS OR PROVIDE ADDITIONAL FINANCIAL
ACCOMMODATIONS UNDER THE LOAN DOCUMENTS TO SUCH BORROWER AS DEBTOR OR
DEBTOR-IN-POSSESSION, OR TO ANY TRUSTEE FOR SUCH BORROWER, NOR CONSENT TO THE
USE OF CASH COLLATERAL (PROVIDED THAT THE APPLICABLE LOAN ACCOUNT SHALL CONTINUE
TO BE CHARGED, TO THE FULLEST EXTENT PERMITTED BY LAW, FOR ACCRUING INTEREST,
FEES, AND LENDER GROUP EXPENSES).

2.2                               LETTERS OF CREDIT.

(A)                                  AGREEMENT TO CAUSE ISSUANCE; AMOUNTS;
OUTSIDE EXPIRATION DATE.  SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT,
AGENT AGREES TO ISSUE LETTERS OF CREDIT PURSUANT TO THIS AGREEMENT; PROVIDED,
HOWEVER, PARENT OR SERVICES COMPANY SHALL HAVE THE RIGHT TO CAUSE CANADIAN
LETTERS OF CREDIT TO BE ISSUED PURSUANT TO THIS AGREEMENT; PROVIDED FURTHER
THAT, SO LONG AS THE L/C DEMAND FACILITY IS IN EFFECT, NO WRITTEN NOTICE OF
TERMINATION HAS BEEN DELIVERED BY EITHER THE ADMINISTRATIVE BORROWER OR THE
AGENT UNDER THE L/C DEMAND FACILITY IN ACCORDANCE WITH THE TERMS THEREOF AND THE
BORROWERS ARE OTHERWISE ENTITLED TO THE ISSUANCE OF L/C DEMAND FACILITY LETTERS
OF CREDIT UNDER THE L/C DEMAND FACILITY, NO COMMERCIAL LETTERS OF CREDIT SHALL
BE ISSUED UNDER THIS AGREEMENT UNLESS, AT THE TIME ANY SUCH COMMERCIAL LETTER OF
CREDIT IS REQUESTED HEREUNDER, THE MAXIMUM AMOUNT AVAILABLE TO BE DRAWN UNDER
SUCH COMMERCIAL LETTER OF CREDIT EXCEEDS THE MAXIMUM AMOUNT AVAILABLE TO BE
ISSUED UNDER THE L/C DEMAND FACILITY (IN WHICH CASE, SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH HEREIN, THE REQUESTED COMMERCIAL LETTER OF CREDIT SHALL BE
ISSUED UNDER THIS AGREEMENT).  AGENT SHALL HAVE NO OBLIGATION TO ISSUE A LETTER
OF CREDIT IF ANY OF THE FOLLOWING WOULD RESULT:

(I)                                     THE AGGREGATE AMOUNT OF:

(A)                              ALL UNDRAWN AND UNREIMBURSED LETTERS OF CREDIT
WOULD EXCEED THE L/C SUBLIMIT; OR

(B)                                ALL UNDRAWN AND UNREIMBURSED CANADIAN LETTERS
OF CREDIT WOULD EXCEED $10,000,000; OR

(II)                                  100% OF THE AGGREGATE AMOUNT OF ALL
UNDRAWN AND UNREIMBURSED LETTERS OF CREDIT WOULD EXCEED THE BORROWING BASE LESS
THE AMOUNT OF OUTSTANDING REVOLVING ADVANCES (INCLUDING ANY AGENT ADVANCES AND
AGENT LOANS); OR

(III)                               THE AGGREGATE AMOUNT OF ALL UNDRAWN OR
UNREIMBURSED LETTERS OF CREDIT WOULD EXCEED THE MAXIMUM AMOUNT (WITHOUT GIVING
EFFECT TO THE SEASONAL OVERADVANCE AMOUNT) LESS THE AMOUNT OF OUTSTANDING
REVOLVING ADVANCES (INCLUDING ANY AGENT ADVANCES AND AGENT LOANS).

Borrowers expressly understand and agree that Agent shall have no obligation to
arrange for the issuance by issuing banks of the letters of credit that are to
be the subject of L/C Guarantees.  Borrowers and the Lender Group acknowledge
and agree that certain of the letters of credit that are to be the subject of
L/C Guarantees may be issued and outstanding on the Closing Date.  Each Letter
of Credit shall have an expiry date no later than the date on which this
Agreement is

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scheduled to terminate under Section 3.4 (without regard to any potential
renewal term) and all such Letters of Credit shall be in form and substance
acceptable to Agent in its sole discretion.  If Agent notifies Parent on or
before 1:00 p.m. Boston time on any Business Day that the Lender Group is
obligated to advance funds under a Letter of Credit, Borrowers shall reimburse
such amount to Agent on the same Business Day.  If Agent notifies Parent after
1:00 p.m. Boston time on any Business Day that the Lender Group is obligated to
advance funds under a Letter of Credit, Borrowers shall reimburse such amount to
Agent by 10:00 a.m. Boston time on the then next Business Day.  In the absence
of such reimbursement, the amount so advanced immediately and automatically
shall be deemed to be an Advance hereunder and, thereafter, shall bear interest
at the rate then applicable to Advances under Section 2.7.

(B)                                 INDEMNIFICATION.  EACH BORROWER HEREBY
AGREES TO INDEMNIFY, SAVE, DEFEND, AND HOLD THE LENDER GROUP HARMLESS FROM ANY
LOSS, COST, EXPENSE, OR LIABILITY, INCLUDING PAYMENTS MADE BY THE LENDER GROUP,
EXPENSES, AND REASONABLE ATTORNEYS FEES INCURRED BY THE LENDER GROUP ARISING OUT
OF OR IN CONNECTION WITH ANY LETTER OF CREDIT.  EACH BORROWER AGREES TO BE BOUND
BY THE ISSUING BANK’S REGULATIONS AND INTERPRETATIONS OF ANY LETTERS OF CREDIT
GUARANTIED BY THE LENDER GROUP AND OPENED TO OR FOR PARENT’S OR SERVICE
COMPANY’S ACCOUNT OR BY AGENT’S INTERPRETATIONS OF ANY LETTER OF CREDIT ISSUED
BY AGENT TO OR FOR ANY BORROWER’S ACCOUNT, EVEN THOUGH THIS INTERPRETATION MAY
BE DIFFERENT FROM SUCH BORROWER’S OWN, AND SUCH BORROWER UNDERSTANDS AND AGREES
THAT THE LENDER GROUP SHALL NOT BE LIABLE FOR ANY ERROR, NEGLIGENCE, OR MISTAKE,
WHETHER OF OMISSION OR COMMISSION, IN FOLLOWING SUCH BORROWER’S INSTRUCTIONS OR
THOSE CONTAINED IN THE LETTER OF CREDIT OR ANY MODIFICATIONS, AMENDMENTS, OR
SUPPLEMENTS THERETO.  EACH BORROWER UNDERSTANDS THAT THE L/C GUARANTEES MAY
REQUIRE THE LENDER GROUP TO INDEMNIFY THE ISSUING BANK FOR CERTAIN COSTS OR
LIABILITIES ARISING OUT OF CLAIMS BY BORROWERS AGAINST SUCH ISSUING BANK.  EACH
BORROWER HEREBY AGREES TO INDEMNIFY, SAVE, DEFEND, AND HOLD THE LENDER GROUP
HARMLESS WITH RESPECT TO ANY LOSS, COST, EXPENSE (INCLUDING REASONABLE ATTORNEYS
FEES), OR LIABILITY INCURRED BY THE LENDER GROUP UNDER ANY L/C GUARANTY AS A
RESULT OF THE LENDER GROUP’S INDEMNIFICATION OF ANY SUCH ISSUING BANK.

(C)                                  SUPPORTING MATERIALS.  BORROWERS HEREBY
AUTHORIZE AND DIRECT ANY BANK THAT ISSUES A LETTER OF CREDIT GUARANTEED BY AN
L/C GUARANTY TO DELIVER TO AGENT ALL INSTRUMENTS, DOCUMENTS, AND OTHER WRITINGS
AND PROPERTY RECEIVED BY THE ISSUING BANK PURSUANT TO SUCH LETTER OF CREDIT, AND
TO ACCEPT AND RELY UPON AGENT’S INSTRUCTIONS AND AGREEMENTS WITH RESPECT TO ALL
MATTERS ARISING IN CONNECTION WITH SUCH LETTER OF CREDIT AND THE RELATED
APPLICATION.  A BORROWER MAY OR MAY NOT BE THE “APPLICANT” OR “ACCOUNT PARTY”
WITH RESPECT TO SUCH LETTER OF CREDIT.

(D)                                 COSTS OF LETTERS OF CREDIT. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, BORROWERS SHALL NOT BE
RESPONSIBLE FOR ANY AND ALL CHARGES, COMMISSIONS, FEES (OTHER THAN THE LETTER OF
CREDIT FEE SET FORTH IN SECTION 2.7(B)), AND COSTS RELATING TO ANY L/C OR TO THE
LETTERS OF CREDIT GUARANTEED BY AN L/C GUARANTY.

(E)                                  INDEMNIFICATION.  IMMEDIATELY UPON THE
TERMINATION OF THIS AGREEMENT, BORROWERS AGREE TO EITHER (I) PROVIDE CASH
COLLATERAL TO BE HELD BY AGENT IN AN AMOUNT EQUAL TO 105% OF THE MAXIMUM AMOUNT
OF THE LENDER GROUP’S OBLIGATIONS UNDER OUTSTANDING LETTERS OF CREDIT, OR (II)
CAUSE TO BE DELIVERED TO AGENT RELEASES OF ALL OF THE LENDER GROUP’S OBLIGATIONS
UNDER OUTSTANDING LETTERS OF CREDIT.  AT AGENT’S DISCRETION, ANY PROCEEDS OF
COLLATERAL RECEIVED

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BY AGENT AFTER THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT
MAY BE HELD AS THE CASH COLLATERAL REQUIRED BY THIS SECTION 2.2(E).

(F)                                    INCREASED COSTS.  IF BY REASON OF (I) ANY
CHANGE IN ANY APPLICABLE LAW, TREATY, RULE, OR REGULATION OR ANY CHANGE IN THE
INTERPRETATION OR APPLICATION BY ANY GOVERNMENTAL AUTHORITY OF ANY SUCH
APPLICABLE LAW, TREATY, RULE, OR REGULATION, OR (II) COMPLIANCE BY THE ISSUING
BANK OR THE LENDER GROUP WITH ANY DIRECTION, REQUEST, OR REQUIREMENT
(IRRESPECTIVE OF WHETHER HAVING THE FORCE OF LAW) OF ANY GOVERNMENTAL AUTHORITY
OR MONETARY AUTHORITY INCLUDING, WITHOUT LIMITATION, REGULATION D OF THE BOARD
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM AS FROM TIME TO TIME IN EFFECT (AND
ANY SUCCESSOR THERETO):

(I)                                     ANY RESERVE, DEPOSIT, OR SIMILAR
REQUIREMENT IS OR SHALL BE IMPOSED OR MODIFIED IN RESPECT OF ANY LETTERS OF
CREDIT ISSUED HEREUNDER, OR

(II)                                  THERE SHALL BE IMPOSED ON THE ISSUING BANK
OR THE LENDER GROUP ANY OTHER CONDITION REGARDING ANY LETTER OF CREDIT, OR
LETTER OF CREDIT, AS APPLICABLE, ISSUED PURSUANT HERETO;

and the result of the foregoing is to increase, directly or indirectly, the cost
to the issuing bank or the Lender Group of issuing, making, guaranteeing, or
maintaining any letter of credit, or Letter of Credit, as applicable, or to
reduce the amount receivable in respect thereof by such issuing bank or the
Lender Group, then, and in any such case, Agent may, at any time within a
reasonable period after the additional cost is incurred or the amount received
is reduced, notify Administrative Borrower, and Borrowers shall pay on demand
such amounts as the issuing bank or Agent may specify to be necessary to
compensate the issuing bank or Agent for such additional cost or reduced
receipt, together with interest on such amount from the date of such demand
until payment in full thereof at the rate set forth in Section 2.7(a) or (c)(i),
as applicable.  The determination by the issuing bank or Agent, as the case may
be, of any amount due pursuant to this Section 2.2(f), as set forth in a
certificate setting forth the calculation thereof in reasonable detail, shall,
in the absence of manifest or demonstrable error, be final and conclusive and
binding on all of the parties hereto.

(G)                                 PARTICIPATIONS.

(I)                                     PURCHASE OF PARTICIPATIONS.  IMMEDIATELY
UPON ISSUANCE OF ANY LETTER OF CREDIT IN ACCORDANCE WITH THIS SECTION 2.2, EACH
LENDER SHALL BE DEEMED TO HAVE IRREVOCABLY AND UNCONDITIONALLY PURCHASED AND
RECEIVED WITHOUT RECOURSE OR WARRANTY, AN UNDIVIDED INTEREST AND PARTICIPATION
IN THE CREDIT SUPPORT OR ENHANCEMENT PROVIDED THROUGH THE AGENT TO SUCH ISSUER
IN CONNECTION WITH THE ISSUANCE OF SUCH LETTER OF CREDIT, EQUAL TO SUCH LENDER’S
PRO RATA SHARE OF THE FACE AMOUNT OF SUCH LETTER OF CREDIT (INCLUDING, WITHOUT
LIMITATION, ALL OBLIGATIONS OF BORROWERS WITH RESPECT THERETO, AND ANY SECURITY
THEREFOR OR GUARANTY PERTAINING THERETO).

(II)                                  DOCUMENTATION.  UPON THE REQUEST OF ANY
LENDER, THE AGENT SHALL FURNISH TO SUCH LENDER COPIES OF ANY LETTER OF CREDIT,
REIMBURSEMENT AGREEMENTS EXECUTED IN CONNECTION THEREWITH, APPLICATION FOR ANY
LETTER OF CREDIT AND CREDIT SUPPORT OR ENHANCEMENT

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PROVIDED THROUGH THE AGENT IN CONNECTION WITH THE ISSUANCE OF ANY LETTER OF
CREDIT, AND SUCH OTHER DOCUMENTATION AS MAY REASONABLY BY REQUESTED BY SUCH
LENDER.

(III)                               OBLIGATIONS IRREVOCABLE.  THE OBLIGATIONS OF
EACH LENDER TO MAKE PAYMENTS TO THE AGENT WITH RESPECT TO ANY LETTER OF CREDIT
OR WITH RESPECT TO ANY CREDIT SUPPORT OR ENHANCEMENT PROVIDED THROUGH THE AGENT
WITH RESPECT TO A LETTER OF CREDIT, AND THE OBLIGATIONS OF BORROWERS TO MAKE
PAYMENTS TO THE AGENT, FOR THE ACCOUNT OF THE LENDERS, SHALL BE IRREVOCABLE, NOT
SUBJECT TO ANY QUALIFICATION OR EXCEPTION WHATSOEVER, INCLUDING, WITHOUT
LIMITATION, ANY OF THE FOLLOWING CIRCUMSTANCES:

(A)                              ANY LACK OF VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;

(B)                                THE EXISTENCE OF ANY CLAIM, SETOFF, DEFENSE,
OR OTHER RIGHT WHICH ANY BORROWER MAY HAVE AT ANY TIME AGAINST A BENEFICIARY
NAMED IN A LETTER OF CREDIT OR ANY TRANSFEREE OF ANY LETTER OF CREDIT (OR ANY
PERSON FOR WHOM ANY SUCH TRANSFEREE MAY BE ACTING), ANY LENDER, THE AGENT, THE
ISSUER OF SUCH LETTER OF CREDIT, OR ANY OTHER PERSON, WHETHER IN CONNECTION WITH
THIS AGREEMENT, ANY LETTER OF CREDIT, THE TRANSACTIONS CONTEMPLATED HEREIN OR
ANY UNRELATED TRANSACTIONS (INCLUDING ANY UNDERLYING TRANSACTIONS BETWEEN SUCH
BORROWER OR ANY OTHER PERSON AND THE BENEFICIARY NAMED IN ANY LETTER OF CREDIT);

(C)                                ANY DRAFT, CERTIFICATE, OR ANY OTHER DOCUMENT
PRESENTED UNDER THE LETTER OF CREDIT PROVING TO BE FORGED, FRAUDULENT, INVALID,
OR INSUFFICIENT IN ANY RESPECT OR ANY STATEMENT THEREIN BEING UNTRUE OR
INACCURATE IN ANY RESPECT;

(D)                               THE SURRENDER OR IMPAIRMENT OF ANY SECURITY
FOR THE PERFORMANCE OR OBSERVANCE OF ANY OF THE TERMS OF ANY OF THE LOAN
DOCUMENTS; OR

(E)                                 THE OCCURRENCE OF ANY DEFAULT OR EVENT OF
DEFAULT.

2.3                               INTENTIONALLY OMITTED.

2.4                               INTENTIONALLY OMITTED.

2.5                               PAYMENTS.

(A)                                  PAYMENTS BY BORROWERS.

(I)                                     ALL PAYMENTS TO BE MADE BY BORROWERS
SHALL BE MADE WITHOUT SET-OFF, RECOUPMENT, DEDUCTION, OR COUNTERCLAIM, EXCEPT AS
OTHERWISE REQUIRED BY LAW.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, ALL
PAYMENTS BY BORROWERS SHALL BE MADE TO AGENT FOR THE ACCOUNT OF THE LENDERS OR
AGENT, AS THE CASE MAY BE, AT AGENT’S ADDRESS SET FORTH IN SECTION 12, AND SHALL
BE MADE IN IMMEDIATELY AVAILABLE FUNDS, NO LATER THAN 2:00 P.M. (BOSTON TIME) ON
THE DATE SPECIFIED HEREIN.  ANY PAYMENT RECEIVED BY AGENT LATER THAN 2:00 P.M.
(BOSTON TIME), AT THE OPTION OF AGENT, SHALL BE DEEMED TO HAVE BEEN RECEIVED ON
THE FOLLOWING BUSINESS DAY AND ANY APPLICABLE INTEREST OR FEE SHALL CONTINUE TO
ACCRUE UNTIL SUCH FOLLOWING BUSINESS DAY.

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(II)                                  WHENEVER ANY PAYMENT IS DUE ON A DAY OTHER
THAN A BUSINESS DAY, SUCH PAYMENT SHALL BE MADE ON THE FOLLOWING BUSINESS DAY,
AND SUCH EXTENSION OF TIME SHALL IN SUCH CASE BE INCLUDED IN THE COMPUTATION OF
INTEREST OR FEES, AS THE CASE MAY BE.

(III)                               UNLESS AGENT RECEIVES NOTICE FROM BORROWERS
PRIOR TO THE DATE ON WHICH ANY PAYMENT IS DUE TO THE LENDERS THAT BORROWERS WILL
NOT MAKE SUCH PAYMENT IN FULL AS AND WHEN REQUIRED, AGENT MAY ASSUME THAT
BORROWERS HAVE MADE SUCH PAYMENT IN FULL TO AGENT ON SUCH DATE IN IMMEDIATELY
AVAILABLE FUNDS AND AGENT MAY (BUT SHALL NOT BE SO REQUIRED), IN RELIANCE UPON
SUCH ASSUMPTION, DISTRIBUTE TO EACH LENDER ON SUCH DUE DATE AN AMOUNT EQUAL TO
THE AMOUNT THEN DUE SUCH LENDER.  IF AND TO THE EXTENT BORROWERS HAVE NOT MADE
SUCH PAYMENT IN FULL TO AGENT, EACH LENDER SHALL REPAY TO AGENT ON DEMAND SUCH
AMOUNT DISTRIBUTED TO SUCH LENDER, TOGETHER WITH INTEREST THEREON AT THE
REFERENCE RATE FOR EACH DAY FROM THE DATE SUCH AMOUNT IS DISTRIBUTED TO SUCH
LENDER UNTIL THE DATE REPAID.

(B)                                 APPORTIONMENT AND APPLICATION.

(I)                                     EXCEPT AS OTHERWISE PROVIDED WITH
RESPECT TO DEFAULTING LENDERS AND EXCEPT AS OTHERWISE PROVIDED IN THE LOAN
DOCUMENTS (INCLUDING LETTER AGREEMENTS BETWEEN AGENT AND INDIVIDUAL LENDERS),
AGGREGATE PRINCIPAL AND INTEREST PAYMENTS SHALL BE APPORTIONED RATABLY AMONG THE
LENDERS (ACCORDING TO THE UNPAID PRINCIPAL BALANCE OF THE OBLIGATIONS TO WHICH
SUCH PAYMENTS RELATE HELD BY EACH LENDER) AND PAYMENTS OF FEES AND EXPENSES
(OTHER THAN FEES OR EXPENSES THAT ARE FOR AGENT’S SEPARATE ACCOUNT, AFTER GIVING
EFFECT TO ANY LETTER AGREEMENTS BETWEEN AGENT AND INDIVIDUAL LENDERS) SHALL BE
APPORTIONED RATABLY AMONG THE LENDERS HAVING A PRO RATA SHARE OF THE TYPE OF
COMMITMENT OR OBLIGATION TO WHICH A PARTICULAR FEE RELATES.  ALL PAYMENTS SHALL
BE REMITTED TO AGENT AND ALL SUCH PAYMENTS, AND ALL PROCEEDS OF COLLATERAL
RECEIVED BY AGENT, SHALL BE APPLIED AS FOLLOWS:

A.                                   first, to pay any Lender Group Expenses
then due to Agent under the Loan Documents, until paid in full,

B.                                     second, to pay any Lender Group Expenses
then due to the Lenders under the Loan Documents, on a ratable basis, until paid
in full,

C.                                     third, to pay any fees then due to Agent
(for its separate accounts, after giving effect to any letter agreements between
Agent and the individual Lenders) under the Loan Documents until paid in full,

D.                                    fourth, to pay any fees then due to any or
all of the Lenders (after giving effect to any letter agreements between Agent
and individual Lenders) under the Loan Documents, on a ratable basis, until paid
in full,

E.                                      fifth, to pay interest due in respect of
all Agent Advances, until paid in full,

F.                                      sixth, ratably to pay interest due in
respect of the Advances (other than Agent Advances) until paid in full,

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G.                                     seventh, to pay the principal of all
Agent Advances until paid in full,

H.                                    eighth, so long as no Event of Default has
occurred and is continuing, to pay (i) first, the entire principal of all
Seasonal Advances (or, if less, the portion of the Seasonal Advances that is
then required to be repaid hereunder), and (ii) second, the principal of all
Revolving Advances until paid in full,

I.                                         ninth, so long as no Event of Default
has occurred and is continuing, and at Agent’s election (which election Agent
agrees will not be made if an Overadvance would be created thereby), to pay
amounts then due and owing by Administrative Borrower or its Subsidiaries in
respect of Bank Products, until paid in full,

J.                                        tenth, if an Event of Default has
occurred and is continuing, first, to pay the principal of all Revolving
Advances until paid in full, second, to the Agent, to be held by the Agent, for
the ratable benefit of those Lenders having a Commitment, as cash collateral in
an amount up to 105% of the then extant Letters of Credit until paid in full,
third, to pay the principal of all Seasonal Advances under the Seasonal
Overadvance Facility, and fourth, to the Agent, to be held by the Agent, for the
benefit of the Bank Product Providers, as cash collateral in an amount up to the
amount of the Bank Product Reserve established prior to the occurrence of, and
not in contemplation of, the subject Event of Default until Administrative
Borrower’s and its Subsidiaries’ obligations in respect of the then outstanding
Bank Products have been paid in full or the cash collateral amount has been
exhausted,

K.                                    eleventh, if an Event of Default has
occurred and is continuing, to pay any other Obligations (including the
provision of amounts to Agent, to be held by Agent, for the benefit of the Bank
Product Providers, as cash collateral in an amount up to the amount determined
by Agent in its discretion as the amount necessary to secure Administrative
Borrower’s and its Subsidiaries’ obligations in respect of the then outstanding
Bank Products), and

L.                                      twelfth, to Borrowers (to be wired to
the Designated Account) or such other Person entitled thereto under applicable
law.

(II)                                  AGENT PROMPTLY SHALL DISTRIBUTE TO EACH
LENDER, PURSUANT TO THE APPLICABLE WIRE INSTRUCTIONS RECEIVED FROM EACH LENDER
IN WRITING, SUCH FUNDS AS IT MAY BE ENTITLED TO RECEIVE, SUBJECT TO A SETTLEMENT
DELAY AS PROVIDED IN SECTION 2.1(J).

(III)                               IN EACH INSTANCE, SO LONG AS NO EVENT OF
DEFAULT HAS OCCURRED AND IS CONTINUING, THIS SECTION 2.5(B) SHALL NOT BE DEEMED
TO APPLY TO ANY PAYMENT BY BORROWERS SPECIFIED BY BORROWERS TO BE FOR THE
PAYMENT OF SPECIFIC OBLIGATIONS THEN DUE AND PAYABLE (OR PREPAYABLE) UNDER ANY
PROVISION OF THIS AGREEMENT.

(IV)                              FOR PURPOSES OF THE FOREGOING, “PAID IN FULL”
MEANS PAYMENT OF ALL AMOUNTS OWING UNDER THE LOAN DOCUMENTS ACCORDING TO THE
TERMS THEREOF, INCLUDING LOAN FEES,

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SERVICE FEES, PROFESSIONAL FEES, INTEREST (AND SPECIFICALLY INCLUDING INTEREST
ACCRUED AFTER THE COMMENCEMENT OF ANY INSOLVENCY PROCEEDING), DEFAULT INTEREST,
INTEREST ON INTEREST, AND EXPENSE REIMBURSEMENTS, WHETHER OR NOT ANY OF THE
FOREGOING WOULD BE OR IS ALLOWED OR DISALLOWED IN WHOLE OR IN PART IN ANY
INSOLVENCY PROCEEDING.

(V)                                 IN THE EVENT OF A DIRECT CONFLICT BETWEEN
THE PRIORITY PROVISIONS OF THIS SECTION 2.5 AND OTHER PROVISIONS CONTAINED IN
ANY OTHER LOAN DOCUMENT, IT IS THE INTENTION OF THE PARTIES HERETO THAT SUCH
PRIORITY PROVISIONS IN SUCH DOCUMENTS SHALL BE READ TOGETHER AND CONSTRUED, TO
THE FULLEST EXTENT POSSIBLE, TO BE IN CONCERT WITH EACH OTHER.  IN THE EVENT OF
ANY ACTUAL, IRRECONCILABLE CONFLICT THAT CANNOT BE RESOLVED AS AFORESAID, THE
TERMS AND PROVISIONS OF THIS SECTION 2.5 SHALL CONTROL AND GOVERN.

2.6                               Overadvances.  If, at any time or for any
reason, the amount of Obligations owed by Borrowers to the Lender Group pursuant
to Sections 2.1 and 2.2 is greater than either the Dollar or percentage
limitations set forth in Sections 2.1 and 2.2 (an “Overadvance”), Borrowers
immediately shall pay to Agent, in cash, the amount of such excess to be used by
Agent to reduce the Obligations pursuant to the terms of Section 2.5(b).

2.7                               INTEREST AND LETTER OF CREDIT FEES:  RATES,
PAYMENTS, AND CALCULATIONS.

(A)                                  INTEREST RATE.  EXCEPT AS PROVIDED IN
SECTION 2.7(C) OR IN SECTION 2.7(D) BELOW, ALL OBLIGATIONS SHALL BEAR INTEREST
ON THE DAILY BALANCE AS FOLLOWS:

(I)                                     EACH LIBOR RATE LOAN SHALL BEAR INTEREST
AT A PER ANNUM RATE EQUAL TO THE ADJUSTED LIBOR RATE PLUS THE LIBOR RATE MARGIN;
AND

(II)                                  ALL OTHER OBLIGATIONS (EXCEPT FOR UNDRAWN
LETTERS OF CREDIT) SHALL BEAR INTEREST AT A PER ANNUM RATE EQUAL TO THE
REFERENCE RATE.

(B)                                 LETTER OF CREDIT FEE.  BORROWERS SHALL PAY
AGENT, FOR THE BENEFIT OF THE LENDER GROUP, A FEE EQUAL TO 0.75% PER ANNUM TIMES
THE AGGREGATE UNDRAWN AMOUNT OF ALL LETTERS OF CREDIT OUTSTANDING AS OF THE END
OF THE DAY.

(C)                                  DEFAULT RATE.  UPON THE OCCURRENCE AND
DURING THE CONTINUATION OF AN EVENT OF DEFAULT, (I) ALL OBLIGATIONS (EXCEPT FOR
UNDRAWN LETTERS OF CREDIT) SHALL BEAR INTEREST ON THE DAILY BALANCE AT A PER
ANNUM RATE EQUAL TO THE RATE IN EFFECT FROM TIME TO TIME PLUS THREE PERCENT
(3.00%), AND (II) THE LETTER OF CREDIT FEE PROVIDED IN SECTION 2.7(B) SHALL BE
INCREASED BY THREE PERCENT (3.00%) PER ANNUM; PROVIDED, HOWEVER, THE FOREGOING
ADJUSTMENTS ARE SUBJECT TO WAIVER BY THE REQUIRED LENDERS.

(D)                                 INTEREST RATE; LETTER OF CREDIT FEE DURING
SEASONAL OVERADVANCE PERIOD.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN, AT ALL TIMES DURING WHICH SEASONAL ADVANCES ARE OUTSTANDING UNDER THE
SEASONAL OVERADVANCE FACILITY, (I) ALL LIBOR RATE LOANS SHALL BEAR INTEREST ON
THE DAILY BALANCE AT A PER ANNUM RATE EQUAL TO (A) THE ADJUSTED LIBOR RATE, PLUS
(B) THE LIBOR RATE MARGIN IN EFFECT FROM TIME TO TIME, PLUS (C) ONE-QUARTER OF
ONE PERCENT (.25%); (II) ALL REFERENCE RATE LOANS SHALL BEAR INTEREST ON THE
DAILY BALANCE AT A PER ANNUM RATE EQUAL TO (A) THE REFERENCE RATE, PLUS (B)
ONE-QUARTER OF ONE PERCENT (.25%); AND (III)

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THE LETTER OF CREDIT FEE PROVIDED IN SECTION 2.7(B) SHALL BE INCREASED BY
ONE-QUARTER OF ONE PERCENT (0.25%) PER ANNUM.

(E)                                  PAYMENTS.  INTEREST IN RESPECT OF REFERENCE
RATE LOANS AND LETTER OF CREDIT FEES PAYABLE HEREUNDER SHALL BE DUE AND PAYABLE,
IN ARREARS, ON THE FIRST DAY OF EACH MONTH DURING THE TERM HEREOF.  INTEREST IN
RESPECT OF EACH LIBOR RATE LOAN SHALL BE DUE AND PAYABLE, IN ARREARS, ON (I) THE
LAST DAY OF THE APPLICABLE INTEREST PERIOD, AND (II) THE FIRST DAY OF EACH MONTH
OCCURRING DURING THE TERM THEREOF.  EACH BORROWER HEREBY AUTHORIZES THE AGENT,
AT ITS OPTION, WITHOUT PRIOR NOTICE TO SUCH BORROWER, TO CHARGE SUCH INTEREST
AND LETTER OF CREDIT FEES, THE FEES AND CHARGES PROVIDED FOR IN SECTION 2.12 (AS
AND WHEN ACCRUED OR INCURRED), ALL AMOUNTS DUE UNDER THE L/C DEMAND FACILITY,
AND ALL INSTALLMENTS OR OTHER PAYMENTS DUE UNDER ANY LOAN DOCUMENT (INCLUDING
THE AMOUNTS DUE AND PAYABLE TO THE BANK PRODUCT PROVIDERS IN RESPECT TO BANK
PRODUCTS UP TO THE AMOUNT OF THE BANK PRODUCT RESERVE) TO ADMINISTRATIVE
BORROWER’S LOAN ACCOUNT, WHICH AMOUNTS THEREAFTER SHALL ACCRUE INTEREST AT THE
RATE THEN APPLICABLE TO ADVANCES HEREUNDER.  ANY INTEREST NOT PAID WHEN DUE
SHALL BE COMPOUNDED AND SHALL THEREAFTER ACCRUE INTEREST AT THE RATE THEN
APPLICABLE TO ADVANCES HEREUNDER.

(F)                                    COMPUTATION.  IN THE EVENT THE REFERENCE
RATE IS CHANGED FROM TIME TO TIME HEREAFTER, THE APPLICABLE RATE OF INTEREST
HEREUNDER AUTOMATICALLY AND IMMEDIATELY SHALL BE INCREASED OR DECREASED BY AN
AMOUNT EQUAL TO SUCH CHANGE IN THE REFERENCE RATE.  ALL INTEREST AND FEES
CHARGEABLE UNDER THE LOAN DOCUMENTS SHALL BE COMPUTED ON THE BASIS OF A 360 DAY
YEAR FOR THE ACTUAL NUMBER OF DAYS ELAPSED.

(G)                                 INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL
RATE.  IN NO EVENT SHALL THE INTEREST RATE OR RATES PAYABLE UNDER THIS
AGREEMENT, PLUS ANY OTHER AMOUNTS PAID IN CONNECTION HEREWITH, EXCEED THE
HIGHEST RATE PERMISSIBLE UNDER ANY LAW THAT A COURT OF COMPETENT JURISDICTION
SHALL, IN A FINAL DETERMINATION, DEEM APPLICABLE.  BORROWERS AND THE LENDER
GROUP, IN EXECUTING AND DELIVERING THIS AGREEMENT, INTEND LEGALLY TO AGREE UPON
THE RATE OR RATES OF INTEREST AND MANNER OF PAYMENT STATED WITHIN IT; PROVIDED,
HOWEVER, THAT, ANYTHING CONTAINED HEREIN TO THE CONTRARY NOTWITHSTANDING, IF
SAID RATE OR RATES OF INTEREST OR MANNER OF PAYMENT EXCEEDS THE MAXIMUM
ALLOWABLE UNDER APPLICABLE LAW, THEN, IPSO FACTO AS OF THE DATE OF THIS
AGREEMENT, BORROWERS ARE AND SHALL BE LIABLE ONLY FOR THE PAYMENT OF SUCH
MAXIMUM AS ALLOWED BY LAW, AND PAYMENT RECEIVED FROM BORROWERS IN EXCESS OF SUCH
LEGAL MAXIMUM, WHENEVER RECEIVED, SHALL BE APPLIED TO REDUCE THE PRINCIPAL
BALANCE OF THE OBLIGATIONS TO THE EXTENT OF SUCH EXCESS.

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2.8                               COLLECTION OF ACCOUNTS.  BORROWERS SHALL AT
ALL TIMES MAINTAIN LOCKBOXES (THE “LOCKBOXES”) AND, IMMEDIATELY AFTER THE
CLOSING DATE, SHALL INSTRUCT ALL ACCOUNT DEBTORS WITH RESPECT TO THE ACCOUNTS,
GENERAL INTANGIBLES, AND NEGOTIABLE COLLATERAL OF BORROWERS TO REMIT ALL
COLLECTIONS IN RESPECT THEREOF TO SUCH LOCKBOXES.  BORROWERS, AGENT, AND THE
LOCKBOX BANKS SHALL ENTER INTO THE LOCKBOX AGREEMENTS, WHICH AMONG OTHER THINGS
SHALL PROVIDE FOR THE OPENING OF A LOCKBOX ACCOUNT FOR THE DEPOSIT OF
COLLECTIONS AT A LOCKBOX BANK.  BORROWERS AGREE THAT ALL COLLECTIONS AND OTHER
AMOUNTS RECEIVED BY BORROWERS FROM ANY ACCOUNT DEBTOR OR ANY OTHER SOURCE
IMMEDIATELY UPON RECEIPT SHALL BE DEPOSITED INTO A LOCKBOX ACCOUNT.  NO LOCKBOX
AGREEMENT OR ARRANGEMENT CONTEMPLATED THEREBY SHALL BE MODIFIED BY BORROWERS
WITHOUT THE PRIOR WRITTEN CONSENT OF AGENT.  UPON THE TERMS AND SUBJECT TO THE
CONDITIONS SET FORTH IN THE LOCKBOX AGREEMENTS, ALL AMOUNTS RECEIVED IN EACH
LOCKBOX ACCOUNT SHALL BE WIRED EACH BUSINESS DAY INTO AN ACCOUNT (THE “AGENT’S
ACCOUNT”) MAINTAINED BY AGENT AT A DEPOSITARY SELECTED BY AGENT (EXCEPT AS
PROVIDED IN THE LAST SENTENCE OF SECTION 2.9).

