Exhibit 10.1

EXECUTION

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

by and among

J. CREW OPERATING CORP.

J. CREW INC.

GRACE HOLMES, INC. d/b/a J. CREW RETAIL

H.F.D. NO. 55, INC. d/b/a J. CREW FACTORY

as Borrowers

and

J. CREW GROUP, INC.

J. CREW INTERNATIONAL, INC.

J. CREW INTERMEDIATE LLC

as Guarantors

WACHOVIA CAPITAL MARKETS LLC

Sole Lead Arranger and Sole Lead Bookrunner

WACHOVIA BANK, NATIONAL ASSOCIATION

as Administrative Agent

BANK OF AMERICA, N.A.

as Syndication Agent

CONGRESS FINANCIAL CORPORATION

as Collateral Agent

and

THE LENDERS FROM TIME TO TIME PARTY HERETO

as Lenders

Dated: December 23, 2004

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TABLE OF CONTENTS

 

           Page

SECTION 1.         DEFINITIONS

   2

SECTION 2.         CREDIT FACILITIES

   32

2.1

  

Revolving Loans

   32

2.2

  

Letter of Credit Accommodations

   32

2.3

  

Intentionally Omitted

   37

2.4

  

Commitments

   37

2.5

  

Loan Limits

   37

2.6

  

Mandatory Prepayments

   38

2.7

  

Intentionally Omitted

   39

2.8

  

Joint and Several Liability

   39

2.9

  

Maximum Credit Increase

   40

SECTION 3.         INTEREST AND FEES

   42

3.1

  

Interest

   42

3.2

  

Fees

   43

3.3

  

Changes in Laws and Increased Costs of Revolving Loans

   44

SECTION 4.         CONDITIONS PRECEDENT

   46

4.1

  

Conditions Precedent to Amendment and Restatement

   46

4.2

  

Conditions Precedent to All Revolving Loans and Letter of Credit Accommodations

   47

SECTION 5.        GRANT AND PERFECTION OF SECURITY INTEREST

   47

5.1

  

Grant of Security Interest

   47

5.2

  

Perfection of Security Interests

   49

SECTION 6.        COLLECTION AND ADMINISTRATION

   53

6.1

  

Borrowers’ Loan Accounts

   53

6.2

  

Statements

   53

6.3

  

Collection of Accounts

   54

6.4

  

Payments

   55

6.5

  

Authorization to Make Revolving Loans

   58

6.6

  

Use of Proceeds

   59

6.7

  

Appointment of Borrower Agent as Agent for Requesting Revolving Loans and
Receipts of Revolving Loans and Statements

   59

6.8

  

Pro Rata Treatment

   59

6.9

  

Sharing of Payments, Etc.

   60

6.10

  

Settlement Procedures

   61

6.11

  

Obligations Several; Independent Nature of Lenders’ Rights

   63

SECTION 7.        COLLATERAL REPORTING AND COVENANTS

   63

7.1

  

Collateral Reporting

   63

 

(i)

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7.2

  

Accounts Covenants

   65

7.3

  

Equipment and Real Property Covenants

   66

7.4

  

Equipment and Real Property Covenants

   67

7.5

  

Power of Attorney

   67

7.6

  

Right to Cure

   68

7.7

  

Access to Premises

   68

7.8

  

Intellectual Property Appraisal

   69

SECTION 8.         REPRESENTATIONS AND WARRANTIES

   69

8.1

  

Corporate or Limited Liability Company Existence, Power and Authority

   69

8.2

  

Name; State of Organization; Chief Executive Office; Collateral Locations

   69

8.3

  

Financial Statements; No Material Adverse Change

   70

8.4

  

Priority of Liens; Title to Properties

   70

8.5

  

Tax Returns

   70

8.6

  

Litigation

   71

8.7

  

Compliance with Other Agreements and Applicable Laws

   71

8.8

  

Environmental Compliance

   71

8.9

  

Credit Card Agreements

   72

8.10

  

Interrelated Businesses

   73

8.11

  

Employee Benefits

   73

8.12

  

Bank Accounts

   74

8.13

  

Intellectual Property

   74

8.14

  

Subsidiaries; Affiliates; Capitalization; Solvency; Inactive Entities

   75

8.15

  

Labor Disputes

   75

8.16

  

Restrictions on Subsidiaries

   76

8.17

  

Material Contracts

   76

8.18

  

Black Canyon Documents

   76

8.19

  

Accuracy and Completeness of Information

   76

8.20

  

Survival of Warranties; Cumulative

   76

SECTION 9.         AFFIRMATIVE AND NEGATIVE COVENANTS

   77

9.1

  

Maintenance of Existence

   77

9.2

  

New Collateral Locations

   77

9.3

  

Compliance with Laws, Regulations, Etc.

   78

9.4

  

Payment of Taxes and Claims

   79

9.5

  

Insurance

   79

9.6

  

Financial Statements and Other Information

   80

9.7

  

Sale of Assets, Consolidation, Merger, Dissolution, Etc.

   82

9.8

  

Encumbrances

   85

9.9

  

Indebtedness

   87

9.10

  

Loans, Investments, Etc.

   101

9.11

  

Restricted Payments

   104

9.12

  

Transactions with Affiliates

   106

9.13

  

Compliance with ERISA

   106

9.14

  

End of Fiscal Years; Fiscal Quarters

   107

9.15

  

Credit Card Agreements

   107

9.16

  

Changes in Business

   107

 

(ii)

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9.17

  

Limitation of Restrictions Affecting Subsidiaries

   107

9.18

  

Fixed Interest Charge Coverage Ratio

   108

9.19

  

Capital Expenditures

   108

9.20

  

License Agreements

   109

9.21

  

After Acquired Real Property

   110

9.22

  

Costs and Expenses

   110

9.23

  

Further Assurances

   111

9.24

  

Minimum Excess Availability

   111

9.25

  

Black Canyon Closing

   111

SECTION 10.        EVENTS OF DEFAULT AND REMEDIES

   112

10.1

  

Events of Default

   112

10.2

  

Remedies

   114

SECTION 11.        JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

   118

11.1

  

Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver

   118

11.2

  

Waiver of Notices

   119

11.3

  

Amendments and Waivers

   119

11.4

  

Waiver of Counterclaims

   121

11.5

  

Indemnification

   121

SECTION 12.        THE AGENT

   122

12.1

  

Appointment, Powers and Immunities

   122

12.2

  

Reliance by Agent

   122

12.3

  

Events of Default

   123

12.4

  

Congress in its Individual Capacity

   123

12.5

  

Indemnification

   124

12.6

  

Non-Reliance on Agent and Other Lenders

   124

12.7

  

Failing to Act

   124

12.8

  

Additional Loans

   124

12.9

  

Concerning the Collateral and the Related Financing Agreements

   125

12.10

  

Field Audit, Examination Reports and Other Information; Disclaimer by Lenders

   125

12.11

  

Collateral Matters

   126

12.12

  

Agency for Perfections

   127

12.13

  

Successor Agent

   128

12.14

  

Co-Agent

   128

SECTION 13.        ACKNOWLEDGMENT AND RESTATEMENT

   128

13.1

  

Existing Obligations

   128

13.2

  

Acknowledgment of Security Interests

   129

13.3

  

Existing Agreements

   129

13.4

  

Restatement

   129

SECTION 14.        TERM OF AGREEMENT: MISCELLANEOUS

   130

14.1

  

Term

   130

 

(iii)

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14.2

  

Interpretative Provisions

   132

14.3

  

Notices

   133

14.4

  

Partial Invalidity

   134

14.5

  

Confidentiality

   134

14.6

  

Successors

   135

14.7

  

Assignments; Participations

   135

14.8

  

Entire Agreement

   137

14.9

  

Counterparts, Etc.

   137

 

(iv)

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INDEX TO

EXHIBITS AND SCHEDULES

 

Exhibit A    Form of Assignment and Acceptance Exhibit B    Information
Certificate Exhibit C    Form of Compliance Certificate Exhibit D    Form of
Borrowing Base Certificate Schedule 1.43    Customs Brokers Schedule 8.9   
Credit Card Agreements

 

(v)

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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This Amended and Restated Loan and Security Agreement dated December 23, 2004 is
entered into by and among J. Crew Operating Corp., a Delaware corporation
(“Operating”), J. Crew Inc., a New Jersey corporation (“J. Crew”), Grace Holmes,
Inc., a Delaware corporation doing business as J. Crew Retail (“Retail”), H.F.D.
No. 55, Inc., a Delaware corporation doing business as J. Crew Factory
(“Factory”, and together with J. Crew, Retail, Operating, each individually a
“Borrower” and collectively, “Borrowers”), J. Crew Group, Inc., a New York
corporation (“Parent”), J. Crew International, Inc. (“JCI”), and J. Crew
Intermediate LLC, a Delaware limited liability company (“Intermediate”, and
together with Parent and JCI, each individually a “Guarantor” and collectively,
“Guarantors”), the parties hereto as lenders, whether by execution of this
Agreement or an Assignment and Acceptance (each individually, a “Lender” and
collectively, “Lenders”), Wachovia Capital Markets, LLC, a Delaware limited
liability company, as sole lead arranger and sole bookrunner (in such capacity,
“Arranger”), Wachovia Bank, National Association, a national banking
association, in its capacity as administrative agent for the lenders (in such
capacity, “Administrative Agent”), Bank of America, N.A., in its capacity as
syndication agent for the lenders (in such capacity, “Syndication Agent”) and
Congress Financial Corporation, a Delaware corporation, in its capacity as
collateral agent for Lenders (in such capacity, “Agent”).

W I T N E S S E T H:

WHEREAS, certain Borrowers, certain Guarantors, Lenders and Agent are parties to
the Loan and Security Agreement, dated as of December 23, 2002, by and among
them, pursuant to which Lenders have made and may make loans and provide other
financial accommodations to such Borrowers;

WHEREAS, Borrowers and Guarantors have requested that Agent and Lenders amend
and restate the Loan Agreement pursuant to and in accordance with the terms and
conditions set forth herein; and

WHEREAS, each Lender is willing to agree (severally and not jointly) to amend
and restate the Loan Agreement and to make such loans and provide such financial
accommodations to Borrowers on a pro rata basis according to its Commitment (as
defined below) on the terms and conditions set forth herein and Agent is willing
to act as collateral agent for Lenders on the terms and conditions set forth
herein and the other Financing Agreements;

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NOW, THEREFORE, in consideration of the mutual conditions and agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

SECTION 1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the respective
meanings given to them below:

1.1 “Accounts” shall mean, as to each Borrower and Guarantor, all present and
future rights of such Borrower and Guarantor to payment of a monetary
obligation, whether or not earned by performance, which is not evidenced by
chattel paper or an instrument, (a) for property that has been or is to be sold,
leased, licensed, assigned, or otherwise disposed of, (b) for services rendered
or to be rendered, (c) for a secondary obligation incurred or to be incurred, or
(d) consisting of Credit Card Receivables.

1.2 “Adjusted Borrowing Base” shall mean the amount equal to:

(a) the lesser of: (i) the sum of: (A) the amount equal to ninety (90%) percent
of Eligible Credit Card Receivables; plus (B) the amount equal to the lesser of:
(1) eighty-five (85%) percent multiplied by the Value of each category of
Eligible Inventory of each Borrower or (2) during the period from August 1 of
any year through and including December 15 of such year, ninety (90%) percent of
the Net Recovery Percentage as to each category of Eligible Inventory of each
Borrower multiplied by the Value of such category of Eligible Inventory of such
Borrower, and at all other times, eighty-five (85%) percent of the Net Recovery
Percentage as to each category of Eligible Inventory of each Borrower multiplied
by the Value of such category of Eligible Inventory of such Borrower; plus
(C) the Adjusted Real Property Availability, and (ii) the Maximum Credit, minus

(b) Reserves.

1.3 “Adjusted Eurodollar Rate” shall mean, with respect to each Interest Period
for any Eurodollar Rate Loan, the rate per annum (rounded upwards, if necessary,
to the next one-sixteenth (1/16) of one (1%) percent) determined by dividing
(a) the Eurodollar Rate for such Interest Period by (b) a percentage equal to:
(i) one (1) minus (ii) the Reserve Percentage. For purposes hereof, “Reserve
Percentage” shall mean the reserve percentage, expressed as a decimal,
prescribed by any United States or foreign banking authority for determining the
reserve requirement which is or would be applicable to deposits of United States
dollars in a non-United States or an international banking office of a Reference
Bank used to fund a Eurodollar Rate Loan or any Eurodollar Rate Loan made with
the proceeds of such deposit, whether or not the Reference Bank actually holds
or has made any such deposits or loans. The Adjusted Eurodollar Rate shall be
adjusted on and as of the effective day of any change in the Reserve Percentage.

1.4 “Adjusted Real Property Availability” shall mean $4,074,000; provided, that,
(a) the Adjusted Real Property Availability shall be reduced automatically and
without further action by the parties effective as of the first day of each
month after the date hereof by an amount equal to $97,000 and (b) if prior to
the date that the Adjusted Borrowing Base shall be used in the calculation of
the amount of the Revolving Loans available to Borrowers as set forth in the
definition of the term Borrowing Base, the Real Property Availability shall be
adjusted as provided for in the definition of such term set forth below, then
the Adjusted Real Property Availability shall mean the amount equal to the
initial amount of the Real Property Availability as so adjusted and as reduced
automatically and without further action by the parties effective as of the
first day of each month after the date of the adjustment of the Real Property
Availability by an amount equal to the initial adjusted Real Property
Availability divided by eighty-four (84).

 

2

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1.5 “Administrative Agent” shall mean Wachovia Bank, National Association in its
capacity as administrative agent on behalf of Lenders pursuant to the terms
hereof and any replacement or successor agent hereunder.

1.6 “Affiliate” shall mean, with respect to a specified Person, any other Person
which directly or indirectly, through one or more intermediaries, controls or is
controlled by or is under common control with such Person, and without limiting
the generality of the foregoing, includes (a) any Person which beneficially owns
or holds ten (10%) percent or more of any class of Voting Stock of such Person
or other equity interests in such Person and (b) any Person of which such Person
beneficially owns or holds ten (10%) percent or more of any class of Voting
Stock or in which such Person beneficially owns or holds ten (10%) percent or
more of the equity interests. For the purposes of this definition, the term
“control” (including with correlative meanings, the terms “controlled by” and
“under common control with”), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of Voting Stock, by agreement or otherwise.

1.7 “Agent” shall mean Congress Financial Corporation, in its capacity as
collateral agent on behalf of Lenders pursuant to the terms hereof and any
replacement or successor agent hereunder.

1.8 “Agent Payment Account” shall mean account no. 5000000030279 of Agent at
Wachovia Bank, National Association, Charlotte, North Carolina, or such other
account of Agent as Agent may from time to time designate to Borrower Agent as
the Agent Payment Account for purposes of this Agreement and the other Financing
Agreements.

1.9 “Applicable Margin” shall mean, at any time, as to the interest rate for
Prime Rate Loans and the interest rate for Eurodollar Rate Loans, the applicable
percentage (on a per annum basis) set forth below if the Quarterly Average
Excess Availability for the immediately preceding fiscal quarter is at or within
the amounts indicated for such percentage as of the last day of the immediately
preceding fiscal quarter:

 

Tier

  

Quarterly Average

Excess Availability

   Applicable
Eurodollar
Rate Margin     Applicable Prime
Rate Margin   1    Greater than $55,000,000    1.25 %    0 %  2    Less than or
equal to $55,000,000 and greater than $40,000,000    1.50 %    0 %  3    Less
than or equal to $40,000,000 and greater than $20,000,000    1.75 %    .25 %  4
   Less than or equal to $20,000,000    2.00 %    .25 % 

 

3

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provided, that, (i) the Applicable Margin shall be calculated and established
once each fiscal quarter and shall remain in effect until adjusted thereafter
after the end of the next fiscal quarter and (ii) if the Excess Availability is
greater than $40,000,000 as of the date hereof, the Applicable Margin through
the last day of the sixth (6th) month after the date hereof shall be the amount
for Tier 2 set forth above.

1.10 “Assignment and Acceptance” shall mean an Assignment and Acceptance
substantially in the form of Exhibit A attached hereto (with blanks
appropriately completed) delivered to Agent in connection with an assignment of
a Lender’s interest hereunder in accordance with the provisions of Section 14.7
hereof.

1.11 “Black Canyon Closing Date” shall mean the date of the initial funding of
the loans under the Black Canyon Credit Agreement.

1.12 “Black Canyon Credit Agreement” shall mean the Credit Agreement, dated as
of November 24, 2004, between Operating, as borrower, the Black Canyon
Guarantors, the lenders named therein and U.S. Bank National Association, as
administrative agent, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.

1.13 “Black Canyon Documents” shall mean, collectively the following (as the
same may now or hereafter exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced): (a) the Black Canyon
Credit Agreement (including any loan notes and loan guarantees issued
thereunder), (b) the Black Canyon Indenture (including any notes and guarantees
issued thereunder), (c) the Black Canyon Security Agreement, (d) the Black
Canyon Intercreditor Agreement, and (e) all other agreements, documents and
instruments now or at any time hereafter executed and/or delivered by Operating
or any other person in connection therewith.

1.14 “Black Canyon Guarantors” shall mean, collectively, Factory, JCI, J. Crew,
Retail and any Subsidiary of Operating or its Subsidiaries formed after
November 24, 2004, or Intermediate on or after the date of the execution and
delivery of the Black Canyon Indenture, that guarantees the Indebtedness under
the Black Canyon Credit Agreement or the Black Canyon Indenture, to the extent
required to do so under the terms thereof, pursuant to the form of loan
guarantee attached as Exhibit B to the Black Canyon Credit Agreement (or the
equivalent form attached to the Black Canyon Indenture), and their respective
successors and assigns, sometimes being referred to individually as a “Black
Canyon Guarantor”.

1.15 “Black Canyon Indenture” shall mean the Indenture to be entered into among
Operating, as issuer, the Black Canyon Guarantors and Noteholder Collateral
Agent in its capacity as trustee thereunder, upon the occurrence of certain
events as set forth in the Black Canyon Credit Agreement, in the form included
as an exhibit to the Black Canyon Credit Agreement as of November 24, 2004
(except as such form may be amended or modified to the extent permitted
hereunder).

1.16 “Black Canyon Intercreditor Agreement” shall mean the Intercreditor
Agreement, dated as of November 24, 2004, by and among Agent, Noteholder
Collateral Agent, Operating, and the Black Canyon Guarantors, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.

 

4

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1.17 “Black Canyon Security Agreement” shall mean the Security Agreement, dated
as of November 24, 2004, by Operating and the Black Canyon Guarantors in favor
of Noteholder Collateral Agent, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.

1.18 “Blocked Accounts” shall have the meaning set forth in Section 6.3 hereof.

1.19 “Borrower Agent” shall mean J. Crew Operating Corp., a Delaware
corporation, in its capacity as Borrower Agent on behalf of the Borrowers
pursuant to Section 6.7 hereof and its successors and assigns in such capacity.

1.20 “Borrowing Base” shall mean, at any time, subject to adjustment as provided
below, the amount equal to:

(a) the lesser of: (i) the sum of: (A) the amount equal to ninety (90%) percent
of Eligible Credit Card Receivables; plus (B) the amount equal to the lesser of:
(1) ninety-five (95%) percent multiplied by the Value of each category of
Eligible Inventory of each Borrower or (2) during the period from August 1 of
any year through and including December 15 of such year, ninety-five
(95%) percent of the Net Recovery Percentage as to each category of Eligible
Inventory of each Borrower multiplied by the Value of such category of Eligible
Inventory of such Borrower, and at all other times, ninety-two and one-half
(92.5%) percent of the Net Recovery Percentage as to each category of Eligible
Inventory of each Borrower multiplied by the Value of such category of Eligible
Inventory of such Borrower; plus (C) the Real Property Availability, and
(ii) the Maximum Credit, minus

(b) Reserves;

provided, that, (A) on and after the date of the incurrence of any Indebtedness
as described in Section 9.9(t) hereof, the term “Borrowing Base” shall mean, at
any such time, the amount equal to the Adjusted Borrowing Base and (B) such
percentage of the net amount of eligible trade accounts receivables as Agent may
determine will be added to the calculation of the Borrowing Base, provided,
that, each of the following conditions is satisfied: (1) Agent shall have
received the written request of Borrower Agent to so include such trade accounts
receivable, (2) Agent shall have conducted a field examination with respect to
such receivables, the results of which shall be reasonably satisfactory to
Agent, (3) Agent shall have established the reports and the frequency thereof
with respect to such trade accounts receivable that Borrowers will be required
to deliver and Borrowers shall have agreed thereto in writing, in form and
substance satisfactory to Agent, and (4) Agent shall have sufficient information
necessary in accordance with the customary practices and procedures of Agent to
establish, and Agent shall have had five (5) Business Days after receipt of such
information to review it after which Agent shall establish, the criteria for
such receivables to constitute eligible trade accounts receivable for purposes
of calculating the Borrowing Base (and including any Reserves with respect
thereto) and the percentage of such net amount of eligible trade accounts
receivable as shall be used for such purpose and Borrowers shall have agreed in
writing to such criteria and such percentage, in form and substance reasonably
satisfactory to Agent.

 

5

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1.21 “Borrowing Base Certificate” shall mean a certificate substantially in the
form of Exhibit D hereto, as such form may from time to time be modified by
Agent, which is duly completed (including all schedules thereto) and executed by
the chief financial officer, vice president of finance, treasurer or controller
of Borrower Agent and delivered to Agent.

1.22 “Business Day” shall mean any day other than a Saturday, Sunday, or other
day on which commercial banks are authorized or required to close under the laws
of the State of New York, or the State of North Carolina, and a day on which
Agent is open for the transaction of business, except that if a determination of
a Business Day shall relate to any Eurodollar Rate Loans, the term Business Day
shall also exclude any day on which banks are closed for dealings in dollar
deposits in the London interbank market or other applicable Eurodollar Rate
market.

1.23 “Capital Expenditures” shall mean all expenditures for, or contracts for
expenditures for, any fixed or capital assets or improvements, or for
replacements, substitutions or additions thereto, which have a useful life of
more than one (1) year, including, but not limited to, the direct or indirect
acquisition of such assets by way of offset items or otherwise and shall include
the principal amount of capitalized lease payments during the applicable period.

1.24 “Capital Leases” shall mean, as applied to any Person, any lease of (or any
agreement conveying the right to use) any property (whether real, personal or
mixed) by such Person as lessee which in accordance with GAAP, is required to be
reflected as a liability on the balance sheet of such Person.

1.25 “Capital Stock” shall mean, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person’s capital stock or partnership, limited liability company or other equity
interests at any time outstanding, and any and all rights, warrants or options
exchangeable for or convertible into such capital stock or other interests (but
excluding any debt security that is exchangeable for or convertible into such
capital stock).

1.26 “Cash Equivalents” shall mean, at any time, (a) any evidence of
Indebtedness with a maturity date of one hundred eighty (180) days or less
issued or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof; provided, that, the full faith
and credit of the United States of America is pledged in support thereof;
(b) certificates of deposit or bankers’ acceptances with a maturity of one
hundred eighty (180) days or less of any financial institution that is a member
of the Federal Reserve System having combined capital and surplus and undivided
profits of not less than $250,000,000; (c) commercial paper (including variable
rate demand notes) with a maturity of one hundred eighty (180) days or less
issued by a corporation (except an Affiliate of any Borrower or Guarantor)
organized under the laws of any State of the United States of America or the
District of Columbia and rated at least A-2 by Standard & Poor’s Ratings
Service, a division of The McGraw-Hill Companies, Inc. or at least P-2 by
Moody’s Investors Service, Inc.; (d) repurchase obligations with a term of not
more than thirty (30) days for underlying securities of the types described in
clause (a) above entered into with any financial institution having combined
capital

 

6

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and surplus and undivided profits of not less than $250,000,000; (e) repurchase
agreements and reverse repurchase agreements relating to marketable direct
obligations issued or unconditionally guaranteed by the United States of America
or issued by any governmental agency thereof and backed by the full faith and
credit of the United States of America, in each case maturing within one hundred
eighty (180) days or less from the date of acquisition; provided, that, the
terms of such agreements comply with the guidelines set forth in the Federal
Financial Agreements of Depository Institutions with Securities Dealers and
Others, as adopted by the Comptroller of the Currency on October 31, 1985; and
(f) investments in money market funds and mutual funds which invest
substantially all of their assets in securities of the types described in
clauses (a) through (e) above.

1.27 “Change in Law” shall mean (a) the adoption of any law, rule or regulation
after the date of this Agreement or (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Government
Authority after the date of this Agreement.

1.28 “Change of Control” shall mean (a) the transfer (in one transaction or a
series of transactions) of all or substantially all of the assets of any
Borrower or Guarantor to any Person or group (as such term is used in
Section 13(d)(3) of the Exchange Act), other than as permitted in Section 9.7
hereof; (b) the liquidation or dissolution of any Borrower or Guarantor or the
adoption of a plan by the stockholders of any Borrower or Guarantor relating to
the dissolution or liquidation of such Borrower or Guarantor, other than to
Permitted Holders or as permitted in Section 9.7 hereof; (c) any Person or group
(as such term is used in Section 13(d)(3) of the Exchange Act), other than
Permitted Holders, shall beneficially own, directly or indirectly, shares of
Voting Stock of Parent representing more than thirty (30%) percent of the voting
power of the total outstanding Voting Stock of Parent; (d) occupation of a
majority of the seats (other than vacant seats) on the Board of Directors of
Parent by Persons who were neither (i) nominated by members of Permitted Holders
or the Board of Directors of Parent nor (ii) appointed by directors so
nominated; (e) the failure of Parent to own directly or indirectly one hundred
(100%) percent of the voting power of the total outstanding Voting Stock of any
Borrower or other Guarantor, except to the extent permitted under Section 9.7
hereof and (f) so long as any of the Senior Discount Debentures or 10 3/8%
Subordinated Notes are outstanding, a “Change of Control” as such term is
defined in the Senior Debenture Indenture or the 10 3/8% Subordinated Note
Indenture.

1.29 “Code” shall mean the Internal Revenue Code of 1986, as the same now exists
or may from time to time hereafter be amended, modified, recodified or
supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.

1.30 “Collateral” shall have the meaning set forth in Section 5 hereof.

1.31 “Collateral Access Agreement” shall mean an agreement in writing, in form
and substance reasonably satisfactory to Agent, from any lessor of premises to
any Borrower or Guarantor, or any other person to whom any Collateral is
consigned or who has custody, control or possession of any such Collateral or is
otherwise the owner or operator of any premises on which any of such Collateral
is located (excluding any retail store location), pursuant to which such lessor,
consignee or other person, inter alia, acknowledges the first priority security
interest of Agent in such Collateral, agrees to waive any and all claims such
lessor, consignee or other

 

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person may, at any time, have against such Collateral, whether for processing,
storage or otherwise, and agrees to permit Agent access to, and the right to
remain on, the premises of such lessor, consignee or other person so as to
exercise Agent’s rights and remedies and otherwise deal with such Collateral and
in the case of any consignee or other person who at any time has custody,
control or possession of any Collateral, acknowledges that it holds and will
hold possession of the Collateral for the benefit of Agent and Lenders and
agrees to follow all instructions of Agent with respect thereto.

1.32 “Commercial Letter of Credit” shall mean any Letter of Credit Accommodation
consisting of a letter of credit issued for the purpose of providing the primary
manner of payment for the purchase price of goods or services by a Borrower in
the ordinary course of the business of such Borrower.

1.33 “Commitment” shall mean, at any time, as to each Lender, the principal
amount set forth below such Lender’s signature on the signatures pages hereto
designated as the Commitment or on Schedule 1 to the Assignment and Acceptance
Agreement pursuant to which such Lender became a Lender hereunder in accordance
with the provisions of Section 14.7 hereof, as the same may be adjusted from
time to time in accordance with the terms hereof; sometimes being collectively
referred to herein as “Commitments”.

1.34 “Congress” shall mean Congress Financial Corporation, a Delaware
corporation, in its individual capacity, and its successors and assigns.

1.35 “Consolidated Net Income” shall mean, with respect to any Person for any
period, the aggregate of the net income (loss) of such Person and its
Subsidiaries, on a consolidated basis, for such period (excluding to the extent
included therein any extraordinary or non recurring gains other than up to an
aggregate of $5,000,000 of cash insurance proceeds received by Borrowers and
Guarantors in each fiscal year of Borrowers and Guarantors with respect to
Inventory losses, fixed asset losses and business interruption) and
extraordinary non-cash charges) after deducting all charges which should be
deducted before arriving at the net income (loss) for such period and after
deducting the Provision for Taxes for such period, all as determined in
accordance with GAAP; provided, that, (a) the net income of any Person that is
not a wholly-owned Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid or payable to such Person or a wholly-owned Subsidiary of
such Person; (b) except to the extent included pursuant to the foregoing clause,
the net income of any Person accrued prior to the date it becomes a wholly-owned
Subsidiary of such Person or is merged into or consolidated with such Person or
any of its wholly-owned Subsidiaries or that Person’s assets are acquired by
such Person or by any of its wholly-owned Subsidiaries shall be excluded;
(c) the effect of any change in accounting principles adopted by such Person or
its Subsidiaries after the date hereof shall be excluded; (d) net income shall
exclude interest accruing, but not paid on indebtedness owing to a Subsidiary or
parent corporation of such Person, which is subordinated in right of payment to
the payment in full of the Obligations, on terms and conditions acceptable to
Agent; and (e) the net income (if positive) of any wholly-owned Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by such wholly-owned Subsidiary to such Person or to any other wholly-owned
Subsidiary of such Person is not at the time permitted by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or

 

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governmental regulation applicable to such wholly-owned Subsidiary shall be
excluded. For the purposes of this definition, net income excludes any gain and
non-cash loss (but not any cash loss) together with any related Provision for
Taxes for such gain and non-cash loss (but not any cash loss) realized upon the
sale or other disposition of any assets that are not sold in the ordinary course
of business (including, without limitation, dispositions pursuant to sale and
leaseback transactions) or of any Capital Stock of such Person or a Subsidiary
of such Person and any net income realized as a result of changes in accounting
principles or the application thereof to such Person.

1.36 “Contingent Principal” shall mean any principal amounts additional to the
face amount of the 16% Senior Discount Notes which, under certain circumstances
set forth in the 16% Senior Discount Note Indenture as in effect on the date
hereof, may be added to the accreted amount, or principal amount at maturity, as
applicable, of the 16% Senior Discount Notes.

1.37 “Credit Card Acknowledgments” shall mean, collectively, the agreements by
Credit Card Issuers or Credit Card Processors who are parties to Credit Card
Agreements in favor of Agent acknowledging Agent’s first priority security
interest, for and on behalf of Lenders, in the monies due and to become due to a
Borrower or Guarantor (including, without limitation, credits and reserves)
under the Credit Card Agreements, and agreeing to transfer all such amounts to
the Blocked Accounts, as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, sometimes being
referred to herein individually as a “Credit Card Acknowledgment”.

1.38 “Credit Card Agreements” shall mean all agreements now or hereafter entered
into by any Borrower or any Guarantor for the benefit of any Borrower, in each
case with any Credit Card Issuer or any Credit Card Processor, as the same now
exist or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced, including, but not limited to, the agreements set forth on
Schedule 8.9 hereto.

1.39 “Credit Card Issuer” shall mean any person (other than a Borrower) who
issues or whose members issue credit cards, including, without limitation,
MasterCard or VISA bank credit or debit cards or other bank credit or debit
cards issued through MasterCard International, Inc., Visa, U.S.A., Inc. or Visa
International and American Express, Discover, Diners Club, Carte Blanche and
other non-bank credit or debit cards, including, without limitation, credit or
debit cards issued by or through American Express Travel Related Services
Company, Inc., Novus Services, Inc. and the J. Crew Card.

1.40 “Credit Card Processor” shall mean any servicing or processing agent or any
factor or financial intermediary who facilitates, services, processes or manages
the credit authorization, billing transfer and/or payment procedures with
respect to any Borrower’s or Guarantor’s sales transactions involving credit
card or debit card purchases by customers using credit cards or debit cards
issued by any Credit Card Issuer.

 

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

1.42 “Credit Facility” shall mean the Revolving Loans and Letter of Credit
Accommodations provided to or for the benefit of any Borrower pursuant to
Sections 2.1 and 2.2 hereof.

1.43 “Customs Broker” shall mean the persons listed on Schedule 1.43 hereto or
such other person selected by any Borrower after written notice by such Borrower
to Agent who are reasonably acceptable to Agent to perform port of entry
services to process Inventory imported by such Borrower from outside the United
States of America and to supply facilities, labor and materials to such Borrower
in connection therewith.

1.44 “Default” shall mean an act, condition or event which with notice or
passage of time or both would constitute an Event of Default.

1.45 “Defaulting Lender” shall have the meaning set forth in Section 6.10
hereof.

1.46 “Deposit Account Control Agreement” shall mean an agreement in writing, in
form and substance satisfactory to Agent, by and among Agent, the Borrower or
Guarantor with a deposit account at any bank and the bank at which such deposit
account is at any time maintained which provides that such bank will comply with
instructions originated by Agent directing disposition of the funds in the
deposit account without further consent by such Borrower or Guarantor and such
other terms and conditions as Agent may require, including as to any such
agreement with respect to any Blocked Account, providing that all items received
or deposited in the Blocked Accounts are the property of Agent, that the bank
has no lien upon, or right to setoff against, the Blocked Accounts, the items
received for deposit therein, or the funds from time to time on deposit therein
(except as Agent may otherwise specifically agree) and that the bank will wire,
or otherwise transfer, in immediately available funds, on a daily basis to the
Agent Payment Account all funds received or deposited into the Blocked Accounts.

1.47 “EBITDA” shall mean, as to any Person, with respect to any period, an
amount equal to: (a) the Consolidated Net Income of such Person and its
Subsidiaries for such period, plus (b) depreciation and amortization and other
non-cash charges including imputed interest and deferred compensation for such
period (to the extent deducted in the computation of Consolidated Net Income of
such Person), all in accordance with GAAP, plus (c) Interest Expense for such
period (to the extent deducted in the computation of Consolidated Net Income of
such Person), plus (d) the Provision for Taxes for such period (to the extent
deducted in the computation of Consolidated Net Income of such Person).

 

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1.48 “Eligible Credit Card Receivables” shall mean, as to each Borrower, Credit
Card Receivables of such Borrower which are and continue to be acceptable to
Agent based on the criteria set forth below. Credit Card Receivables shall be
Eligible Credit Card Receivables if:

(a) such Credit Card Receivables arise from the actual and bona fide sale and
delivery of goods or rendition of services by such Borrower in the ordinary
course of the business of such Borrower which transactions are completed in
accordance with the terms and provisions contained in any agreements binding on
such Borrower or the other party or parties related thereto;

(b) such Credit Card Receivables are not past due (beyond any stated applicable
grace period, if any, therefor) pursuant to the terms set forth in the Credit
Card Agreements with the Credit Card Issuer or Credit Card Processor of the
credit card or debit card used in the purchase which give rise to such Credit
Card Receivables;

(c) such Credit Card Receivables are not unpaid more than five (5) Business Days
after the date of the sale of Inventory giving rise to such Credit Card
Receivables;

(d) all material procedures required by the Credit Card Issuer or the Credit
Card Processor of the credit card or debit card used in the purchase which gave
rise to such Credit Card Receivables shall have been followed by such Borrower
and all documents required for the authorization and approval by such Credit
Card Issuer or Credit Card Processor shall have been obtained in connection with
the sale giving rise to such Credit Card Receivables;

(e) the required authorization and approval by such Credit Card Issuer or Credit
Card Processor shall have been obtained for the sale giving rise to such Credit
Card Receivables;

(f) such Borrower or Guarantor, on behalf of such Borrower, shall have submitted
all materials required by the Credit Card Issuer or Credit Card Processor
obligated in respect of such Credit Card Receivables in order for such Borrower
to be entitled to payment in respect thereof;

(g) the Credit Card Issuer or Credit Card Processor obligated in respect of such
Credit Card Receivable has not failed to remit any monthly payment in respect of
such Credit Card Receivable;

(h) such Credit Card Receivables comply with the applicable terms and conditions
contained in Section 7.2 of this Agreement;

(i) the Credit Card Issuer or Credit Card Processor with respect to such Credit
Card Receivables has not asserted a counterclaim, defense or dispute and does
not have, and does not engage in transactions which may give rise to, any right
of setoff against such Credit Card Receivables (other than setoffs to fees and
chargebacks consistent with the practices of such Credit Card Issuer or Credit
Card Processor with such Borrower as of the date hereof or as such practices may
change as a result of changes to the policies of such Credit Card Issuer or
Credit Card Processor applicable to its customers generally and unrelated to the
circumstance of such Borrower), but the portion of the Credit Card Receivables
owing by such Credit Card Issuer or Credit Card Processor in excess of the
amount owing by such Borrower to such Credit Card Issuer or Credit Card
Processor pursuant to such fees and chargebacks may be deemed Eligible Credit
Card Receivables;

 

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(j) the Credit Card Issuer or Credit Card Processor with respect to such Credit
Card Receivables has not setoff against amounts otherwise payable by such Credit
Card Issuer or Credit Card Processor to such Borrower for the purpose of
establishing a reserve or collateral for obligations of such Borrower to such
Credit Card Issuer or Credit Card Processor (notwithstanding that the Credit
Card Issuer or Credit Card Processor may have setoffs for fees and chargebacks
consistent with the practices of such Credit Card Issuer or Credit Card
Processor with such Borrower as of the date hereof or as such practices may
hereafter change as a result of changes to the policies of such Credit Card
Issuer or Credit Card Processor applicable to its customers generally and
unrelated to the circumstances of such Borrower);

(k) there are no facts, events or occurrences which would impair the validity,
enforceability or collectability of such Credit Card Receivables or reduce the
amount payable or delay payment thereunder (other than for setoffs for fees and
chargebacks consistent with the practices of such Credit Card Issuer or Credit
Card Processor with such Borrower or any Guarantor as of the date hereof or as
such practices may hereafter change as a result of changes to the policies of
such Credit Card Issuer or Credit Card Processor applicable to its customers
generally and unrelated to the circumstances of such Borrower or any Guarantor);

(l) such Credit Card Receivables are subject to the first priority, valid and
perfected security interest and lien of Agent, for and on behalf of itself and
Lenders, as to such Credit Card Receivables of such Borrower and any goods
giving rise thereto are not, and were not at the time of the sale thereof,
subject to any security interest or lien in favor of any person other than Agent
except as otherwise permitted in this Agreement, in each case subject to and in
accordance with the terms and conditions applicable hereunder to any such
permitted security interest or lien;

(m) there are no proceedings or actions which are pending or to the best of any
Borrower’s knowledge threatened, against the Credit Card Issuers or Credit Card
Processors with respect to such Credit Card Receivables which would reasonably
be expected to result in any material adverse change in the financial condition
of any such Credit Card Issuer or Credit Card Processor;

(n) such Credit Card Receivables are owed by Credit Card Issuers or Credit Card
Processors deemed creditworthy at all times by Agent in good faith;

(o) no event of default has occurred under the Credit Card Agreement of such
Borrower with the Credit Card Issuer or Credit Card Processor who has issued the
credit card or debit card or handles payments under the credit card or debit
card used in the sale which gave rise to such Credit Card Receivables which
event of default gives such Credit Card Issuer or Credit Card Processor the
right to cease or suspend payments to such Borrower or any Guarantor and no
event shall have occurred which gives such Credit Card Issuer or Credit Card
Processor the right to setoff against amounts otherwise payable to such
Borrower, including on behalf of a Guarantor (other than for then current fees
and chargebacks consistent with the current practices of such Credit Card Issuer
or Credit Card Processor as of the date hereof or as such practices

 

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may hereafter change as a result of changes to the policies of such Credit Card
Issuer or Credit Card Processor applicable to its customers generally and
unrelated to the circumstances of such Borrower or any Guarantor), except as may
have been waived in writing on terms and conditions reasonably satisfactory to
Agent pursuant to the Credit Card Acknowledgment by such Credit Card Issuer or
Credit Card Processor) or the right to establish reserves or establish or demand
collateral, and the Credit Card Issuer or Credit Card Processor has not sent any
written notice of default and/or notice of its intention to cease or suspend
payments to such Borrower in respect of such Credit Card Receivables or to
establish reserves or cash collateral for obligations of such Borrower to such
Credit Card Issuer or Credit Card Processor, and such Credit Card Agreements are
otherwise in full force and effect and constitute the legal, valid, binding and
enforceable obligations of the parties thereto;

(p) the terms of the sale giving rise to such Credit Card Receivables and all
practices of such Borrower and Guarantors with respect to such Credit Card
Receivables comply in all material respects with applicable Federal, State, and
local laws and regulations; and

(q) the customer using the credit card or debit card giving rise to such Credit
Card Receivable shall not have returned the merchandise purchased giving rise to
such Credit Card Receivable.

Credit Card Receivables which would otherwise constitute Eligible Credit Card
Receivables pursuant to this Section will not be deemed ineligible solely by
virtue of the Credit Card Agreements with respect thereto having been entered
into by any Guarantor, for the benefit of Borrowers. General criteria for
Eligible Credit Card Receivables may only be changed and any new criteria for
Eligible Credit Card Receivables may only be established by Agent in good faith,
upon notice to Borrower Agent, based on either: (i) an event, condition or other
circumstance arising after the date hereof, or (ii) existing on the date hereof
to the extent Agent has no written notice thereof from a Borrower prior to the
date hereof, in either case under clause (i) or (ii) which adversely affects or
could reasonably be expected to adversely affect the Credit Card Receivables in
the good faith determination of Agent. Any Credit Card Receivables which are not
Eligible Credit Card Receivables shall nevertheless be part of the Collateral.

1.49 “Eligible In-Transit Inventory” shall mean Inventory that would be Eligible
Inventory other than for its location that: (a) is located in the United States;
(b) has cleared U.S. Customs and for which all duty, freight and similar charges
for import to the United States have been paid in full; (c) is in transit to one
of the locations of assets permitted hereunder or between such locations; and
(d) has not been in transit more than seven (7) days.

1.50 “Eligible Inventory” shall mean, as to each Borrower, Inventory consisting
of finished goods held for resale in the ordinary course of the business of such
Borrower which are acceptable to Agent based on the criteria set forth below. In
general, Eligible Inventory shall not include (a) work-in-process; (b) raw
materials; (c) spare parts for equipment; (d) packaging and shipping materials;
(e) supplies used or consumed in such Borrower’s business; (f) Inventory at
premises other than those owned or leased and controlled by any Borrower;
provided, that, (i) as to retail store locations (including factory store
locations) which are leased by a Borrower, Agent may, at its option, establish
Reserves in respect of rental payments and other amounts in respect of such
leased location of the type and to the extent set forth in Section 1.122 hereof,
(ii) as to all

 

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other locations leased by any Borrower, if Agent shall not have received a
Collateral Access Agreement from the owner and lessor with respect to such
location, duly authorized, executed and delivered by such owner and lessor (or
Agent shall determine to accept a Collateral Access Agreement that does not
include all required provisions or provisions in the form otherwise required by
Agent), Agent may, at its option, upon notice to any Borrower or Borrower Agent,
establish such Reserves in respect of amounts at any time due or to become due
to the owner and lessor thereof as Agent shall determine and (iii) as to
locations owned and operated by a person other than a Borrower or Guarantor, if
Agent shall not have received a Collateral Access Agreement from the owner and
operator with respect to such location, duly authorized, executed and delivered
by such owner and operator (or Agent shall determine to accept a Collateral
Access Agreement that does not include all required provisions or provisions in
the form otherwise required by Agent), Agent may, at its option, establish such
Reserves in respect of amounts at any time due or to become due to the owner and
operator thereof as Agent shall determine; provided, that, in addition, if
required by Agent, in order for such Inventory at locations owned and operated
by a third person to be Eligible Inventory, Agent shall have received: (A) UCC
financing statements between the owner and operator, as consignee or bailee and
such Borrower, as consignor or bailor, in form and substance satisfactory to
Agent, which are duly assigned to Agent and (B) a written notice to any lender
to the owner and operator of the first priority security interest in such
Inventory of Agent; (g) Inventory subject to a security interest or lien in
favor of any person other than Agent except those permitted in this Agreement
that are subordinate to the security interest of Agent pursuant to an
intercreditor agreement in form and substance satisfactory to Agent between
Agent and the holder of such other security interest or lien; (h) bill and hold
goods; (i) obsolete or slow moving Inventory; (j) Inventory which is not subject
to the first priority, valid and perfected security interest of Agent;
(k) damaged and/or defective Inventory; (1) returned inventory which is not held
for sale in the ordinary course of business; and (m) Inventory purchased or sold
on consignment. General criteria for Eligible Inventory may only be changed and
any new criteria for Eligible Inventory may only be established by Agent in good
faith, upon notice to Borrower Agent, based on either: (i) an event, condition
or other circumstance arising after the date hereof, or (ii) existing on the
date hereof to the extent Agent has no written notice thereof from a Borrower
prior to the date hereof, in either case under clause (i) or (ii) which
adversely affects or could reasonably be expected to adversely affect the
Inventory in the good faith determination of Agent. Any Inventory which is not
Eligible Inventory shall nevertheless be part of the Collateral.

1.51 “Eligible Real Property” shall mean, as to any Borrower, Real Property
owned by such Borrower in fee simple in each case which are acceptable to Agent
in good faith based on the criteria set forth below. In general, Eligible Real
Property shall not include: (i) Real Property which is not operated by a
Borrower except as Agent may otherwise agree; (ii) Real Property subject to a
security interest, lien, mortgage or other encumbrance in favor of any person
other than Agent (and other than those permitted under Section 9.8(b), 9.8(c) or
9.8(d) hereof or are subject to an intercreditor agreement in form and substance
satisfactory to Agent between the holder of such lien and Agent); (iii) Real
Property that is not located in the continental United States of America;
(iv) Real Property that is not subject to the valid and enforceable, first
priority, perfected security interest, lien and mortgage of Agent; (v) Real
Property where Agent determines that issues relating to compliance with
Environmental Laws adversely affect such Real Property in such manner that such
Real Property would not be acceptable for purposes of including it in the
calculation of the Borrowing Base based on the customary practices,

 

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procedures and policies of Agent and its Affiliates; provided, that, if the Real
Property is acceptable for such purposes in accordance with such practices,
procedures and policies, subject to the satisfaction of the other conditions set
forth herein and any requirements arising pursuant to such practices, procedures
and policies, such Real Property will be considered Eligible Real Property but
subject to the right of Agent to establish Reserves to reflect the adverse
affect of any environmental conditions or events with respect thereto on its
value or the ability of Agent to sell or otherwise realize on such Collateral;
(vi) Real Property improved with residential housing; (vii) Real Property that
is not subject to a then current final written appraisal by an appraiser
reasonably acceptable to Agent (which shall be one of the appraisers selected by
Agent from its list of approved appraisers), on which Agent and Lenders are
expressly permitted to rely, and that is in form, scope and methodology
reasonably satisfactory to Agent; (viii) if requested by Agent, Real Property
for which Agent shall not have received a then current environmental audit
conducted by an independent environmental engineering firm reasonably acceptable
to Agent (based on Administrative Agent’s list of approved firms and in form,
scope, substance and methodology reasonably satisfactory to Agent, the results
of which are satisfactory to Agent; (ix) if requested by Agent, Real Property
for which Agent shall not have received, in form and substance reasonably
satisfactory to Agent, a valid and effective title insurance policy (whether in
the form of a pro form policy or a marked up title policy commitment)) issued by
a company and agent reasonably acceptable to Agent: (A) insuring the priority,
amount and sufficiency of the Mortgage with respect to such Real Property,
(B) insuring against matters that would be disclosed by surveys and
(C) containing any legally available endorsements, assurances or affirmative
coverage requested by Agent for protection of its interests. Any Real Property
that is not Eligible Real Property shall nevertheless be part of the Collateral.

1.52 “Eligible Transferee” shall mean (a) any Lender; (b) the parent company of
any Lender and/or any Affiliate of such Lender which is at least fifty
(50%) percent owned by such Lender or its parent company; (c) any person
(whether a corporation, partnership, trust or otherwise) that is engaged in the
business of making, purchasing, holding or otherwise investing in bank loans and
similar extensions of credit in the ordinary course of its business and is
administered or managed by a Lender or with respect to any Lender that is a fund
which invests in bank loans and similar extensions of credit, any other fund
that invests in bank loans and similar extensions of credit and is managed by
the same investment advisor as such Lender or by an Affiliate of such investment
advisor, and in each case is approved by Agent; and (d) any other commercial
bank, financial institution or “accredited investor” (as defined in Regulation D
under the Securities Act of 1933) approved by Agent (which approval shall not be
unreasonably withheld), provided, that, (i) neither any Borrower nor any
Guarantor or any Affiliate of any Borrower or Guarantor shall qualify as an
Eligible Transferee and (ii) no Person to whom any Indebtedness which is in any
way subordinated in right of payment to any other Indebtedness of any Borrower
or Guarantor shall qualify as an Eligible Transferee, except as Agent may
otherwise specifically agree.

1.53 “Environmental Laws” shall mean all foreign, Federal, State and local laws
(including common law), legislation, rules, codes, licenses, permits (including
any conditions imposed therein), authorizations, judicial or administrative
decisions, injunctions or agreements between any Borrower or Guarantor and any
Governmental Authority, (a) relating to pollution and the protection,
preservation or restoration of the environment (including air, water vapor,
surface water, ground water, drinking water, drinking water supply, surface
land, subsurface

 

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land, plant and animal life or any other natural resource), or to human health
or safety, (b) relating to the exposure to, or the use, storage, recycling,
treatment, generation, manufacture, processing, distribution, transportation,
handling, labeling, production, release or disposal, or threatened release, of
Hazardous Materials, or (c) relating to all laws with regard to recordkeeping,
notification, disclosure and reporting requirements respecting Hazardous
Materials. The term “Environmental Laws” includes (i) the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Federal
Superfund Amendments and Reauthorization Act, the Federal Water Pollution
Control Act of 1972, the Federal Clean Air Act, the Federal Resource
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments thereto), the Federal Solid Waste Disposal Act and the Federal Toxic
Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act,
and the Federal Safe Drinking Water Act of 1974, (ii) applicable state
counterparts to such laws and (iii) any common law or equitable doctrine that
may impose liability or obligations for injuries or damages due to, or
threatened as a result of, the presence of or exposure to any Hazardous
Materials.

1.54 “Equipment” shall mean, as to each Borrower and Guarantor, all of such
Borrower’s and Guarantor’s now owned and hereafter acquired equipment, wherever
located, including machinery, data processing and computer equipment (whether
owned or licensed and including embedded software), vehicles, tools, furniture,
fixtures, all attachments, accessions and property now or hereafter affixed
thereto or used in connection therewith, and substitutions and replacements
thereof, wherever located.

1.55 “ERISA” shall mean the Employee Retirement Income Security Act of 1974,
together with all rules, regulations and interpretations thereunder or related
thereto.

1.56 “ERISA Affiliate” shall mean any person required to be aggregated with any
Borrower, any Guarantor or any of its or their respective Subsidiaries under
Sections 414(b), 414(c), 414(m) or 414(o) of the Code.

1.57 “ERISA Event” shall mean (a) any “reportable event”, as defined in
Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a
Plan (other than a reportable event for which the notice provision has been
waived); (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (c) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (d) the filing pursuant to Section 412 of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (e) the occurrence of a “prohibited
transaction” with respect to which any Borrower, Guarantor or any of its or
their respective Subsidiaries is a “disqualified person” (within the meaning of
Section 4975 of the Code) or with respect to which any Borrower, Guarantor or
any of its or their respective Subsidiaries could otherwise be liable; (f) a
complete or partial withdrawal by any Borrower, Guarantor or any ERISA Affiliate
from a Multiemployer Plan or a cessation of operations which is treated as such
a withdrawal or notification that a Multiemployer Plan is in reorganization;
(g) the filing of a notice of intent to terminate, the treatment of a Plan
amendment as a termination under Section 4041 or 4041A of ERISA, or the
commencement of proceedings by the Pension Benefit Guaranty Corporation to
terminate a Plan; (h) an event or

 

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condition which would reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (i) the imposition of any liability under Title IV of
ERISA, other than the Pension Benefit Guaranty Corporation premiums due but not
delinquent under Section 4007 of ERISA, upon any Borrower, Guarantor or any
ERISA Affiliate in excess of $5,000,000 and (j) any other event or condition
with respect to a Plan including any Plan subject to Title IV of ERISA
maintained, or contributed to, by any ERISA Affiliate that could reasonably be
expected to result in liability of any Borrower in excess of $500,000.

1.58 “Eurodollar Rate” shall mean with respect to the Interest Period for a
Eurodollar Rate Loan, the interest rate per annum equal to the arithmetic
average of the rates of interest per annum (rounded upwards, if necessary, to
the next one-sixteenth (1/100) of one (1%) percent) at which a Reference Bank is
offered deposits of United States dollars in the London interbank market (or
other Eurodollar Rate market selected by a Borrower or Borrower Agent on behalf
of such Borrower and approved by Agent) on or about 9:00 a.m. (New York time)
two (2) Business Days prior to the commencement of such Interest Period in
amounts substantially equal to the principal amount of the Eurodollar Rate Loans
requested by and available to such Borrower in accordance with this Agreement,
with a maturity of comparable duration to the Interest Period selected by or on
behalf of a Borrower.

1.59 “Eurodollar Rate Loans” shall mean any Revolving Loans or portion thereof
on which interest is payable based on the Adjusted Eurodollar Rate in accordance
with the terms hereof.

1.60 “Event of Default” shall mean the occurrence or existence of any event or
condition described in Section 10.1 hereof.

1.61 “Excess Availability” shall mean, as to Borrowers (as a whole), the amount,
as determined by Agent in good faith, calculated at any date, equal to:

(a) the sum of: (i) Qualified Cash and (ii) the Borrowing Base (in each case
after giving effect to any Reserves other than any Reserves in respect of Letter
of Credit Accommodations), minus

(b) the sum of: (i) the amount of all then outstanding and unpaid Obligations
(but not including for this purpose Obligations of any Borrower arising pursuant
to any guarantees in favor of Agent and Lenders of the Obligations of the other
Borrowers or any outstanding Letter of Credit Accommodations), plus (ii) the
amount of all Reserves then established in respect of Letter of Credit
Accommodations, plus (iii) the aggregate amount of all then outstanding and
unpaid trade payables and other obligations of any Borrower which are
outstanding more than sixty (60) days past due as of the end of the immediately
preceding month or at Agent’s option, as of a more recent date based on such
reports as Agent may from time to time specify (other than trade payables or
other obligations being contested or disputed by such Borrower in good faith),
plus (iv) without duplication, the amount of checks issued by any Borrower to
pay trade payables and other obligations which are more than sixty (60) days
past due as of the end of the immediately preceding month or at Agent’s option,
as of a more recent date based on such reports as Agent may from time to time
specify (other than trade payables or other obligations being contested or
disputed by such Borrower in good faith), but not yet sent.

 

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1.62 “Exchange Act” shall mean the Securities Exchange Act of 1934, together
with all rules, regulations and interpretations thereunder or related thereto.

1.63 “Exchange Offer Documents” shall mean, individually and collectively, each
and all of the following (as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced):
(a) Confidential Offering Circular and Consent Solicitation Statement with
respect to the Offer to Exchange 16.0% Senior Discount Contingent Principal
Notes due 2008 of J. Crew Intermediate LLC for Outstanding 13 1/8% Senior
Discount Debentures due 2008 of J. Crew Group, Inc. and (b) all other
agreements, documents and instruments related thereto.

1.64 “Excluded Taxes” shall mean, with respect to the Agent, any Lender, any
Participant, any Transferee or any other recipient of any payment to be made by
or on account of any obligation of any Borrower or Guarantor hereunder,
(a) income, branch profits or franchise taxes imposed on (or measured by) its
net income (other than any such taxes imposed solely as a result of a Borrower’s
activities in a jurisdiction) and (b) in the case of a Foreign Lender, any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender’s failure to comply
with Section 6.4(h) (it being understood and agreed, for the avoidance of doubt,
that any withholding tax imposed on a Foreign Lender as a result of a Change in
Law or regulation or interpretation thereof occurring after the time such
Foreign Lender becomes a party to this Agreement shall not be an Excluded Tax).

1.65 “Existing Agreement” shall mean the Loan and Security Agreement, dated as
of December 23, 2002, by and among Agent, Lenders, certain Borrowers and certain
Guarantors.

1.66 “Fee Letter” shall mean the amended and restated letter agreement, dated on
or about the date hereof, by and among Borrowers, Guarantors and Agent, setting
forth certain fees payable by Borrowers to Agent for the benefit of itself and
Lenders, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

1.67 “Financing Agreements” shall mean, collectively, this Agreement and all
notes, guarantees, security agreements, deposit account control agreements,
investment property control agreements, intercreditor agreements and all other
agreements, documents and instruments now or at any time hereafter executed
and/or delivered by any Borrower or Obligor or any other person in connection
with this Agreement; provided, that, in no event shall the term Financing
Agreements be deemed to include any Hedge Agreement.

1.68 “Fixed Interest Charge Coverage Ratio” shall mean, as to any Person, with
respect to any period, the ratio of (a) the amount equal to EBITDA of such
Person and its Subsidiaries for such period to (b) the Fixed Interest Charges of
such Person and its Subsidiaries for such period.

 

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1.69 “Fixed Interest Charges” shall mean, as to any Person and its Subsidiaries
with respect to any twelve (12) consecutive month period, the sum of, without
duplication, (i) all cash Interest Expense during such period, plus (ii) all
cash dividends or other distributions in respect of Capital Stock at any time
used or to be used to make regularly scheduled (as determined at the beginning
of the respective period) interest payments on any Indebtedness of Holdings or
Intermediate during such period, plus (iii) all Capital Expenditures during such
period, plus (iv) the cash portion of any Provision for Taxes paid in such
period and unpaid amounts of any Provision for Taxes the last date for payment
of which before becoming past due occurs during such period plus (v) the
aggregate amount of the payments made during such period in respect of the
Indebtedness permitted under Section 9.9(t) hereof in excess of $2,500,000.

1.70 “Foreign Lender” shall mean any Lender, Participant or Transferee that is
not a “United States person” within the meaning of Section 7701(a)(30) of the
Code.