2.9                               CREDITING PAYMENTS; APPLICATION OF
COLLECTIONS.  THE RECEIPT OF ANY COLLECTIONS BY AGENT (WHETHER FROM TRANSFERS TO
AGENT BY THE LOCKBOX BANKS PURSUANT TO THE LOCKBOX AGREEMENTS OR OTHERWISE)
IMMEDIATELY SHALL BE APPLIED PROVISIONALLY TO REDUCE THE OBLIGATIONS OUTSTANDING
UNDER SECTION 2.1, BUT SHALL NOT BE CONSIDERED A PAYMENT ON ACCOUNT UNLESS SUCH
COLLECTION ITEM IS A WIRE TRANSFER OF IMMEDIATELY AVAILABLE FEDERAL FUNDS AND IS
MADE TO THE AGENT’S ACCOUNT OR UNLESS AND UNTIL SUCH COLLECTION ITEM IS HONORED
WHEN PRESENTED FOR PAYMENT.  SHOULD ANY COLLECTION ITEM NOT BE HONORED WHEN
PRESENTED FOR PAYMENT, THEN BORROWERS SHALL BE DEEMED NOT TO HAVE MADE SUCH
PAYMENT, AND INTEREST SHALL BE RECALCULATED ACCORDINGLY.  ANYTHING TO THE
CONTRARY CONTAINED HEREIN NOTWITHSTANDING, ANY COLLECTION ITEM SHALL BE DEEMED
RECEIVED BY AGENT ONLY IF IT IS RECEIVED INTO THE AGENT’S ACCOUNT ON A BUSINESS
DAY ON OR BEFORE 11:00 A.M. BOSTON TIME.  IF ANY COLLECTION ITEM IS RECEIVED
INTO THE AGENT’S ACCOUNT ON A NON-BUSINESS DAY OR AFTER 11:00 A.M. BOSTON TIME
ON A BUSINESS DAY, IT SHALL BE DEEMED TO HAVE BEEN RECEIVED BY AGENT AS OF THE
OPENING OF BUSINESS ON THE IMMEDIATELY FOLLOWING BUSINESS DAY.  PRIOR TO THE
OCCURRENCE OF AN EVENT OF DEFAULT OR AGENT REASONABLY DEEMING ITSELF INSECURE,
AND SO LONG AS AVAILABILITY IS $25,000,000 OR MORE, AT ADMINISTRATIVE BORROWER’S
OPTION, MONIES SHALL BE TRANSFERRED FROM THE LOCK BOX TO AGENT OR TO
ADMINISTRATIVE BORROWER’S ACCOUNT ON A DAILY BASIS, AND IF TRANSFERRED TO
ADMINISTRATIVE BORROWER’S ACCOUNT SUCH MONIES WILL NOT BE APPLIED TO THE
OBLIGATIONS.

2.10                        DESIGNATED ACCOUNT.  AGENT AND THE LENDER GROUP ARE
AUTHORIZED TO MAKE THE ADVANCES AND THE LETTERS OF CREDIT UNDER THIS AGREEMENT
BASED UPON TELEPHONIC OR OTHER INSTRUCTIONS RECEIVED FROM ANYONE PURPORTING TO
BE AN AUTHORIZED PERSON, OR WITHOUT INSTRUCTIONS IF PURSUANT TO SECTION 2.7(E).
ADMINISTRATIVE BORROWER AGREES TO ESTABLISH AND MAINTAIN THE DESIGNATED ACCOUNT
WITH THE DESIGNATED ACCOUNT BANK FOR THE PURPOSE OF RECEIVING THE PROCEEDS OF
THE ADVANCES REQUESTED BY ADMINISTRATIVE BORROWER AND MADE BY THE LENDER GROUP
HEREUNDER.  UNLESS OTHERWISE AGREED BY AGENT AND ADMINISTRATIVE BORROWER, ANY
ADVANCE REQUESTED BY BORROWERS AND MADE BY THE LENDER GROUP HEREUNDER SHALL BE
MADE TO THE DESIGNATED ACCOUNT.

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2.11                        MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF
OBLIGATIONS.  AGENT SHALL MAINTAIN AN ACCOUNT ON ITS BOOKS IN THE NAME OF
BORROWERS (THE “LOAN ACCOUNT”) ON WHICH BORROWERS WILL BE CHARGED WITH ALL
ADVANCES MADE BY THE LENDER GROUP TO BORROWERS OR FOR BORROWERS’ ACCOUNT,
INCLUDING, ACCRUED INTEREST, LENDER GROUP EXPENSES, AND ANY OTHER PAYMENT
OBLIGATIONS OF BORROWERS.  IN ACCORDANCE WITH SECTION 2.9, THE LOAN ACCOUNT WILL
BE CREDITED WITH ALL PAYMENTS RECEIVED BY AGENT FROM BORROWERS OR FOR BORROWERS’
ACCOUNT, INCLUDING ALL AMOUNTS RECEIVED IN THE AGENT’S ACCOUNT FROM ANY LOCKBOX
BANK.  AGENT SHALL RENDER STATEMENTS REGARDING THE LOAN ACCOUNT TO
ADMINISTRATIVE BORROWER, INCLUDING PRINCIPAL, INTEREST, FEES, AND INCLUDING AN
ITEMIZATION OF ALL CHARGES AND EXPENSES CONSTITUTING THE LENDER GROUP EXPENSES
OWING, AND SUCH STATEMENTS SHALL BE CONCLUSIVELY PRESUMED TO BE CORRECT AND
ACCURATE AND CONSTITUTE AN ACCOUNT STATED BETWEEN ADMINISTRATIVE BORROWER AND
THE LENDER GROUP UNLESS, WITHIN 30 DAYS AFTER RECEIPT THEREOF BY ADMINISTRATIVE
BORROWER, ADMINISTRATIVE BORROWER SHALL DELIVER TO AGENT WRITTEN OBJECTION
THERETO DESCRIBING THE ERROR OR ERRORS CONTAINED IN ANY SUCH STATEMENTS.

2.12                        FEES.  BORROWERS SHALL PAY TO AGENT FOR THE RATABLE
BENEFIT OF THE LENDER GROUP (EXCEPT WHERE OTHERWISE INDICATED) THE FOLLOWING
FEES:

(A)                                  AMENDMENT FEE.  AN AMENDMENT FEE IN THE
AMOUNT AND AS PROVIDED IN THE FEE LETTER.

(B)                                 INTENTIONALLY OMITTED.

(C)                                  INTENTIONALLY OMITTED.

(D)                                 ANNIVERSARY FEE.  AN ANNIVERSARY FEE EQUAL
TO 0.125% OF THE MAXIMUM AMOUNT (WITHOUT GIVING EFFECT TO THE SEASONAL
OVERADVANCE AMOUNT), WHICH FEE SHALL BE DUE AND PAYABLE IN FULL ON EACH OCTOBER
31, COMMENCING OCTOBER 31, 2007 THROUGH AND INCLUDING OCTOBER 31, 2010;
PROVIDED, HOWEVER, THE AGREEMENT HAS NOT PREVIOUSLY BEEN TERMINATED.

(E)                                  UNUSED LINE FEE.  ON THE FIRST DAY OF EACH
MONTH COMMENCING JULY 1, 2007, WHENEVER THE AVERAGE DAILY BALANCE OF OBLIGATIONS
IS LESS THAN THE MAXIMUM AMOUNT THEN IN EFFECT, AN UNUSED LINE FEE IN AN AMOUNT
EQUAL TO 0.25% PER ANNUM TIMES THE AVERAGE UNUSED PORTION OF MAXIMUM AMOUNT.

(F)                                    INTENTIONALLY OMITTED.

(G)                                 APPRAISALS; FINANCIAL EXAMINATION AND
APPRAISAL FEES.  THE AGENT OR ITS DESIGNEE, AT THE SOLE EXPENSE OF BORROWERS,
SHALL CONDUCT PERIODIC APPRAISALS OF THE BORROWERS’ INVENTORY.  SO LONG AS NO
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, THE BORROWERS SHALL NOT BE
LIABLE TO PAY MORE THAN $60,000 PER YEAR (EXCLUSIVE OF OUT OF POCKET EXPENSES)
FOR FINANCIAL ANALYSES AND EXAMINATIONS AND PERIODIC APPRAISALS OF INVENTORY IN
THE AGGREGATE.

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2.13                        LIBOR RATE LOANS.  ANY OTHER PROVISIONS HEREIN TO
THE CONTRARY NOTWITHSTANDING, THE FOLLOWING PROVISIONS SHALL GOVERN WITH RESPECT
TO LIBOR RATE LOANS AS TO THE MATTERS COVERED:

(A)                                  BORROWING; CONVERSION; CONTINUATION. 
ADMINISTRATIVE BORROWER MAY FROM TIME TO TIME, ON OR AFTER THE CLOSING DATE (AND
SUBJECT TO THE SATISFACTION OF THE REQUIREMENTS OF SECTIONS 3.1 AND 3.2),
REQUEST IN A WRITTEN OR TELEPHONIC COMMUNICATION WITH AGENT: (I) ADVANCES TO
CONSTITUTE LIBOR RATE LOANS; (II) THAT REFERENCE RATE LOANS BE CONVERTED INTO
LIBOR RATE LOANS; OR (III) THAT EXISTING LIBOR RATE LOANS CONTINUE FOR AN
ADDITIONAL INTEREST PERIOD.  ANY SUCH REQUEST SHALL SPECIFY THE AGGREGATE AMOUNT
OF THE REQUESTED LIBOR RATE LOANS, THE PROPOSED FUNDING DATE THEREFOR (WHICH
SHALL BE A BUSINESS DAY, AND WITH RESPECT TO CONTINUED LIBOR RATE LOANS SHALL BE
THE LAST DAY OF THE INTEREST PERIOD OF THE EXISTING LIBOR RATE LOANS BEING
CONTINUED), AND THE PROPOSED INTEREST PERIOD (IN EACH CASE SUBJECT TO THE
LIMITATIONS SET FORTH BELOW).  LIBOR RATE LOANS MAY ONLY BE MADE, CONTINUED, OR
EXTENDED IF, AS OF THE PROPOSED FUNDING DATE THEREFOR, EACH OF THE FOLLOWING
CONDITIONS IS SATISFIED:

(v)                                 no Event of Default exists;

(w)                               no more than five Interest Periods may be in
effect at any one time;

(x)                                   the amount of each LIBOR Rate Loan
borrowed, converted, or continued must be in an amount not less than $5,000,000
and integral multiples of $1,000,000 in excess thereof;

(y)                                 Agent shall have determined that the
Interest Period or Adjusted LIBOR Rate is available to it and can be readily
determined as of the date of the request for such LIBOR Rate Loan by Borrowers;
and

(z)                                   Agent shall have received such request at
least three Business Days prior to the proposed Funding Date therefor.

Any request by Administrative Borrower to borrow LIBOR Rate Loans, to convert
Reference Rate Loans to LIBOR Rate Loans, or to continue any existing LIBOR Rate
Loans shall be irrevocable, except to the extent that any Lender shall determine
under Sections 2.13(a), 2.14 or 2.15 that such LIBOR Rate Loans cannot be made
or continued.

(B)                                 DETERMINATION OF INTEREST PERIOD.  BY GIVING
NOTICE AS SET FORTH IN SECTION 2.12(A), BORROWERS SHALL SELECT AN INTEREST
PERIOD FOR SUCH LIBOR RATE LOAN.  THE DETERMINATION OF THE INTEREST PERIOD SHALL
BE SUBJECT TO THE FOLLOWING PROVISIONS:

(I)                                     IN THE CASE OF IMMEDIATELY SUCCESSIVE
INTEREST PERIODS, EACH SUCCESSIVE INTEREST PERIOD SHALL COMMENCE ON THE DAY ON
WHICH THE NEXT PRECEDING INTEREST PERIOD EXPIRES;

(II)                                  IF ANY INTEREST PERIOD WOULD OTHERWISE
EXPIRE ON A DAY WHICH IS NOT A BUSINESS DAY, THE INTEREST PERIOD SHALL BE
EXTENDED TO EXPIRE ON THE NEXT SUCCEEDING BUSINESS DAY; PROVIDED, HOWEVER, THAT
IF THE NEXT SUCCEEDING BUSINESS DAY OCCURS IN THE FOLLOWING CALENDAR MONTH, THEN
SUCH INTEREST PERIOD SHALL EXPIRE ON THE IMMEDIATELY PRECEDING BUSINESS DAY;

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(III)                               IF ANY INTEREST PERIOD BEGINS ON THE LAST
BUSINESS DAY OF A MONTH, OR ON A DAY FOR WHICH THERE IS NO NUMERICALLY
CORRESPONDING DAY IN THE CALENDAR MONTH AT THE END OF SUCH INTEREST PERIOD, THEN
THE INTEREST PERIOD SHALL END ON THE LAST BUSINESS DAY OF THE CALENDAR MONTH AT
THE END OF SUCH INTEREST PERIOD; AND

(IV)                              ADMINISTRATIVE BORROWER MAY NOT SELECT AN
INTEREST PERIOD WHICH EXPIRES LATER THAN THE DATE ON WHICH THIS AGREEMENT IS
SCHEDULED TO TERMINATE PURSUANT TO SECTION 3.4 HEREOF.

(C)                                  AUTOMATIC CONVERSION: OPTIONAL CONVERSION
BY AGENT.  ANY LIBOR RATE LOAN SHALL AUTOMATICALLY CONVERT TO A REFERENCE RATE
LOAN UPON THE LAST DAY OF THE APPLICABLE INTEREST PERIOD, UNLESS AGENT HAS
RECEIVED A REQUEST TO CONTINUE SUCH LIBOR RATE LOAN AT LEAST THREE BUSINESS DAYS
PRIOR TO THE END OF SUCH INTEREST PERIOD IN ACCORDANCE WITH THE TERMS OF
SECTION 2.13(A).  ANY LIBOR RATE LOAN SHALL, AT AGENT’S OPTION, UPON NOTICE TO
BORROWERS, IMMEDIATELY CONVERT TO A REFERENCE RATE LOAN IN THE EVENT THAT (I) AN
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING OR (II) THIS AGREEMENT
SHALL TERMINATE, AND BORROWERS SHALL PAY TO AGENT, FOR THE BENEFIT OF THE
LENDERS, ANY AMOUNTS REQUIRED BY SECTION 2.16 AS A RESULT THEREOF.

2.14                        ILLEGALITY.  ANY OTHER PROVISION HEREIN TO THE
CONTRARY NOTWITHSTANDING, IF THE ADOPTION OF OR ANY CHANGE IN ANY REQUIREMENT OF
LAW OR IN THE INTERPRETATION OR APPLICATION THEREOF BY A GOVERNMENTAL AUTHORITY
MADE SUBSEQUENT TO THE CLOSING DATE SHALL MAKE IT UNLAWFUL FOR ANY LENDER TO
MAKE OR MAINTAIN LIBOR RATE LOANS AS CONTEMPLATED BY THIS AGREEMENT, (A) THE
OBLIGATION OF SUCH LENDER HEREUNDER TO MAKE LIBOR RATE LOANS, CONTINUE LIBOR
RATE LOANS AS SUCH, AND CONVERT REFERENCE RATE LOANS TO LIBOR RATE LOANS SHALL
FORTHWITH BE SUSPENDED AND (B) SUCH LENDER’S THEN OUTSTANDING LIBOR RATE LOANS,
IF ANY, SHALL BE CONVERTED AUTOMATICALLY TO REFERENCE RATE LOANS ON THE
RESPECTIVE LAST DAYS OF THE THEN CURRENT INTEREST PERIODS WITH RESPECT THERETO
OR WITHIN SUCH EARLIER PERIOD AS REQUIRED BY LAW; PROVIDED, HOWEVER, THAT BEFORE
MAKING ANY SUCH DEMAND, EACH LENDER AGREES TO USE REASONABLE EFFORTS (CONSISTENT
WITH ITS INTERNAL POLICY AND LEGAL AND REGULATORY RESTRICTIONS AND SO LONG AS
SUCH EFFORTS WOULD NOT BE DISADVANTAGEOUS TO IT, IN ITS REASONABLE DISCRETION,
IN ANY LEGAL, ECONOMIC, OR REGULATORY MANNER) TO DESIGNATE A DIFFERENT LENDING
OFFICE IF THE MAKING OF SUCH A DESIGNATION WOULD ALLOW SUCH LENDER OR ITS
LENDING OFFICE TO CONTINUE TO PERFORM ITS OBLIGATIONS TO MAKE LIBOR RATE LOANS. 
IF ANY SUCH CONVERSION OF A LIBOR RATE LOAN OCCURS ON A DAY WHICH IS NOT THE
LAST DAY OF THE THEN CURRENT INTEREST PERIOD WITH RESPECT THERETO, BORROWERS
SHALL PAY TO SUCH LENDER SUCH AMOUNTS, IF ANY, AS MAY BE REQUIRED PURSUANT TO
SECTION 2.15.  IF CIRCUMSTANCES SUBSEQUENTLY CHANGE SO THAT SUCH LENDER SHALL
DETERMINE THAT IT IS NO LONGER SO AFFECTED, SUCH LENDER WILL PROMPTLY NOTIFY
AGENT AND ADMINISTRATIVE BORROWER, AND UPON RECEIPT OF SUCH NOTICE, THE
OBLIGATIONS OF SUCH LENDER TO MAKE OR CONTINUE LIBOR RATE LOANS OR TO CONVERT
REFERENCE RATE LOANS INTO LIBOR RATE LOANS SHALL BE REINSTATED.

2.15                        REQUIREMENTS OF LAW.

(A)                                  IF THE ADOPTION OF OR ANY CHANGE IN ANY
REQUIREMENT OF LAW OR IN THE INTERPRETATION OR APPLICATION THEREOF BY A
GOVERNMENTAL AUTHORITY MADE SUBSEQUENT TO THE CLOSING DATE OR COMPLIANCE BY ANY
LENDER WITH ANY REQUEST OR DIRECTIVE (WHETHER OR NOT HAVING

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THE FORCE OF LAW) FROM ANY CENTRAL BANK OR OTHER GOVERNMENTAL AUTHORITY MADE
SUBSEQUENT TO THE CLOSING DATE:

(I)                                     SHALL SUBJECT SUCH LENDER TO ANY TAX,
LEVY, CHARGE, FEE, REDUCTION, OR WITHHOLDING OF ANY KIND WHATSOEVER WITH RESPECT
TO LIBOR RATE LOANS, OR CHANGE THE BASIS OF TAXATION OF PAYMENTS TO SUCH LENDER
IN RESPECT THEREOF (EXCEPT FOR THE ESTABLISHMENT OF A TAX BASED ON THE NET
INCOME OF THE LENDER OR CHANGES IN THE RATE OF TAX ON THE NET INCOME OF SUCH
LENDER);

(II)                                  SHALL IN RESPECT OF LIBOR RATE LOANS
IMPOSE, MODIFY OR HOLD APPLICABLE ANY RESERVE, SPECIAL DEPOSIT, COMPULSORY LOAN,
OR SIMILAR REQUIREMENT AGAINST ASSETS HELD BY, DEPOSITS OR OTHER LIABILITIES IN
OR FOR THE ACCOUNT OF, ADVANCES OR OTHER EXTENSIONS OF CREDIT BY, OR ANY OTHER
ACQUISITION OF FUNDS BY, ANY OFFICE OF SUCH LENDER; OR

(III)                               SHALL IMPOSE ON SUCH LENDER ANY OTHER
CONDITION WITH RESPECT TO LIBOR RATE LOANS;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing, or maintaining LIBOR Rate Loans or to increase the cost to such
Lender in respect of LIBOR Rate Loans, by an amount which such Lender deems to
be material, or to reduce any amount receivable hereunder in respect of LIBOR
Rate Loans, or to forego any other sum payable thereunder or make any payment on
account thereof in respect of LIBOR Rate Loans, then, in any such case,
Borrowers shall promptly pay to Agent (for the benefit of such Lender), upon
such Lender’s demand, any additional amounts necessary to compensate such Lender
for such increased cost or reduced amount receivable; provided, however, that
before making any such demand, each Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, in its reasonable
discretion, in any legal, economic, or regulatory manner) to designate a
different LIBOR lending office if the making of such designation would allow
such Lender or its LIBOR lending office to continue to perform its obligations
to make LIBOR Rate Loans or to continue to fund or maintain LIBOR Rate Loans and
avoid the need for, or materially reduce the amount of, such increased cost.  If
a Lender becomes entitled to claim any additional amounts pursuant to this
Section 2.15, such Lender shall promptly notify Agent and Administrative
Borrower of the event by reason of which it has become so entitled.  A
certificate as to any additional amounts payable pursuant to this Section 2.15
submitted in reasonable detail by such Lender to Agent and Administrative
Borrower shall be conclusive in the absence of manifest error.  Within five
Business Days after a Lender notifies Agent and Administrative Borrower of any
increased cost pursuant to the foregoing provisions of this Section 2.15,
Administrative Borrower may convert all LIBOR Rate Loans then outstanding into
Reference Rate Loans in accordance with Section 2.13 and, additionally,
reimburse such Lender for any cost in accordance with Section 2.16.  This
covenant shall survive the termination of this Agreement and the payment of the
Advances and all other amounts payable hereunder for nine months following such
termination and repayment.

(B)                                 IF A LENDER SHALL HAVE DETERMINED THAT THE
ADOPTION OF OR ANY CHANGE IN ANY REQUIREMENT OF LAW REGARDING CAPITAL ADEQUACY
OR IN THE INTERPRETATION OR APPLICATION

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THEREOF BY A GOVERNMENTAL AUTHORITY MADE SUBSEQUENT TO THE CLOSING DATE OR
COMPLIANCE BY SUCH LENDER OR ANY PERSON CONTROLLING SUCH LENDER WITH ANY REQUEST
OR DIRECTIVE REGARDING CAPITAL ADEQUACY (WHETHER OR NOT HAVING THE FORCE OF LAW)
FROM ANY GOVERNMENTAL AUTHORITY MADE SUBSEQUENT TO THE CLOSING DATE DOES OR
SHALL HAVE THE EFFECT OF INCREASING THE AMOUNT OF CAPITAL REQUIRED TO BE
MAINTAINED OR REDUCING THE RATE OF RETURN ON SUCH LENDER’S OR SUCH PERSON’S
CAPITAL AS A CONSEQUENCE OF ITS OBLIGATIONS HEREUNDER TO A LEVEL BELOW THAT
WHICH SUCH LENDER OR SUCH PERSON COULD HAVE ACHIEVED BUT FOR SUCH CHANGE OR
COMPLIANCE (TAKING INTO CONSIDERATION SUCH LENDER’S OR SUCH PERSON’S POLICIES
WITH RESPECT TO CAPITAL ADEQUACY) BY AN AMOUNT DEEMED BY SUCH LENDER TO BE
MATERIAL, THEN FROM TIME TO TIME, AFTER SUBMISSION BY SUCH LENDER TO AGENT AND
ADMINISTRATIVE BORROWER OF A PROMPT WRITTEN REQUEST THEREFOR, BORROWERS SHALL
PAY TO AGENT (FOR THE BENEFIT OF SUCH LENDER) SUCH ADDITIONAL AMOUNT OR AMOUNTS
AS WILL COMPENSATE SUCH LENDER OR SUCH PERSON FOR SUCH REDUCTION.  THIS COVENANT
SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND THE PAYMENT OF THE ADVANCES
AND ALL OTHER AMOUNTS PAYABLE HEREUNDER FOR NINE MONTHS FOLLOWING SUCH
TERMINATION AND REPAYMENT.

2.16                        INDEMNITY.  EACH BORROWER AGREES TO INDEMNIFY AGENT
AND EACH LENDER AND TO HOLD AGENT AND EACH LENDER HARMLESS FROM ANY LOSS OR
EXPENSE WHICH AGENT AND EACH LENDER MAY SUSTAIN OR INCUR AS A CONSEQUENCE OF
(A) DEFAULT BY BORROWERS IN PAYMENT WHEN DUE OF THE PRINCIPAL AMOUNT OF OR
INTEREST ON ANY LIBOR RATE LOAN, (B) DEFAULT BY BORROWERS IN MAKING A BORROWING
OF, CONVERSION INTO, OR CONTINUATION OF LIBOR RATE LOANS AFTER ADMINISTRATIVE
BORROWER HAVE GIVEN A NOTICE REQUESTING THE SAME IN ACCORDANCE WITH THE
PROVISIONS OF THIS AGREEMENT, (C) DEFAULT BY BORROWERS IN MAKING ANY PREPAYMENT
OF A LIBOR RATE LOAN AFTER ADMINISTRATIVE BORROWER HAS GIVEN A NOTICE THEREOF IN
ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, OR (D) THE MAKING OF A
PREPAYMENT OF LIBOR RATE LOANS ON A DAY WHICH IS NOT THE LAST DAY OF AN INTEREST
PERIOD WITH RESPECT THERETO (WHETHER DUE TO THE TERMINATION OF THIS AGREEMENT,
UPON AN EVENT OF DEFAULT, OR OTHERWISE), INCLUDING, IN EACH CASE, ANY SUCH LOSS
OR EXPENSE (BUT EXCLUDING LOSS OF MARGIN OR ANTICIPATED PROFITS) ARISING FROM
THE REEMPLOYMENT OF FUNDS OBTAINED BY IT OR FROM FEES PAYABLE TO TERMINATE THE
DEPOSITS FROM WHICH SUCH FUNDS WERE OBTAINED; PROVIDED, HOWEVER, THAT AGENT OR
ANY LENDER, IF REQUESTING INDEMNIFICATION, SHALL HAVE DELIVERED TO THE BORROWERS
A CERTIFICATE AS TO THE AMOUNT OF SUCH LOSS OR EXPENSE, WHICH CERTIFICATE SHALL
BE CONCLUSIVE IN THE ABSENCE OF MANIFEST ERROR.  CALCULATION OF ALL AMOUNTS
PAYABLE TO AGENT OR ANY SUCH LENDER UNDER THIS SECTION 2.16 SHALL BE MADE AS
THOUGH SUCH LENDER HAD ACTUALLY FUNDED THE RELEVANT LIBOR RATE LOAN THROUGH THE
PURCHASE OF A DEPOSIT BEARING INTEREST AT THE LIBOR RATE IN AN AMOUNT EQUAL TO
THE AMOUNT OF SUCH LIBOR RATE LOAN AND HAVING A MATURITY COMPARABLE TO THE
RELEVANT INTEREST PERIOD; PROVIDED, HOWEVER, THAT EACH LENDER MAY FUND EACH OF
THE LIBOR RATE LOANS IN ANY MANNER IT SEES FIT, AND THE FOREGOING ASSUMPTION
SHALL BE UTILIZED ONLY FOR THE CALCULATION OF AMOUNTS PAYABLE UNDER THIS
SECTION 2.16.  THIS COVENANT SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND
THE PAYMENT OF THE ADVANCES AND ALL OTHER AMOUNTS PAYABLE HEREUNDER FOR A PERIOD
OF NINE MONTHS THEREAFTER.

2.17                        JOINT AND SEVERAL LIABILITY OF BORROWERS.

(A)                                  EACH BORROWER IS ACCEPTING JOINT AND
SEVERAL LIABILITY HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS IN CONSIDERATION
OF THE FINANCIAL ACCOMMODATIONS TO BE PROVIDED BY THE AGENT AND THE LENDERS
UNDER THIS AGREEMENT, FOR THE MUTUAL BENEFIT, DIRECTLY AND INDIRECTLY,

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OF EACH BORROWER AND IN CONSIDERATION OF THE UNDERTAKINGS OF THE OTHER BORROWERS
TO ACCEPT JOINT AND SEVERAL LIABILITY FOR THE OBLIGATIONS.

(B)                                 EACH BORROWER, JOINTLY AND SEVERALLY, HEREBY
IRREVOCABLY AND UNCONDITIONALLY ACCEPTS, NOT MERELY AS A SURETY BUT ALSO AS A
CO-DEBTOR, JOINT AND SEVERAL LIABILITY WITH THE OTHER BORROWERS, WITH RESPECT TO
THE PAYMENT AND PERFORMANCE OF ALL OF THE OBLIGATIONS (INCLUDING, WITHOUT
LIMITATION, ANY OBLIGATIONS ARISING UNDER THIS SECTION 2.17), IT BEING THE
INTENTION OF THE PARTIES HERETO THAT ALL THE OBLIGATIONS SHALL BE THE JOINT AND
SEVERAL OBLIGATIONS OF EACH PERSON COMPOSING BORROWERS WITHOUT PREFERENCES OR
DISTINCTION AMONG THEM.

(C)                                  IF AND TO THE EXTENT THAT ANY OF BORROWERS
SHALL FAIL TO MAKE ANY PAYMENT WITH RESPECT TO ANY OF THE OBLIGATIONS AS AND
WHEN DUE OR TO PERFORM ANY OF THE OBLIGATIONS IN ACCORDANCE WITH THE TERMS
THEREOF, THEN IN EACH SUCH EVENT THE OTHER PERSONS COMPOSING BORROWERS WILL MAKE
SUCH PAYMENT WITH RESPECT TO, OR PERFORM, SUCH OBLIGATION.

(D)                                 THE OBLIGATIONS OF EACH PERSON COMPOSING
BORROWERS UNDER THE PROVISIONS OF THIS SECTION 2.17 CONSTITUTE THE ABSOLUTE AND
UNCONDITIONAL, FULL RECOURSE OBLIGATIONS OF EACH PERSON COMPOSING BORROWERS
ENFORCEABLE AGAINST EACH SUCH BORROWER TO THE FULL EXTENT OF ITS PROPERTIES AND
ASSETS, IRRESPECTIVE OF THE VALIDITY, REGULARITY OR ENFORCEABILITY OF THIS
AGREEMENT OR ANY OTHER CIRCUMSTANCES WHATSOEVER.

(E)                                  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT, EACH PERSON COMPOSING BORROWERS HEREBY WAIVES NOTICE OF
ACCEPTANCE OF ITS JOINT AND SEVERAL LIABILITY, NOTICE OF ANY ADVANCES OR LETTERS
OF CREDIT ISSUED UNDER OR PURSUANT TO THIS AGREEMENT, NOTICE OF THE OCCURRENCE
OF ANY DEFAULT, EVENT OF DEFAULT, OR OF ANY DEMAND FOR ANY PAYMENT UNDER THIS
AGREEMENT, NOTICE OF ANY ACTION AT ANY TIME TAKEN OR OMITTED BY AGENT OR LENDERS
UNDER OR IN RESPECT OF ANY OF THE OBLIGATIONS, ANY REQUIREMENT OF DILIGENCE OR
TO MITIGATE DAMAGES AND, GENERALLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ALL DEMANDS, NOTICES AND OTHER FORMALITIES OF EVERY KIND IN CONNECTION WITH THIS
AGREEMENT (EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT).  EACH PERSON
COMPOSING BORROWERS HEREBY ASSENTS TO, AND WAIVES NOTICE OF, ANY EXTENSION OR
POSTPONEMENT OF THE TIME FOR THE PAYMENT OF ANY OF THE OBLIGATIONS, THE
ACCEPTANCE OF ANY PAYMENT OF ANY OF THE OBLIGATIONS, THE ACCEPTANCE OF ANY
PARTIAL PAYMENT THEREON, ANY WAIVER, CONSENT OR OTHER ACTION OR ACQUIESCENCE BY
AGENT OR LENDERS AT ANY TIME OR TIMES IN RESPECT OF ANY DEFAULT BY ANY PERSON
COMPOSING BORROWERS IN THE PERFORMANCE OR SATISFACTION OF ANY TERM, COVENANT,
CONDITION OR PROVISION OF THIS AGREEMENT, ANY AND ALL OTHER INDULGENCES
WHATSOEVER BY AGENT OR LENDERS IN RESPECT OF ANY OF THE OBLIGATIONS, AND THE
TAKING, ADDITION, SUBSTITUTION OR RELEASE, IN WHOLE OR IN PART, AT ANY TIME OR
TIMES, OF ANY SECURITY FOR ANY OF THE OBLIGATIONS OR THE ADDITION, SUBSTITUTION
OR RELEASE, IN WHOLE OR IN PART, OF ANY PERSON COMPOSING BORROWERS.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, EACH BORROWER ASSENTS TO ANY OTHER
ACTION OR DELAY IN ACTING OR FAILURE TO ACT ON THE PART OF ANY AGENT OR LENDER
WITH RESPECT TO THE FAILURE BY ANY PERSON COMPOSING BORROWERS TO COMPLY WITH ANY
OF ITS RESPECTIVE OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, ANY FAILURE
STRICTLY OR DILIGENTLY TO ASSERT ANY RIGHT OR TO PURSUE ANY REMEDY OR TO COMPLY
FULLY WITH APPLICABLE LAWS OR REGULATIONS THEREUNDER, WHICH MIGHT, BUT FOR THE
PROVISIONS OF THIS SECTION 2.17 AFFORD GROUNDS FOR TERMINATING, DISCHARGING OR
RELIEVING ANY PERSON COMPOSING BORROWERS, IN WHOLE OR IN PART, FROM ANY OF ITS
OBLIGATIONS UNDER THIS SECTION 2.17, IT BEING THE INTENTION OF EACH PERSON
COMPOSING BORROWERS THAT, SO LONG AS ANY OF

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THE OBLIGATIONS HEREUNDER REMAIN UNSATISFIED, THE OBLIGATIONS OF SUCH PERSON
COMPOSING BORROWERS UNDER THIS SECTION 2.17 SHALL NOT BE DISCHARGED EXCEPT BY
PERFORMANCE AND THEN ONLY TO THE EXTENT OF SUCH PERFORMANCE.  THE OBLIGATIONS OF
EACH PERSON COMPOSING BORROWERS UNDER THIS SECTION 2.17 SHALL NOT BE DIMINISHED
OR RENDERED UNENFORCEABLE BY ANY WINDING UP, REORGANIZATION, ARRANGEMENT,
LIQUIDATION, RECONSTRUCTION OR SIMILAR PROCEEDING WITH RESPECT TO ANY PERSON
COMPOSING BORROWERS OR ANY AGENT OR LENDER.  THE JOINT AND SEVERAL LIABILITY OF
THE PERSONS COMPOSING BORROWERS HEREUNDER SHALL CONTINUE IN FULL FORCE AND
EFFECT NOTWITHSTANDING ANY ABSORPTION, MERGER, AMALGAMATION OR ANY OTHER CHANGE
WHATSOEVER IN THE NAME, CONSTITUTION OR PLACE OF FORMATION OF ANY OF THE PERSONS
COMPOSING BORROWERS OR ANY AGENT OR LENDER.

(F)                                    EACH PERSON COMPOSING BORROWERS
REPRESENTS AND WARRANTS TO AGENT AND LENDERS THAT SUCH BORROWER IS CURRENTLY
INFORMED OF THE FINANCIAL CONDITION OF BORROWERS AND OF ALL OTHER CIRCUMSTANCES
WHICH A DILIGENT INQUIRY WOULD REVEAL AND WHICH BEAR UPON THE RISK OF NONPAYMENT
OF THE OBLIGATIONS.  EACH PERSON COMPOSING BORROWERS FURTHER REPRESENTS AND
WARRANTS TO AGENT AND LENDERS THAT SUCH BORROWER HAS READ AND UNDERSTANDS THE
TERMS AND CONDITIONS OF THE LOAN DOCUMENTS.  EACH PERSON COMPOSING BORROWERS
HEREBY COVENANTS THAT SUCH BORROWER WILL CONTINUE TO KEEP INFORMED OF BORROWERS’
FINANCIAL CONDITION, THE FINANCIAL CONDITION OF OTHER GUARANTORS, IF ANY, AND OF
ALL OTHER CIRCUMSTANCES WHICH BEAR UPON THE RISK OF NONPAYMENT OR NONPERFORMANCE
OF THE OBLIGATIONS.

(G)                                 THE PROVISIONS OF THIS SECTION 2.17 ARE MADE
FOR THE BENEFIT OF THE AGENT, THE LENDERS AND THEIR RESPECTIVE SUCCESSORS AND
ASSIGNS, AND MAY BE ENFORCED BY IT OR THEM FROM TIME TO TIME AGAINST ANY OR ALL
OF THE PERSONS COMPOSING BORROWERS AS OFTEN AS OCCASION THEREFOR MAY ARISE AND
WITHOUT REQUIREMENT ON THE PART OF ANY SUCH AGENT, LENDER, SUCCESSOR OR ASSIGN
FIRST TO MARSHAL ANY OF ITS OR THEIR CLAIMS OR TO EXERCISE ANY OF ITS OR THEIR
RIGHTS AGAINST ANY OF THE OTHER PERSONS COMPOSING BORROWERS OR TO EXHAUST ANY
REMEDIES AVAILABLE TO IT OR THEM AGAINST ANY OF THE OTHER PERSONS COMPOSING
BORROWERS OR TO RESORT TO ANY OTHER SOURCE OR MEANS OF OBTAINING PAYMENT OF ANY
OF THE OBLIGATIONS HEREUNDER OR TO ELECT ANY OTHER REMEDY.  THE PROVISIONS OF
THIS SECTION 2.17 SHALL REMAIN IN EFFECT UNTIL ALL OF THE OBLIGATIONS SHALL HAVE
BEEN PAID IN FULL OR OTHERWISE FULLY SATISFIED.  IF AT ANY TIME, ANY PAYMENT, OR
ANY PART THEREOF, MADE IN RESPECT OF ANY OF THE OBLIGATIONS, IS RESCINDED OR
MUST OTHERWISE BE RESTORED OR RETURNED BY ANY AGENT OR LENDER UPON THE
INSOLVENCY, BANKRUPTCY OR REORGANIZATION OF ANY OF THE PERSONS COMPOSING
BORROWERS, OR OTHERWISE, THE PROVISIONS OF THIS SECTION 2.17 WILL FORTHWITH BE
REINSTATED IN EFFECT, AS THOUGH SUCH PAYMENT HAD NOT BEEN MADE.

(H)                                 EACH OF THE PERSONS COMPOSING BORROWERS
HEREBY AGREES THAT IT WILL NOT ENFORCE ANY OF ITS RIGHTS OF CONTRIBUTION OR
SUBROGATION AGAINST THE OTHER PERSONS COMPOSING BORROWERS WITH RESPECT TO ANY
LIABILITY INCURRED BY IT HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS, ANY
PAYMENTS MADE BY IT TO THE AGENT OR THE LENDERS WITH RESPECT TO ANY OF THE
OBLIGATIONS OR ANY COLLATERAL SECURITY THEREFOR UNTIL SUCH TIME AS ALL OF THE
OBLIGATIONS HAVE BEEN PAID IN FULL IN CASH.  ANY CLAIM WHICH ANY BORROWER MAY
HAVE AGAINST ANY OTHER BORROWER WITH RESPECT TO ANY PAYMENTS TO ANY AGENT OR
LENDER HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENTS ARE HEREBY EXPRESSLY MADE
SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT, WITHOUT LIMITATION AS TO ANY
INCREASES IN THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER, TO THE PRIOR
PAYMENT IN FULL IN CASH OF THE OBLIGATIONS AND, IN THE EVENT OF ANY INSOLVENCY,
BANKRUPTCY, RECEIVERSHIP, LIQUIDATION, REORGANIZATION OR OTHER SIMILAR
PROCEEDING UNDER THE LAWS OF ANY JURISDICTION RELATING TO ANY

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BORROWER, ITS DEBTS OR ITS ASSETS, WHETHER VOLUNTARY OR INVOLUNTARY, ALL SUCH
OBLIGATIONS SHALL BE PAID IN FULL IN CASH BEFORE ANY PAYMENT OR DISTRIBUTION OF
ANY CHARACTER, WHETHER IN CASH, SECURITIES OR OTHER PROPERTY, SHALL BE MADE TO
ANY OTHER BORROWER THEREFOR.

(I)                                     EACH OF THE PERSONS COMPOSING BORROWERS
HEREBY AGREES THAT, AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY
DEFAULT OR EVENT OF DEFAULT, THE PAYMENT OF ANY AMOUNTS DUE WITH RESPECT TO THE
INDEBTEDNESS OWING BY ANY BORROWER TO ANY OTHER BORROWER IS HEREBY SUBORDINATED
TO THE PRIOR PAYMENT IN FULL IN CASH OF THE OBLIGATIONS.  EACH BORROWER HEREBY
AGREES THAT AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY DEFAULT OR
EVENT OF DEFAULT, SUCH BORROWER WILL NOT DEMAND, SUE FOR OR OTHERWISE ATTEMPT TO
COLLECT ANY INDEBTEDNESS OF ANY OTHER BORROWER OWING TO SUCH BORROWER UNTIL THE
OBLIGATIONS SHALL HAVE BEEN PAID IN FULL IN CASH.  IF, NOTWITHSTANDING THE
FOREGOING SENTENCE, SUCH BORROWER SHALL COLLECT, ENFORCE OR RECEIVE ANY AMOUNTS
IN RESPECT OF SUCH INDEBTEDNESS, SUCH AMOUNTS SHALL BE COLLECTED, ENFORCED AND
RECEIVED BY SUCH BORROWER AS TRUSTEE FOR THE AGENT, AND SUCH BORROWER SHALL
DELIVER ANY SUCH AMOUNTS TO AGENT FOR APPLICATION TO THE OBLIGATIONS IN
ACCORDANCE WITH SECTION 2.5(B).

2.18                        INCREASE IN MAXIMUM AMOUNT AND COMMITMENTS.

(A)                                  INCREASE IN MAXIMUM AMOUNT.  PROVIDED THAT
NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, THE BORROWERS SHALL HAVE THE
RIGHT AT ANY TIME, ON UP TO FIVE (5) SEPARATE OCCASIONS (SUBJECT TO SECTION
2.18(B)(III)) AND UPON NOT LESS THAN FIVE (5) BUSINESS DAYS PRIOR WRITTEN NOTICE
TO THE AGENT IN EACH INSTANCE, TO ELECT TO INCREASE THE MAXIMUM AMOUNT (OTHER
THAN THE SEASONAL OVERADVANCE AMOUNT) BY AN AMOUNT OF UP TO $30,000,000.00 IN
THE AGGREGATE (EACH, A “COMMITMENT INCREASE”) FROM THE EXISTING AGGREGATE AMOUNT
OF $100,000,000.00, TO AN AGGREGATE AMOUNT OF $130,000,000.00 (THE “INCREASED
MAXIMUM AMOUNT”).  EACH SUCH REQUESTED INCREASE SHALL BE IN THE MINIMUM AMOUNT
OF $5,000,000.00.  EACH SUCH REQUESTED INCREASE SHALL BE MADE TO ALL EXISTING
LENDERS ON A PRO RATA BASIS IN ACCORDANCE WITH SCHEDULE C-1, EXCEPT AS OTHERWISE
PROVIDED IN SECTION 2.18(D).

(B)                                 INCREASE CONDITIONS.  NO COMMITMENT INCREASE
SHALL BECOME EFFECTIVE UNLESS AND UNTIL EACH OF THE FOLLOWING CONDITIONS HAVE
BEEN SATISFIED:

(I)                                     THE BORROWERS SHALL HAVE PAID THE AGENT
THE COMMITMENT INCREASE FEE WITH RESPECT TO SUCH COMMITMENT INCREASE;

(II)                                  A NOTE WILL BE ISSUED, AT THE BORROWERS’
EXPENSE, TO EACH LENDER TO THE EXTENT NECESSARY TO REFLECT THE NEW COMMITMENTS
OF SUCH LENDER; AND

(III)                               THE BORROWERS SHALL HAVE DELIVERED SUCH
OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS WITH RESPECT TO THE COMMITMENT
INCREASE AS THE AGENT MAY REASONABLY HAVE REQUESTED.

(C)                                  COMMITMENT INCREASE DATE.  THE AGENT SHALL
PROMPTLY NOTIFY EACH LENDER AS TO THE EFFECTIVENESS OF ANY SUCH COMMITMENT
INCREASE (WITH THE DATE OF SUCH EFFECTIVENESS BEING REFERRED TO HEREIN AS THE
“COMMITMENT INCREASE DATE”), AND AT SUCH TIME (I) THE MAXIMUM AMOUNT (OTHER THAN
THE SEASONAL OVERADVANCE AMOUNT) UNDER, AND FOR ALL PURPOSES OF, THIS AGREEMENT
SHALL BE INCREASED BY THE AGGREGATE AMOUNT OF EACH SUCH COMMITMENT INCREASE,
(II)

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THE L/C SUBLIMIT UNDER, AND FOR ALL PURPOSES OF, THIS AGREEMENT SHALL BE
INCREASED BY THE AGGREGATE AMOUNT OF EACH SUCH COMMITMENT INCREASE, (III) THE
COMMITMENTS SET FORTH ON SCHEDULE C-1 SHALL BE DEEMED AMENDED, WITHOUT FURTHER
ACTION, TO REFLECT THE INCREASED COMMITMENTS OF THE LENDERS, AND (IV) THIS
AGREEMENT SHALL BE DEEMED AMENDED, WITHOUT FURTHER ACTION, TO THE EXTENT
NECESSARY TO REFLECT SUCH INCREASED MAXIMUM AMOUNT.

(D)                                 PRO RATA SHARE.  IN CONNECTION WITH ANY
COMMITMENT INCREASE HEREUNDER, THE LENDERS AND THE BORROWERS AGREE THAT,
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THE BORROWERS SHALL,
IN COORDINATION WITH THE AGENT, (I) REPAY OUTSTANDING LOANS OF CERTAIN LENDERS,
AND OBTAIN LOANS FROM CERTAIN OTHER LENDERS, OR (II) TAKE SUCH OTHER ACTIONS AS
REASONABLY MAY BE REQUIRED BY THE AGENT, IN EACH CASE TO THE EXTENT NECESSARY SO
THAT ALL OF THE LENDERS EFFECTIVELY PARTICIPATE IN EACH OF THE OUTSTANDING LOANS
PRO RATA ON THE BASIS OF THEIR COMMITMENT (DETERMINED AFTER GIVING EFFECT TO THE
INCREASED MAXIMUM AMOUNT PURSUANT TO THIS SECTION 2.18); PROVIDED THAT THE AGENT
AND THE LENDERS AGREE THAT NO SUCH PREPAYMENT SHALL BE REQUIRED IF, AS A RESULT
THEREOF, THE BORROWERS WOULD BE OBLIGATED TO PAY ALL LOSSES, COSTS, OR EXPENSES
REQUIRED TO BE PAID PURSUANT TO SECTION 2.16; PROVIDED FURTHER THAT THE AGENT
AGREES THAT THE AGENT WILL ASSUME CITICORP USA, INC.’S PRO RATA SHARE OF EACH
COMMITMENT INCREASE HEREUNDER IN THE EVENT THAT CITICORP USA, INC. HAS NOT
OBTAINED CREDIT APPROVAL FOR SUCH COMMITMENT INCREASE ON OR BEFORE THE
COMMITMENT INCREASE DATE.  UPON EACH COMMITMENT INCREASE DATE, THE AGENT SHALL
ISSUE A NEW SCHEDULE C-1 TO THIS AGREEMENT REFLECTING EACH LENDER’S INCREASED
COMMITMENT.

3.                                      CONDITIONS; TERM OF AGREEMENT.

3.1                               Conditions Precedent to the Initial Advance
and the Initial Letter of Credit.  The obligation of the Lender Group to make
the initial Advance and to issue the initial Letter of Credit is subject to the
fulfillment, to the satisfaction of Agent and its counsel, of each of the
following conditions on or before the Closing Date:

(A)                                  THE CLOSING DATE SHALL OCCUR ON OR BEFORE
JUNE 28, 2007;

(B)                                 AGENT SHALL HAVE RECEIVED A CONFIRMATION OF
THE GUARANTIES AND EACH SECURITY AGREEMENT OR OTHER INSTRUMENT OR DOCUMENT
EXECUTED AND DELIVERED PURSUANT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT TO
SECURE ANY OF THE OBLIGATIONS, DULY EXECUTED, AND EACH SUCH DOCUMENT SHALL BE IN
FULL FORCE AND EFFECT;

(C)                                  AGENT SHALL HAVE RECEIVED A CERTIFICATE
FROM THE SECRETARY OR ASSISTANT SECRETARY OF EACH BORROWER AND GUARANTOR
ATTESTING TO THE RESOLUTIONS OF SUCH BORROWER’S AND GUARANTOR’S BOARD OF
DIRECTORS AUTHORIZING ITS EXECUTION, DELIVERY, AND PERFORMANCE OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS TO WHICH SUCH BORROWER AND GUARANTOR IS A PARTY AND
AUTHORIZING SPECIFIC OFFICERS OF SUCH BORROWER AND GUARANTOR TO EXECUTE THE
SAME;

(D)                                 AGENT SHALL HAVE RECEIVED COPIES OF EACH
BORROWER’S AND GUARANTOR’S GOVERNING DOCUMENTS, AS AMENDED, MODIFIED, OR
SUPPLEMENTED ON OR BEFORE THE CLOSING DATE, CERTIFIED BY THE SECRETARY OR
ASSISTANT SECRETARY OF EACH BORROWER AND GUARANTOR;

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(E)                                  AGENT SHALL HAVE RECEIVED A CERTIFICATE OF
STATUS WITH RESPECT TO EACH BORROWER AND GUARANTOR, DATED WITHIN 10 DAYS OF THE
CLOSING DATE, SUCH CERTIFICATE TO BE ISSUED BY THE APPROPRIATE OFFICER OF THE
JURISDICTION OF ORGANIZATION OF EACH BORROWER AND GUARANTOR, WHICH CERTIFICATE
SHALL INDICATE THAT SUCH BORROWER AND GUARANTOR IS IN GOOD STANDING IN SUCH
JURISDICTION;

(F)                                    AGENT SHALL HAVE RECEIVED A CERTIFICATE
OF INSURANCE, TOGETHER WITH THE ENDORSEMENTS THERETO, AS ARE REQUIRED BY SECTION
6.9, THE FORM AND SUBSTANCE OF WHICH SHALL BE SATISFACTORY TO AGENT AND ITS
COUNSEL;

(G)                                 AGENT SHALL HAVE RECEIVED AN OPINION OF
BORROWERS’ AND GUARANTORS’ COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO AGENT
IN ITS SOLE DISCRETION;

(H)                                 AGENT SHALL HAVE RECEIVED COUNTERPARTS OF
THE FEE LETTER DATED AS OF THE CLOSING DATE DULY EXECUTED BY EACH OF THE PARTIES
THERETO;

(I)                                     AGENT SHALL HAVE RECEIVED FULLY EXECUTED
COLLATERAL ACCESS AGREEMENTS FOR EACH LOCATION SET FORTH ON SCHEDULE 3.1(I).

(J)                                     AGENT SHALL HAVE RECEIVED A FULLY
EXECUTED CUSTOMS BROKER AGREEMENT FOR THE BORROWERS’ CUSTOMS BROKER LISTED ON
SCHEDULE 3.1(J), IN SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT E-1,
SUBJECT TO SUCH CHANGES REQUESTED BY SUCH CUSTOMS BROKER AS SHALL BE REASONABLY
ACCEPTABLE TO THE AGENT.

(K)                                  AGENT SHALL HAVE ENTERED INTO AN
INTERCREDITOR AGREEMENT WITH THE LENDERS UNDER THE L/C DEMAND FACILITY (AS
DEFINED HEREIN), ON TERMS REASONABLY ACCEPTABLE TO THE AGENT;

(L)                                     BORROWERS SHALL HAVE PAID TO THE AGENT
ALL FEES REQUIRED PURSUANT TO THE TERMS AND CONDITIONS OF THE FEE LETTER; AND

(M)                               ALL OTHER DOCUMENTS AND LEGAL MATTERS IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL HAVE BEEN
DELIVERED, EXECUTED, OR RECORDED AND SHALL BE IN FORM AND SUBSTANCE SATISFACTORY
TO AGENT AND ITS COUNSEL.

3.2                               Conditions Precedent to all Advances and all
Letters of Credit.  The following shall be conditions precedent to all Advances
and all Letters of Credit hereunder:

(A)                                  THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRUE AND
CORRECT IN ALL MATERIAL RESPECTS ON AND AS OF THE DATE OF SUCH EXTENSION OF
CREDIT, AS THOUGH MADE ON AND AS OF SUCH DATE (EXCEPT TO THE EXTENT THAT SUCH
REPRESENTATIONS AND WARRANTIES RELATE SOLELY TO AN EARLIER DATE);

(B)                                 EXCEPT FOR GOOD FAITH DISPUTES BETWEEN A
BORROWER AND LANDLORDS, NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND
BE CONTINUING ON THE DATE OF SUCH EXTENSION OF CREDIT, NOR SHALL EITHER RESULT
FROM THE MAKING THEREOF;

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(C)                                  NO INJUNCTION, WRIT, RESTRAINING ORDER, OR
OTHER ORDER OF ANY NATURE PROHIBITING, DIRECTLY OR INDIRECTLY, THE EXTENDING OF
SUCH CREDIT SHALL HAVE BEEN ISSUED AND REMAIN IN FORCE BY ANY GOVERNMENTAL
AUTHORITY AGAINST ANY BORROWER, THE LENDER GROUP OR ANY OF THEIR AFFILIATES; AND

(D)                                 THE AMOUNT OF ANY REQUESTED ADVANCE OR
LETTER OF CREDIT SHALL NOT EXCEED AVAILABILITY AT SUCH TIME.

(E)                                  INTENTIONALLY OMITTED.

3.3                               INTENTIONALLY OMITTED.

3.4                               Term.  This Agreement shall become effective
as of June 28, 2007 upon the execution and delivery hereof by the Borrowers and
the Lender Group and shall continue in full force and effect for a term ending
on November 1, 2010 (the “Maturity Date”).  The foregoing notwithstanding, the
Agent (on behalf of the Lender Group) shall have the right to terminate the
Lender Group’s obligations under this Agreement immediately and without notice
upon the occurrence and during the continuation of an Event of Default.

3.5                               Effect of Termination.  On the date of
termination of this Agreement, all Obligations (including contingent
reimbursement obligations of Borrowers with respect to any outstanding Letters
of Credit and including Bank Product Obligations) immediately shall become due
and payable without notice or demand.  No termination of this Agreement,
however, shall relieve or discharge Borrowers of Borrowers’ duties, Obligations,
or covenants hereunder, and the Lender Group’s continuing security interests in
the Collateral shall remain in effect until all Obligations have been fully and
finally discharged and the Lender Group’s obligation to provide additional
credit hereunder is terminated.

3.6                               EARLY TERMINATION BY BORROWERS.  BORROWERS
HAVE THE OPTION, AT ANY TIME UPON 90 DAYS PRIOR WRITTEN NOTICE TO AGENT, TO
TERMINATE THIS AGREEMENT BY PAYING TO AGENT, FOR THE BENEFIT OF THE LENDER
GROUP, IN CASH, THE OBLIGATIONS (INCLUDING EITHER (A) PROVIDING CASH COLLATERAL
TO BE HELD BY AGENT FOR THE BENEFIT OF THOSE LENDERS WITH A COMMITMENT IN AN
AMOUNT EQUAL TO 105% OF THE THEN OUTSTANDING LETTERS OF CREDIT, OR (B) CAUSING
THE OUTSTANDING ORIGINAL LETTERS OF CREDIT TO BE RETURNED TO THE ISSUER THEREOF,
IN FULL, TOGETHER WITH THE APPLICABLE PREPAYMENT PREMIUM, IF ANY (TO BE
ALLOCATED BASED UPON LETTER AGREEMENTS BETWEEN AGENT AND INDIVIDUAL LENDERS)). 
IF ADMINISTRATIVE BORROWER HAS SENT A NOTICE OF TERMINATION PURSUANT TO THE
PROVISIONS OF THIS SECTION, THEN THE COMMITMENTS SHALL TERMINATE AND BORROWERS
SHALL BE OBLIGATED TO REPAY THE OBLIGATIONS (INCLUDING EITHER (I) PROVIDING CASH
COLLATERAL TO BE HELD BY AGENT FOR THE BENEFIT OF THOSE LENDERS WITH A
COMMITMENT IN AN AMOUNT EQUAL TO 105% OF THE THEN OUTSTANDING LETTERS OF CREDIT,
OR (II) CAUSING THE ORIGINAL LETTERS OF CREDIT TO BE RETURNED TO THE ISSUER
THEREOF, IN FULL, TOGETHER WITH THE APPLICABLE PREPAYMENT PREMIUM, IF ANY, ON
THE DATE SET FORTH AS THE DATE OF TERMINATION OF THIS AGREEMENT IN SUCH
NOTICE).  IN THE EVENT OF THE TERMINATION OF THIS AGREEMENT AND REPAYMENT OF THE
OBLIGATIONS AT ANY TIME PRIOR TO THE DATE ON WHICH THIS AGREEMENT IS SCHEDULED
TO TERMINATE PURSUANT TO SECTION 3.4 HEREOF, FOR ANY OTHER REASON, INCLUDING
(A) FORECLOSURE AND SALE OF COLLATERAL, (B) SALE OF THE COLLATERAL IN ANY
INSOLVENCY PROCEEDING, OR (C) RESTRUCTURE, REORGANIZATION, OR COMPROMISE OF THE
OBLIGATIONS BY

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THE CONFIRMATION OF A PLAN OF REORGANIZATION OR ANY OTHER PLAN OF COMPROMISE,
RESTRUCTURE, OR ARRANGEMENT IN ANY INSOLVENCY PROCEEDING, THEN, IN VIEW OF THE
IMPRACTICABILITY AND EXTREME DIFFICULTY OF ASCERTAINING THE ACTUAL AMOUNT OF
DAMAGES TO THE LENDER GROUP OR PROFITS LOST BY THE LENDER GROUP AS A RESULT OF
SUCH EARLY TERMINATION, AND BY MUTUAL AGREEMENT OF THE PARTIES AS TO A
REASONABLE ESTIMATION AND CALCULATION OF THE LOST PROFITS OR DAMAGES OF THE
LENDER GROUP, BORROWERS SHALL PAY THE APPLICABLE PREPAYMENT PREMIUM, IF ANY, TO
AGENT (TO BE ALLOCATED BASED UPON LETTER AGREEMENTS BETWEEN AGENT AND INDIVIDUAL
LENDERS), MEASURED AS OF THE DATE OF SUCH TERMINATION.

4.                                      CREATION OF SECURITY INTEREST.

4.1                               Grant of Security Interests.  Each Borrower
hereby grants to Agent for the benefit of the Lender Group a continuing security
interest in all currently existing and hereafter acquired or arising Collateral
in order to secure prompt repayment of any and all Obligations and in order to
secure prompt performance by such Borrower of each of its covenants and duties
under the Loan Documents.  The security interests of Agent for the benefit of
the Lender Group in the Collateral shall attach to all Collateral without
further act on the part of the Lender Group or Borrowers.  Anything contained in
this Agreement or any other Loan Document to the contrary notwithstanding, and
other than:  (a) sales of Inventory to buyers in the ordinary course of
business, (b) sales of Equipment in any 12 month period having an aggregate net
book value of $500,000 with the proceeds being applied to the Obligations, and
(c) sale or disposal of Collateral (other than Inventory) in connection with the
closing of Borrowers’ stores, Borrowers have no authority, express or implied,
to dispose of any item or portion of the Collateral.

4.2                               Negotiable Collateral.  In the event that any
Collateral, including proceeds, is evidenced by or consists of Negotiable
Collateral, Borrowers, immediately upon the request of Agent, shall endorse and
deliver physical possession of such Negotiable Collateral to Agent.

4.3                               Collection of Accounts, General Intangibles,
and Negotiable Collateral.  At any time, Agent or Agent’s designee may
(a) notify customers or Account Debtors of any Borrower that the Accounts,
General Intangibles, or Negotiable Collateral have been assigned to Agent for
the benefit of the Lender Group or that Agent for the benefit of the Lender
Group has a security interest therein, and (b) collect the Accounts, General
Intangibles, and Negotiable Collateral directly and charge the collection costs
and expenses to the Loan Account.  Each Borrower agrees that, subject to Section
2.9, it will hold in trust for the Lender Group, as the Lender Group’s trustee,
any Collections that it receives and immediately will deliver said Collections
to Agent in their original form as received by such Borrower.

4.4                               Delivery of Additional Documentation
Required.  At any time upon the request of Agent, Borrowers shall execute and
deliver to Agent all financing statements, continuation financing statements,
fixture filings, security agreements, pledges, assignments, control agreements,
endorsements of certificates of title, applications for title, affidavits,
reports, notices, schedules of accounts, letters of authority, and all other
documents that Agent reasonably may request, in form satisfactory to Agent, to
perfect and continue perfected the Liens of the Lender Group in the Collateral,
and in order to fully consummate all of the transactions contemplated hereby and
under the other the Loan Documents.

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4.5                               Power of Attorney.  Each Borrower hereby
irrevocably makes, constitutes, and appoints Agent (and any of Agent’s officers,
employees, or agents designated by Agent) as such Borrower’s true and lawful
attorney, with power to (a) if any Borrower refuses to, or fails timely to
execute and deliver any of the documents described in Section 4.4, sign the name
of such Borrower on any of the documents described in Section 4.4, (b) at any
time that an Event of Default has occurred and is continuing or the Lender Group
deems itself insecure, sign such Borrower’s name on any invoice or bill of
lading relating to any Account, drafts against Account Debtors, schedules and
assignments of Accounts, verifications of Accounts, and notices to Account
Debtors, (c) send requests for verification of Accounts, (d) endorse such
Borrower’s name on any Collection item that may come into the Lender Group’s
possession, (e) at any time that an Event of Default has occurred and is
continuing or the Lender Group deems itself insecure, notify the post office
authorities to change the address for delivery of such Borrower’s mail to an
address designated by Agent, to receive and open all mail addressed to such
Borrower, and to retain all mail relating to the Collateral and forward all
other mail to such Borrower, (f) at any time that an Event of Default has
occurred and is continuing or the Lender Group deems itself insecure, make,
settle, and adjust all claims under Borrowers’ policies of insurance and make
all determinations and decisions with respect to such policies of insurance, and
(g) at any time that an Event of Default has occurred and is continuing or Agent
deems itself insecure, settle and adjust disputes and claims respecting the
Accounts directly with Account Debtors, for amounts and upon terms that Agent
determines to be reasonable, and Agent may cause to be executed and delivered
any documents and releases that Agent determines to be necessary.  The
appointment of Agent as each Borrower’s attorney, and each and every one of
Agent’s rights and powers, being coupled with an interest, is irrevocable until
all of the Obligations have been fully and finally repaid and performed and the
Lender Group’s obligation to extend credit hereunder is terminated.

4.6                               Right to Inspect.  Agent (through any of its
officers, employees, or agents), shall have the right, from time to time
hereafter to inspect Books and to check, test, and appraise the Collateral in
order to verify Borrowers’ financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral.

5.                                      REPRESENTATIONS AND WARRANTIES.  IN
ORDER TO INDUCE THE LENDER GROUP TO ENTER INTO THIS AGREEMENT, EACH BORROWER
MAKES THE FOLLOWING REPRESENTATIONS AND WARRANTIES WHICH SHALL BE TRUE, CORRECT,
AND COMPLETE IN ALL RESPECTS AS OF THE DATE HEREOF, AND SHALL BE TRUE, CORRECT,
AND COMPLETE IN ALL RESPECTS AS OF THE CLOSING DATE, AND AT AND AS OF THE DATE
OF THE MAKING OF EACH ADVANCE AND LETTER OF CREDIT MADE THEREAFTER, AS THOUGH
MADE ON AND AS OF THE DATE OF SUCH ADVANCE AND LETTER OF CREDIT (EXCEPT TO THE
EXTENT THAT SUCH REPRESENTATIONS AND WARRANTIES RELATE SOLELY TO AN EARLIER
DATE) AND SUCH REPRESENTATIONS AND WARRANTIES SHALL SURVIVE THE EXECUTION AND
DELIVERY OF THIS AGREEMENT:

5.1                               No Encumbrances.  Each Borrower has good and
indefeasible title to the Collateral, free and clear of Liens except for
Permitted Liens.

5.2                               Eligible Accounts.  The Eligible Accounts are,
at the time of the creation thereof and as of each date on which Borrowers
includes them in a Borrowing Base calculation or certification, bona fide
existing obligations created by the sale and delivery of Inventory or the

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rendition of services to Account Debtors in the ordinary course of Borrowers’
business, unconditionally owed to Borrowers without defenses, disputes, offsets,
counterclaims, or rights of return or cancellation other than normal returns or
disputes in the normal course of business.  The property giving rise to such
Eligible Accounts has been delivered to the Account Debtor, or to the Account
Debtor’s agent for immediate shipment to and unconditional acceptance by the
Account Debtor.  At the time of the creation of an Eligible Account and as of
each date on which Borrowers include an Eligible Account in a Borrowing Base
calculation or certification, Borrowers have not received notice of actual or
imminent bankruptcy, insolvency, or material impairment of the financial
condition of any applicable Account Debtor regarding such Eligible Account.

5.3                               Eligible Inventory.  All Eligible Inventory is
now and at all times hereafter shall be of good and merchantable quality, free
from defects, except for minor defects arising in the ordinary course of
business.

5.4                               Equipment.  All of the Equipment is used or
held for use in Borrowers’ business and is fit for such purposes.

5.5                               Location of Inventory and Equipment.  The
Inventory (other than Inventory in transit) and Equipment are not stored with a
bailee, warehouseman, or similar party (without Agent’s prior written consent)
and are located only at the locations identified on Schedule 6.11 or otherwise
permitted by Section 6.11.

5.6                               Inventory Records.  Each Borrower keeps
correct and accurate records itemizing and describing the kind, type, quality
and quantity of its Inventory and each Borrower’s cost therefor in accordance
with the retail method of accounting.

5.7                               Location of Chief Executive Office; FEIN.  The
chief executive office of Borrowers is located at the address indicated in the
preamble to this Agreement and Parent’s FEIN is 31-1241495 and Services
Company’s FEIN is 20-0850965.

5.8                               DUE ORGANIZATION AND QUALIFICATION;
SUBSIDIARIES.

(A)                                  EACH BORROWER IS DULY ORGANIZED AND
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS
INCORPORATION AND QUALIFIED AND LICENSED TO DO BUSINESS IN, AND IN GOOD STANDING
IN, ANY STATE WHERE THE FAILURE TO BE SO LICENSED OR QUALIFIED REASONABLY COULD
BE EXPECTED TO CAUSE A MATERIAL ADVERSE CHANGE.

(B)                                 SET FORTH ON SCHEDULE 5.8, IS A COMPLETE AND
ACCURATE LIST OF EACH BORROWER’S DIRECT AND INDIRECT SUBSIDIARIES, SHOWING: (I)
THE JURISDICTION OF THEIR INCORPORATION; (II) THE NUMBER OF SHARES OF EACH CLASS
OF COMMON AND PREFERRED STOCK AUTHORIZED FOR EACH OF SUCH SUBSIDIARIES; AND
(III) THE NUMBER AND THE PERCENTAGE OF THE OUTSTANDING SHARES OF EACH SUCH CLASS
OWNED DIRECTLY OR INDIRECTLY BY THE APPLICABLE BORROWER.  ALL OF THE OUTSTANDING
CAPITAL STOCK OF EACH SUCH SUBSIDIARY HAS BEEN VALIDLY ISSUED AND IS FULLY PAID
AND NON-ASSESSABLE.

(C)                                  EXCEPT AS SET FORTH ON SCHEDULE 5.8, NO
CAPITAL STOCK (OR ANY SECURITIES, INSTRUMENTS, WARRANTS, OPTIONS, PURCHASE
RIGHTS, CONVERSION OR EXCHANGE RIGHTS, CALLS,

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COMMITMENTS OR CLAIMS OF ANY CHARACTER CONVERTIBLE INTO OR EXERCISABLE FOR
CAPITAL STOCK) OF ANY DIRECT OR INDIRECT SUBSIDIARY OF ANY BORROWER IS SUBJECT
TO THE ISSUANCE OF ANY SECURITY, INSTRUMENT, WARRANT, OPTION, PURCHASE RIGHT,
CONVERSION OR EXCHANGE RIGHT, CALL, COMMITMENT OR CLAIM OF ANY RIGHT, TITLE, OR
INTEREST THEREIN OR THERETO.

5.9                               Due Authorization; No Conflict.

(A)                                  THE EXECUTION AND DELIVERY BY EACH BORROWER
OF EACH LOAN DOCUMENT TO WHICH IT IS A PARTY; EACH BORROWER’S CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED BY SUCH LOAN DOCUMENTS; EACH BORROWER’S
PERFORMANCE UNDER THOSE OF THE LOAN DOCUMENTS TO WHICH IT IS A PARTY:

(I)                                     HAS BEEN DULY AUTHORIZED BY ALL
NECESSARY ACTION.

(II)                                  DOES NOT, AND WILL NOT, CONTRAVENE IN ANY
MATERIAL RESPECT ANY PROVISION OF ANY REQUIREMENT OF LAW OR OBLIGATION OF THAT
BORROWER.

(III)                               WILL NOT RESULT IN THE CREATION OR
IMPOSITION OF, OR THE OBLIGATION TO CREATE OR IMPOSE, ANY LIEN UPON ANY ASSETS
OF THAT BORROWER PURSUANT TO ANY REQUIREMENT OF LAW OR OBLIGATION, EXCEPT
PURSUANT TO THE LOAN DOCUMENTS.

(B)                                 THE LOAN DOCUMENTS HAVE BEEN DULY EXECUTED
AND DELIVERED BY EACH BORROWER AND ARE THE LEGAL, VALID AND BINDING OBLIGATIONS
OF EACH BORROWER, ENFORCEABLE AGAINST EACH BORROWER IN ACCORDANCE WITH THEIR
RESPECTIVE TERMS.

5.10                        Litigation.  Except as set forth on Schedule 5.10,
there are no actions or proceedings pending by or against Borrowers before any
court or administrative agency and Borrowers do not have knowledge or belief of
any pending, threatened, or imminent litigation, governmental investigations, or
claims, complaints, actions, or prosecutions involving Borrowers or any
guarantor of the Obligations, except for: (a) ongoing collection matters in
which Borrowers are the plaintiff; and (b) current matters that, if decided
adversely to Borrowers, would not materially impair the prospect of repayment of
the Obligations or materially impair the value or priority of the Lender Group’s
security interests in the Collateral.

5.11                        NO MATERIAL ADVERSE CHANGE.  ALL FINANCIAL
STATEMENTS RELATING TO BORROWERS OR ANY GUARANTOR OF THE OBLIGATIONS THAT HAVE
BEEN DELIVERED BY BORROWERS TO THE LENDER GROUP HAVE BEEN PREPARED IN ACCORDANCE
WITH GAAP (EXCEPT AS MAY BE DIRECTLY IMPACTED BY THE STOCK OPTION ISSUE AND, IN
THE CASE OF UNAUDITED FINANCIAL STATEMENTS, FOR THE LACK OF FOOTNOTES AND BEING
SUBJECT TO YEAR-END AUDIT ADJUSTMENTS) AND FAIRLY PRESENT BORROWERS’ (OR SUCH
GUARANTOR’S, AS APPLICABLE) FINANCIAL CONDITION AS OF THE DATE THEREOF AND
BORROWERS’ RESULTS OF OPERATIONS FOR THE PERIOD THEN ENDED.  THERE HAS NOT BEEN
A MATERIAL ADVERSE CHANGE WITH RESPECT TO BORROWERS (OR SUCH GUARANTOR, AS
APPLICABLE) SINCE THE DATE OF THE LATEST FINANCIAL STATEMENTS SUBMITTED TO THE
LENDER GROUP IN ACCORDANCE WITH SECTION 6.2 OF THIS AGREEMENT.

5.12                        FRAUDULENT TRANSFER.

(A)                                  EACH BORROWER AND EACH SUBSIDIARY OF A
BORROWER IS SOLVENT.

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(B)                                 NO TRANSFER OF PROPERTY IS BEING MADE BY ANY
BORROWER OR ANY SUBSIDIARY OF A BORROWER AND NO OBLIGATION IS BEING INCURRED BY
ANY BORROWER OR ANY SUBSIDIARY OF A BORROWER IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS WITH THE INTENT TO
HINDER, DELAY, OR DEFRAUD EITHER PRESENT OR FUTURE CREDITORS OF BORROWERS OR
THEIR SUBSIDIARIES.

5.13                        Employee Benefits.  None of any Borrower, any of its
Subsidiaries, or any of their ERISA Affiliates maintains or contributes to any
Benefit Plan, other than those listed on Schedule 5.13.  Each Borrower, each of
its Subsidiaries and each ERISA Affiliate have satisfied the minimum funding
standards of ERISA and the IRC with respect to each Benefit Plan to which it is
obligated to contribute.  No ERISA Event has occurred nor has any other event
occurred that may result in an ERISA Event that reasonably could be expected to
result in a Material Adverse Change.  No Borrower or its Subsidiaries, any ERISA
Affiliate, or any fiduciary of any Plan is subject to any direct or indirect
liability with respect to any Plan under any applicable law, treaty, rule,
regulation, or agreement.  No Borrower or its Subsidiaries or any ERISA
Affiliate is required to provide security to any Plan under Section 401(a)(29)
of the IRC.

5.14                        Environmental Condition.  Except as set forth on
Schedule 5.14, none of Borrowers’ properties or assets has ever been used by
Borrowers or, to the best of Borrowers’ knowledge, by previous owners or
operators in the disposal of, or to produce, store, handle, treat, release, or
transport, any Hazardous Materials.  None of Borrowers’ properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, or a candidate for
closure pursuant to any environmental protection statute.  No lien arising under
any environmental protection statute has attached to any revenues or to any real
or personal property owned or operated by Borrowers.  Borrowers have not
received a summons, citation, notice, or directive from the Environmental
Protection Agency or any other federal or state governmental agency concerning
any action or omission by Borrowers resulting in the releasing or disposing of
Hazardous Materials into the environment.