1.71 “GAAP” shall mean generally accepted accounting principles in the United
States of America as in effect from time to time as set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board which are applicable to the circumstances
as of the date of determination consistently applied, except that, for purposes
of Sections 9.18 and 9.19 hereof and the calculation of EBITDA of Parent and its
Subsidiaries (or any component thereof) for purposes of this Agreement, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the most recent audited
financial statements delivered to Agent prior to the date hereof.

1.72 “Governmental Authority” shall mean any nation or government, any state,
province, or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

1.73 “Guarantors” shall mean, collectively, the following (together with their
respective successors and assigns): (a) J. Crew Group, Inc., a New York
corporation; (b) J. Crew International, Inc., a Delaware corporation, and (c) J.
Crew Intermediate LLC, a Delaware limited liability company; each sometimes
being referred to herein individually as a “Guarantor”.

1.74 “Hazardous Materials” shall mean any hazardous, toxic or dangerous
substances, materials and wastes, including hydrocarbons (including naturally
occurring or man-made petroleum and hydrocarbons), flammable explosives,
asbestos, urea formaldehyde insulation, radioactive materials, polychlorinated
biphenyls, pesticides, herbicides and any other kind and/or type of pollutants
or contaminants (including materials which include hazardous constituents),
sewage, sludge, industrial slag, solvents and including any other substances,
materials or wastes that are or become regulated under any Environmental Law
(including any that are or become classified as hazardous or toxic under any
Environmental Law).

1.75 “Hedge Agreement” shall mean an agreement between any Borrower or Guarantor
and Agent, any Lender, any Affiliate of any Lender or any other financial
institution acceptable to Agent (and in each case as to any such Lender,
Affiliate or other financial institution only to the extent approved by Agent)
that is a rate swap agreement, basis swap, forward rate agreement, commodity
swap, interest rate option, forward foreign exchange

 

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agreement, spot foreign exchange agreement, rate cap agreement rate, floor
agreement, rate collar agreement, currency swap agreement, cross-currency rate
swap agreement, currency option, any other similar agreement (including any
option to enter into any of the foregoing or a master agreement for any the
foregoing together with all supplements thereto) for the purpose of protecting
against or managing exposure to fluctuations in interest or exchange rates,
currency valuations or commodity prices; sometimes being collectively referred
to herein as “Hedge Agreements”.

1.76 “Inactive Subsidiary” shall mean any Subsidiary, direct or indirect, that
(a) has total assets not in excess of $50,000; (b) conducts no business; and
(c) has no Indebtedness; provided, that, if more than one Subsidiary is deemed
an Inactive Subsidiary pursuant to this definition, all Inactive Subsidiaries
shall be considered to be a single consolidated subsidiary for purposes of
determining whether the conditions specified above are satisfied.

1.77 “Indebtedness” shall mean, with respect to any Person, any liability,
whether or not contingent, (a) in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof) or evidenced by bonds, notes, debentures or similar
instruments; (b) representing the balance deferred and unpaid of the purchase
price of any property or services (except any such balance that constitutes an
account payable to a trade creditor (whether or not an Affiliate) created,
incurred, assumed or guaranteed by such Person in the ordinary course of
business of such Person in connection with obtaining goods, materials or
services that is not overdue by more than ninety (90) days, unless the trade
payable is being contested in good faith); (c) all obligations as lessee under
leases which have been, or should be, in accordance with GAAP recorded as
Capital Leases; (d) any contractual obligation, contingent or otherwise, of such
Person to pay or be liable for the payment of any indebtedness described in this
definition of another Person, including, without limitation, any such
indebtedness, directly or indirectly guaranteed, or any agreement to purchase,
repurchase, or otherwise acquire such indebtedness, obligation or liability or
any security therefor, or to provide funds for the payment or discharge thereof,
or to maintain solvency, assets, level of income, or other financial condition;
(e) all obligations with respect to redeemable stock and redemption or
repurchase obligations under any Capital Stock or other equity securities issued
by such Person; (f) all reimbursement obligations and other liabilities of such
Person with respect to surety bonds (whether bid, performance or otherwise),
letters of credit, banker’s acceptances, drafts or similar documents or
instruments issued for such Person’s account; (g) all indebtedness of such
Person in respect of indebtedness of another Person for borrowed money or
indebtedness of another Person otherwise described in this definition which is
secured by any consensual lien, security interest, collateral assignment,
conditional sale, mortgage, deed of trust, or other encumbrance on any asset of
such Person, whether or not such obligations, liabilities or indebtedness are
assumed by or are a personal liability of such Person, all as of such time;
provided, that, to the extent that such Indebtedness is non-recourse to such
Person, the amount of such Indebtedness shall not be deemed to exceed the lesser
of the amount of such Indebtedness and the value of the assets securing such
Indebtedness; (h) all obligations, liabilities and indebtedness of such Person
(marked to market) arising under swap agreements, cap agreements and collar
agreements and other agreements or arrangements designed to protect such person
against fluctuations in interest rates or currency or commodity values; and
(i) all obligations owed by such Person under License Agreements with respect to
non-refundable, advance or minimum guarantee royalty payments.

 

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1.78 “Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

1.79 “Information Certificate” shall mean the Information Certificate of
Borrowers and Guarantors constituting Exhibit B hereto.

1.80 “Intellectual Property” shall mean, as to each Borrower and Guarantor, such
Borrower’s and Guarantor’s now owned and hereafter arising or acquired: patents,
patent rights, patent applications, copyrights, works which are the subject
matter of copyrights, copyright registrations, trademarks, trade names, trade
styles, trademark and service mark applications, and licenses and rights to use
any of the foregoing; all extensions, renewals, reissues, divisions,
continuations, and continuations-in-part of any of the foregoing; all rights to
sue for past, present and future infringement of any of the foregoing;
inventions, trade secrets, formulae, processes, compounds, drawings, designs,
blueprints, surveys, reports, manuals, and operating standards; goodwill
(including any goodwill associated with any trademark or the license of any
trademark); customer and other lists in whatever form maintained; trade secret
rights, copyright rights, rights in works of authorship, domain names and domain
name registration; software and contract rights relating to computer software
programs, in whatever form created or maintained.

1.81 “Intercompany Note” shall mean the Revolving Line of Credit Note, dated as
of July 18, 1998, by Operating, as maker, in favor of JCI, as payee, in the
original principal amount of $50,000,000, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

1.82 “Interest Expense” shall mean, for any period, as to any Person, as
determined in accordance with GAAP, the total interest expense of such Person,
whether paid or accrued during such period (including the interest component of
Capital Leases for such period), including discounts in connection with the sale
of any Accounts, but excluding interest paid in property other than cash and any
other interest expense not payable in cash.

1.83 “Interest Period” shall mean for any Eurodollar Rate Loan, a period of
approximately one (1), two (2), or three (3) months duration as any Borrower (or
Borrower Agent on behalf of such Borrower) may elect, the exact duration to be
determined in accordance with the customary practice in the applicable
Eurodollar Rate market; provided, that, such Borrower (or Borrower Agent on
behalf of such Borrower) may not elect an Interest Period which will end after
the last day of the then-current term of this Agreement.

1.84 “Interest Rate” shall mean,

(a) subject to clause (b) of this definition below:

(i) as to Prime Rate Loans, a rate equal to the then Applicable Margin for Prime
Rate Loans on a per annum basis in excess of the Prime Rate, and

(ii) as to Eurodollar Rate Loans, a rate equal to the then applicable Margin for
Eurodollar Rate Loans on a per annum basis in excess of the Adjusted Eurodollar
Rate.

 

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(b) Notwithstanding anything to the contrary contained herein, Agent may, at its
option, and Agent shall, at the direction of the Required Lenders, increase the
Applicable Margin otherwise used to calculate the Interest Rate for Prime Rate
Loans and Eurodollar Rate Loans in each case to the highest percentage set forth
in the definition of the term Applicable Margin for each category of Revolving
Loans (without regard to the amount of Quarterly Average Excess Availability)
plus two (2%) percent per annum: (A) for the period (1) from and after the
effective date of termination or non-renewal hereof until Agent and Lenders have
received full and final payment of all outstanding and unpaid Obligations which
are not contingent and cash collateral or letter of credit, as Agent may
specify, in the amounts and on the terms required under Section 14.1 hereof for
contingent Obligations (notwithstanding entry of a judgment against any Borrower
or Guarantor) and (2) from and after the date of the occurrence of an Event of
Default and for so long as such Event of Default is continuing and (B) on
Revolving Loans at any time outstanding in excess of the Borrowing Base (whether
or not such excess(es) arise or are made with or without the knowledge or
consent of Agent or any Lender and whether made before or after an Event of
Default), but only to the extent of such excess.

1.85 “Intermediate” shall mean J. Crew Intermediate LLC, a Delaware limited
liability company, together with its successors and assigns.

1.86 “Inventory” shall mean, as to each Borrower and Guarantor, all of such
Borrower’s and Guarantor’s now owned and hereafter existing or acquired goods,
wherever located, which (a) are leased by such Borrower or Guarantor as lessor;
(b) are held by such Borrower or Guarantor for sale or lease or to be furnished
under a contract of service; (c) are furnished by such Borrower or Guarantor
under a contract of service; or (d) consist of raw materials, work in process,
finished goods or materials used or consumed in its business.

1.87 “Investment Property Control Agreement” shall mean an agreement in writing,
in form and substance satisfactory to Agent, by and among Agent, any Borrower or
Guarantor (as the case may be) and any securities intermediary, commodity
intermediary or other person who has custody, control or possession of any
investment property of such Borrower or Guarantor acknowledging that such
securities intermediary, commodity intermediary or other person has custody,
control or possession of such investment property on behalf of Agent, that it
will comply with entitlement orders originated by Agent with respect to such
investment property, or other instructions of Agent, or (as the case may be)
apply any value distributed on account of any commodity contract as directed by
Agent, in each case, without the further consent of such Borrower or Guarantor
and including such other terms and conditions as Agent may require.

1.88 “J. Crew Card” shall mean the private label credit card issued by World
Financial Network National Bank pursuant to the Credit Card Agreement of
Operating with such Bank (or any subsequent Credit Card Issuer with respect to
such private label credit card as to which there has been compliance with
Section 9.15 hereof) to customers or prospective customers of Borrowers.

1.89 “Lenders” shall mean the financial institutions who are signatories hereto
as Lenders and other persons made a party to this Agreement as a Lender in
accordance with Section 14.7 hereof, and their respective successors and
assigns; each sometimes being referred to herein individually as a “Lender”.

 

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1.90 “Letter of Credit Accommodations” shall mean, collectively, the letters of
credit, merchandise purchase or other guaranties which are from time to time
either (a) issued or opened by Agent or any Lender for the account of any
Borrower or Obligor or (b) with respect to which Agent or Lenders have agreed to
indemnify the issuer or guaranteed to the issuer the performance by any Borrower
or Obligor of its obligations to such issuer; sometimes being referred to herein
individually as “Letter of Credit Accommodation”.

1.91 “License Agreements” shall have the meaning set forth in Section 8.13
hereof.

1.92 “Material Adverse Effect” shall mean a material adverse effect on (a) the
financial condition, business, performance or operations of Borrowers, taken as
a whole, or the legality, validity or enforceability of this Agreement or any of
the other Financing Agreements; (b) the legality, validity, enforceability,
perfection or priority of the security interests and liens of Agent upon the
Collateral; (c) the Collateral or its value, (d) the ability of Borrowers to
repay the Obligations or of Borrowers or Guarantors to perform their obligations
under this Agreement or any of the other Financing Agreements as and when to be
performed; or (e) the ability of Agent or any Lender to enforce the Obligations
or realize upon the Collateral or otherwise with respect to the rights and
remedies of Agent and Lenders under this Agreement or any of the other Financing
Agreements (taken as a whole).

1.93 “Material Contract” shall mean (a) any contract or other agreement (other
than the Financing Agreements or purchase orders for merchandise entered into in
the ordinary course of the business of any Borrower or Guarantor), written or
oral, of any Borrower or Guarantor involving monetary liability of or to any
Person in an amount in excess of $5,000,000 in any fiscal year and (b) any other
contract or other agreement (other than the Financing Agreements), whether
written or oral, to which any Borrower or Guarantor is a party as to which the
breach, nonperformance, cancellation or failure to renew by any party thereto
would have a Material Adverse Effect.

1.94 “Maximum Credit” shall mean $ 170,000,000, subject to increase in
accordance with Section 2.9 hereof.

1.95 “Mortgages” shall mean, individually and collectively, each of the
following (as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced): (a) the Deed of Trust,
Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated
December 23, 2002, by Retail in favor of Agent with respect to the Real Property
and related assets of such Borrower located in Asheville, North Carolina and
(b) the Deed of Trust, Assignment of Rents and Leases, Security Agreement and
Fixture Filing, dated December 23, 2002, by J. Crew and Parent in favor of Agent
with respect to the Real Property and related assets of such Borrower and Parent
located in Lynchburg, Virginia.

1.96 “Multiemployer Plan” shall mean a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by any Borrower,
Guarantor or any ERISA Affiliate.

 

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1.97 “Net Recovery Percentage” shall mean the fraction, expressed as a
percentage, (a) the numerator of which is the amount equal to the recovery on
the aggregate amount of the Inventory at such time on a “going out of business
sale” basis as set forth in the most recent appraisal of Inventory received by
Agent in accordance with Section 7.3, net of operating expenses, liquidation
expenses and commissions, and (b) the denominator of which is the applicable
original cost of the aggregate amount of the Inventory subject to appraisal.
Except for the month of December as provided in Section 1.10(a)(i)(B) and (C),
the Net Recovery Percentage for any category of Inventory used in Section 1.21
shall be based on the percentage in the appraisal for the time period for which
the Borrowing Base is being calculated.

1.98 “Noteholder Collateral Agent” shall mean U.S. Bank, National Association,
and any successor or replacement agent or any sub-agent under the Black Canyon
Documents.

1.99 “Obligations” shall mean (a) any and all Revolving Loans, Letter of Credit
Accommodations and all other obligations, liabilities and indebtedness of every
kind, nature and description owing by any or all of Borrowers to Agent or any
Lender and/or any of their Affiliates, including principal, interest, charges,
fees, costs and expenses, however evidenced, whether as principal, surety,
endorser, guarantor or otherwise, arising under this Agreement or any of the
other Financing Agreements, whether now existing or hereafter arising, whether
arising before, during or after the initial or any renewal term of this
Agreement or after the commencement of any case with respect to such Borrower
under the United States Bankruptcy Code or any similar statute (including the
payment of interest and other amounts which would accrue and become due but for
the commencement of such case, whether or not such amounts are allowed or
allowable in whole or in part in such case), whether direct or indirect,
absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, or secured or unsecured and (b) for purposes only of
Section 5.1 hereof and subject to the priority in right of payment set forth in
Section 6.4 hereof, all obligations, liabilities and indebtedness of every kind,
nature and description owing by any or all of Borrowers or Guarantors to Agent,
any Lender, any Affiliate of any Lender or any other financial institution
acceptable to Agent (and in each case as to any such Lender, Affiliate of any
Lender or other financial institution only to the extent approved by Agent)
arising under or pursuant to a Hedge Agreement, whether now existing or
hereafter arising, provided, that, (i) such obligations, liabilities and
indebtedness shall only be included within the Obligations if upon Agent’s
request, Agent shall have entered into an agreement, in form and substance
satisfactory to Agent, with any Lender, any Affiliate of any Lender or any other
financial institution acceptable to Agent that is a counterparty to such Hedge
Agreement, as acknowledged and agreed to by Borrowers and Guarantors, providing
for the delivery to Agent by such counterparty of information with respect to
the amount of such obligations and providing for the other rights of Agent and
such Lender, Affiliate of any Lender or any other financial institution
acceptable to Agent, as the case may be, in connection with such arrangements
and (ii) in no event shall the party to such Hedge Agreement to whom such
obligations, liabilities or indebtedness are owing be deemed a Lender for
purposes hereof to the extent of and as to such obligations, liabilities or
indebtedness other than for purposes of Section 5.1 hereof and other than for
purposes of Sections 12.1, 12.2, 12.3(b), 12.6, 12.7, 12.9, 12.12 and 14.6
hereof and in no event shall the approval of any such person be required in
connection with the release or termination of any security interest or lien of
Agent. Without limiting the generality of the foregoing, the Obligations shall
also include, in addition and not in limitation, any obligations, liabilities or
Indebtedness of any other Borrower or Guarantor to Agent and Lenders resulting
from the exercise by Agent of its remedies with respect to any Indebtedness or
other obligations of any Borrower or Guarantor to any other Borrower or
Guarantor, whether

 

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such Indebtedness or other obligations of a Borrower or Guarantor to any other
Borrower or Guarantor arose from the sale or transfer of Inventory, the payment
of the purchase price of Inventory by a Borrower or Guarantor on behalf of such
other Borrower or Guarantor, loans or other extensions of credit for the benefit
of such other Borrower or Guarantor or otherwise.

1.100 “Obligor” shall mean any guarantor, endorser, acceptor, surety or other
person liable on or with respect to the Obligations or who is the owner of any
property which is security for the Obligations (including, without limitation,
Guarantors), other than Borrowers.

1.101 “Other Taxes” shall mean any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any of the other Financing
Agreements.

1.102 “Parent” shall mean J. Crew Group, Inc., a New York corporation, and its
successors and assigns.

1.103 “Participant” shall mean any financial institution that acquires and holds
a participation in the interest of any Lender in any of the Revolving Loans and
Letter of Credit Accommodations in conformity with the provisions of
Section 14.7 of this Agreement governing participations.

1.104 “Permitted Holders” shall mean, collectively, (a) TPG Partners II, L.P.
and its Affiliates, (b) Millard S. Drexler and his immediate family members,
(c) Emily Woods and her immediate family members and (d) trusts for the benefit
of any of the forgoing Persons, or any of their heirs, executors, successors or
legal representatives.

1.105 “Person” or “person” shall mean any individual, sole proprietorship,
partnership, corporation (including any corporation which elects subchapter S
status under the Code), limited liability company, limited liability
partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.

1.106 “Plan” means an employee benefit plan (as defined in Section 3(3) of
ERISA) which any Borrower or Guarantor sponsors, maintains, or to which it
makes, is making, or is obligated to make contributions, including a
Multiemployer Plan.

1.107 “Prime Rate” shall mean the rate from time to time publicly announced by
Wachovia Bank, National Association, or its successors, as its prime rate,
whether or not such announced rate is the best rate available at such bank.

1.108 “Prime Rate Loans” shall mean any Revolving Loans or portion thereof on
which interest is payable based on the Prime Rate in accordance with the terms
thereof.

1.109 “Pro Rata Share” shall mean as to any Lender, the fraction (expressed as a
percentage) the numerator of which is such Lender’s Commitment and the
denominator of which is the aggregate amount of all of the Commitments of
Lenders, as adjusted from time to time in accordance with the provisions of
Section 14.7 hereof; provided, that, if the Commitments have

 

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been terminated, the numerator shall be the unpaid amount of such Lender’s
Revolving Loans and its interest in the Letter of Credit Accommodations and the
denominator shall be the aggregate amount of all unpaid Revolving Loans and
Letter of Credit Accommodations.

1.110 “Provision for Taxes” shall mean an amount equal to all taxes imposed on
or measured by net income, whether Federal, State, Provincial, county or local,
and whether foreign or domestic, that are paid or payable by any Person in
respect of any period in accordance with GAAP.

1.111 “Qualified Cash” shall mean unrestricted cash or Cash Equivalents of
Borrowers that are subject to the valid, enforceable and first priority
perfected security interest of Agent in an investment account or deposit account
at an institution reasonably acceptable to Agent pursuant to a Deposit Account
Control Agreement or an Investment Property Control Agreement, as applicable,
and which cash and Cash Equivalents are not subject to any other security
interest, pledge, lien, encumbrance or claim, except to the extent that the
holder of any of the same has entered into an intercreditor agreement with
Agent, in form and substance reasonably satisfactory to Agent (other than
customary liens or rights of setoff of the institution maintaining such accounts
permitted hereunder solely in its capacity as a depository, provided, that, for
purposes of the amount of Qualified Cash included in the calculation of Excess
Availability, such amount may be reduced, at Agent’s option, by any obligations
owing to such institution and Borrowers shall provide such information with
respect to such obligations as Agent may from time to time request).

1.112 “Quarterly Average Excess Availability” shall mean, at any time, the daily
average of the aggregate amount of the Excess Availability of Borrowers for the
immediately preceding fiscal quarter.

1.113 “Real Property” shall mean all now owned and hereafter acquired real
property of each Borrower and Guarantor, including leasehold interests (other
than with respect to retail store locations), together with all buildings,
structures, and other improvements located thereon and all licenses, easements
and appurtenances relating thereto, wherever located, including the real
property and related assets more particularly described in the Mortgages.

1.114 “Real Property Availability” shall mean $4,074,000, provided, that, the
Real Property Availability shall be adjusted after the date hereof to mean the
amount equal to the lesser of $8,000,000 or sixty-five (65%) percent of the
appraised fair market value of the Eligible Real Property then owned by
Borrowers; provided, that, such adjustment shall be effective on the first day
of the month after each of the following conditions is satisfied or such earlier
date following the satisfaction of such conditions as agreed to by Agent:
(a) Agent shall have received the written request of Borrower Agent for such
adjustment, (b) as of the date of such adjustment, no Event of Default shall
exist or have occurred and be continuing, (c) Agent shall have received at the
expense of Borrowers not less than ten (10) Business Days’ prior to the
effectiveness of such adjustment, a final written report of an updated, current
appraisal of the Eligible Real Property by an appraiser reasonably acceptable to
Agent (which shall be one of the appraisers selected by Agent from its list of
approved appraisers), on which Agent and Lenders shall be expressly permitted to
rely, and that is in form, scope and methodology reasonably satisfactory to
Agent, and (d) the amount of the appraised fair market value of the Eligible
Real Property used for purposes of adjusting the Real Property Availability
shall be based on such appraisal.

 

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1.115 “Receivables” shall mean all of the following now owned or hereafter
arising or acquired property of each Borrower and Guarantor: (a) all Accounts;
(b) all interest, fees, late charges, penalties, collection fees and other
amounts due or to become due or otherwise payable in connection with any
Account; (c) all payment intangibles of such Borrower or Guarantor; (d) letters
of credit, indemnities, guarantees, security or other deposits and proceeds
thereof issued payable to any Borrower or Guarantor or otherwise in favor of or
delivered to any Borrower or Guarantor in connection with any Account or any
Credit Card Receivables; or (e) all other accounts, contract rights, chattel
paper, instruments, notes, general intangibles and other forms of obligations
owing to any Borrower or Guarantor, whether from the sale and lease of goods or
other property, licensing of any property (including Intellectual Property or
other general intangibles), rendition of services or from loans or advances by
any Borrower or Guarantor or to or for the benefit of any third person
(including loans or advances to any Affiliates or Subsidiaries of any Borrower
or Guarantor) or otherwise associated with any Accounts, Inventory or general
intangibles of any Borrower or Guarantor (including, without limitation, choses
in action, causes of action, tax refunds, tax refund claims, any funds which may
become payable to any Borrower or Guarantor in connection with the termination
of any Plan or other employee benefit plan and any other amounts payable to any
Borrower or Guarantor from any Plan or other employee benefit plan, rights and
claims against carriers and shippers, rights to indemnification, business
interruption insurance and proceeds thereof, casualty or any similar types of
insurance and any proceeds thereof and proceeds of insurance covering the lives
of employees on which any Borrower or Guarantor is a beneficiary).

1.116 “Records” shall mean, as to each Borrower and Guarantor, all of such
Borrower’s and Guarantor’s present and future books of account of every kind or
nature, purchase and sale agreements, invoices, ledger cards, bills of lading
and other shipping evidence, statements, correspondence, memoranda, credit files
and other data relating to the Collateral or any account debtor, together with
the tapes, disks, diskettes and other data and software storage media and
devices, file cabinets or containers in or on which the foregoing are stored
(including any rights of any Borrower or Guarantor with respect to the foregoing
maintained with or by any other person).

1.117 “Reference Bank” shall mean Wachovia Bank, National Association, or such
other bank as Agent may from time to time designate.

1.118 “Refinancing Indebtedness” shall have meaning set forth in Section 9.9
hereof.

1.119 “Renewal Date” shall the meaning set forth in Section 14.1 hereof.

1.120 “Register” shall have the meaning set forth in Section 14.7 hereof.

1.121 “Required Lenders” shall mean, at any time, those Lenders whose Pro Rata
Shares aggregate sixty-six and two-thirds (66 2/3%) percent or more of the
aggregate of the Commitments of all Lenders, or if the Commitments shall have
been terminated, Lenders to whom at least sixty-six and two-thirds (66 2/3%)
percent of the then outstanding Obligations are owing.

 

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1.122 “Reserves” shall mean as of any date of determination, such amounts as
Agent may from time to time establish and revise in good faith reducing the
amount of Revolving Loans and Letter of Credit Accommodations which would
otherwise be available to any Borrower under the lending formula(s) provided for
herein: (a) to reflect events, conditions, contingencies or risks which
adversely affect, or would have a reasonable likelihood of adversely affecting,
either (i) any of the Collateral of the types or categories included in the
Borrowing Base or related thereto or its value or (ii) the assets or business of
any Borrower or Obligor or (iii) the security interests and other rights of
Agent or any Lender in the Collateral (including the enforceability, perfection
and priority thereof) or (b) to reflect Agent’s good faith belief that any
collateral report or financial information furnished by or on behalf of any
Borrower or Obligor to Agent is or may have been incomplete, inaccurate or
misleading in any material respect or (c) to reflect outstanding Letter of
Credit Accommodations as provided in Section 2.2 hereof or (d) in respect of any
state of facts which Agent determines in good faith constitutes a Default or an
Event of Default. Without limiting the generality of the foregoing, Reserves may
be established to reflect any of the following: (i) that dilution with respect
to the Credit Card Receivables (based on the ratio of the aggregate amount of
non-cash reductions in Credit Card Receivables for any period to the aggregate
dollar amount of the sales of Borrowers giving rise to Credit Card Receivables
for such period) as calculated by Agent for any period is or is reasonably
anticipated to be greater than five (5%) percent, (ii) to the extent that the
fair market value of any of the Real Property subject to the Mortgages as set
forth in the most recent acceptable appraisals received by Agent with respect
thereto has declined so that the amount of the Real Property Availability is
greater than sixty (60%) percent of such appraised fair market value,
(iii) inventory shrinkage, (iv) reserves in respect of markdowns and cost
variances (pursuant to discrepancies between the purchase order price of
Inventory and the actual cost thereof), (v) amounts due or to become due in
respect of sales, use and/or withholding taxes, (vi) any rental payments,
service charges or other amounts to become due to lessors of real property to
the extent Inventory or Records are located in or on such property or such
Records are needed to monitor or otherwise deal with the Collateral, provided,
that, the Reserves established pursuant to this clause (vi) as to retail store
locations (including factory store locations) that are leased shall not exceed
at any time the aggregate of amounts payable for the next three (3) months to
the lessors of such retail store locations (including factory store locations)
located in those States where any right of the lessor to Collateral may have
priority over the security interest and lien of Agent therein, provided, that,
such limitation on the amount of the Reserves pursuant to this clause (vi) shall
only apply so long as: (A) no Event of Default shall exist or have occurred and
be continuing, (B) neither a Borrower, Guarantor nor Agent shall have received
notice of any event of default by the lessee under the lease with respect to
such location and (C) no Borrower has granted to the lessor a security interest
or lien upon any assets of such Borrower, (vii) any rental payments, service
changes or other amounts due or to become due to lessors of personal property;
(viii) amounts owing by Borrowers to Credit Card Issuers or Credit Card
Processors in connection with the Credit Card Agreements, (ix) up to fifty
(50%) percent of the aggregate amount of merchandise gift certificates and
coupons, (x) an increase in the number of days of the turnover of Inventory or a
change in the mix of the Inventory that results in an overall decrease in the
value thereof or a deterioration in its nature or quality (but only to the
extent not addressed by the lending formulas in a manner satisfactory to Agent),
(xi) variances between the perpetual inventory records of

 

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Borrowers and the results of the test counts of Inventory conducted by Agent
with respect thereto in excess of the percentage acceptable to Agent, (xii) the
aggregate amount of deposits, if any, received by any Borrower from its retail
customers in respect of unfilled orders for merchandise and the purchase price
of layaway goods, and (xiii) obligations, liabilities or indebtedness
(contingent or otherwise) of Borrowers or Guarantors to Agent, any Lender, any
Affiliate of any Lender or any other financial institution acceptable to Agent
(and in each case as to any such Lender, Affiliate of any Lender or other
financial institution only to the extent approved by Agent) arising under or in
connection with any Hedge Agreement of any Borrower or Guarantor with Agent, any
Lender, any Affiliate of any Lender or any other financial institution
acceptable to Agent or as such Person may otherwise require in connection
therewith to the extent that such obligation, liabilities or indebtedness
constitute Obligations as such term is defined herein or otherwise receive the
benefit of the security interest of Agent in any Collateral. The amount of any
Reserve established by Agent shall have a reasonable relationship to the event,
condition or other matter which is the basis for such Reserve as determined by
Agent in good faith. In the event that based on the calculation of the Borrowing
Base by Agent at the time, the establishment of a Reserve at such time will
result in there being no Excess Availability at such time, Agent shall give
Borrower Agent one (1) Business Day’s notice prior to establishing such new
Reserves. Promptly upon the receipt of such notice, Borrowers shall take such
action as may be required so that the event, condition or matters that is the
basis for the Reserve no longer exists in a manner and to the extent
satisfactory to Agent. In no event shall such notice and opportunity limit the
right of Agent to establish such Reserve unless Agent shall have determined that
the event, condition or other matter that is the basis for such new Reserve no
longer exists or has otherwise been addressed in a manner and to the extent
satisfactory to Agent so that Agent determines that such Reserve does not need
to be established.

1.123 “Restricted Payment” shall mean any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of Capital Stock of Parent, Operating or any Subsidiary of either of
them, or any payment (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any such shares of
Capital Stock of Parent, Operating or any Subsidiary or any option, warrant or
other right to acquire any such shares of Capital Stock of Parent, Operating or
any such Subsidiary.

1.124 “Revolving Loans” shall mean the loans now or hereafter made by or on
behalf of any Lender or by Agent for the account of any Lender on a revolving
basis pursuant to the Credit Facility (involving advances, repayments and
readvances) as set forth in Section 2.1 hereof and any reference to the term
“Loans” used herein shall have the same meaning as the term Revolving Loans.

1.125 “Securities Laws” shall mean the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and all rules, regulations and
interpretations issued pursuant thereto or in connection therewith, and all
state and local statutes, rules and regulations issued in connection therewith
or related thereto, as the same now exist or may hereafter be amended, modified,
interpreted, recodified or supplemented.

1.126 “Senior Debenture Indenture” shall mean the Indenture, dated as of
October 17, 1997, between Parent, as issuer, and State Street Bank and Trust
Company, as trustee, with respect to the Senior Discount Debentures as the same
now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.

 

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1.127 “Senior Discount Debentures” shall mean, collectively, the 13 1/8% Senior
Discount Debentures due 2008 issued by Parent pursuant to the Senior Debenture
Indenture, as the same now exist or may hereafter be amended, modified,
supplemented, extended, modified, supplemented, extended, renewed, restated or
replaced.

1.128 “16% Senior Discount Note Indenture” shall mean the Indenture, dated
May 6, 2003, between Intermediate, as issuer and 16% Senior Discount Note
Trustee, with respect to the 16% Senior Discount Notes, as the same now exists
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.

1.129 “16% Senior Discount Notes” shall mean, collectively, the 16.0% Senior
Discount Contingent Principal Notes due 2008 issued by Intermediate under the
16% Senior Discount Note Indenture, as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.

1.130 “16% Senior Discount Note Trustee” shall mean U.S. Bank, National
Association, and its successors and assigns, and any replacement trustee
permitted pursuant to the terms and conditions of the 16% Senior Discount Note
Indenture.

1.131 “Solvent” shall mean, at any time with respect to any Person, that at such
time such Person (a) is able to pay its debts as they mature and has (and has a
reasonable basis to believe it will continue to have) sufficient capital (and
not unreasonably small capital) to carry on its business consistent with its
practices as of the date hereof, and (b) the assets and properties of such
Person at a fair valuation (and including as assets for this purpose at a fair
valuation all rights of subrogation, contribution or indemnification arising
pursuant to any guarantees given by such Person) are greater than the
Indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such person has a reasonable basis to
believe, represents an amount which can reasonably be expected to become an
actual or matured liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as reduced to
reflect the probability of it becoming a matured liability).

1.132 “Special Agent Advances” shall have the meaning set forth in Section 12.11
hereof.

1.133 “Standby Letter of Credit” shall mean all Letter of Credit Accommodations
other than Commercial Letters of Credit.

1.134 “Store Accounts” shall have the meaning set forth in Section 6.3 hereof.

1.135 “Subsidiary” or “subsidiary” shall mean, with respect to any Person, any
corporation, limited liability company, limited liability partnership or other
limited or general partnership, trust, association or other business entity of
which an aggregate of at least a majority of the outstanding Capital Stock or
other interests entitled to vote in the election of the board of directors of
such corporation (irrespective of whether, at the time, Capital Stock of any
other class or classes of such corporation shall have or might have voting power
by reason of the

 

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happening of any contingency), managers, trustees or other controlling persons,
or an equivalent controlling interest therein, of such Person is, at the time,
directly or indirectly, owned by such Person and/or one or more subsidiaries of
such Person.

1.136 “Syndication Agent” shall mean Bank of America N.A., in its capacity as
syndication agent on behalf of Lenders pursuant to the terms hereof and any
replacement or successor syndication agent hereunder.

1.137 “Taxes” shall mean any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of Agent or any Lender, such taxes (including income
taxes, franchise taxes or capital taxes) as are imposed on or measured by such
Lender’s net income or capital by any jurisdiction (or any political subdivision
thereof).

1.138 “10 3/8% Subordinated Notes” shall mean, collectively, the 10 3/8% Senior
Subordinated Notes due 2007 issued by Operating under the 10 3/8% Subordinated
Note Indenture, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

1.139 “10 3/8% Subordinated Note Indenture” shall mean the Indenture, dated as
of October 17, 1997, by and among Operating, as issuer, Borrowers, and certain
Affiliates of Borrowers, as guarantors, and State Street Bank and Trust Company,
as trustee, with respect to the 10 3/8% Subordinated Notes, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated, or replaced.

1.140 “TPG Partners” shall mean (a) TPG Partners II, L.P.; (b) any managing
director, principal, officer or employee of TPG Partners II, L.P. who control it
as of the date of this Agreement; and (c) any other Person controlled by any of
the Persons included in clauses (a) and (b) of this definition. For the purposes
of this definition, the term “control” (including with correlative meanings, the
terms “controlled by” and “under common control with”), as used with respect to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of Voting Stock, by agreement or otherwise.

1.141 “Transferee” shall mean any transferee or assignee of a Lender or a
Participant.

1.142 “UCC” shall mean the Uniform Commercial Code as in effect in the State of
New York, and any successor statute, as in effect from time to time (except that
terms used herein which are defined in the Uniform Commercial Code as in effect
in the State of New York on the date hereof shall continue to have the same
meaning notwithstanding any replacement or amendment of such statute except as
Agent may otherwise determine).

1.143 “Value” shall mean, as determined by Agent in good faith, with respect to
Inventory, the lower of (a) cost computed on a first-in first-out basis in
accordance with GAAP or (b) market value, provided, that, for purposes of the
calculation of the Borrowing Base, (i) the Value of the Inventory shall not
include: (A) the portion of the Value of Inventory equal to the profit earned by
any Affiliate on the sale thereof to any Borrower or (B) write-ups or
write-downs in value with respect to currency exchange rates and
(ii) notwithstanding anything to the contrary contained herein, the cost of the
Inventory shall be computed in the same manner and consistent with the most
recent appraisal of the Inventory received by Agent prior to the date hereof, if
any.

 

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1.144 “Voting Stock” shall mean with respect to any Person, (a) one (1) or more
classes of Capital Stock of such Person having general voting powers to elect at
least a majority of the board of directors, managers or trustees of such Person,
irrespective of whether at the time Capital Stock of any other class or classes
have or might have voting power by reason of the happening of any contingency,
and (b) any Capital Stock of such Person convertible or exchangeable without
restriction at the option of the holder thereof into Capital Stock of such
Person described in clause (a) of this definition.

1.145 “Weighted Average Life to Maturity” shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding principal amount of such Indebtedness into (b) the total of the
product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.

SECTION 2. CREDIT FACILITIES

2.1 Revolving Loans. Subject to and upon the terms and conditions contained
herein, each Lender severally (and not jointly) agrees to make its Pro Rata
Share of Revolving Loans to Borrowers from time to time in amounts requested by
Borrowers (or Borrower Agent on behalf of Borrowers) up to the amount
outstanding at any time equal to the Borrowing Base at such time.

2.2 Letter of Credit Accommodations.

(a) Subject to and upon the terms and conditions contained herein, at the
request of a Borrower (or Borrower Agent on behalf of such Borrower), Agent
agrees, for the ratable risk of each Lender according to its Pro Rata Share, to
provide or arrange for Letter of Credit Accommodations for the account of such
Borrower containing terms and conditions acceptable to Agent and the issuer
thereof. Any payments made by or on behalf of Agent or any Lender to any issuer
thereof and/or related parties in connection with the Letter of Credit
Accommodations provided to or for the benefit of a Borrower shall constitute
additional Revolving Loans to such Borrower pursuant to this Section 2 (or
Special Agent Advances as the case may be).

(b) In addition to any charges, fees or expenses charged by any bank or issuer
in connection with the Letter of Credit Accommodations, Borrowers shall pay to
Agent, for the benefit of Lenders, monthly a letter of credit fee at a rate
equal to the percentage (on a per annum basis) set forth below on the daily
outstanding balance of the Letter of Credit Accommodations during the
immediately preceding month (or part thereof), payable in arrears as of the
first of each succeeding month, provided, that, such percentage shall be
increased or decreased, as the case may be, to the percentage (on a per annum
basis) set forth below based on the Quarterly

 

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Average Excess Availability for the immediately preceding fiscal quarter being
at or within the amounts indicated for such percentage:

 

Tier

  

Quarterly Average

Excess Availability

   Documentary
L/C Rate     Standby L/C
Rate   1    Greater than $55,000,000    .625 %    1.250 %  2    Less than or
equal to $55,000,000 and greater than $40,000,000    .750 %    1.250 %  3   
Less than or equal to $40,000,000 and greater than $20,000,000    .875 %   
1.250 %  4    Less than or equal to $20,000,000    1.000 %    1.250 % 

provided, that, (i) the applicable percentage shall be calculated and
established once each fiscal quarter and shall remain in effect until adjusted
thereafter after the end of the next fiscal quarter, (ii) if the Excess
Availability is greater than $40,000,000 as of the date hereof, the applicable
percentage through the last day of the sixth (6th) month after the date hereof
shall be the amount for Tier 2 set forth above, and (iii) notwithstanding
anything to the contrary contained herein, Agent may, and upon the written
direction of Required Lenders shall, require Borrowers to pay to Agent for the
benefit of Lenders, such letter of credit fee at a rate equal to two
(2%) percent per annum on such daily outstanding balance higher than the
otherwise applicable percentage: (A) for the period (1) from and after the
effective date of termination or non-renewal hereof until Agent and Lenders have
received full and final payment of all outstanding and unpaid Obligations which
are not contingent and cash collateral or letter of credit, as Agent may
specify, in the amounts and on the terms required under Section 14.1 hereof for
contingent Obligations (notwithstanding entry of a judgment against any Borrower
or Guarantor) and (2) from and after the date of the occurrence of an Event of
Default and for so long as such Event of Default is continuing.

(c) The Borrower requesting such Letter of Credit Accommodation (or Borrower
Agent on behalf of such Borrower) shall give Agent two (2) Business Days’ prior
written notice of such Borrower’s request for the issuance of a Letter of Credit
Accommodation. Such notice shall be irrevocable and shall specify the original
face amount of the Letter of Credit Accommodation requested, the effective date
(which date shall be a Business Day) of issuance of such requested Letter of
Credit Accommodation, whether such Letter of Credit Accommodations may be drawn
in a single or in partial draws, the date on which such requested Letter of
Credit Accommodation is to expire (which date shall be a Business Day and in no
event shall the expiration date of any Letter of Credit Accommodation be a date
less than five (5)

 

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Business Days prior to the end of the then current term of this Agreement), the
purpose for which such Letter of Credit Accommodation is to be issued, and the
beneficiary of the requested Letter of Credit Accommodation. The Borrower
requesting the Letter of Credit Accommodation (or Borrower Agent on behalf of
such Borrower) shall attach to such notice the proposed form of the Letter of
Credit Accommodation.

(d) In addition to being subject to the satisfaction of the applicable
conditions precedent contained in Section 4 hereof and the other terms and
conditions contained herein, no Letter of Credit Accommodations shall be
available unless each of the following conditions precedent have been satisfied
in a manner satisfactory to Agent: (i) the Borrower requesting such Letter of
Credit Accommodation (or Borrower Agent on behalf of such Borrower) shall have
delivered to the proposed issuer of such Letter of Credit Accommodation at such
times and in such manner as such proposed issuer may require, an application, in
form and substance satisfactory to such proposed issuer and Agent, for the
issuance of the Letter of Credit Accommodation and such other documents as may
be required pursuant to the terms thereof, and the form and terms of the
proposed Letter of Credit Accommodation shall be satisfactory to Agent and such
proposed issuer, (ii) as of the date of issuance, no order of any court,
arbitrator or other Governmental Authority shall purport by its terms to enjoin
or restrain money center banks generally from issuing letters of credit of the
type and in the amount of the proposed Letter of Credit Accommodation, and no
law, rule or regulation applicable to money center banks generally and no
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over money center banks generally shall
prohibit, or request that the proposed issuer of such Letter of Credit
Accommodation refrain from, the issuance of letters of credit generally or the
issuance of such Letters of Credit Accommodation; and (iii) the Excess
Availability, prior to giving effect to any Reserves with respect to such Letter
of Credit Accommodations, on the date of the proposed issuance of any Letter of
Credit Accommodation shall be equal to or greater than: (A) if the proposed
Letter of Credit Accommodation is a Commercial Letter of Credit for the purpose
of purchasing Inventory and the documents of title with respect thereto are
consigned to the issuer or delivered to and in the possession of a Customs
Broker (provided, that, as to such Customs Broker, Agent shall have received a
Collateral Access Agreement duly authorized, executed and delivered by such
person, such agreement shall be in full force and effect and such person shall
be in compliance in all material respects with the terms thereof), the sum of:
(1) the percentage equal to one hundred (100%) percent minus the then applicable
percentage with respect to the category of Eligible Inventory to be purchased
with such Letter of Credit Accommodation plus (2) the amount of the Reserve to
be established based on freight, taxes, duty and other amounts which Agent
estimates must be paid in connection with such Inventory being purchased with
such Letter of Credit Accommodation calculated as described below and (B) if the
proposed Letter of Credit Accommodation is a Standby Letter of Credit or for any
other purpose or the documents of title are note consigned to the issuer or are
not delivered to and in the possession of a Customs Broker (or if delivered to
and in the possession of a Customs Broker, an of the conditions set forth in
clause (A) are not satisfied as to such Customs Broker) in connection with a
Letter of Credit Accommodation for the purpose of purchasing Inventory, an
amount equal to one hundred (100%) percent of the face amount thereof and all
other commitments and obligations made or incurred by Agent with respect
thereto. Effective on the issuance of each Letter of Credit Accommodation, a
Reserve shall be established in the applicable amount set forth in
Section 2.2(d)(iii)(A) or Section 2.2(d)(iii)(B).

 

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(e) The amount of the Reserve based on freight, taxes, duty and other amounts
referred to above shall be calculated from time to time as follows: (i) the
amount equal to (A) the most recent determination by Agent of the average of the
freight, taxes, duty and other amounts referred to above as a percentage of the
outstanding Letter of Credit Accommodations consisting of Commercial Letters of
Credit used to purchase Inventory as of the date of such calculation in
accordance with the current practices and procedures of Agent as of the date
hereof, multiplied by (B) the then outstanding amount of such Letter of Credit
Accommodations multiplied by (ii) the percentage equal to (A) the percentage of
one hundred (100%) percent minus (B) the average of the percentages used for
Inventory at such time in the calculation of the Borrowing Base.

(f) Except in Agent’s discretion, with the consent of all Lenders (except as
otherwise provided herein), the amount of all outstanding Letter of Credit
Accommodations and all other commitments and obligations made or incurred by
Agent or any Lender in a connection therewith shall not at any time exceed the
Maximum Credit less any Revolving Loans outstanding.

(g) Borrowers and Guarantors shall indemnify and hold Agent and Lenders harmless
from and against any and all losses, claims, damages, liabilities, costs and
expenses which Agent or any Lender may suffer or incur in connection with any
Letter of Credit Accommodations and any documents, drafts or acceptances
relating thereto, including any losses, claims, damages, liabilities, costs and
expenses due to any action taken by any issuer or correspondent with respect to
any Letter of Credit Accommodation, except for such losses, claims, damages,
liabilities, costs or expenses that are a direct result of the gross negligence
or wilful misconduct of Agent or any Lender as determined pursuant to a final
non-appealable order of a court of competent jurisdiction. Each Borrower and
Guarantor assumes all risks with respect to the acts or omissions of the drawer
under or beneficiary of any Letter of Credit Accommodation and for such purposes
the drawer or beneficiary shall be deemed such Borrower’s agent. Each Borrower
and Guarantor assumes all risks for, and agrees to pay, all foreign, Federal,
State and local taxes, duties and levies relating to any goods subject to any
Letter of Credit Accommodations or any documents, drafts or acceptances
thereunder. Each Borrower and Guarantor hereby releases and holds Agent and
Lenders harmless from and against any acts, waivers, errors, delays or
omissions, whether caused by any Borrower, Guarantor, by any issuer or
correspondent or otherwise with respect to or relating to any Letter of Credit
Accommodation, except for the gross negligence or wilful misconduct of Agent or
any Lender as determined pursuant to a final, non-appealable order of a court of
competent jurisdiction. The provisions of this Section 2.2(f) shall survive the
payment of Obligations and the termination of this Agreement.

(h) In connection with Inventory purchased pursuant to Letter of Credit
Accommodations, Borrowers and Guarantors shall, at Agent’s request, instruct all
suppliers, carriers, forwarders, customs brokers, warehouses or others receiving
or holding cash, checks, Inventory, documents or instruments in which Agent
holds a security interest to deliver them to Agent and/or subject to Agent’s
order, and if they shall come into such Borrower’s or Guarantor’s possession, to
deliver them, upon Agent’s request, to Agent in their original form; provided,
that, Agent shall not exercise the rights under this clause (g) to have such
persons deliver any cash, checks, Inventory, documents or instruments (but as to
such documents and instruments, Agent shall not exercise such rights only so
long as the same are held by a Customs

 

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Broker and the conditions set forth in Section 2.2(d)(iii)(A) hereof as to such
Customs Broker are satisfied), unless an Event of Default shall exist or have
occurred and be continuing. Borrowers and Guarantors shall also, at Agent’s
request, designate Agent as the consignee on all bills of lading and other
negotiable and non-negotiable documents.

(i) Each Borrower and Guarantor hereby irrevocably authorizes and directs any
issuer of a Letter of Credit Accommodation to name such Borrower or Guarantor as
the account party therein and to deliver to Agent all instruments, documents and
other writings and property received by issuer pursuant to the Letter of Credit
Accommodations and to accept and rely upon Agent’s instructions and agreements
with respect to all matters arising in connection with the Letter of Credit
Accommodations or the applications therefor. Nothing contained herein shall be
deemed or construed to grant any Borrower or Guarantor any right or authority to
pledge the credit of Agent or any Lender in any manner. Agent and Lenders shall
have no liability of any kind with respect to any Letter of Credit Accommodation
provided by an issuer other than Agent or any Lender unless Agent has duly
executed and delivered to such issuer the application or a guarantee or
indemnification in writing with respect to such Letter of Credit Accommodation.
Borrowers and Guarantors shall be bound by any reasonable interpretation made in
good faith by Agent, or any other issuer or correspondent under or in connection
with any Letter of Credit Accommodation or any documents, drafts or acceptances
thereunder, notwithstanding that such interpretation may be inconsistent with
any instructions of any Borrower or Guarantor.

(j) At any time an Event of Default exists or has occurred and is continuing,
Agent shall have the right and authority to, and Borrowers shall not, without
the prior consent of Agent, (i) approve or resolve any questions of
non-compliance of documents, (ii) give any instructions as to acceptance or
rejection of any documents or goods, (iii) execute any and all applications for
steamship or airway guaranties, indemnities or delivery orders, (iv) grant any
extensions of the maturity of, time of payments for, or time of presentation of,
any drafts, acceptances, or documents, and (v) agree to any amendments,
renewals, extensions, modifications, changes or cancellations of any of the
terms or conditions of any of the applications, Letter of Credit Accommodations,
or documents, drafts or acceptances thereunder or any letters of credit included
in the Collateral. Agent may take such actions either in its own name or in any
Borrower’s name.

(k) At any time, so long as no Event of Default exists or has occurred and is
continuing, a Borrower may, with Agent’s consent, (i) grant any extensions of
the maturity of, time of payment for, or time of presentation of, any drafts,
acceptances, or documents, and (ii) agree to any amendments, renewals,
extensions, modifications, changes or cancellations of any of the terms or
conditions of any of the applications, Letter of Credit Accommodations, or
documents, drafts or acceptances thereunder or any letters of credit included in
the Collateral; provided, that, Borrowers may approve or resolve any questions
of non-compliance of documents following notice to Agent thereof and without
Agent’s consent except as otherwise provided in Section 2.2(i).

(l) Any rights, remedies, duties or obligations granted or undertaken by any
Borrower or Guarantor to any issuer or correspondent in any application for any
Letter of Credit Accommodation, or any other agreement in favor of any issuer or
correspondent relating to any Letter of Credit Accommodation, shall be deemed to
have been granted or undertaken by such

 

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Borrower or Guarantor to Agent for the ratable benefit of Lenders. Any duties or
obligations undertaken by Agent to any issuer or correspondent in any
application for any Letter of Credit Accommodation, or any other agreement by
Agent in favor of any issuer or correspondent to the extent relating to any
Letter of Credit Accommodation, shall be deemed to have been undertaken by
Borrowers and Guarantors to Agent for the ratable benefit of Lenders and to
apply in all respects to Borrowers and Guarantors.

(m) Immediately upon the issuance or amendment of any Letter of Credit
Accommodation, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received, without recourse or warranty, an
undivided interest and participation to the extent of such Lender’s Pro Rata
Share of the liability with respect to such Letter of Credit Accommodation
(including, without limitation, all Obligations with respect thereto).

(n) Each Borrower is irrevocably and unconditionally obligated, without
presentment, demand or protest, to pay to Agent any amounts paid by an issuer of
a Letter of Credit Accommodation with respect to such Letter of Credit
Accommodation (whether through the borrowing of Revolving Loans in accordance
with Section 2.2(a) or otherwise). In the event that any Borrower fails to pay
Agent on the date of any payment under a Letter of Credit Accommodation in an
amount equal to the amount of such payment, Agent (to the extent it has actual
notice thereof) shall promptly notify each Lender of the unreimbursed amount of
such payment and each Lender agrees, upon one (1) Business Day’s notice, to fund
to Agent the purchase of its participation in such Letter of Credit
Accommodation in an amount equal to its Pro Rata Share of the unpaid amount. The
obligation of each Lender to deliver to Agent an amount equal to its respective
participation pursuant to the foregoing sentence is absolute and unconditional
and such remittance shall be made notwithstanding the occurrence or continuance
of any Event of Default, the failure to satisfy any other condition set forth in
Section 4 or any other event or circumstance. If such amount is not made
available by a Lender when due, Agent shall be entitled to recover such amount
on demand from such Lender with interest thereon, for each day from the date
such amount was due until the date such amount is paid to Agent at the interest
rate then payable by any Borrower in respect of Revolving Loans that are Prime
Rate Loans as set forth in Section 3.1 (a) hereof.

2.3 Intentionally Omitted.

2.4 Commitments. The aggregate amount of each Lender’s Pro Rata Share of the
Revolving Loans and Letter of Credit Accommodations shall not exceed the amount
of such Lender’s Commitment, as the same may from time to time be amended in
accordance with the provisions hereof.

2.5 Loan Limits.

(a) Notwithstanding anything to the contrary contained herein, except in Agent’s
determination, with the consent of all Lenders, or as otherwise provided herein,
the sum of the aggregate principal amount of the Revolving Loans and the Letter
of Credit Accommodations outstanding at any time shall not exceed the Borrowing
Base.

 

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(b) To the extent that the 10 3/8% Subordinated Note Indenture is in effect and
contains a limitation upon the amount of Revolving Loans and Letter of Credit
Accommodations (and, in each case, interest and fees thereon) that may be
incurred hereunder by Borrowers other than Operating, then, notwithstanding any
other provision of this Agreement (including, without limitation, Sections 2.1,
2.2, and 2.8) and the books and records of Lenders or Agent or any Borrower,
(i) at any date, all Revolving Loans (and interest thereon) and Letter of Credit
Accommodations (and fees thereon) in excess of the amounts permitted to be
incurred by Borrowers other than Operating in accordance with the 10 3/8%
Subordinated Note Indenture (including amounts permitted under Section 4.09 of
the 10 3/8% Subordinated Note Indenture other than under subsection (i) thereof)
are deemed made and shall be made solely to Operating and (ii) in no event at
any date shall the amount of Indebtedness (as defined in the 10 3/8%
Subordinated Note Indenture) arising pursuant to Revolving Loans and Letter of
Credit Accommodations to Borrowers other than Operating exceed the amount
thereof that such Borrowers (other than Operating) are permitted to incur at
such time under the terms of the 10 3/8% Subordinated Note Indenture and
(iii) Borrowers shall determine that the Indebtedness of Borrowers hereunder
(other than Operating) is, and the Indebtedness of Borrowers hereunder (other
than Operating) shall be deemed, permitted under such subsections of
Section 4.09 of the 10 3/8% Subordinated Note Indenture, other than subsection
(i) thereof, to the extent that the amounts permitted under such other
subsections are not otherwise then the basis for permitting Indebtedness of
Borrowers (other than the Indebtedness hereunder) and to the extent that such
other subsections are applicable to the Indebtedness of Borrowers hereunder
(other than Operating). The limitation on Revolving Loans and Letter of Credit
Accommodations of Borrowers other than Operating set forth in Section 2.5(b)
above shall automatically be adjusted from time to time upon the incurrence or
repayment of any Indebtedness (as defined in the 10 3/8% Subordinated Note
Indenture) permitted under the applicable subsections of Section 4.09 of the 10
3/8% Subordinated Note Indenture.

2.6 Mandatory Prepayments.

(a) In the event that at any time (i) the aggregate principal amount of the
Revolving Loans and the Letter of Credit Accommodations outstanding exceed the
Borrowing Base, or (ii) the aggregate principal amount of the Revolving Loans
and Letter of Credit Accommodations outstanding to all of Borrowers exceed the
Maximum Credit, or (iii) the aggregate amount of the outstanding Letter of
Credit Accommodations exceed the sublimit for Letter of Credit Accommodations
set forth in Section 2.2(e) hereof, or (iv) the aggregate amount of the
Revolving Loans and Letter of Credit Accommodations exceed the Maximum Credit,
any such event shall not limit, waive or otherwise affect any rights of Agent or
Lenders in such circumstances or on any future occasions and Borrowers shall,
upon demand by Agent, which may be made at any time or from time to time,
immediately repay to Agent the entire amount of any such excess(es) for which
payment is demanded. Except to the extent Agent is permitted to make certain
additional Revolving Loans and Letter of Credit Accommodations as provided in
Section 12.8 hereof, Agent shall make such demand upon the request of the
Required Lenders.

(b) Without limiting any of the rights of Agent or Lenders pursuant hereto or
otherwise, on each date when any reduction in the Real Property Availability
becomes effective pursuant to the terms hereof, regardless of the value of the
Real Property, Borrowers shall, absolutely and unconditionally, automatically
and without demand make a payment to Agent, for the benefit of Lenders, in
respect of the Revolving Loans in an amount equal to the excess, if any, of the
aggregate unpaid principal amount of the Revolving Loans over the Borrowing Base
as so reduced.

 

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(c) Subject to Section 14.1 (c) and Section 3.3(d) hereof, all such payments in
respect of the Revolving Loans pursuant to this Section 2.6 shall be without
premium or penalty. All interest accrued on the principal amount of the
Revolving Loans paid pursuant to this Section 2.6 shall be paid, or may be
charged by Agent to any loan account(s) of Borrowers, at Agent’s option, on the
date of such payment. Interest shall accrue and be due, until the next Business
Day, if the amount so paid by Borrowers to the bank account designated by Agent
for such purpose is received in such bank account after 12:00 noon, New York
City time.