6.                                      AFFIRMATIVE COVENANTS.  Each Borrower
covenants and agrees that, so long as any credit hereunder shall be available
and until full and final payment of the Obligations, Borrowers shall do all of
the following:

6.1                               ACCOUNTING SYSTEM AND SCHEDULES.

(A)                                  MAINTAIN A STANDARD AND MODERN SYSTEM OF
ACCOUNTING IN ACCORDANCE WITH GAAP WITH LEDGER AND ACCOUNT CARDS OR COMPUTER
TAPES, DISCS, PRINTOUTS, AND RECORDS PERTAINING TO THE COLLATERAL WHICH CONTAIN
INFORMATION AS FROM TIME TO TIME MAY BE REQUESTED BY AGENT.  BORROWERS ALSO
SHALL KEEP PROPER BOOKS OF ACCOUNT SHOWING ALL SALES, CLAIMS, AND ALLOWANCES ON
ITS INVENTORY.

(B)                                 SCHEDULES OF ACCOUNTS.  WITH SUCH REGULARITY
AS AGENT SHALL REQUIRE, BORROWERS SHALL PROVIDE AGENT WITH SCHEDULES DESCRIBING
ALL ACCOUNTS.  AGENT’S FAILURE TO REQUEST SUCH SCHEDULES OR BORROWERS’ FAILURE
TO EXECUTE AND DELIVER SUCH SCHEDULES SHALL NOT AFFECT OR LIMIT THE LENDER
GROUP’S SECURITY INTERESTS OR OTHER RIGHTS IN AND TO THE ACCOUNTS.

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6.2                               Financial Statements, Reports, Certificates. 
Deliver to Agent: (a) as soon as available, but in any event within 30 days
after the end of each Fiscal Month (except with respect to the last Fiscal Month
of each fiscal quarter, with respect to which the applicable period for delivery
shall be 45 days rather than 30 days) during each of Parent’s Fiscal Years, a
company prepared balance sheet, income statement, and cash flow statement
covering Parent’s operations during such Fiscal Month; and (b) as soon as
available, but in any event within 90 days after the end of each of Parent’s
Fiscal Years (except with respect to the Fiscal Year ended February 3, 2007,
with respect to which the deadline for delivery shall be July 31, 2007),
financial statements of Parent for each such Fiscal Year, audited by independent
certified public accountants reasonably acceptable to Agent and certified,
without any going concern or other material qualifications, by such accountants
to have been prepared in accordance with GAAP; together with a certificate of
such accountants addressed to Agent stating that such accountants do not have
knowledge of the existence of any failure of Parent to comply with
Section 7.19.  Such audited financial statements shall include a balance sheet,
profit and loss statement, and cash flow statement, and, if prepared, such
accountants’ letter to management.  If Parent is a parent company of one or more
Subsidiaries, or Affiliates, or is a Subsidiary or Affiliate of another company,
then, in addition to the financial statements referred to above, Parent agrees
to deliver financial statements prepared on a consolidating basis so as to
present Parent and each such related entity separately, and on a consolidated
basis.

Parent also shall deliver to Lenders (a) written notice of the filing of
Parent’s Form 10-Q Quarterly Reports, Form 10-K Annual Reports, and Form 8-K
Current Reports, and any other filings made by Parent with the Securities and
Exchange Commission, if any, as soon as the same are filed, (b) any other
information that is provided by Parent to its public shareholders, and (c) any
other report reasonably requested by Agent relating to the Collateral and
financial condition of Parent.

Each month, together with the financial statements provided pursuant to
Section 6.2(a), Administrative Borrower shall deliver to Agent a Compliance
Certificate signed by its chief financial officer to the effect that: (i) all
reports, statements, or computer prepared information of any kind or nature
delivered or caused to be delivered to Agent hereunder have been prepared in
accordance with GAAP and fairly present the financial condition of Borrowers,
except for the months ended March, 2007, April, 2007 and May, 2007 as may be
directly impacted by the Stock Option Issue; (ii) Borrowers are in timely
compliance with all of its covenants and agreements hereunder; (iii) the
representations and warranties of Borrowers contained in this Agreement and the
other Loan Documents are true and correct in all material respects on and as of
the date of such certificate, as though made on and as of such date (except to
the extent that such representations and warranties relate solely to an earlier
date); and (iv) on the date of delivery of such certificate to Agent there does
not exist any condition or event that constitutes an Event of Default (or, in
each case, to the extent of any non-compliance, describing such non-compliance
as to which he or she may have knowledge and what action Borrowers have taken,
is taking, or proposes to take with respect thereto).

Administrative Borrower shall deliver to Agent its Business Plan for each fiscal
year, the form of which shall be substantially similar to the business plan for
the Fiscal Year ending on or about

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January 31, 2008 attached hereto as Exhibit B-1 and the substance of which shall
be reasonably satisfactory to the Agent, on or before March 1 of such fiscal
year.

Administrative Borrower shall have issued written instructions to its
independent certified public accountants authorizing them to communicate with
Agent and to release to Agent whatever financial information concerning
Borrowers that Agent may request.  Administrative Borrower hereby irrevocably
authorizes and directs all auditors, accountants, or other third parties to
deliver to Agent, at Borrowers’ expense, copies of Borrowers’ financial
statements, papers related thereto, and other accounting records of any nature
in their possession, and to disclose to Agent any information they may have
regarding the Collateral or the financial condition of Borrowers.

6.3                               Tax Returns.  Deliver to Agent copies of each
of Parent’s future federal income tax returns, and any amendments thereto,
concurrently with the filing thereof with the Internal Revenue Service.

6.4                               Borrowing Base Certificate.  Borrowers shall
now and from time to time hereafter, but not less frequently than (a) weekly (to
be delivered each Wednesday based upon the close of business on the preceding
Saturday) or (b) monthly, so long as Borrowers have maintained at least
$25,000,000 of Availability without being limited by the Maximum Amount (to be
delivered on the first Wednesday of each Fiscal Month (or, if such day is not a
Business Day, on the next succeeding Business Day) based upon the close of
business as of the last day of the immediately preceding Fiscal Month), execute
and deliver to Agent a Borrowing Base Certificate (in the form of Exhibit D-1
attached hereto, as such form may be revised from time to time by Agent
consistent with the terms of this Agreement) and a designation of Inventory
specifying the retail selling price of Borrowers’ Inventory, and not less
frequently than monthly, execute and deliver to Agent a designation of Inventory
specifying Borrowers’ cost, and further specifying such other information as
Agent may reasonably request.  Such designation shall separately report
Inventory that is subject to a letter of credit issued by any Person other than
Agent.  Borrowers will not include Inventory in transit in its Inventory reports
until such Inventory has been paid for by draws under applicable letters of
credit or has been acquired by Borrowers without letter of credit financing.

6.5                               Store Openings and Closings and Rents
Reports.  Borrowers shall give Agent reasonable prior notice of new store
openings and closing of its stores.  Borrowers shall make timely payment of all
rents on real property leases where a Borrower is the lessee within applicable
grace periods, and shall provide Agent with a monthly report specifying the
status of such payments.  In the event that Borrowers become delinquent in their
rent payments, then Agent can establish reserves against the Borrowing Base for
the amount of any landlord liens arising from such delinquency.

6.6                               Title to Equipment.  Upon Agent’s request,
Borrowers shall within 30 days of such request deliver to Agent, properly
endorsed, any and all evidences of ownership of, certificates of title, or
applications for title to any items of Equipment with a market value of $100,000
or more other than Equipment leased or to be leased.

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6.7                               Maintenance of Equipment.  Maintain the
Equipment in good operating condition and repair (ordinary wear and tear
excepted), and make all necessary replacements thereto so that the value and
operating efficiency thereof shall at all times be maintained and preserved. 
Other than those items of Equipment that constitute fixtures on the Closing
Date, Borrowers shall not permit any item of Equipment to become a fixture to
real estate or an accession to other property, and such Equipment shall at all
times remain personal property.

6.8                               Taxes.  Cause all assessments and taxes,
whether real, personal, or otherwise, due or payable by, or imposed, levied, or
assessed against Borrowers, their Subsidiaries, or any of their property to be
paid in full, before delinquency or before the expiration of any extension
period, except to the extent that the validity of such assessment or tax shall
be the subject of a Permitted Protest.  Borrowers shall make due and timely
payment or deposit of all such federal, state, and local taxes, assessments, or
contributions required of it by law, and will execute and deliver to Agent, on
demand, appropriate certificates attesting to the payment thereof or deposit
with respect thereto.  Borrowers will make timely payment or deposit of all tax
payments and withholding taxes required of it by applicable laws, including
those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state,
and federal income taxes, and will, upon request, furnish Agent with proof
satisfactory to Agent indicating that Borrowers have made such payments or
deposits.

6.9                               INSURANCE.

(A)                                  BORROWERS, AT THEIR EXPENSE, SHALL KEEP THE
COLLATERAL INSURED AGAINST LOSS OR DAMAGE BY FIRE, THEFT, EXPLOSION, SPRINKLERS,
AND ALL OTHER HAZARDS AND RISKS, AND IN SUCH AMOUNTS, AS ARE ORDINARILY INSURED
AGAINST BY OTHER OWNERS IN SIMILAR BUSINESSES.  BORROWERS ALSO SHALL MAINTAIN
BUSINESS INTERRUPTION, PUBLIC LIABILITY, PRODUCT LIABILITY, AND PROPERTY DAMAGE
INSURANCE RELATING TO BORROWERS’ OWNERSHIP AND USE OF THE COLLATERAL, AS WELL AS
INSURANCE AGAINST LARCENY, EMBEZZLEMENT, AND CRIMINAL MISAPPROPRIATION.

(B)                                 ALL SUCH POLICIES OF INSURANCE SHALL BE IN
SUCH FORM, WITH SUCH COMPANIES, AND IN SUCH AMOUNTS AS MAY BE REASONABLY
SATISFACTORY TO AGENT.  ALL SUCH POLICIES OF INSURANCE (EXCEPT THOSE OF PUBLIC
LIABILITY AND PROPERTY DAMAGE) SHALL CONTAIN A 438BFU LENDER’S LOSS PAYABLE
ENDORSEMENT, OR AN EQUIVALENT ENDORSEMENT IN A FORM SATISFACTORY TO AGENT,
SHOWING AGENT AS SOLE LOSS PAYEE THEREOF, AND SHALL CONTAIN A WAIVER OF
WARRANTIES, AND SHALL SPECIFY THAT THE INSURER MUST GIVE AT LEAST 10 DAYS PRIOR
WRITTEN NOTICE TO AGENT BEFORE CANCELING ITS POLICY FOR ANY REASON. 
ADMINISTRATIVE BORROWER SHALL DELIVER TO AGENT CERTIFIED COPIES OF SUCH POLICIES
OF INSURANCE AND EVIDENCE OF THE PAYMENT OF ALL PREMIUMS THEREFOR.  ALL PROCEEDS
PAYABLE UNDER ANY SUCH POLICY SHALL BE PAYABLE TO AGENT TO BE APPLIED ON ACCOUNT
OF THE OBLIGATIONS.

6.10                        No Setoffs or Counterclaims.  Make payments
hereunder and under the other Loan Documents by or on behalf of Borrowers
without setoff or counterclaim and free and clear of, and without deduction or
withholding for or on account of, any federal, state, or local taxes.

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6.11                        Location of Inventory and Equipment.  Keep the
Inventory (other than Inventory in transit) and Equipment only at the locations
identified on Schedule 6.11; provided, however, that Borrowers may amend
Schedule 6.11 so long as such amendment occurs by written notice to Agent not
less than 30 days prior to the date on which the Inventory or Equipment is moved
to such new location, so long as such new location is within the continental
United States, Alaska, Hawaii or Puerto Rico, and so long as, at the time of
such written notification, Borrowers provide any financing statements necessary
to perfect and continue perfected the Agent’s Lien for the benefit of the Lender
Group in such assets, and Borrowers will use their best efforts to obtain a
Collateral Access Agreement if requested by Agent.

6.12                        Compliance with Laws.  Comply with the requirements
of all applicable laws, rules, regulations, and orders of any Governmental
Authority, including the Fair Labor Standards Act and the Americans With
Disabilities Act, other than laws, rules, regulations, and orders the
non-compliance with which, individually or in the aggregate, would not have and
could not reasonably be expected to cause a Material Adverse Change.

6.13                        EMPLOYEE BENEFITS.  (A)                     DELIVER
TO AGENT:  (I) PROMPTLY, AND IN ANY EVENT WITHIN 10 BUSINESS DAYS AFTER PARENT
OR ANY OF ITS SUBSIDIARIES KNOWS OR HAS REASON TO KNOW THAT AN ERISA EVENT HAS
OCCURRED THAT REASONABLY COULD BE EXPECTED TO RESULT IN A MATERIAL ADVERSE
CHANGE, A WRITTEN STATEMENT OF THE CHIEF FINANCIAL OFFICER OF PARENT DESCRIBING
SUCH ERISA EVENT AND ANY ACTION THAT IS BEING TAKING WITH RESPECT THERETO BY
PARENT, ANY SUCH SUBSIDIARY OR ERISA AFFILIATE, AND ANY ACTION TAKEN OR
THREATENED BY THE IRS, DEPARTMENT OF LABOR, OR PBGC.  PARENT OR SUCH SUBSIDIARY,
AS APPLICABLE, SHALL BE DEEMED TO KNOW ALL FACTS KNOWN BY THE ADMINISTRATOR OF
ANY BENEFIT PLAN OF WHICH IT IS THE PLAN SPONSOR, (II) PROMPTLY, AND IN ANY
EVENT WITHIN THREE BUSINESS DAYS AFTER THE FILING THEREOF WITH THE IRS, A COPY
OF EACH FUNDING WAIVER REQUEST FILED WITH RESPECT TO ANY BENEFIT PLAN AND ALL
COMMUNICATIONS RECEIVED BY PARENT, ANY OF ITS SUBSIDIARIES OR, TO THE KNOWLEDGE
OF PARENT, ANY ERISA AFFILIATE WITH RESPECT TO SUCH REQUEST, AND (III) PROMPTLY,
AND IN ANY EVENT WITHIN THREE BUSINESS DAYS AFTER RECEIPT BY PARENT, ANY OF ITS
SUBSIDIARIES OR, TO THE KNOWLEDGE OF PARENT, ANY ERISA AFFILIATE, OF THE PBGC’S
INTENTION TO TERMINATE A BENEFIT PLAN OR TO HAVE A TRUSTEE APPOINTED TO
ADMINISTER A BENEFIT PLAN, COPIES OF EACH SUCH NOTICE.

(B)                                 CAUSE TO BE DELIVERED TO AGENT, UPON AGENT’S
REQUEST, EACH OF THE FOLLOWING:  (I) A COPY OF EACH PLAN (OR, WHERE ANY SUCH
PLAN IS NOT IN WRITING, COMPLETE DESCRIPTION THEREOF) (AND IF APPLICABLE,
RELATED TRUST AGREEMENTS OR OTHER FUNDING INSTRUMENTS) AND ALL AMENDMENTS
THERETO, ALL WRITTEN INTERPRETATIONS THEREOF AND WRITTEN DESCRIPTIONS THEREOF
THAT HAVE BEEN DISTRIBUTED TO EMPLOYEES OR FORMER EMPLOYEES OF PARENT OR ITS
SUBSIDIARIES; (II) THE MOST RECENT DETERMINATION LETTER ISSUED BY THE IRS WITH
RESPECT TO EACH BENEFIT PLAN; (III) FOR THE THREE MOST RECENT PLAN YEARS, ANNUAL
REPORTS ON FORM 5500 SERIES REQUIRED TO BE FILED WITH ANY GOVERNMENTAL AGENCY
FOR EACH BENEFIT PLAN; (IV) ALL ACTUARIAL REPORTS PREPARED FOR THE LAST THREE
PLAN YEARS FOR EACH BENEFIT PLAN; (V) A LISTING OF ALL MULTIEMPLOYER PLANS, WITH
THE AGGREGATE AMOUNT OF THE MOST RECENT ANNUAL CONTRIBUTIONS REQUIRED TO BE MADE
BY PARENT OR ANY ERISA AFFILIATE TO EACH SUCH PLAN AND COPIES OF THE COLLECTIVE
BARGAINING AGREEMENTS REQUIRING SUCH CONTRIBUTIONS; (VI) ANY INFORMATION THAT
HAS BEEN PROVIDED TO PARENT OR ANY ERISA AFFILIATE REGARDING WITHDRAWAL
LIABILITY UNDER ANY MULTIEMPLOYER PLAN; AND (VII) THE AGGREGATE AMOUNT OF

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THE MOST RECENT ANNUAL PAYMENTS MADE TO FORMER EMPLOYEES OF PARENT OR ITS
SUBSIDIARIES UNDER ANY RETIREE HEALTH PLAN.

6.14                        Leases.  Pay when due all rents and other amounts
payable under any leases to which Parent is a party or by which Borrowers’
properties and assets are bound, unless such payments are the subject of a
Permitted Protest.  To the extent that Borrowers fail timely to make payment of
such rents and other amounts payable when due under their leases, Agent shall be
entitled, in its discretion, to reserve an amount equal to such unpaid amounts
against the Borrowing Base.

6.15                        RESTATEMENT OF FINANCIAL STATEMENTS.

On or before July 31, 2007, the Parent shall:

(A)                                  DELIVER TO THE AGENT (I) ITS QUARTERLY
REPORTS ON FORM 10-Q FOR THE QUARTERS ENDED JULY 29, 2006, OCTOBER 28, 2006 AND
MAY 5, 2007 (OR THE EQUIVALENT REPORT(S) WHICH THE PARENT FILES WITH THE SEC
THAT COVERS THE SAME PERIODS); AND (II) ITS ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED FEBRUARY 3, 2007;

(B)                                 FILE WITH THE SEC ITS (I) QUARTERLY REPORTS
ON FORM 10-Q FOR THE QUARTERS ENDED JULY 29, 2006, OCTOBER 28, 2006 AND MAY 5,
2007 (OR THE EQUIVALENT REPORT(S) WHICH THE PARENT FILES WITH THE SEC THAT
COVERS THE SAME PERIODS); AND (II) ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED FEBRUARY 3, 2007.

7.                                      NEGATIVE COVENANTS.  EACH BORROWER
COVENANTS AND AGREES THAT, SO LONG AS ANY CREDIT HEREUNDER SHALL BE AVAILABLE
AND UNTIL FULL AND FINAL PAYMENT OF THE OBLIGATIONS, BORROWERS WILL NOT DO ANY
OF THE FOLLOWING:

7.1                               Indebtedness.  Create, incur, assume, permit,
guarantee, or otherwise become or remain, directly or indirectly, liable with
respect to any Indebtedness, except:

(A)                                  INDEBTEDNESS EVIDENCED BY THIS AGREEMENT,
TOGETHER WITH INDEBTEDNESS TO ISSUERS OF LETTERS OF CREDIT THAT IS THE SUBJECT
OF L/C GUARANTEES;

(B)                                 INDEBTEDNESS SET FORTH IN SCHEDULE 7.1;

(C)                                  INDEBTEDNESS SECURED BY PERMITTED LIENS;

(D)                                 REFINANCINGS, RENEWALS, OR EXTENSIONS OF
INDEBTEDNESS PERMITTED UNDER CLAUSES (B) AND (C) OF THIS SECTION 7.1 (AND
CONTINUANCE OR RENEWAL OF ANY PERMITTED LIENS ASSOCIATED THEREWITH) SO LONG AS:
(I) THE TERMS AND CONDITIONS OF SUCH REFINANCINGS, RENEWALS, OR EXTENSIONS DO
NOT MATERIALLY IMPAIR THE PROSPECTS OF REPAYMENT OF THE OBLIGATIONS BY
BORROWERS, (II) THE NET CASH PROCEEDS OF SUCH REFINANCINGS, RENEWALS, OR
EXTENSIONS DO NOT RESULT IN AN INCREASE IN THE AGGREGATE PRINCIPAL AMOUNT OF THE
INDEBTEDNESS SO REFINANCED, RENEWED, OR EXTENDED, (III) SUCH REFINANCINGS,
RENEWALS, REFUNDINGS, OR EXTENSIONS DO NOT RESULT IN A SHORTENING OF THE AVERAGE
WEIGHTED MATURITY OF THE INDEBTEDNESS SO REFINANCED, RENEWED, OR EXTENDED, AND
(IV) TO THE EXTENT THAT INDEBTEDNESS THAT IS REFINANCED WAS SUBORDINATED IN
RIGHT OF PAYMENT TO THE

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OBLIGATIONS, THEN THE SUBORDINATION TERMS AND CONDITIONS OF THE REFINANCING
INDEBTEDNESS MUST BE AT LEAST AS FAVORABLE TO THE LENDER GROUP AS THOSE
APPLICABLE TO THE REFINANCED INDEBTEDNESS;

(E)                                  LEASES, WHETHER OPERATING LEASES OR CAPITAL
LEASES OF EXISTING OR AFTER ACQUIRED EQUIPMENT, INCLUDING, WITHOUT LIMITATION,
THE ALABAMA CAPITAL LEASE;

(F)                                    INDEBTEDNESS SUBORDINATED TO THE
OBLIGATIONS ON TERMS AND CONDITIONS SATISFACTORY TO AGENT;

(G)                                 INTERCOMPANY INDEBTEDNESS BETWEEN AND AMONG
BORROWERS AND GUARANTORS, WHICH INDEBTEDNESS SHALL (I) BE EVIDENCED BY SUCH
DOCUMENTATION AS AGENT MAY REASONABLY REQUIRE, (II) CONSTITUTE “COLLATERAL”
UNDER THIS AGREEMENT, (III) BE ON TERMS (INCLUDING SUBORDINATION TERMS)
REASONABLY ACCEPTABLE TO AGENT, AND (IV) BE OTHERWISE PERMITTED UNDER THE
PROVISIONS OF SECTION 7.13;

(H)                                 ANY LIABILITY OR OBLIGATION OF ANY BORROWER
TO ANY OTHER BORROWER OR TO ANY AFFILIATE OF ANY BORROWER, AND ANY LIABILITY OR
OBLIGATION OF ANY AFFILIATE OF ANY BORROWER TO ANY BORROWER OR TO ANY OTHER
AFFILIATE OF ANY BORROWER, TO REIMBURSE OR SHARE THE COSTS OF ANY SERVICES OR
THIRD PARTY EXPENSES IN ACCORDANCE WITH THE TERMS OF THE INTERCOMPANY SERVICES
AGREEMENT OR ANY SIMILAR INTERCOMPANY COST-SHARING AGREEMENT OR ARRANGEMENT,
PROVIDED THAT NO DEFAULT OR EVENT OF DEFAULT THEN EXISTS OR WOULD ARISE
THEREFROM;

(I)                                     INDEBTEDNESS UNDER THE L/C DEMAND
FACILITY (INCLUDING GUARANTEES BY THE BORROWERS OR ANY GUARANTOR IN RESPECT OF
SUCH INDEBTEDNESS) NOT TO EXCEED $60,000,000; AND

(J)                                     INDEBTEDNESS INCURRED IN CONNECTION WITH
THE ALABAMA SALE-LEASEBACK TRANSACTION.

7.2                               Liens.  Create, incur, assume, or permit to
exist, directly or indirectly, any Lien on or with respect to any of its
property or assets, of any kind, whether now owned or hereafter acquired, or any
income or profits therefrom, except for Permitted Liens (including Liens that
are replacements of Permitted Liens to the extent that the original Indebtedness
is refinanced under Section 7.1(d) and so long as the replacement Liens only
encumber those assets or property that secured the original Indebtedness).

7.3                               Restrictions on Fundamental Changes.  Without
Required Lenders’ prior written consent, enter into any merger, consolidation,
reorganization, or recapitalization, or reclassify its capital stock, or
liquidate, wind up, or dissolve itself (or suffer any liquidation or
dissolution), provided that Borrowers shall be permitted to liquidate or
dissolve Twin Brook at any time upon prior written notice to Agent, provided
further that before, or within three (3) Business Days after, the liquidation or
dissolution of Twin Brook, Twin Brook shall have contributed all of its assets
to Parent and Parent shall have caused the former assets of Twin Brook,
including, without limitation, the equity interests in Services Company, to be
pledged to Agent for the benefit of the Lender Group.  In the event of any
liquidation or dissolution of Twin Brook in accordance with the preceding
sentence, Twin Brook will automatically cease to be a Guarantor hereunder.

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7.4                               Disposal of Assets.  Convey, sell, lease,
assign, transfer, or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial portion of Borrowers’ properties or assets
other than (a) sales of Inventory to buyers in the ordinary course of Borrowers’
business as currently conducted, (b) sales of Equipment having a fair market
value, in the aggregate, of up to $500,000 in any Fiscal Year, (c) distributions
or transfers of some or all of the assets of Twin Brook to Parent, provided that
before, or within three (3) Business Days after, any such distribution or
transfer, Parent shall have caused the assets so distributed to be pledged to
Agent for the benefit of the Lender Group, and (d) as long as no Default or
Event of Default then exists or would arise therefrom, (x) the Alabama
Sale-Leaseback Transaction, provided that such sale is made for fair market
value and the Agent shall have received from the purchaser of the Real Property
subject to the Alabama Sale-Leaseback Transaction a Collateral Access Agreement
substantially in the form attached hereto as Exhibit F-1, subject to such
changes requested by the purchaser of the Real Property subject to the Alabama
Sale-Leaseback Transaction as shall be reasonably acceptable to the Agent, and
(y) the Alabama Capital Lease, provided that the Agent shall have received from
the lessor under the Alabama Capital Lease a Collateral Access Agreement
substantially in the form attached hereto as Exhibit G-1, subject to such
changes requested by the lessor under the Alabama Capital Lease as shall be
reasonably acceptable to the Agent.

7.5                               Change Name.  Change any Borrower’s name,
FEIN, corporate structure (within the meaning of Section 9402(7) of the Code),
state or organization or identity, or add any new fictitious name.

7.6                               Guarantee.  Guarantee or otherwise become in
any way liable with respect to the obligations of any third Person except (i) by
endorsement of instruments or items of payment for deposit to the account of
Borrowers or which are transmitted or turned over to Agent; (ii) guarantee and
indemnification obligations to the Walt Disney Companies in accordance with the
Acquisition Agreement and the TCP Guaranty and Commitment (as defined in the
Acquisition Agreement); and (iii) indemnification obligations to the Walt Disney
Companies pursuant to the Disney License Agreement (as to which, the Borrowers
are subject to the restrictions set forth in Section 7.16, below).

7.7                               Nature of Business.  Make any change in the
principal nature of Borrower’s business, other than in connection with the
consummation of the Disney Stores Transaction.

7.8                               PREPAYMENTS AND AMENDMENTS.

(A)                                  EXCEPT IN CONNECTION WITH A REFINANCING
PERMITTED BY SECTION 7.1(D), PREPAY, REDEEM, RETIRE, DEFEASE, PURCHASE, OR
OTHERWISE ACQUIRE ANY INDEBTEDNESS OWING TO ANY THIRD PERSON, OTHER THAN THE
OBLIGATIONS IN ACCORDANCE WITH THIS AGREEMENT, AND

(B)                                 DIRECTLY OR INDIRECTLY, AMEND, MODIFY,
ALTER, INCREASE, OR CHANGE ANY OF THE TERMS OR CONDITIONS OF ANY AGREEMENT,
INSTRUMENT, DOCUMENT, INDENTURE, OR OTHER WRITING EVIDENCING OR CONCERNING
INDEBTEDNESS PERMITTED UNDER SECTIONS 7.1(B), (C), OR (D).

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7.9                               Change of Control.  Except for transfers of
shares by Parent’s existing shareholders to members of their immediate family,
cause, permit, or suffer, directly or indirectly, any Change of Control.

7.10                        Consignments.  Consign any Inventory or sell any
Inventory on bill and hold, sale or return, sale on approval, or other
conditional terms of sale.

7.11                        Distributions.  Make any distribution or declare or
pay any dividends (in cash or other property, other than capital stock) on, or
purchase, acquire, redeem, or retire any of Parent’s capital stock, of any
class, whether now or hereafter outstanding; provided, however, Parent may buy
back certain of its capital stock so long as (i) no Event of Default or Default
exists and (ii) there has been at least $10,000,000 of borrowing Availability
under Section 2.1 (without being limited by the Maximum Amount) as of the end of
each of the three months preceding such payment or purchase, and on such date,
after taking into account the payment or purchase of such stock.

7.12                        Accounting Methods.  Modify or change its method of
accounting or enter into, modify, or terminate any agreement currently existing,
or at any time hereafter entered into with any third party accounting firm or
service bureau for the preparation or storage of Borrowers’ accounting records
without said accounting firm or service bureau agreeing to provide Agent
information regarding the Collateral or Borrowers’ financial condition.  Each
Borrower waives the right to assert a confidential relationship, if any, it may
have with any accounting firm or service bureau in connection with any
information requested by Agent pursuant to or in accordance with this Agreement,
and agrees that Agent may contact directly any such accounting firm or service
bureau in order to obtain such information.

7.13                        Advances, Investments and Loans.  Make any
investment except:

(A)                                  INVESTMENTS IN CASH AND CASH EQUIVALENTS
AND EQUITY INVESTMENTS IN SUBSIDIARIES IN AN AMOUNT NOT TO EXCEED $1,000,000 IN
THE AGGREGATE IN ANY FISCAL YEAR, (INCLUDING NOT MORE THAN $750,000 TO TWIN
BROOK IN ANY FISCAL YEAR);

(B)                                 SO LONG AS NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, OR WOULD OCCUR AS A CONSEQUENCE THEREOF, PARENT AND
ITS SUBSIDIARIES MAY (I) MAKE LOANS AND ADVANCES TO EMPLOYEES FOR MOVING AND
TRAVEL EXPENSES AND OTHER SIMILAR EXPENSES, IN EACH CASE INCURRED IN THE
ORDINARY COURSE OF BUSINESS, AND (II) MAKE OTHER LOANS AND ADVANCES TO
DIRECTORS, OFFICERS, EMPLOYEES AND VENDORS, (A) SO LONG AS, AS OF THE END OF
EACH OF THE THREE MONTHS PRECEDING SUCH LOAN OR ADVANCE AND ON SUCH DATE AFTER
TAKING INTO ACCOUNT THE PARTICULAR LOAN OR ADVANCE AND (B) SUCH LOANS AND
ADVANCES IN THE AGGREGATE SHALL NOT EXCEED, $6,000,000 OUTSTANDING AT ANY ONE
TIME;

(C)                                  INVESTMENTS IN EXISTENCE ON THE DATE HEREOF
AND SO LONG AS NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, OR
WOULD OCCUR AS A CONSEQUENCE THEREOF, EXTENSIONS, RENEWALS, MODIFICATIONS,
RESTATEMENTS OR REPLACEMENTS THEREOF SO LONG AS THE AGGREGATE DOLLAR AMOUNT OF
ALL SUCH EXTENSIONS, RENEWALS, MODIFICATIONS, RESTATEMENTS, OR REPLACEMENTS DOES
NOT EXCEED THE AMOUNT OF SUCH INVESTMENTS IN EXISTENCE ON THE DATE HEREOF;

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(D)                                 SO LONG AS NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, OR WOULD OCCUR AS A CONSEQUENCE THEREOF, PARENT MAY
MAKE LOANS AND ADVANCES TO ITS SUBSIDIARIES IN THE AGGREGATE AMOUNT OF
$5,000,000 OUTSTANDING AT ANY ONE TIME;

(E)                                  SO LONG AS NO EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, OR WOULD OCCUR AS A CONSEQUENCE THEREOF, PARENT MAY
MAKE INVESTMENTS IN HOOP HOLDINGS, LLC, HOOP RETAIL STORES, LLC AND/OR HOOP
CANADA, INC. (I) SOLELY FOR THE PURPOSE OF PAYMENT OR FINANCING OF CAPITAL
EXPENDITURES AND/OR REIMBURSEMENT FOR CAPITAL EXPENDITURES MADE BY HOOP
HOLDINGS, LLC, HOOP RETAIL STORES, LLC AND/OR HOOP CANADA, INC. IN THE THEN
CURRENT FISCAL YEAR, WHICH ARE REQUIRED TO BE MADE PURSUANT TO THE DISNEY
LICENSE AGREEMENT, AND (II) OTHER INVESTMENTS OR CAPITAL CONTRIBUTIONS WHICH ARE
REQUIRED TO BE MADE PURSUANT TO THE TCP GUARANTY AND COMMITMENT (AS EACH OF
THOSE TERMS IS DEFINED IN THE ACQUISITION AGREEMENT); PROVIDED THAT THE
AGGREGATE AMOUNT OF THE INVESTMENTS MADE PURSUANT TO CLAUSE (I) OF THIS SECTION
7.13(E) IN ANY FISCAL YEAR SHALL NOT EXCEED THE AMOUNT SET FORTH FOR SUCH FISCAL
YEAR IN THE SECOND TABLE IN SECTION 7.19(B) OF THIS AGREEMENT; PROVIDED FURTHER
THAT IN NO EVENT SHALL THE AGGREGATE AMOUNT OF THE INVESTMENTS MADE PURSUANT TO
CLAUSES (I) AND (II) OF THIS SECTION 7.13(E) EXCEED $175,000,000.00 IN THE
AGGREGATE DURING THE TERM OF THIS AGREEMENT OR ANY EXTENSIONS OR RENEWALS
THEREOF; PROVIDED FURTHER THAT THE BORROWERS SHALL PROVIDE THE AGENT WITH SUCH
DOCUMENTATION AS THE AGENT SHALL REASONABLY REQUEST FROM TIME TO TIME TO
EVIDENCE ANY CAPITAL EXPENDITURES BEING FINANCED AND/OR REIMBURSED BY MEANS OF
THE INVESTMENTS MADE PURSUANT TO CLAUSE (I) OF THIS SECTION 7.13(E); PROVIDED
FURTHER THAT INVESTMENTS IN HOOP CANADA, INC. MADE PURSUANT TO THIS SECTION
7.13(E) SHALL NOT EXCEED $12,500,000 IN THE AGGREGATE DURING THE TERM OF THIS
AGREEMENT OR ANY EXTENSIONS OR RENEWALS THEREOF;

(F)                                    INTERCOMPANY LOANS AND ADVANCES OR OTHER
INTERCOMPANY INDEBTEDNESS (I) EXISTING ON THE DATE HEREOF AND DESCRIBED ON
SCHEDULE 7.13(F) HEREOF, (II) HEREAFTER MADE BY ANY BORROWER TO ANY OTHER
BORROWER OR GUARANTOR, OR (III) HEREAFTER MADE BY ANY GUARANTOR TO ANY BORROWER
OR ANY OTHER GUARANTOR, PROVIDED THAT SUCH INTERCOMPANY LOANS, ADVANCES OR OTHER
INTERCOMPANY INDEBTEDNESS SHALL (X) BE EVIDENCED BY SUCH DOCUMENTATION AS AGENT
MAY REASONABLY REQUIRE, (Y) CONSTITUTE “COLLATERAL” UNDER THIS AGREEMENT, AND
(Z) BE ON TERMS (INCLUDING SUBORDINATION TERMS) ACCEPTABLE TO AGENT; AND

(G)                                 INTERCOMPANY LOANS AND ADVANCES OR OTHER
INTERCOMPANY INDEBTEDNESS PERMITTED BY SECTION 7.1(H).

7.14                        Transactions with Affiliates.  Directly or
indirectly enter into or permit to exist any material transaction with any
Affiliate of any Borrower except for: (a) transactions that are in the ordinary
course of such Borrower’s business, upon fair and reasonable terms, that are
fully disclosed to Agent, and that are no less favorable to such Borrower than
would be obtained in arm’s length transaction with a non-Affiliate; (b) the
employment agreement between Parent and Ezra Dabah; (c) transactions in
connection with the Disney Stores Transaction, as otherwise contemplated by, and
specified in this Agreement; (d) payment of insurance premiums to Twin Brook in
an amount not to exceed $750,000 in any Fiscal Year; (e) transactions between
Parent and Services Company in the ordinary course of business; and (f) (i) any
intercompany Indebtedness permitted by Section 7.1(g), (ii) any intercompany
loans and advances or other

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intercompany Indebtedness permitted by Sections 7.13(f) or 7.13(g), and (iii)
any investments permitted by Section 7.13(e).

7.15                        Suspension.  Suspend or go out of a material portion
of their business.

7.16                        Use of Proceeds.  Use (a) the proceeds of the
Advances for any purpose other than (i) to pay transactional costs and expenses
incurred in connection with this Agreement, (ii) to fund working capital in the
ordinary course of business; (iii) to fund Capital Expenditures in the amounts
permitted pursuant to Section 7.19(b) of this Agreement; (iv) to make
investments for the purposes, and in the amounts, permitted pursuant to Section
7.13(e) of this Agreement, provided that in no event shall the proceeds of
Advances be used to make investments pursuant to clause (ii) of Section 7.13(e)
in excess of $50,000,000 in the aggregate during the term of this Agreement or
any extensions or renewals thereof; and (v) consistent with the terms and
conditions hereof, for any lawful and permitted corporate purposes.  In no event
may any proceeds of Advances be used to pay indemnification obligations to the
Walt Disney Companies, as described in Section 7.6, above, in an amount greater
than $25,000,000.00 at any one time or in the aggregate, without the prior
written consent of the Required Lenders.

7.17                        Change in Location of Chief Executive Office;
Inventory and Equipment with Bailees.  Relocate its chief executive office to a
new location without providing 30 days prior written notification thereof to
Agent and so long as, at the time of such written notification, Borrowers
provide any financing statements or fixture filings necessary to perfect and
continue perfected the Agent’s Lien (for the benefit of the Lender Group) and
also provides to Agent a Collateral Access Agreement with respect to such new
location.  The Inventory and Equipment shall not at any time now or hereafter be
stored with a bailee, warehouseman, or similar party without Agent’s prior
written consent.

7.18                        No Prohibited Transactions Under ERISA.  Directly or
indirectly:

(A)                                  ENGAGE, OR PERMIT ANY SUBSIDIARY OF ANY
BORROWER TO ENGAGE, IN ANY PROHIBITED TRANSACTION WHICH IS REASONABLY LIKELY TO
RESULT IN A CIVIL PENALTY OR EXCISE TAX DESCRIBED IN SECTIONS 406 OF ERISA OR
4975 OF THE IRC FOR WHICH A STATUTORY OR CLASS EXEMPTION IS NOT AVAILABLE OR A
PRIVATE EXEMPTION HAS NOT BEEN PREVIOUSLY OBTAINED FROM THE DEPARTMENT OF LABOR;

(B)                                 PERMIT TO EXIST WITH RESPECT TO ANY BENEFIT
PLAN ANY ACCUMULATED FUNDING DEFICIENCY (AS DEFINED IN SECTIONS 302 OF ERISA AND
412 OF THE IRC), WHETHER OR NOT WAIVED;

(C)                                  FAIL, OR PERMIT ANY SUBSIDIARY OF ANY
BORROWER TO FAIL, TO PAY TIMELY REQUIRED CONTRIBUTIONS OR ANNUAL INSTALLMENTS
DUE WITH RESPECT TO ANY WAIVED FUNDING DEFICIENCY TO ANY BENEFIT PLAN;

(D)                                 TERMINATE, OR PERMIT ANY SUBSIDIARY OF ANY
BORROWER TO TERMINATE, ANY BENEFIT PLAN WHERE SUCH EVENT WOULD RESULT IN ANY
LIABILITY OF ANY BORROWER, ANY OF ITS SUBSIDIARIES OR ANY ERISA AFFILIATE UNDER
TITLE IV OF ERISA;

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(E)                                  FAIL, OR PERMIT ANY SUBSIDIARY OF ANY
BORROWER TO FAIL, TO MAKE ANY REQUIRED CONTRIBUTION OR PAYMENT TO ANY
MULTIEMPLOYER PLAN;

(F)                                    FAIL, OR PERMIT ANY SUBSIDIARY OF ANY
BORROWER TO FAIL, TO PAY ANY REQUIRED INSTALLMENT OR ANY OTHER PAYMENT REQUIRED
UNDER SECTION 412 OF THE IRC ON OR BEFORE THE DUE DATE FOR SUCH INSTALLMENT OR
OTHER PAYMENT;

(G)                                 AMEND, OR PERMIT ANY SUBSIDIARY OF ANY
BORROWER TO AMEND, A PLAN RESULTING IN AN INCREASE IN CURRENT LIABILITY FOR THE
PLAN YEAR SUCH THAT EITHER OF ANY BORROWER, ANY SUBSIDIARY OF ANY BORROWER OR
ANY ERISA AFFILIATE IS REQUIRED TO PROVIDE SECURITY TO SUCH PLAN UNDER SECTION
401(A)(29) OF THE IRC; OR

(H)                                 WITHDRAW, OR PERMIT ANY SUBSIDIARY OF ANY
BORROWER TO WITHDRAW, FROM ANY MULTIEMPLOYER PLAN WHERE SUCH WITHDRAWAL IS
REASONABLY LIKELY TO RESULT IN ANY LIABILITY OF ANY SUCH ENTITY UNDER TITLE IV
OF ERISA;

which, individually or in the aggregate, results in or reasonably would be
expected to result in a claim against or liability of any Borrower, any of its
Subsidiaries or any ERISA Affiliate in excess of $100,000.

7.19                        FINANCIAL COVENANTS. 

(A)                                  FAIL TO MAINTAIN AVAILABILITY AT ALL TIMES
OF NOT LESS THAN AN AMOUNT EQUAL TO THE PRODUCT OF (I) THE MAXIMUM AMOUNT (OTHER
THAN THE SEASONAL OVERADVANCE AMOUNT) THEN IN EFFECT, MULTIPLIED BY (II) TEN
PERCENT (10%).

(B)                                 MAKE CAPITAL EXPENDITURES (BASED UPON
PARENT’S STATEMENT OF CASH FLOWS FOR INVESTING ACTIVITIES, NET OF CONSTRUCTION
ALLOWANCES OR OTHER ALLOWANCES GRANTED BY THE APPLICABLE LANDLORD, EXCLUSIVE OF
NON-CAPITAL ITEMS AND INCLUSIVE OF ANY CAPITAL EXPENDITURES MADE BY HOOP
HOLDINGS, LLC, HOOP RETAIL STORES, LLC AND HOOP CANADA, INC. DURING SUCH PERIOD,
EXCEPT TO THE EXTENT THE AGGREGATE AMOUNT OF CAPITAL EXPENDITURES MADE BY HOOP
HOLDINGS, LLC, HOOP RETAIL STORES, LLC AND HOOP CANADA, INC. DURING SUCH PERIOD
EXCEEDS THE AGGREGATE AMOUNT OF FUNDING PROVIDED BY THE BORROWERS TO SUCH
SUBSIDIARY DURING SUCH PERIOD) IN EACH OF THE FOLLOWING FISCAL YEARS IN EXCESS
OF THE APPLICABLE AMOUNT SET FORTH BELOW:

Fiscal Year Ending
On or About

 

Maximum
Capital Expenditures

 

 

 

January 31, 2008

 

$203,000,000.00

 

 

 

January 31, 2009

 

To be determined in accordance with the two following paragraphs.

 

 

 

January 31, 2010

 

To be determined in accordance with the two following paragraphs.

 

 

 

January 31, 2011

 

To be determined in accordance with the two following paragraphs.

 

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Agent, the Required Lenders and Administrative Borrower shall reasonably agree
upon the maximum Capital Expenditures for each Fiscal Year subsequent to the
Fiscal Year ending on or about January 31, 2008 based upon Parent’s Business
Plan for such Fiscal Year.  Further, any unutilized Capital Expenditures in any
given Fiscal Year may be carried forward as an increase to the subsequent year’s
Capital Expenditure covenant, without regard to any prior carryover.

In no event shall the maximum permitted Capital Expenditures for any Fiscal Year
specified in the table above, as agreed by Agent, the Required Lenders and
Administrative Borrower in accordance with the preceding paragraph, be less than
the corresponding amounts that are set forth in the table below.

In addition, the Borrowers acknowledge and agree that the respective amounts set
forth in the table below opposite each such period shall only be available for
use as investments in Hoop Holdings, LLC, Hoop Retail Stores, LLC and/or Hoop
Canada, Inc. which are expressly permitted pursuant to Section 7.13(e) of this
Agreement:

Period

 

Amount to be Preserved
for investments in Hoop
Holdings, LLC, Hoop Retail
Stores, LLC and/or Hoop
Canada, Inc.

 

Closing Date through January 31, 2008

 

$

20,000,000

 

February 1, 2008 – January 31, 2009

 

$

55,000,000

 

February 1, 2009 – January 31, 2010

 

$

36,000,000

 

February 1, 2010 – January 31, 2011

 

$

52,000,000

 

 

Further, if the Borrowers desire during any fiscal period specified in the table
above to expend amounts greater than those provided for such period in the table
above as investments in Hoop Retail Stores, LLC, then such additional
investments shall be permitted if, as of the date any such additional investment
is made, (a) no Default or Event of Default then exists or would arise
therefrom, and (b)(i) immediately after giving effect to the proposed
investment, and (ii) for a period of ninety (90) days thereafter, the Borrowers
are projected to maintain Availability of not less than $25,000,000.  The Agent
and each of the Lenders agrees that it will not unreasonably withhold its
consent to any requested modification of, or increase to, the foregoing terms
and conditions.

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8.                                      EVENTS OF DEFAULT.  ANY ONE OR MORE OF
THE FOLLOWING EVENTS SHALL CONSTITUTE AN EVENT OF DEFAULT (EACH, AN “EVENT OF
DEFAULT”) UNDER THIS AGREEMENT:

(A)                                  IF ANY BORROWER FAILS TO PAY WHEN DUE AND
PAYABLE OR WHEN DECLARED DUE AND PAYABLE, ANY PORTION OF THE OBLIGATIONS
(WHETHER OF PRINCIPAL, INTEREST (INCLUDING ANY INTEREST WHICH, BUT FOR THE
PROVISIONS OF THE BANKRUPTCY CODE, WOULD HAVE ACCRUED ON SUCH AMOUNTS), FEES AND
CHARGES DUE THE LENDER GROUP, REIMBURSEMENT OF LENDER GROUP EXPENSES, OR OTHER
AMOUNTS CONSTITUTING OBLIGATIONS);

(B)                                 IF ANY BORROWER FAILS OR NEGLECTS TO
PERFORM, KEEP, OR OBSERVE ANY TERM, PROVISION, CONDITION, COVENANT, OR AGREEMENT
CONTAINED IN THIS AGREEMENT, IN ANY OF THE LOAN DOCUMENTS, OR IN ANY OTHER
PRESENT OR FUTURE AGREEMENT AMONG BORROWERS AND THE LENDER GROUP; PROVIDED,
HOWEVER, THAT BORROWERS’ FAILURE OR NEGLECT TO COMPLY WITH SECTIONS 6.1(B), 6.2,
6.3, 6.4, 6.5, 6.6, 6.8, 6.11 AND 6.13 SHALL NOT CONSTITUTE AN EVENT OF DEFAULT
HEREUNDER UNLESS SUCH FAILURE OR NEGLECT CONTINUES FOR FIVE DAYS OR MORE;

(C)                                  IF THERE IS A MATERIAL IMPAIRMENT OF THE
PROSPECT OF REPAYMENT OF ANY PORTION OF THE OBLIGATIONS OWING TO THE LENDER
GROUP OR A MATERIAL IMPAIRMENT OF THE VALUE OR PRIORITY OF THE LENDER GROUP’S
SECURITY INTERESTS IN THE COLLATERAL;

(D)                                 IF ANY MATERIAL PORTION OF BORROWERS’
PROPERTIES OR ASSETS IS ATTACHED, SEIZED, SUBJECTED TO A WRIT OR DISTRESS
WARRANT, OR IS LEVIED UPON, OR COMES INTO THE POSSESSION OF ANY THIRD PERSON;

(E)                                  IF AN INSOLVENCY PROCEEDING IS COMMENCED BY
ANY BORROWER;

(F)                                    IF AN INSOLVENCY PROCEEDING IS COMMENCED
AGAINST ANY BORROWER AND ANY OF THE FOLLOWING EVENTS OCCUR:  (A) SUCH BORROWER
CONSENTS TO THE INSTITUTION OF THE INSOLVENCY PROCEEDING AGAINST IT; (B) THE
PETITION COMMENCING THE INSOLVENCY PROCEEDING IS NOT TIMELY CONTROVERTED; (C)
THE PETITION COMMENCING THE INSOLVENCY PROCEEDING IS NOT DISMISSED WITHIN 45
CALENDAR DAYS OF THE DATE OF THE FILING THEREOF; PROVIDED, HOWEVER, THAT, DURING
THE PENDENCY OF SUCH PERIOD, THE LENDER GROUP SHALL BE RELIEVED OF ITS
OBLIGATION TO EXTEND CREDIT HEREUNDER; (D) AN INTERIM TRUSTEE IS APPOINTED TO
TAKE POSSESSION OF ALL OR A SUBSTANTIAL PORTION OF THE PROPERTIES OR ASSETS OF,
OR TO OPERATE ALL OR ANY SUBSTANTIAL PORTION OF THE BUSINESS OF, SUCH BORROWER;
OR (E) AN ORDER FOR RELIEF SHALL HAVE BEEN ISSUED OR ENTERED THEREIN;

(G)                                 IF ANY BORROWER IS ENJOINED, RESTRAINED, OR
IN ANY WAY PREVENTED BY COURT ORDER FROM CONTINUING TO CONDUCT ALL OR ANY
MATERIAL PART OF ITS BUSINESS AFFAIRS;

(H)                                 IF A NOTICE OF LIEN, LEVY, OR ASSESSMENT IS
FILED OF RECORD WITH RESPECT TO ANY OF ANY BORROWER’S PROPERTIES OR ASSETS BY
THE UNITED STATES GOVERNMENT, OR ANY DEPARTMENT, AGENCY, OR INSTRUMENTALITY
THEREOF, OR BY ANY STATE, COUNTY, MUNICIPAL, OR GOVERNMENTAL AGENCY, OR IF ANY
TAXES OR DEBTS OWING AT ANY TIME HEREAFTER TO ANY ONE OR MORE OF SUCH ENTITIES
BECOMES A LIEN, WHETHER CHOATE OR OTHERWISE, UPON ANY OF ANY BORROWER’S
PROPERTIES OR ASSETS AND THE SAME IS NOT PAID ON THE PAYMENT DATE THEREOF;

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(I)                                     IF (A) AN ACTION OR PROCEEDING IS
BROUGHT AGAINST ANY BORROWER WHICH IS REASONABLY LIKELY TO BE DECIDED ADVERSELY
TO SUCH BORROWER, AND SUCH ADVERSE DECISION WOULD MATERIALLY IMPAIR THE PROSPECT
OF REPAYMENT OF THE OBLIGATIONS OR MATERIALLY IMPAIR THE VALUE OR PRIORITY OF
THE LENDER GROUP’S SECURITY INTERESTS IN THE COLLATERAL, OR (B) IF A JUDGMENT OR
OTHER CLAIM IN EXCESS OF $500,000 BECOMES A LIEN OR ENCUMBRANCE UPON ANY
MATERIAL PORTION OF ANY BORROWER’S PROPERTIES OR ASSETS AND SHALL REMAIN
OUTSTANDING 30 DAYS OR LONGER;

(J)                                     IF THERE IS A DEFAULT IN AN AGREEMENT
INVOLVING INDEBTEDNESS OF $500,000, OR MORE, OR ANY MATERIAL AGREEMENT TO WHICH
ANY BORROWER IS A PARTY WITH ONE OR MORE THIRD PERSONS RESULTING IN A RIGHT BY
SUCH THIRD PERSONS, IRRESPECTIVE OF WHETHER EXERCISED, TO ACCELERATE THE
MATURITY OF SUCH BORROWER’S OBLIGATIONS THEREUNDER;

(K)                                  IF ANY BORROWER MAKES ANY PAYMENT ON
ACCOUNT OF INDEBTEDNESS THAT HAS BEEN CONTRACTUALLY SUBORDINATED IN RIGHT OF
PAYMENT TO THE PAYMENT OF THE OBLIGATIONS, EXCEPT TO THE EXTENT SUCH PAYMENT IS
PERMITTED BY THE TERMS OF THE SUBORDINATION PROVISIONS APPLICABLE TO SUCH
INDEBTEDNESS;

(L)                                     IF ANY MATERIAL MISSTATEMENT OR
MISREPRESENTATION EXISTS NOW OR HEREAFTER IN ANY WARRANTY, REPRESENTATION,
STATEMENT, OR REPORT MADE TO THE LENDER GROUP BY ANY BORROWER OR ANY OFFICER,
EMPLOYEE, AGENT, OR DIRECTOR OF ANY BORROWER, OR IF ANY SUCH WARRANTY OR
REPRESENTATION IS WITHDRAWN;

(M)                               IF THE OBLIGATION OF ANY GUARANTOR UNDER ITS
GUARANTY OR OTHER THIRD PERSON UNDER ANY LOAN DOCUMENT IS LIMITED OR TERMINATED
BY OPERATION OF LAW OR BY THE GUARANTOR OR OTHER THIRD PERSON THEREUNDER, OR ANY
SUCH GUARANTOR OR OTHER THIRD PERSON BECOMES THE SUBJECT OF AN INSOLVENCY
PROCEEDING; OR

(N)                                 IF ANY “EVENT OF DEFAULT” OCCURS UNDER THE
L/C DEMAND FACILITY LETTER OF CREDIT AGREEMENT (OTHER THAN ANY SUCH “EVENT OF
DEFAULT” THAT HAS BEEN WAIVED IN WRITING BY THE AGENT AND THE REQUIRED LENDERS
UNDER THE L/C DEMAND FACILITY).

9.                                      THE LENDER GROUP’S RIGHTS AND REMEDIES.

9.1                               Rights and Remedies.  Upon the occurrence, and
during the continuation, of an Event of Default Agent may, or, at the request of
the Required Lenders shall, pursuant to Sections 17.4 and 17.5, without notice
of its election and without demand, do any one or more of the following, all of
which are authorized by Borrowers:

(A)                                  DECLARE ALL OBLIGATIONS, WHETHER EVIDENCED
BY THIS AGREEMENT, BY ANY OF THE OTHER LOAN DOCUMENTS, OR OTHERWISE, IMMEDIATELY
DUE AND PAYABLE;

(B)                                 CEASE ADVANCING MONEY OR EXTENDING CREDIT TO
OR FOR THE BENEFIT OF BORROWERS UNDER THIS AGREEMENT, UNDER ANY OF THE LOAN
DOCUMENTS, OR UNDER ANY OTHER AGREEMENT BETWEEN BORROWERS AND THE LENDER GROUP;

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(C)                                  TERMINATE THIS AGREEMENT AND ANY OF THE
OTHER LOAN DOCUMENTS AS TO ANY FUTURE LIABILITY OR OBLIGATION OF THE LENDER
GROUP, BUT WITHOUT AFFECTING THE LENDER GROUP’S RIGHTS AND SECURITY INTERESTS IN
THE COLLATERAL AND WITHOUT AFFECTING THE OBLIGATIONS;

(D)                                 SETTLE OR ADJUST DISPUTES AND CLAIMS
DIRECTLY WITH ACCOUNT DEBTORS FOR AMOUNTS AND UPON TERMS WHICH AGENT CONSIDERS
ADVISABLE, AND IN SUCH CASES, AGENT WILL CREDIT BORROWERS’ LOAN ACCOUNT WITH
ONLY THE NET AMOUNTS RECEIVED BY AGENT IN PAYMENT OF SUCH DISPUTED ACCOUNTS
AFTER DEDUCTING ALL LENDER GROUP EXPENSES INCURRED OR EXPENDED IN CONNECTION
THEREWITH;

(E)                                  CAUSE BORROWERS TO HOLD ALL RETURNED
INVENTORY IN TRUST FOR THE LENDER GROUP, SEGREGATE ALL RETURNED INVENTORY FROM
ALL OTHER PROPERTY OF BORROWERS OR IN BORROWERS’ POSSESSION AND CONSPICUOUSLY
LABEL SAID RETURNED INVENTORY AS THE PROPERTY OF THE LENDER GROUP;

(F)                                    WITHOUT NOTICE TO OR DEMAND UPON
BORROWERS OR ANY GUARANTOR, MAKE SUCH PAYMENTS AND DO SUCH ACTS AS AGENT
CONSIDERS NECESSARY OR REASONABLE TO PROTECT ITS SECURITY INTERESTS IN THE
COLLATERAL.  EACH BORROWER AGREES TO ASSEMBLE THE COLLATERAL IF AGENT SO
REQUIRES, AND TO MAKE THE COLLATERAL AVAILABLE TO AGENT AS AGENT MAY DESIGNATE. 
EACH BORROWER AUTHORIZES AGENT TO ENTER THE PREMISES WHERE THE COLLATERAL IS
LOCATED, TO TAKE AND MAINTAIN POSSESSION OF THE COLLATERAL, OR ANY PART OF IT,
AND TO PAY, PURCHASE, CONTEST, OR COMPROMISE ANY ENCUMBRANCE, CHARGE, OR LIEN
THAT IN AGENT’S DETERMINATION APPEARS TO CONFLICT WITH THE LIENS OF AGENT (FOR
THE BENEFIT OF THE LENDER GROUP) IN THE COLLATERAL AND TO PAY ALL EXPENSES
INCURRED IN CONNECTION THEREWITH.  WITH RESPECT TO ANY OF BORROWERS’ OWNED OR
LEASED PREMISES, BORROWERS HEREBY GRANT AGENT A LICENSE TO ENTER INTO POSSESSION
OF SUCH PREMISES AND TO OCCUPY THE SAME, WITHOUT CHARGE, FOR UP TO 120 DAYS IN
ORDER TO EXERCISE ANY OF THE LENDER GROUP’S RIGHTS OR REMEDIES PROVIDED HEREIN,
AT LAW, IN EQUITY, OR OTHERWISE;

(G)                                 WITHOUT NOTICE TO BORROWERS (SUCH NOTICE
BEING EXPRESSLY WAIVED), AND WITHOUT CONSTITUTING A RETENTION OF ANY COLLATERAL
IN SATISFACTION OF AN OBLIGATION (WITHIN THE MEANING OF SECTION 9505 OF THE
CODE), SET OFF AND APPLY TO THE OBLIGATIONS ANY AND ALL (I) BALANCES AND
DEPOSITS OF BORROWERS HELD BY THE LENDER GROUP (INCLUDING ANY AMOUNTS RECEIVED
IN THE LOCKBOX ACCOUNTS), OR (II) INDEBTEDNESS AT ANY TIME OWING TO OR FOR THE
CREDIT OR THE ACCOUNT OF BORROWERS HELD BY THE LENDER GROUP;

(H)                                 HOLD, AS CASH COLLATERAL, ANY AND ALL
BALANCES AND DEPOSITS OF BORROWERS HELD BY THE LENDER GROUP, AND ANY AMOUNTS
RECEIVED IN THE LOCKBOX ACCOUNTS, TO SECURE THE FULL AND FINAL REPAYMENT OF ALL
OF THE OBLIGATIONS;

(I)                                     SHIP, RECLAIM, RECOVER, STORE, FINISH,
MAINTAIN, REPAIR, PREPARE FOR SALE, ADVERTISE FOR SALE, AND SELL (IN THE MANNER
PROVIDED FOR HEREIN) THE COLLATERAL.  AGENT IS HEREBY GRANTED A LICENSE OR OTHER
RIGHT TO USE, WITHOUT CHARGE, BORROWERS’ LABELS, PATENTS, COPYRIGHTS, RIGHTS OF
USE OF ANY NAME, TRADE SECRETS, TRADE NAMES, TRADEMARKS, SERVICE MARKS, AND
ADVERTISING MATTER, OR ANY PROPERTY OF A SIMILAR NATURE, AS IT PERTAINS TO THE
COLLATERAL, IN COMPLETING PRODUCTION OF, ADVERTISING FOR SALE, AND SELLING ANY
COLLATERAL AND BORROWERS’ RIGHTS UNDER ALL LICENSES AND ALL FRANCHISE AGREEMENTS
SHALL INURE TO THE LENDER GROUP’S BENEFIT;

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(J)                                     SELL THE COLLATERAL AT EITHER A PUBLIC
OR PRIVATE SALE, OR BOTH, BY WAY OF ONE OR MORE CONTRACTS OR TRANSACTIONS, FOR
CASH OR ON TERMS, IN SUCH MANNER AND AT SUCH PLACES (INCLUDING BORROWERS’
PREMISES) AS AGENT DETERMINES IS COMMERCIALLY REASONABLE.  IT IS NOT NECESSARY
THAT THE COLLATERAL BE PRESENT AT ANY SUCH SALE;

(K)                                  AGENT SHALL GIVE NOTICE OF THE DISPOSITION
OF THE COLLATERAL AS FOLLOWS:

(A)                              AGENT SHALL GIVE ADMINISTRATIVE BORROWER AND
EACH HOLDER OF A SECURITY INTEREST IN THE COLLATERAL WHO HAS FILED WITH AGENT A
WRITTEN REQUEST FOR NOTICE, A NOTICE IN WRITING OF THE TIME AND PLACE OF PUBLIC
SALE, OR, IF THE SALE IS A PRIVATE SALE OR SOME OTHER DISPOSITION OTHER THAN A
PUBLIC SALE IS TO BE MADE OF THE COLLATERAL, THEN THE TIME ON OR AFTER WHICH THE
PRIVATE SALE OR OTHER DISPOSITION IS TO BE MADE;

(B)                                THE NOTICE SHALL BE PERSONALLY DELIVERED OR
MAILED, POSTAGE PREPAID, TO ADMINISTRATIVE BORROWER AS PROVIDED IN SECTION 12,
AT LEAST 10 DAYS BEFORE THE DATE FIXED FOR THE SALE, OR AT LEAST 10 DAYS BEFORE
THE DATE ON OR AFTER WHICH THE PRIVATE SALE OR OTHER DISPOSITION IS TO BE MADE;
NO NOTICE NEEDS TO BE GIVEN PRIOR TO THE DISPOSITION OF ANY PORTION OF THE
COLLATERAL THAT IS PERISHABLE OR THREATENS TO DECLINE SPEEDILY IN VALUE OR THAT
IS OF A TYPE CUSTOMARILY SOLD ON A RECOGNIZED MARKET.  NOTICE TO PERSONS OTHER
THAN BORROWERS CLAIMING AN INTEREST IN THE COLLATERAL SHALL BE SENT TO SUCH
ADDRESSES AS THEY HAVE FURNISHED TO AGENT;

(C)                                IF THE SALE IS TO BE A PUBLIC SALE, AGENT
ALSO SHALL GIVE NOTICE OF THE TIME AND PLACE BY PUBLISHING A NOTICE ONE TIME AT
LEAST 10 DAYS BEFORE THE DATE OF THE SALE IN A NEWSPAPER OF GENERAL CIRCULATION
IN THE COUNTY IN WHICH THE SALE IS TO BE HELD;

(L)                                     AGENT MAY CREDIT BID AND PURCHASE AT ANY
PUBLIC SALE; AND

(M)                               ANY DEFICIENCY THAT EXISTS AFTER DISPOSITION
OF THE COLLATERAL AS PROVIDED ABOVE WILL BE PAID IMMEDIATELY BY BORROWERS.  ANY
EXCESS WILL BE RETURNED, WITHOUT INTEREST AND SUBJECT TO THE RIGHTS OF THIRD
PERSONS, BY AGENT TO BORROWERS.

9.2                               REMEDIES CUMULATIVE.  THE LENDER GROUP’S
RIGHTS AND REMEDIES UNDER THIS AGREEMENT, THE LOAN DOCUMENTS, AND ALL OTHER
AGREEMENTS SHALL BE CUMULATIVE.  THE LENDER GROUP SHALL HAVE ALL OTHER RIGHTS
AND REMEDIES NOT INCONSISTENT HEREWITH AS PROVIDED UNDER THE CODE, BY LAW, OR IN
EQUITY.  NO EXERCISE BY THE LENDER GROUP OF ONE RIGHT OR REMEDY SHALL BE DEEMED
AN ELECTION, AND NO WAIVER BY THE LENDER GROUP OF ANY EVENT OF DEFAULT SHALL BE
DEEMED A CONTINUING WAIVER.  NO DELAY BY THE LENDER GROUP SHALL CONSTITUTE A
WAIVER, ELECTION, OR ACQUIESCENCE BY IT.

10.                               TAXES AND EXPENSES.  IF BORROWERS FAIL TO PAY
ANY MONIES (WHETHER TAXES, ASSESSMENTS, INSURANCE PREMIUMS, OR, IN THE CASE OF
LEASED PROPERTIES OR ASSETS, RENTS OR OTHER AMOUNTS PAYABLE UNDER SUCH LEASES)
DUE TO THIRD PERSONS, OR FAILS TO MAKE ANY DEPOSITS OR FURNISH ANY REQUIRED
PROOF OF PAYMENT OR DEPOSIT, ALL AS REQUIRED UNDER THE TERMS OF THIS AGREEMENT,
THEN, TO THE EXTENT THAT AGENT DETERMINES THAT SUCH FAILURE BY BORROWERS COULD
RESULT IN A MATERIAL ADVERSE CHANGE, IN ITS DISCRETION AND WITHOUT PRIOR NOTICE
TO BORROWERS, AGENT MAY DO ANY OR ALL OF THE FOLLOWING:  (A) MAKE PAYMENT OF THE
SAME OR ANY PART THEREOF; (B) SET UP SUCH RESERVES IN

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BORROWERS’ LOAN ACCOUNT AS AGENT DEEMS NECESSARY TO PROTECT THE LENDER GROUP
FROM THE EXPOSURE CREATED BY SUCH FAILURE; OR (C) OBTAIN AND MAINTAIN INSURANCE
POLICIES OF THE TYPE DESCRIBED IN SECTION 6.9, AND TAKE ANY ACTION WITH RESPECT
TO SUCH POLICIES AS AGENT DEEMS PRUDENT.  ANY SUCH AMOUNTS PAID BY AGENT SHALL
CONSTITUTE LENDER GROUP EXPENSES.  ANY SUCH PAYMENTS MADE BY AGENT SHALL NOT
CONSTITUTE AN AGREEMENT BY THE LENDER GROUP TO MAKE SIMILAR PAYMENTS IN THE
FUTURE OR A WAIVER BY THE LENDER GROUP OF ANY EVENT OF DEFAULT UNDER THIS
AGREEMENT.  AGENT NEED NOT INQUIRE AS TO, OR CONTEST THE VALIDITY OF, ANY SUCH
EXPENSE, TAX, OR LIEN AND THE RECEIPT OF THE USUAL OFFICIAL NOTICE FOR THE
PAYMENT THEREOF SHALL BE CONCLUSIVE EVIDENCE THAT THE SAME WAS VALIDLY DUE AND
OWING.

11.                               WAIVERS; INDEMNIFICATION.

11.1                        Demand; Protest; etc.  Each Borrower waives demand,
protest, notice of protest, notice of default or dishonor, notice of payment and
nonpayment, nonpayment at maturity, release, compromise, settlement, extension,
or renewal of accounts, documents, instruments, chattel paper, and guarantees at
any time held by the Lender Group on which such Borrower may in any way be
liable.

11.2                        THE LENDER GROUP’S LIABILITY FOR COLLATERAL.  SO
LONG AS THE LENDER GROUP COMPLIES WITH ITS OBLIGATIONS, IF ANY, UNDER SECTION
9207 OF THE CODE, THE LENDER GROUP SHALL NOT IN ANY WAY OR MANNER BE LIABLE OR
RESPONSIBLE FOR:  (A) THE SAFEKEEPING OF THE COLLATERAL; (B) ANY LOSS OR DAMAGE
THERETO OCCURRING OR ARISING IN ANY MANNER OR FASHION FROM ANY CAUSE; (C) ANY
DIMINUTION IN THE VALUE THEREOF; OR (D) ANY ACT OR DEFAULT OF ANY CARRIER,
WAREHOUSEMAN, BAILEE, FORWARDING AGENCY, OR OTHER PERSON.  ALL RISK OF LOSS,
DAMAGE, OR DESTRUCTION OF THE COLLATERAL SHALL BE BORNE BY BORROWERS.

11.3                        INDEMNIFICATION.  EACH BORROWER SHALL PAY,
INDEMNIFY, DEFEND, AND HOLD EACH AGENT-RELATED PERSON, EACH LENDER, EACH
PARTICIPANT, AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
COUNSEL, AGENTS, AND ATTORNEYS-IN-FACT (EACH, AN “INDEMNIFIED PERSON”) HARMLESS
(TO THE FULLEST EXTENT PERMITTED BY LAW) FROM AND AGAINST ANY AND ALL CLAIMS,
DEMANDS, SUITS, ACTIONS, INVESTIGATIONS, PROCEEDINGS, AND DAMAGES, AND ALL
REASONABLE ATTORNEYS FEES AND DISBURSEMENTS AND OTHER COSTS AND EXPENSES
ACTUALLY INCURRED IN CONNECTION THEREWITH (AS AND WHEN THEY ARE INCURRED AND
IRRESPECTIVE OF WHETHER SUIT IS BROUGHT), AT ANY TIME ASSERTED AGAINST, IMPOSED
UPON, OR INCURRED BY ANY OF THEM IN CONNECTION WITH OR AS A RESULT OF OR RELATED
TO THE EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE, AND ADMINISTRATION OF THIS
AGREEMENT AND ANY OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREIN,
AND WITH RESPECT TO ANY INVESTIGATION, LITIGATION, OR PROCEEDING RELATED TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT, OR THE USE OF THE PROCEEDS OF THE CREDIT
PROVIDED HEREUNDER (IRRESPECTIVE OF WHETHER ANY INDEMNIFIED PERSON IS A PARTY
THERETO), OR ANY ACT, OMISSION, EVENT OR CIRCUMSTANCE IN ANY MANNER RELATED
THERETO (ALL THE FOREGOING, COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”).  EACH
BORROWER SHALL HAVE NO OBLIGATION TO ANY INDEMNIFIED PERSON UNDER THIS
SECTION 11.3 WITH RESPECT TO ANY INDEMNIFIED LIABILITY THAT A COURT OF COMPETENT
JURISDICTION FINALLY DETERMINES TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PERSON.  THIS PROVISION SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT AND THE REPAYMENT OF THE OBLIGATIONS.

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12.                               NOTICES.  UNLESS OTHERWISE PROVIDED IN THIS
AGREEMENT, ALL NOTICES OR DEMANDS BY ANY PARTY RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT SHALL BE IN WRITING AND (EXCEPT FOR FINANCIAL STATEMENTS AND
OTHER INFORMATIONAL DOCUMENTS WHICH MAY BE SENT BY FIRST-CLASS MAIL, POSTAGE
PREPAID) SHALL BE PERSONALLY DELIVERED OR SENT BY REGISTERED OR CERTIFIED MAIL
(POSTAGE PREPAID, RETURN RECEIPT REQUESTED), OVERNIGHT COURIER, OR TELEFACSIMILE
TO ADMINISTRATIVE BORROWER OR TO AGENT, AS THE CASE MAY BE, AT ITS ADDRESS SET
FORTH BELOW:

If to Administrative Borrower:

 

THE CHILDREN’S PLACE RETAIL STORES, INC.
915 Secaucus Road
Secaucus, New Jersey 07094
Attn:   Chief Financial Officer
Fax No. 201.558.2837

 

 

 

 

 

THE CHILDREN’S PLACE RETAIL STORES, INC.
915 Secaucus Road
Secaucus, New Jersey 07094
Attn:   General Counsel
Fax No. 201.558.2840

 

 

 

with copies to:

 

STROOCK & STROOCK & LAVAN LLP
180 Maiden Lane
New York, New York 10038
Attn:   Jeffrey S. Lowenthal, Esq.
Fax No. 212.806.6006

 

 

 

If to Agent or the Lender Group in case of Agent:

 

WELLS FARGO RETAIL FINANCE, LLC
One Boston Place
Suite 1800
Boston, Massachusetts 02108
Attn:   Michele Ayou
Fax No. 617.523.4027

 

 

 

with copies to:

 

RIEMER & BRAUNSTEIN LLP
Three Center Plaza
Boston, Massachusetts 02108
Attn:Kevin J. Simard, Esq.
Fax No. 617 880 3456

 

The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other.  All
notices or demands sent in accordance with this Section 12, other than notices
by Agent in connection with Sections 9611 or 9620 of the Code, shall be deemed
received on the earlier of the date of actual receipt or three days after the
deposit thereof in the mail.  Borrowers acknowledge and agree that notices sent
by Agent in connection with Sections 9611 or 9620 of the Code shall be deemed
sent when

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deposited in the mail or personally delivered, or, where permitted by law,
transmitted by telefacsimile or other similar method set forth above.