2.7 Intentionally Omitted.

2.8 Joint and Several Liability. Subject to Section 2.5(b) hereof, all Borrowers
shall be jointly and severally liable for all amounts due to Agent and Lenders
under this Agreement and the other Financing Agreements, regardless of which
Borrower actually receives the Revolving Loans or Letter of Credit
Accommodations hereunder or the amount of such Revolving Loans received or the
manner in which Agent or any Lender accounts for such Revolving Loans, Letter of
Credit Accommodations or other extensions of credit on its books and records.
Subject to Section 2.5(b) hereof, all references herein or in any of the other
Financing Agreements to any of the obligation of Borrowers to make any payment
hereunder or thereunder shall constitute joint and several obligations of
Borrowers. The Obligations with respect to Revolving Loans made to a Borrower,
and the Obligations arising as a result of the joint and several liability of a
Borrower hereunder, with respect to Revolving Loans made to the other Borrowers,
shall be separate and distinct obligations, but all such other Obligations shall
be primary obligations of all Borrowers. Subject to Section 2.5(b) hereof, the
Obligations arising as a result of the joint and several liability of a Borrower
hereunder with respect to Revolving Loans, Letter of Credit Accommodations or
other extensions of credit made to the other Borrowers shall, to the fullest
extent permitted by law, be unconditional irrespective of (a) the validity or
enforceability, avoidance or subordination of the Obligations of the other
Borrowers or of any promissory note or other document evidencing all or any part
of the Obligations of the other Borrowers, (b) the absence of any attempt to
collect the Obligations from the other Borrowers, any Guarantor or any other
security therefor, or the absence of any other action to enforce the same,
(c) the waiver, consent, extension, forbearance or granting of any indulgence by
Agent or any Lender with respect to any provisions of any instrument evidencing
the Obligations of the other Borrowers, or any part thereof, or any other
agreement now or hereafter executed by the other Borrowers and delivered to
Agent or any Lender, (d) the failure by Agent or any Lender to take any steps to
perfect and maintain its security interest in, or to preserve its rights and
maintain its security or collateral for the Obligations of the other Borrowers,
(e) the election of Agent and Lenders in any proceeding instituted under the
Bankruptcy Code, of the application of Section 1111 (b)(2) of the Bankruptcy
Code, (f) the disallowance of all or any portion of the claim(s) of Agent or any
Lender for the repayment of the Obligations of the other Borrowers under
Section 502 of the Bankruptcy Code, or (g) any other circumstances which might
constitute a legal or equitable discharge or defense of a Guarantor or of the
other Borrowers other than the gross negligence or wilful misconduct of Agent or
a Lender as determined pursuant to a final non-appealable order of a court of
competent jurisdiction. With respect to the Obligations arising as a result of
the joint

 

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and several liability of a Borrower hereunder with respect to Revolving Loans,
Letter of Credit Accommodations or other extensions of credit made to the other
Borrowers hereunder, each Borrower waives, until the Obligations shall have been
paid in full and this Agreement shall have been terminated, any right to enforce
any right of subrogation or any remedy which Agent or any Lender now has or may
hereafter have against any Borrower or Guarantor and any benefit of, and any
right to participate in, any security or collateral given to Agent or any
Lender. Upon any Event of Default, and for so long as such Event of Default is
continuing, Agent may proceed directly and at once, without notice, against any
Borrower to collect and recover the full amount, or any portion of the
Obligations, without first proceeding against the other Borrowers or any other
Person, or against any security or collateral for the Obligations. Each Borrower
consents and agrees that Agent and Lenders shall be under no obligation to
marshall any assets in favor of Borrower(s) or against or in payment of any or
all of the Obligations.

2.9 Maximum Credit Increase.

(a) Borrower Agent may, at any time, deliver a written request to Agent to
increase the Maximum Credit. Any such written request shall specify the amount
of the increase in the Maximum Credit that Borrowers are requesting, provided,
that, (i) in no event shall the aggregate amount of any such increase in the
Maximum Credit cause the Maximum Credit to exceed $250,000,000, (ii) such
request shall be for an increase of not less than $10,000,000, (iii) any such
request shall be irrevocable, and (iv) in no event shall more than one such
written request be delivered to Agent in any calendar quarter.

(b) Upon the receipt by Agent of any such written request, Agent shall notify
each of the Lenders of such request and each Lender shall have the option (but
not the obligation) to increase the amount of its Commitment by an amount up to
its Pro Rata Share of the amount of the increase in the Maximum Credit requested
by Borrower Agent as set forth in the notice from Agent to such Lender. Each
Lender shall notify Agent within fifteen (15) days after the receipt of such
notice from Agent whether it is willing to so increase its Commitment, and if
so, the amount of such increase; provided, that, (i) the minimum increase in the
Commitments of each such Lender providing the additional Commitments shall equal
or exceed $2,000,000, and (ii) no Lender shall be obligated to provide such
increase in its Commitment and the determination to increase the Commitment of a
Lender shall be within the sole and absolute discretion of such Lender. If the
aggregate amount of the increases in the Commitments received from the Lenders
equals or exceeds the amount of the increase in the Maximum Credit requested by
Borrower Agent, such increase shall be effective on the date five (5) Business
Days after each of the conditions set forth in Section 2.9(c) have been
satisfied or such earlier date after such conditions have been satisfied as
Agent may agree. If the aggregate amount of the increases in the Commitments
received from the Lenders does not equal or exceed the amount of the increase in
the Maximum Credit requested by Borrower Agent, Agent may seek additional
increases from Lenders or Commitments from such Eligible Transferees as it may
determine, after consultation with Borrower Agent. In the event Lenders (or
Lenders and any such Eligible Transferees, as the case may be) have committed in
writing to provide increases in their Commitments or new Commitments in an
aggregate amount in excess of the increase in the Maximum Credit requested by
Borrowers or permitted hereunder, Agent shall then have the right to allocate
such commitments, first to Lenders and then to Eligible Transferees, in such
amounts and manner as Agent may determine, after consultation with Borrower
Agent.

 

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(c) The Maximum Credit shall be increased by the amount of the increase in
Commitments from Lenders or new Commitments from Eligible Transferees, in each
case selected in accordance with Section 2.9(a) above, for which Agent has
received Assignment and Acceptances sixty (60) days after the date of the
request by Borrower Agent for the increase or such earlier date as Borrower
Agent may request (such earlier date being referred to herein as the “Early
Increase Date”) after five (5) Business Days’ prior written notice to Agent (but
subject to the satisfaction of the conditions set forth below), whether or not
the aggregate amount of the increase in Commitments and new Commitments, as the
case may be, equal or exceed the amount of the increase in the Maximum Credit
requested by Borrower Agent in accordance with the terms hereof, effective on
the date that each of the following conditions have been satisfied:

(i) Agent shall have received from each Lender or Eligible Transferee that is
providing an additional Commitment as part of the increase in the Maximum
Credit, an Assignment and Acceptance duly executed by such Lender or Eligible
Transferee and each Borrower, provided, that, the aggregate Commitments set
forth in such Assignment and Acceptance(s) shall be not less than $10,000,000;

(ii) the conditions precedent to the making of Revolving Loans set forth in
Section 4.2 shall be satisfied as of the date of the increase in the Maximum
Credit, both before and after giving effect to such increase;

(iii) Agent shall have received an opinion of counsel to Borrowers in form and
substance and from counsel reasonably satisfactory to Agent and Lenders
addressing such matters as Agent may reasonably request (including an opinion as
to no conflicts with other Indebtedness);

(iv) such increase in the Maximum Credit on the date of the effectiveness
thereof shall not violate any applicable law, regulation or order or decree of
any court or other Governmental Authority and shall not be enjoined,
temporarily, preliminarily or permanently;

(v) there shall have been paid to each Lender and Eligible Transferee providing
an additional Commitment in connection with such increase in the Maximum Credit
all fees and expenses due and payable to such Person on or before the
effectiveness of such increase;

(vi) there shall have been paid to Agent, for the account of the Agent and
Lenders (in accordance with any agreement among them) all fees and expenses
(including reasonable fees and expenses of counsel) due and payable pursuant to
any of the Financing Agreements on or before the effectiveness of such increase.

(d) In the event that Borrower requests that the Maximum Credit is increased on
an Early Increase Date, and the aggregate amount of the increases in the
Commitments received from the Lenders and new Commitments from Eligible
Transferees, as the case may be, as of the Early Increase Date (based upon the
satisfaction of the conditions set forth above) does not equal or exceed the
amount of the increase in the Maximum Credit requested by Borrower Agent, the
Maximum Credit may thereafter be increased again on the date that is sixty
(60) days after the date of the original request by Borrower Agent for such
increase based on any additional increase in Commitments or new Commitments
received by Agent (i) after the Early Increase Date but (ii) prior to the date
that is sixty (60) days after the date of such original request by Borrower
Agent for any such increase.

 

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(e) As of the effective date of any such increase in the Maximum Credit, each
reference to the term Maximum Credit herein, and in any of the other Financing
Agreements shall be deemed amended to mean the amount of the Maximum Credit
specified in the most recent written notice from Agent to Borrower Agent of the
increase in the Maximum Credit.

SECTION 3. INTEREST AND FEES

3.1 Interest.

(a) Borrowers shall pay to Agent, for the benefit of itself and Lenders,
interest on the outstanding principal amount of the Revolving Loans at the
Interest Rate. All interest accruing hereunder on and after the date of any
Event of Default or termination hereof shall be payable on demand.

(b) Each Borrower (or Borrower Agent on behalf of such Borrower) may from time
to time request Eurodollar Rate Loans or may request that Prime Rate Loans be
converted to Eurodollar Rate Loans or that any existing Eurodollar Rate Loans
continue for an additional Interest Period. Such request from a Borrower (or
Borrower Agent on behalf of such Borrower) shall specify the amount of the
Eurodollar Rate Loans or the amount of the Prime Rate Loans to be converted to
Eurodollar Rate Loans or the amount of the Eurodollar Rate Loans to be continued
(subject to the limits set forth below) and the Interest Period to be applicable
to such Eurodollar Rate Loans. Subject to the terms and conditions contained
herein, three (3) Business Days after receipt by Agent of such a request from a
Borrower (or Borrower Agent on behalf of such Borrower), such Eurodollar Rate
Loans shall be made or Prime Rate Loans shall be converted to Eurodollar Rate
Loans or such Eurodollar Rate Loans shall continue, as the case may be,
provided, that, (i) no Event of Default shall exist or have occurred and be
continuing, (ii) no party hereto shall have sent any notice of termination of
this Agreement, (iii) such Borrower (or Borrower Agent on behalf of such
Borrower) shall have complied with such customary procedures as are reasonably
established by Agent and specified by Agent to Borrower Agent from time to time
for requests by Borrowers for Eurodollar Rate Loans, (iv) no more than eight
(8) Interest Periods may be in effect at any one time, (v) the aggregate amount
of the Eurodollar Rate Loans must be in an amount not less than $2,000,000 or an
integral multiple of $1,000,000 in excess thereof, and (vi) Agent and each
Lender shall have determined that the Interest Period or Adjusted Eurodollar
Rate is available to Agent and such Lender and can be readily determined as of
the date of the request for such Eurodollar Rate Loan by such Borrower. Any
request by or on behalf of a Borrower for Eurodollar Rate Loans or to convert
Prime Rate Loans to Eurodollar Rate Loans or to continue any existing Eurodollar
Rate Loans shall be irrevocable. Notwithstanding anything to the contrary
contained herein, Agent and Lenders shall not be required to purchase United
States Dollar deposits in the London interbank market or other applicable
Eurodollar Rate market to fund any Eurodollar Rate Loans, but the provisions
hereof shall be deemed to apply as if Agent and Lenders had purchased such
deposits to fund the Eurodollar Rate Loans.

 

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(c) Any Eurodollar Rate Loans shall automatically convert to Prime Rate Loans
upon the last day of the applicable Interest Period, unless Agent has received
and obtained bank approval with respect to a request to continue such Eurodollar
Rate Loan at least three (3) Business Days prior to such last day in accordance
with the terms hereof. Any Eurodollar Rate Loans shall, at Agent’s option, upon
notice by Agent to Borrower Agent, be subsequently converted to Prime Rate Loans
on the effective date of the termination of this Agreement in the event that
this Agreement shall terminate or not be renewed. Borrowers shall pay to Agent,
for the benefit of Lenders, upon demand by Agent (or Agent may, at its option,
charge any loan account of any Borrower) any amounts required to compensate any
Lender or Participant for any loss, cost or expense incurred by such person, as
a result of the conversion of Eurodollar Rate Loans to Prime Rate Loans pursuant
to any of the foregoing. At the request of Borrower Agent, Agent shall provide
to Borrower Agent all available supporting documentation with respect to such
loss, cost or expense. No loss, cost or expense will arise upon the conversion
of a Eurodollar Rate Loan to a Prime Rate Loan on the last day of the Interest
Period for such Eurodollar Rate Loan.

(d) Interest shall be payable by Borrowers to Agent, for the account of Lenders,
monthly in arrears not later than the first day of each calendar month and shall
be calculated on the basis of a three hundred sixty (360) day year and actual
days elapsed. The interest rate on non-contingent Obligations (other than
Eurodollar Rate Loans) shall increase or decrease by an amount equal to each
increase or decrease in the Prime Rate effective on the first day of the month
after any change in such Prime Rate is announced based on the Prime Rate in
effect on the last day of the month in which any such change occurs. In no event
shall charges constituting interest payable by Borrowers to Agent and Lenders
exceed the maximum amount or the rate permitted under any applicable law or
regulation, and if any such part or provision of this Agreement is in
contravention of any such law or regulation, such part or provision shall be
deemed amended to conform thereto.

3.2 Fees.

(a) Borrowers shall pay to Agent, for the account of Lenders, monthly an unused
line fee at a rate equal to the percentage (on a per annum basis) set forth
below calculated upon the amount by which the Maximum Credit exceeds the average
daily principal balance of the outstanding Revolving Loans and Letter of Credit
Accommodations during the immediately preceding month (or part thereof) while
the Loan Agreement is in effect and for so long thereafter as any Obligations
are outstanding. Such fee shall be payable on the first day of each month in
arrears. The percentage used for determining the unused line fee shall be as set
forth below if the Quarterly Average Excess Availability for the immediately
preceding fiscal quarter is at or within the amounts indicated for such
percentage:

 

Quarterly Average Excess Availability

   Unused Line
Fee Percentage  

Greater than $55,000,000

   .375 % 

Less than or equal to $55,000,000 and greater than $40,000,000

   .375 % 

Less than or equal to $40,000,000 and greater than $20,000,000

   .250 % 

Less than $20,000,000 or equal to $20,000,000

   .250 % 

 

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provided, that, the unused line fee percentage shall be calculated and
established based on the foregoing once each fiscal quarter. Such unused line
fee percentage shall be used commencing on the date hereof based on the
Quarterly Average Excess Availability during the fiscal quarter of Borrowers
ending immediately prior to the date hereof

(b) Borrowers agree to pay to Agent the other fees and amounts set forth in the
Fee Letter in the amounts and at all times specified therein.

3.3 Changes in Laws and Increased Costs of Revolving Loans.

(a) If after the date hereof, either (i) any change in, or in the interpretation
of, any law or regulation is introduced, including, without limitation, with
respect to reserve requirements, applicable to Agent or any banking or financial
institution from whom any Lender borrows funds or obtains credit (a “Funding
Bank”), or (ii) a Funding Bank or any Lender complies with any future guideline
or request from any central bank or other Governmental Authority or (iii) a
Funding Bank or any Lender determines that the adoption of any applicable law,
rule or regulation regarding capital adequacy, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof has or would have the effect described below, or a
Funding Bank or any Lender complies with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, and in the case of any event set forth in
this clause (iii), such adoption, change or compliance has or would have the
direct or indirect effect of reducing the rate of return on any Lender’s capital
as a consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking
into consideration the Funding Bank’s or Lender’s policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, and the
result of any of the foregoing events described in clauses (i), (ii) or (iii) is
or results in an increase in the cost to any Lender of funding or maintaining
the Revolving Loans, the Letter of Credit Accommodations or its Commitment, then
Borrowers and Guarantors shall from time to time upon demand by Agent pay to
Agent additional amounts sufficient to indemnify Lenders against such increased
cost on an after-tax basis (after taking into account applicable deductions and
credits in respect of the amount indemnified). A certificate as to the amount of
such increased cost shall be submitted to Borrower Agent by Agent and shall be
conclusive, absent manifest error.

 

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(b) If prior to the first day of any Interest Period, (i) Agent shall have
determined in good faith (which determination shall be conclusive and binding
upon Borrowers and Guarantors) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, (ii) Agent has received notice from
the Required Lenders that the Eurodollar Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to Lenders
of making or maintaining Eurodollar Rate Loans during such Interest Period, or
(iii) Dollar deposits in the principal amounts of the Eurodollar Rate Loans to
which such Interest Period is to be applicable are not generally available in
the London interbank market, Agent shall give telecopy or telephonic notice
thereof to Borrower Agent as soon as practicable thereafter, and will also give
prompt written notice to Borrower Agent when such conditions no longer exist. If
such notice is given (A) any Eurodollar Rate Loans requested to be made on the
first day of such Interest Period shall be made as Prime Rate Loans, (B) any
Revolving Loans that were to have been converted on the first day of such
Interest Period to or continued as Eurodollar Rate Loans shall be converted to
or continued as Prime Rate Loans and (C) each outstanding Eurodollar Rate Loan
shall be converted, on the last day of the then-current Interest Period thereof,
to Prime Rate Loans. Until such notice has been withdrawn by Agent, no further
Eurodollar Rate Loans shall be made or continued as such, nor shall any Borrower
(or Borrower Agent on behalf of any Borrower) have the right to convert Prime
Rate Loans to Eurodollar Rate Loans.

(c) Notwithstanding any other provision herein, if the adoption of or any change
in any law, treaty, rule or regulation or final, non-appealable determination of
an arbitrator or a court or other Governmental Authority or in the
interpretation or application thereof occurring after the date hereof shall make
it unlawful for Agent or any Lender to make or maintain Eurodollar Rate Loans as
contemplated by this Agreement, (i) Agent or such Lender shall promptly give
written notice of such circumstances to Borrower Agent (which notice shall be
withdrawn whenever such circumstances no longer exist), (ii) the commitment of
such Lender hereunder to make Eurodollar Rate Loans, continue Eurodollar Rate
Loans as such and convert Prime Rate Loans to Eurodollar Rate Loans shall
forthwith be canceled and, until such time as it shall no longer be unlawful for
such Lender to make or maintain Eurodollar Rate Loans, such Lender shall then
have a commitment only to make a Prime Rate Loan when a Eurodollar Rate Loan is
requested and (iii) such Lender’s Revolving Loans then outstanding as Eurodollar
Rate Loans, if any, shall be converted automatically to Prime Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Revolving Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Rate Loan occurs on a day which is not the last day
of the then current Interest Period with respect thereto, Borrowers and
Guarantors shall pay to such Lender such amounts, if any, as may be required
pursuant to Section 3.3(d) below.

(d) Borrowers and Guarantors shall indemnify Agent and each Lender and hold
Agent and each Lender harmless from any loss or expense which Agent or such
Lender may sustain or incur as a consequence of (i) default by Borrower in
making a borrowing of, conversion into or extension of Eurodollar Rate Loans
after such Borrower (or Borrower Agent on behalf of such Borrower) has given a
notice requesting the same in accordance with the provisions of this Loan
Agreement, (ii) default by any Borrower in making any prepayment of a Eurodollar
Rate Loan after such Borrower has given a notice thereof in accordance with the
provisions of this Agreement, and (iii) the making of a prepayment of Eurodollar
Rate Loans on

 

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a day which is not the last day of an Interest Period with respect thereto. With
respect to Eurodollar Rate Loans, such indemnification may include an amount
equal to the excess, if any, of (A) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or extended, for
the period from the date of such prepayment or of such failure to borrow,
convert or extend to the last day of the applicable Interest Period (or, in the
case of a failure to borrow, convert or extend, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Eurodollar Rate Loans provided for herein over (B) the
amount of interest (as determined by such Agent or such Lender) which would have
accrued to Agent or such Lender on such amount by placing such amount on deposit
for a comparable period with leading banks in the interbank Eurodollar market.
This covenant shall survive the termination or non-renewal of this Loan
Agreement and the payment of the Obligations.

SECTION 4. CONDITIONS PRECEDENT

4.1 Conditions Precedent to Amendment and Restatement. Each of the following is
a condition precedent to the effectiveness hereof:

(a) all requisite corporate or limited liability company action and proceedings
in connection with this Agreement and the other Financing Agreements shall be
reasonably satisfactory in form and substance to Agent, and Agent shall have
received all information and copies of all documents, including records of
requisite corporate or limited liability company action and proceedings which
Agent may have reasonably requested in connection therewith, such documents
where requested by Agent or its counsel to be certified by appropriate corporate
officers or Governmental Authority (and including a copy of the articles or
certificate of incorporation, certificate of formation, operating agreement or
comparable organizational documents of each Borrower and Guarantor certified by
the Secretary of State (or equivalent Governmental Authority) which shall set
forth the same complete corporate or limited liability company name of such
Borrower or Guarantor as is set forth herein and such document as shall set
forth the organizational identification number of each Borrower or Guarantor, if
one is issued in its jurisdiction of organization;

(b) Agent shall have received evidence, in form and substance reasonably
satisfactory to Agent, that Borrowers and Guarantors have obtained all necessary
consents and approvals to the execution, delivery and performance of this
Agreement;

(c) Agent shall have received evidence, in form consistent with the current
practices and procedures of Agent, that the aggregate amount of the Excess
Availability after provision for payment of all fees and expenses of the
transactions contemplated hereby, shall be not less than $20,000,000;

(d) Agent shall have received evidence, in form consistent with the current
practices and procedures of Agent, that the accounts payable of Borrowers are at
the same historical level for comparable prior periods;

 

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(e) Agent shall have received evidence, in a form reasonably satisfactory to
Agent, that Borrowers have received the gross proceeds of the loans under the
Black Canyon Credit Agreement in an amount of not less than $275,000,000;

(f) Agent shall have received, in form and substance reasonably satisfactory to
Agent, such opinion letters of counsel to Borrowers and Guarantors with respect
to this Agreement and such other matters as Agent may request;

(g) this Agreement and any other agreements, documents and instruments related
thereto required hereunder shall have been duly executed and delivered to Agent,
in form and substance reasonably satisfactory to Agent.

4.2 Conditions Precedent to All Revolving Loans and Letter of Credit
Accommodations. Each of the following is an additional condition precedent to
the Revolving Loans and/or providing Letter of Credit Accommodations to
Borrowers, including the initial Loans and Letter of Credit Accommodations and
any future Revolving Loans and Letter of Credit Accommodations and the
effectiveness hereof:

(a) all representations and warranties contained herein and in the other
Financing Agreements shall be true and correct in all material respects with the
same effect as though such representations and warranties had been made on and
as of the date of the making of each such Revolving Loan or providing each such
Letter of Credit Accommodation and after giving effect thereto, except to the
extent that such representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties shall have been
true and correct in all material respects on and as of such earlier date);

(b) no law, regulation, order, judgment or decree of any Governmental Authority
shall exist, and no action, suit, investigation, litigation or proceeding shall
be pending or threatened in any court or before any arbitrator or Governmental
Authority, which in each case in the good faith judgment of Agent (i) purports
to enjoin, prohibit, restrain or otherwise affect (A) the making of the
Revolving Loans or providing the Letter of Credit Accommodations, or (B) the
consummation of the transactions contemplated pursuant to the terms hereof or
the other Financing Agreements or (ii) has or has a reasonable likelihood of
having a Material Adverse Effect; and

(c) no Event of Default shall exist or have occurred and be continuing on and as
of the date of the making of such Revolving Loan or providing each such Letter
of Credit Accommodation and after giving effect thereto.

SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST

5.1 Grant of Security Interest. To secure payment and performance of all
Obligations, each Borrower and Guarantor hereby grants to Agent, for itself and
the benefit of Lenders, a continuing security interest in, a lien upon, and a
right of set off against, and hereby assigns to Agent, for itself and the
benefit of Lenders, as security, and hereby confirms, reaffirms and restates the
prior grant thereof to Agent, for itself and Lenders, pursuant to the Existing
Agreements, all personal property and real property subject to the Mortgages and
fixtures, and interests in property and fixtures, of each Borrower and
Guarantor, whether now owned or hereafter acquired or existing, and wherever
located (together with all other collateral security for the Obligations at any
time granted to or held or acquired by Agent or any Lender, collectively, the
“Collateral”), including:

(i) all Accounts;

 

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(ii) all general intangibles, including, without limitation, all Intellectual
Property;

(iii) all goods, including, without limitation, Inventory and Equipment;

(iv) all Real Property subject to the Mortgages and fixtures;

(v) all chattel paper, including, without limitation, all tangible and
electronic chattel paper;

(vi) all instruments, including, without limitation, all promissory notes;

(vii) all documents;

(viii) all deposit accounts;

(ix) all letters of credit, banker’s acceptances and similar instruments and
including all letter-of-credit rights;

(x) all supporting obligations and all present and future liens, security
interests, rights, remedies, title and interest in, to and in respect of
Receivables and other Collateral, including (A) rights and remedies under or
relating to guaranties, contracts of suretyship, letters of credit and credit
and other insurance related to the Collateral, (B) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (C) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Receivables or other Collateral, including returned, repossessed
and reclaimed goods, and (D) deposits by and property of account debtors or
other persons securing the obligations of account debtors;

(xi) all (A) investment property (including securities, whether certificated or
uncertificated, securities accounts, security entitlements, commodity contracts
or commodity accounts) and (B) monies, credit balances, deposits and other
property of any Borrower or Guarantor now or hereafter held or received by or in
transit to Agent, any Lender or its Affiliates or at any other depository or
other institution from or for the account of any Borrower or Guarantor, whether
for safekeeping, pledge, custody, transmission, collection or otherwise;

(xii) all commercial tort claims, including, without limitation, those
identified in the Information Certificate;

(xiii) to the extent not otherwise described above, all Receivables;

(xiv) all Records; and

 

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(xv) all products and proceeds of the foregoing, in any form, including
insurance proceeds and all claims against third parties for loss or damage to or
destruction of or other involuntary conversion of any kind or nature of any or
all of the other Collateral.

(b) Notwithstanding anything to the contrary set forth in Section 5.1 (a) above,
the types or items of Collateral described in such Section shall not include:

(i) any rights or interests in any contract, lease, permit, license, charter or
license agreement covering real or personal property, as such, if under the
terms of such contract, lease, permit, license, charter or license agreement, or
applicable law with respect thereto, the valid grant of a security interest or
lien therein to Agent is prohibited and such prohibition has not been or is not
waived or the consent of the other party to such contract, lease, permit,
license, charter or license agreement has not been or is not otherwise obtained
or under applicable law such prohibition cannot be waived; provided, that, the
foregoing exclusion shall in no way be construed (A) to apply if any such
prohibition is unenforceable under Sections 9-406, 9-407 or 9-408 of the UCC or
other applicable law or (B) so as to limit, impair or otherwise affect Agent’s
unconditional continuing security interests in and liens upon any rights or
interests of a Borrower or Guarantor in or to monies due or to become due under
any such contract, lease, permit, license, charter or license agreement
(including any Receivables); or

(ii) the Capital Stock of J. Crew Japan, Inc. (“J. Crew Japan”) to the extent
that (A) J. Crew Japan is a “controlled foreign corporation” (as such term is
defined in Section 957(a) of the Code or a successor provision thereof) of a
Borrower or Guarantor, (B) such Capital Stock is in excess of sixty five
(65%) percent of all of the issued and outstanding shares of Capital Stock of J.
Crew Japan entitled to vote (within the meaning of Treasury Regulation
Section 1.956-2) and (C) a pledge of more than such percentage would result in
adverse tax consequences to any Borrower or Guarantor.

5.2 Perfection of Security Interests.

(a) Each Borrower and Guarantor irrevocably and unconditionally authorizes Agent
(or its agent) to file at any time and from time to time such financing
statements with respect to the Collateral naming Agent or its designee as the
secured party and such Borrower or Guarantor as debtor, as Agent may require,
and including any other information with respect to such Borrower or Guarantor
or otherwise required by part 5 of Article 9 of the Uniform Commercial Code of
such jurisdiction as Agent may determine, together with any amendment and
continuations with respect thereto, which authorization shall apply to all
financing statements filed on, prior to or after the date hereof. Each Borrower
and Guarantor hereby ratifies and approves all financing statements naming Agent
or its designee as secured party and such Borrower or Guarantor, as the case may
be, as debtor with respect to the Collateral (and any amendments with respect to
such financing statements) filed by or on behalf of Agent prior to the date
hereof and ratifies and confirms the authorization of Agent to file such
financing statements (and amendments, if any). Each Borrower and Guarantor
hereby authorizes Agent to adopt on behalf of such Borrower and Guarantor any
symbol required for authenticating any electronic filing. In the event that the
description of the collateral in any financing statement naming Agent or its
designee as the secured party and any Borrower or Guarantor as debtor includes
assets and properties of such Borrower or Guarantor that do not at any time
constitute Collateral, whether

 

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hereunder, under any of the other Financing Agreements or otherwise, the filing
of such financing statement shall nonetheless be deemed authorized by such
Borrower or Guarantor to the extent of the Collateral included in such
description and it shall not render the financing statement ineffective as to
any of the Collateral or otherwise affect the financing statement as it applies
to any of the Collateral. In no event shall any Borrower or Guarantor at any
time file, or permit or cause to be filed, any correction statement or
termination statement with respect to any financing statement (or amendment or
continuation with respect thereto) naming Agent or its designee as secured party
and such Borrower or Guarantor as debtor.

(b) Each Borrower and Guarantor does not have any chattel paper (whether
tangible or electronic) or instruments as of the date hereof, except as set
forth in the Information Certificate. In the event that any Borrower or
Guarantor shall be entitled to or shall receive any chattel paper or instrument
after the date hereof, Borrowers and Guarantors shall promptly notify Agent
thereof in writing. Promptly upon the receipt thereof by or on behalf of any
Borrower or Guarantor (including by any agent or representative), such Borrower
or Guarantor shall deliver, or cause to be delivered to Agent, all tangible
chattel paper and instruments that such Borrower or Guarantor has or may at any
time acquire, accompanied by such instruments of transfer or assignment duly
executed in blank as Agent may from time to time specify, in each case except as
Agent may otherwise agree. At Agent’s option, each Borrower and Guarantor shall,
or Agent may at any time on behalf of any Borrower or Guarantor, cause the
original of any such instrument or chattel paper to be conspicuously marked in a
form and manner acceptable to Agent with the following legend referring to
chattel paper or instruments as applicable: “This [chattel paper] [instrument]
is subject to the security interest of Congress Financial Corporation and any
sale, transfer, assignment or encumbrance of this [chattel paper] [instrument]
violates the rights of such secured party.”

(c) In the event that any Borrower or Guarantor shall at any time hold or
acquire an interest in any electronic chattel paper or any “transferable record”
(as such term is defined in Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction), such Borrower or
Guarantor shall promptly notify Agent thereof in writing. Promptly upon Agent’s
request, such Borrower or Guarantor shall take, or cause to be taken, such
actions as Agent may reasonably request to give Agent control of such electronic
chattel paper under Section 9-105 of the UCC and control of such transferable
record under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as in effect in such jurisdiction.

(d) Each Borrower and Guarantor does not have any deposit accounts as of the
date hereof, except as set forth in the Information Certificate. Borrowers and
Guarantors shall not, directly or indirectly, after the date hereof open,
establish or maintain any deposit account unless each of the following
conditions is satisfied: (i) Agent shall have received not less than five
(5) Business Days prior written notice of the intention of any Borrower or
Guarantor to open or establish such account which notice shall specify in
reasonable detail and specificity reasonably acceptable to Agent the name of the
account, the owner of the account, the name and address of the bank at which
such account is to be opened or established, the individual at such bank with
whom such Borrower or Guarantor is dealing and the purpose of the account,
except as to any Store Account opened or established after the date hereof, so
long as no Event of

 

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Default shall exist or have occurred, Agent shall only have received such
information as to such Store Account on the next monthly report with respect to
deposit accounts in accordance with Section 7.1 (a) hereof, (ii) the bank where
such account is opened or maintained shall be reasonably acceptable to Agent,
and (iii) on or before the opening of such deposit account (other than as to a
Store Account so long as no Event of Default shall exist or have occurred and be
continuing), such Borrower or Guarantor shall as Agent may specify either
(A) deliver to Agent a Deposit Account Control Agreement with respect to such
deposit account duly authorized, executed and delivered by such Borrower or
Guarantor and the bank at which such deposit account is opened and maintained or
(B) arrange for Agent to become the customer of the bank with respect to the
deposit account on terms and conditions reasonably acceptable to Agent. The
terms of this subsection (d) shall not apply to deposit accounts specifically
and exclusively used for payroll, payroll taxes and other employee wage and
benefit payments to or for the benefit of any Borrower’s or Guarantor’s salaried
employees or the escrow of security deposits with respect to Real Property
subject to lease.

(e) No Borrower or Guarantor owns or holds, directly or indirectly, beneficially
or as record owner or both, any investment property, as of the date hereof, or
have any investment account, securities account, commodity account or other
similar account with any bank or other financial institution or other securities
intermediary or commodity intermediary as of the date hereof, in each case
except as set forth in the Information Certificate.

(i) In the event that any Borrower or Guarantor shall be entitled to or shall at
any time after the date hereof hold or acquire any certificated securities, such
Borrower or Guarantor shall promptly endorse, assign and deliver the same to
Agent, for itself and the benefit of Lenders, accompanied by such instruments of
transfer or assignment duly executed in blank as Agent may from time to time
specify. If any securities, now or hereafter acquired by any Borrower or
Guarantor are uncertificated and are issued to such Borrower or Guarantor or its
nominee directly by the issuer thereof, such Borrower or Guarantor shall
immediately notify Agent thereof and shall as Agent may specify, either
(A) cause the issuer to agree to comply with instructions from Agent as to such
securities, without further consent of any Borrower or Guarantor or such
nominee, or (B) arrange for Agent to become the registered owner of the
securities.

(ii) Borrowers and Guarantors shall not, directly or indirectly, after the date
hereof open, establish or maintain any investment account, securities account,
commodity account or any other similar account (other than a deposit account)
with any securities intermediary or commodity intermediary unless each of the
following conditions is satisfied: (A) Agent shall have received not less than
two (2) Business Days prior written notice of the intention of such Borrower or
Guarantor to open or establish such account which notice shall specify in
reasonable detail and specificity acceptable to Agent the name of the account,
the owner of the account, the name and address of the securities intermediary or
commodity intermediary at which such account is to be opened or established, the
individual at such intermediary with whom such Borrower or Guarantor is dealing
and the purpose of the account, (B) the securities intermediary or commodity
intermediary (as the case may be) where such account is opened or maintained
shall be reasonably acceptable to Agent, and (C) on or before the opening of
such investment account, securities account or other similar account with a
securities intermediary or commodity intermediary, such Borrower or Guarantor
shall as Agent

 

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may specify either (1) execute and deliver, and cause to be executed and
delivered to Agent, an Investment Property Control Agreement with respect
thereto duly authorized, executed and delivered by such Borrower or Guarantor
and such securities intermediary or commodity intermediary or (2) arrange for
Agent to become the entitlement holder with respect to such investment property
on terms and conditions acceptable to Agent.

(f) Borrowers and Guarantors are not the beneficiary or otherwise entitled to
any right to payment under any letter of credit, banker’s acceptance or similar
instrument as of the date hereof, except as set forth in the Information
Certificate. In the event that any Borrower or Guarantor shall be entitled to or
shall receive any right to payment under any letter of credit, banker’s
acceptance or any similar instrument with a face amount in excess of $500,000,
whether as beneficiary thereof or otherwise after the date hereof, such Borrower
or Guarantor shall promptly notify Agent thereof in writing. Such Borrower or
Guarantor shall immediately, as Agent may specify, either (i) deliver, or cause
to be delivered to Agent, with respect to any such letter of credit, banker’s
acceptance or similar instrument, the written agreement of the issuer and any
other nominated person obligated to make any payment in respect thereof
(including any confirming or negotiating bank), in form and substance
satisfactory to Agent, consenting to the assignment of the proceeds of the
letter of credit to Agent by such Borrower or Guarantor and agreeing to make all
payments thereon directly to Agent or as Agent may otherwise direct or
(ii) cause Agent to become, at Borrowers’ expense, the transferee beneficiary of
the letter of credit, banker’s acceptance or similar instrument (as the case may
be).

(g) Borrowers and Guarantors do not have any commercial tort claims as of the
date hereof, except as set forth in the Information Certificate. In the event
that any Borrower or Guarantor shall at any time after the date hereof have any
commercial tort claims in excess of $1,000,000, such Borrower or Guarantor (or
Borrower Agent) shall promptly notify Agent thereof in writing, which notice
shall (i) set forth in reasonable detail the basis for and nature of such
commercial tort claim and (ii) include the express grant by such Borrower or
Guarantor to Agent of a security interest in such commercial tort claim (and the
proceeds thereof). In the event that such notice does not include such grant of
a security interest, the sending thereof by such Borrower or Guarantor to Agent
shall be deemed to constitute such grant to Agent. Upon the sending of such
notice, any commercial tort claim described therein shall constitute part of the
Collateral and shall be deemed included therein. Without limiting the
authorization of Agent provided in Section 5.2(a) hereof or otherwise arising by
the execution by such Borrower or Guarantor of this Agreement or any of the
other Financing Agreements, Agent is hereby irrevocably authorized from time to
time and at any time to file such financing statements naming Agent or its
designee as secured party and such Borrower or Guarantor as debtor, or any
amendments to any financing statements, covering any such commercial tort claim
as Collateral. In addition, each Borrower and Guarantor shall promptly upon
Agent’s request, execute and deliver, or cause to be executed and delivered, to
Agent such other agreements, documents and instruments as Agent may require in
connection with such commercial tort claim.

(h) Borrowers and Guarantors do not have any goods, documents of title or other
Collateral in the custody, control or possession of a third party as of the date
hereof, except as set forth in the Information Certificate and except for goods
located in the United States in transit to a location of a Borrower or Guarantor
permitted herein in the ordinary course of business of such Borrower or
Guarantor in the possession of the carrier transporting such goods.

 

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In the event that any goods, documents of title or other Collateral are at any
time after the date hereof in the custody, control or possession of any other
person not referred to in the Information Certificate or such carriers,
Borrowers and Guarantors shall promptly notify Agent thereof in writing.
Promptly upon Agent’s request, Borrowers and Guarantors shall deliver to Agent a
Collateral Access Agreement duly authorized, executed and delivered by such
person and the Borrower or Guarantor that is the owner of such Collateral.

(i) Borrowers and Guarantors shall take any other actions reasonably requested
by Agent from time to time to cause the attachment, perfection and first
priority of, and the ability of Agent to enforce, the security interest of Agent
in any and all of the Collateral, including, without limitation, (i) executing,
delivering and, where appropriate, filing financing statements and amendments
relating thereto under the UCC or other applicable law, to the extent, if any,
that any Borrower’s or Guarantor’s signature thereon is required therefor,
(ii) causing Agent’s name to be noted as secured party on any certificate of
title for a titled good if such notation is a condition to attachment,
perfection or priority of, or ability of Agent to enforce, the security interest
of Agent in such Collateral (other than motor vehicles, if any), (iii) complying
with any provision of any statute, regulation or treaty of the United States as
to any Collateral if compliance with such provision is a condition to
attachment, perfection or priority of, or ability of Agent to enforce, the
security interest of Agent in such Collateral, (iv) obtaining the consents and
approvals of any Governmental Authority or third party, including, without
limitation, any consent of any licensor, lessor or other person obligated on
Collateral, and taking all actions required by any earlier versions of the UCC
or by other law, as applicable in any relevant jurisdiction.

SECTION 6. COLLECTION AND ADMINISTRATION

6.1 Borrowers’ Loan Accounts. Agent, for and on behalf of Lenders, shall
maintain one or more loan account(s) on its books in which shall be recorded
(a) all Revolving Loans, Letter of Credit Accommodations and other Obligations
and the Collateral, (b) all payments made by or on behalf of Borrowers and
(c) all other appropriate debits and credits as provided in this Agreement,
including, without limitation, fees, charges, costs, expenses and interest. All
entries in the loan account(s) shall be made in accordance with Agent’s
customary practices as in effect from time to time.

6.2 Statements. Agent shall render to Borrower Agent, as agent for Borrowers,
each month a statement setting forth the balance in Borrowers’ loan account(s)
maintained by Agent for Borrowers pursuant to the provisions of this Agreement,
including principal, interest, fees, costs and expenses. Each such statement
shall be subject to subsequent adjustment by Agent but shall, absent manifest
errors or omissions, be considered correct and deemed accepted by Borrowers and
Guarantors and conclusively binding upon Borrowers and Guarantors as an account
stated except to the extent that Agent receives a written notice from Borrower
Agent of any specific exceptions of Borrower Agent thereto within sixty
(60) days after the date such statement has been received by Borrower Agent.
Until such time as Agent shall have rendered to any Borrower or Borrower Agent,
a written statement as provided above, the balance in a Borrower’s loan
account(s) shall be presumptive evidence of the amounts due and owing to Agent
by Borrowers.

 

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6.3 Collection of Accounts.

(a) Each Borrower and Guarantor shall establish and maintain, at its expense,
deposit account arrangements and merchant payment arrangements with the banks
set forth on Schedule 8.10 to the Information Certificate and subject to
Section 5.2(d) hereof such other banks as such Borrower or Guarantor may
hereafter select. The banks set forth on Schedule 8.10 to the Information
Certificate constitute all of the banks with which Borrowers and Guarantors have
deposit account arrangements and merchant payment arrangements as of the date
hereof and identifies each of the deposit accounts at such banks that are used
solely for receiving store receipts from a retail store location of a Borrower
(together with any other deposit accounts at any time established or used by any
Borrower for receiving such store receipts from any retail store location,
collectively, the “Store Accounts” and each individually, a “Store Account”) or
otherwise describes the nature of the use of such deposit account by such
Borrower.

(i) Each Borrower shall deposit all proceeds from sales of Inventory in every
form, including, without limitation, cash, checks, credit card sales drafts,
credit card sales or charge slips or receipts and other forms of daily store
receipts, from each retail store location of such Borrower on each Business Day
into the Store Account of such Borrower used solely for such purpose. All such
funds deposited into the Store Accounts shall be sent by wire transfer or other
electronic funds transfer no less frequently than weekly or more frequently upon
Agent’s request at any time that an Event of Default exists or has occurred and
is continuing to the Blocked Accounts as provided in Section 6.3(a)(ii) below,
except nominal amounts which are required to be maintained in such Store
Accounts under the terms of such Borrower’s arrangements with the bank at which
such Store Accounts are maintained, which nominal amounts shall not exceed
$5,000 as to any individual Store Account at any time.

(ii) Each Borrower shall establish and maintain, at its expense, deposit
accounts with such banks as are reasonably acceptable to Agent (the “Blocked
Accounts”) into which each Borrower shall promptly either cause all amounts on
deposit in the Store Accounts of such Borrower to be sent as provided in
Section 6.3(a)(i) above or shall itself deposit or cause to be deposited all
proceeds from sales of Inventory, all amounts payable to each Borrower from
Credit Card Issuers and Credit Card Processors and all other proceeds of
Collateral. Borrowers and Guarantors shall deliver, or cause to be delivered to
Agent a Deposit Account Control Agreement duly authorized, executed and
delivered by each bank where a Blocked Account is maintained as provided in
Section 5.2 hereof or at any time and from time to time Agent may become the
bank’s customer with respect to any of the Blocked Accounts and promptly upon
Agent’s request, Borrowers shall execute and deliver such agreements and
documents as Agent may reasonably require in connection therewith. Each Borrower
and Guarantor agrees that all payments made to such Blocked Accounts or other
funds received and collected by Agent or any Lender, whether in respect of the
Receivables, as proceeds of Inventory or other Collateral or otherwise shall be
treated as payments to Agent, for the benefit of Lenders, in respect of the
Obligations and therefore shall constitute the property of Agent and Lenders to
the extent of the then outstanding Obligations.

(b) For purposes of calculating the amount of the Revolving Loans available to
each Borrower and for purposes of calculating interest on the Obligations, such
payments will be applied (conditional upon final collection) to the Obligations
on the Business Day of receipt by

 

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Agent of immediately available funds in the Agent Payment Account provided such
payments and notice thereof are received in accordance with Agent’s usual and
customary practices as in effect from time to time and within sufficient time to
credit such Borrower’s loan account on such day, and if not, then on the next
Business Day.

(c) Each Borrower and Guarantor and their respective shareholders, directors,
employees, agents, Subsidiaries or other Affiliates shall, acting as trustee for
Agent, receive, as the property of Agent, any monies, checks, notes, drafts or
any other payment relating to and/or proceeds of Receivables or other Collateral
which come into their possession or under their control and immediately upon
receipt thereof, shall deposit or cause the same to be deposited in the Blocked
Accounts, or remit the same or cause the same to be remitted, in kind, to Agent.
In no event shall the same be commingled with a Borrower’s own funds. Each
Borrower agrees to reimburse Agent and Lenders on demand for any amounts owed or
paid to any bank at which a Blocked Account is established or any other bank or
person involved in the transfer of funds to or from the Blocked Accounts arising
out of the payments by Agent or any Lender to or indemnification of such bank or
person in connection with such Blocked Account or any amounts received therein
or transferred therefrom. The obligation of Borrowers to reimburse Agent and
Lenders for such amounts pursuant to this Section 6.3 shall survive the
termination or non-renewal of this Agreement.

(d) On or before April 30, 2005, (i) Borrowers and Guarantors shall use
reasonable efforts to execute and deliver, and cause to be executed and
delivered to, Agent the Deposit Account Control Agreements by and among Agent,
each Borrower and Guarantor, as the case may be, and Wachovia Bank, National
Association as to any deposit account of a Borrower or Guarantor maintained at
such bank and (ii) Borrowers and Guarantors shall execute and deliver, and cause
to be executed and delivered to Agent, the Deposit Account Control Agreements or
Investment Property Control Agreements by and among Agent, each Borrower and
Guarantor, as the case may be, at each other bank or other institution where
such Borrower (or Guarantor) has a deposit account or investment account for
which it is required to obtain a Deposit Account Control Agreement pursuant to
Section 6.3 hereof or an Investment Property Control Agreement pursuant to
Section 5.2(e) or otherwise, in each case, duly authorized, executed and
delivered by such bank and Borrower or Guarantor, as the case may be.

6.4 Payments.

(a) All Obligations shall be payable to the Agent Payment Account as provided in
Section 6.3 or such other place as Agent may designate from time to time. Agent
shall apply payments received or collected from any Borrower or Guarantor or for
the account of any Borrower or Guarantor (including the monetary proceeds of
collections or of realization upon any Collateral) as follows: first, to pay any
fees, indemnities or expense reimbursements then due to Agent and Lenders from
any Borrower or Guarantor; second, to pay interest due in respect of any
Revolving Loans (and including any Special Agent Advances); third, to pay or
prepay principal in respect of Special Agent Advances; fourth, to pay principal
due in respect of the Revolving Loans and to pay any Obligations then due
arising under or pursuant to any Hedge Agreements of a Borrower or Guarantor
with Agent, any Lender, any Affiliate of any Lender or any other financial
institution acceptable to Agent (up to the amount of any then effective Reserve
established in respect of such Obligations), on a pro rata basis; fifth, to pay
or prepay

 

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any other Obligations consisting of Revolving Loans, whether or not then due,
and any other Obligations then due, in each case in such order and manner as
Agent determines or on and after an Event of Default, to be held as cash
collateral in connection with any Letter of Credit Accommodations or other
contingent Obligations (but not including for this purpose any Obligations
arising under or pursuant to any Hedge Agreements) and sixth, to pay any
Obligations then due arising under or pursuant to Hedge Agreements (other than
to the extent provided for above) on a pro rata basis. Notwithstanding anything
to the contrary contained in this Agreement, (i) unless so directed by Borrower
Agent, or unless a Default or an Event of Default shall exist or have occurred
and be continuing, Agent shall not apply any payments which it receives to any
Eurodollar Rate Loans, except (A) on the expiration date of the Interest Period
applicable to any such Eurodollar Rate Loans or (B) in the event that there are
no outstanding Prime Rate Loans and (ii) to the extent any Borrower uses any
proceeds of the Revolving Loans or Letter of Credit Accommodations to acquire
rights in or the use of any Collateral or to repay any Indebtedness used to
acquire rights in or the use of any Collateral, payments in respect of the
Obligations shall be deemed applied first to the Obligations arising from
Revolving Loans and Letter of Credit Accommodations that were not used for such
purposes and second to the Obligations arising from Revolving Loans and Letter
of Credit Accommodations the proceeds of which were used to acquire rights in or
the use of any Collateral in the chronological order in which such Borrower
acquired such rights in or the use of such Collateral. So long as no Event of
Default shall exist or have occurred and be continuing and there is Excess
Availability after giving effect thereto, amounts received by Agent from
Borrowers pursuant to this Section 6.4(a) that are not applied to the
Obligations in accordance herewith shall, at the request of Borrower Agent
received by Agent on or before 12:00 noon New York City time on any Business
Day, be remitted to Borrower Agent or any Borrower as Agent may direct.

(b) At Agent’s option, all principal, interest, fees, costs, expenses and other
charges provided for in this Agreement or the other Financing Agreements may be
charged directly to the loan account(s) of any Borrower maintained by Agent.

(c) Except as otherwise required by law, any and all payments by or on behalf of
any Borrower or Guarantor hereunder and under any other Financing Agreement
shall be made, in accordance with Section 6.4 hereof, free and clear of and
without deduction for any and all Indemnified Taxes. In addition, Borrowers
agree to pay to the relevant Governmental Authority in accordance with
applicable law any Other Taxes.

(d) If any Borrower or Guarantor shall be required by law to deduct or withhold
in respect of any Indemnified Taxes or Other Taxes from or in respect of any sum
payable hereunder to Agent or any Lender, then:

(i) the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section) such Lender (or Agent
on behalf of such Lender) receives an amount equal to the sum it would have
received had no such deductions or withholdings been made;

 

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(ii) such Borrower or Guarantor shall make such deductions and withholdings;

(iii) such Borrower or Guarantor shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and

(iv) to the extent not paid to Agent and Lenders pursuant to clause (i) above,
such Borrower or Guarantor shall also pay to Agent or any Lender, at the time
interest is paid, all additional amounts which Agent or any Lender specifies as
necessary to preserve the after-tax yield such Lender would have received if
such Indemnified Taxes or Other Taxes had not been imposed.

(e) Within thirty (30) days after the date of any payment by any Borrower or
Guarantor of Indemnified Taxes or Other Taxes, upon Agent’s request, such
Borrower or Guarantor shall furnish to Agent the original or a certified copy of
a receipt evidencing payment thereof, or other evidence of payment reasonably
satisfactory to Agent.

(f) Borrowers will indemnify Agent and each Lender (or Transferee) for the full
amount of Indemnified Taxes and Other Taxes paid by Agent or such Lender (or
Transferee, as the case may be). If Agent or such Lender (or Transferee)
receives a refund in respect of any Indemnified Taxes or Other Taxes for which
Lender (or Transferee) has received payment from any Borrower or Guarantor
hereunder, so long as no Default or Event of Default shall exist or have
occurred and be continuing, Agent or such Lender (as the case may be) shall
credit to the loan account of Borrowers the amount of such refund plus any
interest received (but only to the extent of indemnity payments made, or
additional amounts paid, by Borrowers or Guarantors under this Section 6.4 with
respect to the Indemnified Taxes or Other Taxes giving rise to such refund). If
a Lender (or any Transferee) claims a tax credit in respect of any Indemnified
Taxes or Other Taxes for which it has been indemnified by Borrowers or
Guarantors pursuant to this Section 6.4, such Lender will apply the amount of
the actual dollar benefit received by such Lender as a result thereof, as
reasonably calculated by Lender and net of all expenses related thereto, to the
Revolving Loans. If Indemnified Taxes or Other Taxes were not correctly or
legally asserted, Agent or such Lender shall, upon Borrower Agent’s request and
at Borrowers’ expense, provide such documents to Borrower Agent in form and
substance reasonably satisfactory to both Borrower Agent and Agent, as Borrower
Agent may reasonably request, to enable Borrowers to contest such Indemnified
Taxes or Other Taxes pursuant to appropriate proceedings then available to such
Borrower (so long as providing such documents shall not, in the good faith
determination of Agent, have a reasonable likelihood of resulting in any
liability of Agent or any Lender).

(g) If after receipt of any payment of, or proceeds of Collateral applied to the
payment of, any of the Obligations, Agent or any Lender is required to surrender
or return such payment or proceeds to any Person for any reason, then the
Obligations intended to be satisfied by such payment or proceeds shall be
reinstated and continue and this Agreement shall continue in full force and
effect as if such payment or proceeds had not been received by Agent or such
Lender. Borrowers and Guarantors shall be liable to pay to Agent, and do hereby
indemnify and hold Agent and Lenders harmless for the amount of any payments or
proceeds surrendered or

 

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returned. This Section 6.4(g) shall remain effective notwithstanding any
contrary action which may be taken by Agent or any Lender in reliance upon such
payment or proceeds. This Section 6.4 shall survive the payment of the
Obligations and the termination of this Agreement.

(h) Each Foreign Lender, on or prior to the date of its execution and delivery
of this Agreement, or on or prior to the date on which it first becomes a Lender
in the case of each Transferee, and from time to time thereafter if requested in
writing by Borrower Agent or the Agent, shall provide Borrower Agent and Agent
with (i) two duly completed copies of Internal Revenue Service Form W-8BEN, or
any successor form prescribed by the Internal Revenue Service, certifying that
such Foreign Lender is entitled to benefits under any income tax treaty to which
the United States is a party which reduces to zero the rate of withholding tax
on payments of interest, or (ii) two duly completed copies of Internal Revenue
Service Form W-8ECI, or any successor form prescribed by the Internal Revenue
Service, certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States. Each Foreign Lender (or Transferee) also agrees to deliver to Borrower
Agent and Agent two further copies of Form W-8BEN or W-8ECI or successor
applicable forms on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event (including, without limitation, a
change in such Foreign Lender’s (or Transferee’s) lending office) requiring a
change in the most recent form previously delivered by it to Borrower Agent and
Agent, and to obtain such extensions of the time for filing and to renew such
forms as may reasonably be requested by Borrower Agent or Agent. Notwithstanding
the foregoing provisions of this Section 6.4(h), no Foreign Lender (or
Transferee) shall be required to deliver or provide any form pursuant to this
Section 6.4 if such Foreign Lender (or Transferee) is not then legally able to
do so as a result of a Change in Law that occurs following the date such Foreign
Lender (or Transferee) becomes a party hereto. From time to time if requested in
writing by Borrower Agent, Agent shall provide Borrower Agent with Internal
Revenue Service Form W-8ECI, or any successor form prescribed by the Internal
Revenue Service, certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States. Each Lender or Transferee that is a “United States person, “
as defined under Section 7701(a)(30) of the Code, and that is not a corporation,
agrees that it will deliver to Borrower Agent and Agent a Form W-9 stating that
it is entitled to an exemption from United States backup withholding tax.

6.5 Authorization to Make Revolving Loans. Agent and Lenders are authorized to
make the Loans and provide the Letter of Credit Accommodations based upon
telephonic or other instructions received from anyone purporting to be an
officer of Borrower Agent or any Borrower or other authorized person or, at the
discretion of Agent, if such Loans are necessary to satisfy any Obligations. All
requests for Revolving Loans or Letter of Credit Accommodations hereunder shall
specify the date on which the requested advance is to be made or Letter of
Credit Accommodations established (which day shall be a Business Day) and the
amount of the requested Revolving Loan. Requests received after 12:00 noon New
York City time on any day shall be deemed to have been made as of the opening of
business on the immediately following Business Day. All Revolving Loans and
Letter of Credit Accommodations under this Agreement shall be conclusively
presumed to have been made to, and at the request of and for the benefit of, any
Borrower or Guarantor when deposited to the credit of any Borrower or Guarantor
or otherwise disbursed or established in accordance with the instructions of any
Borrower or Guarantor or in accordance with the terms and conditions of this
Agreement.

 

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6.6 Use of Proceeds. All Revolving Loans made or Letter of Credit Accommodations
provided to or for the benefit of any Borrower pursuant to the provisions hereof
shall be used by such Borrower only for general operating, working capital and
other corporate purposes of such Borrower not otherwise prohibited by the terms
hereof. None of the proceeds will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security or for the purposes of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might cause any of
the Revolving Loans to be considered a “purpose credit” within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, as
amended.

6.7 Appointment of Borrower Agent as Agent for Requesting Revolving Loans and
Receipts of Revolving Loans and Statements.

(a) Each Borrower hereby irrevocably appoints and constitutes Borrower Agent as
its agent to request and receive Revolving Loans and Letter of Credit
Accommodations pursuant to this Agreement and the other Financing Agreements
from Agent or any Lender in the name or on behalf of such Borrower. Agent and
Lenders may disburse the Loans to such bank account of Borrower Agent or a
Borrower or otherwise make such Loans to a Borrower and provide such Letter of
Credit Accommodations to a Borrower as Borrower Agent may designate or direct,
without notice to any other Borrower or Obligor. Notwithstanding anything to the
contrary contained herein, Agent may at any time and from time to time require
that Loans to or for the account of any Borrower be disbursed directly to an
operating account of such Borrower.

(b) Borrower Agent hereby accepts the appointment by Borrowers to act as the
agent of Borrowers pursuant to this Section 6.7.

(c) Borrower Agent shall ensure that the disbursement of any Revolving Loans to
each Borrower requested by or paid to or for the account of Parent, or the
issuance of any Letter of Credit Accommodations for a Borrower hereunder, shall
be paid to or for the account of such Borrower.

(d) Each Borrower and other Guarantor hereby irrevocably appoints and
constitutes Borrower Agent as its agent to receive statements on account and all
other notices from Agent and Lenders with respect to the Obligations or
otherwise under or in connection with this Agreement and the other Financing
Agreements.

(e) Any notice, election, representation, warranty, agreement or undertaking by
or on behalf of any other Borrower or any Guarantor by Borrower Agent shall be
deemed for all purposes to have been made by such Borrower or Guarantor, as the
case may be, and shall be binding upon and enforceable against such Borrower or
Guarantor to the same extent as if made directly by such Borrower of Guarantor.

(f) No purported termination of the appointment of Borrower Agent as agent as
aforesaid shall be effective, except after ten (10) days’ prior written notice
to Agent.

6.8 Pro Rata Treatment. Except to the extent otherwise provided in this
Agreement: (a) the making and conversion of Revolving Loans shall be made among
the Lenders based on their respective Pro Rata Shares as to the Revolving Loans
and (b) each payment on account of any Obligations to or for the account of one
or more of Lenders in respect of any Obligations due on a particular day shall
be allocated among the Lenders entitled to such payments based on their
respective Pro Rata Shares and shall be distributed accordingly.

 

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6.9 Sharing of Payments, Etc.

(a) Each Borrower and Guarantor agrees that, in addition to (and without
limitation of) any right of setoff, banker’s lien or counterclaim Agent or any
Lender may otherwise have, each Lender shall be entitled, at its option (but
subject, as among Agent and Lenders, to the provisions of Section 12.3(b)
hereof), to offset balances held by it for the account of such Borrower or
Guarantor at any of its offices, in dollars or in any other currency, against
any principal of or interest on any Revolving Loans owed to such Lender or any
other amount payable to such Lender hereunder, that is not paid when due
(regardless of whether such balances are then due to such Borrower or
Guarantor), in which case it shall promptly notify Borrower Agent and Agent
thereof; provided, that, such Lender’s failure to give such notice shall not
affect the validity thereof.