13.                               CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. 
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY
PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT), THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE
PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR
THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. 
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF SUFFOLK, COMMONWEALTH OF
MASSACHUSETTS OR, AT THE SOLE OPTION OF THE LENDER GROUP, IN ANY OTHER COURT IN
WHICH THE LENDER GROUP SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH
HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.  EACH BORROWER
AND EACH MEMBER OF THE LENDER GROUP WAIVES, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 13.  EACH BORROWER AND EACH MEMBER OF THE LENDER
GROUP HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH
BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY
OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

14.                               DESTRUCTION OF BORROWERS’ DOCUMENTS.  ALL
DOCUMENTS, SCHEDULES, INVOICES, AGINGS, OR OTHER PAPERS DELIVERED TO AGENT MAY
BE DESTROYED OR OTHERWISE DISPOSED OF BY AGENT FOUR MONTHS AFTER THEY ARE
DELIVERED TO OR RECEIVED BY AGENT, UNLESS ADMINISTRATIVE BORROWER REQUESTS, IN
WRITING, THE RETURN OF SAID DOCUMENTS, SCHEDULES, OR OTHER PAPERS AND MAKES
ARRANGEMENTS, AT BORROWERS’ EXPENSE, FOR THEIR RETURN.

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15.                               ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

15.1                        ASSIGNMENTS AND PARTICIPATIONS.

(A)                                  ANY LENDER MAY, WITH THE WRITTEN CONSENT OF
AGENT (AND, IF NO EVENT OF DEFAULT THEN EXISTS AND IS CONTINUING, THE
ADMINISTRATIVE BORROWER (EACH SUCH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR
DELAYED)) ASSIGN AND DELEGATE TO ONE OR MORE ELIGIBLE TRANSFEREES (EACH AN
“ASSIGNEE”) ALL, OR ANY RATABLE PART, OF THE OBLIGATIONS, THE COMMITMENTS, AND
THE OTHER RIGHTS AND OBLIGATIONS OF SUCH LENDER HEREUNDER AND UNDER THE OTHER
LOAN DOCUMENTS, IN A MINIMUM AMOUNT OF $5,000,000; PROVIDED, HOWEVER, THAT
BORROWERS AND AGENT MAY CONTINUE TO DEAL SOLELY AND DIRECTLY WITH SUCH LENDER IN
CONNECTION WITH THE INTEREST SO ASSIGNED TO AN ASSIGNEE UNTIL (I) WRITTEN NOTICE
OF SUCH ASSIGNMENT, TOGETHER WITH PAYMENT INSTRUCTIONS, ADDRESSES, AND RELATED
INFORMATION WITH RESPECT TO THE ASSIGNEE, SHALL HAVE BEEN GIVEN TO
ADMINISTRATIVE BORROWER AND AGENT BY SUCH LENDER AND THE ASSIGNEE; (II) SUCH
LENDER AND ITS ASSIGNEE SHALL HAVE DELIVERED TO ADMINISTRATIVE BORROWER AND
AGENT A FULLY EXECUTED ASSIGNMENT AND ACCEPTANCE (“ASSIGNMENT AND ACCEPTANCE”)
IN THE FORM OF EXHIBIT A-1; AND (III) THE ASSIGNOR LENDER OR ASSIGNEE HAS PAID
TO AGENT FOR AGENT’S SOLE AND SEPARATE ACCOUNT A PROCESSING FEE IN THE AMOUNT OF
$5,000.  ANYTHING CONTAINED HEREIN TO THE CONTRARY NOTWITHSTANDING, THE CONSENT
OF AGENT AND ADMINISTRATIVE BORROWER SHALL NOT BE REQUIRED (AND PAYMENT OF ANY
FEES SHALL NOT BE REQUIRED) IF (I) SUCH ASSIGNMENT IS IN CONNECTION WITH ANY
MERGER, CONSOLIDATION, SALE, TRANSFER, OR OTHER DISPOSITION OF ALL OR ANY
SUBSTANTIAL PORTION OF THE BUSINESS OR LOAN PORTFOLIO OF THE ASSIGNING LENDER,
OR (II) SUCH ASSIGNMENT IS TO AN AFFILIATE OF THE ASSIGNING LENDER.

(B)                                 FROM AND AFTER THE DATE THAT AGENT NOTIFIES
THE ASSIGNOR LENDER THAT IT HAS RECEIVED A FULLY EXECUTED ASSIGNMENT AND
ACCEPTANCE AND PAYMENT OF THE ABOVE-REFERENCED PROCESSING FEE, (I) THE ASSIGNEE
THEREUNDER SHALL BE A PARTY HERETO AND, TO THE EXTENT THAT RIGHTS AND
OBLIGATIONS HEREUNDER HAVE BEEN ASSIGNED TO IT PURSUANT TO SUCH ASSIGNMENT AND
ACCEPTANCE, SHALL HAVE THE RIGHTS AND OBLIGATIONS OF A LENDER UNDER THE LOAN
DOCUMENTS, AND (II) THE ASSIGNOR LENDER SHALL, TO THE EXTENT THAT RIGHTS AND
OBLIGATIONS HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS HAVE BEEN ASSIGNED BY
IT PURSUANT TO SUCH ASSIGNMENT AND ACCEPTANCE, RELINQUISH ITS RIGHTS AND BE
RELEASED FROM ITS OBLIGATIONS UNDER THIS AGREEMENT (AND IN THE CASE OF AN
ASSIGNMENT AND ACCEPTANCE COVERING ALL OR THE REMAINING PORTION OF AN ASSIGNING
LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, SUCH LENDER SHALL CEASE TO BE A PARTY HERETO AND THERETO), AND SUCH
ASSIGNMENT SHALL EFFECT A NOVATION BETWEEN BORROWERS AND THE ASSIGNEE.

(C)                                  BY EXECUTING AND DELIVERING AN ASSIGNMENT
AND ACCEPTANCE, THE ASSIGNING LENDER THEREUNDER AND THE ASSIGNEE THEREUNDER
CONFIRM TO AND AGREE WITH EACH OTHER AND THE OTHER PARTIES HERETO AS FOLLOWS: 
(1) OTHER THAN AS PROVIDED IN SUCH ASSIGNMENT AND ACCEPTANCE, SUCH ASSIGNING
LENDER MAKES NO REPRESENTATION OR WARRANTY AND ASSUMES NO RESPONSIBILITY WITH
RESPECT TO ANY STATEMENTS, WARRANTIES, OR REPRESENTATIONS MADE IN OR IN
CONNECTION WITH THIS AGREEMENT OR THE EXECUTION, LEGALITY, VALIDITY,
ENFORCEABILITY, GENUINENESS, SUFFICIENCY, OR VALUE OF THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT FURNISHED PURSUANT HERETO; (2) SUCH ASSIGNING LENDER MAKES
NO REPRESENTATION OR WARRANTY AND ASSUMES NO RESPONSIBILITY WITH RESPECT TO THE
FINANCIAL CONDITION OF BORROWERS OR ANY GUARANTOR OR THE PERFORMANCE OR
OBSERVANCE BY BORROWERS OR ANY GUARANTOR OF ANY OF ITS OBLIGATIONS UNDER THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT FURNISHED PURSUANT HERETO; (3) SUCH
ASSIGNEE CONFIRMS THAT IT HAS RECEIVED A COPY OF THIS AGREEMENT, TOGETHER WITH
SUCH OTHER DOCUMENTS AND INFORMATION AS IT HAS DEEMED APPROPRIATE TO MAKE ITS
OWN CREDIT ANALYSIS AND DECISION TO ENTER INTO SUCH ASSIGNMENT AND

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ACCEPTANCE; (4) SUCH ASSIGNEE WILL, INDEPENDENTLY AND WITHOUT RELIANCE UPON
AGENT, SUCH ASSIGNING LENDER, 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 THIS AGREEMENT; (5)
SUCH ASSIGNEE APPOINTS AND AUTHORIZES AGENT TO TAKE SUCH ACTION AS AGENT ON ITS
BEHALF AND TO EXERCISE SUCH POWERS UNDER THIS AGREEMENT AS ARE DELEGATED TO
AGENT BY THE TERMS HEREOF, TOGETHER WITH SUCH POWERS AS ARE REASONABLY
INCIDENTAL THERETO; AND (6) SUCH ASSIGNEE AGREES THAT IT WILL PERFORM IN
ACCORDANCE WITH THEIR TERMS ALL OF THE OBLIGATIONS WHICH BY THE TERMS OF THIS
AGREEMENT ARE REQUIRED TO BE PERFORMED BY IT AS A LENDER.

(D)                                 IMMEDIATELY UPON EACH ASSIGNEE’S MAKING ITS
PROCESSING FEE PAYMENT UNDER THE ASSIGNMENT AND ACCEPTANCE, THIS AGREEMENT SHALL
BE DEEMED TO BE AMENDED TO THE EXTENT, BUT ONLY TO THE EXTENT, NECESSARY TO
REFLECT THE ADDITION OF THE ASSIGNEE AND THE RESULTING ADJUSTMENT OF THE
COMMITMENTS OF THE ASSIGNOR AND ASSIGNEE ARISING THEREFROM.  THE COMMITMENT
ALLOCATED TO EACH ASSIGNEE SHALL REDUCE SUCH COMMITMENT OF THE ASSIGNING LENDER
PRO TANTO.

(E)                                  ANY LENDER MAY AT ANY TIME, WITH THE
WRITTEN CONSENT OF AGENT, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD,
(AND, IF NO EVENT OF DEFAULT THEN EXISTS AND IS CONTINUING, THE ADMINISTRATIVE
BORROWER (WHOSE CONSENT SHALL NOT BE UNREASONABLY WITHHELD)) SELL TO ONE OR MORE
PERSONS (A “PARTICIPANT”) PARTICIPATING INTERESTS IN THE OBLIGATIONS, THE
COMMITMENT, AND THE OTHER RIGHTS AND INTERESTS OF THAT LENDER (THE “ORIGINATING
LENDER”) HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS; PROVIDED, HOWEVER, THAT
(I) THE ORIGINATING LENDER’S OBLIGATIONS UNDER THIS AGREEMENT SHALL REMAIN
UNCHANGED, (II) THE ORIGINATING LENDER SHALL REMAIN SOLELY RESPONSIBLE FOR THE
PERFORMANCE OF SUCH OBLIGATIONS, (III) BORROWERS AND AGENT SHALL CONTINUE TO
DEAL SOLELY AND DIRECTLY WITH THE ORIGINATING LENDER IN CONNECTION WITH THE
ORIGINATING LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS, (IV) NO ORIGINATING LENDER SHALL TRANSFER OR GRANT ANY
PARTICIPATING INTEREST UNDER WHICH THE PARTICIPANT HAS THE SOLE AND EXCLUSIVE
RIGHT TO APPROVE ANY AMENDMENT TO, OR ANY CONSENT OR WAIVER WITH RESPECT TO,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, EXCEPT TO THE EXTENT SUCH AMENDMENT
TO, OR CONSENT OR WAIVER WITH RESPECT TO THIS AGREEMENT OR OF ANY OTHER LOAN
DOCUMENT WOULD (A) EXTEND THE FINAL MATURITY DATE OF THE OBLIGATIONS HEREUNDER
IN WHICH SUCH PARTICIPANT IS PARTICIPATING; (B) REDUCE THE INTEREST RATE
APPLICABLE TO THE OBLIGATIONS HEREUNDER IN WHICH SUCH PARTICIPANT IS
PARTICIPATING; (C) RELEASE ALL OR A MATERIAL PORTION OF THE COLLATERAL (EXCEPT
TO THE EXTENT EXPRESSLY PROVIDED HEREIN OR IN ANY OF THE LOAN DOCUMENTS)
SUPPORTING THE OBLIGATIONS HEREUNDER IN WHICH SUCH PARTICIPANT IS PARTICIPATING;
(D) POSTPONE THE PAYMENT OF, OR REDUCE THE AMOUNT OF, THE INTEREST OR FEES
HEREUNDER IN WHICH SUCH PARTICIPANT IS PARTICIPATING; OR (E) CHANGE THE AMOUNT
OR DUE DATES OF SCHEDULED PRINCIPAL REPAYMENTS OR PREPAYMENTS OR PREMIUMS IN
RESPECT OF THE OBLIGATIONS HEREUNDER IN WHICH SUCH PARTICIPANT IS PARTICIPATING;
AND (V) ALL AMOUNTS PAYABLE BY BORROWERS HEREUNDER SHALL BE DETERMINED AS IF
SUCH ORIGINATING LENDER HAD NOT SOLD SUCH PARTICIPATION; EXCEPT THAT, IF AMOUNTS
OUTSTANDING UNDER THIS AGREEMENT ARE DUE AND UNPAID, OR SHALL HAVE BEEN DECLARED
OR SHALL HAVE BECOME DUE AND PAYABLE UPON THE OCCURRENCE OF AN EVENT OF DEFAULT,
EACH PARTICIPANT SHALL BE DEEMED TO HAVE THE RIGHT OF SET-OFF IN RESPECT OF ITS
PARTICIPATING INTEREST IN AMOUNTS OWING UNDER THIS AGREEMENT TO THE SAME EXTENT
AS IF THE AMOUNT OF ITS PARTICIPATING INTEREST WERE OWING DIRECTLY TO IT AS A
LENDER UNDER THIS AGREEMENT; PROVIDED, HOWEVER, THAT NO PARTICIPANT MAY EXERCISE
ANY SUCH RIGHT OF SETOFF WITHOUT THE NOTICE TO AND CONSENT OF AGENT.  THE RIGHTS
OF ANY PARTICIPANT SHALL ONLY BE

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DERIVATIVE THROUGH THE ORIGINATING LENDER WITH WHOM SUCH PARTICIPANT
PARTICIPATES AND NO PARTICIPANT SHALL HAVE ANY DIRECT RIGHTS AS TO THE OTHER
LENDERS, AGENT, BORROWERS, THE COLLECTIONS, THE COLLATERAL, OR OTHERWISE IN
RESPECT OF THE ADVANCES OR THE LETTERS OF CREDIT.  NO PARTICIPANT SHALL HAVE THE
RIGHT TO PARTICIPATE DIRECTLY IN THE MAKING OF DECISIONS BY THE LENDERS AMONG
THEMSELVES.  THE PROVISIONS OF THIS SECTION 15.1(E) ARE SOLELY FOR THE BENEFIT
OF THE LENDER GROUP, AND BORROWERS SHALL HAVE NO RIGHTS AS A THIRD PARTY
BENEFICIARY OF ANY OF SUCH PROVISIONS.

(F)                                    IN CONNECTION WITH ANY SUCH ASSIGNMENT OR
PARTICIPATION OR PROPOSED ASSIGNMENT OR PARTICIPATION, A LENDER MAY DISCLOSE TO
A THIRD PARTY ALL DOCUMENTS AND INFORMATION WHICH IT NOW OR HEREAFTER MAY HAVE
RELATING TO BORROWERS OR BORROWERS’ BUSINESS.

(G)                                 NOTWITHSTANDING ANY OTHER PROVISION IN THIS
AGREEMENT, (I) ANY LENDER MAY AT ANY TIME CREATE A SECURITY INTEREST IN, OR
PLEDGE, ALL OR ANY PORTION OF ITS RIGHTS UNDER AND INTEREST IN THIS AGREEMENT IN
FAVOR OF ANY FEDERAL RESERVE BANK IN ACCORDANCE WITH REGULATION A OF THE FRB OR
U.S. TREASURY REGULATION 31 CFR §203.14, AND SUCH FEDERAL RESERVE BANK MAY
ENFORCE SUCH PLEDGE OR SECURITY INTEREST IN ANY MANNER PERMITTED UNDER
APPLICABLE LAW AND THE ADMINISTRATIVE BORROWER SHALL HAVE NO RIGHT TO CONSENT
THERETO, AND (II) THE AGENT SHALL NOT BE ENTITLED TO CONSENT TO ANY ASSIGNMENT
OR PARTICIPATION ARISING AS A RESULT OF THE  ACQUISITION OF A LENDER OR ALL OR
ANY PORTION OF ITS LOAN PORTFOLIO BY ANY OTHER PERSON.

15.2                        SUCCESSORS.  THIS AGREEMENT SHALL BIND AND INURE TO
THE BENEFIT OF THE RESPECTIVE SUCCESSORS AND ASSIGNS OF EACH OF THE PARTIES;
PROVIDED, HOWEVER, THAT BORROWERS MAY NOT ASSIGN THIS AGREEMENT OR ANY RIGHTS OR
DUTIES HEREUNDER WITHOUT THE LENDERS’ PRIOR WRITTEN CONSENT AND ANY PROHIBITED
ASSIGNMENT SHALL BE ABSOLUTELY VOID.  NO CONSENT TO ASSIGNMENT BY THE LENDERS
SHALL RELEASE BORROWERS FROM THEIR OBLIGATIONS.  A LENDER MAY ASSIGN THIS
AGREEMENT AND ITS RIGHTS AND DUTIES HEREUNDER PURSUANT TO SECTION 15.1 AND,
EXCEPT AS EXPRESSLY REQUIRED PURSUANT TO SECTION 15.1, NO CONSENT OR APPROVAL BY
BORROWERS IS REQUIRED IN CONNECTION WITH ANY SUCH ASSIGNMENT.

16.                               AMENDMENTS; WAIVERS.

16.1                        AMENDMENTS AND WAIVERS.

No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent with respect to any departure by Borrowers therefrom,
shall be effective unless the same shall be in writing and signed by the
Required Lenders (or by Agent at the written request of the Required Lenders)
and Borrowers and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and
signed by all the Lenders and Borrowers and acknowledged by Agent, do any of the
following:

(A)                                  INCREASE OR EXTEND THE COMMITMENT OF ANY
LENDER;

(B)                                 EXCEPT AS PROVIDED IN SECTION 2.18, INCREASE
THE AGGREGATE COMMITMENTS;

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(C)                                  POSTPONE OR DELAY ANY DATE FIXED BY THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT FOR ANY PAYMENT OF PRINCIPAL, INTEREST,
FEES, OR OTHER AMOUNTS DUE TO THE LENDERS (OR ANY OF THEM) HEREUNDER OR UNDER
ANY OTHER LOAN DOCUMENT;

(D)                                 REDUCE THE PRINCIPAL OF, OR THE RATE OF
INTEREST SPECIFIED HEREIN ON, ANY ADVANCE, OR ANY FEES OR OTHER AMOUNTS PAYABLE
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT;

(E)                                  CHANGE THE PERCENTAGE OF THE COMMITMENTS OR
OF THE AGGREGATE UNPAID PRINCIPAL AMOUNT OF THE ADVANCES, WHICH IS REQUIRED FOR
THE LENDERS OR ANY OF THEM TO TAKE ANY ACTION HEREUNDER;

(F)                                    INCREASE THE ADVANCE RATE WITH RESPECT TO
ADVANCES (EXCEPT FOR THE RESTORATION OF AN ADVANCE RATE AFTER THE PRIOR
REDUCTION THEREOF), OR CHANGE SECTION 2.1(B);

(G)                                 AMEND THIS SECTION OR ANY PROVISION OF THE
AGREEMENT PROVIDING FOR CONSENT OR OTHER ACTION BY ALL LENDERS;

(H)                                 RELEASE COLLATERAL OTHER THAN AS PERMITTED
BY SECTION 17.11;

(I)                                     CHANGE THE DEFINITION OF “REQUIRED
LENDERS”;

(J)                                     RELEASE ANY BORROWER FROM ANY OBLIGATION
FOR THE PAYMENT OF MONEY; OR

(K)                                  AMEND ANY OF THE PROVISIONS OF ARTICLE 17.

and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by Agent, affect the rights or duties of Agent under this
Agreement or any other Loan Document; and, provided further, that the limitation
contained in clause (e) above shall not be deemed to limit the ability of Agent
to make Advances or Agent Loans, as applicable, in accordance with the
provisions of Sections 2.1(g), (h), or (l).  The foregoing notwithstanding, any
amendment, modification, waiver, consent, termination, or release of or with
respect to any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Borrowers, shall not require
consent by or the agreement of Borrowers.

If any Lender does not Consent (a “Non-Consenting Lender”) to a proposed
amendment, waiver, consent or release with respect to any Loan Document that
requires the consent of such Lender or the Required Lenders, Administrative
Borrower may replace such Non-Consenting Lender in accordance with Section 16.2;
provided that such amendment, waiver, consent or release can be effected as a
result of the assignment contemplated by Section 16.2 (together with all other
such assignments required by Administrative Borrower to be made pursuant to this
paragraph).

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16.2                        Replacement of Non-Consenting Lenders.  If any
Lender is a Non-Consenting Lender, then Borrowers may, at their sole expense and
effort, upon notice to such Lender and Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 15.1), all of its interests,
rights and obligations under this Agreement and the related Loan Documents to an
Eligible Transferee selected by Borrowers (with the consent of Agent, such
consent not to be unreasonably withheld or delayed) that shall assume such
obligations (which Eligible Transferee may be another Lender, if a Lender
accepts such assignment), provided that:

(A)                                  THE BORROWERS SHALL HAVE PAID TO AGENT THE
ASSIGNMENT FEE SPECIFIED IN SECTION 15.1(A);

(B)                                 SUCH LENDER SHALL HAVE RECEIVED PAYMENT OF
AN AMOUNT EQUAL TO SUCH LENDER’S PRO-RATA SHARE OF THE OUTSTANDING PRINCIPAL OF
ALL ADVANCES AND OBLIGATIONS IN RESPECT OF L/CS, ACCRUED INTEREST THEREON,
ACCRUED FEES AND ALL OTHER AMOUNTS PAYABLE TO IT HEREUNDER AND UNDER THE OTHER
LOAN DOCUMENTS FROM THE ASSIGNEE (TO THE EXTENT OF SUCH OUTSTANDING PRINCIPAL
AND ACCRUED INTEREST AND FEES) OR THE BORROWERS (IN THE CASE OF ALL OTHER
AMOUNTS); AND

(C)                                  SUCH ASSIGNMENT DOES NOT CONFLICT WITH
APPLICABLE LAWS.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation
cease to apply.

16.3                        NO WAIVERS; CUMULATIVE REMEDIES.  NO FAILURE BY
AGENT OR ANY LENDER TO EXERCISE ANY RIGHT, REMEDY, OR OPTION UNDER THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY PRESENT OR FUTURE SUPPLEMENT HERETO
OR THERETO, OR IN ANY OTHER AGREEMENT BETWEEN OR AMONG BORROWERS AND AGENT
AND/OR ANY LENDER, OR DELAY BY AGENT OR ANY LENDER IN EXERCISING THE SAME, WILL
OPERATE AS A WAIVER THEREOF.  NO WAIVER BY AGENT OR ANY LENDER WILL BE EFFECTIVE
UNLESS IT IS IN WRITING, AND THEN ONLY TO THE EXTENT SPECIFICALLY STATED.  NO
WAIVER BY AGENT OR THE LENDERS ON ANY OCCASION SHALL AFFECT OR DIMINISH AGENT’S
AND EACH LENDER’S RIGHTS THEREAFTER TO REQUIRE STRICT PERFORMANCE BY BORROWERS
OF ANY PROVISION OF THIS AGREEMENT.  AGENT’S AND EACH LENDER’S RIGHTS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS WILL BE CUMULATIVE AND NOT EXCLUSIVE OF
ANY OTHER RIGHT OR REMEDY WHICH AGENT OR ANY LENDER MAY HAVE.

17.                               AGENT; THE LENDER GROUP.

17.1                        APPOINTMENT AND AUTHORIZATION OF AGENT.

Each Lender hereby designates and appoints Wells Fargo Retail as its Agent under
this Agreement and the other Loan Documents and each Lender hereby irrevocably
authorizes Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to it by the terms of this Agreement or
any other Loan Document, together with such powers as are reasonably incidental
thereto.  Agent agrees to act as such on the express conditions contained in
this Article 17.  The provisions of this Article 17 are solely for the benefit
of Agent and the Lenders, and Borrowers shall not have any rights as a third
party beneficiary of any of the

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provisions contained herein; provided, however, that the provisions of
Sections 17.10, 17.11, and 17.16(d) also shall be for the benefit of Borrowers. 
Any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations, or liabilities
shall be read into this Agreement or any other Loan Document or otherwise exist
against Agent.  Except as expressly otherwise provided in this Agreement, Agent
shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions which Agent is expressly entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents, including making the
determinations contemplated by Section 2.1(b).  Without limiting the generality
of the foregoing, or of any other provision of the Loan Documents that provides
rights or powers to Agent, Lenders agree that Agent shall have the right to
exercise the following powers as long as this Agreement remains in effect:  (a)
maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Advances, the Collateral, the Collections,
and related matters; (b) execute and/or file any and all financing or similar
statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim for Lenders, notices and other written agreements
with respect to the Loan Documents; (c) make Advances for itself or on behalf of
Lenders as provided in the Loan Documents; (d) exclusively receive, apply, and
distribute the Collections as provided in the Loan Documents; (e) open and
maintain such bank accounts and lock boxes as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral and the Collections; (f) perform, exercise, and
enforce any and all other rights and remedies of the Lender Group with respect
to Borrowers, the Advances, the Collateral, the Collections, or otherwise
related to any of same as provided in the Loan Documents; and (g) incur and pay
such Lender Group Expenses as Agent may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Documents.

17.2                        DELEGATION OF DUTIES.  EXCEPT AS OTHERWISE PROVIDED
IN THIS SECTION, AGENT MAY EXECUTE ANY OF ITS DUTIES UNDER THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT BY OR THROUGH AGENTS, EMPLOYEES, OR ATTORNEYS-IN-FACT AND
SHALL BE ENTITLED TO ADVICE OF COUNSEL CONCERNING ALL MATTERS PERTAINING TO SUCH
DUTIES.  AGENT SHALL NOT BE RESPONSIBLE FOR THE NEGLIGENCE OR MISCONDUCT OF ANY
AGENT OR ATTORNEY-IN-FACT THAT IT SELECTS AS LONG AS SUCH SELECTION WAS MADE IN
COMPLIANCE WITH THIS SECTION AND WITHOUT GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.  THE FOREGOING NOTWITHSTANDING, AGENT SHALL NOT MAKE ANY MATERIAL
DELEGATION OF DUTIES TO SUBAGENTS OR NON-EMPLOYEE DELEGEES WITHOUT THE PRIOR
WRITTEN CONSENT OF REQUIRED LENDERS (IT BEING UNDERSTOOD THAT ROUTINE DELEGATION
OF SUCH ADMINISTRATIVE MATTERS AS FILING FINANCING STATEMENTS, OR CONDUCTING
APPRAISALS OR AUDITS, IS NOT VIEWED AS A MATERIAL DELEGATION THAT REQUIRES PRIOR
REQUIRED LENDER APPROVAL).

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17.3                        LIABILITY OF AGENT-RELATED PERSONS.  NONE OF THE
AGENT-RELATED PERSONS SHALL (I) BE LIABLE FOR ANY ACTION TAKEN OR OMITTED TO BE
TAKEN BY ANY OF THEM UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (EXCEPT FOR ITS OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT), OR, (II) BE RESPONSIBLE IN ANY MANNER TO ANY
OF THE LENDERS FOR ANY RECITAL, STATEMENT, REPRESENTATION OR WARRANTY MADE BY
BORROWERS, OR ANY SUBSIDIARY OR AFFILIATE OF BORROWERS, OR ANY OFFICER OR
DIRECTOR THEREOF, CONTAINED IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT, OR
IN ANY CERTIFICATE, REPORT, STATEMENT, OR OTHER DOCUMENT REFERRED TO OR PROVIDED
FOR IN, OR RECEIVED BY AGENT UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR THE VALIDITY, EFFECTIVENESS, GENUINENESS, ENFORCEABILITY
OR SUFFICIENCY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR ANY FAILURE
OF BORROWERS OR ANY OTHER PARTY TO ANY LOAN DOCUMENT TO PERFORM ITS OBLIGATIONS
HEREUNDER OR THEREUNDER.  NO AGENT-RELATED PERSON SHALL BE UNDER ANY OBLIGATION
TO ANY LENDER TO ASCERTAIN OR TO INQUIRE AS TO THE OBSERVANCE OR PERFORMANCE OF
ANY OF THE AGREEMENTS CONTAINED IN, OR CONDITIONS OF, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR TO INSPECT THE PROPERTIES, BOOKS, OR RECORDS OF
BORROWERS, OR ANY OF BORROWERS’ SUBSIDIARIES OR AFFILIATES.

17.4                        RELIANCE BY AGENT.  AGENT SHALL BE ENTITLED TO RELY,
AND SHALL BE FULLY PROTECTED IN RELYING, UPON ANY WRITING, RESOLUTION, NOTICE,
CONSENT, CERTIFICATE, AFFIDAVIT, LETTER, TELEGRAM, FACSIMILE, TELEX, OR
TELEPHONE MESSAGE, STATEMENT OR OTHER DOCUMENT OR CONVERSATION BELIEVED BY IT TO
BE GENUINE AND CORRECT AND TO HAVE BEEN SIGNED, SENT, OR MADE BY THE PROPER
PERSON OR PERSONS, AND UPON ADVICE AND STATEMENTS OF LEGAL COUNSEL (INCLUDING
COUNSEL TO BORROWERS OR COUNSEL TO ANY LENDER), INDEPENDENT ACCOUNTANTS, AND
OTHER EXPERTS SELECTED BY AGENT.  AGENT SHALL BE FULLY JUSTIFIED IN FAILING OR
REFUSING TO TAKE ANY ACTION UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
UNLESS IT SHALL FIRST RECEIVE SUCH ADVICE OR CONCURRENCE OF THE REQUIRED LENDERS
OR ALL LENDERS, AS APPLICABLE, AND UNTIL SUCH INSTRUCTIONS ARE RECEIVED, AGENT
SHALL ACT, OR REFRAIN FROM ACTING, AS IT DEEMS ADVISABLE SO LONG AS IT IS NOT
GROSSLY NEGLIGENT OR GUILTY OF WILLFUL MISCONDUCT.  IF AGENT SO REQUESTS, IT
SHALL FIRST BE INDEMNIFIED TO ITS REASONABLE SATISFACTION BY LENDERS AGAINST ANY
AND ALL LIABILITY AND EXPENSE WHICH MAY BE INCURRED BY IT BY REASON OF TAKING OR
CONTINUING TO TAKE ANY SUCH ACTION.  AGENT SHALL IN ALL CASES BE FULLY PROTECTED
IN ACTING, OR IN REFRAINING FROM ACTING, UNDER THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ACCORDANCE WITH A REQUEST OR CONSENT OF THE REQUIRED LENDERS OR ALL
LENDERS, AS APPLICABLE, AND SUCH REQUEST AND ANY ACTION TAKEN OR FAILURE TO ACT
PURSUANT THERETO SHALL BE BINDING UPON ALL OF THE LENDERS.

17.5                        NOTICE OF DEFAULT OR EVENT OF DEFAULT.  AGENT SHALL
NOT BE DEEMED TO HAVE KNOWLEDGE OR NOTICE OF THE OCCURRENCE OF ANY DEFAULT OR
EVENT OF DEFAULT, EXCEPT WITH RESPECT TO DEFAULTS IN THE PAYMENT OF PRINCIPAL,
INTEREST, FEES, AND EXPENSES REQUIRED TO BE PAID TO AGENT FOR THE ACCOUNT OF
AGENT OR THE LENDERS, EXCEPT WITH RESPECT TO ACTUAL KNOWLEDGE OF THE EXISTENCE
OF AN OVERADVANCE, AND EXCEPT WITH RESPECT TO DEFAULTS AND EVENTS OF DEFAULT OF
WHICH AGENT HAS ACTUAL KNOWLEDGE, UNLESS AGENT SHALL HAVE RECEIVED WRITTEN
NOTICE FROM A LENDER OR A BORROWER REFERRING TO THIS AGREEMENT, DESCRIBING SUCH
DEFAULT OR EVENT OF DEFAULT, AND STATING THAT SUCH NOTICE IS A “NOTICE OF
DEFAULT.”  AGENT PROMPTLY WILL NOTIFY THE LENDERS OF ITS RECEIPT OF ANY SUCH
NOTICE OR OF ANY EVENT OF DEFAULT OF WHICH AGENT HAS, OR IS DEEMED TO HAVE,
ACTUAL KNOWLEDGE.  IF ANY LENDER OBTAINS ACTUAL KNOWLEDGE OF ANY EVENT OF
DEFAULT, SUCH LENDER PROMPTLY SHALL NOTIFY THE OTHER LENDERS AND AGENT OF SUCH
EVENT OF DEFAULT.  EACH LENDER SHALL BE SOLELY RESPONSIBLE FOR GIVING ANY
NOTICES TO ITS PARTICIPANTS, IF ANY.  SUBJECT TO SECTION 17.4, AGENT SHALL TAKE
SUCH

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ACTION WITH RESPECT TO SUCH DEFAULT OR EVENT OF DEFAULT AS MAY BE REQUESTED BY
THE REQUIRED LENDERS; PROVIDED, HOWEVER, THAT:

(A)                                  AT ALL TIMES, AGENT MAY PROPOSE AND, WITH
THE CONSENT OF REQUIRED LENDERS (WHICH SHALL NOT BE UNREASONABLY WITHHELD AND
WHICH SHALL BE DEEMED TO HAVE BEEN GIVEN BY A LENDER UNLESS SUCH LENDER HAS
NOTIFIED AGENT TO THE CONTRARY IN WRITING WITHIN THREE DAYS OF NOTIFICATION OF
SUCH PROPOSED ACTIONS BY AGENT) EXERCISE, ANY REMEDIES ON BEHALF OF THE LENDER
GROUP; AND

(B)                                 AT ALL TIMES, ONCE REQUIRED LENDERS OR ALL
LENDERS, AS THE CASE MAY BE, HAVE APPROVED THE EXERCISE OF A PARTICULAR REMEDY
OR PURSUIT OF A COURSE OF ACTION, AGENT MAY, BUT SHALL NOT BE OBLIGATED TO, MAKE
ALL ADMINISTRATIVE DECISIONS IN CONNECTION THEREWITH OR TAKE ALL OTHER ACTIONS
REASONABLY INCIDENTAL THERETO (FOR EXAMPLE, IF THE REQUIRED LENDERS APPROVE THE
FORECLOSURE OF CERTAIN COLLATERAL, AGENT SHALL NOT BE REQUIRED TO SEEK CONSENT
FOR THE ADMINISTRATIVE ASPECTS OF CONDUCTING SUCH SALE OR HANDLING OF SUCH
COLLATERAL).

17.6                        CREDIT DECISION.  EACH LENDER ACKNOWLEDGES THAT NONE
OF THE AGENT-RELATED PERSONS HAS MADE ANY REPRESENTATION OR WARRANTY TO IT, AND
THAT NO ACT BY AGENT HEREINAFTER TAKEN, INCLUDING ANY REVIEW OF THE AFFAIRS OF
BORROWERS AND THEIR SUBSIDIARIES OR AFFILIATES, SHALL BE DEEMED TO CONSTITUTE
ANY REPRESENTATION OR WARRANTY BY ANY AGENT-RELATED PERSON TO ANY LENDER.  EACH
LENDER REPRESENTS TO AGENT THAT IT HAS, INDEPENDENTLY AND WITHOUT RELIANCE UPON
ANY AGENT-RELATED PERSON AND BASED ON SUCH DOCUMENTS AND INFORMATION AS IT HAS
DEEMED APPROPRIATE, MADE ITS OWN APPRAISAL OF AND INVESTIGATION INTO THE
BUSINESS, PROSPECTS, OPERATIONS, PROPERTY, FINANCIAL AND OTHER CONDITION, AND
CREDITWORTHINESS OF BORROWERS AND ANY OTHER PERSON (OTHER THAN THE LENDER GROUP)
PARTY TO A LOAN DOCUMENT, AND ALL APPLICABLE BANK REGULATORY LAWS RELATING TO
THE TRANSACTIONS CONTEMPLATED HEREBY, AND MADE ITS OWN DECISION TO ENTER INTO
THIS AGREEMENT AND TO EXTEND CREDIT TO BORROWERS.  EACH LENDER ALSO REPRESENTS
THAT IT WILL, INDEPENDENTLY AND WITHOUT RELIANCE UPON ANY AGENT-RELATED PERSON
AND BASED ON SUCH DOCUMENTS AND INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE
TIME, CONTINUE TO MAKE ITS OWN CREDIT ANALYSIS, APPRAISALS, AND DECISIONS IN
TAKING OR NOT TAKING ACTION UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AND TO MAKE SUCH INVESTIGATIONS AS IT DEEMS NECESSARY TO INFORM ITSELF AS TO THE
BUSINESS, PROSPECTS, OPERATIONS, PROPERTY, FINANCIAL AND OTHER CONDITION, AND
CREDITWORTHINESS OF BORROWERS, AND ANY OTHER PERSON (OTHER THAN THE LENDER
GROUP) PARTY TO A LOAN DOCUMENT.  EXCEPT FOR NOTICES, REPORTS, AND OTHER
DOCUMENTS EXPRESSLY HEREIN REQUIRED TO BE FURNISHED TO THE LENDERS BY AGENT,
AGENT SHALL NOT HAVE ANY DUTY OR RESPONSIBILITY TO PROVIDE ANY LENDER WITH ANY
CREDIT OR OTHER INFORMATION CONCERNING THE BUSINESS, PROSPECTS, OPERATIONS,
PROPERTY, FINANCIAL AND OTHER CONDITION, OR CREDITWORTHINESS OF BORROWERS, AND
ANY OTHER PERSON PARTY TO A LOAN DOCUMENT THAT MAY COME INTO THE POSSESSION OF
ANY OF THE AGENT-RELATED PERSONS.