(b) If any Lender (including Agent) shall obtain from any Borrower or Guarantor
payment of any principal of or interest on any Revolving Loan owing to it or
payment of any other amount under this Agreement or any of the other Financing
Agreements through the exercise of any right of setoff, banker’s lien or
counterclaim or similar right or otherwise (other than from Agent as provided
herein), and, as a result of such payment, such Lender shall have received more
than its Pro Rata Share of the principal of the Revolving Loans or more than its
share of such other amounts then due hereunder or thereunder by any Borrower or
Guarantor to such Lender than the percentage thereof received by any other
Lender, it shall promptly pay to Agent, for the benefit of Lenders, the amount
of such excess and simultaneously purchase from such other Lenders a
participation in the Loans or such other amounts, respectively, owing to such
other Lenders (or such interest due thereon, as the case may be) in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all Lenders shall share the benefit of such excess
payment (net of any expenses that may be incurred by such Lender in obtaining or
preserving such excess payment) in accordance with their respective Pro Rata
Shares or as otherwise agreed by Lenders. To such end all Lenders shall make
appropriate adjustments among themselves (by the resale of participation sold or
otherwise) if such payment is rescinded or must otherwise be restored.

(c) Each Borrower and Guarantor agrees that any Lender purchasing a
participation (or direct interest) as provided in this Section may exercise, in
a manner consistent with this Section, all rights of setoff, banker’s lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender were a direct holder of Revolving Loans or other amounts (as the
case may be) owing to such Lender in the amount of such participation.

(d) Nothing contained herein shall require any Lender to exercise any right of
setoff, banker’s lien, counterclaims or similar rights or shall affect the right
of any Lender to exercise, and retain the benefits of exercising, any such right
with respect to any other Indebtedness or obligation of any Borrower or
Guarantor. If, under any applicable bankruptcy, insolvency or other similar law,
any Lender receives a secured claim in lieu of a setoff to which this Section
applies, such Lender shall, to the extent practicable, assign such rights to
Agent for the benefit of Lenders and, in any event, exercise its rights in
respect of such secured claim in a manner consistent with the rights of Lenders
entitled under this Section to share in the benefits of any recovery on such
secured claim.

 

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6.10 Settlement Procedures.

(a) In order to administer the Credit Facility in an efficient manner and to
minimize the transfer of funds between Agent and Lenders, Agent may, at its
option, subject to the terms hereof, make available, on behalf of Lenders, the
full amount of the Revolving Loans requested or charged to any Borrower’s loan
account(s) or otherwise to be advanced by Lenders pursuant to the terms hereof,
without requirement of prior notice to Lenders of the proposed Loans.

(b) With respect to all Loans made by Agent on behalf of Lenders as provided in
this Section, the amount of each Lender’s Pro Rata Share of the outstanding
Loans shall be computed weekly, and shall be adjusted upward or downward on the
basis of the amount of the outstanding Loans as of 5:00 p.m. New York City time
on the Business Day immediately preceding the date of each settlement
computation; provided, that, Agent retains the absolute right at any time or
from time to time to make the above described adjustments at intervals more
frequent than weekly, but in no event more than twice in any week. Agent shall
deliver to each of the Lenders after the end of each week, or at such lesser
period or periods as Agent shall determine, a summary statement of the amount of
outstanding Loans for such period (such week or lesser period or periods being
hereinafter referred to as a “Settlement Period”). If the summary statement is
sent by Agent and received by a Lender prior to 12:00 p.m. New York City time,
then such Lender shall make the settlement transfer described in this Section by
no later than 3:00 p.m. New York City time on the same Business Day and if
received by a Lender after 12:00 p.m. New York City time, then such Lender shall
make the settlement transfer by not later than 3:00 p.m. New York City time on
the next Business Day following the date of receipt. If, as of the end of any
Settlement Period, the amount of a Lender’s Pro Rata Share of the outstanding
Revolving Loans is more than such Lender’s Pro Rata Share of the outstanding
Loans as of the end of the previous Settlement Period, then such Lender shall
forthwith (but in no event later than the time set forth in the preceding
sentence) transfer to Agent by wire transfer in immediately available funds the
amount of the increase. Alternatively, if the amount of a Lender’s Pro Rata
Share of the outstanding Revolving Loans in any Settlement Period is less than
the amount of such Lender’s Pro Rata Share of the outstanding Loans for the
previous Settlement Period, Agent shall forthwith transfer to such Lender by
wire transfer in immediately available funds the amount of the decrease. The
obligation of each of the Lenders to transfer such funds and effect such
settlement shall be irrevocable and unconditional and without recourse to or
warranty by Agent. Agent and each Lender agrees to mark its books and records at
the end of each Settlement Period to show at all times the dollar amount of its
Pro Rata Share of the outstanding Revolving Loans and Letter of Credit
Accommodations. Each Lender shall only be entitled to receive interest on its
Pro Rata Share of the Revolving Loans to the extent such Loans have been funded
by such Lender. Because the Agent on behalf of Lenders may be advancing and/or
may be repaid Loans prior to the time when Lenders will actually advance and/or
be repaid such Revolving Loans, interest with respect to Revolving Loans shall
be allocated by Agent in accordance with the amount of Revolving Loans actually
advanced by and repaid to each Lender and the Agent and shall accrue from and
including the date such Revolving Loans are so advanced to but excluding the
date such Revolving Loans are either repaid by Borrowers or actually settled
with the applicable Lender as described in this Section.

 

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(c) To the extent that Agent has made any such amounts available and the
settlement described above shall not yet have occurred, upon repayment of any
Revolving Loans by Borrowers, Agent may apply such amounts repaid directly to
any amounts made available by Agent pursuant to this Section. In lieu of weekly
or more frequent settlements, Agent may, at its option, at any time require each
Lender to provide Agent with immediately available funds representing its Pro
Rata Share of each Revolving Loan, prior to Agent’s disbursement of such
Revolving Loan to Borrowers. In such event, all Revolving Loans under this
Agreement shall be made by the Lenders simultaneously and proportionately to
their Pro Rata Shares. No Lender shall be responsible for any default by any
other Lender in the other Lender’s obligation to make a Revolving Loan requested
hereunder nor shall the Commitment of any Lender be increased or decreased as a
result of the default by any other Lender in the other Lender’s obligation to
make a Revolving Loan hereunder.

(d) If Agent is not funding a particular Revolving Loan to Borrowers (or
Borrower Agent for the benefit of Borrowers) pursuant to this Section on any
day, Agent may assume that each Lender will make available to Agent such
Lender’s Pro Rata Share of the Revolving Loan requested or otherwise made on
such day and Agent may, in its discretion, but shall not be obligated to, cause
a corresponding amount to be made available to or for the benefit of such
Borrower on such day. If Agent makes such corresponding amount available to a
Borrower and such corresponding amount is not in fact made available to Agent by
such Lender, Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon for each day from the
date such payment was due until the date such amount is paid to Agent at the
Federal Funds Rate for each day during such period (as published by the Federal
Reserve Bank of New York or at Agent’s option based on the arithmetic mean
determined by Agent of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York City time) on that day by each of
the three leading brokers of Federal funds transactions in New York City
selected by Agent) and if such amounts are not paid within three (3) days of
Agent’s demand, at the highest Interest Rate provided for in Section 3.1 hereof
applicable to Prime Rate Loans. During the period in which such Lender has not
paid such corresponding amount to Agent, notwithstanding anything to the
contrary contained in this Agreement or any of the other Financing Agreements,
the amount so advanced by Agent to or for the benefit of any Borrower shall, for
all purposes hereof, be a Loan made by Agent for its own account. Upon any such
failure by a Lender to pay Agent, Agent shall promptly thereafter notify
Borrower Agent of such failure and Borrowers shall pay such corresponding amount
to Agent for its own account within five (5) Business Days of Borrower Agent’s
receipt of such notice. A Lender who fails to pay Agent its Pro Rata Share of
any Loans made available by the Agent on such Lender’s behalf, or any Lender who
fails to pay any other amount owing by it to Agent, is a “Defaulting Lender”.
Agent shall not be obligated to transfer to a Defaulting Lender any payments
received by Agent for the Defaulting Lender’s benefit, nor shall a Defaulting
Lender be entitled to the sharing of any payments hereunder (including any
principal, interest or fees). Amounts payable to a Defaulting Lender shall
instead be paid to or retained by Agent. Agent may hold and, in its discretion,
relend to a Borrower the amount of all such payments received or retained by it
for the account of such Defaulting Lender. For purposes of voting or consenting
to matters with respect to this Agreement and the other

 

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Financing Agreements and determining Pro Rata Shares, such Defaulting Lender
shall be deemed not to be a “Lender” and such Lender’s Commitment shall be
deemed to be zero (0). This Section shall remain effective with respect to a
Defaulting Lender until such default is cured. The operation of this Section
shall not be construed to increase or otherwise affect the Commitment of any
Lender, or relieve or excuse the performance by any Borrower or Obligor of their
duties and obligations hereunder.

(e) Nothing in this Section or elsewhere in this Agreement or the other
Financing Agreements shall be deemed to require Agent to advance funds on behalf
of any Lender or to relieve any Lender from its obligation to fulfill its
Commitment hereunder or to prejudice any rights that any Borrower may have
against any Lender as a result of any default by any Lender hereunder in
fulfilling its Commitment.

6.11 Obligations Several; Independent Nature of Lenders’ Rights. The obligation
of each Lender hereunder is several, and no Lender shall be responsible for the
obligation or commitment of any other Lender hereunder. Nothing contained in
this Agreement or any of the other Financing Agreements and no action taken by
the Lenders pursuant hereto or thereto shall be deemed to constitute the Lenders
to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and subject to Section 12.3 hereof, each Lender
shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.

SECTION 7. COLLATERAL REPORTING AND COVENANTS

7.1 Collateral Reporting.

(a) Borrowers, or Borrower Agent on behalf of Borrowers, shall provide Agent
with the following documents in a form reasonably satisfactory to Agent:

(i) as soon as possible after the end of each month (but in any event within ten
(10) Business Days after the end thereof) so long as no Default or Event of
Default exists and Excess Availability shall be greater than $20,000,000 (and
more frequently as Agent may require at any time a Default or Event of Default
exists or Excess Availability is less than $20,000,000), a Borrowing Base
Certificate setting forth the calculation of the Borrowing Base as of the last
Business Day of the immediately preceding period as to the Accounts and
Inventory, duly completed and executed by the chief financial officer, vice
president of finance, treasurer or controller of Borrower Agent, together with
all schedules required pursuant to the terms of the Borrowing Base Certificate
duly completed, including but not limited to (A) a monthly aging of Credit Card
Receivables identifying those outstanding more than five (5) Business Days since
the sale date giving rise thereto and (B) an inventory summary report by
category (consisting of retail, factory outlet and direct inventory (and upon
Agent’s request, letter of credit inventory) and identifying in the case of each
of retail, factory outlet and direct, the applicable store and warehouse where
such Inventory is located;

 

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(ii) as soon as possible after the end of each month (but in any event within
ten (10) Business Days after the end thereof), on a monthly basis or more
frequently as Agent may request, (A) perpetual inventory reports by location and
category (and including the amounts of Inventory and the value thereof at any
leased locations and at premises of warehouses, processors or other third
parties), (B) list of outstanding accounts payable (and including information
indicating the amounts owing to owners and lessors of leased premises,
warehouses, fulfillment centers, processors and other third parties from time to
time in possession of any Collateral), and (C) reports on sales and use tax
collections, deposits and payments, including monthly sales and use tax
accruals;

(iii) as soon as possible after the end of each month (but in any event ten
(10) Business Days after the end thereof), in each case certified by the chief
financial officer or controller of Borrowers or Borrower Agent as true and
correct: (A) a statement confirming the payment of rent and other amounts due to
owners and lessors of real property used by Borrower in the immediately
preceding month, subject to year-end or monthly percentage rent payment
adjustments, (B) the addresses of all new retail store locations (including
factory store locations) of Borrowers and Guarantors opened and existing retail
store locations (including factory store locations) closed or sold, in each case
since the date of the most recent certificate delivered to Agent containing the
information required under this clause, and (C) a report of any new deposit
account established or used by any Borrower or Guarantor with any bank or other
financial institution, including the Borrower or Guarantor in whose name the
account is maintained, the account number, the name and address of the financial
institution at which such account is maintained, the purpose of such account
and, if any, the amount held in such account on or about the date of such
report;

(iv) upon Agent’s request, (A) reports of sales for each category of Inventory,
(B) reports of aggregate Inventory purchases (including all costs related
thereto, such as freight, duty and taxes) and identifying items of Inventory in
transit to any Borrower or Guarantor related to the applicable documentary
letter of credit and/or bill of lading number, (C) copies of remittance advices
and reports, and copies of deposit slips and bank statements, (D) copies of
shipping and delivery documents, (E) copies of purchase orders, invoices and
delivery documents for Inventory and Equipment acquired by Borrowers and
Guarantor, and (F) reports by retail store location of sales and operating
profits for each such retail store location;

(v) upon Agent’s request, the monthly statements received by any Borrower or any
of its Affiliates from any Credit Card Issuers or Credit Card Processors,
together with such additional information with respect thereto as shall be
sufficient to enable Agent to monitor the transactions pursuant to the Credit
Card Agreements;

(vi) such other reports as to the Collateral as Agent shall reasonably request
from time to time.

(b) Nothing contained in any Borrowing Base Certificate shall be deemed to
limit, impair or otherwise affect the rights of Agent contained herein and in
the event of any conflict or inconsistency between the calculation of the
Borrowing Base as set forth in any Borrowing Base Certificate and as determined
by Agent in its good faith, the determination of Agent shall govern and be
conclusive and binding upon Borrowers and Guarantors, absent manifest error.
Without limiting the foregoing, Borrowers shall furnish to Agent any information
which Agent may reasonably request regarding the determination and calculation
of any of the amounts set forth in any Borrowing Base Certificate. The Borrowing
Base may be adjusted based on the information set forth in the reports received
by Agent pursuant to Section 7.1(a)(i) above.

 

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7.2 Accounts Covenants.

(a) Each Borrower shall notify Agent promptly of the assertion of (i) any
claims, offsets, defenses or counterclaims by any account debtor, Credit Card
Issuer or Credit Card Processor or any disputes with any of such persons or any
settlement, adjustment or compromise thereof, to the extent any of the foregoing
exceeds $75,000 in any one case or $200,000 in the aggregate and (ii) all
material adverse information relating to the financial condition of any account
debtor, Credit Card Issuer or Credit Card Processor. No credit, discount,
allowance or extension or agreement for any of the foregoing shall be granted to
any account debtor, Credit Card Issuer or Credit Card Processor except in the
ordinary course of a Borrower’s business in accordance with the current
practices of such Borrower as in effect on the date hereof. So long as no Event
of Default exists or has occurred and is continuing, no Borrower shall settle,
adjust or compromise any claim, offset, counterclaim or dispute with any account
debtor, Credit Card Issuer, Credit Card Processor. At any time that an Event of
Default exists or has occurred and is continuing, Agent shall, at its option,
have the exclusive right to settle, adjust or compromise any claim, offset,
counterclaim or dispute with account debtors, Credit Card Issuers or Credit Card
Processors or grant any credits, discounts or allowances.

(b) With respect to each Account: (i) no payments shall be made thereon except
payments delivered to Agent pursuant to the terms of this Agreement, (ii) there
shall be no setoffs, deductions, contras, defenses, counterclaims or disputes
existing or asserted with respect thereto except as reported to Agent in
accordance with the terms of this Agreement and (iii) none of the transactions
giving rise thereto will violate in any material respect any applicable State or
Federal Laws or regulations, all documentation relating thereto will be legally
sufficient under such laws and regulations and all such documentation will be
legally enforceable in accordance with its terms.

(c) Each Borrower shall notify Agent promptly of: (i) any notice of a material
default by such Borrower under any of the Credit Card Agreements or of any
default which has a reasonable likelihood of resulting in the Credit Card Issuer
or Credit Card Processor ceasing to make payments or suspending payments to such
Borrower, (ii) any notice from any Credit Card Issuer or Credit Card Processor
that such person is ceasing or suspending, or will cease or suspend, any present
or future payments due or to become due to such Borrower from such person, or
that such person is terminating or will terminate any of the Credit Card
Agreements, and (iii) the failure of such Borrower to comply with any material
terms of the Credit Card Agreements or any terms thereof which has a reasonable
likelihood of resulting in the Credit Card Issuer or Credit Card Processor
ceasing or suspending payments to such Borrower.

(d) Agent shall have the right at any time or times, in Agent’s name or in the
name of a nominee of Agent, to verify the validity, amount or any other matter
relating to any Receivables or other Collateral, by mail, telephone, facsimile
transmission or otherwise.

 

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7.3 Equipment and Real Property Covenants. With respect to the Inventory:
(a) each Borrower and Guarantor shall at all times maintain inventory records
reasonably satisfactory to Agent, keeping correct and accurate records itemizing
and describing the kind, type, quality and quantity of Inventory, such
Borrower’s or Guarantor’s cost therefor and daily withdrawals therefrom and
additions thereto; (b) Borrowers and Guarantors shall conduct a physical count
of the Inventory either through periodic cycle counts or wall to wall counts, so
that all Inventory is subject to such counts at least once each year, but at any
time or times as Agent may request at any time an Event of Default exists or has
occurred and is continuing, and promptly following such physical inventory
(whether through periodic cycle counts or wall to wall counts) shall supply
Agent with a report in the form and with such specificity as may be reasonably
satisfactory to Agent concerning such physical count; (c) Borrowers and
Guarantors shall not remove any Inventory from the locations set forth or
permitted herein, without the prior written consent of Agent, except for sales
of Inventory in the ordinary course of Borrowers’ business and except to move
Inventory directly from one location set forth or permitted herein to another
such location and except for Inventory shipped from the manufacturer thereof to
such Borrower or Guarantor which is in transit to the locations set forth or
permitted herein; (d) upon Agent’s request, Borrowers shall, at their expense,
no more than three (3) times in any twelve (12) month period, but at any time or
times as Agent may request at Agent’s expense, or at any time or times as Agent
may request at Borrowers’ expense at any time an Event of Default exists or has
occurred and is continuing, deliver or cause to be delivered to Agent written
reports or appraisals as to the Inventory in form, scope and methodology
acceptable to Agent and by an appraiser acceptable to Agent, addressed to Agent
and upon which Agent and Lenders are expressly permitted to rely; (e) upon
Agent’s request, Borrowers shall, at their expense, conduct through RGIS
Inventory Specialists, Inc. or another inventory counting service acceptable to
Agent, a physical count of the Inventory in form, scope and methodology
acceptable to Agent no more than two (2) times in any twelve (12) month period,
but at any time or times as Agent may request at any time an Event of Default
exists or has occurred and is continuing or at any time or times as Agent may
request in the event of test count variances in excess of the shrinkage reserve
established by any Borrower, the results of which shall be reported directly by
such inventory counting service to Agent and Borrowers shall promptly deliver
confirmation in a form satisfactory to Agent that appropriate adjustments have
been made to the inventory records of Borrowers to reconcile the inventory count
to Borrowers’ inventory records; (f) each Borrower and Guarantor shall produce,
use, store and maintain the Inventory, with all reasonable care and caution and
in accordance with applicable standards of any insurance and in conformity with
applicable laws (including the requirements of the Federal Fair Labor Standards
Act of 1938, as amended and all rules, regulations and orders related thereto);
(g) none of the Inventory or other Collateral constitutes farm products or the
proceeds thereof; (h) each Borrower and Guarantor assumes all responsibility and
liability arising from or relating to the production, use, sale or other
disposition of the Inventory; (i) Borrowers and Guarantors shall not sell
Inventory to any customer on approval, or any other basis which entitles the
customer to return or may obligate any Borrower or Guarantor to repurchase such
Inventory except for the right of return given to retail customers of such
Borrower in the ordinary course of the business of such Borrower in accordance
with the then current return policy of such Borrower; (j) Borrowers and
Guarantors shall keep the Inventory in good and marketable condition;
(k) Borrowers and Guarantors shall not, without prior written notice to Agent or
the specific identification of such Inventory in a report with respect thereto
provided by Borrower Agent to Agent pursuant to Section 7.1 (a) hereof, acquire
or accept any Inventory on consignment or approval.

 

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7.4 Equipment and Real Property Covenants. With respect to the Equipment and
Real Property subject to the Mortgages: (a) Borrowers and Guarantors shall keep
the Equipment in good order, repair, running and marketable condition (ordinary
wear and tear excepted); (b) Borrowers and Guarantors shall use the Equipment
and Real Property with all reasonable care and caution and in accordance with
applicable standards of any insurance and in material conformity with all
applicable laws; (c) the Equipment is and shall be used in the business of
Borrowers and Guarantors and not for personal, family, household or farming use;
(d) Borrowers and Guarantors shall not remove any Equipment from the locations
set forth or permitted herein, except to the extent necessary to have any
Equipment repaired or maintained in the ordinary course of its business or to
move Equipment directly from one location set forth or permitted herein to
another such location and except for the movement of motor vehicles used by or
for the benefit of such Borrower or Guarantor in the ordinary course of
business; (e) the Equipment is now and shall remain personal property and
Borrowers and Guarantors shall not permit any of the Equipment to be or become a
part of or affixed to real property; and (f) each Borrower and Guarantor assumes
all responsibility and liability arising from the use of the Equipment and Real
Property.

7.5 Power of Attorney. Each Borrower and Guarantor hereby irrevocably designates
and appoints Agent (and all persons designated by Agent) as such Borrower’s and
Guarantor’s true and lawful attorney-in-fact, and authorizes Agent, in such
Borrower’s, Guarantor’s or Agent’s name, to: (a) at any time an Event of Default
exists or has occurred and is continuing (i) demand payment on Receivables or
other Collateral, (ii) enforce payment of Receivables by legal proceedings or
otherwise, (iii) exercise all of such Borrower’s or Guarantor’s rights and
remedies to collect any Receivable or other Collateral, (iv) sell or assign any
Receivable upon such terms, for such amount and at such time or times as the
Agent deems advisable, (v) settle, adjust, compromise, extend or renew an
Account, (vi) discharge and release any Receivable, (vii) prepare, file and sign
such Borrower’s or Guarantor’s name on any proof of claim in bankruptcy or other
similar document against an account debtor or other obligor in respect of any
Receivables or other Collateral, (viii) notify the post office authorities to
change the address for delivery of remittances from account debtors or other
obligors in respect of Receivables or other proceeds of Collateral to an address
designated by Agent, and open and dispose of all mail addressed to such Borrower
or Guarantor and handle and store all mail relating to the Collateral; (ix) sign
any Borrower’s or Guarantor’s name on any verification of Receivables and
notices thereof to account debtors or any secondary obligors or other obligors
in respect thereof, and (x) do all acts and things which are necessary, in
Agent’s determination, to fulfill such Borrower’s or Guarantor’s obligations
under this Agreement and the other Financing Agreements and (b) at any time to
(i) take control in any manner of any item of payment in respect of Receivables
or constituting Collateral or otherwise received in or for deposit in the
Blocked Accounts or otherwise received by Agent or any Lender, (ii) have access
to any lockbox or postal box into which remittances from account debtors or
other obligors in respect of Receivables or other proceeds of Collateral are
sent or received, (iii) endorse such Borrower’s or Guarantor’s name upon any
items of payment in respect of Receivables or constituting Collateral or
otherwise received by Agent and any Lender and deposit the same in Agent’s
account for application to the Obligations, (iv) endorse such Borrower’s or
Guarantor’s name upon any chattel paper,

 

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document, instrument, invoice, or similar document or agreement relating to any
Receivable or any goods pertaining thereto or any other Collateral, including
any warehouse or other receipts, or bills of lading and other negotiable or
non-negotiable documents, and (v) clear Inventory the purchase of which was
financed with Letter of Credit Accommodations through U.S. Customs or foreign
export control authorities in such Borrower’s or Guarantor’s name, Agent’s name
or the name of Agent’s designee, and to sign and deliver to customs officials
powers of attorney in such Borrower’s or Guarantor’s name for such purpose, and
to complete in such Borrower’s or Guarantor’s or Agent’s name, any order, sale
or transaction, obtain the necessary documents in connection therewith and
collect the proceeds thereof. Each Borrower and Guarantor hereby releases Agent
and Lenders and their respective officers, employees and designees from any
liabilities arising from any act or acts under this power of attorney and in
furtherance thereof, whether of omission or commission, except as a result of
Agent’s or any Lender’s own gross negligence or wilful misconduct as determined
pursuant to a final non-appealable order of a court of competent jurisdiction.

7.6 Right to Cure. Agent may, at its option, upon notice to Borrower Agent,
(a) cure any default by any Borrower or Guarantor under any material agreement
with a third party that affects the Collateral, its value or the ability of
Agent to collect, sell or otherwise dispose of the Collateral or the rights and
remedies of Agent or any Lender therein or the ability of any Borrower or
Guarantor to perform its obligations hereunder or under any of the other
Financing Agreements, (b) pay or bond on appeal any judgment entered against any
Borrower or Guarantor, (c) discharge taxes, liens, security interests or other
encumbrances at any time levied on or existing with respect to the Collateral
and pay any amount, incur any expense or perform any act which, in Agent’s good
faith judgment, is necessary or appropriate to preserve, protect, insure or
maintain the Collateral and the rights of Agent and Lenders with respect
thereto. Agent may add any amounts so expended to the Obligations and charge any
Borrower’s account therefor, such amounts to be repayable by Borrowers on
demand. Agent and Lenders shall be under no obligation to effect such cure,
payment or bonding and shall not, by doing so, be deemed to have assumed any
obligation or liability of any Borrower or Guarantor. Any payment made or other
action taken by Agent or any Lender under this Section shall be without
prejudice to any right to assert an Event of Default hereunder and to proceed
accordingly.

7.7 Access to Premises. From time to time as requested by Agent, at the cost and
expense of Borrowers, (a) Agent or its designee shall have complete access to
all of each Borrower’s and Guarantor’s premises during normal business hours and
after reasonable notice to Parent, or at any time and without notice to Borrower
Agent if an Event of Default exists or has occurred and is continuing, for the
purposes of inspecting, verifying and auditing the Collateral and all of each
Borrower’s and Guarantor’s books and records, including the Records, and
(b) each Borrower and Guarantor shall promptly furnish to Agent such copies of
such books and records or extracts therefrom as Agent may reasonably request,
and Agent or any Lender or Agent’s designee may use during normal business hours
such of any Borrower’s and Guarantor’s personnel, equipment, supplies and
premises as may be reasonably necessary for the foregoing (provided, that,
Borrowers and Guarantors shall make such personnel, equipment, supplies and
premises available to Agent or its designee in such manner so as to minimize any
interference with the operations of Borrowers and Guarantors) and if an Event of
Default exists or has occurred and is continuing for the collection of
Receivables and realization of other Collateral.

 

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7.8 Intellectual Property Appraisal. At Agent’s request, no more than once in
any twelve (12) month period, but at any time or times as Agent may request at
Agent’s expense, or at any time as Agent may request at Borrowers’ expense on or
after an Event of Default, deliver or cause to be delivered to Agent written
appraisals as to the Intellectual Property by an appraiser acceptable to Agent,
in form, scope and methodology acceptable to Agent, addressed to Agent and upon
which Agent and Lenders are expressly permitted to rely.

SECTION 8. REPRESENTATIONS AND WARRANTIES

Each Borrower and Guarantor hereby represents and warrants to Agent and Lenders
the following (which shall survive the execution and delivery of this
Agreement), the truth and accuracy of which are a continuing condition of the
making of Revolving Loans and providing Letter of Credit Accommodations to
Borrowers:

8.1 Corporate or Limited Liability Company Existence, Power and Authority. Each
Borrower and Guarantor is a corporation or limited liability company duly
organized and in good standing under the laws of its state of organization and
is duly qualified as a foreign corporation or limited liability company and in
good standing in all states or other jurisdictions where the nature and extent
of the business transacted by it or the ownership of assets makes such
qualification necessary, except for those jurisdictions in which the failure to
so qualify would not have a Material Adverse Effect. The execution, delivery and
performance of this Agreement, the other Financing Agreements and the
transactions contemplated hereunder and thereunder (a) are all within each
Borrower’s and Guarantor’s corporate or limited liability company powers,
(b) have been duly authorized, (c) are not in contravention of law or the terms
of any Borrower’s or Guarantor’s certificate of incorporation, certificate of
formation, by-laws, membership agreement or other organizational documentation,
or any indenture, agreement or undertaking to which any Borrower or Guarantor is
a party or by which any Borrower or Guarantor or its property are bound and
(d) will not result in the creation or imposition of, or require or give rise to
any obligation to grant, any lien, security interest, charge or other
encumbrance upon any property of any Borrower or Guarantor. This Agreement and
the other Financing Agreements to which any Borrower or Guarantor is a party
constitute legal, valid and binding obligations of such Borrower and Guarantor
enforceable in accordance with their respective terms.

8.2 Name; State of Organization; Chief Executive Office; Collateral Locations.

(a) The exact legal name of each Borrower and Guarantor is as set forth on the
signature page of this Agreement and in the Information Certificate. No Borrower
or Guarantor has, during the past five years, been known by or used any other
corporate or fictitious name or been a party to any merger or consolidation, or
acquired all or substantially all of the assets of any Person, or acquired any
of its property or assets out of the ordinary course of business, except as set
forth in the Information Certificate.

(b) Each Borrower and Guarantor is an organization of the type and organized in
the jurisdiction set forth in the Information Certificate. The Information
Certificate accurately sets forth the organizational identification number of
each Borrower and Guarantor or accurately states that such Borrower or Guarantor
has none and accurately sets forth the federal employer identification number of
each Borrower and Guarantor.

 

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(c) The chief executive office and mailing address of each Borrower and
Guarantor and each Borrower’s and Guarantor’s Records concerning Accounts are
located only at the address identified as such in Schedule 8.2 to the
Information Certificate and its only other places of business and the only other
locations of Collateral, if any, are the addresses set forth in Schedule 8.2 to
the Information Certificate, subject to the rights of any Borrower or Guarantor
to establish new locations in accordance with Section 9.2 below. The Information
Certificate correctly identifies any of such locations which are not owned by a
Borrower or Guarantor and sets forth the owners and/or operators thereof.

8.3 Financial Statements; No Material Adverse Change. All financial statements
relating to any Borrower or Guarantor which have been or may hereafter be
delivered by any Borrower or Guarantor to Agent and Lenders have been prepared
in accordance with GAAP (except as to any interim financial statements, to the
extent such statements are subject to normal year-end adjustments and do not
include any notes) and fairly present in all material respects the financial
condition and the results of operation of such Borrower and Guarantor as at the
dates and for the periods set forth therein. Except as disclosed in any interim
financial statements furnished by Borrowers and Guarantors to Agent prior to the
date of this Agreement, there has been no act, condition or event which has had
or is reasonably likely to have a Material Adverse Effect since the date of the
most recent audited financial statements of any Borrower or Guarantor furnished
by any Borrower or Guarantor to Agent prior to the date of the Existing
Agreement.

8.4 Priority of Liens; Title to Properties. The security interests and liens
granted to Agent under this Agreement and the other Financing Agreements
constitute valid and upon the filing of a financing statement, control or
possession by Agent, as applicable, perfected first priority liens and security
interests in and upon the Collateral subject only to the liens indicated on
Schedule 8.4 to the Information Certificate and the other liens permitted under
Section 9.8 hereof, including as to priority to the extent that such liens have
priority under applicable law or as specified in Section 9.8. Each Borrower and
Guarantor has good and marketable fee simple title to or valid leasehold
interests in all of its Real Property and good, valid and merchantable title to
all of its other properties and assets subject to no liens, mortgages, pledges,
security interests, encumbrances or charges of any kind, except those granted to
Agent and such others as are specifically listed on Schedule 8.4 to the
Information Certificate or permitted under Section 9.8 hereof.

8.5 Tax Returns. Each Borrower and Guarantor has filed, or caused to be filed,
in a timely manner all tax returns, reports and declarations which are required
to be filed by it, where the failure to so file has or could reasonably be
expected to have a Material Adverse Effect. All information in such tax returns,
reports and declarations is complete and accurate in all material respects. Each
Borrower and Guarantor has paid or caused to be paid all material Taxes due and
payable or claimed due and payable in any assessment received by it, except
taxes the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to such Borrower or Guarantor and
with respect to which adequate reserves have been set aside on its books.
Adequate provision has been made for the payment of all accrued and unpaid
Federal, State, county, local, foreign and other Taxes whether or not yet due
and payable and whether or not disputed.

 

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8.6 Litigation. Except as set forth on Schedule 8.6 to the Information
Certificate, (a) there is no investigation by any Governmental Authority
pending, or to the best of any Borrower’s or Guarantor’s knowledge threatened,
against or affecting any Borrower or Guarantor, its or their assets or business
and (b) there is no action, suit, proceeding or claim by any Person pending, or
to the best of any Borrower’s or Guarantor’s knowledge threatened, against any
Borrower or Guarantor or its or their assets or goodwill, or against or
affecting any transactions contemplated by this Agreement, in each case, which
has a reasonable possibility of being adversely determined and which, if
adversely determined against such Borrower or Guarantor, has or could reasonably
be expected to have a Material Adverse Effect.

8.7 Compliance with Other Agreements and Applicable Laws. To Borrowers’ and
Guarantors’ knowledge, no Borrower or Guarantor is in default in any respect
under, or in violation in any respect of any of the terms of, any material
agreement, contract, instrument, lease or other commitment to which it is a
party or by which it or any of its assets are bound where such default or
violation has or could reasonably be expected to have a Material Adverse Effect.
To Borrowers’ and Guarantors’ knowledge, each Borrower is in compliance with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority relating to its business, including, without limitation,
those set forth in or promulgated pursuant to the Occupational Safety and Health
Act of 1970, as amended, the Fair Labor Standards Act of 1938, as amended,
ERISA, the Code, as amended, and the rules and regulations thereunder, all
Federal, State and local statutes, regulations, rules and orders relating to
consumer credit (including, without limitation, as each has been amended, the
Truth-in-Lending Act, the Fair Credit Billing Act, the Equal Credit Opportunity
Act and the Fair Credit Reporting Act, and regulations, rules and orders
promulgated thereunder), all Federal, State and local states, regulations, rules
and orders pertaining to sales of consumer goods (including, without limitation,
the Consumer Products Safety Act of 1972, as amended, and the Federal Trade
Commission Act of 1914, as amended, and all regulations, rules and orders
promulgated thereunder) where the failure to so comply has or could reasonably
be expected to have a Material Adverse Effect.

8.8 Environmental Compliance.

(a) Except as set forth on Schedule 8.8 to the Information Certificate,
Borrowers, Guarantors and any Subsidiary of any Borrower or Guarantor have not
generated, used, stored, treated, transported, manufactured, handled, produced
or disposed of any Hazardous Materials, on or off its premises (whether or not
owned by it) in any manner which at any time violates any applicable
Environmental Law or Permit that is required under any applicable Environmental
Laws where such violation has or could reasonably be expected to have a Material
Adverse Effect, and the operations of Borrowers, Guarantors and any Subsidiary
of any Borrower or Guarantor complies with all Environmental Laws and all
Permits that are required under any applicable Environmental Law where the
failure to so comply has or could reasonably be expected to have a Material
Adverse Effect.

(b) Except as set forth on Schedule 8.8 to the Information Certificate, there
has been no investigation by any Governmental Authority or any proceeding,
complaint, order, directive, claim, citation or notice by any Governmental
Authority or any other person nor is any pending or to any Borrower’s or
Guarantor’ s knowledge threatened, with respect to any non-compliance

 

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with or violation of the requirements of any Environmental Law by any Borrower
or Guarantor and any Subsidiary of any Borrower or Guarantor or the release,
spill or discharge, threatened or actual, of any Hazardous Material or the
generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Materials or any other environmental,
health or safety matter, which has or could reasonably be expected to have a
Material Adverse Effect.

(c) Except as set forth on Schedule 8.8 to the Information Certificate,
Borrowers, Guarantors and their Subsidiaries have no liability (contingent or
otherwise) in connection with a release, spill or discharge, threatened or
actual, of any Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials, which has had or could reasonably be expected to have a Material
Adverse Effect.

(d) Borrowers, Guarantors and their Subsidiaries have all Permits required to be
obtained or filed in connection with the operations of Borrowers and Guarantors
under any Environmental Law and all of such licenses, certificates, approvals or
similar authorizations and other Permits are valid and in full force and effect,
where failure to have obtained or filed such could reasonably be expected to
have a Material Adverse Effect.

8.9 Credit Card Agreements. Set forth in Schedule 8.9 hereto is a correct and
complete list of all of the Credit Card Agreements and all other agreements,
documents and instruments existing as of the date hereof between or among any
Borrower, any of its Affiliates, the Credit Card Issuers, the Credit Card
Processors and any of their Affiliates. The Credit Card Agreements constitute
all of such agreements necessary for each Borrower to operate its business as
presently conducted with respect to credit cards and debit cards and no
Receivables of any Borrower arise from purchases by customers of Inventory with
credit cards or debit cards, other than those which are issued by Credit Card
Issuers with whom such Borrower has entered into one of the Credit Card
Agreements set forth on Schedule 8.9 hereto or with whom Borrower has entered
into a Credit Card Agreement in accordance with Section 9.16 hereof. Each of the
Credit Card Agreements constitutes the legal, valid and binding obligations of
the Borrower that is party thereto and to the best of each Borrower’s and
Guarantor’s knowledge, the other parties thereto, enforceable in accordance with
their respective terms and is in full force and effect. No material default or
material event of default, or act, condition or event which after notice or
passage of time or both, would constitute a material default or a material event
of default under any of the Credit Card Agreements (other than any Credit Card
Agreement with a Credit Card Issuer or Credit Card Processor where the sales
using the applicable card are less than ten (10%) percent of all such sales in
the immediately preceding fiscal year) exists or has occurred that would entitle
the other party thereto to suspend, withhold or reduce amounts that would
otherwise be payable to a Borrower. Each Borrower and the other parties thereto
have complied in all material respects with all of the terms and conditions of
the Credit Card Agreements (other than any Credit Card Agreement with a Credit
Card Issuer or Credit Card Processor where the sales using the applicable card
are less than ten (10%) percent of all such sales in the immediately preceding
fiscal year) to the extent necessary for such Borrower to be entitled to receive
all payments thereunder. Borrowers have delivered, or caused to be delivered to
Agent, true, correct and complete copies of all of the Credit Card Agreements.

 

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8.10 Interrelated Businesses. Borrowers and Guarantors make up a related
organization of various entities constituting a single economic and business
enterprise so that Borrowers and Guarantors share an identity of interests such
that any benefit received by any one of them benefits the others. Borrowers and
Guarantors render services to or for the benefit of the other Borrowers and/or
Guarantors, as the case may be, purchase or sell and supply goods to or from or
for the benefit of the others, make loans, advances and provide other financial
accommodations to or for the benefit of the other Borrowers and Guarantors
(including inter alia, the payment by Borrowers and Guarantors of creditors of
the other Borrowers or Guarantors and guarantees by Borrowers and Guarantors of
indebtedness of the other Borrowers and Guarantors and provide administrative,
marketing, payroll and management services to or for the benefit of the other
Borrowers and Guarantors). Substantially all of the Inventory is paid for
pursuant to Letter of Credit Accommodations funded by Operating on behalf of the
other Borrowers or are otherwise paid for by Operating, and Borrowers use
substantially all of the proceeds from the disposition of the Inventory so
purchased to repay the amounts owing to Operating as a result of such
arrangements. Borrowers and Guarantors (other than JCI) have the same chief
executive office, centralized accounting and legal services, certain common
officers and directors and generally do not provide consolidating financial
statements to creditors. Nothing contained herein should be construed to mean
that each Borrower and Guarantor is not a separate corporate entity and entitled
to the rights and privileges thereof, and except to the extent contractually
agreed or required under applicable law, no Borrower or Guarantor is obligated
for the liabilities of any other Borrower or Guarantor.

8.11 Employee Benefits.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or State law. Each Plan which is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service and to the best of any
Borrower’s or Guarantor’s knowledge, nothing has occurred which would cause the
loss of such qualification. Each Borrower and its ERISA Affiliates have made all
required contributions to any Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.

(b) There are no pending, or to the best of any Borrower’s or Guarantor’s
knowledge, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan, which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan, which has resulted or could reasonably be expected to result in a
Material Adverse Effect.

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) the
current value of each Plan’s assets are not less than such Plan’s liabilities
under Section 4001(a)(16) of ERISA; (iii) each Borrower and Guarantor, and their
ERISA Affiliates, have not incurred and do not reasonably expect to incur, any
liability under Title IV of ERISA with respect to any Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) each Borrower and
Guarantor, and their ERISA Affiliates, have not incurred and do not reasonably
expect to incur, any liability (and no event has occurred which, with the giving
of

 

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notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) each
Borrower and Guarantor, and their ERISA Affiliates, have not engaged in a
transaction that would be subject to Section 4069 or 4212(c) of ERISA.

8.12 Bank Accounts. All of the deposit accounts, investment accounts or other
accounts in the name of or used by any Borrower or Guarantor maintained at any
bank or other financial institution are set forth on Schedule 8.10 to the
Information Certificate, subject to the right of each Borrower and Guarantor to
establish new accounts in accordance with Section 5.2 hereof.

8.13 Intellectual Property. Each Borrower and Guarantor owns or licenses or
otherwise has the right to use all Intellectual Property necessary for the
operation of its business as presently conducted or proposed to be conducted. As
of the date hereof, Borrowers and Guarantors do not have any Intellectual
Property registered, or subject to pending applications, in the United States
Patent and Trademark Office or any similar office or agency in the United
States, any State thereof, any political subdivision thereof or in any other
country, other than those described in Schedule 8.11 or Schedule 8.6 to the
Information Certificate and has not granted any licenses with respect thereto
other than as set forth in Schedule 8.11 to the Information Certificate. To the
best of any Borrower’s and Guarantor’s knowledge, no slogan or other advertising
device, product, process, method, substance or other Intellectual Property or
goods bearing or using any Intellectual Property presently contemplated to be
sold by or employed by any Borrower or Guarantor infringes any patent,
trademark, servicemark, tradename, copyright, license or other Intellectual
Property owned by any other Person presently and no claim or litigation is
pending or threatened against or affecting any Borrower or Guarantor contesting
its right to sell or use any such Intellectual Property except as set forth on
Schedule 8.11 to the Information Certificate. Schedule 8.11 to the Information
Certificate sets forth all of the agreements or other arrangements of each
Borrower and Guarantor pursuant to which such Borrower or Guarantor has a
license or other right to use any trademarks, logos, designs, representations or
other Intellectual Property owned by another person as in effect on the date
hereof and the dates of the expiration of such agreements or other arrangements
of such Borrower or Guarantor as in effect on the date hereof (collectively,
together with such agreements or other arrangements as may be entered into by
any Borrower or Guarantor after the date hereof, collectively, the “License
Agreements” and individually, a “License Agreement”). No trademark, servicemark,
copyright or other Intellectual Property at any time used by any Borrower or
Guarantor which is owned by another person, or owned by such Borrower or
Guarantor subject to any security interest, lien, collateral assignment, pledge
or other encumbrance in favor of any person other than Agent, is affixed to any
Eligible Inventory, except (a) to the extent permitted under the term of the
license agreements listed on Schedule 8.11 to the Information Certificate and
(b) to the extent the sale of Inventory to which such Intellectual Property is
affixed is permitted to be sold by such Borrower or Guarantor under applicable
law (including the United States Copyright Act of 1976) and (c) to the extent
permitted under Section 9.8(o) hereof.

 

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8.14 Subsidiaries; Affiliates; Capitalization; Solvency; Inactive Entities.

(a) Each Borrower and Guarantor does not have any direct or indirect
Subsidiaries or Affiliates and is not engaged in any joint venture or
partnership except as set forth in Schedule 8.12 to the Information Certificate.

(b) Each Borrower and Guarantor is the record and beneficial owner of all of the
issued and outstanding shares of Capital Stock of each of the Subsidiaries
listed on Schedule 8.12 to the Information Certificate as being owned by such
Borrower or Guarantor and there are no proxies, irrevocable or otherwise, with
respect to such shares and no equity securities of any of the Subsidiaries are
or may become required to be issued by reason of any options, warrants, rights
to subscribe to, calls or commitments of any kind or nature and there are no
contracts, commitments, understandings or arrangements by which any Subsidiary
is or may become bound to issue additional shares of it Capital Stock or
securities convertible into or exchangeable for such shares.

(c) The issued and outstanding shares of Capital Stock of each Borrower and
Guarantor are directly and beneficially owned and held by the persons indicated
in the Information Certificate, and in each case all of such shares or
membership interests have been duly authorized and are fully paid and
non-assessable, free and clear of all claims, liens, pledges and encumbrances of
any kind, except as disclosed in writing to Agent prior to the date hereof.

(d) There is no debt outstanding that is convertible into membership interests
in Intermediate, and there are no outstanding rights, options or warrants to
acquire any membership interests in or debt convertible into membership
interests in Intermediate.

(e) Each Borrower and International is Solvent and will continue to be Solvent
after the creation of the Obligations, the security interests of Agent and the
other transaction contemplated hereunder.

(f) Each of C&W Outlet Inc., a New York corporation, J. Crew Services, Inc., a
Delaware corporation, and ERL, Inc., a New Jersey corporation, is an Inactive
Subsidiary and does not and will not engage in any business or commercial
activities and each does not and will not own or hold any assets or properties.
The only activity of J. Crew Virginia, Inc., a Virginia corporation, is in
connection with the issuance of gift cards and store credits for and on behalf
of Borrowers. J. Crew Virginia, Inc. does not and will not engage in any other
business or activity and does not and will not hold any assets or properties.

8.15 Labor Disputes.

(a) Set forth on Schedule 8.13 to the Information Certificate is a list
(including dates of termination) of all collective bargaining or similar
agreements between or applicable to each Borrower and Guarantor and any union,
labor organization or other bargaining agent in respect of the employees of any
Borrower or Guarantor on the date hereof.

(b) There is (i) no significant unfair labor practice complaint pending against
any Borrower or Guarantor or, to the best of any Borrower’s or Guarantor’s
knowledge, threatened against it, before the National Labor Relations Board, and
no significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is pending on the date hereof against
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Guarantor’s knowledge, threatened against it, and (ii) no significant strike,
labor dispute, slowdown or stoppage is pending against any Borrower or Guarantor
or, to the best of any Borrower’s or Guarantor’s knowledge, threatened against
any Borrower or Guarantor.

8.16 Restrictions on Subsidiaries. Except for restrictions contained in this
Agreement or any other agreement with respect to Indebtedness of any Borrower or
Guarantor permitted hereunder as in effect on the date hereof, there are no
contractual or consensual restrictions on any Borrower or Guarantor or any of
its Subsidiaries which prohibit or otherwise restrict (a) the transfer of cash
or other assets (i) between any Borrower or Guarantor and any of its or their
Subsidiaries or (ii) between any Subsidiaries of any Borrower or Guarantor or
(b) the ability of any Borrower or Guarantor or any of its or their Subsidiaries
to incur Indebtedness or grant security interests to Agent or any Lender in the
Collateral.

8.17 Material Contracts. Schedule 8.15 to the Information Certificate sets forth
all Material Contracts to which any Borrower or Guarantor is a party or is bound
as of the date hereof. Agent has received true, correct and complete copies of
such Material Contracts on or before the date hereof. To Borrowers’ and
Guarantors’ knowledge, Borrowers and Guarantors are not in breach (for a period
equal to the lesser of ten (10) days or the applicable cure period, if any, with
respect thereto) or in default in any material respect of or under any Material
Contract and have not received any notice of the intention of any other party
thereto to terminate any Material Contract.

8.18 Black Canyon Documents. Neither the execution and delivery of any of the
Black Canyon Documents nor the consummation of the transactions therein
contemplated, nor compliance with the provisions thereof (a) has violated or
will violate any of the Securities Laws or any other law or regulation or any
order or decree of any court or governmental instrumentality in any respect, or
(b) does or shall conflict with or result in the breach of, or constitute a
default in any respect under, any indenture, mortgage, deed of trust, security
agreement, agreement or instrument to which any Borrower or Guarantor is a party
or by which it or any of its assets may be bound, or (c) violate any provision
of the Certificate of Incorporation, By-Laws, Articles of Formation or Operating
Agreement of any Borrower or Guarantor.

8.19 Accuracy and Completeness of Information. All written information furnished
by or on behalf of any Borrower or Guarantor to Agent or any Lender in
connection with this Agreement or any of the other Financing Agreements or any
transaction contemplated hereby or thereby, including all information on the
Information Certificate is true and correct in all material respects on the date
as of which such information is dated or certified and does not omit any
material fact necessary in order to make such information not misleading. No
event or circumstance has occurred prior to the date hereof which has had or
could reasonably be expected to have a Material Adverse Affect, which has not
been disclosed to Agent in writing prior to the date hereof.

8.20 Survival of Warranties; Cumulative. All representations and warranties
contained in this Agreement or any of the other Financing Agreements shall
survive the execution and delivery of this Agreement and shall be deemed to have
been made again to Agent and Lenders on the date of each additional borrowing or
other credit accommodation hereunder and shall be

 

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conclusively presumed to have been relied on by Agent and Lenders regardless of
any investigation made or information possessed by Agent or any Lender. The
representations and warranties set forth herein shall be cumulative and in
addition to any other representations or warranties which any Borrower or
Guarantor shall now or hereafter give, or cause to be given, to Agent or any
Lender.

SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS

9.1 Maintenance of Existence.

(a) Each Borrower and Guarantor shall at all times preserve, renew and keep in
full force and effect its corporate or limited liability company existence and
rights and franchises with respect thereto and maintain in full force and effect
all licenses, trademarks, tradenames, approvals, authorizations, leases,
contracts and Permits necessary to carry on the business as presently or
proposed to be conducted, except as to any Guarantor other than Parent as
permitted in Section 9.7 hereof or to the extent that the failure to maintain
the same has or could reasonably be expected to have a Material Adverse Effect.

(b) No Borrower or Guarantor shall change its name unless each of the following
conditions is satisfied: (i) Agent shall have received not less than thirty
(30) days prior written notice from Borrower Agent of such proposed change in
its corporate or limited liability company name, which notice shall accurately
set forth the new name; and (ii) Agent shall have received a copy of the
amendment to the Certificate of Incorporation or Articles of Incorporation (or
Certificate of Formation or other organizational document as applicable) of such
Borrower or Guarantor providing for the name change certified by the Secretary
of State of the jurisdiction of incorporation or organization of such Borrower
or Guarantor as soon as it is available.

(c) No Borrower or Guarantor shall change its chief executive office or its
mailing address or organizational identification number (or if it does not have
one, shall not acquire one) unless Agent shall have received not less than
thirty (30) days’ prior written notice from Borrower Agent of such proposed
change, which notice shall set forth such information with respect thereto as
Agent may require and Agent shall have received such agreements as Agent may
reasonably require in connection therewith. No Borrower or Guarantor shall
change its type of organization, jurisdiction of organization or other legal
structure.

9.2 New Collateral Locations. Each Borrower and Guarantor may only open any new
location within the continental United States provided such Borrower or
Guarantor (a) gives Agent ten (10) days prior written notice of the intended
opening of any such new location and (b) executes and delivers, or causes to be
executed and delivered, to Agent such agreements, documents, and instruments as
Agent may deem reasonably necessary or desirable to protect its interests in the
Collateral at such location; provided, that, without limiting the obligations of
Borrowers and Guarantors pursuant to Section 7.1 hereof or otherwise hereunder,
Borrowers and Guarantors shall not be required to comply with the foregoing
conditions with respect to the opening by them of any new retail or factory
store locations.

 

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9.3 Compliance with Laws, Regulations, Etc.

(a) Each Borrower and Guarantor shall, and shall cause any Subsidiary to, at all
times, comply in all material respects with all laws, rules, regulations,
licenses, approvals, orders and other Permits applicable to it and duly observe
all requirements of any foreign, Federal, State or local Governmental Authority,
including ERISA, the Code, the Occupational Safety and Health Act of 1970, as
amended, the Fair Labor Standards Act of 1938, as amended, all Federal, State
and local statutes, regulations, rules and orders relating to consumer credit
(including, without limitation, as each has been amended, the Truth-in-Lending
Act, the Fair Credit Billing Act, the Equal Credit Opportunity Act and the Fair
Credit Reporting Act, and regulations, rules and orders promulgated thereunder),
all Federal, State and local statutes, regulations, rules and orders pertaining
to sales of consumer goods (including, without limitation, the Consumer Products
Safety Act of 1972, as amended, and the Federal Trade Commission Act of 1914, as
amended, and all regulations, rules and orders promulgated thereunder) and all
applicable Environmental Laws, in each case where the failure to so comply or
observe has or could reasonably be expected to have a Material Adverse Effect.

(b) Borrowers and Guarantors shall give written notice to Agent promptly upon
any Borrower’s or Guarantor’s receipt of any notice of, or any Borrower’s or
Guarantor’s otherwise obtaining knowledge of, with respect to the Real Property
subject to the Mortgages, (i) the occurrence of any event involving the release,
spill or discharge, threatened or actual, of any Hazardous Material or (ii) any
investigation, proceeding, complaint, order, directive, claims, citation or
notice with respect to: (A) any non-compliance with or violation of any
Environmental Law by any Borrower or Guarantor or (B) the release, spill or
discharge, threatened or actual, of any Hazardous Material other than in the
ordinary course of business and other than as permitted under any applicable
Environmental Law which is reasonably likely to result in a material liability.
Copies of all environmental surveys, audits, assessments, feasibility studies
and results of remedial investigations of such matters shall be promptly
furnished, or caused to be furnished, by such Borrower or Guarantor to Agent.
Each Borrower and Guarantor shall take action in a commercially reasonable
manner to respond to any material non-compliance with any of the Environmental
Laws as required by law and shall regularly report to Agent on such response.

(c) Without limiting the generality of the foregoing, whenever Agent reasonably
determines that, with respect to the Real Property subject to the Mortgages,
there is non-compliance, or any condition which requires any action by or on
behalf of any Borrower or Guarantor in order to avoid any non-compliance, with
any Environmental Law which is reasonably likely to result in a material
liability, Borrowers shall, at Agent’s request and Borrowers’ expense: (i) cause
an independent environmental engineer reasonably acceptable to Agent to conduct
such tests of any such Real Property subject to the Mortgages where non-
compliance or alleged non-compliance with such Environmental Laws has occurred
as to such non-compliance and prepare and deliver to Agent a report as to such
non-compliance setting forth the results of such tests, a proposed plan for
responding to any requirements of Environmental Laws with respect to the
findings of such tests and an estimate of the costs thereof and (ii) provide to
Agent a supplemental report of such engineer whenever the scope of such
non-compliance, or such Borrower’s or Guarantor’s response thereto or the
estimated costs thereof, shall change in any material respect.

 

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(d) Each Borrower and Guarantor shall indemnify and hold harmless Agent and
Lenders and their respective directors, officers, employees, agents, invitees,
representatives, successors and assigns, from and against any and all losses,
claims, damages, liabilities, costs, and expenses (including reasonable
attorneys’ fees and expenses) directly or indirectly arising out of or
attributable to the use, generation, manufacture, reproduction, storage,
release, threatened release, spill, discharge, disposal or presence of a
Hazardous Material at the Real Property subject to the Mortgages, including the
costs of any required or necessary repair, cleanup or other remedial work with
respect to any Real Property of any Borrower or Guarantor subject to the
Mortgages and the preparation and implementation of any closure, remedial or
other plans required by Environmental Laws. All representations, warranties,
covenants and indemnifications in this Section 9.3 shall survive the payment of
the Obligations and the termination of this Agreement.

9.4 Payment of Taxes and Claims. Each Borrower and Guarantor shall, and shall
cause any Subsidiary to, duly pay and discharge all Taxes, assessments,
contributions and governmental charges upon or against it or its properties or
assets, except for Taxes the validity of which are being contested in good faith
by appropriate proceedings diligently pursued and available to such Borrower,
Guarantor or Subsidiary, as the case may be, and with respect to which adequate
reserves have been set aside on its books. Each Borrower and Guarantor shall be
liable for any Tax or penalties other than Excluded Taxes imposed on Agent or
any Lender as a result of the financing arrangements provided for herein and
each Borrower and Guarantor agrees to indemnify and hold Agent harmless with
respect to the foregoing, and to repay to Agent, for the benefit of Lenders, on
demand the amount thereof, and until paid by such Borrower or Guarantor such
amount shall be added and deemed part of the Revolving Loans, provided, that,
nothing contained herein shall be construed to require any Borrower or Guarantor
to pay any income or franchise taxes attributable to the income of Agent or
Lenders from any amounts charged or paid hereunder to Agent or Lenders. The
foregoing indemnity shall survive the payment of the Obligations and the
termination of this Agreement. If Agent or any Lender receives a tax refund or
credit (“Tax Benefit”), or otherwise would have received a Tax Benefit in
respect of Agent’s or such Lender’s Taxes which, in the good faith determination
of Agent or such Lender, as the case may be, is allocable to a Borrower or
Guarantor, Agent shall promptly remit such Tax Refund to such Borrower or
Guarantor; provided, that, no Event of Default exists or has occurred and is
continuing.

9.5 Insurance. Each Borrower and Guarantor shall, and shall cause any Subsidiary
to, at all times, maintain with financially sound and reputable insurers
insurance with respect to the Collateral against loss or damage and all other
insurance of the kinds and in the amounts customarily insured against or carried
by corporations of established reputation engaged in the same or similar
businesses and similarly situated. Said policies of insurance shall be
reasonably satisfactory to Agent as to form, amount and insurer. Borrowers and
Guarantors shall furnish certificates, policies or endorsements to Agent as
Agent shall reasonably require as proof of such insurance, and, if any Borrower
or Guarantor fails to do so, Agent is authorized, but not required, to obtain
such insurance at the expense of Borrowers. All policies shall provide for at
least thirty (30) days prior written notice to Agent of any cancellation or
reduction of coverage and that Agent may act as attorney for each Borrower and
Guarantor in obtaining, and at any time an Event of Default exists or has
occurred and is continuing, adjusting, settling, amending and canceling such
insurance. Borrowers and Guarantors shall cause Agent to be named as a loss

 

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payee and an additional insured (but without any liability for any premiums)
under such insurance policies and Borrowers and Guarantors shall obtain
non-contributory lender’s loss payable endorsements to all insurance policies in
form and substance satisfactory to Agent. Such lender’s loss payable
endorsements shall specify that the proceeds of such insurance shall be payable
to Agent as its interests may appear and further specify that Agent and Lenders
shall be paid regardless of any act or omission by any Borrower, Guarantor or
any of its or their Affiliates. Without limiting any other rights of Agent or
Lenders, any insurance proceeds received by Agent at any time may be applied to
payment of the Obligations, whether or not then due, in any order and in such
manner as Agent may determine. Upon application of such proceeds to the
Revolving Loans, Revolving Loans may be available subject and pursuant to the
terms hereof to be used for the costs of repair or replacement of the Collateral
lost or damages resulting in the payment of such insurance proceeds.

9.6 Financial Statements and Other Information.

(a) Each Borrower and Guarantor shall, and shall cause any Subsidiary to, keep
proper books and records in which true and complete entries shall be made of all
dealings or transactions of or in relation to the Collateral and the business of
such Borrower, Guarantor and its Subsidiaries in accordance with GAAP. Borrowers
and Guarantors shall furnish or cause to be furnished to Agent, the following:
(i) within thirty (30) days after the end of each fiscal month, monthly
unaudited consolidated financial statements (including balance sheets,
statements of income and loss, statements of cash flow and statements of
shareholders’ equity), and unaudited consolidating financial statements
(consisting of balance sheets and statements of income and loss), all in
reasonable detail, fairly presenting in accordance with GAAP the financial
position and the results of the operations of Parent and its Subsidiaries as of
the end of and through such fiscal month, certified by the chief financial
officer or controller of Parent, subject to normal year-end adjustments and no
footnotes and accompanied by a compliance certificate substantially in the form
of Exhibit C hereto, along with a schedule in a form satisfactory to Agent of
the calculations used in determining, as of the end of such month, whether
Borrowers and Guarantors are in compliance with the covenants set forth in
Sections 9.18 and 9.19 of this Agreement for such month and (ii) within ninety
(90) days after the end of each fiscal year, audited consolidated financial
statements (including in each case, balance sheets and statements of income and
loss, statements of cash flow and statements of shareholders’ equity) of Parent
and its Subsidiaries, and the accompanying notes thereto (including in each
case, balance sheets and statements of income and loss, statements of cash flow,
and statements of shareholders’ equity), all in reasonable detail, fairly
presenting the financial position and the results of the operations of Parent
and its Subsidiaries as of the end of and for such fiscal year, together with
the unqualified opinion of independent certified public accountants with respect
to the audited consolidated financial statements, which accountants shall be an
independent accounting firm selected by Borrowers and acceptable to Agent, that
such audited consolidated financial statements have been prepared in accordance
with GAAP, and present fairly the results of operations and financial condition
of Parent and its Subsidiaries as of the end of and for the fiscal year then
ended.

(b) At such time as available, but in no event later than five (5) days prior to
the end of each fiscal year (commencing with the fiscal year of Parent ending in
January of 2003), projected consolidated financial statements (including in each
case, balance sheets and

 

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statements of income and loss, statements of cash flow, and statements of
shareholders’ equity) of Parent and its Subsidiaries for the next fiscal year
(including forecasted income statements, cash flow statements and balance sheets
and statements of income and loss), all in reasonable detail, and in a format
consistent with the projections delivered by Parent to Agent prior to the date
hereof, together with such supporting information as Agent may reasonably
request. Such projected financial statements shall be prepared on a monthly
basis for the next succeeding year. Such projections shall represent Borrowers’
reasonable best estimate of the future financial performance of Borrowers for
the periods set forth therein and shall have been prepared on the basis of the
assumptions set forth therein which Borrowers believe are fair and reasonable as
of the date of preparation in light of current and reasonably foreseeable
business conditions (it being understood that actual results may differ from
those set forth in such projected financial statements). Each year Borrowers
shall provide to Agent a semi-annual update with respect to such projections.

(c) At such time as available, but in no event later than thirty (30) days after
the end of each fiscal quarter, Borrower Agent shall furnish to Agent a profit
and loss summary analysis on a store-by-store basis for all store locations with
respect to the immediately preceding twelve (12) months.

(d) Borrowers and Guarantors shall promptly notify Agent in writing of the
details of (i) any loss, damage, investigation, action, suit, proceeding or
claim relating to Collateral having a value of more than $1,000,000 or which if
adversely determined would have a Material Adverse Effect, (ii) any Material
Contract being terminated or amended or any new Material Contract entered into
(in which event Borrowers and Guarantors shall provide Agent with a copy of such
Material Contract), (iii) any order, judgment or decree in excess of $1,000,000
shall have been entered against any Borrower or Guarantor any of its or their
properties or assets, (iv) any written notification of a material violation of
laws or regulations received by any Borrower or Guarantor, (v) any ERISA Event,
and (vi) the occurrence of any Default or Event of Default.

(e) Borrowers and Guarantors shall promptly after the sending or filing thereof
furnish or cause to be furnished to Agent copies of all reports which any
Borrower or Guarantor sends to its stockholders generally and copies of all
reports and registration statements which any Borrower or Guarantor files with
the Securities and Exchange Commission, any national securities exchange or the
National Association of Securities Dealers, Inc.

(f) Borrowers and Guarantors shall furnish or cause to be furnished to Agent
such budgets, forecasts, projections and other information respecting the
Collateral and the business of Borrowers and Guarantors, as Agent may, from time
to time, reasonably request. Agent is hereby authorized to deliver a copy of any
financial statement or any other information relating to the business of
Borrowers and Guarantors to any court or other Governmental Authority or to any
Lender or Participant or prospective Lender or Participant or any Affiliate of
any Lender or Participant. Each Borrower and Guarantor hereby irrevocably
authorizes and directs all accountants or auditors to deliver to Agent, at
Borrowers’ expense, copies of the financial statements of any Borrower and
Guarantor and any reports or management letters prepared by such accountants or
auditors on behalf of any Borrower or Guarantor and to disclose to Agent and
Lenders such information as they may have regarding the business of any Borrower

 

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and Guarantor. Any documents, schedules, invoices or other papers delivered to
Agent or any Lender may be destroyed or otherwise disposed of by Agent or such
Lender one (1) year after the same are delivered to Agent or such Lender, except
as otherwise designated by Borrower Agent to Agent or such Lender in writing.

9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each Borrower and
Guarantor shall not, and shall not permit any Subsidiary to, directly or
indirectly,

(a) merge into or with or consolidate with any other Person or permit any other
Person to merge into or with or consolidate with it except that any wholly-owned
Subsidiary of Parent (other than any Borrower) may merge with and into or
consolidate with any other wholly-owned Subsidiary of Parent (other than any
Borrower), and any Borrower may merge with and into or consolidate with any
other Borrower, provided, that, each of the following conditions is satisfied as
determined by Agent in good faith: (i) Agent shall have received not less than
ten (10) Business Days’ prior written notice of the intention of such
Subsidiaries to so merge or consolidate, which notice shall set forth in
reasonable detail satisfactory to Agent, the persons that are merging or
consolidating, which person will be the surviving entity, the locations of the
assets of the persons that are merging or consolidating, and the material
agreements and documents relating to such merger or consolidation, (ii) Agent
shall have received such other information with respect to such merger or
consolidation as Agent may reasonably request, (iii) as of the effective date of
the merger or consolidation and after giving effect thereto, no Default or Event
of Default shall exist or have occurred, (iv) Agent shall have received, true,
correct and complete copies of all agreements, documents and instruments
relating to such merger or consolidation, including, but not limited to, the
certificate or certificates of merger to be filed with each appropriate
Secretary of State (with a copy as filed promptly after such filing), (v) the
surviving corporation shall expressly confirm, ratify and assume the Obligations
and the Financing Agreements to which it is a party in writing, in form and
substance reasonably satisfactory to Agent, and Borrowers and Guarantors shall
execute and deliver such other agreements, documents and instruments as Agent
may request in connection therewith;

(b) sell, issue, assign, lease, license, transfer, abandon or otherwise dispose
of any Capital Stock or Indebtedness to any other Person or any of its assets to
any other Person, except for

(i) sales of Inventory in the ordinary course of business,

(ii) the sale or other disposition of Equipment (including worn-out or obsolete
Equipment or Equipment no longer used or useful in the business of any Borrower
or Guarantor) so long as such sales or other dispositions do not involve
Equipment having an aggregate fair market value in excess of $7,500,000 for all
such Equipment disposed of in any fiscal year of Borrowers or as Agent may
otherwise agree,

(iii) the issuance and sale by any Borrower or Guarantor of Capital Stock of
such Borrower or Guarantor after the date hereof; provided, that, (A) Agent
shall have received not less than ten (10) Business Days’ prior written notice
of such issuance and sale by such Borrower or Guarantor, which notice shall
specify the parties to whom such shares are to be sold, the terms of such sale,
the total amount which it is anticipated will be realized from the

 

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issuance and sale of such stock and the net cash proceeds which it is
anticipated will be received by such Borrower or Guarantor from such sale,
(B) such Borrower or Guarantor shall not be required to pay any cash dividends
or repurchase or redeem such Capital Stock or make any other payments in respect
thereof, except as otherwise permitted in Section 9.11 hereof and except after
the end of the then current term of this Agreement and the payment in full in
cash or other immediately available funds of all of the Obligations, (C) the
terms of such Capital Stock, and the terms and conditions of the purchase and
sale thereof, shall not include any terms that include any limitation on the
right of any Borrower to request or receive Revolving Loans or Letter of Credit
Accommodations or the right of any Borrower and Guarantor to amend or modify any
of the terms and conditions of this Agreement or any of the other Financing
Agreements or otherwise in any way relate to or affect the arrangements of
Borrowers and Guarantors with Agent and Lenders or are more restrictive or
burdensome to any Borrower or Guarantor than the terms of any Capital Stock in
effect on the date hereof, (D) except with respect to any sale and issuance of
Capital Stock of Parent or Operating and as to the other Borrowers and
Guarantors and their respective Subsidiaries, except as Agent may otherwise
agree in writing, all of the proceeds of the sale and issuance of such Capital
Stock shall be paid to Agent for application to the Obligations in accordance
with Section 6.4(a) hereof and (E) after giving effect thereto, no Default or
Event of Default shall exist or have occurred,

(iv) the issuance of Capital Stock of any Borrower or Guarantor consisting of
common stock pursuant to an employee stock option or grant or similar equity
plan or 401(k) plans of such Borrower or Guarantor for the benefit of its
employees, directors and consultants, provided, that, in no event shall such
Borrower or Guarantor be required to issue, or shall such Borrower or Guarantor
issue, Capital Stock pursuant to such stock plans or 401(k) plans which would
result in a Change of Control or other Event of Default,

(v) sales or other dispositions by any Borrower of assets in connection with the
closing or sale of a retail store location of such Borrower in the ordinary
course of such Borrower’s business which consist of leasehold interests in the
premises of such store, the Equipment and fixtures located at such premises and
the books and records relating exclusively and directly to the operations of
such store; provided, that, as to each and all such sales and closings, (A) on
the date of, and after giving effect to, any such closing or sale, the aggregate
number of retail store locations operated by Retail and Factory closed or sold
by Borrowers in any fiscal year minus the number of retail stores operated by
Retail and Factory opened by Borrowers in such fiscal year, shall not exceed the
amount equal to twenty (20%) percent of the number of retail store locations of
Borrowers operated by Retail and Factory, as of the end of the immediately
preceding fiscal year, (B) Agent shall have received not less than ten
(10) Business Days prior written notice of such sale or closing, which notice
shall set forth in reasonable detail satisfactory to Agent, the parties to such
sale or other disposition, the assets to be sold or otherwise disposed of, the
purchase price and the manner of payment thereof and such other information with
respect thereto as Agent may request, (C) after giving effect thereto, no Event
of Default shall exist or have occurred and be continuing, (D) such sale shall
be on commercially reasonable prices and terms in a bona fide arm’s length
transaction, and (E) any and all proceeds payable or delivered to such Borrower
in respect of such sale or other disposition shall be paid or delivered, or
caused to be paid or delivered, to Agent in accordance with the terms of this
Agreement (except to the extent such proceeds reflect payment in respect of
Indebtedness secured by a properly perfected first priority security interest in
the assets sold, in which case, such proceeds shall be applied to such
indebtedness secured thereby),

 

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(vi) the grant by any Borrower or Guarantor after the date hereof of a
non-exclusive license or an exclusive license to any person for the use of any
Intellectual Property consisting of trademarks owned by such Borrower or
Guarantor; provided, that, as to any such license, each of the following
conditions is satisfied, (A) such license is only for the use of trademarks in
the manufacture, distribution or sale of products outside the United States of
America and Canada or, if such license is for the use of such trademarks in the
manufacture, distribution or sale of products within the United States of
America or Canada, it is only for categories or types of Inventory other than
men’s or women’s wearing apparel of the type or category being sold by any
Borrower or Guarantor as of the date of this Agreement or that Borrower and
Guarantors do not manufacture, distribute or sell, (B) such licenses shall be on
commercially reasonable prices and terms in a bona fide arms’ length
transactions, (C) in the case of a non-exclusive license, the rights of the
licensee shall be subject to the rights of Agent, and in the case of any
license, shall not adversely affect, limit or restrict the rights of Agent to
use any Intellectual Property of a Borrower or Guarantor to sell or otherwise
dispose of any Inventory or other Collateral, (D) Agent shall have received,
true, correct and complete copies of the executed license agreement, promptly
upon the execution thereof and (E) as of the date of the grant of any such
license, and after giving effect thereto, no Event of Default shall exist or
have occurred and be continuing,

(vii) sales, transfers and dispositions to Operating or a Subsidiary of
Operating (other than an Inactive Subsidiary); provided, that, any such sales,
transfers or dispositions involving a Subsidiary that is not a Borrower or
Guarantor shall be made in compliance with Section 9.12 hereof,

(c) wind up, liquidate or dissolve except that any Guarantor (other than Parent)
may wind up, liquidate and dissolve, provided, that, each of the following
conditions is satisfied, (i) the winding up, liquidation and dissolution of such
Guarantor shall not violate any law or any order or decree of any court or other
Governmental Authority in any material respect and shall not conflict with or
result in the breach of, or constitute a default under, any indenture, mortgage,
deed of trust, or any other agreement or instrument to which any Borrower or
Guarantor is a party or may be bound, (ii) such winding up, liquidation or
dissolution shall be done in accordance with the requirements of all applicable
laws and regulations, (iii) effective upon such winding up, liquidation or
dissolution, all of the assets and properties of such Guarantor shall be duly
and validly transferred and assigned to its shareholders, free and clear of any
liens, restrictions or encumbrances other than the security interest and liens
of Agent (and Agent shall have received such evidence thereof as Agent may
require) and Agent shall have received such deeds, assignments or other
agreements as Agent may request to evidence and confirm the transfer of such
assets to of such Guarantor to such shareholders, (iv) Agent shall have received
all documents and agreements that any Borrower or Guarantor has filed with any
Governmental Authority or as are otherwise required to effectuate such winding
up, liquidation or dissolution, (v) no Borrower or Guarantor shall assume any
Indebtedness, obligations or liabilities as a result of such winding up,
liquidation or dissolution, or otherwise become liable in respect of any
obligations or liabilities of the entity that is winding up, liquidating or
dissolving, unless such Indebtedness is otherwise expressly permitted hereunder,
(vi) Agent shall have received not less

 

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than ten (10) Business Days prior written notice of the intention of such
Guarantor to wind up, liquidate or dissolve, and (vii) as of the date of such
winding up, liquidation or dissolution and after giving effect thereto, no Event
of Default shall exist or have occurred; or

(d) agree to any of the foregoing set forth in subsections (a) through (c) of
this Section 9.7.

9.8 Encumbrances. Each Borrower and Guarantor shall not, and shall not permit
any Subsidiary to, create, incur, assume or suffer to exist any security
interest, mortgage, pledge, lien, charge or other encumbrance of any nature
whatsoever on any of its assets or properties, including the Collateral, or file
or permit the filing of, or permit to remain in effect, any financing statement
or other similar notice of any security interest or lien with respect to any
such assets or properties, except:

(a) the security interests and liens of Agent for itself and the benefit of
Lenders and the security interests and liens of Agent for the benefit of itself,
any Lender, any Affiliate of any Lender or any other financial institution
acceptable to Agent (and in each case as to any such Lender, Affiliate or other
financial institution only to the extent approved by Agent) that is party to a
Hedge Agreement to the extent provided for herein and subject to the terms
hereof;

(b) liens securing the payment of taxes, assessments or other governmental
charges or levies either not yet overdue or the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to such Borrower, or Guarantor or Subsidiary, as the case may be and
with respect to which adequate reserves have been set aside on its books;

(c) non-consensual statutory liens (other than liens securing the payment of
taxes) arising in the ordinary course of such Borrower’s, Guarantor’s or
Subsidiary’s business to the extent: (i) such liens secure Indebtedness which is
not overdue or which is being contested in good faith and by appropriate
proceedings, diligently pursued and available to such Borrower, Guarantor or
Subsidiary or (ii) such liens secure Indebtedness relating to claims or
liabilities that are fully insured and being defended at the sole cost and
expense and at the sole risk of the insurer or being contested in good faith by
appropriate proceedings diligently pursued and available to such Borrower,
Guarantor or such Subsidiary, but in each case under clause (i) and (ii) hereof,
(A) prior to the commencement of foreclosure or other similar proceedings,
(B) with respect to which adequate reserves have been set aside on its books,
(C) subject to the right of Agent, at its option, to establish a Reserve in
respect thereof (which Reserve shall be terminated upon the payment and
satisfaction in full of such Indebtedness and the receipt by Agent of evidence
thereof satisfactory to Agent or may be used by Agent to pay such Indebtedness
after notice to Borrower Agent in the event of the commencement or threatened
commencement (to the extent such threat is imminent as determined in good faith
by Agent) of any action by the party to whom such Indebtedness is owed to
exercise its remedies with respect thereto or to the extent necessary for Agent
to exercise any of its rights or remedies); and (D) as to any such liens (or the
Indebtedness secured thereby) that are being contested, the aggregate amount of
the Indebtedness secured by all such liens at any time outstanding shall not
exceed $1,000,000;

 

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(d) zoning restrictions, easements, licenses, covenants and other restrictions
affecting the use of Real Property which do not interfere in any material
respect with the use of such Real Property or ordinary conduct of the business
of such Borrower, Guarantor or such Subsidiary as presently conducted thereon
or, in the case of Real Property subject to the Mortgages, materially impair the
value of the Real Property which may be subject thereto;

(e) purchase money security interests in Equipment (including Capital Leases)
and purchase money mortgages on Real Property to secure Indebtedness permitted
under Section 9.9(b) hereof;

(f) pledges and deposits of cash by any Borrower or Guarantor after the date
hereof in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security benefits
consistent with the current practices of such Borrower or Guarantor as of the
date hereof;

(g) pledges and deposits of cash by any Borrower or Guarantor after the date
hereof to secure the performance of tenders, bids, leases, trade contracts
(other than for the repayment of Indebtedness), statutory obligations and other
similar obligations in each case in the ordinary course of business consistent
with the current practices of such Borrower or Guarantor as of the date hereof;
provided, that, in connection with any performance bonds issued by a surety or
other person, the issuer of such bond shall have waived in writing any rights in
or to, or other interest in, any of the Collateral in an agreement, in form and
substance satisfactory to Agent in good faith;

(h) liens arising from (i) operating leases and the precautionary UCC financing
statement filings in respect thereof and (ii) equipment or other materials which
are not owned by any Borrower or Guarantor located on the premises of such
Borrower or Guarantor (but not in connection with, or as part of, the financing
thereof) from time to time in the ordinary course of business and consistent
with current practices of such Borrower or Guarantor and the precautionary UCC
financing statement filings in respect thereof;

(i) liens or rights of setoff against credit balances of Borrowers with Credit
Card Issuers or Credit Card Processors or amounts owing by such Credit Card
Issuers or Credit Card Processors to Borrower in the ordinary course of
business, but not liens on or rights of setoff against any other property or
assets of Borrowers, pursuant to the Credit Card Agreements (as in effect on the
date hereof) to secure the obligations of Borrowers to the Credit Card Issuers
or Credit Card Processors as a result of fees and chargebacks;

(j) statutory or common law liens or rights of setoff of depository banks with
respect to funds of Borrowers or Guarantors at such banks to secure fees and
charges in connection with returned items or the standard fees and charges of
such banks in connection with the deposit accounts maintained by Borrowers and
Guarantors at such banks (but not any other Indebtedness or obligations);

(k) deposits of cash with the owner or lessor of premises leased and operated by
Borrowers in the ordinary course of the business of Borrowers to secure the
performance by Borrowers of their respective obligations under the terms of the
lease for such premises;

 

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(l) judgments and other similar liens arising in connection with court
proceedings that do not constitute an Event of Default, provided, that, (i) such
liens are being contested in good faith and by appropriate proceedings
diligently pursued and available to such Borrower, Guarantor or Subsidiary,
(ii) adequate reserves or other appropriate provision, if any, as are required
by GAAP have been made therefor, (iii) a stay of enforcement of any such liens
is in effect and (iv) Agent may establish a Reserve with respect thereto (which
Reserve shall be terminated simultaneously with the payment and satisfaction in
full of the Indebtedness secured thereby and the receipt by Agent of evidence
thereof satisfactory to Agent or may be used by Agent to pay such Indebtedness
after notice to Borrower Agent in the event of the commencement or threatened
commencement (to the extent such threat is imminent as determined in good faith
by Agent) of any action by the party to whom such Indebtedness is owed to
exercise its remedies with respect thereto or to the extent necessary for Agent
to exercise any of its rights or remedies); and

(m) the security interests and liens set forth on Schedule 8.4 to the
Information Certificate;

(n) the security interests and liens of the Noteholder Collateral Agent in the
Collateral pursuant to the Black Canyon Security Agreement to secure (i) the
Indebtedness of Operating and the Black Canyon Guarantors under the Black Canyon
Documents to the extent such Indebtedness is permitted under Section 9.9(r)
hereof and (ii) the Indebtedness of Intermediate evidenced by the remaining
portion of the 16% Senior Discount Notes on an equal and ratable basis to the
extent such Indebtedness is permitted under Section 9.9(q) hereof, which
security interests and liens of the Noteholder Collateral Agent are and shall at
all times be junior and subordinate to the security interests and liens of Agent
pursuant to the Black Canyon Intercreditor Agreement;

(o) the security interests and liens of the financial institution or
institutions providing the Indebtedness permitted pursuant to Section 9.9(t)
hereof on the Intellectual Property and all other Collateral, in each case to
secure the Indebtedness of Borrowers and Guarantors permitted under
Section 9.9(t) hereof, which security interests and liens of such financial
institution or institutions shall at all times be subject to an intercreditor
agreement on terms and conditions reasonably acceptable to Agent, including a
subordinate and junior lien of such financial institution or institutions as to
all Collateral (other than Intellectual Property) and the priority of the
security interests and liens of such financial institution or institutions as to
the Intellectual Property and the right of Agent to use the Intellectual
Property to realize on the Collateral.

9.9 Indebtedness. Each Borrower and Guarantor shall not, and shall not permit
any Subsidiary to, incur, create, assume, become or be liable in any manner with
respect to, or permit to exist, any Indebtedness, or guarantee, assume, endorse,
or otherwise become responsible for (directly or indirectly), the Indebtedness,
performance, obligations or dividends of any other Person, except:

(a) the Obligations;

 

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(b) purchase money Indebtedness (including Capital Leases) arising after the
date hereof to the extent secured by purchase money security interests in
Equipment (including Capital Leases) and purchase money mortgages on Real
Property not to exceed $20,000,000 in the aggregate at any time outstanding so
long as such security interests and mortgages do not apply to any property of
such Borrower, Guarantor or Subsidiary other than the Equipment or Real Property
so acquired, and the Indebtedness secured thereby does not exceed the cost of
the Equipment or Real Property so acquired, as the case may be;

(c) guarantees by any Borrower or Guarantor of the Obligations of the other
Borrowers or Guarantors in favor of Agent for the benefit of Lenders;

(d) unsecured guarantees by Parent or a Borrower of the obligations of a
Borrower arising pursuant to a lease or license by a third party in a bona fide
arm’s length transaction of real property for use as a retail store location in
the ordinary course of the business of such Borrower; provided, that, (i) the
Person issuing such guarantee is permitted hereunder to incur directly the
obligation that is being guaranteed and (ii) as of the date on which such
guarantee is issued no Event of Default exists or has occurred and is
continuing;

(e) unsecured guarantees by any Borrower or Guarantor of the obligations to a
third party of any other Borrower or Guarantor (other than Parent); provided,
that, (i) the Person issuing such guarantee is permitted hereunder to incur
directly the Indebtedness that is being guaranteed, and (ii) as of the date on
which such guarantee is issued, no Event of Default exists or has occurred and
is continuing;

(f) the Indebtedness of any Borrower or Guarantor to any other Borrower or
Guarantor arising after the date hereof pursuant to loans by any Borrower or
Guarantor permitted under Section 9.10(g) hereof;

(g) unsecured Indebtedness of any Borrower or Guarantor arising after the date
hereof to any third party (but not to any other Borrower or Guarantor and other
than any Indebtedness permitted under Sections 9.9(h) or 9.9(i) below) pursuant
to loans in cash or other immediately available funds by such person to such
Borrower or Guarantor, provided, that, each of the following conditions is
satisfied as determined by Agent: (i) such Indebtedness shall be on terms and
conditions reasonably acceptable to Agent, (ii) in no event shall any Borrower
or Guarantor make, or be required to make under the terms thereof, payments in
respect of such Indebtedness prior to the date one hundred eighty (180) days
after the end of the then current term of this Agreement (other than regularly
scheduled payments of interest and fees or payments pursuant to the issuance of
additional Indebtedness on substantially the same terms as the initial
Indebtedness), (iii) Agent shall have received not less than ten (10) Business
Days’ prior written notice of the intention of such Borrower or Guarantor to
incur such Indebtedness, which notice shall set forth in reasonable detail
satisfactory to Agent the amount of such Indebtedness, the person or persons to
whom such Indebtedness will be owed, the interest rate, the schedule of
repayments and maturity date with respect thereto and such other information as
Agent may reasonably request with respect thereto, (iv) Agent shall have
received true, correct and complete copies of all agreements, documents and
instruments evidencing or otherwise related to such Indebtedness, (v) except as
Agent may otherwise agree in writing, all of the proceeds of the loans or other
accommodations giving rise to such Indebtedness shall be paid to

 

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Agent for application to the Obligations in such order and manner as Agent may
determine, (vi) the aggregate principal amount of all such Indebtedness shall
not exceed $20,000,000, (vii) as of the date of incurring such Indebtedness and
after giving effect thereto, no Default or Event of Default shall exist or have
occurred, (viii) such Borrower and Guarantor shall not, directly or indirectly,
(A) amend, modify, alter or change the terms of such Indebtedness or any
agreement, document or instrument related thereto, except, that, such Borrower
or Guarantor may, after prior written notice to Agent, amend, modify, alter or
change the terms thereof so as to extend the maturity thereof, or defer the
timing of any payments in respect thereof, or to forgive or cancel any portion
of such Indebtedness (other than pursuant to payments thereof), or to reduce the
interest rate or any fees in connection therewith, or (B) redeem, retire,
defease, purchase or otherwise acquire such Indebtedness (except pursuant to
regularly scheduled payments permitted herein), or set aside or otherwise
deposit or invest any sums for such purpose, and (ix) Borrowers and Guarantors
shall furnish to Agent all notices or demands in connection with such
Indebtedness either received by any Borrower or Guarantor or on its behalf
promptly after the receipt thereof, or sent by any Borrower or Guarantor or on
its behalf concurrently with the sending thereof, as the case may be;

(h) unsecured Indebtedness of Parent arising after the date hereof to any Person
(but not to any other Borrower or Guarantor and other than any Indebtedness
permitted under Sections 9.9(g) above or 9.9(i) below) pursuant to loans in cash
or other immediately available funds by such person to Parent, provided, that,
each of the following conditions is satisfied as determined by Agent: (i) such
Indebtedness shall be on terms and conditions reasonably acceptable to Agent,
(ii) in no event shall any Borrower or Guarantor make, or be required to make
under the terms thereof, payments in respect of such Indebtedness prior to the
termination of this Agreement and the payment in full in cash or other
immediately available funds of all of the Obligations (other than payments
pursuant to the issuance of additional Indebtedness by Parent on substantially
the same terms as the initial Indebtedness), (iii) Agent shall have received
prior written notice of the intention of Parent to incur such Indebtedness,
which notice shall set forth in reasonable detail satisfactory to Agent the
amount of such Indebtedness, the person or persons to whom such Indebtedness
will be owed, the interest rate, the schedule of repayments and maturity date
with respect thereto and such other information as Agent may reasonably request
with respect thereto, (iv) Agent shall have received true, correct and complete
copies of all agreements, documents and instruments evidencing or otherwise
related to such Indebtedness, (v) Parent shall not, directly or indirectly,
(A) amend, modify, alter or change the terms of such Indebtedness or any
agreement, document or instrument related thereto, except, that, Parent may,
after prior written notice to Agent, amend, modify, alter or change the terms
thereof so as to extend the maturity thereof, or defer the timing of any
payments in respect thereof, or to forgive or cancel any portion of such
Indebtedness (other than pursuant to payments thereof), or to reduce the
interest rate or any fees in connection therewith, or (B) redeem, retire,
defease, purchase or otherwise acquire such Indebtedness (except pursuant to
payments in the form permitted herein), or set aside or otherwise deposit or
invest any sums for such purpose, and (vi) Borrowers and Guarantors shall
furnish to Agent all notices or demands in connection with such Indebtedness
either received by any Borrower or Guarantor or on its behalf promptly after the
receipt thereof, or sent by any Borrower or Guarantor or on its behalf
concurrently with the sending thereof, as the case may be;

 

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(i) unsecured Indebtedness of Operating arising after the date hereof to TPG
Partners, any Affiliate of TPG Partners or any third party to the extent such
Indebtedness of Operating to such third party is guaranteed by TPG Partners or
any Affiliate of TPG Partners (other than any Indebtedness permitted under
Sections 9.9(g) or 9.9(h) above) pursuant to loans in cash or other immediately
available funds by such person to Operating, provided, that, each of the
following conditions is satisfied as determined by Agent: (i) such Indebtedness
shall be on terms and conditions reasonably acceptable to Agent, and such
Indebtedness shall be subject and subordinate in right of payment to the right
of Agent and Lenders to receive the prior indefeasible payment and satisfaction
in full in cash or other immediately available funds of all of the Obligations
pursuant to the terms of an intercreditor agreement between Agent and the person
to whom such Indebtedness is owed, in form and substance satisfactory to Agent,
(ii) Agent shall have received prior written notice of the intention of
Operating to incur such Indebtedness, which notice shall set forth in reasonable
detail satisfactory to Agent the amount of such Indebtedness, the person or
persons to whom such Indebtedness will be owed, the interest rate, the schedule
of repayments and maturity date with respect thereto and such other information
as Agent may reasonably request with respect thereto, (iii) Agent shall have
received true, correct and complete copies of all agreements, documents and
instruments evidencing or otherwise related to such Indebtedness, (iv) Operating
shall not, directly or indirectly, (A) amend, modify, alter or change the terms
of such Indebtedness or any agreement, document or instrument related thereto,
except, that, Operating may, after prior written notice to Agent, amend, modify,
alter or change the terms thereof so as to extend the maturity thereof, or defer
the timing of any payments in respect thereof, or to forgive or cancel any
portion of such Indebtedness (other than pursuant to payments thereof), or to
reduce the interest rate or any fees in connection therewith, or (B) redeem,
retire, defease, purchase or otherwise acquire such Indebtedness (except
pursuant to regularly scheduled payments that may be permitted under the terms
of the intercreditor agreement referred to above), or set aside or otherwise
deposit or invest any sums for such purpose, and (v) Borrowers and Guarantors
shall furnish to Agent all notices or demands in connection with such
Indebtedness either received by any Borrower or Guarantor or on its behalf
promptly after the receipt thereof, or sent by any Borrower or Guarantor or on
its behalf concurrently with the sending thereof, as the case may be;

(j) Indebtedness of Parent evidenced by the Senior Discount Debentures as in
effect on the date hereof or as permitted to be amended pursuant to the terms
hereof, provided, that:

(i) the aggregate amount of such Indebtedness shall not exceed $25,000,000, less
the aggregate amount of all repayments or redemptions, whether optional or
mandatory, in respect thereof, plus interest thereon at the rate provided for in
the Senior Discount Debentures as in effect on the date hereof,

(ii) the Credit Facility is and shall at all times continue to be the “New
Credit Facility” as such term is defined in the Senior Debenture Indenture as in
effect on the date hereof and is and shall be entitled to all of the rights and
benefits thereof, if any, under the Senior Debenture Indenture as in effect on
the date hereof,

 

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(iii) Borrowers and Guarantors shall not, directly or indirectly, make any
payments in respect of such Indebtedness, except that they may make
(A) regularly scheduled payments of interest and fees, if any, in respect of
such Indebtedness when due in accordance with the terms of the Senior Discount
Debentures and the Senior Debenture Indenture, in each case as in effect on the
date hereof and any reasonable and customary fees required to be paid to holders
of the Senior Discount Debentures in connection with a consent solicitation and
(B) payments permitted under clause (j)(v) below of this Section 9.9,

(iv) Borrowers and Guarantors shall not, directly or indirectly, amend, modify,
alter or change, in each case, in any material respect any terms of such
Indebtedness or any of the Senior Discount Debentures, the Senior Debenture
Indenture or any related agreements, documents and instruments, except that
Borrowers and Guarantors may, after prior written notice to Agent, amend,
modify, alter or change the terms thereof so as to extend the maturity thereof
or defer the timing of any payments in respect thereof, or to forgive or cancel
any portion of such Indebtedness other than pursuant to payments thereof, or to
reduce the interest rate or any fees in connection therewith, or to eliminate
any covenants contained therein, or make any such covenants less restrictive or
otherwise more favorable to any Borrower or Guarantor, and

(v) Borrowers and Guarantors shall not, directly or indirectly, redeem, retire,
defease, purchase or otherwise acquire all or any part of such Indebtedness
other than at maturity (as set forth in the Senior Debenture Indenture as in
effect on the date hereof or as extended after the date hereof), or set aside or
otherwise deposit or invest any sums for such purpose, except that

(A) Borrowers or Guarantors may redeem, retire, defease, purchase or otherwise
acquire all or any part of such Indebtedness with Refinancing Indebtedness with
respect thereto to the extent permitted under Section 9.9(o) hereof,

(B) Borrowers or Guarantors may redeem, retire, defease, purchase or otherwise
acquire all or any portion of such Indebtedness with the net proceeds of the
issuance and sale of Capital Stock of Parent or Operating permitted hereunder
received by such Borrower or Guarantor in cash or other immediately available
funds, provided, that, as of the date of any such redemption or purchase or any
payment in respect thereof and after giving effect thereto, (1) Borrowers and
Guarantors shall have complied with all of the requirements of Sections
9.7(b)(iii)(A), (B), (C) and (E) with respect to such issuance and sale of
Capital Stock and in addition to such requirements, the notice provided to Agent
pursuant thereto shall specify that the proceeds are to be used for the
redemption, retirement, defeasance, purchase or acquisition of all or any part
all of such Indebtedness (and shall specify which of the foregoing is intended),
the maximum amount that Borrowers and Guarantors will pay in respect thereof and
the range of the principal amount of the Senior Discount Debentures that
Borrowers and Guarantors anticipate will be so redeemed, retired, defeased,
purchased or otherwise acquired, (2) the redemption, retirement, defeasance,
repurchase or acquisition of all or any part of such Indebtedness shall be
substantially contemporaneous with the issuance and sale of the Capital Stock of
Parent or Operating subject to such notice provided to Agent, (3) as of the date
of any such payment and after giving effect thereto, there shall be Excess
Availability, and (4) as of the date of any such payment and after giving effect
thereto, no Default or Event of Default shall exist or have occurred and be
continuing,

 

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(C) Borrowers or Guarantors may redeem or repurchase such Indebtedness in cash
or other immediately available funds (other than with proceeds of the issuance
and sale of Capital Stock of Parent or Operating as provided in clause
(B) above); provided, that, (1) Borrower Agent shall have provided to Agent not
less than ten (10) Business Days’ notice of the intention of such Borrower or
Guarantor to redeem or repurchase such Indebtedness (specifying the amount to be
paid by Borrowers or Guarantors and the principal amount of the Senior Discount
Debentures that Borrowers and Guarantors anticipate will be so redeemed or
repurchased), (2) for the two consecutive month period immediately prior to the
date of any payment in respect of such redemption or repurchase, Excess
Availability shall have been not less than $30,000,000, (3) Agent shall have
received, not more than twenty (20) Business Days prior to such payment and not
less than five (5) Business Days prior to such payment, current, updated
projections of the amount of the Borrowing Base and Excess Availability for the
one month period after the date of any payment in respect of such redemption or
repurchase, in a form reasonably satisfactory to Agent, representing Borrowers’
reasonable best estimate of the future Borrowing Base and Excess Availability
for the period set forth therein as of the date not more than ten (10) days
prior to the date of the payment in respect of such redemption and repurchase,
which projections shall have been prepared on the basis of the assumptions set
forth therein which Borrowers believe are fair and reasonable as of the date of
preparation in light of current and reasonably foreseeable business conditions,
(4) the amount of the Excess Availability as set forth in such projections for
such one month period shall be not less than $20,000,000, and (5) as of the date
of any such payment and after giving effect thereto, no Default or Event of
Default exists or has occurred and is continuing;

(k) intentionally omitted;

(l) contingent Indebtedness arising pursuant to the guarantee existing on the
date hereof by any Subsidiary of Operating of the Indebtedness of Operating
evidenced by the 10 3/8% Subordinated Notes to the extent such Indebtedness of
Operating is permitted hereunder, set forth in the 10 3/8% Subordinated Note
Indenture as in effect on the date hereof;

(m) Indebtedness incurred in respect of workers’ compensation claims,
self-insurance obligations, performance, surety and similar bonds and completion
guarantees provided by a Borrower or Guarantor in the ordinary course of
business consistent with current practices as of the date hereof;

(n) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument (other than daylight
overdrafts and drafts in the controlled disbursement accounts to be covered by
Revolving Loans) inadvertently drawn against insufficient funds in the ordinary
course of business; provided, that, such Indebtedness shall be repaid within
five (5) days of its incurrence and shall not exceed $1,000,000 outstanding at
any one time;

(o) Indebtedness of Parent, Operating or Intermediate, as the case may be,
arising after the date hereof issued in exchange for, or the proceeds of which
are used to extend, refinance, replace or substitute for Indebtedness permitted
under Sections 9.9(j), 9.9(q), 9.9(r), 9.9(s), 9.9(t) or 9.9(u) hereof (the
“Refinancing Indebtedness”); provided, that, as to any such Refinancing
Indebtedness, each of the following conditions is satisfied: (i) Agent shall
have

 

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received not less than ten (10) Business Days’ prior written notice of the
intention to incur such Indebtedness, which notice shall set forth in reasonable
detail satisfactory to Agent, the amount of such Indebtedness, the schedule of
repayments and maturity date with respect thereto and such other information
with respect thereto as Agent may reasonably request, (ii) promptly upon Agent’s
request, Agent shall have received true, correct and complete copies of all
agreements, documents and instruments evidencing or otherwise related to such
Indebtedness, as duly authorized, executed and delivered by the parties thereto,
(iii) the Refinancing Indebtedness shall have a Weighted Average Life to
Maturity and a final maturity equal to or greater than the Weighted Average Life
to Maturity and the final maturity, respectively, of the Indebtedness being
extended, refinanced, replaced, or substituted for, (iv) the Refinancing
Indebtedness shall rank in right of payment no more senior than, and be at least
as subordinated (if subordinated) to, the Obligations as the Indebtedness being
extended, refinanced, replaced or substituted for, (v) the Refinancing
Indebtedness shall not include terms and conditions with respect to any Borrower
or Guarantor which are more burdensome or restrictive in any material respect
than those included in the Indebtedness so extended, refinanced, replaced or
substituted for, (vi) such Indebtedness incurred by any Borrower or Guarantor
shall be at rates and with fees or other charges that are commercially
reasonable, (vii) the incurring of such Indebtedness shall not result in an
Event of Default, (viii) the principal amount of such Refinancing Indebtedness
shall not exceed the principal amount of the Indebtedness so extended,
refinanced, replaced or substituted for (plus the amount of refinancing fees and
expenses incurred in connection therewith outstanding on the date of such
event), (ix) Borrowers and Guarantors may only make payments of principal,
interest and fees, if any, in respect of such Indebtedness to the extent such
payments would have been permitted hereunder in respect of the Indebtedness so
extended, refinanced, replaced or substituted for (and except as otherwise
permitted below), (x) Borrowers and Guarantors shall not, directly or
indirectly, (A) amend, modify, alter or change any terms of the agreements with
respect to such Refinancing Indebtedness, except that Borrowers and Guarantors
may, after prior written notice to Agent, amend, modify, alter or change the
terms thereof to the extent permitted with respect to the Indebtedness so
extended, refinanced, replaced or substituted for, or (B) redeem, retire,
defease, purchase or otherwise acquired such Indebtedness, or set aside or
otherwise deposit or invest any sums for such purpose (other than with
Refinancing Indebtedness to the extent permitted herein and to the extent
permitted with respect to the Indebtedness so extended, refinanced, replaced or
substituted for), and (xi) Borrowers and Guarantors shall furnish to Agent
copies of all material notices or demands in connection with Indebtedness
received by any Borrower or Guarantor or on its behalf promptly after the
receipt thereof or sent by any Borrower or Guarantor or on its behalf
concurrently with the sending thereof, as the case may be; and

(p) the Indebtedness set forth on Schedule 9.9 to the Information Certificate;
provided, that, (i) Borrowers and Guarantors may only make regularly scheduled
payments of principal and interest in respect of such Indebtedness in accordance
with the terms of the agreement or instrument evidencing or giving rise to such
Indebtedness as in effect on the date hereof, (ii) Borrowers and Guarantors
shall not, directly or indirectly, (A) amend, modify, alter or change the terms
of such Indebtedness or any agreement, document or instrument related thereto as
in effect on the date hereof except, that, Borrowers and Guarantors may, after
prior written notice to Agent, amend, modify, alter or change the terms thereof
so as to extend the maturity thereof, or defer the timing of any payments in
respect thereof, or to forgive or cancel any portion of such Indebtedness (other
than pursuant to payments thereof), or to reduce the

 

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interest rate or any fees in connection therewith, or (B) redeem, retire,
defease, purchase or otherwise acquire such Indebtedness, or set aside or
otherwise deposit or invest any sums for such purpose, and (iii) Borrowers and
Guarantors shall furnish to Agent all notices or demands in connection with such
Indebtedness either received by any Borrower or Guarantor or on its behalf,
promptly after the receipt thereof, or sent by any Borrower or Guarantor or on
its behalf, concurrently with the sending thereof, as the case may be.

(q) Indebtedness of Intermediate evidenced by the 16% Senior Discount Notes as
in effect on the date hereof or as permitted to be amended pursuant to the terms
hereof, provided, that:

(i) the aggregate amount of such Indebtedness shall not exceed $75,000,000, plus
Contingent Principal, less the aggregate amount of all repayments or
redemptions, whether optional or mandatory, in respect thereof, plus interest
thereon at the rate provided for in the 16% Senior Discount Note Indenture as in
effect on the date hereof;

(ii) the Credit Facility is and shall at all times continue to be the “New
Credit Facility” as such term is defined in the 16% Senior Discount Note
Indenture as in effect on the date hereof and is and shall be entitled to all of
the rights and benefits thereof, if any, under the 16% Senior Discount Note
Indenture as in effect on the date hereof,

(iii) Borrowers and Guarantors shall not, directly or indirectly, make any
payments in respect of such Indebtedness, except that (A) they may make
regularly scheduled payments of interest by capitalizing such interest and
adding such capitalized amount to the outstanding principal amount of such
Indebtedness, and fees, if any, in respect of such Indebtedness when due in
accordance with the terms of the 16% Senior Discount Notes in effect on the date
hereof and the 16% Senior Discount Note Indenture as in effect on the date
hereof, in each case in accordance with the terms of the Exchange Offer
Documents as in effect on the date hereof and any reasonable and customary fees
required to be paid to holders of the 16% Senior Discount Notes in connection
with a consent solicitation, it being understood and agreed that in no event
shall the provisions of the 16% Senior Discount Notes as in effect on the date
hereof and the 16% Senior Discount Note Indenture as in effect on the date
hereof with respect thereto, vary from the provisions of the Exchange Offer
Documents and (B) payments permitted under clause (q)(v) below of this
Section 9.9 ,

(iv) Borrowers and Guarantors shall not, directly or indirectly, amend, modify,
alter or change, in each case, in any material respect any terms of such
Indebtedness or any of the 16% Senior Discount Notes, the 16% Senior Discount
Note Indenture or any related agreements, documents and instruments, except that
Borrowers and Guarantors may, after prior written notice to Agent, amend,
modify, alter or change the terms thereof so as to extend the maturity thereof
or defer the timing of any payments in respect thereof, or to forgive or cancel
any portion of such Indebtedness other than pursuant to payments thereof, or to
reduce the interest rate or any fees in connection therewith, or to eliminate
any covenants contained therein, or make any such covenants less restrictive or
otherwise more favorable to any Borrower or Guarantor, and

 

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(v) Borrowers and Guarantors shall not, directly or indirectly, redeem, retire,
defease, purchase or otherwise acquire all or any part of such Indebtedness
other than at maturity (as set forth in the 16% Senior Discount Note Indenture
as in effect on the date hereof or as extended after such date), or set aside or
otherwise deposit or invest any sums for such purpose, except that

(A) Borrowers or Guarantors may redeem, retire, defease, purchase or otherwise
acquire all or any part of such Indebtedness with Refinancing Indebtedness with
respect thereto to the extent permitted under Section 9.9(o) hereof,

(B) Borrowers or Guarantors may redeem, retire, defease, purchase or otherwise
acquire all or any portion of such Indebtedness with the net proceeds of the
issuance and sale of Capital Stock of Parent or Operating permitted hereunder
received by such Borrower or Guarantor in cash or other immediately available
funds; provided, that, as of the date of any such redemption or purchase or any
payment in respect thereof and after giving effect thereto, (1) Borrowers and
Guarantors shall have complied with all of the requirements of Sections
9.7(b)(iii)(A), (B), (C) and (E) with respect to such issuance and sale of
Capital Stock and in addition to such requirements, the notice provided to Agent
pursuant thereto shall specify that the proceeds are to be used for the
redemption, retirement, defeasance, purchase or acquisition of all or any part
all of such Indebtedness (and shall specify which of the foregoing is intended),
the maximum amount that Borrowers and Guarantors will pay in respect thereof and
the range of the principal amount of the 16% Senior Discount Notes that
Borrowers and Guarantors anticipate will be so redeemed, retired, defeased,
purchased or otherwise acquired, (2) the redemption, retirement, defeasance,
repurchase or acquisition of all or any part of such Indebtedness shall be
substantially contemporaneous with the issuance and sale of the Capital Stock of
Parent or Operating subject to such notice provided to Agent, (3) as of the date
of any such payment and after giving effect thereto, there shall be Excess
Availability, and (4) as of the date of any such payment and after giving effect
thereto, no Default or Event of Default shall exist or have occurred and be
continuing, and

(C) Borrowers or Guarantors may redeem or repurchase such Indebtedness in cash
or other immediately available funds (other than with proceeds of the issuance
and sale of Capital Stock of Parent or Operating as provided in clause
(B) above); provided, that, (1) Borrower Agent shall have provided to Agent not
less than ten (10) Business Days’ notice of the intention of such Borrower or
Guarantor to redeem or purchase such Indebtedness (specifying the amount to be
paid by Borrowers or Guarantors and the principal amount of the 16% Senior
Discount Notes that Borrowers and Guarantors anticipate will be so redeemed or
repurchased), (2) for the two consecutive month period immediately prior to the
date of any payment in respect of such redemption or repurchase, Excess
Availability shall have been not less than $30,000,000, (3) Agent shall have
received, not more than twenty (20) Business Days prior to such payment and not
less than five (5) Business Days prior to such payment, current, updated
projections of the amount of the Borrowing Base and Excess Availability for the
one month period after the date of any payment in respect of such redemption or
repurchase, in a form reasonably satisfactory to Agent, representing Borrowers’
reasonable best estimate of the future Borrowing Base and Excess Availability
for the period set forth therein as of the date not more than ten (10) days
prior to the date of the payment in respect of such redemption and repurchase,
which projections shall have been prepared on the basis of the

 

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assumptions set forth therein which Borrowers believe are fair and reasonable as
of the date of preparation in light of current and reasonably foreseeable
business conditions, and (4) the amount of the Excess Availability as set forth
in such projections for such one month period shall be not less than
$20,000,000, and (5) as of the date of any such payment and after giving effect
thereto, no Default or Event of Default exists or has occurred and is
continuing;

(r) Indebtedness of Operating arising on the Black Canyon Closing Date under the
Black Canyon Credit Agreement (or under the Black Canyon Indenture upon its
execution and delivery after the Black Canyon Closing Date), provided, that:

(i) the aggregate amount of such Indebtedness shall not exceed $275,000,000 (or
such greater amount as is permitted below), less the aggregate amount of all
repayments or redemptions, whether optional or mandatory, in respect thereof,
plus interest thereon at the rate provided for in the Black Canyon Credit
Agreement (or provided for in the Black Canyon Indenture upon its execution and
delivery after the date hereof), except, that, at the option of Borrowers, the
aggregate principal amount of such Indebtedness outstanding at such time may be
increased, provided, that, (A) Agent shall have received not less than ten
(10) Business Days’ prior written notice of the intention of Borrowers to
exercise such option, which notice shall specify the then current amounts of
such Indebtedness, the amount of such increase and such other information with
respect thereto as Agent may reasonably request, (B) each of the conditions to
any such increase under the terms of the Black Canyon Credit Agreement as in
effect on the date hereof have been satisfied and Agent shall have received such
evidence thereof as Agent may request, (C) such Indebtedness shall be on the
same terms and conditions as the Indebtedness of Borrowers under the Black
Canyon Credit Agreement as in effect on the date hereof (or as permitted to be
amended hereunder) or the same terms and conditions of the Black Canyon
Indenture (as such terms and conditions are permitted hereunder) or terms and
conditions more favorable to Borrowers and Guarantors and subject in all
respects to the Black Canyon Intercreditor Agreement or other intercreditor
agreements no less favorable to Agent in any respect, (D) Agent shall receive
written confirmation from Borrower Agent that Borrowers have received the
proceeds of the loans in immediately available funds giving rise to such
increase in Indebtedness promptly upon the receipt thereof and the amount of
such funds, (E) in no event shall the aggregate amount of all such increases
exceed at any time the amount equal to $50,000,000 minus the amount of the
outstanding Indebtedness permitted under Section 9.9(u) hereof, (F) after giving
effect to any such increase, Excess Availability shall be not less than
$20,000,000 and (G) as of the date of such increase and after giving effect
thereto, no Default or Event of Default shall exist or have occurred and be
continuing,

(ii) the Credit Facility is and shall at all times continue to be the “Congress
Credit Facility” as such term is defined in the Black Canyon Documents and the
Obligations are and shall at all times constitute “Senior Debt” and “Designated
Senior Debt” as each of such terms is defined in the Black Canyon Documents and
is and shall be entitled to all of the rights and benefits thereof, if any,
under the Black Canyon Documents,

(iii) Borrowers and Guarantors shall not, directly or indirectly, make any
payments in respect of such Indebtedness, except that (A) they may make
regularly scheduled payments of interest and fees, if any, in respect of such
Indebtedness when due in accordance with the terms of the Black Canyon Credit
Agreement (or in accordance with the terms of the

 

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Black Canyon Indenture upon its execution and delivery after the Black Canyon
Closing Date), and any reasonable and customary fees required to be paid to
lenders or holders of the Indebtedness of Operating under the Black Canyon
Documents and (B) payments permitted under clause (r)(v) below of this
Section 9.9,

(iv) Borrowers and Guarantors shall not, directly or indirectly, amend, modify,
alter or change, in each case, in any material respect any terms of such
Indebtedness or any of the Black Canyon Documents or any related agreements,
documents and instruments, except that Borrowers and Guarantors may, after prior
written notice to Agent, amend, modify, alter or change the terms thereof so as
to extend the maturity thereof or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such Indebtedness other than
pursuant to payments thereof, or to reduce the interest rate or any fees in
connection therewith, or to eliminate any covenants contained therein, or make
any such covenants less restrictive or otherwise more favorable to any Borrower
or Guarantor or to execute and deliver a loan guarantee in the form attached as
Exhibit B to the Black Canyon Credit Agreement (or the equivalent form attached
to the Black Canyon Indenture), and

(v) Borrowers and Guarantors shall not, directly or indirectly, redeem, retire,
defease, purchase or otherwise acquire all or any part of such Indebtedness
other than at maturity (as set forth in the Black Canyon Credit Agreement or the
Black Canyon Indenture upon its execution and delivery after the Black Canyon
Closing Date), or set aside or otherwise deposit or invest any sums for such
purpose, except that

(A) Borrowers or Guarantors may redeem, retire, defease, purchase or otherwise
acquire all or any part of such Indebtedness with Refinancing Indebtedness with
respect thereto to the extent permitted under Section 9.9(o) hereof,

(B) Borrowers or Guarantors may redeem, retire, defease, purchase or otherwise
acquire all or any portion of such Indebtedness with the net proceeds of the
issuance and sale of Capital Stock of Parent or Operating permitted hereunder
received by such Borrower or Guarantor in cash or other immediately available
funds; provided, that, as of the date of any such redemption or purchase or any
payment in respect thereof and after giving effect thereto, (1) Borrowers and
Guarantors shall have complied with all of the requirements of Sections
9.7(b)(iii)(A), (B), (C) and (E) with respect to such issuance and sale of
Capital Stock and in addition to such requirements, the notice provided to Agent
pursuant thereto shall specify that the proceeds are to be used for the
redemption, retirement, defeasance, purchase or acquisition of all or any part
all of such Indebtedness (and shall specify which of the foregoing is intended),
the maximum amount that Borrowers and Guarantors will pay in respect thereof and
the range of the principal amount of such Indebtedness that Borrowers and
Guarantors anticipate will be so redeemed, retired, defeased, purchased or
otherwise acquired, (2) the redemption, retirement, defeasance, repurchase or
acquisition of all or any part of such Indebtedness shall be substantially
contemporaneous with the issuance and sale of the Capital Stock of Parent or
Operating subject to such notice provided to Agent, (3) as of the date of any
such payment and after giving effect thereto, there shall be Excess
Availability, and (4) as of the date of any such payment and after giving effect
thereto, no Default or Event of Default shall exist or have occurred and be
continuing, and

 

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(C) Borrowers or Guarantors may redeem or repurchase such Indebtedness in cash
or other immediately available funds (other than with proceeds of the issuance
and sale of Capital Stock of Parent or Operating as provided in clause
(B) above); provided, that, (1) Borrower Agent shall have provided to Agent not
less than ten (10) Business Days’ notice of the intention of such Borrower or
Guarantor to redeem or repurchase such Indebtedness (specifying the amount to be
paid by Borrowers or Guarantors and the principal amount of such Indebtedness
that Borrowers and Guarantors anticipate will be so redeemed or repurchased),
(2) for the two consecutive month period immediately prior to the date of any
payment in respect of such redemption or repurchase, Excess Availability shall
have been not less than $30,000,000, (3) Agent shall have received, not more
than ten (10) Business Days prior to such payment and not less than five
(5) Business Days prior to such payment, current, updated projections of the
amount of the Borrowing Base and Excess Availability for the one month period
after the date of any payment in respect of such redemption or repurchase, in a
form reasonably satisfactory to Agent, representing Borrowers’ reasonable best
estimate of the future Borrowing Base and Excess Availability for the period set
forth therein as of the date not more than ten (10) days prior to the date of
the payment in respect of such redemption and repurchase, which projections
shall have been prepared on the basis of the assumptions set forth therein which
Borrowers believe are fair and reasonable as of the date of preparation in light
of current and reasonably foreseeable business conditions, (4) the amount of the
Excess Availability as set forth in such projections for such one month period
shall be not less than $20,000,000, and (5) as of the date of any such payment
and after giving effect thereto, no Default or Event of Default exists or has
occurred and is continuing.

(s) contingent Indebtedness arising pursuant to the guarantees existing on
November 24, 2004 by the Black Canyon Guarantors (or thereafter pursuant to any
person that becomes a Black Canyon Guarantor after November 24, 2004 in
accordance with the terms of the Black Canyon Documents) of the Indebtedness of
Operating arising under the Black Canyon Documents to the extent such
Indebtedness of Operating is permitted hereunder, set forth in the Black Canyon
Credit Agreement, or on substantially the same terms, in the Black Canyon
Indenture upon the execution and delivery thereof.