17.7                        COSTS AND EXPENSES; INDEMNIFICATION.  AGENT MAY
INCUR AND PAY LENDER GROUP EXPENSES TO THE EXTENT AGENT DEEMS REASONABLY
NECESSARY OR APPROPRIATE FOR THE PERFORMANCE AND FULFILLMENT OF ITS FUNCTIONS,
POWERS, AND OBLIGATIONS PURSUANT TO THE LOAN DOCUMENTS, INCLUDING WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, BUT SUBJECT TO ANY REQUIREMENTS OF THE
LOAN DOCUMENTS THAT IT OBTAIN ANY APPLICABLE CONSENTS OR ENGAGE IN ANY REQUIRED
CONSULTATION, COURT COSTS, REASONABLE ATTORNEYS FEES AND EXPENSES, COSTS OF
COLLECTION BY OUTSIDE COLLECTION AGENCIES

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AND AUCTIONEER FEES AND COSTS OF SECURITY GUARDS OR INSURANCE PREMIUMS PAID TO
MAINTAIN THE COLLATERAL, WHETHER OR NOT BORROWERS ARE OBLIGATED TO REIMBURSE
AGENT OR LENDERS FOR SUCH EXPENSES PURSUANT TO THIS AGREEMENT OR OTHERWISE. 
AGENT IS AUTHORIZED AND DIRECTED TO DEDUCT AND RETAIN SUFFICIENT AMOUNTS FROM
COLLECTIONS TO REIMBURSE AGENT FOR SUCH OUT-OF-POCKET COSTS AND EXPENSES PRIOR
TO THE DISTRIBUTION OF ANY AMOUNTS TO LENDERS.  IN THE EVENT AGENT IS NOT
REIMBURSED FOR SUCH COSTS AND EXPENSES FROM COLLECTIONS, EACH LENDER HEREBY
AGREES THAT IT IS AND SHALL BE OBLIGATED TO PAY TO OR REIMBURSE AGENT FOR THE
AMOUNT OF SUCH LENDER’S PRO RATA SHARE THEREOF.  WHETHER OR NOT THE TRANSACTIONS
CONTEMPLATED HEREBY ARE CONSUMMATED, THE LENDERS SHALL INDEMNIFY UPON DEMAND THE
AGENT-RELATED PERSONS (TO THE EXTENT NOT REIMBURSED BY OR ON BEHALF OF BORROWERS
AND WITHOUT LIMITING THE OBLIGATIONS OF BORROWERS TO DO SO), ACCORDING TO THEIR
PRO RATA SHARES, FROM AND AGAINST ANY AND ALL INDEMNIFIED LIABILITIES; PROVIDED,
HOWEVER, THAT NO LENDER SHALL BE LIABLE FOR THE PAYMENT TO THE AGENT-RELATED
PERSONS OF ANY PORTION OF SUCH INDEMNIFIED LIABILITIES RESULTING SOLELY FROM
SUCH PERSON’S GROSS NEGLIGENCE, BAD FAITH, OR WILLFUL MISCONDUCT.  WITHOUT
LIMITATION OF THE FOREGOING, EACH LENDER SHALL REIMBURSE AGENT UPON DEMAND FOR
ITS RATABLE SHARE OF ANY COSTS OR OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEY
FEES AND EXPENSES) INCURRED BY AGENT IN CONNECTION WITH THE PREPARATION,
EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT
(WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL
ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT, ANY OTHER
LOAN DOCUMENT, OR ANY DOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN, TO THE
EXTENT THAT AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY OR ON BEHALF OF
BORROWERS.  THE UNDERTAKING IN THIS SECTION 17.7 SHALL SURVIVE THE PAYMENT OF
ALL OBLIGATIONS HEREUNDER AND THE RESIGNATION OR REPLACEMENT OF AGENT.

17.8                        AGENT IN INDIVIDUAL CAPACITY.  WELLS FARGO RETAIL
AND ITS AFFILIATES MAY MAKE LOANS TO, ISSUE LETTERS OF CREDIT FOR THE ACCOUNT
OF, ACCEPT DEPOSITS FROM, ACQUIRE EQUITY INTERESTS, IN AND GENERALLY ENGAGE IN
ANY KIND OF BANKING, TRUST, FINANCIAL ADVISORY, UNDERWRITING, OR OTHER BUSINESS
WITH BORROWERS AND ITS SUBSIDIARIES AND AFFILIATES AND ANY OTHER PERSON PARTY TO
ANY LOAN DOCUMENTS AS THOUGH WELLS FARGO RETAIL WERE NOT AGENT HEREUNDER WITHOUT
NOTICE TO OR CONSENT OF THE LENDERS.  THE LENDERS ACKNOWLEDGE THAT, PURSUANT TO
SUCH ACTIVITIES, WELLS FARGO RETAIL AND ITS AFFILIATES MAY RECEIVE INFORMATION
REGARDING BORROWERS OR THEIR AFFILIATES AND ANY OTHER PERSON PARTY TO ANY LOAN
DOCUMENTS THAT IS SUBJECT TO CONFIDENTIALITY OBLIGATIONS IN FAVOR OF BORROWERS
OR SUCH OTHER PERSON AND THAT PROHIBIT THE DISCLOSURE OF SUCH INFORMATION TO THE
LENDERS, AND THE LENDERS ACKNOWLEDGE THAT, IN SUCH CIRCUMSTANCES (AND IN THE
ABSENCE OF A WAIVER OF SUCH CONFIDENTIALITY OBLIGATIONS, WHICH WAIVER AGENT WILL
USE ITS REASONABLE BEST EFFORTS TO OBTAIN), AGENT SHALL BE UNDER NO OBLIGATION
TO PROVIDE SUCH INFORMATION TO THEM.  WITH RESPECT TO THE AGENT LOANS AND AGENT
ADVANCES, WELLS FARGO RETAIL SHALL HAVE THE SAME RIGHTS AND POWERS UNDER THIS
AGREEMENT AS ANY OTHER LENDER AND MAY EXERCISE THE SAME AS THOUGH IT WERE NOT
AGENT, AND THE TERMS “LENDER” AND “LENDERS” INCLUDE WELLS FARGO RETAIL IN ITS
INDIVIDUAL CAPACITY.

17.9                        SUCCESSOR AGENT.  AGENT MAY RESIGN AS AGENT
FOLLOWING NOTICE OF SUCH RESIGNATION (“NOTICE”) TO THE LENDERS AND
ADMINISTRATIVE BORROWER, AND EFFECTIVE UPON THE APPOINTMENT OF AND ACCEPTANCE OF
SUCH APPOINTMENT BY, A SUCCESSOR AGENT.  IF AGENT RESIGNS UNDER THIS AGREEMENT,
THE REQUIRED LENDERS SHALL APPOINT ANY LENDER OR ELIGIBLE TRANSFEREE AS
SUCCESSOR AGENT FOR THE LENDERS.  IF NO SUCCESSOR AGENT IS APPOINTED WITHIN 30
DAYS OF SUCH RETIRING AGENT’S NOTICE, AGENT MAY APPOINT A SUCCESSOR AGENT, AFTER
CONSULTING WITH THE LENDERS

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AND ADMINISTRATIVE BORROWER.  IN ANY SUCH EVENT, UPON THE ACCEPTANCE OF ITS
APPOINTMENT AS SUCCESSOR AGENT HEREUNDER, SUCH SUCCESSOR AGENT SHALL SUCCEED TO
ALL THE RIGHTS, POWERS AND DUTIES OF THE RETIRING AGENT AND THE TERM “AGENT”
SHALL MEAN SUCH SUCCESSOR AGENT AND THE RETIRING AGENT’S APPOINTMENT, POWERS,
AND DUTIES AS AGENT SHALL BE TERMINATED.  AFTER ANY RETIRING AGENT’S RESIGNATION
HEREUNDER AS AGENT, THE PROVISIONS OF THIS SECTION 17 SHALL INURE TO ITS BENEFIT
AS TO ANY ACTIONS TAKEN OR OMITTED TO BE TAKEN BY IT WHILE IT WAS AGENT UNDER
THIS AGREEMENT.

17.10                 WITHHOLDING TAX.

(A)                                  IF ANY LENDER IS A “FOREIGN CORPORATION,
PARTNERSHIP OR TRUST” WITHIN THE MEANING OF THE IRC AND SUCH LENDER CLAIMS
EXEMPTION FROM, OR A REDUCTION OF, U.S. WITHHOLDING TAX UNDER SECTIONS 1441 OR
1442 OF THE IRC, SUCH LENDER AGREES WITH AND IN FAVOR OF AGENT AND BORROWERS, TO
DELIVER TO AGENT AND BORROWERS:

(I)                                     IF SUCH LENDER CLAIMS AN EXEMPTION FROM,
OR A REDUCTION OF, WITHHOLDING TAX UNDER A UNITED STATES TAX TREATY, PROPERLY
COMPLETED IRS FORMS W-8BEN BEFORE THE PAYMENT OF ANY INTEREST IN THE FIRST
CALENDAR YEAR AND BEFORE THE PAYMENT OF ANY INTEREST IN EACH THIRD SUCCEEDING
CALENDAR YEAR DURING WHICH INTEREST MAY BE PAID UNDER THIS AGREEMENT;

(II)                                  IF SUCH LENDER CLAIMS THAT INTEREST PAID
UNDER THIS AGREEMENT IS EXEMPT FROM UNITED STATES WITHHOLDING TAX BECAUSE IT IS
EFFECTIVELY CONNECTED WITH A UNITED STATES TRADE OR BUSINESS OF SUCH LENDER, TWO
PROPERLY COMPLETED AND EXECUTED COPIES OF IRS FORM W-8ECI BEFORE THE PAYMENT OF
ANY INTEREST IS DUE IN THE FIRST TAXABLE YEAR OF SUCH LENDER AND IN EACH
SUCCEEDING TAXABLE YEAR OF SUCH LENDER DURING WHICH INTEREST MAY BE PAID UNDER
THIS AGREEMENT, AND IRS FORM W-9; AND

(III)                               SUCH OTHER FORM OR FORMS AS MAY BE REQUIRED
UNDER THE IRC OR OTHER LAWS OF THE UNITED STATES AS A CONDITION TO EXEMPTION
FROM, OR REDUCTION OF, UNITED STATES WITHHOLDING TAX.

Such Lender agrees to promptly notify Agent and Borrowers of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.

(B)                                 IF ANY LENDER CLAIMS EXEMPTION FROM, OR
REDUCTION OF, WITHHOLDING TAX UNDER A UNITED STATES TAX TREATY BY PROVIDING IRS
FORM W-8BEN AND SUCH LENDER SELLS, ASSIGNS, GRANTS A PARTICIPATION IN, OR
OTHERWISE TRANSFERS ALL OR PART OF THE OBLIGATIONS OF BORROWERS, SUCH LENDER
AGREES TO NOTIFY AGENT AND BORROWERS OF THE PERCENTAGE AMOUNT IN WHICH IT IS NO
LONGER THE BENEFICIAL OWNER OF OBLIGATIONS OF BORROWERS TO SUCH LENDER.  TO THE
EXTENT OF SUCH PERCENTAGE AMOUNT, AGENT AND BORROWERS WILL TREAT SUCH LENDER’S
IRS FORM W-8BEN AS NO LONGER VALID.

(C)                                  IF ANY LENDER CLAIMING EXEMPTION FROM
UNITED STATES WITHHOLDING TAX BY FILING IRS FORM W-8ECI WITH AGENT SELLS,
ASSIGNS, GRANTS A PARTICIPATION IN, OR OTHERWISE TRANSFERS ALL OR PART OF THE
OBLIGATIONS OF BORROWERS TO SUCH LENDER, SUCH LENDER AGREES TO UNDERTAKE SOLE
RESPONSIBILITY FOR COMPLYING WITH THE WITHHOLDING TAX REQUIREMENTS IMPOSED BY
SECTIONS 1441 AND 1442 OF THE IRC.

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(D)                                 IF ANY LENDER IS ENTITLED TO A REDUCTION IN
THE APPLICABLE WITHHOLDING TAX, AGENT MAY WITHHOLD FROM ANY INTEREST PAYMENT TO
SUCH LENDER AN AMOUNT EQUIVALENT TO THE APPLICABLE WITHHOLDING TAX AFTER TAKING
INTO ACCOUNT SUCH REDUCTION.  IF THE FORMS OR OTHER DOCUMENTATION REQUIRED BY
SUBSECTION (A) OF THIS SECTION ARE NOT DELIVERED TO AGENT, THEN AGENT MAY
WITHHOLD FROM ANY INTEREST PAYMENT TO SUCH LENDER NOT PROVIDING SUCH FORMS OR
OTHER DOCUMENTATION AN AMOUNT EQUIVALENT TO THE APPLICABLE WITHHOLDING TAX.

(E)                                  IF THE IRS OR ANY OTHER GOVERNMENTAL
AUTHORITY OF THE UNITED STATES OR OTHER JURISDICTION ASSERTS A CLAIM THAT AGENT
OR BORROWERS DID NOT PROPERLY WITHHOLD TAX FROM AMOUNTS PAID TO OR FOR THE
ACCOUNT OF ANY LENDER (BECAUSE THE APPROPRIATE FORM WAS NOT DELIVERED, WAS NOT
PROPERLY EXECUTED, OR BECAUSE SUCH LENDER FAILED TO NOTIFY AGENT AND BORROWERS
OF A CHANGE IN CIRCUMSTANCES WHICH RENDERED THE EXEMPTION FROM, OR REDUCTION OF,
WITHHOLDING TAX INEFFECTIVE, OR FOR ANY OTHER REASON) SUCH LENDER SHALL
INDEMNIFY AGENT AND BORROWERS FULLY FOR ALL AMOUNTS PAID, DIRECTLY OR
INDIRECTLY, BY AGENT OR BORROWERS AS TAX OR OTHERWISE, INCLUDING PENALTIES AND
INTEREST, AND INCLUDING ANY TAXES IMPOSED BY ANY JURISDICTION ON THE AMOUNTS
PAYABLE TO AGENT OR BORROWERS UNDER THIS SECTION, TOGETHER WITH ALL COSTS AND
EXPENSES (INCLUDING ATTORNEYS FEES AND EXPENSES).  THE OBLIGATION OF THE LENDERS
UNDER THIS SUBSECTION SHALL SURVIVE THE PAYMENT OF ALL OBLIGATIONS AND THE
RESIGNATION OF AGENT.

17.11                 COLLATERAL MATTERS.

(A)                                  THE LENDERS HEREBY IRREVOCABLY AUTHORIZE
AGENT, TO RELEASE ANY LIEN ON ANY COLLATERAL (I) UPON THE TERMINATION OF THE
COMMITMENTS AND PAYMENT AND SATISFACTION IN FULL BY BORROWERS OF ALL
OBLIGATIONS; AND UPON SUCH TERMINATION AND PAYMENT AGENT SHALL DELIVER TO
ADMINISTRATIVE BORROWER, AT ADMINISTRATIVE BORROWER’S SOLE COST AND EXPENSE, ALL
UCC TERMINATION STATEMENTS AND ANY OTHER DOCUMENTS NECESSARY TO TERMINATE THE
LOAN DOCUMENTS AND RELEASE THE LIENS WITH RESPECT TO THE COLLATERAL; (II)
CONSTITUTING PROPERTY BEING SOLD OR DISPOSED OF IF A RELEASE IS REQUIRED OR
DESIRABLE IN CONNECTION THEREWITH AND IF ADMINISTRATIVE BORROWER CERTIFIES TO
AGENT THAT THE SALE OR DISPOSITION IS PERMITTED UNDER SECTION 7.4 OF THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS (AND AGENT MAY RELY CONCLUSIVELY ON ANY
SUCH CERTIFICATE, WITHOUT FURTHER INQUIRY); (III) CONSTITUTING PROPERTY IN WHICH
BORROWERS OWNED NO INTEREST AT THE TIME THE LIEN WAS GRANTED OR AT ANY TIME
THEREAFTER; OR (IV) CONSTITUTING PROPERTY LEASED TO BORROWERS UNDER A LEASE THAT
HAS EXPIRED OR BEEN TERMINATED IN A TRANSACTION PERMITTED UNDER THIS AGREEMENT. 
EXCEPT AS PROVIDED ABOVE, AGENT WILL NOT RELEASE ANY LIEN ON ANY COLLATERAL
WITHOUT THE PRIOR WRITTEN AUTHORIZATION OF THE LENDERS.  UPON REQUEST BY AGENT
OR ADMINISTRATIVE BORROWER AT ANY TIME, THE LENDERS WILL CONFIRM IN WRITING
AGENT’S AUTHORITY TO RELEASE ANY SUCH LIENS ON PARTICULAR TYPES OR ITEMS OF
COLLATERAL PURSUANT TO THIS SECTION 17.11; PROVIDED, HOWEVER, THAT (I) AGENT
SHALL NOT BE REQUIRED TO EXECUTE ANY DOCUMENT NECESSARY TO EVIDENCE SUCH RELEASE
ON TERMS THAT, IN AGENT’S OPINION, WOULD EXPOSE AGENT TO LIABILITY OR CREATE ANY
OBLIGATION OR ENTAIL ANY CONSEQUENCE OTHER THAN THE RELEASE OF SUCH LIEN WITHOUT
RECOURSE, REPRESENTATION, OR WARRANTY, AND (II) SUCH RELEASE SHALL NOT IN ANY
MANNER DISCHARGE, AFFECT OR IMPAIR THE OBLIGATIONS OR ANY LIENS (OTHER THAN
THOSE EXPRESSLY BEING RELEASED), UPON (OR OBLIGATIONS OF BORROWERS IN RESPECT
OF) ALL INTERESTS RETAINED BY BORROWERS, INCLUDING, THE PROCEEDS OF ANY SALE,
ALL OF WHICH SHALL CONTINUE TO CONSTITUTE PART OF THE COLLATERAL.

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(B)                                 AGENT SHALL HAVE NO OBLIGATION WHATSOEVER TO
ANY OF THE LENDERS TO ASSURE THAT THE COLLATERAL EXISTS OR IS OWNED BY
BORROWERS, IS CARED FOR, PROTECTED, OR INSURED OR HAS BEEN ENCUMBERED, OR THAT
THE LIENS OF THE AGENT (FOR THE BENEFIT OF THE LENDER GROUP) HAVE BEEN PROPERLY
OR SUFFICIENTLY OR LAWFULLY CREATED, PERFECTED, PROTECTED, OR ENFORCED OR ARE
ENTITLED TO ANY PARTICULAR PRIORITY, OR TO EXERCISE AT ALL OR IN ANY PARTICULAR
MANNER OR UNDER ANY DUTY OF CARE, DISCLOSURE, OR FIDELITY, OR TO CONTINUE
EXERCISING, ANY OF THE RIGHTS, AUTHORITIES AND POWERS GRANTED OR AVAILABLE TO
AGENT PURSUANT TO ANY OF THE LOAN DOCUMENTS, IT BEING UNDERSTOOD AND AGREED THAT
IN RESPECT OF THE COLLATERAL, OR ANY ACT, OMISSION OR EVENT RELATED THERETO,
SUBJECT TO THE TERMS AND CONDITIONS CONTAINED HEREIN, AGENT MAY ACT IN ANY
MANNER IT MAY DEEM APPROPRIATE, IN ITS SOLE DISCRETION GIVEN AGENT’S OWN
INTEREST IN THE COLLATERAL IN ITS CAPACITY AS ONE OF THE LENDERS AND THAT AGENT
SHALL HAVE NO OTHER DUTY OR LIABILITY WHATSOEVER TO ANY LENDER AS TO ANY OF THE
FOREGOING, EXCEPT AS OTHERWISE PROVIDED HEREIN.

17.12                 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.

(A)                                  SUBJECT TO SECTION 17.12(B), EACH OF THE
LENDERS AGREES THAT IT MAY, AT ANY TIME AND FROM TIME TO TIME, AFTER OBTAINING
THE PRIOR WRITTEN CONSENT OF AGENT OR THE REQUIRED LENDERS, AND AGREES THAT IT
SHALL, TO THE EXTENT IT IS LAWFULLY ENTITLED TO DO SO, UPON THE REQUEST OF
AGENT, SET OFF AGAINST THE OBLIGATIONS ANY AMOUNTS OWING BY SUCH LENDER TO
BORROWERS OR ANY ACCOUNTS OF BORROWERS NOW OR HEREAFTER MAINTAINED WITH SUCH
LENDER.  EACH OF THE LENDERS FURTHER AGREES TO NOTIFY ADMINISTRATIVE BORROWER
AND AGENT PROMPTLY AFTER ANY SUCH SETOFF, PROVIDED THAT THE FAILURE TO GIVE SUCH
NOTICE SHALL NOT AFFECT THE VALIDITY OF SUCH SETOFF.  EACH OF THE LENDERS AGREES
THAT IT SHALL NOT, UNLESS SPECIFICALLY REQUESTED TO DO SO BY AGENT, TAKE OR
CAUSE TO BE TAKEN ANY ACTION, INCLUDING THE COMMENCEMENT OF ANY LEGAL OR
EQUITABLE PROCEEDINGS, TO FORECLOSE ANY LIEN ON, OR OTHERWISE ENFORCE ANY
SECURITY INTEREST IN, ANY OF THE COLLATERAL THE PURPOSE OF WHICH IS, OR COULD
BE, TO GIVE SUCH LENDER ANY PREFERENCE OR PRIORITY AGAINST THE OTHER LENDERS
WITH RESPECT TO THE COLLATERAL.

(B)                                 SUBJECT TO SECTION 17.8, IF, AT ANY TIME OR
TIMES ANY LENDER SHALL RECEIVE (I) BY PAYMENT, FORECLOSURE, SETOFF, OR
OTHERWISE, ANY PROCEEDS OF COLLATERAL OR ANY PAYMENTS WITH RESPECT TO THE
OBLIGATIONS OF BORROWERS TO SUCH LENDER ARISING UNDER, OR RELATING TO, THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS, EXCEPT FOR ANY SUCH PROCEEDS OR PAYMENTS
RECEIVED BY SUCH LENDER FROM AGENT PURSUANT TO THE TERMS OF THIS AGREEMENT, OR
(II) PAYMENTS FROM AGENT PURSUANT TO THE TERMS OF THIS AGREEMENT, IN EACH CASE
IN EXCESS OF SUCH LENDER’S PRO RATA SHARE, SUCH LENDER SHALL PROMPTLY (1) TURN
THE SAME OVER TO AGENT, IN KIND, AND WITH SUCH ENDORSEMENTS AS MAY BE REQUIRED
TO NEGOTIATE THE SAME TO AGENT, OR IN SAME DAY FUNDS, AS APPLICABLE, FOR THE
ACCOUNT OF ALL OF THE LENDERS AND FOR APPLICATION TO THE OBLIGATIONS IN
ACCORDANCE WITH THE APPLICABLE PROVISIONS OF THIS AGREEMENT, OR (2) PURCHASE,
WITHOUT RECOURSE OR WARRANTY, AN UNDIVIDED INTEREST AND PARTICIPATION IN THE
OBLIGATIONS OWED TO THE OTHER LENDERS SO THAT SUCH EXCESS PAYMENT RECEIVED SHALL
BE APPLIED RATABLY AS AMONG THE LENDERS IN ACCORDANCE WITH THEIR PRO RATA
SHARES; PROVIDED, HOWEVER, THAT IF ALL OR PART OF SUCH EXCESS PAYMENT RECEIVED
BY THE PURCHASING PARTY IS THEREAFTER RECOVERED FROM IT, THOSE PURCHASES OF
PARTICIPATIONS SHALL BE RESCINDED IN WHOLE OR IN PART, AS APPLICABLE, AND THE
APPLICABLE PORTION OF THE PURCHASE PRICE PAID THEREFOR SHALL BE RETURNED TO SUCH
PURCHASING PARTY, BUT WITHOUT INTEREST EXCEPT TO THE EXTENT THAT SUCH PURCHASING
PARTY IS REQUIRED TO PAY INTEREST IN CONNECTION WITH THE RECOVERY OF THE EXCESS
PAYMENT.

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17.13                 AGENCY FOR PERFECTION.  AGENT AND EACH LENDER HEREBY
APPOINTS EACH OTHER LENDER AS AGENT FOR THE PURPOSE OF PERFECTING THE LIENS OF
THE LENDER GROUP IN ASSETS WHICH, IN ACCORDANCE WITH ARTICLE 9 OF THE UCC CAN BE
PERFECTED ONLY BY POSSESSION.  SHOULD ANY LENDER OBTAIN POSSESSION OF ANY SUCH
COLLATERAL, SUCH LENDER SHALL NOTIFY AGENT THEREOF, AND, PROMPTLY UPON AGENT’S
REQUEST THEREFOR SHALL DELIVER SUCH COLLATERAL TO AGENT OR IN ACCORDANCE WITH
AGENT’S INSTRUCTIONS.

17.14                 PAYMENTS BY AGENT TO THE LENDERS.  ALL PAYMENTS TO BE MADE
BY AGENT TO THE LENDERS SHALL BE MADE BY BANK WIRE TRANSFER OR INTERNAL TRANSFER
OF IMMEDIATELY AVAILABLE FUNDS PURSUANT TO THE INSTRUCTIONS SET FORTH ON
SCHEDULE C-1, OR PURSUANT TO SUCH OTHER WIRE TRANSFER INSTRUCTIONS AS EACH PARTY
MAY DESIGNATE FOR ITSELF BY WRITTEN NOTICE TO AGENT.  CONCURRENTLY WITH EACH
SUCH PAYMENT, AGENT SHALL IDENTIFY WHETHER SUCH PAYMENT (OR ANY PORTION THEREOF)
REPRESENTS PRINCIPAL, PREMIUM OR INTEREST ON REVOLVING ADVANCES OR OTHERWISE.

17.15                 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. 
EACH MEMBER OF THE LENDER GROUP AUTHORIZES AND DIRECTS AGENT TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS RELATING TO THE COLLATERAL, FOR THE
RATABLE BENEFIT (SUBJECT TO SECTION 4.1) OF THE LENDER GROUP.  EACH MEMBER OF
THE LENDER GROUP AGREES THAT ANY ACTION TAKEN BY AGENT, REQUIRED LENDERS, OR ALL
LENDERS, AS APPLICABLE, IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS RELATING TO THE COLLATERAL AND THE EXERCISE BY AGENT,
REQUIRED LENDERS, OR ALL LENDERS, AS APPLICABLE, OF THEIR RESPECTIVE POWERS SET
FORTH THEREIN OR HEREIN, TOGETHER WITH SUCH OTHER POWERS THAT ARE REASONABLY
INCIDENTAL THERETO, SHALL BE BINDING UPON ALL OF THE LENDERS.

17.16                 Field Audits and Examination Reports; Confidentiality;
Disclaimers by Lenders; Other Reports and Information.  By signing this
Agreement, each Lender:

(A)                                  IS DEEMED TO HAVE REQUESTED THAT AGENT
FURNISH SUCH LENDER, PROMPTLY AFTER THE SAME BECOME AVAILABLE, COPIES OF ALL
FINANCIAL STATEMENTS, REPORTS AND CERTIFICATES REQUIRED TO BE DELIVERED BY
ADMINISTRATIVE BORROWER UNDER SECTIONS 6.2, 6.4 AND 6.15 OF THIS AGREEMENT, AND
A COPY OF EACH FIELD AUDIT OR EXAMINATION REPORT (EACH A “REPORT” AND
COLLECTIVELY, “REPORTS”) RECEIVED BY AGENT, AND AGENT SHALL SO FURNISH EACH
LENDER WITH SUCH REPORTS;

(B)                                 EXPRESSLY AGREES AND ACKNOWLEDGES THAT AGENT
(I) DOES NOT MAKE ANY REPRESENTATION OR WARRANTY AS TO THE ACCURACY OF ANY
REPORT, AND (II) SHALL NOT BE LIABLE FOR ANY INFORMATION CONTAINED IN ANY
REPORT;

(C)                                  EXPRESSLY AGREES AND ACKNOWLEDGES THAT THE
REPORTS ARE NOT COMPREHENSIVE AUDITS OR EXAMINATIONS, THAT AGENT OR OTHER PARTY
PERFORMING ANY AUDIT OR EXAMINATION WILL INSPECT ONLY SPECIFIC INFORMATION
REGARDING BORROWERS AND WILL RELY SIGNIFICANTLY UPON BOOKS AND RECORDS, AS WELL
AS ON REPRESENTATIONS OF BORROWERS’ PERSONNEL;

(D)                                 AGREES TO KEEP ALL REPORTS AND OTHER
MATERIAL INFORMATION OBTAINED BY IT PURSUANT TO THE REQUIREMENTS OF THIS
AGREEMENT IN ACCORDANCE WITH ITS REASONABLE CUSTOMARY PROCEDURES FOR HANDLING
CONFIDENTIAL INFORMATION; IT BEING UNDERSTOOD AND AGREED BY BORROWERS THAT IN
ANY EVENT SUCH LENDER MAY MAKE DISCLOSURES (I) REASONABLY REQUIRED BY ANY BONA
FIDE

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POTENTIAL OR ACTUAL ASSIGNEE, TRANSFEREE, OR PARTICIPANT IN CONNECTION WITH ANY
CONTEMPLATED OR ACTUAL ASSIGNMENT OR TRANSFER BY SUCH LENDER OF AN INTEREST
HEREIN OR ANY PARTICIPATION INTEREST IN SUCH LENDER’S RIGHTS HEREUNDER, (II) OF
INFORMATION THAT HAS BECOME PUBLIC BY DISCLOSURES MADE BY PERSONS OTHER THAN
SUCH LENDER, ITS AFFILIATES, ASSIGNEES, TRANSFEREES, OR PARTICIPANTS, (III) AS
REQUIRED OR REQUESTED BY ANY COURT, GOVERNMENTAL OR ADMINISTRATIVE AGENCY,
PURSUANT TO ANY SUBPOENA OR OTHER LEGAL PROCESS, OR BY ANY LAW, STATUTE,
REGULATION, OR COURT ORDER, OR (IV) TO EXAMINERS, AUDITORS, AND INVESTIGATORS
HAVING REGULATORY AUTHORITY OVER SUCH LENDER; PROVIDED, HOWEVER, THAT, UNLESS
PROHIBITED BY APPLICABLE LAW, STATUTE, REGULATION, OR COURT ORDER, SUCH LENDER
SHALL NOTIFY ADMINISTRATIVE BORROWER OF ANY REQUEST BY ANY COURT, GOVERNMENTAL
OR ADMINISTRATIVE AGENCY, OR PURSUANT TO ANY SUBPOENA OR OTHER LEGAL PROCESS,
FOR DISCLOSURE OF ANY NON-PUBLIC MATERIAL INFORMATION PURSUANT TO CLAUSE (III)
OF THIS SECTION 17.16(D) CONCURRENT WITH, OR WHERE PRACTICABLE, PRIOR TO THE
DISCLOSURE THEREOF; AND

(E)                                  WITHOUT LIMITING THE GENERALITY OF ANY
OTHER INDEMNIFICATION PROVISION CONTAINED IN THIS AGREEMENT, AGREES:  (I) TO
HOLD AGENT AND ANY SUCH OTHER LENDER PREPARING A REPORT HARMLESS FROM ANY ACTION
THE INDEMNIFYING LENDER MAY TAKE OR CONCLUSION THE INDEMNIFYING LENDER MAY REACH
OR DRAW FROM ANY REPORT IN CONNECTION WITH ANY LOANS OR OTHER CREDIT
ACCOMMODATIONS THAT THE INDEMNIFYING LENDER HAS MADE OR MAY MAKE TO BORROWERS,
OR THE INDEMNIFYING LENDER’S PARTICIPATION IN, OR THE INDEMNIFYING LENDER’S
PURCHASE OF, A LOAN OR LOANS OF BORROWERS; AND (II) TO PAY AND PROTECT, AND
INDEMNIFY, DEFEND, AND HOLD AGENT AND ANY SUCH OTHER LENDER PREPARING A REPORT
HARMLESS FROM AND AGAINST, THE CLAIMS, ACTIONS, PROCEEDINGS, DAMAGES, COSTS,
EXPENSES AND OTHER AMOUNTS (INCLUDING, ATTORNEY COSTS) INCURRED BY AGENT AND ANY
SUCH OTHER LENDER PREPARING A REPORT AS THE DIRECT OR INDIRECT RESULT OF ANY
THIRD PARTIES WHO MIGHT OBTAIN ALL OR PART OF ANY REPORT THROUGH THE
INDEMNIFYING LENDER.

In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent, and, upon receipt of such request,
Agent shall provide a copy of same to such Lender promptly upon receipt thereof;
(y) to the extent that Agent is entitled, under any provision of the Loan
Documents, to request additional reports or information from Borrowers, any
Lender may, from time to time, reasonably request Agent to exercise such right
as specified in such Lender’s notice to Agent, whereupon Agent promptly shall
request of Borrowers the additional reports or information specified by such
Lender, and, upon receipt thereof, Agent promptly shall provide a copy of same
to such Lender; and (z) any time that Agent renders to Administrative Borrower a
statement regarding the Loan Account, Agent shall send a copy of such statement
to each Lender.

17.17                 SEVERAL OBLIGATIONS; NO LIABILITY.  NOTWITHSTANDING THAT
CERTAIN OF THE LOAN DOCUMENTS NOW OR HEREAFTER MAY HAVE BEEN OR WILL BE EXECUTED
ONLY BY OR IN FAVOR OF AGENT IN ITS CAPACITY AS SUCH, AND NOT BY OR IN FAVOR OF
THE LENDERS, ANY AND ALL OBLIGATIONS ON THE PART OF AGENT (IF ANY) TO MAKE ANY
ADVANCES SHALL CONSTITUTE THE SEVERAL (AND NOT JOINT) OBLIGATIONS OF THE
RESPECTIVE LENDERS ON A RATABLE BASIS, ACCORDING TO THEIR RESPECTIVE
COMMITMENTS, TO MAKE AN AMOUNT OF SUCH ADVANCES NOT TO EXCEED, IN PRINCIPAL
AMOUNT, AT ANY ONE TIME OUTSTANDING, THE AMOUNT OF THEIR RESPECTIVE
COMMITMENTS.  NOTHING CONTAINED HEREIN SHALL CONFER UPON ANY LENDER ANY INTEREST
IN, OR SUBJECT ANY LENDER TO ANY LIABILITY FOR, OR IN RESPECT OF, THE BUSINESS,
ASSETS, PROFITS, LOSSES, OR LIABILITIES OF ANY OTHER LENDER.  EACH LENDER SHALL
BE SOLELY RESPONSIBLE

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FOR NOTIFYING ITS PARTICIPANTS OF ANY MATTERS RELATING TO THE LOAN DOCUMENTS TO
THE EXTENT ANY SUCH NOTICE MAY BE REQUIRED, AND NO LENDER SHALL HAVE ANY
OBLIGATION, DUTY, OR LIABILITY TO ANY PARTICIPANT OF ANY OTHER LENDER.  EXCEPT
AS PROVIDED IN SECTION 17.7, NO MEMBER OF THE LENDER GROUP SHALL HAVE ANY
LIABILITY FOR THE ACTS OF ANY OTHER MEMBER OF THE LENDER GROUP.  NO LENDER SHALL
BE RESPONSIBLE TO BORROWERS OR ANY OTHER PERSON FOR ANY FAILURE BY ANY OTHER
LENDER TO FULFILL ITS OBLIGATIONS TO MAKE ADVANCES, NOR TO ADVANCE FOR IT OR ON
ITS BEHALF IN CONNECTION WITH ITS COMMITMENT, NOR TO TAKE ANY OTHER ACTION ON
ITS BEHALF HEREUNDER OR IN CONNECTION WITH THE FINANCING CONTEMPLATED HEREIN.

17.18                 DOCUMENTATION AGENT; CO-AGENT.

Notwithstanding the provisions of this Agreement or any of the other Loan
Documents, Wachovia Capital Finance Corporation (New England) (in its capacity
as Documentation Agent, as opposed to its capacity as a Lender), and LaSalle
Retail Finance, a division of LaSalle Business Credit LLC (in its capacity as
Co-Agent, as opposed to its capacity as a Lender) shall have no powers, rights,
duties, responsibilities, or liabilities with respect to this Agreement and the
other Loan Documents, nor shall Wachovia Capital Finance Corporation (New
England) or LaSalle Retail Finance, a division of LaSalle Business Credit LLC 
have or be deemed to have any fiduciary relationship with any Lender.