(t) Indebtedness of any Borrower or Guarantor arising after the date hereof to
any financial institution or institutions pursuant to loans in cash or other
immediately available funds by such institution or institutions to such Borrower
or Guarantor, provided, that, each of the following conditions is satisfied as
determined by Agent: (i) such Indebtedness shall be owing to a financial
institution or institutions reasonably acceptable to Agent, (ii) in no event
shall any Borrower or Guarantor make, or be required to make under the terms
thereof, any payments in respect of such Indebtedness prior to the date one
hundred eighty (180) days after the end of the then current term of this
Agreement, except for (A) regularly scheduled payments of interest and
(B) regularly scheduled payments of principal so long as the aggregate amount of
such payments of principal in any twelve (12) consecutive month period (but not
including payments on the final maturity date of such Indebtedness) do not
exceed $10,000,000 (provided, that, the amount of any such payments of principal
in excess of $2,500,000 to be made in any such twelve (12) month period shall be
included in the calculation of the Fixed Interest Charge Coverage Ratio as
provided herein), (iii) the terms and conditions of such Indebtedness shall be
on “market” terms (based on the market for a secured term loan provided in
conjunction with an asset-based facility of the type provided for in this
Agreement) and otherwise on commercially

 

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reasonable rates and terms in a bona fide transaction, (iv) such Indebtedness
shall be secured only by a first priority security interest in the Intellectual
Property and a security interest in such other Collateral as such financial
institution or institutions may require which is subordinate and junior in all
respects to the security interest and lien of Agent therein, (v) Agent shall
have received an intercreditor agreement, in form and substance reasonably
satisfactory to Agent, duly authorized, executed and delivered by the persons to
whom such Indebtedness is owed, and acknowledged and agreed to by Borrowers and
Guarantors, (vi) Agent shall have received not less than ten (10) Business Days’
prior written notice of the intention of such Borrower or Guarantor to incur
such Indebtedness, which notice shall set forth in reasonable detail
satisfactory to Agent the amount of such Indebtedness, the person or persons to
whom such Indebtedness will be owed, the interest rate, the schedule of
repayments and maturity date with respect thereto and such other information as
Agent may reasonably request with respect thereto, (vii) on and after the
incurrence of such Indebtedness, the Adjusted Borrowing Base shall be used for
purposes hereof and as of the date of incurring such Indebtedness, immediately
after giving effect to the Adjusted Borrowing Base, Excess Availability shall be
not less than $20,000,000, (viii) Agent shall have received true, correct and
complete copies of all material agreements, documents and instruments evidencing
or otherwise related to such Indebtedness and such other agreements, documents
and instruments as Agent may reasonably request, (ix) the net cash proceeds of
such loans received by the Borrowers shall not be less than $20,000,000 and
shall not exceed $80,000,000, (x) as of the date of incurring such Indebtedness
and after giving effect thereto, no Default or Event of Default shall exist or
have occurred and be continuing, (xi) such Borrower and Guarantor shall not,
directly or indirectly, (A) amend, modify, alter or change the terms of such
Indebtedness or any agreement, document or instrument related thereto, except,
that, such Borrower or Guarantor may, after prior written notice to Agent,
amend, modify, alter or change the terms thereof so as to extend the maturity
thereof, or defer the timing of any payments in respect thereof, or to forgive
or cancel any portion of such Indebtedness (other than pursuant to payments
thereof), or to reduce the interest rate or any fees in connection therewith, or
in such other manner as Agent may agree or (B) redeem, retire, defease, purchase
or otherwise acquire such Indebtedness (except pursuant to regularly scheduled
payments permitted herein), or set aside or otherwise deposit or invest any sums
for such purpose, and (xii) Borrowers and Guarantors shall furnish to Agent all
material notices or demands in connection with such Indebtedness either received
by any Borrower or Guarantor or on its behalf promptly after the receipt
thereof, or sent by any Borrower or Guarantor or on its behalf concurrently with
the sending thereof, as the case may be;

(u) Indebtedness of any Borrower or Guarantor arising after the date hereof to
any financial institution or institutions pursuant to loans in cash or other
immediately available funds by such institution or institutions to such Borrower
or Guarantor, provided, that, each of the following conditions is satisfied as
determined by Agent: (i) such Indebtedness shall be owing to a financial
institution or institutions reasonably acceptable to Agent, (ii) each of the
conditions to any increase in the amount of Indebtedness under the terms of the
Black Canyon Credit Agreement as in effect on the date hereof shall have been
satisfied and Agent shall have received such evidence thereof as Agent may
request, (iii) such Indebtedness shall be on the same terms and conditions as
the Indebtedness of Borrowers under the Black Canyon Credit Agreement as in
effect on the date hereof (or as permitted to be amended hereunder) or the terms
and conditions of the Black Canyon Indenture (as such terms and conditions are
permitted hereunder) or terms and conditions more favorable to Borrowers and
Guarantors, (iv) Agent shall

 

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have received an intercreditor agreement, in form and substance satisfactory to
Agent, duly authorized, executed and delivered by the persons to whom such
Indebtedness is owed, and acknowledged and agreed to by Borrowers and
Guarantors, which shall be no less favorable to Agent and Lenders than the Black
Canyon Intercreditor Agreement, (v) Agent shall receive written confirmation
from Borrower Agent that Borrowers have received the proceeds of the loans in
immediately available funds giving rise to such Indebtedness on the date of the
receipt thereof and the amount of such funds, (vi) in no event shall the
aggregate amount of all such Indebtedness exceed at any time the amount equal to
$50,000,000 minus the amount of all increases in the Indebtedness permitted
under Section 9.9(r)(i) hereof above, (vii) after giving effect to any such
Indebtedness, Excess Availability shall be not less than $20,000,000,
(vii) Agent shall have received not less than ten (10) Business Days’ prior
written notice of the intention of such Borrower or Guarantor to incur such
Indebtedness, which notice shall set forth in reasonable detail satisfactory to
Agent the amount of such Indebtedness, the person or persons to whom such
Indebtedness will be owed, the interest rate, the schedule of repayments and
maturity date with respect thereto and such other information as Agent may
reasonably request with respect thereto, (viii) Agent shall have received true,
correct and complete copies of all material agreements, documents and
instruments evidencing or otherwise related to such Indebtedness and such other
agreements, documents and instruments as Agent may reasonably request, (ix) as
of the date of incurring such Indebtedness and after giving effect thereto, no
Default or Event of Default shall exist or have occurred and be continuing,
(x) such Borrower and Guarantor shall not, directly or indirectly, (A) amend,
modify, alter or change the terms of such Indebtedness or any agreement,
document or instrument related thereto, except, that, such Borrower or Guarantor
may, after prior written notice to Agent, amend, modify, alter or change the
terms thereof so as to extend the maturity thereof, or defer the timing of any
payments in respect thereof, or to forgive or cancel any portion of such
Indebtedness (other than pursuant to payments thereof), or to reduce the
interest rate or any fees in connection therewith, or in such other manner as
Agent may agree, (B) redeem, retire, defease, purchase or otherwise acquire such
Indebtedness (except pursuant to regularly scheduled payments permitted herein),
or set aside or otherwise deposit or invest any sums for such purpose, and
(xi) Borrowers and Guarantors shall furnish to Agent all material notices or
demands in connection with such Indebtedness either received by any Borrower or
Guarantor or on its behalf promptly after the receipt thereof, or sent by any
Borrower or Guarantor or on its behalf concurrently with the sending thereof, as
the case may be; and

(v) Indebtedness of any Borrower or Guarantor entered into in the ordinary
course of business pursuant to a Hedge Agreement; provided, that, (i) such
arrangements are either with Agent, any Lender, or any Affiliate of any Lender
or other financial institutions acceptable to Agent (and in each case as to any
such Lender, Affiliate or other financial institution only to the extent
approved by Agent), (ii) such arrangements are not for speculative purposes, and
(iii) such Indebtedness shall be unsecured, except to the extent such
Indebtedness constitutes part of the Obligations arising under or pursuant to
Hedge Agreements with Agent, any Lender, any Affiliate of any Lender or another
financial institution that are secured under the terms hereof.

 

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9.10 Loans, Investments, Etc. Each Borrower and Guarantor shall not, and shall
not permit any Subsidiary to, directly or indirectly, make any loans or advance
money or property to any person, or invest in (by capital contribution or
otherwise) or purchase or repurchase the Capital Stock or Indebtedness or all or
a substantial part of the assets or property of any person, or form or acquire
any Subsidiaries, or agree to do any of the foregoing, except:

(a) the endorsement of instruments for collection or deposit in the ordinary
course of business;

(b) investments in cash or Cash Equivalents, provided, that, (i) no Revolving
Loans are then outstanding and (ii) the terms and conditions of Section 5.2
hereof shall have been satisfied with respect to the deposit account, investment
account or other account in which such cash or Cash Equivalents are held;

(c) the equity investments of each Borrower and Guarantor in its Subsidiaries,
provided, that, no Borrower or Guarantor shall have any further obligations or
liabilities to make any capital contributions or other additional investments or
other payments to or in or for the benefit of any of such Subsidiaries;

(d) loans and advances by any Borrower or Guarantor to employees of such
Borrower or Guarantor not to exceed the principal amount of $3,000,000 in the
aggregate at any time outstanding for: (i) reasonably and necessary work-related
travel or other ordinary business expenses to be incurred by such employee in
connection with their work for such Borrower or Guarantor and (ii) reasonable
and necessary relocation expenses of such employees (including home mortgage
financing for relocated employees);

(e) stock or obligations issued to any Borrower or Guarantor by any Person (or
the representative of such Person) in respect of Indebtedness of such Person
owing to such Borrower or Guarantor in connection with the insolvency,
bankruptcy, receivership or reorganization of such Person or a composition or
readjustment of the debts of such Person; provided, that, the original of any
such stock or instrument evidencing such obligations shall be promptly delivered
to Agent, upon Agent’s request, together with such stock power, assignment or
endorsement by such Borrower or Guarantor as Agent may request;

(f) obligations of account debtors to any Borrower or Guarantor arising from
Accounts which are past due evidenced by a promissory note made by such account
debtor payable to such Borrower or Guarantor; provided, that, promptly upon the
receipt of the original of any such promissory note by such Borrower or
Guarantor, such promissory note shall be endorsed to the order of Agent by such
Borrower or Guarantor and promptly delivered to Agent as so endorsed;

(g) loans by Operating to any Subsidiary of Operating (other than an Inactive
Subsidiary) or by Intermediate or any Subsidiary of Operating to Operating or
any other Subsidiary of Operating (other than an Inactive Subsidiary); provided,
that, as to all of such loans, the Indebtedness arising pursuant to any such
loan shall not be evidenced by a promissory note or other instrument, unless the
single original of such note or other instrument is promptly delivered to Agent
upon its request to hold as part of the Collateral, with such endorsement and/or
assignment by the payee of such note or other instrument as Agent may require,

 

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(h) the formation by Parent of a direct wholly-owned Subsidiary after the date
hereof that is incorporated under the laws of a State of the United States of
America; provided, that, each of the following conditions is satisfied: (i) the
only asset of such wholly-owned Subsidiary shall be Capital Stock of Operating
issued after the date hereof to the extent such issuance is permitted under this
Agreement and such Subsidiary shall not engage in any business or commercial
activity or own or hold any other assets or properties, (ii) Parent shall cause
any such Subsidiary to execute and deliver to Agent, each of the following, in
each case in form and substance satisfactory to Agent: (A) an absolute and
unconditional guarantee of payment of the Obligations, (B) a security agreement
granting to Agent a first security interest in and lien upon all of the assets
of any such Subsidiary, and (C) such other agreements, documents and instruments
as Agent may require and (iii) Parent shall (A) execute and deliver to Agent, a
pledge and security agreement, in form and substance satisfactory to Agent,
granting to Agent a first pledge of and lien on all of the issued and
outstanding shares of Capital Stock of any such Subsidiary, and (B) deliver the
original stock certificates evidencing such shares of Capital Stock (or such
other evidence as may be issued in the case of a limited liability company),
together with stock powers with respect thereto duly executed in blank (or the
equivalent thereof in the case of a limited liability company in which such
interests are certificated, or otherwise take such actions as Agent shall
require with respect to Agent’s security interests therein),

(i) other investments in an aggregate amount not to exceed $ 1,000,000 at any
time outstanding, provided, that, as of the date of any such investment and
after giving effect thereto, no Default or Event of Default shall exist or have
occurred and be continuing;

(j) the loans and advances set forth on Schedule 9.10 to the Information
Certificate; provided, that, as to such loans and advances, Borrowers and
Guarantors shall not, directly or indirectly, amend, modify, alter or change the
terms of such loans and advances or any agreement, document or instrument
related thereto and Borrowers and Guarantors shall furnish to Agent all notices
or demands in connection with such loans and advances either received by any
Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or
sent by any Borrower or Guarantor or on its behalf, concurrently with the
sending thereof, as the case may be;

(k) an intercompany loan by Operating to Intermediate on or about the Black
Canyon Closing Date with a portion of the proceeds of the loans received by
Operating under the Black Canyon Credit Agreement, the proceeds of which shall
be used on or about the Black Canyon Closing Date by Intermediate solely to
prepay a portion of the 16% Senior Discount Notes, provided, that, the
Indebtedness arising pursuant to such loan shall not be evidenced by a
promissory note or other instrument, unless the single original of such note or
other instrument is promptly delivered to Agent upon its request to hold as part
of the Collateral, with such endorsement and/or assignment by the payee of such
note or other instrument as Agent may require.

(l) the acquisition after the date of the date hereof by any Borrower or
Guarantor of any direct wholly-owned Subsidiary of such Borrower or Guarantor
organized under the laws of a jurisdiction in the United States of America;
provided, that, as to any such acquisition of any such Subsidiary, each of the
following conditions is satisfied:

(i) as of the date of any such acquisition of such Subsidiary or any payments in
connection with the acquisition of such Subsidiary, and in each case after
giving effect thereto, no Default or Event of Default shall exist or have
occurred and be continuing,

 

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(ii) as of the date of any such acquisition of such Subsidiary or any payments
in connection with the acquisition of such Subsidiary, for the two consecutive
month period immediately prior to the date of any payment in respect of such
redemption or repurchase, Excess Availability shall have been not less than
$30,000,000,

(iii) Agent shall have received, not more than twenty (20) Business Days prior
to the acquisition of such Subsidiary or any payment in connection with the
acquisition of such Subsidiary, and not less than five (5) Business Days prior
to such payment, current, updated projections of the amount of the Borrowing
Base and Excess Availability for the one month period after the date of any
payment in respect of such acquisition, in a form reasonably satisfactory to
Agent, representing Borrowers’ reasonable best estimate of the future Borrowing
Base and Excess Availability for the period set forth therein as of the date not
more than term (10) days prior to the date of such acquisition or any payment in
connection with it, which projections shall have been prepared on the basis of
the assumptions set forth therein which Borrowers believe are fair and
reasonable as of the date of preparation in light of current and reasonably
foreseeable business conditions,

(iv) the amount of the Excess Availability as set forth in such projections for
such one month period shall be not less than $20,000,000,

(v) the Subsidiary acquired shall be engaged in a business related, ancillary or
complementary to the business of Borrowers permitted in this Agreement,

(vi) the Borrower or Guarantor forming such Subsidiary shall, except as Agent
may otherwise agree, (A) execute and deliver to Agent, a pledge and security
agreement, in form and substance satisfactory to Agent, granting to Agent a
first pledge of and lien on all of the issued and outstanding shares of Capital
Stock of any such Subsidiary, and (B) deliver the original stock certificates
evidencing such shares of Capital Stock (or such other evidence as may be issued
in the case of a limited liability company), together with stock powers with
respect thereto duly executed in blank (or the equivalent thereof in the case of
a limited liability company in which such interests are certificated, or
otherwise take such actions as Agent shall require with respect to Agent’s
security interests therein),

(vii) as to any such Subsidiary, except as Agent may otherwise agree, (A) the
Borrower or Guarantor forming such Subsidiary shall cause any such Subsidiary to
execute and deliver to Agent, the following (each in form and substance
satisfactory to Agent), (A) an absolute and unconditional guarantee of payment
of the Obligations, (B) a security agreement granting to Agent a first security
interest and lien (except as otherwise consented to in writing by Agent) upon
all of the assets of any such Subsidiary, and (C) such other agreements,
documents and instruments as Agent may reasonably require in connection with the
documents referred to above, including, but not limited to, supplements and
amendments hereto and other loan agreements or instruments evidencing
Indebtedness of such new Subsidiary to Agent,

 

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(viii) Agent shall have received (A) not less than ten (10) Business Days’ prior
written notice thereof setting forth in reasonable detail the nature and terms
thereof, (B) true, correct and complete copies of all material agreements,
documents and instruments relating thereto and (C) such other agreements,
documents and instruments relating thereto and information with respect thereto
as Agent may reasonably request.

9.11 Restricted Payments. Each Borrower and Guarantor shall not, and shall not
permit any Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except:

(a) Parent or Operating may make Restricted Payments with respect to its Capital
Stock payable solely in additional shares of its Capital Stock that satisfies
the requirements for issuance of Capital Stock by Parent or Operating under
Section 9.7(b)(iii) hereof;

(b) Parent may make Restricted Payments with respect to the 14.50% Series A
Preferred Stock of Parent and the 14.50% payment-in-kind Series B Redeemable
Cumulative Preferred Stock of Parent, payable solely in additional shares of
such preferred stock;

(c) Subsidiaries of Operating may make Restricted Payments to Operating and to
wholly owned Subsidiaries of Operating (other than Inactive Subsidiaries) and
may declare and pay dividends ratably with respect to their common stock;

(d) if at the time thereof and after giving effect thereto, no Default or Event
of Default shall exist or have occurred and be continuing, Operating may pay
cash dividends to Parent, in an aggregate amount not exceeding $1,500,000 during
any fiscal year, at such time and in such amounts as shall be necessary to
permit Parent to (i) pay Taxes imposed upon it and liabilities incidental to its
existence when due and (ii) pay directors’ fees and management compensation to
its directors when due; provided, that, any dividends permitted to be paid to
Parent shall not be paid prior to the date that Parent will apply the proceeds
of such dividends to the purposes for which such dividends are permitted;

(e) Operating and its Subsidiaries may make payments to Parent pursuant to and
in accordance with the tax sharing agreement by and among Parent and its
Subsidiaries to reimburse Parent for their respective shares of income taxes
paid by Parent determined as if Operating or such Subsidiary had filed its tax
returns separately from Parent;

(f) (i) Operating may declare and pay a dividend to Parent (directly, or by
payment of such dividend to Intermediate), and Intermediate may declare and pay
a dividend to Parent, from time to time, (A) in the amount equal to any payment
by Parent of cash interest permitted to be made by Parent pursuant to
Section 9.9(j) hereof in respect of the Senior Discount Debentures, the proceeds
of which shall be used by Parent only to make a payment of the interest then due
and payable in accordance with the terms of the Senior Discount Debentures as in
effect on the date hereof, and (B) in the amount up to the amount of any
prepayments of principal that Parent is then permitted to make in respect of the
Senior Discount Debentures under Section 9.9(j)(v)(C) hereof, the proceeds of
which shall only be used by Parent to make prepayments of principal under the
Senior Discount Debentures to the extent that Parent is

 

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permitted to make such prepayments permitted under Section 9.9(j)(v)(C) hereof
and (C) in the amount of the payment of principal required to be made by Parent
on the scheduled final maturity date under the Senior Discount Debentures as in
effect on the date hereof (or as such maturity date may be extended), the
proceeds of which shall only be used by Parent to make such required payment on
such scheduled final maturity date and (ii) Operating may declare and pay a
dividend to Intermediate, from time to time, (A) in the amount up to the amount
of any prepayments of principal that Intermediate is then permitted to make in
respect of the 16% Senior Discount Notes under Section 9.9(q)(v)(C) hereof, the
proceeds of which shall only be used by Intermediate to make such prepayments
permitted under Section 9.9(q)(v)(C) and (B) in the amount of the payment of
principal required to be made by Intermediate on the scheduled final maturity
date under the 16% Senior Discount Notes as in effect on the date hereof (or as
such maturity date may be extended), the proceeds of which shall only be used by
Intermediate to make such required payment on such scheduled final maturity
date; provided, that, as to any of the dividends referred to in clauses (i)(A)
and (i) (C) and (ii)(B) above, any such dividend shall not be paid more than
ninety (90) days prior to the date such payment of interest or principal is due
and payable and if such dividend is paid by Operating to Parent or Intermediate
prior to the date that such interest or principal is due and payable, all such
funds shall be held in an investment account or deposit account subject to an
Investment Property Control Agreement or Deposit Account Control Agreement, as
the case may be, in favor of Agent, as duly authorized, executed and delivered
by the financial intermediary where such funds are held, Parent and/or
Intermediate and Agent and as to any of the dividends referred to in clause
(i)(B) and (ii)(A) above, any such dividend shall not be paid more than five
(5) Business Days prior to the date of such prepayment and Agent shall have
received not less than ten (10) Business Days’ prior written notice of the
intention of Operating to pay such dividends, which notice shall set forth the
amount thereof that Operating is intending to pay,

(g) Operating may declare and pay to a dividend to Parent from time to time, in
each case, in the amount equal to any payment by Parent of cash interest
permitted to be made by Parent pursuant to Section 9.9(o) hereof in respect of
Refinancing Indebtedness with respect to the Senior Discount Debentures, the
proceeds of which shall be used by Parent only to make a payment of the interest
then due and payable in accordance with the terms of such Refinancing
Indebtedness, provided, that, any such dividend shall not be paid more than
ninety (90) days prior to the date such payment of interest is due and payable
and if such dividend is paid by Operating to Parent prior to the date that such
interest is due and payable, all such funds shall be held in an investment
account subject to an Investment Property Control Agreement in favor of Agent,
as duly authorized, executed and delivered by the financial intermediary where
such funds are held, Parent and Agent;

(h) Borrowers and Guarantors may repurchase Capital Stock consisting of common
stock held by employees pursuant to any employee stock ownership plan thereof
upon the termination, retirement or death of any such employee in accordance
with the provisions of such plan, provided, that, as to any such repurchase,
each of the following conditions is satisfied: (i) as of the date of the payment
for such repurchase and after giving effect thereto, no Default or Event of
Default shall exist or have occurred and be continuing, (ii) such repurchase
shall be paid with funds legally available therefor, (iii) such repurchase shall
not violate any law or regulation or the terms of any indenture, agreement or
undertaking to which such Borrower or Guarantor is a party or by which such
Borrower or Guarantor or its or their property are bound, and (iv) the aggregate
amount of all payments for such repurchases in any calendar year shall not
exceed $500,000;

 

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(i) Borrowers and Guarantors may make Restricted Payments for the purpose of
paying dividends and paying other distributions in respect of Capital Stock or
the repurchase of Capital Stock, provided, that, (A) Borrower Agent shall have
provided to Agent not less than ten (10) Business Days’ prior written notice of
the intention of such Borrower or Guarantor to pay such dividends or other
distributions or make such other repurchases (specifying the amount to be paid
by Borrowers or Guarantors), (B) for the two consecutive month period
immediately prior to the date of any payment in respect of such dividends or
other distributions or repurchases, Excess Availability shall have been not less
than $30,000,000, (C) Agent shall have received, not more than twenty
(20) Business Days prior to such payment and not less than five (5) Business
Days prior to such payment, current, updated projections of the amount of the
Borrowing Base and Excess Availability for the one month period after the date
of any payment in respect of such dividends, other distributions or repurchases,
in a form reasonably satisfactory to Agent, representing Borrowers’ reasonable
best estimate of the future Borrowing Base and Excess Availability for the
period set forth therein as of the date not more than ten (10) days prior to the
date of the payment in respect of such dividend or other distributions, which
projections shall have been prepared on the basis of the assumptions set forth
therein which Borrowers believe are fair and reasonable as of the date of
preparation in light of current and reasonably foreseeable business conditions,
(D) the amount of the Excess Availability as set forth in such projections for
such one month period shall be not less than $20,000,000, and (E) as of the date
of any such payment and after giving effect thereto, no Default or Event of
Default exists or has occurred and is continuing.

9.12 Transactions with Affiliates. Each Borrower and Guarantor shall not, and
shall not permit any Subsidiary, directly or indirectly, to sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except: (a) transactions in the
ordinary course of business that do not involve Parent and are at prices and on
terms no less favorable to such Borrower or Guarantor than could be obtained on
an arm’s-length basis from unrelated third parties or are otherwise permitted
under Section 9.9(i) hereof, (b) transactions between and among Operating and
the other Borrowers and Guarantors not involving any other Affiliate, and
(c) any Restricted Payment permitted by Section 9.11.

9.13 Compliance with ERISA. Each Borrower and Guarantor shall, and shall cause
each of its ERISA Affiliates, to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Federal and State law; (b) cause each Plan which is qualified under Section 401
(a) of the Code to maintain such qualification; (c) not terminate any of such
Plans so as to incur any liability to the Pension Benefit Guaranty Corporation
that would have a Material Adverse Effect; (d) not allow or suffer to exist any
prohibited transaction involving any of such Plans or any trust created
thereunder which would subject such Borrower, Guarantor or such ERISA Affiliate
to a material tax or penalty or other material liability on prohibited
transactions imposed under Section 4975 of the Code or ERISA; (e) make all
required contributions to any Plan which it is obligated to pay under
Section 302 of ERISA, Section 412 of the Code or the terms of such Plan; (f) not
allow or suffer to exist any accumulated funding deficiency, whether or not
waived, with respect to any such Plan; or (g)

 

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allow or suffer to exist any occurrence of a reportable event or any other event
or condition which presents a material risk of termination by the Pension
Benefit Guaranty Corporation of any such Plan that is a single employer plan,
which termination could result in any liability in excess of $5,000,000.

9.14 End of Fiscal Years; Fiscal Quarters. Each Borrower and Guarantor shall,
for financial reporting purposes, cause its, and each of its Subsidiaries’
(a) fiscal years to end on the Saturday closest to January 31st of each year and
(b) fiscal quarters to end on or around each of April 30th, July 31st,
October 31st, and January 31st of each year.

9.15 Credit Card Agreements. Each Borrower shall (a) observe and perform all
material terms, covenants, conditions and provisions of the Credit Card
Agreements to be observed and performed by it at the times set forth therein;
and (b) at all times maintain in full force and effect the Credit Card
Agreements and not terminate, cancel, surrender, modify, amend, waive or release
any of the Credit Card Agreements, or consent to or permit to occur any of the
foregoing; except, that, (i) any Borrower may terminate or cancel any of the
Credit Card Agreements in the ordinary course of the business of such Borrower;
provided, that, such Borrower shall give Agent not less than fifteen (15) days
prior written notice of its intention to so terminate or cancel any of the
Credit Card Agreements; (d) not enter into any new Credit Card Agreements with
any new Credit Card Issuer unless (i) Agent shall have received not less than
thirty (30) days prior written notice of the intention of such Borrower to enter
into such agreement (together with such other information with respect thereto
as Agent may request) and (ii) such Borrower delivers, or causes to be delivered
to Agent, a Credit Card Acknowledgment in favor of Agent, (e) give Agent
immediate written notice of any Credit Card Agreement entered into by such
Borrower after the date hereof, together with a true, correct and complete copy
thereof and such other information with respect thereto as Agent may request;
and (f) furnish to Agent, promptly upon the request of Agent, such information
and evidence as Agent may require from time to time concerning the observance,
performance and compliance by such Borrower or the other party or parties
thereto with the terms, covenants or provisions of the Credit Card Agreements.

9.16 Changes in Business. Each Borrower and Guarantor shall not engage in any
business other than the business of such Borrower or Guarantor on the date
hereof and any business reasonably related, ancillary or complimentary to the
business in which such Borrower or Guarantor is engaged on the date hereof.
Operating does and shall continue to fund the payments under the Letter of
Credit Accommodations and issue checks and other payments for the purchase of
substantially all of the Inventory for which the other Borrowers shall repay
Operating on a regular basis in a manner consistent with the current practices
of Borrowers as of the date hereof.

9.17 Limitation of Restrictions Affecting Subsidiaries. Each Borrower and
Guarantor shall not, directly, or indirectly, create or otherwise cause or
suffer to exist any encumbrance or restriction which prohibits or limits the
ability of any Subsidiary of such Borrower or Guarantor to (a) pay dividends or
make other distributions or pay any Indebtedness owed to such Borrower or
Guarantor or any Subsidiary of such Borrower or Guarantor; (b) make loans or
advances to such Borrower or Guarantor or any Subsidiary of such Borrower or
Guarantor, (c) transfer any of its properties or assets to such Borrower or
Guarantor or any Subsidiary of such Borrower or Guarantor; or (d) create, incur,
assume or suffer to exist any lien upon any of its property, assets

 

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or revenues, whether now owned or hereafter acquired, other than encumbrances
and restrictions arising under (i) applicable law, (ii) this Agreement,
(iii) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of such Borrower or Guarantor or any Subsidiary
of such Borrower or Guarantor, (iv) customary restrictions on dispositions of
real property interests found in reciprocal easement agreements of such Borrower
or Guarantor or any Subsidiary of such Borrower or Guarantor, (v) any agreement
relating to permitted Indebtedness incurred by a Subsidiary of such Borrower or
Guarantor prior to the date on which such Subsidiary was acquired by such
Borrower or such Guarantor and outstanding on such acquisition date, and
(vi) the extension or continuation of contractual obligations in existence on
the date hereof; provided, that, any such encumbrances or restrictions contained
in such extension or continuation are no less favorable to Agent and Lenders
than those encumbrances and restrictions under or pursuant to the contractual
obligations so extended or continued.

9.18 Fixed Interest Charge Coverage Ratio. At any time that Excess Availability
is less than $20,000,000, the Fixed Interest Charge Coverage Ratio of Operating
and its Subsidiaries (on a consolidated basis) for the immediately preceding
twelve (12) consecutive fiscal months (treated as a single account period)
ending on the last day of the most recent fiscal month for which financial
statements of Operating and its Subsidiaries have been received by Agent
pursuant to Section 9.6(a) shall be not less than 1.10 to 1.00 with respect to
such period.

9.19 Capital Expenditures.

(a) Subject to the terms of Section 9.19(b) below, Borrowers and Guarantors
shall not permit the aggregate amount of all Capital Expenditures of Borrowers
and Guarantors during the fiscal year of Borrowers and Guarantors ending on or
about:

(i) January 31, 2005, to exceed $ 15,000,000;

(ii) January 31, 2006, to exceed the greater of (A) the amount equal to:
(1) $40,000,000 as reduced by the amount by which the EBITDA of Operating and
its Subsidiaries for the fiscal year ending January 31, 2005 as set forth in the
audited year-end financial statements for such period is less than $75,000,000
or (B) $25,000,000;

(iii) January 31, 2007, to exceed the greater of (A) the amount equal to:
(1) $50,000,000 as reduced by the amount by which the EBITDA of Operating and
its Subsidiaries for the fiscal year ending January 31, 2006 as set forth in the
audited year-end financial statements for such period is less than $85,000,000
or (B) $25,000,000;

(iv) January 31, 2008, to exceed the greater of (A) the amount equal to:
(1) $60,000,000 as reduced by the amount by which the EBITDA of Operating and
its Subsidiaries for the fiscal year ending January 31, 2007 as set forth in the
audited year-end financial statements for such period is less than $95,000,000
or (B) $25,000,000;

(v) January 31, 2009, to exceed the greater of (A) the amount equal to:
(1) $70,000,000 as reduced by the amount by which the EBITDA of Operating and
its Subsidiaries for the fiscal year ending January 31, 2008 as set forth in the
audited year-end financial statements for such period is less than $105,000,000
or (B) $25,000,000;

 

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(vi) January 31, 2010, to exceed the greater of (A) the amount equal to:
(1) $80,000,000 as reduced by the amount by which the EBITDA of Operating and
its Subsidiaries for the fiscal year ending January 31, 2009 as set forth in the
audited year-end financial statements for such period is less than $115,000,000
or (B) $25,000,000.

(b) To the extent that the actual amount of Capital Expenditures in any fiscal
year shall be less than the amount otherwise permitted hereunder for such fiscal
year, Capital Expenditures may be made in the immediately subsequent fiscal year
in the amount of up to $10,000,000 of such excess, in addition to the amount
otherwise permitted hereunder for such subsequent fiscal year.

9.20 License Agreements.

(a) With respect to a License Agreement applicable to Intellectual Property that
is owned by a third party and licensed to a Borrower or Guarantor and that is
affixed to or otherwise used in connection with the manufacture, sale or
distribution of any Inventory, each Borrower and Guarantor shall (i) give Agent
not less than ninety (90) days prior written notice of its intention to not
renew or to terminate, cancel, surrender or release its rights under any such
License Agreement, or to amend any such License Agreement or related
arrangements to limit the scope of the right of such Borrower or Guarantor to
use the Intellectual Property subject to such License Agreement, either with
respect to product, territory, term or otherwise, or to increase the amounts to
be paid by such Borrower or Guarantor thereunder or in connection therewith (and
Agent may establish such Reserves as a result of any of the foregoing as Agent
may reasonably determine), (ii) give Agent prompt written notice of any such
License Agreement entered into by such Borrower or Guarantor after the date
hereof, or any material amendment to any such License Agreement existing on the
date hereof, in each case together with a true, correct and complete copy
thereof and such other information with respect thereto as Agent may in good
request, (iii) give Agent prompt written notice of any material breach of any
obligation, or any default, by the third party that is the licensor or by the
Borrower or Guarantor that is the licensee or any other party under any such
License Agreement, and deliver to Agent (promptly upon the receipt thereof by
such Borrower or Guarantor in the case of a notice to such Borrower or Guarantor
and concurrently with the sending thereof in the case of a notice from such
Borrower or Guarantor) a copy of each notice of default and any other notice
received or delivered by such Borrower or Guarantor in connection with any such
a License Agreement that relates to the scope of the right, or the continuation
of the right, of such Borrower or Guarantor to use the Intellectual Property
subject to such License Agreement or the amounts required to be paid thereunder.

(b) With respect to a License Agreement applicable to Intellectual Property that
is owned by a third party and licensed to a Borrower or Guarantor and that is
affixed to or otherwise used in connection with the manufacture, sale or
distribution of any Inventory, at any time an Event of Default shall exist or
have occurred and be continuing or if after giving effect to any Reserves, or
the reduction in the applicable Borrowing Base as a result of Eligible Inventory
using such licensed Intellectual Property ceasing to be Eligible Inventory,
Agent shall have, and is hereby granted, the irrevocable right and authority, at
its option, to renew or extend the term of such License Agreement, whether in
its own name and behalf, or in the name and behalf of a designee or nominee of
Agent or in the name and behalf of such Borrower or Guarantor, subject

 

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to and in accordance with the terms of such License Agreement. Agent may, but
shall not be required to, perform any or all of such obligations of such
Borrower or Guarantor under any of the License Agreements, including, but not
limited to, the payment of any or all sums due from such Borrower or Guarantor
thereunder. Any sums so paid by Agent shall constitute part of the Obligations.

9.21 After Acquired Real Property. If any Borrower or Guarantor hereafter
acquires any Real Property, fixtures or any other property that is of the kind
or nature described in the Mortgages and such Real Property, fixtures or other
property is adjacent to, contiguous with or necessary or related to or used in
connection with any Real Property then subject to a Mortgage, or if such Real
Property is not adjacent to, contiguous with or related to or used in connection
with such Real Property, then if such Real Property, fixtures or other property
at any location (or series of adjacent, contiguous or related locations, and
regardless of the number of parcels) has a fair market value in an amount equal
to or greater than $1,000,000 (or if an Event of Default exists, then regardless
of the fair market value of such assets), without limiting any other rights of
Agent or any Lender, or duties or obligations of any Borrower or Guarantor,
promptly upon Agent’s request, such Borrower or Guarantor shall execute and
deliver to Agent a mortgage, deed of trust or deed to secure debt, as Agent may
determine, in form and substance substantially similar to the Mortgages and as
to any provisions relating to specific state laws satisfactory to Agent and in
form appropriate for recording in the real estate records of the jurisdiction in
which such Real Property or other property is located granting to Agent a first
and only lien and mortgage on and security interest in such Real Property,
fixtures or other property (except as such Borrower or Guarantor would otherwise
be permitted to incur hereunder or under the Mortgages or as otherwise consented
to in writing by Agent) and such other agreements, documents and instruments as
Agent may require in connection therewith provided, that, as to any such Real
Property that is not adjacent, contiguous or related to Real Property then
subject to a Mortgage, if the purchase price for such Real Property is paid with
the initial proceeds of a loan from a financial institution giving rise to
Indebtedness permitted under Section 9.9(b) hereof, then such Borrower or
Guarantor shall not be required to execute and deliver such mortgage, deed of
trust or deed to secure debt in favor of Agent with respect to such Real
Property.

9.22 Costs and Expenses. Borrowers and Guarantors shall pay to Agent on demand
all costs, expenses, filing fees and taxes paid or payable in connection with
the preparation, negotiation, execution, delivery, recording, administration,
collection, liquidation, enforcement and defense of the Obligations, Agent’s
rights in the Collateral, this Agreement, the other Financing Agreements and all
other documents related hereto or thereto, including any amendments, supplements
or consents which may hereafter be contemplated (whether or not executed) or
entered into in respect hereof and thereof, including: (a) all out-of-pocket
costs and expenses of filing or recording (including Uniform Commercial Code
financing statement filing taxes and fees, documentary taxes, intangibles taxes
and mortgage recording taxes and fees, if applicable); (b) out-of-pocket costs
and expenses and fees for insurance premiums, environmental audits, title
insurance premiums, surveys, assessments, engineering reports and inspections,
appraisal fees and search fees, costs and expenses of remitting loan proceeds,
collecting checks and other items of payment, and establishing and maintaining
the Blocked Accounts, together with Agent’s customary charges and fees with
respect thereto; (c) charges, fees or expenses charged by any bank or issuer in
connection with the Letter of Credit

 

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Accommodations; (d) costs and expenses of preserving and protecting the
Collateral; (e) costs and expenses paid or incurred in connection with obtaining
payment of the Obligations, enforcing the security interests and liens of Agent,
selling or otherwise realizing upon the Collateral, and otherwise enforcing the
provisions of this Agreement and the other Financing Agreements or defending any
claims made or threatened against Agent or any Lender arising out of the
transactions contemplated hereby and thereby (including preparations for and
consultations concerning any such matters); (f) all out-of-pocket expenses and
costs heretofore and from time to time hereafter incurred by Agent during the
course of periodic field examinations of the Collateral and such Borrower’s or
Guarantor’s operations, plus a per diem charge at Agent’s then standard rate for
Agent’s examiners in the field and office (which rate as of the date hereof is
$850 per person per day), provided that periodic field examinations will be
limited to two in any twelve (12) consecutive month period unless (i) Excess
Availability is less than $30,000,000, in which case, Agent shall be entitled to
conduct a third field examination, and (ii) if an Event of Default shall have
occurred and be continuing, there shall be no restriction on field examinations;
and (g) the reasonable fees and disbursements of counsel (including legal
assistants) to Agent in connection with any of the foregoing.

9.23 Further Assurances. At the request of Agent at any time and from time to
time, Borrowers and Guarantors shall, at their expense, duly execute and
deliver, or cause to be duly executed and delivered, such further agreements,
documents and instruments, and do or cause to be done such further acts as may
be necessary or proper to evidence, perfect, maintain and enforce the security
interests and the priority thereof in the Collateral and to otherwise effectuate
the provisions or purposes of this Agreement or any of the other Financing
Agreements. Agent may at any time and from time to time request a certificate
from an officer of any Borrower or Guarantor representing that all conditions
precedent to the making of Revolving Loans and providing Letter of Credit
Accommodations contained herein are satisfied. In the event of such request by
Agent, Agent and Lenders may, at Agent’s option, cease to make any further
Revolving Loans or provide any further Letter of Credit Accommodations until
Agent has received such certificate and, in addition, Agent has determined that
such conditions are satisfied.

9.24 Minimum Excess Availability. Operating and its Subsidiaries (on a
consolidated basis) shall maintain Excess Availability at all times in excess of
$5,000,000.

9.25 Black Canyon Closing.

(a) On or prior to the Black Canyon Closing Date, the Black Canyon Credit
Agreement shall have been duly authorized, issued and delivered by Operating,
and the transactions contemplated thereunder shall have been performed in
accordance with their terms by the respective parties thereto in all respects to
the extent to be performed thereunder on or before the Black Canyon Closing
Date, including the fulfillment (or the waiver) of all conditions precedent set
forth therein.

(b) On or prior to the Black Canyon Closing Date, all actions and proceedings
required by the Black Canyon Documents, applicable law or regulations,
including, without limitation, all Securities Laws, shall have been taken in all
material respects, and the transactions required thereunder shall have been (or
will be when required to under the Black Canyon Documents or applicable law)
duly and validly taken and consummated.

 

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(c) Borrowers shall provide written notice to Agent of the Black Canyon Closing
Date on such date.

(d) The Black Canyon Closing Date shall occur on or about December 23, 2004 and
Borrowers and Guarantors shall have received the proceeds of the initial loans
under the Black Canyon Credit Agreement on or about such date.

SECTION 10. EVENTS OF DEFAULT AND REMEDIES

10.1 Events of Default. The occurrence or existence of any one or more of the
following events are referred to herein individually as an “Event of Default”,
and collectively as “Events of Default”:

(a) (i) any Borrower fails to pay any of the Obligations when due or (ii) any
Borrower or Obligor fails to perform any of the covenants contained in Sections
7.1(a)(i), 7.1(a)(ii) or 7.1(a)(iii) of this Agreement and such failure shall
continue for ten (10) days or Sections 9.2, 9.3, 9.4, 9.6(a), 9.6(c), 9.13,
9.14, 9.16 and 9.17 of this Agreement or any covenants contained in any of the
Financing Agreements other than any note, guarantee, security agreement,
mortgage or deed of trust and such failure shall continue for fifteen (15) days;
provided, that, such five (5) day period or ten (10) day period, as applicable,
shall not apply in the case of: (A) any failure to observe any such covenant
which is not capable of being cured at all or within such ten (10) or fifteen
(15) day period, as applicable, or which in the case of a failure to perform any
covenant contained in Sections 7.1(a)(i), 7.1(a)(ii) or 7.1(a)(iii) has been the
subject of two (2) prior failures within a calendar year or, in the case of a
failure to perform any of the other covenants set forth in this clause (a)(ii)
has been the subject of a prior failure within a six (6) month period or (B) an
intentional breach by any Borrower or Obligor of any such covenant or (iii) any
Borrower or Obligor fails to perform any of the terms, covenants, conditions or
provisions contained in this Agreement or any of the other Financing Agreements
other than those described in Sections 10.1(a)(i) and 10.1(a)(ii) above;

(b) any representation, warranty or statement of fact made by any Borrower or
Guarantor to Agent in this Agreement, the other Financing Agreements shall when
made or deemed made be false or misleading in any material respect;

(c) any Obligor revokes or terminates or purports to revoke or terminate or
fails to perform any of the terms, covenants, conditions or provisions of any
guarantee, endorsement or other agreement of such party in favor of Agent or any
Lender;

(d) any judgment for the payment of money is rendered against any Borrower or
Obligor in excess of $7,500,000 in any one case or in excess of $10,000,000 in
the aggregate outstanding at any time (to the extent not covered by insurance
where the insurer has assumed responsibility in writing for such judgment) and
shall remain undischarged and unvacated for a period in excess of sixty
(60) days or execution shall at any time not be effectively stayed, or any
judgment other than for the payment of money, or injunction, attachment,
garnishment or execution is rendered against any Borrower or Obligor that has or
is reasonably likely to have a Material Adverse Effect or any of the Collateral
having a value in excess of $7,000,000 and shall remain undischarged and
unvacated for a period in excess of sixty (60) days;

 

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(e) any Obligor (being a natural person or a general partner of an Obligor which
is a partnership) dies or any Borrower or Obligor, which is a partnership,
limited liability company, limited liability partnership or a corporation,
dissolves or suspends or discontinues doing business;

(f) any Borrower or Obligor makes an assignment for the benefit of creditors,
makes or sends notice of a bulk transfer;

(g) a case or proceeding under the bankruptcy laws of the United States of
America now or hereafter in effect or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction now or hereafter in effect (whether at law or in equity) is
filed against any Borrower or Obligor or all or any part of its properties and
such petition or application is not dismissed or vacated within sixty (60) days
after the date of its filing or any Borrower or Obligor shall file any answer
admitting or not contesting such petition or application or indicates its
consent to, acquiescence in or approval of, any such action or proceeding or the
relief requested is granted sooner;

(h) a case or proceeding under the bankruptcy laws of the United States of
America now or hereafter in effect or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction now or hereafter in effect (whether at a law or equity) is
filed by any Borrower or Obligor or for all or any part of its property;

(i) any default by any Borrower or any Obligor under any agreement, document or
instrument relating to any Indebtedness owing to any person other than Lenders,
or any capitalized lease obligations, contingent indebtedness in connection with
any guarantee, letter of credit, indemnity or similar type of instrument in
favor of any person other than Lenders, in any case in an amount in excess of
$5,000,000, which default continues for more than the applicable cure period, if
any, with respect thereto, or any default by any Borrower or any Obligor under
any Material Contract (including, without limitation, any of the Credit Card
Agreements), which default continues for more than the applicable cure period,
if any, with respect thereto which default has or could reasonably be expected
to have a Material Adverse Effect, or any Credit Card Issuer or Credit Card
Processor (other than with a Credit Card Issuer or Credit Card Processor where
the sales using the applicable card are less than ten (10%) percent of all such
sales in the immediately preceding fiscal year) withholds payment of amounts
otherwise payable to a Borrower to fund a reserve account or otherwise hold as
collateral, or shall require a Borrower to pay funds into a reserve account or
for such Credit Card Issuer or Credit Card Processor to otherwise hold as
collateral, or any Borrower shall provide a letter of credit, guarantee,
indemnity or similar instrument to or in favor of such Credit Card Issuer or
Credit Card Processor such that in the aggregate all of such funds in the
reserve account, other amounts held as collateral and the amount of such letters
of credit, guarantees, indemnities or similar instruments shall exceed
$2,000,000 or any such Credit Card Issuer or Credit Card Processor shall debit
or deduct any amounts in excess of $50,000 in the aggregate in any fiscal year
of Borrowers and Guarantors from any deposit account of any Borrower;

 

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(j) any Credit Card Issuer or Credit Card Processor shall send written notice to
any Borrower that it is ceasing to make or suspending payments to any Borrower
of amounts due or to become due to any Borrower or shall cease or suspend such
payments, or shall send written notice to any Borrower that it is terminating
its arrangements with any Borrower or such arrangements shall terminate as a
result of any event of default under such arrangements, which continues for more
than the applicable cure period, if any, with respect thereto, unless such
Borrower shall have entered into arrangements with another Credit Card Issuer or
Credit Card Processor, as the case may be, within sixty (60) days after the date
of any such notice;

(k) any material provision hereof or of any of the other Financing Agreements
shall for any reason cease to be valid, binding and enforceable with respect to
any party hereto or thereto (other than Agent) in accordance with its terms, or
any such party shall challenge the enforceability hereof or thereof, or shall
assert in writing, or take any action or fail to take any action based on the
assertion that any provision hereof or of any of the other Financing Agreements
has ceased to be or is otherwise not valid, binding or enforceable in accordance
with its terms, or any security interest provided for herein or in any of the
other Financing Agreements shall cease to be a valid and perfected first
priority security interest in any of the Collateral purported to be subject
thereto (except as otherwise permitted herein or therein);

(l) an ERISA Event shall occur which results in or could reasonably be expected
to result in liability of any Borrower in an aggregate amount in excess of
$5,000,000;

(m) any Change of Control;

(n) the indictment by any Governmental Authority, or as Agent may reasonably and
in good faith determine, the threatened indictment by any Governmental Authority
of any Borrower or Obligor of which any Borrower, Obligor or Agent receives
notice, in either case, as to which there is a reasonable possibility of an
adverse determination, in the good faith determination of Agent, under any
criminal statute, or commencement or threatened commencement of criminal or
civil proceedings against such Borrower or Obligor, pursuant to which statute or
proceedings the penalties or remedies sought or available include forfeiture of
(i) any of the Collateral having a value in excess of $5,000,000 or (ii) any
other property of any Borrower or Guarantor which is necessary or material to
the conduct of its business; or

(o) there shall be a Material Adverse Effect (it being understood that this
Section 10.1(p) shall not constitute a limitation upon the dollar threshold
amounts set forth in Section 10.1(d) hereof).

10.2 Remedies.

(a) At any time an Event of Default exists or has occurred and is continuing,
Agent and Lenders shall have all rights and remedies provided in this Agreement,
the other Financing Agreements, the UCC and other applicable law, all of which
rights and remedies may be exercised without notice to or consent by any
Borrower or Obligor, except as such notice or consent is expressly provided for
hereunder or required by applicable law. All rights, remedies and powers granted
to Agent and Lenders hereunder, under any of the other Financing Agreements, the
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Agent’s discretion, alternatively, successively, or concurrently on any one or
more occasions, and shall include, without limitation, the right to apply to a
court of equity for an injunction to restrain a breach or threatened breach by
any Borrower or Obligor of this Agreement or any of the other Financing
Agreements. Subject to Section 12 hereof, Agent may, and at the direction of the
Required Lenders shall, at any time or times, proceed directly against any
Borrower or Obligor to collect the Obligations without prior recourse to the
Collateral.

(b) Without limiting the foregoing, at any time an Event of Default exists or
has occurred and is continuing, Agent may, in its discretion, and upon the
direction of the Required Lenders, shall (i) accelerate the payment of all
Obligations and demand immediate payment thereof to Agent for itself and the
ratable benefit of Lenders (provided, that, upon the occurrence of any Event of
Default described in Sections 10.1(g) and 10.1(h), all Obligations shall
automatically become immediately due and payable), (ii) with or without judicial
process or the aid or assistance of others, enter upon any premises on or in
which any of the Collateral may be located and take possession of the Collateral
or complete processing, manufacturing and repair of all or any portion of the
Collateral, (iii) require any Borrower or Obligor, at Borrowers’ expense, to
assemble and make available to Agent any part or all of the Collateral at any
place and time designated by Agent, (iv) collect, foreclose, receive,
appropriate, setoff and realize upon any and all Collateral, (v) remove any or
all of the Collateral from any premises on or in which the same may be located
for the purpose of effecting the sale, foreclosure or other disposition thereof
or for any other purpose, (vi) sell, lease, transfer, assign, deliver or
otherwise dispose of any and all Collateral (including entering into contracts
with respect thereto, public or private sales at any exchange, broker’s board,
at any office of Agent or elsewhere) at such prices or terms as Agent may deem
reasonable, for cash, upon credit or for future delivery, with the Agent having
the right to purchase the whole or any part of the Collateral at any such public
sale, all of the foregoing being free from any right or equity of redemption of
any Borrower or Obligor, which right or equity of redemption is hereby expressly
waived and released by Borrowers and Obligors and/or (vii) terminate this
Agreement. If any of the Collateral is sold or leased by Agent upon credit terms
or for future delivery, the Obligations shall not be reduced as a result thereof
until payment therefor is finally collected by Agent. If notice of disposition
of Collateral is required by law, ten (10) days prior notice by Agent to
Borrower Agent designating the time and place of any public sale or the time
after which any private sale or other intended disposition of Collateral is to
be made, shall be deemed to be reasonable notice thereof and Borrowers and
Obligors waive any other notice. In the event Agent institutes an action to
recover any Collateral or seeks recovery of any Collateral by way of prejudgment
remedy, each Borrower and Obligor waives the posting of any bond which might
otherwise be required. At any time an Event of Default exists or has occurred
and is continuing, upon Agent’s request, Borrowers will either, as Agent shall
specify, furnish cash collateral to the issuer to be used to secure and fund
Agent’s reimbursement obligations to the issuer in connection with any Letter of
Credit Accommodations or furnish cash collateral to Agent for the Letter of
Credit Accommodations. Such cash collateral shall be in the amount equal to one
hundred ten (110%) percent of the amount of the Letter of Credit Accommodations
plus the amount of any fees and expenses payable in connection therewith through
the end of the latest expiration date of such Letter of Credit Accommodations.

 

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(c) At any time or times that an Event of Default exists or has occurred and is
continuing, Agent may, in its discretion, and upon the direction of the Required
Lenders, Agent shall, enforce the rights of any Borrower or Obligor against any
account debtor, secondary obligor or other obligor in respect of any of the
Accounts or other Receivables. Without limiting the generality of the foregoing,
Agent may, in its discretion, and upon the direction of the Required Lenders,
Agent shall, at such time or times (i) notify any or all account debtors
(including Credit Card Issuers and Credit Card Processors), secondary obligors
or other obligors in respect thereof that the Receivables have been assigned to
Agent and that Agent has a security interest therein and Agent may direct any or
all accounts debtors (including Credit Card Issuers and Credit Card Processors),
secondary obligors and other obligors to make payment of Receivables directly to
Agent, (ii) extend the time of payment of, compromise, settle or adjust for
cash, credit, return of merchandise or otherwise, and upon any terms or
conditions, any and all Receivables or other obligations included in the
Collateral and thereby discharge or release the account debtor or any secondary
obligors or other obligors in respect thereof without affecting any of the
Obligations, (iii) demand, collect or enforce payment of any Receivables or such
other obligations, but without any duty to do so, and Agent and Lenders shall
not be liable for any failure to collect or enforce the payment thereof nor for
the negligence of its agents or attorneys with respect thereto and (iv) take
whatever other action Agent may deem necessary or desirable for the protection
of its interests and the interests of Lenders. At any time that an Event of
Default exists or has occurred and is continuing, at Agent’s request, all
invoices and statements sent to any account debtor shall state that the Accounts
and such other obligations have been assigned to Agent and are payable directly
and only to Agent and Borrowers and Obligors shall deliver to Agent such
originals of documents evidencing the sale and delivery of goods or the
performance of services giving rise to any Accounts as Agent may require. In the
event any account debtor returns Inventory when an Event of Default exists or
has occurred and is continuing, Borrowers shall, upon Agent’s request, hold the
returned Inventory in trust for Agent, segregate all returned Inventory from all
of its other property, dispose of the returned Inventory solely according to
Agent’s instructions, and not issue any credits, discounts or allowances with
respect thereto without Agent’s prior written consent.

(d) To the extent that applicable law imposes duties on Agent or any Lender to
exercise remedies in a commercially reasonable manner (which duties cannot be
waived under such law), each Borrower and Guarantor acknowledges and agrees that
it is not commercially unreasonable for Agent or any Lender (i) to fail to incur
expenses reasonably deemed significant by Agent or any Lender to prepare
Collateral for disposition or otherwise to complete raw material or work in
process into finished goods or other finished products for disposition, (ii) to
fail to obtain third party consents for access to Collateral to be disposed of,
or to obtain or, if not required by other law, to fail to obtain consents of any
Governmental Authority or other third party for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection
remedies against account debtors, secondary obligors or other persons obligated
on Collateral or to remove liens or encumbrances on or any adverse claims
against Collateral, (iv) to exercise collection remedies against account debtors
and other persons obligated on Collateral directly or through the use of
collection agencies and other collection specialists, (v) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (vi) to contact other
persons, whether or not in the same business as any Borrower or Guarantor, for
expressions of interest in acquiring all or any portion of the Collateral,
(vii) to hire one or more professional auctioneers to assist in the disposition
of Collateral, whether or not the collateral is of a specialized nature,
(viii) to dispose of Collateral by utilizing Internet sites that provide for the
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types included in the Collateral or that have the reasonable capability of doing
so, or that match buyers and sellers of assets, (ix) to dispose of assets in
wholesale rather than retail markets, (x) to disclaim disposition warranties,
(xi) to purchase insurance or credit enhancements to insure Agent or Lenders
against risks of loss, collection or disposition of Collateral or to provide to
Agent or Lenders a guaranteed return from the collection or disposition of
Collateral, or (xii) to the extent deemed appropriate by Agent, to obtain the
services of other brokers, investment bankers, consultants and other
professionals to assist Agent in the collection or disposition of any of the
Collateral. Each Borrower and Guarantor acknowledges that the purpose of this
Section is to provide non-exhaustive indications of what actions or omissions by
Agent or any Lender would not be commercially unreasonable in the exercise by
Agent or any Lender of remedies against the Collateral and that other actions or
omissions by Agent or any Lender shall not be deemed commercially unreasonable
solely on account of not being indicated in this Section. Without limitation of
the foregoing, nothing contained in this Section shall be construed to grant any
rights to any Borrower or Guarantor or to impose any duties on Agent or Lenders
that would not have been granted or imposed by this Agreement or by applicable
law in the absence of this Section.

(e) For the purpose of enabling Agent to exercise the rights and remedies
hereunder, each Borrower and Obligor hereby grants to Agent, to the extent
assignable, an irrevocable, non-exclusive license (exercisable at any time an
Event of Default shall exist or have occurred and for so long as the same is
continuing) without payment of royalty or other compensation to any Borrower or
Obligor, to use, assign, license or sublicense any of the trademarks,
service-marks, trade names, business names, trade styles, designs, logos and
other source of business identifiers and other Intellectual Property and general
intangibles now owned or hereafter acquired by any Borrower or Obligor, wherever
the same maybe located, including in such license reasonable access to all media
in which any of the licensed items may be recorded or stored and to all computer
programs used for the compilation or printout thereof, which license shall be
provided for in, and subject to, the terms of the intercreditor agreement
described in Section 9.8(o) hereof on and after the incurrence of any
Indebtedness permitted pursuant to Section 9.9(t) hereof.

(f) Agent may apply the cash proceeds of Collateral actually received by Agent
from any sale, lease, foreclosure or other disposition of the Collateral to
payment of the Obligations, in whole or in part and in such order as Agent may
elect, whether or not then due. Borrowers and Guarantors shall remain liable to
Agent and Lenders for the payment of any deficiency with interest at the highest
rate provided for herein and all costs and expenses of collection or
enforcement, including attorneys’ fees and expenses.

(g) Without limiting the foregoing, (i) upon the occurrence of a Default (other
than a Default as a result of the failure of any Borrower or Obligor to perform
any of the covenants contained in Sections 7.1(a)(i), 7.1(a)(ii), 7.1(a)(iii),
9.6(a), 9.6(b) or 9.6(c) hereof) or an Event of Default, Agent and Lenders may,
at Agent’s option, and upon the occurrence of an Event of Default at the
direction of the Required Lenders, Agent and Lenders shall, without notice,
(A) cease making Revolving Loans or arranging for Letter of Credit
Accommodations or reduce the lending formulas or amounts of Revolving Loans and
Letter of Credit Accommodations available to Borrowers and/or (B) terminate any
provision of this Agreement providing for any future Revolving Loans or Letter
of Credit Accommodations to be made by Agent and Lenders to Borrowers and
(ii) Agent may, at its option, establish such Reserves as Agent determines,
without limitation or restriction, notwithstanding anything to the contrary
contained herein.

 

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SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.

(a) The validity, interpretation and enforcement of this Agreement and the other
Financing Agreements (other than the Mortgages to the extent provided therein)
and any dispute arising out of the relationship between the parties hereto,
whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of New York but excluding any principles of conflicts
of law or other rule of law that would cause the application of the law of any
jurisdiction other than the laws of the State of New York.

(b) Borrowers, Guarantors, Agent and Lenders irrevocably consent and submit to
the non-exclusive jurisdiction of the Supreme Court of the State of New York for
New York County and the United States District Court for the Southern District
of New York, whichever Agent may elect, and waive any objection based on venue
or forum non conveniens with respect to any action instituted therein arising
under this Agreement or any of the other Financing Agreements or in any way
connected with or related or incidental to the dealings of the parties hereto in
respect of this Agreement or any of the other Financing Agreements or the
transactions related hereto or thereto, in each case whether now existing or
hereafter arising, and whether in contract, tort, equity or otherwise, and agree
that any dispute with respect to any such matters shall be heard only in the
courts described above (except that Agent and Lenders shall have the right to
bring any action or proceeding against any Borrower or Guarantor or its or their
property in the courts of any other jurisdiction which Agent deems necessary or
appropriate in order to realize on the Collateral or to otherwise enforce its
rights against any Borrower or Guarantor or its or their property).

(c) Each Borrower and Guarantor hereby waives personal service of any and all
process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth
herein and service so made shall be deemed to be completed five (5) days after
the same shall have been so deposited in the U.S. mails, or, at Agent’s option,
by service upon any Borrower or Guarantor (or Borrower Agent on behalf of such
Borrower or Guarantor) in any other manner provided under the rules of any such
courts. Within thirty (30) days after such service, such Borrower or Guarantor
shall appear in answer to such process, failing which such Borrower or Guarantor
shall be deemed in default and judgment may be entered by Agent against such
Borrower or Guarantor for the amount of the claim and other relief requested.

(d) BORROWERS, GUARANTORS, AGENT AND LENDERS EACH HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS
AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN

 

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RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.
BORROWERS, GUARANTORS, AGENT AND LENDERS EACH HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY AND THAT ANY BORROWER, ANY GUARANTOR, AGENT OR ANY LENDER
MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.

(e) Agent and Lenders shall not have any liability to any Borrower or Guarantor
(whether in tort, contract, equity or otherwise) for losses suffered by such
Borrower or Guarantor in connection with, arising out of, or in any way related
to the transactions or relationships contemplated by this Agreement, or any act,
omission or event occurring in connection herewith, unless it is determined by a
final and non-appealable judgment or court order binding on Agent and such
Lender, that the losses were the result of acts or omissions constituting gross
negligence or willful misconduct. Each Borrower and Guarantor: (i) certifies
that neither Agent, any Lender nor any representative, agent or attorney acting
for or on behalf of Agent or any Lender has represented, expressly or otherwise,
that Agent and Lenders would not, in the event of litigation, seek to enforce
any of the waivers provided for in this Agreement or any of the other Financing
Agreements and (ii) acknowledges that in entering into this Agreement and the
other Financing Agreements, Agent and Lenders are relying upon, among other
things, the waivers and certifications set forth in this Section 11.1 and
elsewhere herein and therein.

11.2 Waiver of Notices. Each Borrower and Guarantor hereby expressly waives
demand, presentment, protest and notice of protest and notice of dishonor with
respect to any and all instruments and chattel paper, included in or evidencing
any of the Obligations or the Collateral, and any and all other demands and
notices of any kind or nature whatsoever with respect to the Obligations, the
Collateral and this Agreement, except such as are expressly provided for herein.
No notice to or demand on any Borrower or Guarantor which Agent or any Lender
may elect to give shall entitle such Borrower or Guarantor to any other or
further notice or demand in the same, similar or other circumstances.

11.3 Amendments and Waivers.

(a) Neither this Agreement nor any other Financing Agreement nor any terms
hereof or thereof may be amended, waived, discharged or terminated unless such
amendment, waiver, discharge or termination is in writing signed by Agent and
the Required Lenders or at Agent’s option, by Agent with the authorization of
the Required Lenders, and as to amendments to any of the Financing Agreements
(other than with respect to any provision of Section 12 hereof), by any
Borrower; except, that, no such amendment, waiver, discharge or termination
shall:

(i) reduce the interest rate or any fees or extend the time of payment of
principal, interest or any fees or reduce the principal amount of any Loan or
Letter of Credit Accommodations, in each case without the consent of each Lender
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(ii) increase the Commitment of any Lender over the amount thereof then in
effect or provided hereunder, in each case without the consent of the Lender
directly affected thereby,

(iii) release any Collateral (except as expressly required hereunder or under
any of the other Financing Agreements or applicable law and except as permitted
under Section 12.1l(b) hereof), without the consent of Agent and all of Lenders,

(iv) reduce any percentage specified in the definition of Required Lenders,
without the consent of Agent and all of Lenders,

(v) consent to the assignment or transfer by any Borrower or Guarantor of any of
their rights and obligations under this Agreement, without the consent of Agent
and all of Lenders,

(vi) amend, modify or waive any terms of this Section 11.3 hereof, without the
consent of Agent and all of Lenders, or

(vii) increase the advance rates constituting part of the Borrowing Base,
without the consent of Agent and all of Lenders.

(b) Agent and Lenders shall not, by any act, delay, omission or otherwise be
deemed to have expressly or impliedly waived any of its or their rights, powers
and/or remedies unless such waiver shall be in writing and signed as provided
herein. Any such waiver shall be enforceable only to the extent specifically set
forth therein. A waiver by Agent or any Lender of any right, power and/or remedy
on any one occasion shall not be construed as a bar to or waiver of any such
right, power and/or remedy which Agent or any Lender would otherwise have on any
future occasion, whether similar in kind or otherwise.

(c) Notwithstanding anything to the contrary contained in Section 11.3(a) above,
in connection with any amendment, waiver, discharge or termination, in the event
that any Lender whose consent thereto is required shall fail to consent or fail
to consent in a timely manner (such Lender being referred to herein as a
“Non-Consenting Lender”), but the consent of any other Lenders to such
amendment, waiver, discharge or termination that is required are obtained, if
any, then Congress shall have the right, but not the obligation, at any time
thereafter, and upon the exercise by Congress of such right, such Non-Consenting
Lender shall have the obligation, to sell, assign and transfer to Congress or
such Eligible Transferee as Congress may specify, the Commitment of such
Non-Consenting Lender and all rights and interests of such Non-Consenting Lender
pursuant thereto. Congress shall provide the Non-Consenting Lender with prior
written notice of its intent to exercise its right under this Section, which
notice shall specify on date on which such purchase and sale shall occur. Such
purchase and sale shall be pursuant to the terms of an Assignment and Acceptance
(whether or not executed by the Non-Consenting Lender), except that on the date
of such purchase and sale, Congress, or such Eligible Transferee specified by
Congress, shall pay to the Non-Consenting Lender the amount equal to: (i) the
principal balance of the Revolving Loans held by the Non-Consenting Lender
outstanding as of the close of business on the business day immediately
preceding the effective date of such purchase and sale, plus (ii) amounts
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the Non-Consenting Lender to the effective date of the purchase (but in no event
shall the Non-Consenting Lender be deemed entitled to any early termination
fee), minus (iii) the amount of the closing fee received by the Non-Consenting
Lender pursuant to the terms hereof or of any of the other Financing Agreements
multiplied by the fraction, the numerator of which is the number of months
remaining in the then current term of the Credit Facility and the denominator of
which is the number of months in the then current term thereof. Such purchase
and sale shall be effective on the date of the payment of such amount to the
Non-Consenting Lender and the Commitment of the Non-Consenting Lender shall
terminate on such date.

(d) The consent of Agent shall be required for any amendment, waiver or consent
affecting the rights or duties of Agent hereunder or under any of the other
Financing Agreements, in addition to the consent of the Lenders otherwise
required by this Section and the exercise by Agent of any of its rights
hereunder with respect to Reserves or Eligible Credit Card Receivables or
Eligible Inventory shall not be deemed an amendment to the advance rates
provided for in this Section 11.3.

(e) The consent of Agent and any Lender, any Affiliate of any Lender or any
other financial institution acceptable to Agent, as the case may be, that is
party to a Hedge Agreement at such time shall be required for any amendment to
the priority of payment of Obligations arising under or pursuant to any Hedge
Agreements of a Borrower or Guarantor as set forth in Section 6.4(a) hereof.

11.4 Waiver of Counterclaims. Each Borrower and Guarantor waives all rights to
interpose any claims, deductions, setoffs or counterclaims of any nature (other
then compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto.

11.5 Indemnification. Each Borrower and Guarantor shall, jointly and severally,
indemnify and hold Agent and each Lender, and its officers, directors, agents,
employees, advisors and counsel and their respective Affiliates (each such
person being an “Indemnitee”), harmless from and against any and all losses,
claims, damages, liabilities, costs or expenses (including reasonable attorneys’
fees and expenses) imposed on, incurred by or asserted against any of them in
connection with any litigation, investigation, claim or proceeding commenced or
threatened related to the negotiation, preparation, execution, delivery,
enforcement, performance or administration of this Agreement, any other
Financing Agreements, or any undertaking or proceeding related to any of the
transactions contemplated hereby or any act, omission, event or transaction
related or attendant thereto, including amounts paid in settlement (but only
after notice to Borrower Agent), court costs, and the reasonable fees and
expenses of counsel except that Borrowers and Guarantors shall not have any
obligation under this Section 11.5 to indemnify an Indemnitee with respect to a
matter covered hereby resulting from the gross negligence or wilful misconduct
of such Indemnitee as determined pursuant to a final, non-appealable order of a
court of competent jurisdiction (but without limiting the obligations of
Borrowers or Guarantors as to any other Indemnitee) or which is a liability for
Taxes (to the extent that the indemnification for such Taxes is subject to
Section 6.4 hereof). To the extent that the undertaking to indemnify, pay and
hold harmless set forth in this Section may be unenforceable because it violates
any law or public policy, Borrowers and Guarantors shall pay the maximum portion
which it is permitted to pay under applicable law to Agent and Lenders in

 

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satisfaction of indemnified matters under this Section. To the extent permitted
by applicable law, no Borrower or Guarantor shall assert, and each Borrower and
Guarantor hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any of the other Financing Agreements or any undertaking or
transaction contemplated hereby. All amounts due under this Section shall be
payable upon demand. The foregoing indemnity shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement.

SECTION 12. THE AGENT

12.1 Appointment Powers and Immunities. Each Lender irrevocably designates,
appoints and authorizes Congress to act as Agent hereunder and under the other
Financing Agreements with such powers as are specifically delegated to Agent by
the terms of this Agreement and of the other Financing Agreements, together with
such other powers as are reasonably incidental thereto. Agent (a) shall have no
duties or responsibilities except those expressly set forth in this Agreement
and in the other Financing Agreements, and shall not by reason of this Agreement
or any other Financing Agreement be a trustee or fiduciary for any Lender;
(b) shall not be responsible to Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in any of the other
Financing Agreements, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Financing Agreement, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Financing Agreement
or any other document referred to or provided for herein or therein or for any
failure by any Borrower or any Obligor or any other Person to perform any of its
obligations hereunder or thereunder; and (c) shall not be responsible to Lenders
for any action taken or omitted to be taken by it hereunder or under any other
Financing Agreement or under any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct as determined by a final
non-appealable judgment of a court of competent jurisdiction. Agent may employ
agents and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
Agent may deem and treat the payee of any note as the holder thereof for all
purposes hereof unless and until the assignment thereof pursuant to an agreement
(if and to the extent permitted herein) in form and substance satisfactory to
Agent shall have been delivered to and acknowledged by Agent. Wachovia Capital
Markets LLC is hereby designated as the sole lead arranger and sole bookrunner
with respect to the Credit Facility, Wachovia Bank, National Association is
hereby designated as the administrative agent with respect to the Credit
Facility and Bank of America, N.A. is hereby designated as the syndication
agent. The designation of Wachovia Capital Markets LLC as sole lead arranger and
sole bookrunner, Wachovia Bank, National Association as administrative agent and
Bank of America, N.A. as syndication agent shall not as to any of them create
any rights in favor of it in such capacity nor subject it to any duties or
obligations in such capacity.

12.2 Reliance by Agent. Agent shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telephone, telecopy,
telex, telegram or cable) believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
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accountants and other experts selected by Agent. As to any matters not expressly
provided for by this Agreement or any other Financing Agreement, Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the Required Lenders or
all of Lenders as is required in such circumstance, and such instructions of
such Agents and any action taken or failure to act pursuant thereto shall be
binding on all Lenders.

12.3 Events of Default.

(a) Agent shall not be deemed to have knowledge or notice of the occurrence of a
Default or an Event of Default or other failure of a condition precedent to the
Revolving Loans and Letter of Credit Accommodations hereunder, unless and until
Agent has received written notice from a Lender, or a Borrower specifying such
Event of Default or any unfulfilled condition precedent, and stating that such
notice is a “Notice of Default or Failure of Condition”. In the event that Agent
receives such a Notice of Default or Failure of Condition, Agent shall give
prompt notice thereof to the Lenders. Agent shall (subject to Section 12.7) take
such action with respect to any such Event of Default or failure of condition
precedent as shall be directed by the Required Lenders; provided, that, unless
and until Agent shall have received such directions, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to or by reason of such Event of Default or failure of condition precedent, as
it shall deem advisable in the best interest of Lenders. Without limiting the
foregoing, and notwithstanding the existence or occurrence and continuance of an
Event of Default or any other failure to satisfy any of the conditions precedent
set forth in Section 4 of this Agreement to the contrary, Agent may, but shall
have no obligation to, continue to make Revolving Loans and issue or cause to be
issued Letter of Credit Accommodations for the ratable account and risk of
Lenders from time to time if Agent believes making such Revolving Loans or
issuing or causing to be issued such Letter of Credit Accommodations is in the
best interests of Lenders.

(b) Except with the prior written consent of Agent, no Lender may assert or
exercise any enforcement right or remedy in respect of the Revolving Loans,
Letter of Credit Accommodations or other Obligations, as against any Borrower or
Obligor or any of the Collateral or other property of any Borrower or Obligor.

12.4 Congress in its Individual Capacity. With respect to its Commitment and the
Revolving Loans made and Letter of Credit Accommodations issued or caused to be
issued by it (and any successor acting as Agent), so long as Congress shall be a
Lender hereunder, it shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not acting as Agent,
and the term “Lender” or “Lenders” shall, unless the context otherwise
indicates, include Congress in its individual capacity as Lender hereunder.
Congress (and any successor acting as Agent) and its Affiliates may (without
having to account therefor to any Lender) lend money to, make investments in and
generally engage in any kind of business with Borrowers (and any of its
Subsidiaries or Affiliates) as if it were not acting as Agent, and Congress and
its Affiliates may accept fees and other consideration from any Borrower or
Guarantor and any of its Subsidiaries and Affiliates for services in connection
with this Agreement or otherwise without having to account for the same to
Lenders.

 

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12.5 Indemnification. Lenders agree to indemnify Agent (to the extent not
reimbursed by Borrowers hereunder and without limiting any obligations of
Borrowers hereunder) ratably, in accordance with their Pro Rata Shares, for any
and all claims of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against Agent (including by any Lender) arising out of
or by reason of any investigation in or in any way relating to or arising out of
this Agreement or any other Financing Agreement or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses that Agent is
obligated to pay hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided, that, no Lender shall be
liable for any of the foregoing to the extent it arises from the gross
negligence or willful misconduct of the party to be indemnified as determined by
a final non-appealable judgment of a court of competent jurisdiction. The
foregoing indemnity shall survive the payment of the Obligations and the
termination or non-renewal of this Agreement.

12.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that it has,
independently and without reliance on Agent or other Lender, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of Borrowers and Obligors and has made its own decision to enter into
this Agreement and that it will, independently and without reliance upon 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 analysis and decisions in
taking or not taking action under this Agreement or any of the other Financing
Agreements. Agent shall not be required to keep itself informed as to the
performance or observance by any Borrower or Obligor of any term or provision of
this Agreement or any of the other Financing Agreements or any other document
referred to or provided for herein or therein or to inspect the properties or
books of any Borrower or Obligor. Agent will use reasonable efforts to provide
Lenders with any information received by Agent from any Borrower or Obligor
which is required to be provided to Lenders hereunder or deemed to be requested
by Lenders hereunder and with a copy of any Notice of Default or Failure of
Condition received by Agent from any Borrower or any Lender; provided, that,
Agent shall not be liable to any Lender for any failure to do so, except to the
extent that such failure is attributable to Agent’s own gross negligence or
willful misconduct as determined by a final non-appealable judgment of a court
of competent jurisdiction. Except for notices, reports and other documents
expressly required to be furnished to Lenders by Agent hereunder, Agent shall
not have any duty or responsibility to provide any Lender with any other credit
or other information concerning the affairs, financial condition or business of
any Borrower or Obligor that may come into the possession of Agent.

12.7 Failing to Act. Except for action expressly required of Agent hereunder and
under the other Financing- Agreements, Agent shall in all cases be fully
justified in failing or refusing to act hereunder and thereunder unless it shall
receive further assurances to its satisfaction from Lenders of their
indemnification obligations under Section 12.5 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.

12.8 Additional Loans. Agent shall not make any Revolving Loans intentionally
and with actual knowledge that such Revolving Loans would cause the aggregate
amount of the total outstanding Revolving Loans to exceed the Borrowing Base or
make any Revolving Loans or

 

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provide any Letter of Credit Accommodations intentionally and with actual
knowledge that such Revolving Loans or Letter of Credit Accommodations would
cause the aggregate amount of the total outstanding Revolving Loans and Letter
of Credit Accommodations to exceed the Borrowing Base, without the prior consent
of all Lenders, except, that, Agent may make such additional Revolving Loans
intentionally and with actual knowledge that such Revolving Loans will cause the
total outstanding Revolving Loans to exceed the Borrowing Base and Agent may
make such additional Revolving Loans and provide such additional Letter of
Credit Accommodations on behalf of Lenders, intentionally and with actual
knowledge that such Revolving Loans or Letter of Credit Accommodations will
cause the total outstanding Revolving Loans and Letter of Credit Accommodations
to exceed the Borrowing Base, as Agent may deem necessary or advisable in its
discretion, provided, that: (a) the total principal amount of the additional
Revolving Loans which Agent may make after obtaining actual knowledge that the
aggregate principal amount of the Revolving Loans equal or exceed the Borrowing
Base and the additional Revolving Loans and additional Letter of Credit
Accommodations which Agent may make or provide after obtaining such actual
knowledge that the aggregate principal amount of the Revolving Loans and Letter
of Credit Accommodations equal or exceed the Borrowing Base, plus the amount of
Special Agent Advances made pursuant to Section 12.11(a)(ii) hereof then
outstanding, shall not exceed the aggregate amount equal to the lesser of
$10,000,000 or ten (10%) percent of the Maximum Credit outstanding at any time
and shall not cause the total principal amount of the Revolving Loans and Letter
of Credit Accommodations to exceed the Maximum Credit and (b) no such additional
Revolving Loan or Letter of Credit Accommodation shall be outstanding more than
sixty (60) days after the date such additional Revolving Loan or Letter of
Credit Accommodation is made or issued (as the case may be), except as the
Required Lenders may otherwise agree. Each Lender shall be obligated to pay
Agent the amount of its Pro Rata Share of any such additional Revolving Loans or
Letter of Credit Accommodations.

12.9 Concerning the Collateral and the Related Financing Agreements. Each Lender
authorizes and directs Agent to enter into this Agreement and the other
Financing Agreements. Each Lender agrees that any action taken by Agent or
Required Lenders in accordance with the terms of this Agreement or the other
Financing Agreements and the exercise by Agent or Required Lenders 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.

12.10 Field Audit, Examination Reports and Other Information; Disclaimer by
Lenders. By signing this Agreement, each Lender:

(a) is deemed to have requested that Agent furnish such Lender, promptly after
it becomes available, a copy of each field audit or examination report and a
report with respect to the Borrowing Base prepared by Agent (each field audit or
examination report and report with respect to the Borrowing Base being referred
to herein as a “Report” and collectively, “Reports”);

(b) expressly agrees and acknowledges that Agent (i) does not make any
representation or warranty as to the accuracy of any Report, or (ii) shall not
be liable for any information contained in any Report;

 

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(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that Agent or any other party performing any audit or
examination will inspect only specific information regarding Borrowers and
Guarantors and will rely significantly upon Borrowers’ and Guarantors’ books and
records, as well as on representations of Borrowers’ and Guarantors’ personnel;
and

(d) agrees to keep all Reports confidential and strictly for its internal use in
accordance with the terms of Section 14.5 hereof, and not to distribute or use
any Report in any other manner.

12.11 Collateral Matters.

(a) Agent may, at its option, from time to time, at any time on or after an
Event of Default and for so long as the same is continuing or upon any other
failure of a condition precedent to the Revolving Loans and Letter of Credit
Accommodations hereunder, make such disbursements and advances (“Special Agent
Advances”) which Agent, in its sole discretion, (i) deems necessary or desirable
either to preserve or protect the Collateral or any portion thereof or (ii) to
enhance the likelihood or maximize the amount of repayment by Borrowers and
Guarantors of the Revolving Loans and other Obligations, provided, that, the
aggregate principal amount of the Special Agent Advances pursuant to this clause
(ii), plus the then outstanding principal amount of the additional Loans and
Letter of Credit Accommodations which Agent may make or provide as set forth in
Section 12.8 hereof, shall not exceed the aggregate amount of the lesser of
$10,000,000 or ten (10%) percent of the Maximum Credit outstanding at any time
or (iii) to pay any other amount chargeable to any Borrower or Guarantor
pursuant to the terms of this Agreement or any of the other Financing Agreements
consisting of (A) costs, fees and expenses and (B) payments to any issuer of
Letter of Credit Accommodations. Special Agent Advances shall be repayable on
demand and be secured by the Collateral. Special Agent Advances shall not
constitute Revolving Loans but shall otherwise constitute Obligations hereunder.
Without limitation of its obligations pursuant to Section 6.10, each Lender
agrees that it shall make available to Agent, upon Agent’s demand, in
immediately available funds, the amount equal to such Lender’s Pro Rata Share of
each such Special Agent Advance. If such funds are not made available to Agent
by such Lender, such Lender shall be deemed a Defaulting Lender and Agent shall
be entitled to recover such funds, on demand from such Lender together with
interest thereon for each day from the date such payment was due until the date
such amount is paid to Agent at the Federal Funds Rate for each day during such
period (as published by the Federal Reserve Bank of New York or at Agent’s
option based on the arithmetic mean determined by Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of the three leading brokers of Federal
funds transactions in New York City selected by Agent) and if such amounts are
not paid within three (3) days of Agent’s demand, at the highest Interest Rate
provided for in Section 3.1 hereof applicable to Prime Rate Loans.

(b) Lenders hereby irrevocably authorize Agent, at its option and in its
discretion to release any security interest in, mortgage or lien upon, any of
the Collateral (i) upon termination of the Commitments and payment and
satisfaction of all of the Obligations and delivery of cash collateral to the
extent required under Section 14.1 below, or (ii) constituting property being
sold or disposed of if Borrower Agent or any Borrower or Guarantor certifies to

 

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Agent that the sale or disposition is made in compliance with Section 9.7 hereof
(and Agent may rely conclusively on any such certificate, without further
inquiry), or (iii) constituting property in which any Borrower or Guarantor did
not own an interest at the time the security interest, mortgage or lien was
granted or at any time thereafter, or (iv) having a value in the aggregate in
any twelve (12) month period of less than $5,000,000, or (v) if required or
permitted under the terms of any of the other Financing Agreements, including
any intercreditor agreement, or (vi) approved, authorized or ratified in writing
by all of Lenders. Except as provided above, Agent will not release any security
interest in, mortgage or lien upon, any of the Collateral without the prior
written authorization of all of Lenders. Upon request by Agent at any time,
Lenders will promptly confirm in writing Agent’s authority to release particular
types or items of Collateral pursuant to this Section.

(c) Without any manner limiting Agent’s authority to act without any specific or
further authorization or consent by the Required Lenders, each Lender agrees to
confirm in writing, upon request by Agent, the authority to release Collateral
conferred upon Agent under this Section. Agent shall (and is hereby irrevocably
authorized by Lenders to) execute such documents as may be necessary to evidence
the release of the security interest, mortgage or liens granted to Agent upon
any Collateral to the extent set forth above; provided, that, (i) Agent shall
not be required to execute any such document on terms which, in Agent’s opinion,
would expose Agent to liability or create any obligations or entail any
consequence other than the release of such security interest, mortgage or liens
without recourse or warranty and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any security interest, mortgage
or lien upon (or obligations of any Borrower or Guarantor in respect of) the
Collateral retained by such Borrower or Guarantor.

(d) Agent shall have no obligation whatsoever to any Lender or any other Person
to investigate, confirm or assure that the Collateral exists or is owned by any
Borrower or Guarantor or is cared for, protected or insured or has been
encumbered, or that any particular items of Collateral meet the eligibility
criteria applicable in respect of the Revolving Loans or Letter of Credit
Accommodations hereunder, or whether any particular reserves are appropriate, or
that the liens and security interests granted to Agent pursuant hereto or any of
the Financing Agreements or otherwise 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 in this Agreement
or in any of the other Financing Agreements, it being understood and agreed that
in respect of the Collateral, or any act, omission or event related thereto,
Agent may act in any manner it may deem appropriate, in its discretion, given
Agent’s own interest in the Collateral as a Lender and that Agent shall have no
duty or liability whatsoever to any other Lender.

12.12 Agency for Perfections. Each Lender hereby appoints Agent and each other
Lender as agent and bailee for the purpose of perfecting the security interests
in and liens upon the Collateral of Agent in assets which, in accordance with
Article 9 of the UCC can be perfected only by possession (or where the security
interest of a secured party with possession has priority over the security
interest of another secured party) and Agent and each Lender hereby acknowledges
that it holds possession of any such Collateral for the benefit of Agent as
secured party. 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.

 

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12.13 Successor Agent. Agent may resign as Agent upon thirty (30) days’ notice
to Lenders and Parent. If Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor agent for Lenders. If
no successor agent is appointed prior to the effective date of the resignation
of Agent, Agent may appoint, after consulting with Lenders and Parent, a
successor agent from among Lenders. Upon the acceptance by the Lender so
selected of its appointment as successor agent hereunder, such successor agent
shall succeed to all of the rights, powers and duties of the retiring Agent and
the term “Agent” as used herein and in the other Financing Agreements 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 12 shall inure to its benefit as to any
actions taken or omitted by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is thirty
(30) days after the date of a retiring Agent’s notice of resignation, the
retiring Agent’s resignation shall nonetheless thereupon become effective and
Lenders shall perform all of the duties of Agent hereunder until such time, if
any, as the Required Lenders appoint a successor agent as provided for above.

12.14 Co-Agent. Agent may at any time and from time to time determine that a
Lender may, in addition, be a “Co-Agent”, “Co-Documentation Agent” or similar
designation hereunder and enter into an agreement with such Lender to have it so
identified for purposes of this Agreement. Agent shall provide written notice to
Borrower Agent of any such agreement. Any Lender that is so designated as a
Co-Agent, Co-Documentation Agent or such similar designation by Agent shall have
no right, power, obligation, liability, responsibility or duty under this
Agreement or any of the other Financing Agreements other than those applicable
to all Lenders as such. Without limiting the foregoing, the Lenders so
identified shall not have or be deemed to have any fiduciary relationship with
any Lender and no Lender shall be deemed to have relied, nor shall any Lender
rely, on a Lender so identified as a Co-Agent, Co-Documentation Agent or such
similar designation in deciding to enter into this Agreement or in taking or not
taking action hereunder.

SECTION 13. ACKNOWLEDGMENT AND RESTATEMENT

13.1 Existing Obligations. Each Borrower and Guarantor hereby acknowledges,
confirms and agrees that (a) Borrowers and Guarantors are indebted to Agent and
Lenders for outstanding loans and advances to Borrowers under the Existing
Agreements and in respect of Letter of Credit Accommodations (as defined in the
Existing Agreements), 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 and
Guarantors to Agent and Lenders to the extent set forth in the Existing
Agreements, without offset, defense or counterclaim of any kind, nature or
description whatsoever.

 

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13.2 Acknowledgment of Security Interests

(a) Each Borrower and Guarantor hereby acknowledges, confirms and agrees that
Agent on behalf of itself and Lenders shall continue to have a security interest
in and lien upon the Collateral heretofore granted to Agent pursuant to the
Existing Agreements to secure the Obligations, as well as any Collateral granted
under this Agreement or under any of the other Financing Agreements or otherwise
granted to or held by Agent or any Lender.

(b) The liens and security interests of Agent 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 to Agent, whether under the
Existing Agreements, this Agreement or any of the other Financing Agreements.

13.3 Existing Agreements. Borrowers and Guarantors each hereby acknowledge,
confirm and agree that, subject to Section 13.4 hereof: (a) the Existing
Agreements have been duly executed and delivered by Borrowers and Guarantors and
are in full force and effect as of the date hereof; (b) the agreements and
obligations of Borrowers and Guarantors contained in the Existing Agreements
constitute the legal, valid and binding obligations of Borrowers or Guarantors,
as the case may be, enforceable against such Borrower or Guarantor in accordance
with its terms and no Borrower or Guarantor has a valid defense to the
enforcement of such obligations; and (c) Agent and Lenders are entitled to all
of the rights, remedies and benefits provided for in or arising pursuant to the
Existing Agreements.

13.4 Restatement.

(a) Except as otherwise stated in Section 13.2 hereof and this Section 13.4, as
of the date hereof, the terms, conditions, agreements, covenants,
representations and warranties set forth in the Existing Agreements are
simultaneously 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 Financing Agreements executed and/or delivered on or after the date
hereof, except that nothing herein or in the other Financing Agreements shall
impair or adversely affect the continuation of the liability of Borrowers and
Guarantors for the Obligations heretofore incurred and the security interests,
liens, hypothecs and other interests in the Collateral heretofore granted,
pledged and/or assigned by Borrowers or Guarantors to Agent, Agent or any Lender
(whether directly, indirectly or otherwise).

(b) 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 Indebtedness and other obligations and
liabilities of Borrowers or Guarantors evidenced by or arising under the
Existing Agreements, and the liens and security interests of Agent securing such
Indebtedness and other obligations and liabilities, which shall not in any
manner be impaired, limited, terminated, waived or released, but shall continue
in full force and effect in favor of Agent for the benefit of itself and
Lenders.

(c) All loans, advances and other financial accommodations under the Existing
Agreements and all other Obligations of Borrowers and Guarantors to Agent and
Lenders outstanding and unpaid as of the date hereof pursuant to the Existing
Agreements or otherwise shall be deemed Obligations of Borrowers and Guarantors
pursuant to the terms hereof. The principal amount of the Revolving Loans and
the amount of the Letters of Credit Accommodations outstanding as of the date
hereof under the Existing Agreements shall be allocated to the Revolving Loans
and Letter of Credit Accommodations hereunder in such manner and in such amounts
as Agent shall determine in accordance with the terms hereof.

 

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SECTION 14. TERM OF AGREEMENT; MISCELLANEOUS

14.1 Term.

(a) This Agreement and the other Financing Agreements shall continue in full
force and effect for a term ending on December 23, 2009 (the “Renewal Date”),
and from year to year thereafter, unless sooner terminated pursuant to the terms
hereof. Agent may, at its option (or shall at the direction of any Lender in
writing received by Agent at least ninety (90) days prior to the Renewal Date or
the anniversary of any Renewal Date, as the case may be), terminate this
Agreement and the other Financing Agreements, or Borrower Agent may terminate
this Agreement and the other Financing Agreements, each case, effective on the
Renewal Date or on the anniversary of the Renewal Date in any year by giving to
the other party at least sixty (60) days prior written notice; provided, that,
this Agreement and all other Financing Agreements must be terminated
simultaneously. In addition, Borrowers may terminate this Agreement at any time
upon ten (10) days prior written notice to Agent (which notice shall be
irrevocable) and Agent may, at its option, and shall at the direction of
Required Lenders, terminate this Agreement at any time on or after an Event of
Default. Upon any effective date of termination of the Financing Agreements,
Borrowers shall pay to Agent all outstanding and unpaid monetary Obligations and
shall furnish cash collateral to Agent (or at Agent’s option, a letter of credit
issued for the account of Borrowers and at Borrowers’ expense, in form and
substance satisfactory to Agent, by an issuer acceptable to Agent and payable to
Agent as beneficiary) in such amounts as Agent determines are reasonably
necessary to secure Agent and Lenders from loss, cost, damage or expense,
including reasonable attorneys’ fees and expenses, in connection with any
contingent Obligations, including issued and outstanding Letter of Credit
Accommodations and checks or other payments provisionally credited to the
Obligations and/or as to which Agent or any Lender has not yet received final
and indefeasible payment (and including any contingent liability of Agent to any
bank at which deposit accounts of Borrowers and Guarantors are maintained under
any Deposit Account Control Agreement) and for any of the Obligations arising
under or in connection with any Hedge Agreement in such amounts as the other
party to such Hedge Agreement may require (unless such Obligations arising under
or in connection with any Hedge Agreement are paid in full in cash and
terminated in a manner satisfactory to such other party). The amount of such
cash collateral (or letter of credit, as Agent may determine) as to any Letter
of Credit Accommodations shall be in the amount equal to one hundred ten
(110%) percent of the amount of the Letter of Credit Accommodations plus the
amount of any fees and expenses payable in connection therewith through the end
of the latest expiration date of such Letter of Credit Accommodations. Such
payments in respect of the Obligations and cash collateral shall be remitted by
wire transfer in Federal funds to the Agent Payment Account or such other bank
account of Agent, as Agent may, in its discretion, designate in writing to
Borrower Agent for such purpose. Interest shall be due until and including the
next Business Day, if the amounts so paid by Borrowers to the Agent Payment
Account or other bank account designated by Agent are received in such bank
account later than 12:00 noon, New York City time.

 

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(b) No termination of this Agreement or the other Financing Agreements shall
relieve or discharge any Borrower or Guarantor of its respective duties,
obligations and covenants under this Agreement or the other Financing Agreements
until all monetary Obligations have been fully and finally discharged and paid
and as to contingent Obligations, Agent shall have received such cash collateral
(or letter of credit, as Agent may determine), as is required pursuant to the
terms hereof, and Agent’s continuing security interest in the Collateral and the
rights and remedies of Agent and Lenders hereunder, under the other Financing
Agreements and applicable law, shall remain in effect until all such monetary
Obligations have been so paid and as to contingent Obligations, Agent shall have
received such cash collateral (or letter of credit, as Agent may determine) as
is required pursuant to the terms hereof. Accordingly, each Borrower and
Guarantor waives any rights it may have under the UCC to demand the filing of
termination statements with respect to the Collateral and Agent shall not be
required to send such termination statements to Borrowers or Guarantors, or to
file them with any filing office, unless and until this Agreement shall have
been terminated in accordance with its terms and all monetary Obligations paid
in full in immediately available funds and as to contingent Obligations, Agent
shall have received such cash collateral (or letter of credit, as Agent may
determine), as required pursuant to the terms hereof.

(c) If for any reason this Agreement is terminated prior to the Renewal Date and
upon such termination the Obligations are repaid with proceeds of loans that are
secured by any assets of a Borrower or Guarantor not provided by Agent or any of
its Affiliates where Agent or such Affiliate is the administrative and
collateral agent (with rights and duties consistent with the rights and duties
of Agent hereunder), in view of the impracticality and extreme difficulty of
ascertaining actual damages and by mutual agreement of the parties as to a
reasonable calculation of Agent’s and each Lender’s lost profits as a result
thereof, Borrowers agree to pay to Agent for itself and the ratable benefit of
Lenders, upon the effective date of such termination, an early termination fee
in the amount equal to

 

Amount

  

Period

(i) 0.50% of Maximum Credit

   From the date hereof to and including the second anniversary of the date
hereof

(ii) 0.25% of Maximum Credit

   From and after the second anniversary of the date hereof to and including the
third anniversary of the date hereof

Such early termination fee shall be presumed to be the amount of damages
sustained by Agent and Lenders as a result of such early termination and
Borrowers and Guarantors agree that it is reasonable under the circumstances
currently existing.

(d) Notwithstanding anything to the contrary contained in Section 14.1(c) above,
in the event of the termination of this Agreement at the request of Borrower
Agent prior to the end of the term of this Agreement and the full and final
repayment of all Obligations and the receipt by Agent of cash collateral all as
provided in Section 14.1(a) above, Borrowers shall not be required to pay to
Agent, for the benefit of Lenders an early termination fee if such payments are
made to Agent, for the benefit of Lenders, with the initial proceeds of an
unsecured credit facility provided by Wachovia Bank, National Association, to
Borrowers.

 

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14.2 Interpretative Provisions.

(a) All terms used herein which are defined in Article 1, Article 8 or Article 9
of the UCC shall have the meanings given therein unless otherwise defined in
this Agreement.

(b) All references to the plural herein shall also mean the singular and to the
singular shall also mean the plural unless the context otherwise requires.

(c) All references to any Borrower, Guarantor, Agent and Lenders pursuant to the
definitions set forth in the recitals hereto, or to any other person herein,
shall include their respective successors and assigns.

(d) The words “hereof, “herein”, “hereunder”, “this Agreement” and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not any particular provision of this Agreement and as this Agreement
now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.

(e) The word “including” when used in this Agreement shall mean “including,
without limitation”.

(f) An Event of Default shall exist or continue or be continuing until such
Event of Default is waived in accordance with Section 11.3 or is cured in a
manner satisfactory to Agent, if such Event of Default is capable of being cured
as determined by Agent.

(g) All references to “store” or “retail store” as applied to Borrowers shall
include both factory outlet stores and other retail stores operated by
Borrowers.

(h) All references to the term “knowledge” used herein when applicable to any
Borrower or Guarantor shall mean the actual knowledge of the Chief Executive
Officer, Chief Financial Officer, Chief Operating Officer, General Counsel,
Chief Accounting Officer of a Borrower or Guarantor or persons having the same
or similar responsibilities or functions as such positions as in effect on the
date hereof, or as customarily understood to be the case for companies similarly
situated.

(i) All references to the term “good faith” used herein or the term “reasonable”
or “reasonably” when applicable to Agent or any Lender shall be based upon the
manner in which a comparable asset-based lender similarly situated, with similar
rights and providing a credit facility of the type and with the Collateral and
information then available to it set forth herein, would act in such
circumstances.

(j) Any accounting term used in this Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given in accordance with
GAAP, and all financial computations hereunder shall be computed unless
otherwise specifically provided herein, in accordance with GAAP as consistently
applied and using the same method for inventory valuation as used in the
preparation of the financial statements of Parent most recently received by
Agent prior to the date hereof.

 

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(k) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”, the words “to” and
“until” each mean “to but excluding” and the word “through” means “to and
including”.

(l) Unless otherwise expressly provided herein, (i) references herein to any
agreement, document or instrument shall be deemed to include all subsequent
amendments, modifications, supplements, extensions, renewals, restatements or
replacements with respect thereto, but only to the extent the same are not
prohibited by the terms hereof or of any other Financing Agreement, and
(ii) references to any statute or regulation are to be construed as including
all statutory and regulatory provisions consolidating, amending, replacing,
recodifying, supplementing or interpreting the statute or regulation.

(m) The captions and headings of this Agreement are for convenience of reference
only and shall not affect the interpretation of this Agreement.

(n) This Agreement and other Financing Agreements may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.

(o) This Agreement and the other Financing Agreements are the result of
negotiations among and have been reviewed by counsel to Agent and the other
parties, and are the products of all parties. Accordingly, this Agreement and
the other Financing Agreements shall not be construed against Agent or Lenders
merely because of Agent’s or any Lender’s involvement in their preparation.

14.3 Notices. All notices, requests and demands hereunder shall be in writing
and deemed to have been given or made: if delivered in person, immediately upon
delivery; if by nationally recognized overnight courier service with
instructions to deliver the next Business Day, one (1) Business Day after
sending; and if by certified mail, return receipt requested, five (5) days after
mailing. All notices, requests and demands upon the parties are to be given to
the following addresses (or to such other address as any party may designate by
notice in accordance with this Section):

 

If to any Borrower or Guarantor:

   J. Crew Group, Inc.    770 Broadway    New York, New York 10013    Attention:
Chief Financial Officer    Telephone No.: 212-209-2545

with a copy to:

   J. Crew Group, Inc.    770 Broadway    New York, New York 10013    Attention:
General Counsel    Telephone No.: 212-209-8254

If to Agent:

   Congress Financial Corporation    1133 Avenue of the Americas    New York,
New York 10036    Attention: Portfolio Manager    Telephone No.: 212-840-2000   
Telecopy No.: 212-545-4283

 

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14.4 Partial Invalidity. If any provision of this Agreement is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.

14.5 Confidentiality.

(a) Agent and each Lender shall use all reasonable efforts to keep confidential,
in accordance with its customary procedures for handling confidential
information and safe and sound lending practices, any non-public information
supplied to it by any Borrower pursuant to this Agreement which is clearly and
conspicuously marked as confidential at the time such information is furnished
by such Borrower to Agent or such Lender, provided, that, nothing contained
herein shall limit the disclosure of any such information: (i) to the extent
required by statute, rule, regulation, subpoena or court order, (ii) to bank
examiners and other regulators, auditors and/or accountants, in connection with
any litigation to which Agent or such Lender is a party, (iii) to any Lender or
Participant (or prospective Lender or Participant) or to any Affiliate of any
Lender so long as such Lender or Participant (or prospective Lender or
Participant) or Affiliate shall have been instructed to treat such information
as confidential in accordance with this Section 14.5, or (iv) to counsel for
Agent or any Lender or Participant (or prospective Lender or Participant).

(b) In the event that Agent or any Lender receives a request or demand to
disclose any confidential information pursuant to any subpoena or court order,
Agent or such Lender, as the case may be, agrees (i) to the extent permitted by
applicable law or if permitted by applicable law, to the extent Agent or such
Lender determines in good faith that it will not create any risk of liability to
Agent or such Lender, Agent or such Lender will promptly notify Borrower Agent
of such request so that Borrower Agent may seek a protective order or other
appropriate relief or remedy and (ii) if disclosure of such information is
required, disclose such information and, subject to reimbursement by Borrowers
of Agent’s or such Lender’s expenses, cooperate with Borrower Agent in the
reasonable efforts to obtain an order or other reliable assurance that
confidential treatment will be accorded to such portion of the disclosed
information which Borrower Agent so designates, to the extent permitted by
applicable law or if permitted by applicable law, to the extent Agent or such
Lender determines in good faith that it will not create any risk of liability to
Agent or such Lender.

 

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(c) In no event shall this Section 14.5 or any other provision of this
Agreement, any of the other Financing Agreements or applicable law be deemed:
(i) to apply to or restrict disclosure of information that has been or is made
public by any Borrower, Guarantor or any third party or otherwise becomes
generally available to the public other than as a result of a disclosure in
violation hereof, (ii) to apply to or restrict disclosure of information that
was or becomes available to Agent or any Lender (or any Affiliate of any Lender)
on a non-confidential basis from a person other than a Borrower or Guarantor,
(iii) to require Agent or any Lender to return any materials furnished by a
Borrower or Guarantor to Agent or a Lender or prevent Agent or a Lender from
responding to routine informational requests in accordance with the Code of
Ethics for the Exchange of Credit Information promulgated by The Robert Morris
Associates or other applicable industry standards relating to the exchange of
credit information. The obligations of Agent and Lenders under this Section 14.5
shall supersede and replace the obligations of Agent and Lenders under any
confidentiality letter signed prior to the date hereof.

14.6 Successors. This Agreement, the other Financing Agreements and any other
document referred to herein or therein shall be binding upon and inure to the
benefit of and be enforceable by Agent, Lenders, Borrowers, Guarantors and their
respective successors and assigns, except that Borrower may not assign its
rights under this Agreement, the other Financing Agreements and any other
document referred to herein or therein without the prior written consent of
Agent and Lenders. Any such purported assignment without such express prior
written consent shall be void. No Lender may assign its rights and obligations
under this Agreement without the prior written consent of Agent, except as
provided in Section 14.7 below. The terms and provisions of this Agreement and
the other Financing Agreements are for the purpose of defining the relative
rights and obligations of Borrowers, Guarantors, Agent and Lenders with respect
to the transactions contemplated hereby and there shall be no third party
beneficiaries of any of the terms and provisions of this Agreement or any of the
other Financing Agreements.

14.7 Assignments; Participations

(a) Each Lender may, with the prior written consent of Agent, assign all or, if
less than all, a portion equal to at least $10,000,000 in the aggregate for the
assigning Lender, of such rights and obligations under this Agreement to one or
more Eligible Transferees (but not including for this purpose any assignments in
the form of a participation), each of which assignees shall become a party to
this Agreement as a Lender by execution of an Assignment and Acceptance;
provided, that, (i) such transfer or assignment will not be effective until
recorded by Agent on the Register and (ii) Agent shall have received for its
sole account payment of a processing fee from the assigning Lender or the
assignee in the amount of $5,000.

(b) Agent shall maintain a register of the names and addresses of Lenders, their
Commitments and the principal amount of their Revolving Loans (the “Register”).
Agent shall also maintain a copy of each Assignment and Acceptance delivered to
and accepted by it and shall modify the Register to give effect to each
Assignment and Acceptance. The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and any Borrowers, Obligors,
Agent and Lenders may treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by Borrower Agent and any Lender at any reasonable time
and from time to time upon reasonable prior notice.

 

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(c) Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and to the other Financing Agreements and, to
the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations
(including, without limitation, the obligation to participate in Letter of
Credit Accommodations) of a Lender hereunder and thereunder and the assigning
Lender shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement.

(d) By execution and delivery of an Assignment and Acceptance, the assignor and
assignee thereunder confirm to and agree with each other and the other parties
hereto as follows: (i) other than as provided in such Assignment and Acceptance,
the 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 any of the other Financing
Agreements or the execution, legality, enforceability, genuineness, sufficiency
or value of this Agreement or any of the other Financing Agreements furnished
pursuant hereto, (ii) the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Borrower, Obligor or any of their Subsidiaries or the performance or observance
by any Borrower or Obligor of any of the Obligations; (iii) such assignee
confirms that it has received a copy of this Agreement and the other Financing
Agreements, together with such other documents and information it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (iv) such assignee will, independently and without
reliance upon the assigning Lender, Agent 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 and the
other Financing Agreements, (v) such assignee appoints and authorizes Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Financing Agreements as are delegated to Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto, and (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement and the
other Financing Agreements are required to be performed by it as a Lender. Agent
and Lenders may furnish any information concerning any Borrower or Obligor in
the possession of Agent or any Lender from time to time to assignees and
Participants.

(e) Each Lender may sell participations to one or more banks or other entities
in or to all or a portion of its rights and obligations under this Agreement and
the other Financing Agreements (including, without limitation, all or a portion
of its Commitments and the Revolving Loans owing to it and its participation in
the Letter of Credit Accommodations, without the consent of Agent or the other
Lenders); provided, that, (i) such Lender’s obligations under this Agreement
(including, without limitation, its Commitment hereunder) and the other
Financing Agreements shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, and Borrowers, Guarantors,

 

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the other Lenders and Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement and the other Financing Agreements, and (iii) the Participant shall
not have any rights under this Agreement or any of the other Financing
Agreements (the Participant’s rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such Lender in
favor of the Participant relating thereto) and all amounts payable by any
Borrower or Obligor hereunder shall be determined as if such Lender had not sold
such participation.

(f) Nothing in this Agreement shall prevent or prohibit any Lender from pledging
its Revolving Loans hereunder to a Federal Reserve Bank in support of borrowings
made by such Lenders from such Federal Reserve Bank.

(g) Borrowers and Guarantors shall assist Agent or any Lender permitted to sell
assignments or participations under this Section 14.7 in whatever manner
reasonably necessary in order to enable or effect any such assignment or
participation, including (but not limited to) the execution and delivery of any
and all agreements, notes and other documents and instruments as shall be
requested and the delivery of informational materials, appraisals or other
documents for, and the participation of relevant management in meetings and
conference calls with, potential Lenders or Participants. Borrowers shall
certify the correctness, completeness and accuracy, in all material respects, of
all descriptions of Borrowers and Guarantors and their affairs provided,
prepared or reviewed by any Borrower or Guarantor that are contained in any
selling materials and all other information provided by it and included in such
materials.

14.8 Entire Agreement. This Agreement, the other Financing Agreements, any
supplements hereto or thereto, and any instruments or documents delivered or to
be delivered in connection herewith or therewith represents the entire agreement
and understanding concerning the subject matter hereof and thereof between the
parties hereto, and supersede all other prior agreements, understandings,
negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether
oral or written. In the event of any inconsistency between the terms of this
Agreement and any schedule or exhibit hereto, the terms of this Agreement shall
govern.

14.9 Counterparts, Etc. This Agreement or any of the other Financing Agreements
may be executed in any number of counterparts, each of which shall be an
original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement or any of the
other Financing Agreements by telefacsimile shall have the same force and effect
as the delivery of an original executed counterpart of this Agreement or any of
such other Financing Agreements. Any party delivering an executed counterpart of
any such agreement by telefacsimile shall also deliver an original executed
counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of such agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, Administrative Agent, Syndication Agent, Agent, Lenders,
Borrowers and Guarantors have caused these presents to be duly executed as of
the day and year first above written.

 

BORROWERS J. CREW OPERATING CORP. By:   /s/ Amanda Bokman   Amanda Bokman, EVP &
CFO J. CREW INC. By:   /s/ Amanda Bokman   Amanda Bokman, EVP & CFO GRACE
HOLMES, INC. d/b/a J. CREW RETAIL By:   /s/ Amanda Bokman   Amanda Bokman, EVP &
CFO H.F.D. NO. 55, INC. d/b/a J. CREW FACTORY By:   /s/ Amanda Bokman   Amanda
Bokman, EVP & CFO GUARANTORS J. CREW GROUP, INC. By:   /s/ Amanda Bokman  
Amanda Bokman, EVP & CFO J. CREW INTERNATIONAL, INC. By:   /s/ Nick Lamberti  
Nick Lamberti, VP & Controller J. CREW INTERMEDIATE LLC By:   /s/ Amanda Bokman
  Amanda Bokman, EVP & CFO

LOAN AND SECURITY SIGNATURE PAGES

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

ADMINISTRATIVE AGENT WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative
Agent By:   /s/ Illegible Title:   Director SYNDICATION AGENT BANK OF AMERICA,
N.A.,
as Syndication Agent By:     Title:     AGENT CONGRESS FINANCIAL CORPORATION,
as Agent By:     Title:     LENDERS CONGRESS FINANCIAL CORPORATION By:    
Title:     Commitment: $65,000,000 BANK OF AMERICA, N.A. By:     Title:    
Commitment: $50,000,000

LOAN AND SECURITY SIGNATURE PAGES

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

ADMINISTRATIVE AGENT WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent By:     Title:     SYNDICATION AGENT BANK OF AMERICA,
N.A.,
as Syndication Agent By:   /s/ Illegible Title:   Vice President AGENT CONGRESS
FINANCIAL CORPORATION,
as Agent By:     Title:     LENDERS CONGRESS FINANCIAL CORPORATION By:    
Title:     Commitment: $65,000,000 BANK OF AMERICA, N.A. By:   /s/ Illegible
Title:   Vice President Commitment: $50,000,000

LOAN AND SECURITY SIGNATURE PAGES

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

ADMINISTRATIVE AGENT WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative
Agent By:     Title:     SYNDICATION AGENT BANK OF AMERICA, N.A.,
as Syndication Agent By:     Title:     AGENT CONGRESS FINANCIAL CORPORATION,
as Agent By:   /s/ Illegible Title:   First Vice President LENDERS CONGRESS
FINANCIAL CORPORATION By:   /s/ Illegible Title:   First Vice President
Commitment: $65,000,000 BANK OF AMERICA, N.A. By:     Title:     Commitment:
$50,000,000

LOAN AND SECURITY SIGNATURE PAGES

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THE CIT GROUP/BUSINESS CREDIT, INC. By:   /s/ Illegible Title:   Vice President
Commitment: $25,000,000 LASALLE RETAIL FINANCE, a division of LaSalle Business
Credit, as agent for Standard Federal Bank National Association By:     Title:  
  Commitment: $30,000,000

LOAN AND SECURITY SIGNATURE PAGES

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

THE CIT GROUP/BUSINESS CREDIT, INC. By:     Title:    

Commitment: $25,000,000

 

LASALLE RETAIL FINANCE, a division of LaSalle Business Credit, as agent for
Standard Federal Bank National Association

By:   /s/ Craig G. Nutbrown Title:   Craig G. Nutbrown, Vice President
Commitment: $30,000,000

LOAN AND SECURITY SIGNATURE PAGES

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EXHIBIT A

to

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

ASSIGNMENT AND ACCEPTANCE AGREEMENT

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

W I T N E S S E T H :

WHEREAS, Wachovia Bank, National Association, in its capacity as administrative
agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on
behalf of the parties thereto as lenders (in such capacity, “Administrative
Agent”), Bank of America, N.A., in its capacity as syndication agent pursuant to
the Loan Agreement acting for and on behalf of the parties thereto as lenders
(in such capacity, “Syndication Agent”), Congress Financial Corporation, in its
capacity as collateral agent pursuant to the Loan Agreement acting for and on
behalf of the parties thereto as lenders (in such capacity, “Agent”), Wachovia
Capital Markets, LLC, in its capacity as sole lead arranger and sole bookrunner
(in such capacity, “Arranger”), and the parties to the Loan Agreement as lenders
(individually, each a “Lender” and collectively, “Lenders”) have entered or are
about to enter into financing arrangements pursuant to which Administrative
Agent, Syndication Agent, Agent and Lenders may make loans and advances and
provide other financial accommodations to J. Crew Operating Corp., J. Crew,
Inc., Grace Holmes, Inc. d/b/a J. Crew Retail, and HFD No. 55, Inc. d/b/a J.
Crew Factory (collectively, “Borrowers”) as set forth in the Amended and
Restated Loan and Security Agreement, dated December 23, 2004, by and among
Borrowers, certain of their affiliates, Administrative Agent, Syndication Agent,
Agent, Arranger and Lenders (as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, the “Loan
Agreement”), and the other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto (all of the foregoing, together with the Loan Agreement, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, being collectively referred to herein as the
“Financing Agreements”);

WHEREAS, as provided under the Loan Agreement, Assignor committed to making
Revolving Loans (the “Committed Loans”) to Borrowers in an aggregate amount not
to exceed $                     (the “Commitment”);

WHEREAS, Assignor wishes to assign to Assignee [part of the] [all] rights and
obligations of Assignor under the Loan Agreement in respect of its Commitment in
an amount equal to $                     (the “Assigned Commitment Amount”) on
the terms and subject to the conditions set forth herein and Assignee wishes to
accept assignment of such rights and to assume such obligations from Assignor on
such terms and subject to such conditions;

 

A-1

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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,
Assignor hereby sells, transfers and assigns to Assignee, and Assignee hereby
purchases, assumes and undertakes from Assignor, without recourse and without
representation or warranty (except as provided in this Assignment and
Acceptance) an interest in (i) the Commitment and each of the Committed Loans of
Assignor and (ii) all related rights, benefits, obligations, liabilities and
indemnities of the Assignor under and in connection with the Loan Agreement and
the other Financing Agreements, so that after giving effect thereto, the
Commitment of Assignee shall be as set forth below and the Pro Rata Share of
Assignee shall be                      (    %) percent.

(b) With effect on and after the Effective Date (as defined in Section 5
hereof), 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 and
the payment of indemnification, with a Commitment in an amount equal to the
Assigned Commitment Amount. 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 Assignor shall, as of the Effective Date, be
reduced by an amount equal to the Assigned Commitment Amount and Assignor shall
relinquish its rights and be released from its obligations under the Loan
Agreement to the extent such obligations have been assumed by Assignee;
provided, that, Assignor shall not relinquish its rights under Sections 2.1,
6.4, 6.8 and 6.9 of 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 Assignee’s Commitment will be $                    .

(d) After giving effect to the assignment and assumption set forth herein, on
the Effective Date Assignor’s Commitment will be $                     (as such
amount may be further reduced by any other assignments by Assignor on or after
the date hereof).

2. Payments.

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

(b) Assignee shall pay to Agent the processing fee in the amount specified in
Section 14.7(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, Committed Loans and
outstanding Letter of Credit Accommodations shall be for the account of
Assignor. Any interest, fees and other

 

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payments accrued on and after the Effective Date with respect to the Assigned
Commitment Amount shall be for the account of Assignee. Each of Assignor and
Assignee agrees that it will hold in trust for the 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. Assignee 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 of                      and its
Subsidiaries, 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 agrees that it will, independently and
without reliance upon Assignor, Agent or any 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 Assignor and Assignee, the effective date for this Assignment and
Acceptance shall be                     , 200_ (the “Effective Date”); provided,
that, the following conditions precedent have been satisfied on or before the
Effective Date:

(i) this Assignment and Acceptance shall be executed and delivered by Assignor
and Assignee;

(ii) the consent of Agent as required for an effective assignment of the
Assigned Commitment Amount by Assignor to Assignee shall have been duly obtained
and shall be in full force and effect as of the Effective Date;

(iii) written notice of such assignment, together with payment instructions,
addresses and related information with respect to Assignee, shall have been
given to Borrower Agent and Agent;

(iv) Assignee shall pay to Assignor all amounts due to Assignor under this
Assignment and Acceptance; and

(v) the processing fee referred to in Section 2(b) hereof shall have been paid
to Agent.

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

[6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AN AGENT]

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

 

A-3

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(b) Assignee shall assume no duties or obligations held by Assignor in its
capacity as Agent under the Loan Agreement.]

7. Withholding Tax. Assignee (a) represents and warrants to Assignor, Agent and
Borrowers that under applicable law and treaties no tax will be required to be
withheld by Assignee, Agent or Borrowers with respect to any payments to be made
to Assignee hereunder or under any of the Financing Agreements, (b) agrees to
furnish (if it is not a “United States Person” as such term is defined in
Section 7701(a)(30) of the Code) to Agent and Borrowers prior to the time that
Agent or Borrowers are required to make any payment of principal, interest or
fees hereunder, duplicate executed originals of either U.S. Internal Revenue
Service Form W-8 ECI or U.S. Internal Revenue Service Form W-8 BEN (wherein
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 W-8 ECI or W-8 BEN upon the
expiration of any previously delivered form or comparable statements in
accordance with applicable U.S. law and regulations and amendments thereto, duly
executed and completed by 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) 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 security interest, lien, encumbrance 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
Assignor, enforceable against 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) Assignor makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Loan Agreement or any of the other Financing Agreements or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Loan Agreement or any other instrument or document furnished
pursuant thereto. Assignor makes no representation or warranty in connection
with, and assumes no responsibility with respect to, the solvency, financial
condition or statements of Borrowers, Guarantors or any of their respective
Affiliates, or the performance or observance by Borrowers, Guarantors or any
other Person, of any of its respective obligations under the Loan Agreement or
any other instrument or document furnished in connection therewith.