18.                               GENERAL PROVISIONS.

18.1                        EFFECTIVENESS.

This Agreement shall be binding and deemed effective when executed by Borrowers
and the Lender Group.

18.2                        SECTION HEADINGS.  HEADINGS AND NUMBERS HAVE BEEN
SET FORTH HEREIN FOR CONVENIENCE ONLY.  UNLESS THE CONTRARY IS COMPELLED BY THE
CONTEXT, EVERYTHING CONTAINED IN EACH SECTION APPLIES EQUALLY TO THIS ENTIRE
AGREEMENT.

18.3                        INTERPRETATION.  NEITHER THIS AGREEMENT NOR ANY
UNCERTAINTY OR AMBIGUITY HEREIN SHALL BE CONSTRUED OR RESOLVED AGAINST THE
LENDER GROUP OR BORROWERS, WHETHER UNDER ANY RULE OF CONSTRUCTION OR OTHERWISE. 
ON THE CONTRARY, THIS AGREEMENT HAS BEEN REVIEWED BY ALL PARTIES AND SHALL BE
CONSTRUED AND INTERPRETED ACCORDING TO THE ORDINARY MEANING OF THE WORDS USED SO
AS TO FAIRLY ACCOMPLISH THE PURPOSES AND INTENTIONS OF ALL PARTIES HERETO.

18.4                        SEVERABILITY OF PROVISIONS.  EACH PROVISION OF THIS
AGREEMENT SHALL BE SEVERABLE FROM EVERY OTHER PROVISION OF THIS AGREEMENT FOR
THE PURPOSE OF DETERMINING THE LEGAL ENFORCEABILITY OF ANY SPECIFIC PROVISION.

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18.5                        COUNTERPARTS; TELEFACSIMILE EXECUTION.  THIS
AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS AND BY DIFFERENT PARTIES
ON SEPARATE COUNTERPARTS, EACH OF WHICH, WHEN EXECUTED AND DELIVERED, SHALL BE
DEEMED TO BE AN ORIGINAL, AND ALL OF WHICH, WHEN TAKEN TOGETHER, SHALL
CONSTITUTE BUT ONE AND THE SAME AGREEMENT.  DELIVERY OF AN EXECUTED COUNTERPART
OF THIS AGREEMENT BY TELEFACSIMILE SHALL BE EQUALLY AS EFFECTIVE AS DELIVERY OF
AN ORIGINAL EXECUTED COUNTERPART OF THIS AGREEMENT.  ANY PARTY DELIVERING AN
EXECUTED COUNTERPART OF THIS AGREEMENT BY TELEFACSIMILE ALSO SHALL DELIVER AN
ORIGINAL EXECUTED COUNTERPART OF THIS AGREEMENT BUT THE FAILURE TO DELIVER AN
ORIGINAL EXECUTED COUNTERPART SHALL NOT AFFECT THE VALIDITY, ENFORCEABILITY, AND
BINDING EFFECT OF THIS AGREEMENT.

18.6                        REVIVAL AND REINSTATEMENT OF OBLIGATIONS.  IF THE
INCURRENCE OR PAYMENT OF THE OBLIGATIONS BY BORROWERS OR ANY GUARANTOR OF THE
OBLIGATIONS OR THE TRANSFER BY ANY OR ALL OF SUCH PARTIES TO THE LENDER GROUP OF
ANY PROPERTY OF EITHER OR BOTH OF SUCH PARTIES SHOULD FOR ANY REASON
SUBSEQUENTLY BE DECLARED TO BE VOID OR VOIDABLE UNDER ANY STATE OR FEDERAL LAW
RELATING TO CREDITORS’ RIGHTS, INCLUDING PROVISIONS OF THE BANKRUPTCY CODE
RELATING TO FRAUDULENT CONVEYANCES, PREFERENCES, AND OTHER VOIDABLE OR
RECOVERABLE PAYMENTS OF MONEY OR TRANSFERS OF PROPERTY (COLLECTIVELY, A
“VOIDABLE TRANSFER”), AND IF THE LENDER GROUP IS REQUIRED TO REPAY OR RESTORE,
IN WHOLE OR IN PART, ANY SUCH VOIDABLE TRANSFER, OR ELECTS TO DO SO UPON THE
REASONABLE ADVICE OF ITS COUNSEL, THEN, AS TO ANY SUCH VOIDABLE TRANSFER, OR THE
AMOUNT THEREOF THAT THE LENDER GROUP IS REQUIRED OR ELECTS TO REPAY OR RESTORE,
AND AS TO ALL REASONABLE COSTS, EXPENSES, AND ATTORNEYS FEES OF THE LENDER GROUP
RELATED THERETO, THE LIABILITY OF BORROWERS OR SUCH GUARANTOR AUTOMATICALLY
SHALL BE REVIVED, REINSTATED, AND RESTORED AND SHALL EXIST AS THOUGH SUCH
VOIDABLE TRANSFER HAD NEVER BEEN MADE.

18.7                        INTEGRATION.  THIS AGREEMENT, TOGETHER WITH THE
OTHER LOAN DOCUMENTS, REFLECTS THE ENTIRE UNDERSTANDING OF THE PARTIES WITH
RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY AND SHALL NOT BE CONTRADICTED OR
QUALIFIED BY ANY OTHER AGREEMENT, ORAL OR WRITTEN, BEFORE THE DATE HEREOF.

18.8        PARENT AS AGENT FOR BORROWERS.  EACH BORROWER HEREBY IRREVOCABLY
APPOINTS PARENT AS THE BORROWING AGENT AND ATTORNEY-IN-FACT FOR ALL BORROWERS
(THE “ADMINISTRATIVE BORROWER”) WHICH APPOINTMENT SHALL REMAIN IN FULL FORCE AND
EFFECT UNLESS AND UNTIL AGENT SHALL HAVE RECEIVED PRIOR WRITTEN NOTICE SIGNED BY
EACH BORROWER THAT SUCH APPOINTMENT HAS BEEN REVOKED AND THAT ANOTHER BORROWER
HAS BEEN APPOINTED ADMINISTRATIVE BORROWER.  EACH BORROWER HEREBY IRREVOCABLY
APPOINTS AND AUTHORIZES THE ADMINISTRATIVE BORROWER (I) TO PROVIDE AGENT WITH
ALL NOTICES WITH RESPECT TO ADVANCES AND LETTERS OF CREDIT OBTAINED FOR THE
BENEFIT OF ANY BORROWER AND ALL OTHER NOTICES AND INSTRUCTIONS UNDER THIS
AGREEMENT AND (II) TO TAKE SUCH ACTION AS THE ADMINISTRATIVE BORROWER DEEMS
APPROPRIATE ON ITS BEHALF TO OBTAIN ADVANCES AND LETTERS OF CREDIT AND TO
EXERCISE SUCH OTHER POWERS AS ARE REASONABLY INCIDENTAL THERETO TO CARRY OUT THE
PURPOSES OF THIS AGREEMENT.  IT IS UNDERSTOOD THAT THE HANDLING OF THE LOAN
ACCOUNT AND COLLATERAL OF BORROWERS IN A COMBINED FASHION, AS MORE FULLY SET
FORTH HEREIN, IS DONE SOLELY AS AN ACCOMMODATION TO BORROWERS IN ORDER TO
UTILIZE THE COLLECTIVE BORROWING POWERS OF BORROWERS IN THE MOST EFFICIENT AND
ECONOMICAL MANNER AND AT THEIR REQUEST, AND THAT LENDER GROUP SHALL NOT INCUR
LIABILITY TO ANY BORROWER AS A RESULT HEREOF.  EACH BORROWER EXPECTS TO DERIVE
BENEFIT, DIRECTLY OR INDIRECTLY, FROM THE HANDLING OF THE LOAN ACCOUNT AND THE
COLLATERAL IN A COMBINED FASHION SINCE THE SUCCESSFUL OPERATION OF EACH BORROWER
IS DEPENDENT ON THE CONTINUED SUCCESSFUL

88

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PERFORMANCE OF THE INTEGRATED GROUP.  TO INDUCE THE LENDER GROUP TO DO SO, AND
IN CONSIDERATION THEREOF, EACH BORROWER HEREBY JOINTLY AND SEVERALLY AGREES TO
INDEMNIFY EACH MEMBER OF THE LENDER GROUP AND HOLD EACH MEMBER OF THE LENDER
GROUP HARMLESS AGAINST ANY AND ALL LIABILITY, EXPENSE, LOSS OR CLAIM OF DAMAGE
OR INJURY, MADE AGAINST THE LENDER GROUP BY ANY BORROWER OR BY ANY THIRD PARTY
WHOSOEVER, ARISING FROM OR INCURRED BY REASON OF (A) THE HANDLING OF THE LOAN
ACCOUNT AND COLLATERAL OF BORROWERS AS HEREIN PROVIDED, (B) THE LENDER GROUP’S
RELYING ON ANY INSTRUCTIONS OF THE ADMINISTRATIVE BORROWER, OR (C) ANY OTHER
ACTION TAKEN BY THE LENDER GROUP HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS,
EXCEPT THAT BORROWERS WILL HAVE NO LIABILITY TO THE RELEVANT AGENT-RELATED
PERSON OR LENDER-RELATED PERSON UNDER THIS SECTION 18.8 WITH RESPECT TO ANY
LIABILITY THAT HAS BEEN FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION
TO HAVE RESULTED SOLELY FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
AGENT-RELATED PERSON OR LENDER-RELATED PERSON, AS THE CASE MAY BE.

18.9                        Acknowledgment and Restatement of Existing Loan
Agreement.

(A)                                  EXISTING OBLIGATIONS.  EACH BORROWER HEREBY
ACKNOWLEDGES, CONFIRMS AND AGREES THAT BORROWERS ARE INDEBTED TO AGENT AND
LENDERS FOR ADVANCES TO BORROWERS UNDER THE EXISTING LOAN AGREEMENT, AS OF THE
CLOSE OF BUSINESS ON JUNE 27, 2007, IN THE AGGREGATE PRINCIPAL AMOUNT OF
$9,234,916.65 AND THE AGGREGATE AMOUNT OF $80,931,033.52 IN RESPECT OF UNDRAWN
OR UNREIMBURSED LETTERS OF CREDIT, TOGETHER WITH ALL INTEREST ACCRUED AND
ACCRUING THEREON (TO THE EXTENT APPLICABLE), AND ALL FEES, COSTS, EXPENSES AND
OTHER CHARGES RELATING THERETO, ALL OF WHICH ARE UNCONDITIONALLY OWING BY
BORROWERS TO AGENT AND LENDERS, WITHOUT OFFSET, DEFENSE OR COUNTERCLAIM OF ANY
KIND, NATURE OR DESCRIPTION WHATSOEVER.

(B)                                 ACKNOWLEDGMENT OF SECURITY INTERESTS. 

(I)                                     EACH BORROWER HEREBY ACKNOWLEDGES,
CONFIRMS AND AGREES THAT AGENT, FOR ITSELF AND THE RATABLE BENEFIT OF LENDERS,
HAS AND SHALL CONTINUE TO HAVE A SECURITY INTEREST IN AND LIEN UPON THE
COLLATERAL HERETOFORE GRANTED TO AGENT PURSUANT TO THE EXISTING LOAN AGREEMENT
TO SECURE THE OBLIGATIONS, AS WELL AS ANY COLLATERAL GRANTED UNDER THIS
AGREEMENT OR UNDER ANY OF THE OTHER LOAN DOCUMENTS OR OTHERWISE GRANTED TO OR
HELD BY AGENT OR ANY LENDER.

(II)                                  THE LIENS AND SECURITY INTERESTS OF AGENT,
FOR ITSELF AND THE RATABLE BENEFIT OF LENDERS, IN THE COLLATERAL SHALL BE DEEMED
TO BE CONTINUOUSLY GRANTED AND PERFECTED FROM THE EARLIEST DATE OF THE GRANTING
AND PERFECTION OF SUCH LIENS AND SECURITY INTERESTS, WHETHER UNDER THE EXISTING
AGREEMENT, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS.

(C)                                  EXISTING LOAN AGREEMENT.  EACH BORROWER
HEREBY ACKNOWLEDGES, CONFIRMS AND AGREES THAT: (A) THE EXISTING LOAN AGREEMENT
HAS BEEN DULY EXECUTED AND DELIVERED BY EACH BORROWER AND IS IN FULL FORCE AND
EFFECT AS OF THE DATE HEREOF AND (B) THE AGREEMENTS AND OBLIGATIONS OF EACH
BORROWER CONTAINED IN THE EXISTING LOAN AGREEMENT CONSTITUTE THE LEGAL, VALID
AND BINDING OBLIGATIONS OF EACH BORROWER, ENFORCEABLE AGAINST IT IN ACCORDANCE
WITH THEIR RESPECT TERMS, AND EACH BORROWER HAS NO VALID DEFENSE TO THE
ENFORCEMENT OF SUCH OBLIGATIONS AND (C) AGENT AND LENDERS ARE ENTITLED TO ALL OF
THE RIGHTS AND REMEDIES PROVIDED FOR IN THE EXISTING LOAN AGREEMENT.

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(D)                                 RESTATEMENT.

(I)                                     EXCEPT AS OTHERWISE STATED IN SECTION
18.9(B) HEREOF AND THIS SECTION 18.9(D), AS OF THE DATE HEREOF, THE TERMS,
CONDITIONS, AGREEMENTS, COVENANTS, REPRESENTATIONS AND WARRANTIES SET FORTH IN
THE EXISTING LOAN AGREEMENT ARE HEREBY AMENDED AND RESTATED IN THEIR ENTIRETY,
AND AS SO AMENDED AND RESTATED, REPLACED AND SUPERSEDED, BY THE TERMS,
CONDITIONS, AGREEMENTS, COVENANTS, REPRESENTATIONS AND WARRANTIES SET FORTH IN
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, EXCEPT THAT NOTHING HEREIN OR IN
THE OTHER LOAN DOCUMENTS SHALL IMPAIR OR ADVERSELY AFFECT THE CONTINUATION OF
THE LIABILITY OF ANY BORROWER FOR THE OBLIGATIONS HERETOFORE GRANTED, PLEDGE
AND/OR ASSIGNED TO AGENT OR ANY LENDER.  THE AMENDMENT AND RESTATEMENT CONTAINED
HEREIN SHALL NOT, IN ANY MANNER, BE CONSTRUED TO CONSTITUTE PAYMENT OF, OR
IMPAIR, LIMIT, CANCEL OR EXTINGUISH, OR CONSTITUTE A NOVATION IN RESPECT OF, THE
OBLIGATIONS AND OTHER LIABILITIES OF ANY BORROWER EVIDENCED BY OR ARISING UNDER
THE EXISTING LOAN AGREEMENT, AND THE LIENS AND SECURITY INTERESTS SECURING SUCH
OBLIGATIONS AND OTHER LIABILITIES, WHICH SHALL NOT IN ANY MANNER BE IMPAIRED,
LIMITED, TERMINATED, WAIVED OR RELEASED.

(E)                                  THE PRINCIPAL AMOUNT OF THE ADVANCES
OUTSTANDING UNDER THE EXISTING LOAN AGREEMENT ON THE CLOSING DATE (AS SET FORTH
IN SECTION 18.9(A) ABOVE) SHALL, FOR PURPOSES OF THIS AGREEMENT, BE INCLUDED AS
ADVANCES HEREUNDER AND EACH OF THE L/CS AND LC GUARANTEES OUTSTANDING UNDER THE
EXISTING LOAN AGREEMENT ON THE CLOSING DATE SHALL, FOR PURPOSES OF THIS
AGREEMENT, BE INCLUDED AS L/CS AND L/C GUARANTEES HEREUNDER; PROVIDED, HOWEVER,
THAT THE OUTSTANDING L/CS DESCRIBED ON SCHEDULE 18.9(E)(I) SHALL BE DEEMED TO
HAVE BEEN ISSUED AS OF THE CLOSING DATE BY WELLS FARGO BANK, NATIONAL
ASSOCIATION, AS ISSUING BANK UNDER THE L/C DEMAND FACILITY LETTER OF CREDIT
AGREEMENT, AND SHALL NO LONGER BE DEEMED TO BE L/CS ISSUED HEREUNDER BUT,
RATHER, SHALL BE DEEMED AS OF THE CLOSING DATE TO BE L/C DEMAND FACILITY LETTERS
OF CREDIT.  THE OUTSTANDING L/CS DESCRIBED ON SCHEDULE 18.9(E)(II) SHALL REMAIN
L/CS HEREUNDER.

[Remainder of this page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date set forth in the first paragraph of this Agreement.

 

THE CHILDREN’S PLACE RETAIL
STORES, INC., a Delaware corporation

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Susan Riley

 

 

 

Title:

Executive Vice President - Finance
and Administration

 

 

 

 

 

 

 

 

 

 

 

 

 

THE CHILDREN’S PLACE SERVICES
COMPANY LLC, a Delaware limited
liability company

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Susan Riley

 

 

 

Title:

Senior Vice President, Chief
Financial Officer and Treasurer

 

 

 

 

 

 

 

 

 

 

 

 

 

WELLS FARGO RETAIL FINANCE,
LLC, as Agent and as a Lender

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Michele Ayou

 

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

WACHOVIA CAPITAL FINANCE
CORPORATION (NEW ENGLAND), as
Documentation Agent and as a Lender

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

Fifth Amended and Restated
Loan and Security Agreement

S-1

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

 

 

LASALLE RETAIL FINANCE,
a Division of LaSalle Business Credit, LLC,
as Agent for Standard Federal Bank
National Association, as Co-Agent and as a
Lender

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A., as a
Lender

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CITICORP USA, INC., as a Lender

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HSBC BANK USA, NATIONAL
ASSOCIATION, as a Lender

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

Fifth Amended and Restated
Loan and Security Agreement

S-2

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

SCHEDULE C-1

COMMITMENTS ON CLOSING DATE

1.

Wells Fargo Retail Finance, LLC

 

$

37,200,000

 

 

 

 

 

 

2.

Wachovia Capital Finance Corporation (New England)

 

$

24,000,000

 

 

 

 

 

 

3.

LaSalle Retail Finance, a division of LaSalle Business Credit, LLC, as Agent for
Standard Federal Bank National Association

 

$

24,000,000

 

 

 

 

 

 

4.

JPMorgan Chase Bank, N.A.

 

$

12,000,000

 

 

 

 

 

 

5.

Citicorp USA, Inc.

 

$

12,000,000

 

 

 

 

 

 

6.

HSBC Bank USA, National Association

 

$

10,800,000

 

 

 

 

 

 

Total

 

 

$

120,000,000.00

 

 

Commitment on Closing Date

C-1

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

EXHIBIT A-1

FORM OF ASSIGNMENT AND ACCEPTANCE

This ASSIGNMENT AND ACCEPTANCE (this “Assignment and Acceptance”) dated as of
                          , 200    is made between
                                   (the “Assignor”) and
                                   (the “Assignee”).

RECITALS

A.                                   The Assignor is party to that certain Fifth
Amended and Restated Loan and Security Agreement, dated as of June 28, 2007 (as
amended, amended and restated, modified, supplemented or renewed from time to
time, the “Loan Agreement”), among The Children’s Place Retail Stores, Inc. and
The Children’s Place Services Company LLC (“Borrowers”), the several financial
institutions from time to time party thereto (including the Assignor,
collectively, the “Lenders”), and Wells Fargo Retail Finance LLC, a Delaware
limited liability company, as agent for the Lenders (the “Agent”).  Any terms
defined in the Loan Agreement and not defined in this Assignment and Acceptance
are used herein as defined in the Loan Agreement;

B.                                     As provided under the Loan Agreement, the
Assignor has committed to making Advances (the “Committed Loans”) to the
Borrowers in an aggregate amount not to exceed $                     (the
“Commitment”);

C.                                     [The Assignor has made Committed Loans in
the aggregate principal amount of $                    to the Borrowers] [No
Committed Loans are outstanding under the Loan Agreement];

D.                                    [The Assignor has acquired a participation
in the Agent’s liability under Letters of Credit in an aggregate outstanding
principal amount of $                         (the “L/C Obligations”)] [No
Letters of Credit are outstanding under the Loan Agreement]; and

E.                                      The Assignor wishes to assign to the
Assignee [part of the] [all] rights and obligations of the Assignor under the
Loan Agreement in respect of its Commitment, [together with a corresponding
portion of each of its outstanding Committed Loans and L/C Obligations,] in an
amount equal to $                   (the “Assigned Amount”) on the terms and
subject to the conditions set forth herein and the Assignee wishes to accept
assignment of such rights and to assume such obligations from the Assignor on
such terms and subject to such conditions.

NOW THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:

1.                                       Assignment and Acceptance.

(a)                                  Subject to the terms and conditions of this
Assignment and Acceptance, (i) the Assignor hereby sells, transfers, delegates,
and assigns to the Assignee, and (ii) the Assignee hereby purchases, assumes and
undertakes from the Assignor, without recourse

1

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and without representation or warranty (except as provided in this Assignment
and Acceptance)     % (the “Assignee’s Percentage Share”) of (A) the Commitment
[and the Committed Loans and the L/C Obligations] of the Assignor and (B) all
related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Loan Agreement and the other Loan
Documents.

[If appropriate, add paragraph specifying payment to Assignor by Assignee of
outstanding principal of, accrued interest on, and fees with respect to,
Committed Loans and L/C Obligations assigned.]

(b)                                 With effect on and after the Effective Date
(as defined in Section 5 hereof), the Assignee shall be a party to the Loan
Agreement and succeed to all of the rights and be obligated to perform all of
the obligations of a Lender under the Loan Agreement, including the requirements
concerning confidentiality (if any) and the payment of indemnification to the
Agent, with a Commitment in an amount equal to the Assigned Amount.  The
Assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Agreement are required to be
performed by it as a Lender.  It is the intent of the parties hereto that the
Commitment of the Assignor shall, as of the Effective Date, be reduced by an
amount equal to the Assigned Amount and the Assignor shall relinquish its rights
and be released from its obligations under the Loan Agreement to the extent such
obligations have been assumed by the Assignee; provided, however, the Assignor
shall not relinquish the rights under the Loan Agreement to the extent such
rights relate to the time prior to the Effective Date.

(c)                                  After giving effect to the assignment and
assumption set forth herein, on the Effective Date the Assignee’s Commitment
will be $              .

(d)                                 After giving effect to the assignment and
assumption set forth herein, on the Effective Date the Assignor’s Commitment
will be $             .

2.                                       Payments.

(a)                                  As consideration for the sale, assignment
and transfer contemplated in Section 1 hereof, the Assignee shall pay to the
Assignor on the Effective Date in immediately available funds an amount equal to
$              , representing the Assignee’s Percentage Share of the principal
amount of all Committed Loans.

(b)                                 The [Assignor] [Assignee] further agrees to
pay to the Agent a processing fee in the amount of
                                   ($              ), as specified in Section
15.1(a) of the Loan Agreement.

3.                                       Reallocation of Payments.

Any interest, fees and other payments accrued to the Effective Date with respect
to the Commitment [,] [and] Committed Loans [and L/C Obligations] shall be for
the account of the Assignor.  Any interest, fees and other payments accrued on
and after the Effective Date with respect to the Assigned Amount shall be for
the account of the Assignee.  Each of the Assignor and the Assignee agrees that
it will hold in trust for the

2

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other party any interest, fees and other amounts which it may receive to which
the other party is entitled pursuant to the preceding sentence and pay to the
other party any such amounts which it may receive promptly upon receipt.

4.                                       Independent Credit Decision.

The Assignee (a) acknowledges that it has received a copy of the Loan Agreement
and the Schedules and Exhibits thereto, together with copies of the most recent
financial statements referred to in Section 6.3 of the Loan Agreement, and such
other documents and information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this Assignment and
Acceptance; and (b) agrees that it will, independently and without reliance upon
the Assignor, the Agent 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 and legal decisions in taking or not taking action under the Loan
Agreement.

5.                                       Effective Date; Notices.

(a)                                  As between the Assignor and the Assignee,
the effective date for this Assignment and Acceptance (the “Effective Date”)
shall be the later of:  (i)                        , 200  ; and (ii) the first
day on which the following conditions precedent have been satisfied:

(I)                                     ASSIGNMENT AND ACCEPTANCE SHALL BE
EXECUTED AND DELIVERED BY THE ASSIGNOR AND THE ASSIGNEE;

(II)                                  THE CONSENT OF THE AGENT REQUIRED FOR AN
EFFECTIVE ASSIGNMENT OF THE ASSIGNED AMOUNT BY THE ASSIGNOR TO THE ASSIGNEE
UNDER SECTION 15.1(A) OF THE LOAN AGREEMENT SHALL HAVE BEEN DULY OBTAINED AND
SHALL BE IN FULL FORCE AND EFFECT AS OF THE EFFECTIVE DATE;

(III)                               THE ASSIGNEE SHALL PAY TO THE ASSIGNOR ALL
AMOUNTS DUE TO THE ASSIGNOR UNDER THIS ASSIGNMENT AND ACCEPTANCE;

(IV)                              THE PROCESSING FEE REFERRED TO IN SECTION 2(B)
HEREOF AND IN SECTION 15.1 OF THE LOAN AGREEMENT IN THE AMOUNT OF
                                          ($              ), SHALL HAVE BEEN
PAID TO THE AGENT; AND

(V)                                 THE ASSIGNOR SHALL HAVE ASSIGNED AND THE
ASSIGNEE SHALL HAVE ASSUMED A PERCENTAGE EQUAL TO THE ASSIGNEE’S PERCENTAGE
SHARE OF THE RIGHTS AND OBLIGATIONS OF THE ASSIGNOR UNDER THE LOAN AGREEMENT.

(b)                                 Promptly following the execution of this
Assignment and Acceptance, the Assignor shall deliver to the Administrative
Borrower and the Agent for acknowledgement by the Agent, a Notice of Assignment
[substantially] in the form attached hereto as Schedule 1.

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6.                                       Agent.

[(a)]                          The Assignee hereby appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under the Loan Agreement as are delegated to the Agent by the Lenders pursuant
to the terms of the Loan Agreement.

[INCLUDE ONLY IF ASSIGNOR IS AGENT] [(b)  The Assignee shall assume no duties or
obligations held by the Assignor in its capacity as Agent under the Loan
Agreement.]

7.                                       Withholding Tax.

The Assignee (a) represents and warrants to the Lenders, the Agent and the
Borrowers that under applicable law and treaties no tax will be required to be
withheld by the Lenders with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Agent and
the Borrowers prior to the time that the Agent or the Borrowers are required to
make any payment of principal, interest or fees hereunder, duplicate executed
originals of either U.S. Internal Revenue service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms 4224 or 1001 upon the expiration of any previously delivered form or
comparable statements in accordance with all applicable U.S. laws and
regulations and amendments thereto, duly executed and completed by the Assignee,
and (c) agrees to comply with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.

8.                                       Representations and Warranties.

(a)                                  The Assignor represents and warrants that
(i) it is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any lien or other adverse
claim; (ii) it is duly organized and existing and it has the full power and
authority to take, and has taken, all action necessary to execute and deliver
this Assignment and Acceptance and any other documents required or permitted to
be executed or delivered by it in connection with this Assignment and Acceptance
and to fulfill its obligations hereunder; (iii) no notices to, or consents,
authorizations or approvals of, any person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance, and apart from any agreements or undertakings or
filings required by the Loan Agreement, no further action by, or notice to, or
filing with, any person is required of it for such execution, delivery or
performance; and (iv) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignor, enforceable against the Assignor in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors’ rights and to general equitable principles.

(b)                                 The Assignor makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in

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connection with the Loan Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement or any
other instrument or document furnished pursuant thereto.  The Assignor makes no
representation or warranty in connection with, and assumes no responsibility
with respect to, the financial condition of the Borrowers, or the performance or
observance by the Borrowers, of any of its obligations under the Loan Agreement
or any other instrument or document furnished in connection therewith.

(c)                                  The Assignee represents and warrants that
(i) it is duly organized and existing and is an Eligible Transferee and it has
full power and authority to take, and has taken, all action necessary to execute
and deliver this Assignment and Acceptance and any other documents required or
permitted to be executed or delivered by it in connection with this Assignment
and Acceptance, and to fulfill its obligations hereunder; (ii) no notices to, or
consents, authorizations or approvals of, any person are required (other than
any already given or obtained) for its due execution, delivery and performance
of this Assignment and Acceptance; and apart from any agreements or undertakings
or filings required by the Loan Agreement, no further action by, or notice to,
or filing with any person is required of it for such execution, delivery or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors’ rights and to general equitable principles.

9.                                       Further Assurances.

The Assignor and the Assignee each hereby agrees to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance, including the delivery of any notices or other documents or
instruments to the Administrative Borrower or the Agent, which may be required
in connection with the assignment and assumption contemplated hereby.

10.                                 Miscellaneous.

(a)                                  Any amendment or waiver of any provision of
this Assignment and Acceptance shall be in writing and signed by the parties
hereto.  No failure or delay by either party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof and any waiver of
any breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further breach thereof.

(b)                                 All payments made hereunder shall be made
without any set-off or counterclaim.

(c)                                  The Assignor and the Assignee shall each
pay its own costs and expenses incurred in connection with the negotiation,
preparation, execution and performance of this Assignment and Acceptance.

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(d)                                 This Assignment and Acceptance may be
executed in any number of counterparts, each of which shall be an original, but
all of which shall together constitute one and the same agreement.

(e)                                  THIS ASSIGNMENT AND ACCEPTANCE SHALL BE
DEEMED TO HAVE BEEN MADE IN THE COMMONWEALTH OF MASSACHUSETTS AND SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF SUCH COMMONWEALTH,
EXCEPT THAT NO DOCTRINE OF CHOICE OF LAW SHALL BE USED TO APPLY THE LAWS OF ANY
OTHER STATE OR JURISDICTION.  The Assignor and Assignee each agrees that, in
addition to any other courts that may have jurisdiction under applicable laws or
rules, any action or proceeding to enforce or arising out of this Assignment and
Acceptance may be commenced in the state and federal courts located in the
County of Suffolk, Commonwealth of Massachusetts, and the Assignor and Assignee
each consents and submits in advance to such jurisdiction and agrees that venue
will be proper in such courts on any such matter.  Each party to this Assignment
and Acceptance hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding.

(f)                                    THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY
WAIVES TRIAL BY JURY, RIGHTS OF SETOFF, AND THE RIGHT TO IMPOSE COUNTERCLAIMS IN
ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT
OF THIS ASSIGNMENT AND ACCEPTANCE, THE LOAN AGREEMENT, ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER
ORAL OR WRITTEN) DELIVERED PURSUANT HERETO OR THERETO, OR ANY OTHER CLAIM OR
DISPUTE HOWSOEVER ARISING, BETWEEN THE ASSIGNOR AND THE ASSIGNEE.  THE ASSIGNOR
AND THE ASSIGNEE EACH CONFIRMS THAT THE FOREGOING WAIVERS ARE INFORMED AND
FREELY MADE.

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[Other provisions to be added as may be negotiated between the Assignor and the
Assignee, provided that such provisions are not inconsistent with the Loan
Agreement.]

IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment
and Acceptance to be executed and delivered by their duly authorized officers as
of the date first above written.

 

[ASSIGNOR]

 

By:

 

 

Title:

 

 

By:

 

 

Title:

 

 

Address:

 

 

 

 

 

 

[ASSIGNEE]

 

By:

 

 

Title:

 

 

By:

 

 

Title:

 

 

Address:

 

 

 

 

 

 

 

 

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SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE

                          , 200    

Wells Fargo Retail Finance, LLC

One Boston Place

Suite 1800

Boston, Massachusetts  02108

Attn:                                             

[Name and Address of Borrowers]

Ladies and Gentlemen:

We refer to the Fifth Amended and Restated Loan and Security Agreement, dated as
of June 28, 2007 (as amended, amended and restated, modified, supplemented or
renewed from time to time, the “Loan Agreement”), among The Children’s Place
Retail Stores, Inc. and The Children’s Place Services Company, LLC
(“Borrowers”), the several financial institutions from time to time party
thereto (collectively, the “Lenders”), and Wells Fargo Retail Finance LLC, as
agent for the Lenders (the “Agent”).  Terms defined in the Loan Agreement are
used herein as therein defined.

1.                                       We hereby give you notice of, and
request your consent to, the assignment by             (the “Assignor”) to
                                    (the “Assignee”) of           % of the
right, title and interest of the Assignor in and to the Loan Agreement
(including, without limitation, the right, title and interest of the Assignor in
and to the Commitments of the Assignor[,] [and] all outstanding loans made by
the Assignor [and the Assignor’s participation in the Letters of Credit])
pursuant to the Assignment and Acceptance Agreement attached hereto (the
“Assignment and Acceptance”).  Before giving effect to such assignment, the
Assignor’s Commitment is $                  [,] [and] the aggregate amount of
its outstanding loans is $              [, and its participation in L/C
Obligations is $                     ].

2.                                       The Assignee agrees that, upon
receiving the consent of the Agent to such assignment, the Assignee will be
bound by the terms of the Loan Agreement as fully and to the same extent as if
the Assignee were the Lender originally holding such interest in the Loan
Agreement.

3.                                       The following administrative details
apply to the Assignee:

(A)                              Notice Address:

Assignee
name:                                                                            

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Address:                                              
                                                                                    

                                                                                                   

(B)                                Payment Instructions:

Account
No.:                                                                                    

At:                                                                                    

Reference:                                       
                                                                                    

Attention:                                        
                                                                                    

4.                                       You are entitled to rely upon the
representations, warranties and covenants of each of the Assignor and Assignee
contained in the Assignment and Acceptance.

IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice of
Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.

Very truly yours,

 

[NAME OF ASSIGNOR]

 

 

 

By:

 

 

Title:

 

 

 

 

 

By:

 

 

Title:

 

 

 

 

 

[NAME OF ASSIGNEE]

 

 

 

By:

 

 

Title:

 

 

 

 

 

By:

 

 

Title:

 

 

9

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ACKNOWLEDGED AND, TO THE EXTENT REQUIRED, CONSENTED TO:

THE CHILDREN’S PLACE RETAIL

 

STORES, INC., a Delaware corporation,

 

as Administrative Borrower

 

 

By:

 

 

 

 

 

Title:

 

 

 

ACKNOWLEDGED AND ASSIGNMENT

 

 

 

CONSENTED TO:

 

 

 

WELLS FARGO RETAIL FINANCE, LLC,

 

 

 

a Delaware limited liability company, as Agent

 

 

By:

 

 

 

 

 

Title:

 

 

 

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EXHIBIT C-1

COMPLIANCE CERTIFICATE SAMPLE COPY

Date                                   , 200    

WELLS FARGO RETAIL FINANCE, LLC

One Boston Place, Suite 1800

Boston, Massachusetts  02108

Attn:                                                 

RE:                            Fifth Amended and Restated Loan and Security
Agreement, dated as of June 28, 2007 (the “Agreement”) by and among WELLS FARGO
RETAIL FINANCE, LLC, as agent (“Agent”) for certain financial institutions, the
financial institutions, and THE CHILDREN’S PLACE RETAIL STORES, INC. and THE
CHILDREN’S PLACE SERVICES COMPANY, LLC (“Borrowers”).

Dear                             :

This certificate accompanies the financial statements for the Fiscal Month
ending                             (the “Financial Statements”) furnished by
Borrowers to Agent in accordance with Section 6.2 of the Agreement.  Capitalized
terms used but not defined herein shall have the meanings set forth in the
Agreement.

The undersigned, in his/her capacity as the chief financial officer of
Administrative Borrower, has reviewed the Financial Statements, the Agreement
and each of the other Loan Documents and has made such investigation of the
business and affairs of Borrowers and such inquiry of the officers of Borrowers
as the undersigned has deemed appropriate under the circumstances.  Following
such review and investigation, the undersigned hereby certifies, on behalf of
Administrative Borrower and the other Borrowers, as of the date of this
certificate as follows: (i) all reports, statements, or computer prepared
information of any kind or nature delivered or caused to be delivered to Agent
under the Agreement have been prepared in accordance with GAAP and fairly
present the financial condition of Borrowers[, except for the months ended
March, 2007, April, 2007 and May, 2007 as may be directly impacted by the Stock
Option Issue]; (ii) Borrowers are in timely compliance with all of the covenants
and agreements under the Agreement; (iii) the representations and warranties of
Borrowers contained in the Agreement and the other Loan Documents are true and
correct in all material respects on and as of the date of this certificate, as
though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date); and (iv)
except as set forth on Exhibit A attached hereto, there does not exist any
condition or event that constitutes an Event of Default (if there does exist an
Event of Default, Borrowers have taken, are taking, or propose to take those
actions with respect thereto as described on said Exhibit A).

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Sincerely,

 

THE CHILDREN’S PLACE RETAIL STORES, INC.

 

 

By:

 

 

Name:

 

 

Title:

Chief Financial Officer

 

 

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