 

A-4

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

(c) Assignee represents and warrants that (i) it is duly organized and existing
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; and (iii) this Assignment and Acceptance has been duly
executed and delivered by it and constitutes the legal, valid and binding
obligation of Assignee, enforceable against 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 to general equitable principles.

9. Further Assurances. Assignor and Assignee each hereby agree 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 Borrowers or 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 for further breach thereof.

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

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

(d) This Assignment and Acceptance may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.

(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF                     . Assignor and
Assignee each irrevocably submits to the non-exclusive jurisdiction of any State
or Federal court sitting in                      County,                     
over any suit, action or proceeding arising out of or relating to this
Assignment and Acceptance and irrevocably agrees that all claims in respect of
such action or proceeding may be heard and determined in such
                     State or Federal court. 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.

 

A-5

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

(f) ASSIGNOR AND ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT
AND ACCEPTANCE, THE LOAN AGREEMENT, ANY OF THE OTHER FINANCING AGREEMENTS OR ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).

IN WITNESS WHEREOF, Assignor and 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:     [ASSIGNEE] By:     Title:    

 

A-6

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SCHEDULE 1

NOTICE OF ASSIGNMENT AND ACCEPTANCE

                    , 20    

 

               Attn.:                            
                                                    

 

  Re:                                                                      
                

Ladies and Gentlemen:

Congress Financial Corporation, in its capacity as agent pursuant to the Loan
Agreement (as hereinafter defined) acting for and on behalf of the parties
thereto as lenders (in such capacity, “Agent”), Wachovia Bank, National
Association, in its capacity as arranger pursuant to the Loan Agreement (in such
capacity, “Arranger”) and the financial institutions which are parties to the
Loan Agreement as lenders (individually, each a “Lender” and collectively,
“Lenders”) have entered or are about to enter into financing arrangements
pursuant to which Agent and Lenders may make loans and advances and provide
other financial accommodations to                     ,                     ,
                    , and                      (collectively, “Borrowers”) as
set forth in the Loan and Security Agreement, dated                     , 2002,
by and among Borrowers, certain of their affiliates, Agent and Lenders (as the
same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, the “Loan Agreement”), and the other agreements,
documents and instruments referred to therein or at any time executed and/or
delivered in connection therewith or related thereto (all of the foregoing,
together with the Loan Agreement, as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, being
collectively referred to herein as the “Financing Agreements”). Capitalized
terms not otherwise defined herein shall have the respective meanings ascribed
thereto in the Loan Agreement.

1. We hereby give you notice of, and request your consent to, the assignment by
                             (the “Assignor”) to                             
(the “Assignee”) such that after giving effect to the assignment Assignee shall
have an interest equal to                      (    %) percent of the total
Commitments pursuant to the Assignment and Acceptance Agreement attached hereto
(the “Assignment and Acceptance”). We understand that the Assignor’s Commitment
shall be reduced by $                    , as the same may be further reduced by
other assignments on or after the date hereof.

 

A-7

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2. Assignee agrees that, upon receiving the consent of Agent to such assignment,
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
under the Loan Agreement.

3. The following administrative details apply to Assignee:

 

  (A) Notice address:

Assignee name:

Address:

Attention:

Telephone:

Telecopier:

 

  (B) Payment instructions:

Account No.:

At:

 

  

Reference:

Attention:

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

 

A-8

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

IN WITNESS WHEREOF, Assignor and 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:     [NAME OF ASSIGNEE] By:     Title:    

 

ACKNOWLEDGED AND ASSIGNMENT CONSENTED TO:

 

CONGRESS FINANCIAL CORPORATION,
as Agent

By:     Title:    

 

A-9

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

EXHIBIT B

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

REVISED INFORMATION CERTIFICATE

OF

J. CREW GROUP, INC.

AND ITS SUBSIDIARIES

Dated: December 23, 2004

Congress Financial Corporation, as Agent

1133 Avenue of the Americas

New York, New York 10036

In connection with certain financing provided or to be provided by you
(“Lender”), each of the undersigned (individually, a “Company” and,
collectively, the “Companies”) jointly and severally represents and warrants to
Lender the following information about it, its organizational structure and
other matters of interest to Lender. Capitalized terms used herein and not
otherwise defined have the meanings set forth in the Amended and Restated Loan
and Security Agreement, dated of even date herewith, among Lender, each of the
undersigned, Wachovia Bank, National Association, as Arranger, and the lenders
from time to time party thereto.

 

1. The full and exact name of each Company as set forth in its certificate of
incorporation (or its certificate of formation or other organizational document
filed with the applicable state governmental authority, as the case may be) is
as follows:

J. Crew Group, Inc.

J. Crew Intermediate LLC

J. Crew Operating Corp.

J. Crew Inc.

J. Crew International, Inc.

Grace Holmes, Inc.

H.F.D. No. 55, Inc.

 

2. Each Company uses and owns the following trade name(s) in the operation of
its business (e.g. billing, advertising, etc.; note: do not include names which
are product names only):

 

Company

   Trade Names      

All Companies use the “J. Crew” trade name and variations thereon

 

3. Each Company is a registered organization of the following type (for example,
corporation, limited partnership, limited liability company, etc.):

Each Company is organized as a corporation, except for J. Crew Intermediate LLC
which is organized as a limited liability company.

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

4. Each Company was organized on the date indicated for such company below,
under the laws of the State indicated below for such Company, and each Company
is in good standing under the laws of such State.

 

Company

   Date of
Organization    Jurisdiction of
Organization

J. Crew Group, Inc.

   5/19/88    New York

J. Crew Intermediate LLC

   3/27/03    Delaware

J. Crew Operating Corp.

   9/12/97    Delaware

J. Crew Inc.

   3/23/84    New Jersey

J. Crew International, Inc.

   5/15/92    Delaware

Grace Holmes, Inc.

   1/8/62    Delaware

H.F.D. No. 55, Inc.

   7/14/69    Delaware

 

5. The organizational identification number of each Company issued by its
jurisdiction of organization is as set forth below (or if none is issued by the
jurisdiction of organization indicate “none”):

 

Company

   ID No.

J. Crew Group, Inc.

   None

J. Crew Intermediate LLC

   3641106

J. Crew Operating Corp.

   2794492

J. Crew Inc.

   0100221886

J. Crew International, Inc.

   2297963

Grace Holmes, Inc.

   0577825

H.F.D. No. 55, Inc.

   0720619

 

6. The Federal Employer Identification Number of each Company is as follows:

 

Company

   FEIN

J. Crew Group, Inc.

   22-2894486

J. Crew Intermediate LLC

   N/A

J. Crew Operating Corp.

   22-3540930

J. Crew Inc.

   22-2516360

J. Crew International, Inc.

   51-0342712

Grace Holmes, Inc.

   22-1691409

H.F.D. No. 55, Inc.

   22-1869438

 

7. Each Company is duly qualified as a foreign corporation and is in good
standing, or has applied for such qualification and/or good standing, in all
states or other jurisdictions where the nature and extent of the business
transacted by it or the ownership of assets makes such qualification necessary,
except for those jurisdictions in which the failure to qualify would not have a
Material Adverse Effect.

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

8. Since the date of its organization, the name of each Company as set forth in
its organizational documentation as filed of record with the applicable state
authority has been changed as follows:

 

Company

   Date of Change   

Prior Name

J. Crew Operating Corp.

   9/29/97    J. Crew Corp.

J. Crew Inc.

   9/22/86    J. Crew Outfitters, Inc.

J. Crew International, Inc.

   1/25/93    J. CREW International, Inc.

 

9. Since January 1, 1990, no Company has been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of its property or assets out of the ordinary course of
business.

 

10. The chief executive office and mailing address of each Company is located at
the address indicated for such Company on Schedule 8.2 hereto.

 

11. The books and records of each Company pertaining to accounts, contract
rights, inventory, and other assets are located at the addresses indicated for
such Company on Schedule 8.2 hereto.

 

12. Each Company has other places of business and/or maintains inventory or
other assets only at the addresses (indicate whether locations are owned, leased
or operated by third parties and if leased or operated by third parties, their
name and address) indicated for such Company on Schedule 8.2 hereto, subject to
the rights of each Company to establish new locations in accordance with
Section 9.2 of the Loan Agreement.

 

13. The places of business or other locations of any assets used by each Company
during the last four (4) months prior to the date hereof other than those listed
above are as indicated for such Company on Schedule 8.2 hereto.

 

14. Each Company has good and marketable fee simple title to or valid leasehold
interests in all of its Real Property and good, valid and merchantable title to
all of its other properties and assets subject to no liens, mortgages, pledges,
security interests, encumbrances or charges of any kind, except those granted to
Agent and such others as are set forth on Schedule 8.4 hereto.

 

15. Except as set forth on Schedule 8.6 hereto, (a) there is no investigation by
any Governmental Authority pending, or to the best of any Company’s knowledge
threatened, against or affecting any Company’s assets or business and (b) there
is no action, suit, proceeding or claim by any Person pending, or to the best of
any Company’s knowledge threatened, against any Company’s assets or goodwill, or
against or affecting any transactions contemplated by this Agreement, in each
case, which has a reasonable possibility of being adversely determined and
which, if adversely determined against such Company has or could reasonably be
expected to have a Material Adverse Effect.

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

16. To the best knowledge of each Company, such Company is in material
compliance with all environmental laws applicable to its business or operations
where the failure to so comply has or could reasonably be expected to have a
Material Adverse Effect, except as set forth on Schedule 8.8 hereto.

 

17. All deposit accounts, investment accounts or other accounts in the name of
or used by any Company maintained at any bank or other financial institution,
are set forth on Schedule 8.10 hereto, subject to the right of each Company to
establish new accounts in accordance with Section 5.23 of the Loan Agreement
(indicate type of account).

 

18. As of the date hereof, no Company (i) owns or licenses any Intellectual
Property, (ii) has granted any licenses with respect thereto or (iii) has
entered into any License Agreement except, in each case, as set forth on
Schedule 8.11 hereto (indicate type of intellectual property and whether owned
or licensed, registration number, date of registration, and, if licensed, the
name and address of the licensor).

 

19. Each Company is affiliated with, or has ownership in, the corporations
(including subsidiaries) and other organizations set forth on Schedule 8.12
hereto.

 

20. The names of the stockholders (or members or partners, including general
partners and limited partners) of each Company and their holdings are as set
forth on Schedule 8.12 hereto (if stock or other interests are widely held
indicate only holders owning 10% or more of the voting stock or other
interests).

 

21. No Company is a party to or bound by an collective bargaining or similar
agreement with any union, labor organization or other bargaining agent except as
set forth on Schedule 8.13 hereto (indicate date of agreement, parties to
agreement, description of employees covered, and date of termination).

 

22. No Company is a party to or bound by any Material Contract except as set
forth on Schedule 8.15 hereto.

 

23. No Company has any Indebtedness except as set forth on Schedule 9.9 hereto
or as otherwise permitted under Section 9.9 of the Loan Agreement.

 

24. No Company has made any loans or advances or guaranteed or otherwise become
liable for the obligations of any others except as set forth on Schedule 9.9 or
9.10 hereto.

 

25. No Company has any chattel paper (whether tangible or electronic) or
instruments as of the date hereof.

 

26. No Company has any commercial tort claims as of the date hereof.

 

27. There is no provision in the certificate of incorporation, certificate of
formation, articles of organization, by-laws or operating agreement of any
Company (as applicable) or the other organizational documents of such Company,
requiring any vote or consent of its shareholders, members or other holders of
the equity interests therein to borrow or to authorize the mortgage or pledge of
or creation of a security interest in any assets of such Company or any
subsidiary.

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

28. Certain officers of each Company and their respective titles are listed on
Schedule I hereto.

The following will have signatory powers as to all transactions of each Company
with Lender.

Amanda J. Bokman

Nicholas P. Lamberti

 

29. The members of the Board of Directors of each Company (or, if the Company is
a limited partnership, the general partner or, if the Company is a limited
liability company, the managers) are listed on Schedule I hereto.

 

30. At the present time, there are no material delinquent taxes due (including,
but not limited to, all payroll taxes, personal property taxes, real estate
taxes or income taxes) except for taxes, if any, being contested in good faith.

 

31. Certified Public Accountants for each Company is the firm of:

 

Name KPMG LLP

Address 345 Park Avenue. New York. NY 10154

Partner Handling Relationship Jeff Sands

Were statements uncertified for any fiscal year? No

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

Lender shall be entitled to rely upon the foregoing in all respects and each of
the undersigned is duly authorized to execute and deliver this Information
Certificate on behalf of the Company for which he or she is signing.

 

Very truly yours, J. CREW GROUP, INC.

By:

 

/s/ Amanda Bokman

Title:

 

Executive Vice-President

and Chief Financial Officer

J. CREW INTERMEDIATE LLC

By:

 

/s/ Amanda Bokman

Title:

 

Executive Vice-President

and Chief Financial Officer

J. CREW OPERATING CORP.

By:

 

/s/ Amanda Bokman

Title:

 

Executive Vice-President

and Chief Financial Officer

J. CREW INC.

By:

 

/s/ Amanda Bokman

Title:

 

Executive Vice-President

and Chief Financial Officer

J. CREW INTERNATIONAL, INC.

By:

 

/s/ Nicholas Lamberti

Title:

 

Vice-President and Controller

GRACE HOLMES, INC.

By:

 

/s/ Amanda Bokman

Title:

 

Executive Vice-President

and Chief Financial Officer

H.F.D. NO. 55, INC.

By:

 

/s/ Amanda Bokman

Title:

 

Executive Vice-President

and Chief Financial Officer

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

SCHEDULE 8.2

to

INFORMATION CERTIFICATE

Locations

A. Company:

 

1. Chief Executive Office

 

Company

 

Chief Executive Office

J. Crew Group, Inc.

  770 Broadway

J. Crew Intermediate LLC

  New York, NY 10003

J. Crew Operating Corp.

 

J. Crew Inc.

 

Grace Holmes, Inc.

 

H.F.D. No. 55, Inc.

 

J. Crew International, Inc.

 

802 West Street, Suite 102

Wilmington, DE 19801

 

2. Location of Books and Records

Same as response to #1 above

 

3. Locations of Inventory, Equipment and Other Assets

 

Address

  

Owned/Leased/Third Party*

  

Name/Address of Lessor
Third Party, as Applicable

770 Broadway

New York, NY 10003

   Leased by J. Crew Group, Inc.   

770 Broadway Company LLC

c/o Vornado Management

Company LLC

888 Seventh Avenue

New York, NY 10106

 

* Indicate in this column next to applicable address whether the location is
owned by each Company, leased by each Company or owned and operated by a third
party (e.g., warehouse, processor, consignee, etc.)

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

One Clifford Way

Asheville, NC 28810

   Owned by Grace Holmes, Inc.   

One Ivy Crescent

Lynchburg, VA 24506

   Owned by J. Crew Inc.   

25 Mills Race Drive

Lynchburg, VA 24502

   Leased by J. Crew Inc.   

Mae Holding Company

5145 Fischer Place

Cincinnati, OH

205 Vista Boulevard

Arden, NC 28704

 

This lease will expire on 12/31/04

   Leased by J. Crew Operating Corp.   

Space Providers of Asheville,

LLC

P.O. Box 5282

Asheville, NC 28813

See also attached list of retail store locations leased by Grace Holmes, Inc.
and factory store locations leased by H.F.D. No. 55, Inc. as of the date hereof

 

4. Locations of Assets in Prior 4 Months not Listed Above

None

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

RETAIL (AS OF 12/23/04)

 

ST#

 

LOCATION

  

CITY

  

ST

501   South Street Seaport    New York    NY 502   San Francisco Shopping Center
   San Francisco    CA 503   The Atrium    Chestnut Hill    MA 504   South Coast
Plaza    Costa Mesa    CA 505   The Shops @ Liberty Place    Philadelphia    PA
506   Pioneer Place    Portland    OR 507   Cambridgeside Galleria    Cambridge
   MA 508   Georgetown Park    Washington    DC 509   Montgomery Mall   
Bethesda    MD 510   Northpark Mall    Dallas    TX 511   Oakbrook Center   
Oakbrook    IL 512   Northbrook Court    Northbrook    IL 513   900 North
Michigan Avenue    Chicago    IL 514   Somerset Mall    Troy    Ml 516  
Westport -145 Main Street    Westport    CT 517   Scottsdale Fashion Square   
Scottsdale    AZ 518   Tower City Center    Cleveland    OH 519   Lenox Square
   Atlanta    GA 520   Roosevelt Field Mall    Garden City    NY 521   One
Colorado Boulevard    Pasadena    CA 522   Lincoln Place    Santa Fe    NM 523  
Houston Galleria I    Houston    TX 524   Plaza Frontenac    St. Louis    MO 525
  Northshore Mall    Peabody    MA 526   Downtown Plaza    Sacramento    CA 527
  Keystone at the Crossing    Indianapolis    IN 528   Southdale Mall    Edina
   MN 529   Bellevue Square    Believue    WA 530   Plaza at King of Prussia   
King of Prussia    PA 531   Crabtree Valley Mall    Raleigh    NC 532   Tysons
Galleria    McLean    VA 533   Park Meadows Shopping Center    Denver    CO 534
  Highland Mall    Austin    TX 535   Woodfield Mall    Schaumburg    IL 537  
Garden State Plaza    Paramus    NJ 538   Stanford Shopping Center    Palo Alto
   CA 539   99 Prince Street    New York    NY 540   91 Fifth Avenue    New York
   NY 541   Town Center at Boca Raton    Boca Raton    FL 542   Copley Place   
Boston    MA 543   The Mall at Short Hills    Short Hills    NJ 544   SouthPark
Mall    Charlotte    NC 545   Danbury Fair Mall    Danbury    CT 546   Century
City Shopping Center    Los Angeles    CA 547   West Farms Mall    West Hartford
   CT 548   Fashion Valley Mall    San Diego    CA 549   Beachwood Mall   
Cleveland    OH 550   Aventura Mall    Miami    FL 551   Palisades Center   
West Nyack    NY 552   South Shore Plaza    Braintree    MA 553   Riverside
Square    Hackensack    NJ 554   Perimeter Mall    Atlanta    GA 555   1222
Third Street Promenade    Santa Monica    CA 556   Horton Plaza    San Diego   
CA

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

557    The Village at Corte Madera    Corte Madera    CA 558    1232-38
Burlingame Avenue    Burlingame    CA 559    The Gallery at Harborplace   
Baltimore    MD 560    The Westchester    White Plains    NY 561    Oak Park
Mall    Overland Park    KS 562    Pacific Place    Seattle    WA 563    Walt
Whitman Mall    Huntington Station    NY 565    Menlo Park    Edison    NJ 566
   Briarwood Mall    Ann Arbor    Ml 567    MacArthur Center    Norfolk    VA
568    Town Center at Easton    Columbus    OH 569    Cherry Creek Mall   
Denver    CO 570    Riverchase Galleria    Birmingham    AL 572    Washington
Square    Portland    OR 573    Kenwood Towne Center    Cincinnati    OH 574   
Cape Cod Mall    Hyannis    MA 575    Mall of Georgia    Atlanta    GA 576   
Providence Place    Providence    Rl 577    Mission Viejo Mall    Mission Viejo
   CA 578    Brea Mall    Brea    CA 579    Florida Mall    Orlando    FL 581   
Rockefeller Center    New York    NY 582    The Mall at Green Hills    Nashville
   TN 583    Old Orchard Shopping Center    Chicago    IL 584    Fashion Show   
Las Vegas    NV 585    North Star Mall    San Antonio    TX 586    Tucson Mall
   Tucson    AZ 587    Woodland Mall    Grand Rapids    Ml 588    Flatiron
Crossing    Boulder    CO 589    Galleria at Roseville    Roseville    CA 590   
Lakeside Mall    Metairie    LA 591    Deer Park Town Center    Deer Park    IL
592    Ave. of the Peninsula    Palos Verde    CA 593    Saddle Creek Shopping
Center    Memphis    TN 594    Waiden Galleria    Buffalo    NY 595    126
Greenwich Avenue    Greenwich    CT 596    Stonebriar Centre    Dallas    TX 597
   Ross Park Mall    Pittsburgh    PA 599    Stonestown Galleria    San
Francisco    CA 600    Mayfair Mall    Milwaukee    Wl 601    Pentagon City   
Arlington    VA 602    Mall of America    Bloomington    MN 603    Haywood Mall
   Greenville    SC 604    Carousel Center    Syracuse    NY 605    Country Club
Plaza    Kansas City    MO 606    The Shoppes at Brinton Lake    Brinton Lake   
PA 607    Suburban Square    Ardmore    PA 608    The Grove at Farmers Market   
Los Angeles    CA 609    Valley Fair Mall    Santa Clara    CA 610    The
Gateway    Salt Lake City    UT 611    The Promenade at Sagemore    Marlton   
NJ 612    Tices Comer    Woodcliff Lake    NJ 613    International Plaza   
Tampa    FL 614    29 Broadway    New Haven    CT 615    Twelve Oaks Mall   
Novi    Ml 616    North Avenue Collection    Chicago    IL 617    Burlington
Town Center    Burlington    VT 618    Fayette Mall    Lexington    KY

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

619    Franklin Park Mall    Toledo    OH 620    Polaris Fashion Place   
Columbus    OH 621    Kierland Commons    Scottsdale    AZ 622    The Forum at
Peachtree    Atlanta    GA 623    Columbia Mall    Columbia    MD 624    Willow
Grove Park    Willow Grove    PA 625    Fashion Place Mall    Murray    UT 626
   Four Seasons Town Centre    Greensboro    NC 627    Sherman Oaks Fashion
Square    Sherman Oaks    CA 628    Woodland Hills    Tulsa    OK 629   
Hawthorn Center    Vernon Hills    IL 630    Short Pump Town Center    Richmond
   VA 631    Mall at Fairfield Commons    Beavercreek    OH 632    West Town
Mall    Knoxville    TN 633    The Summit    Louisville    KY 634    Crossgates
Mall    Albany    NY 635    Chandler Fashion Center    Chandler    AZ 636   
Mall at Rockingham Park    Salem    NH 637    Aspen Grove Lifestyle Center   
Denver    CO 638    Penn Square    Oklahoma City    OK 639    University Village
   Seattle    WA 640    264 King Street    Charleston    SC 641    The Shops @
Willow Bend    Dallas    TX 643    South Hills Village    Pittsburgh    PA 644
   Willowbrook Mall    Wayne    NJ 645    Palmer Square    Princeton    NJ 646
   The Streets at Southpoint    Durham    NC 647    Charlottesville Fashion
Square    Charlottesville    VA 648    Eastview Mall    Victor    NY 649    347
Madison Avenue    New York    NY 650    Eastwood Towne Center    Lansing    Ml
651    The Village of Rochester Hills    Rochester Hills    Ml 652    Arbor
Lakes    Maple Grove    MN 653    Rockaway Townsquare    Rockaway    NJ 655   
Smith Haven Mall    Lake Grove    NY 656    Grand Place    Saint Paul    MN 659
   Stoneridge Center    Pleasanton    CA 660    The Summit    Birmingham    AL
661    Orland Square    Orland Park    IL 662    Chevy Chase Pavilion   
Washington    DC 668    Manhasset Center    Manhasset    NY 671    Walnut Street
   Pittsburgh    PA 672    Evergreen Walk    South Windsor    CT 673    Jordan
Creek Town Center    West Des Moines    IA 700    Columbus Centre    New York   
NY

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

FACTORY (AS OF 12/23/04)

 

ST#

  

LOCATION

  

CITY

  

ST

002    Lakeside Marketplace    Kenosha    Wl 003    Pigeon Forge Factory Stores
   Pigeon Forge    TN 004    Prime Outlets at Williamsburg    Williamsburg    VA
005    Hilton Head Factory Stores    Bluffton    SC 006    Settlers’ Green   
North Conway    NH 008    Bow Street    Freeport    ME 009    Prime Outlets at
Birch Run    Birch Run    Ml 010    Kittery Outlet Village    Kittery    ME 014
   Silverthorne Factory Stores    Silverthorne    CO 016    Riviera Centre   
Foley    AL 017    Lighthouse Place    Michigan City    IN 018    Manchester
Commons    Manchester    VT 019    Silver Sands Factory Stores    Destin    FL
021    Millstream Factory Stores    Lancaster    PA 022    Woodbury Common
Premium Outlets    Central Valley    NY 023    Crossings Factory Stores   
Tannersville    PA 024    San Marcos Factory Stores    San Marcos    TX 025   
Outlets at Gilroy    Gilroy    CA 027    St. Augustine Outlet Center    St.
Augustine    FL 028    Lakes Region Factory Stores    Tilton    NH 029    Tanger
Factory Outlet Center    Seymour    IN 030    Napa Factory Stores    Napa    CA
031    Desert Hills Premium Outlets    Cabazon    CA 033    Tanger Factory
Outlet Center    Commerce    GA 034    Pacific Edge Factory Stores    Burlington
   WA 035    Southwest Outlet Center    Hillsboro    TX 036    Prime Outlets at
Calhoun    Gordon County    GA 037    Rocky Mountain Factory    Loveland    CO
038    Ocean Outlets - Seaside II    Rehoboth Beach    DE 039    Sawgrass Mills
   Sunrise    FL 040    Prime Outlets at Niagara Falls USA    Niagara Falls   
NY 042    Westbrook Factory Stores    Westbrook    CT 043    Tanger Factory
Outlet Center    Branson    MO 044    Finger Lakes Outlet Center    Seneca    NY
045    Grove City Factory Shops    Springfield    PA 046    Prime Outlets at Lee
(f/k/a Berkshire Outlet)    Lee    MA 047    Tanger Factory Outlet    Riverhead
   NY 048    Six Flags Factory Outlets    Jackson    NJ 049    Myrtle Beach
Factory Stores    Myrtle Beach    VA 051    Outlet Village at Hagerstown   
Hagerstown    MD 052    Leesburg Premium Outlet    Leesburg    VA 053   
Wrentham Village Premium Outlets    Wrentham    MA

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

SCHEDULE 8.4

to

INFORMATION CERTIFICATE

Existing Liens

See attached list.

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

SCHEDULES

to

INFORMATION CERTIFICATE

Existing Liens

 

Debtor

  

Jurisdiction

   File Date    File Number   Type
of Lien   

Secured Party

   Collateral J. CREW INC.    New York    06/22/00    00123220   UCC-1   
Conseco Finance Vendor Services Corporation    Equipment J. CREW INC.    NY
County, NY    12/24/97    97PN61118   UCC-1    The Financial Corp of Illinois   
Equipment J. CREW INC.    NY County, NY    12/24/97    97PN61119   UCC-1    The
Financial Corp of Illinois    Equipment J. CREW INC.    NY County, NY   
12/24/97    97PN61120   UCC-1    The Financial Corp of Illinois    Equipment J.
CREW INC.    NY County, NY    12/24/97    97PN61121   UCC-1    The Financial
Corp of Illinois    Equipment J. CREW INC.    NY County, NY    12/24/97   
97PN61122   UCC-1    The Financial Corp of Illinois    Equipment J. CREW INC.   
NY County, NY    12/24/97    97PN61126   UCC-1    The Financial Corp of Illinois
   Equipment J. CREW INC.    NY County, NY    12/22/97    001049710**   Tax   
NYC Department of Finance    Tax Warrant J. CREW INC.    NY County, NY   
01/12/98    001054011**   Tax    NYC Department of Finance    Tax Warrant J CREW
INC.    NY County, NY    07/03/00    001295527**   Tax    NYC Department of
Finance    Tax Warrant J CREW INC.    NY County, NY    09/25/00    001323439**  
Tax    NYC Department of Finance    Tax Warrant J. CREW INC.    NY County, NY   
08/14/02    001591260   Tax    NY State Department of Taxation and Finance   
Tax Warrant J. CREW INC.    North Carolina    07/26/99    19990072089   UCC-1   
Mellon First United Leasing    Equipment J. CREW INC.    Virginia    09/19/94   
940919 7287   UCC-1    TriCon Capital, a unit of Greyhound Financial Corporation
   Equipment

 

* Will have lapsed by closing date.

** Tax Warrant discharged after search date.

As of 12/09/02

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

Debtor

  

Jurisdiction

   File Date   

File Number

  

Type

of Lien

  

Secured Party

   Collateral       08/17/99    990817 7828    Cont       J. CREW INC.   
Virginia    10/31/94    941031 7175    UCC-1    TriCon Capital, a unit of
Greyhound Financial Corporation    Equipment       09/14/99    990914 7804   
Cont       J. CREW INC.    Virginia    02/02/95    950202 7119    UCC-1   
TriCon Capital, a unit of Greyhound Financial Corporation    Equipment      
02/17/00    000217 7823    Cont       J. CREW INC.    Virginia    12/05/97   
971205 7103    UCC-1    Weyerhaeuser Company    Equipment J. CREW INC.   
Virginia    03/09/00    000309 7025    UCC-1    Pitney Bowes Credit Corporation
   Equipment GRACE HOLMES, INC.    California    11/04/98    9831361280**    Tax
   The State of California Board of Equalization    Tax Lien GRACE HOLMES, INC.
   Delaware    08/30/01    11070304    UCC-1    Chase Equipment Leasing, Inc.   
Equipment GRACE HOLMES, INC.    Delaware    08/30/01    11070338    UCC-1   
Chase Equipment Leasing Inc.    Equipment GRACE HOLMES, INC.    New Jersey   
10/23/96    1728383    UCC-1    Chase Equipment Leasing, Inc.    Equipment      
07/02/01    1728383    Cont       GRACE HOLMES, INC.    New York    03/07/00   
045697    UCC-1    Jacom Computer Services, Inc.    Equipment GRACE HOLMES, INC.
   NY County, NY    04/04/00    00PN17411    UCC-1    Jacom Computer Services,
Inc.    Equipment GRACE HOLMES, INC.    North Carolina    10/04/96    1384737   
UCC-1    Chase Equipment Leasing, Inc.    Equipment       05/15/01   
20010046995    Cont       GRACE HOLMES, INC.    North Carolina    03/08/00   
20000024648    UCC-1    Jacom Computer Services, Inc.    Equipment

 

* Will have lapsed by closing date.

** Tax Warrant discharged after search date.

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

Debtor

  

Jurisdiction

   File Date    File Number    Type
of Lien   

Secured Party

   Collateral GRACE HOLMES, INC.    Virginia    03/07/00    003077134    UCC-1
   Jacom Computer Services, Inc.    Equipment H.F.D. NO. 55, INC.    Gordon
County, Georgia    10/22/98    BK 14/73    Tax    Gordon County Tax Commission
   Tax Warrant H.F.D. NO. 55, INC.    Gordon County, Georgia    09/24/02    BK
17/73    Tax    Georgia Department of Labor    Tax Warrant H.F.D. NO. 55, INC.
   NY County, NY    07/27/98    5573978    Tax    NYC Department of Finance   
Tax Warrant H.F.D. NO. 55, INC.    NY County, NY    07/27/98    5573979    Tax
   NYC Department of Finance    Tax Warrant J. CREW GROUP, INC.    New Jersey   
06/07/94    1574515    UCC-1    U.S. Bancorp Leasing & Financial American
Finance Group, Inc.    Equipment       12/04/96    1574515    Assign            
05/13/99    1574515    Cont       J. CREW GROUP, INC.    New Jersey    02/27/97
   1752264    UCC-1    F.L. Partnership Management, Inc.    Equipment J. CREW
GROUP, INC.    New Jersey    12/19/97    1808151    UCC 1    The Financial
Corporation of Illinois    Equipment J. CREW GROUP, INC.    New Jersey   
04/22/98    1831262    UCC-1    Fidelity Leasing Income Fund VII    Equipment J.
CREW GROUP, INC.    New York    12/22/97    261822    UCC-1    Oliver-Allen
Corporation    Equipment J. CREW GROUP, INC.    New York    12/22/97    261828
   UCC-1    Oliver-Allen Corporation    Equipment       08/06/02    181554   
Cont       J. CREW GROUP, INC.    New York    08/10/98    170815    UCC-1   
Copelco Capital, Inc.    Equipment J. CREW GROUP, INC.    New York    10/06/98
   212818    UCC-1    First American Commericial Bancorp, Inc.    Equipment J.
CREW GROUP, INC.    New York    09/10/99    182951    UCC-1    American
Equipment Leasing    Equipment

 

* Will have lapsed by closing date.

** Tax Warrant discharged after search date.

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

Debtor

  

Jurisdiction

   File Date   File Number   Type
of Lien   

Secured Party

   Collateral J. CREW GROUP, INC.    New York    05/17/00   097337   UCC-1   
Jacom Computer Services, Inc.    Equipment J. CREW GROUP, INC.    New York   
09/27/00   187082   UCC-1    JTA Leasing Co. LLC    Equipment J. CREW GROUP,
INC.    New York    01/28/02   021048   UCC-1    EMC Corporation    Equipment J.
CREW GROUP, INC.    New York    02/08/02   031977   UCC-1    Crown Credit
Company    Equipment J. CREW GROUP, INC.    New York    04/16/02   088528  
UCC-1    Raymond Leasing Corporation    Equipment J. CREW GROUP, INC.    New
York    06/17/02   141955   UCC-1    Marlin Leasing Corp.    Equipment J. CREW
GROUP, INC.    New York    06/21/02   146081   UCC-l    Wells Fargo Financial
Leasing    Equipment J. CREW GROUP, INC.    New York    08/21/02   193972  
UCC-1    Fidelity Leasing, A Division of EAB Leasing Corp.    Equipment J. CREW
GROUP, INC.    NY County, NY    10/03/97*   97PN45716   UCC-1    Copelco
Capital, Inc.    Equipment J. CREW GROUP, INC.    NY County, NY    08/13/98  
98PN42878   UCC-1    Copelco Capital, Inc.    Equipment J. CREW GROUP, INC.   
NY County, NY    10/06/98   98PN52872   UCC-1    Imperial Business Credit, Inc.
   Equipment J. CREW GROUP, INC.    NY County, NY    09/15/99   99PN50513  
UCC-1    American Equipment Leasing    Equipment J. CREW GROUP, INC.    NY
County, NY    05/17/00   00PN24945   UCC-1    Jacom Computer Services, Inc.   
Equipment J. CREW GROUP, INC.    NY County, NY    06/27/00   00PN32012   UCC-1
   Conseco Finance Vendor Services Corp.    Equipment J. CREW GROUP, INC.    NY
County, NY    10/05/00   00PN49382   UCC-1    JTA Leasing CO, LLC    Equipment
J. CREW GROUP, INC.    NY County, NY    12/22/97   001049713**   Tax    NYC
Department of Finance    Tax Warrant J. CREW GROUP, INC.    NY County, NY   
12/22/97   001049714**   Tax    NYC Department of Finance    Tax Warrant J. CREW
GROUP, INC    North Carolina    03/19/01   20010027107   UCC-1    Carolina
Handling LLC    Equipment J. CREW GROUP, INC.    North Carolina    05/25/01  
20010050237   UCC-1    EMC Corporation Associates Leasing Inc.    Equipment

 

* Will have lapsed by closing date.

** Tax Warrant discharged after search date.

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

Debtor

  

Jurisdiction

   File Date    File Number    Type
of Lien   

Secured Party

   Collateral J. CREW GROUP, INC.    Virginia    12/29/97    9712297433    UCC-1
   Associates Commercial Corporation    Equipment J. CREW GROUP, INC.   
Virginia    01/13/98    9801137118    UCC-1    IBM Credit Corporation   
Equipment J. CREW GROUP, INC.    Virginia    03/09/98    9803097144    UCC-1   
IBM Credit Corporation    Equipment J. CREW GROUP, INC.    Virginia    03/09/98
   9803097145    UCC-1    IBM Credit Corporation    Equipment J. CREW GROUP,
INC.    Virginia    03/23/98    9803237600    UCC-1    ComSource, Inc.   
Equipment J. CREW GROUP, INC.    Virginia    08/21/98    9808217193    UCC-1   
Associates Leasing, Inc.    Equipment J. CREW GROUP, INC.    Virginia   
09/02/98    9809027025    UCC-1    Associates Commercial Corporation   
Equipment J. CREW GROUP, INC.    Virginia    07/28/99    9907287061    UCC-1   
CCA Financial, Inc.    Equipment J. CREW GROUP, INC.    Virginia    09/10/99   
9909107157    UCC-1    American Equipment Leasing, a division of EAB Leasing
Corp.    Equipment J. CREW GROUP, INC.    Virginia    10/27/99    9910277014   
UCC-1    CCA Financial, Inc.    Equipment J. CREW GROUP, INC.    Virginia   
11/12/99    9911127315    UCC-1    IBM Credit Corporation    Equipment J. CREW
OPERATING CORP.    Delaware    05/6/02    21321425    UCC-1    Preferred
Capital, Inc.    Equipment

 

* Will have lapsed by closing date.

** Tax Warrant discharged after search date.

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

SCHEDULE 8.6

to

INFORMATION CERTIFICATE

Pending Litigation

Charles E. Hill & Associates, Inc. v. Amazon.com, Inc. et al. – In 2002,
Plaintiff filed a lawsuit against a group of defendants, including J. Crew
Group, Inc., in the U.S. District Court for the Eastern District of Texas,
Marshall Division, alleging patent infringement relating to each defendant’s
eCommerce business.

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

SCHEDULE 8.8

to

INFORMATION CERTIFICATE

Environmental Compliance

None

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

SCHEDULE 8.10

to

INFORMATION CERTIFICATE

Deposit Accounts; Investment Accounts

A. Part I - Deposit Accounts

 

Name of Company

  

Name and Address of Bank

  

Account No.

  

Purpose*

J. Crew International Inc.    JP Morgan Chase Bank
Wilmington, DE    023-500987    Business Checking

See attached list for additional deposit accounts

B. Part 2 - Investment and Other Accounts

 

Name of Company

  

Name and Address
of Broker

or Other Institution

  

Account No.

  

Types of
Investments

J. Crew Operating Corp.    Merrill Lynch    318-3323539-2    Merrill Lynch
Premier Institutional Fund J. Crew International, Inc.    JP Morgan Chase Bank
Wilmington, DE    C-87625-00-7    Asset Account Portfolio (JP Morgan Prime Money
Market)

 

* For the “purpose” indicate either: (a) “collection account” if proceeds of
receivables or other assets are deposited in it, and note “lockbox” if it is
subject to lockbox servicing arrangements with the applicable bank or
“disbursement account” if it is a checking account or (b) account used for
transferring funds to third parties, and in addition, indicate if it is used for
a specific purpose, e.g., “payroll”, “medical”, etc.

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

Updated List

¯        

 

Store

       

Bank

   Account Number   

Sub-Account Numbers

2       First Banking Center    40034496    3       Citizens National Bank   
33840    5       South Carolina B&T    120198650    6       The Berlin City Bank
   29830    8       Key Bank    29203660    9       National City    3333100033
   10       Peoples Heritage Bank    27266437    14       1st Bank of
Silverthorne    4065502802    16       AMSouthBank    87245388    17      
National City    189208    18       Factory Point National    1128698    19   
   Trustmark    7103005071    21       Sovereign Bank    81033435    22      
Fleet    9366179990    23       Citizens Bank    6100169545    27       Wachovia
   2090000803749    28       Pemigewasset National    613231    29       Irwin
Union Bank    39852173    31       Wells Fargo    610106155    33      
Community Bank & Trust    155093    34       Skagit State Bank    3887001446   
35       Wells Fargo    6161030817    36       BB&T    5142123675    37      
Compass Bank    809001381    38       Wilmington Trust    27614736    42      
Citizens Bank    2202532670    43       Union Planters Bank    6411362660    44
      National Bank of Geneva    277788358    45       National City    71761401
   46       Legacy Banks    1115003632    48       Wachovia    2000009172403   
51       The Fidelity Bank    168400104    52       Wachovia    2000014597617   
53       Wrentham Co-Operative    16005373    100       Bank of America
(factory)    5486854671       4          5486851959    24          5493629970   
25          5486851946    30          5486851933    39          5486851920    49
         5486854668 101       HSBC    834147599    301       SouthTrust Bank   
70972621    302       SunTrust    8801964167    303       Citibank    800374758
   492       Key    479681021222       594          479681021230    604         
479881021248    617          479681021255    634          479681021016

 

1

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

Store

       

Bank

   Account Number   

Sub-Account Numbers

493       Fleet    9429133405    494       US Bank (firstar)    823312079      
528          153910034484    573          488836172    582          190918474   
600          754880292 495       Bank One    633498019       513         
631050366    514          363511554    527          705001244940    535         
622713972    549          633496043    566          205000115365    568         
633498050    590          1589015849    591          622714012    615         
363565924    616          631050424    620          643950413    625         
901064807    631          633549084    637          192493995    651         
363669634    661          627216534 496       Wells Fargo    4944051168      
506          4944093780    521          4944093798    522          4944093806   
534          4944093814    546          4944093822    548          4944093830   
555          4944093848    556          4944093855    558          4944093863   
569          4944093871    592          4944093913    608          4944177971   
610          4944224807    621          4944289867    652          4944247717   
656          4944163948    659          4944177989    673          4944265289
497       Wachovia    2000006158543    498       Bank of America (retail)   
5486854684       502          5486852589    504          5486854642

 

2

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

Store

       

Bank

   Account Number   

Sub-Account Numbers

   508          5486854639    510          5486854626    517          5486854613
   523          5486854600    524          5486854590    526          5486852259
   529          5486852246    538          5486852233    541          5486852220
   550          5486852217    554          5486852204    557          5486852194
   559          5486852181    562          5486852178    572          5486852165
   577          5486852152    578          5486852149    584          5486852123
   585          5486852110    588          5486852107    589          5486852097
   596          5486852084    599          5486852068    605          5486852055
   609          5486852042    613          5486852039    623          5487721538
   627          5486852026    628          5486852013    630          5488743065
   635          5486852000    638          5486851991    639          5495582170
   641          5486851988    646          5486851975    647          5486851962
499       Chase    323187536    509       Chevy Chase Bank    1624300740    518
      National City    657178081    525       Banknorth, N.A.    138003661   
532       BB&T    5135715427    533       Community First National    4505019507
   551       Washington Mutual Bank    9362299202    561       Hillcrest Bank   
10026654    563       HSBC    148018211    571       PNC Bank    5603610986   
587       Standard Federal Bank    5893069517    588       First National Bank
of CO    242421    593       AMSouth Bank    1004078561    597       Citizens
Bank    6101281055   

 

3

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

Store

       

Bank

   Account Number   

Sub-Account Numbers

601       Chevy Chase Bank    1074303857    602       Highland Bank   
3010014677    618       National City    96463682    619       Sky Bank   
6700020464    633       BB&T    5182873294    643       National City   
967011017    644       Valley National Bank    40744841    648       Canandaigua
National B&T    1101037872    650       Fifth Third Bank    7160918800    671   
   National City    649900484    Corp       Chase - Corp Concentration   
22073673    Corp       Wachovia - Corp Concentration    2000015151816    Direct
      Suntrust    201334097   

 

4

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

SCHEDULE 8.11

to

INFORMATION CERTIFICATE

Intellectual Property

A list of all registered trademarks and all pending trademark applications by J.
Crew International, Inc. is attached.

Other than the registered trademark, no Company owns or licenses from any third
party any trademarks, copyrights or patents (other than software licenses in the
ordinary course of business).

J. Crew International, Inc. currently licenses its trademark “J. Crew” and
certain know-how to Itochu Corporation for use in connection with the
manufacture and sale of merchandise in Japan.

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

J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

               Updated list                   ¯   

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Argentina    CREWCUTS    2008284    11-07-95    1615822    9/16/1996   
REGISTERED 25: CLASS HEADING Argentina    J. CREW    1833779    02-26-92   
1732673    4/22/1999    REGISTERED 25: ALL GOODS UNDER THIS CLASS Argentina   
J. CREW    1833780    02-26-92    1556012    3/31/1995    REGISTERED 35: SALES
PROMOTION BY MEANS OF CATALOGUES AND MAIL RELATING TO THE FIELD OF CLOTHING,
LUGGAGE AND CLOTHING ACCESSORIES Argentina    J. CREW    2163790    07-20-98   
1770468    1/10/2000    REGISTERED 9: LENSES, SUNGLASSES, EYEGLASSES, FRAMES;
CARRYING CASES FOR SUNGLASSES AND EYEGLASSES, SPECIAL CASES FOR GLASSES AND
LENSES, PARTS AND FITTINGS FOR SUNGLASSES AND EYEGLASSES, CORDS AND CHAINS FOR
EYEGLASSES Argentina    J. CREW    2163791    07-20-98    1770469    1/10/2000
   REGISTERED 16: PRINTED MATTER, MAGAZINES, AND CATALOGS Argentina    J. CREW
and Design (with oarsman and underline)    1833782    02-26-92    1676462   
7/24/1998    REGISTERED    LOGO [g24244jcrew_line.jpg]                25: MEN’S
AND WOMEN’S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS,
PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES AND DRESSES

 

   Created by Cowan, Liebowitz & Latman, P.C.    Page:    1

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

J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Argentina    J. CREW and Design (with oarsman and underline)    1833783   
02-26-92    1556013    3/31/1993    REGISTERED    LOGO [g24244jcrew_line.jpg]   
            35: SALES PROMOTION BY MEANS OF CATALOGUES AND MAIL RELATING TO THE
FIELD OF CLOTHING, LUGGAGE AND CLOTHING ACCESSORIES Australia    J. CREW   
B598886    03-23-93    598886    11/14/1997    REGISTERED 16: MAIL ORDER
CATALOGUES AND ALL OTHER GOODS IN THIS CLASS Australia    J. CREW and Design
(with oarsman and no underline)    B598890    03-23-93    598890    11/14/1997
   REGISTERED    LOGO [g24244jcrew_no.jpg]                16: MAIL ORDER
CATALOGUES AND ALL OTHER GOODS IN THIS CLASS Austria    CREWCUTS    AM5475/95   
09-27-95    160913    11/13/1995    REGISTERED 25: CLASS HEADING Benclux   
CREWCUTS    856183    09-22-95    577814    9/22/1995    REGISTERED 25:
CLOTHING, FOOTWEAR, HEADGEAR Benclux    J. CREW    713271    03-22-88    447085
   3/22/1988    REGISTERED 18: BELTS 25: MEN’S AND WOMEN’S SHIRT, SWEATERS,
SHOES, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS,
SLICKERS, SKIRTS, BLOUSES AND DRESSES

 

   Created by Cowan, Liebowitz & Latman, P.C.    Page:    2

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

J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Bermuda    CREWCUTS    27871    05-22-96    27871    5/22/1996    REGISTERED 25:
SHIRTS, SWEATERS, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS,
SOCKS, JACKETS, SLICKERS, BLOUSES, DRESSES, SKIRTS, KNIT TOPS, UNDERSHIRTS,
SHOES, ATHLETIC SHOES AND BOOTS Bermuda    J.CREW    26724    02-22-95    B26724
   2/22/1995    REGISTERED 25: SHIRTS, T-SHIRTS, BLOUSES, CAMISOLES,
SWEATSHIRTS, SWEATERS, CARDIGANS, VESTS, TUNICS, COATS, JACKETS, SLICKERS,
BLAZERS, SUITS, BODYSUITS, TANK TOPS, ROMPERS, JUMPSUITS, PANTS, JEANS, SHORTS,
STIRRUPS, SKIRTS, DRESSES, CHEMISES, PAJAMAS, NIGHT-GOWNS, BELTS, SWIMWEAR,
LINGERIE, PANTIES. BRAS, SLIPS, HOSIERY, SOCKS, LEGGINGS, EXERCISEWEAR,
LEOTARDS, UNITARDS, BICYCLE SHORTS, BRA TOPS, SCARVES, BANDANNAS. GLOVES, HATS,
FOOTWEAR, SLIPPERS, SHOES, SNEAKERS, MULES, SANDALS, MOCCASINS, ESPADRILLES AND
THONGS Bermuda    J. CREW & DESIGN    26449    10-05-94    26449    10/5/1994   
REGISTERED 25: SHIRTS, T-SHIRTS, BLOUSES, CAMISOLES, SWEATSHIRTS, SWEATERS,
CARDIGANS, VESTS, TUNICS, COATS, JACKETS, SLICKERS, BLAZERS, SUITS, BODYSUITS,
TANK TOPS, ROMPERS, JUMPSUITS, PANTS, JEANS, SHORTS, STIRRUPS, SKIRTS, DRESSES,
CHEMISES, PAJAMAS, NIGHT-GOWNS, BELTS, SWIMWEAR, LINGERIE, PANTIES, BRAS, SLIPS,
HOSIERY, SOCKS, LEGGINGS, LEOTARDS, UNITARDS, BICYCLE SHORTS, BRA TOPS, SCARVES,
BANDANNAS, GLOVES, HATS, FOOTWEAR, SLIPPERS, SHOES, SNEAKERS, MULES, SANDALS,
MOCCASINS, ESPADRILLES AND THONGS Brazil    CREWCUTS    818908173    11-16-95   
818908173    10/24/2000    REGISTERED 25: SHIRTS, SWEATERS, CAPS, HATS,
BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS, BLOUSES,
DRESSES, SKIRTS, KNIT TOPS, UNDERSHIRTS, SHOES, ATHLETIC SHOES AND BOOTS Brazil
   J.CREW    816726361    05-19-92    816726361    10/28/1997    REGISTERED NA
25.10 AND 25.60: DESIGNING AND MERCHANDISING OF MEN’S AND WOMEN’S APPAREL,
APPAREL-RELATED ACCESSORIES AND LUGGAGE AND SALES OF SUCH MERCHANDISE THROUGH
RETAIL STORES AND MAIL ORDER Brazil    J.CREW    817895256    06-16-94   
817895256    9/17/1996    REGISTERED NA 40.15: RETAIL AND MAIL ORDER SERVICES IN
THE FIELD OF CLOTHING, CLOTHING ACCESSORIES, JEWELRY AND LUGGAGE; FACTORY
RETAIL, AND WHOLESALE OUTLET STORE SERVICES IN THE FIELD OF CLOTHING, CLOTHING
ACCESSORIES, JEWELRY AND LUGGAGE

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Brazil    J. CREW and Design (with oarsman and underline)    816727880   
05-20-92    816727880    8/26/1997    REGISTERED    LOGO [g24244jcrew_line.jpg]
               NA 25.10 AND 25.60: DESIGNING AND MERCHANDISING OF MEN’S AND
WOMEN’S APPAREL, APPAREL-RELATED ACCESSORIES AND LUGGAGE AND SALES OF SUCH
MERCHANDISE THROUGH RETAIL STORES AND MAIL ORDER Canada    CREWCUTS    788044   
07-20-95    498047    7/29/1998    REGISTERED BASED ON USE: WEARING APPAREL,
NAMELY CHILDREN’S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANNAS, SHORTS,
SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SHIRTS, BLOUSES, DRESSES;
BASED ON USE: WEARING APPAREL, NAMELY SHIRTS, SWEATERS, CAPS, HATS, BANDANNAS,
SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS, BLOUSES, DRESSES,
SKIRTS, KNIT TOPS, UNDERSHIRTS, SHOES, ATHLETIC SHOES AND BOOTS Canada    J.
CREW    768042    11-08-94    469783    1/27/1997    REGISTERED CLOTHING AND
ACCESSORIES, NAMELY, SHIRTS, SWEATERS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS,
JEANS, BELTS, SOCKS, JACKETS, COATS, SLICKERS, SKIRTS, BLOUSES, DRESSES,
CARDIGANS, VESTS, SCARVES, JUMPSUITS, T-SHIRTS, TIES, GLOVES, TANK TOPS,
BLAZERS, LIGERIE, CAMISOLES, CHEMISES, UNDERWEAR, BRAS, BRA TOPS, SLEEPWEAR,
HORSIERY, SWIMWEAR, SUITS, LEGGINGS, BODYSUITS, ROMPERS, ROBES, LEOTARDS,
TUNICS; FOOTWEAR, NAMELY SHOES, SNEAKERS, BOOTS, ESPADRILLES, SCANDALS,
MOCCASINS, SLIPPERS, THONGS, MULES: HEADWEAR, NAMELY CAPS, HATS, HEAD BANDS:
SUNGLASSES; BACKPACKS, DUFFLE BAGS, TOTE BAGS; MAIL ORDER SERVICES Canada    J.
CREW and Design (with oarsman and underline)    604038    04-05-88    375013   
11/2/1990    REGISTERED    LOGO [g24244jcrew_line.jpg]                MEN’S AND
WOMEN’S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS,
PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES AND DRESSES; LUGGAGE,
UMBRELLAS, HANDBAGS AND DUFFEL BAGS; RETAIL CATALOG SERVICES IN THE FIELD OF
CLOTHING, LUGGAGE AND CLOTHING ACCESSORIES Canada    jcrew.ca               
Registered

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

China (People’s Republic Of)    CREWCUTS (ENGLISH AND CHINESE CHARACTERS)   
950123345    09-29-95    997228    5/6/1997    REGISTERED    LOGO
[g24244ex10_1pg184.jpg]                25: CLOTHING, FOOTWEAR AND HEADGEAR
China (People’s Republic Of)    J. CREW    9700128772    12-02-97    1281194   
6/7/1999    REGISTERED 9: EYEGLASSES, PINCE-NEZ, CONTACT LENSES, EYEGLASSES
CASES, PINCE-NEZ CASES, CHAINS FOR EYE GLASSES, BOXES FOR CONTACT LENSES,,
EYEGLASS FRAMES, CONTAINERS FOR CONTACT LENSES, CLEANING CLOTHS FOR EYEGLASSES,
SPECTACLES, LENSES FOR EYEGLASSES, LENSES (OPTICS), CHAINS FOR PINCE-NEZ, STRING
FOR PINCE-NEZ AND FRAMES FOR PINCE-NEZ China (People’s Republic Of)    J. CREW &
DESIGN (WITH LINE)    8832227    09-10-88    358993    8/29/1989    REGISTERED
   LOGO [g24244jcrew_line.jpg]                25: MEN’S AND WOMEN’S SHIRTS,
SWEATERS, SHORTS, SWEATSHIRTS, PANTS, JACKETS, SLICKERS, SKIRTS, BLOUSES,
DRESSES, SHOES, CAPS AND HATS China (People’s Republic Of)    J. CREW (CHINESE
CHARACTERS)    94111635    10-31-94    882248    10/14/1996    REGISTERED 25:
CLOTHING, FOOTWEAR AND HEADGEAR    China (People’s Republic Of)    J. CREW
(STYLIZED)    8836338    10-14-88    362359    9/29/1989    REGISTERED 25:
CLOTHING INCLUDING MEN’S AND WOMEN’S SHIRTS, SWEATERS, SHORTS, SWEAT SHIRTS,
PANTS, JACKETS, SLICKERS, SKIRTS, BLOUSES, DRESSES AND SOCKS

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

China (People’s Republic Of)    J. CREW (STYLIZED)    8836339    10-14-88   
361137    9/9/1989    REGISTERED 25: SHOES, CAPS AND HATS (FORMERLY LOCAL CLASS
54) China (People’s Republic Of)    J. CREW (STYLIZED)    8836340    10-14-88   
362731    9/29/1989    REGISTERED 24: BANDANNAS China (People’s Republic Of)   
J. CREW and Design (with oarsman and underline)    8832226    09-10-88    362742
   9/29/1989    REGISTERED    LOGO [g24244jcrew_line.jpg]                25:
SOCKS AND BANDANNAS China (People’s Republic Of)    J. CREW and Design (with
oarsman and underline)          384288    9/29/1989    REGISTERED    LOGO
[g24244jcrew_line.jpg]                24: BANDANNAS Columbia    CREWCUTS   
9503339    11-10-95    184927    3/1/1996    REGISTERED 25: CLOTHING FOOTWEAR
AND HEADGEAR Columbia    J. CREW    94.006.448    02-18-94          FILED 25:
MEN’S AND WOMEN’S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANNAS, SHORTS,
SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES AND DRESSES

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Columbia    J. CREW and Design (with oarsman and underline    94.006.449   
02-18-94          FILED    LOGO [g24244jcrew_line.jpg]                25: MEN’S
AND WOMEN’S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS,
PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES, DRESSES Denmark    CREW
   1337/1982    04-02-82    1337/1982    4/2/1982    REGISTERED 25: ALL GOODS
UNDER THIS CLASS Ecuador    J. CREW    110172    12-27-00    1156501   
5/15/2001    REGISTERED 25: SHIRTS, POLO’S, BLOUSES, CAMISOLES, T-SHIRTS,
SWEATERS, CARDIGANS, VESTS, TUNICS, COATS, JACKETS, BLAZERS, SUITS, TANK TOPS,
CLOTHING SETS FOR CHILDREN, SKI CLOTHES, PANTS, JEANS, SHORTS, OVERALLS, SKIRTS,
DRESSES, WOMEN’S SHIRTS, PYJAMAS, NIGHTGOWNS, BELTS, SWIMSUITS, UNDERGARMENTS
FOR WOMEN, KNEE-HI, BRAS, UNDERWEAR, SPORTSWEAR AND EXERCISE WEAR, HANKERCHIEFS,
GLOVES, HATS, SHOES, SNEAKERS, SANDALS, MOCASSINS, THONGS AND ALL OTHER GOODS IN
THIS CLASS European Union    CREWCUTS    147629    04-01-96    147629   
4/1/1996    REGISTERED

25: CLOTHING, FOOTWEAR, HEADGEAR

 

SENIORITY CLAIMED IN AUSTRIA

European Union    CREWCUTS    003431319    10-30-03          FILED 18: LEATHER
AND IMITATION LEATHER AND GOODS MADE OF THESE MATERIALS AND NOT INCLUDED IN
OTHER CLASSES; ANIMAL SKINS, HIDES, TRUNKS AND TRAVELLING BAGS; UMBRELLAS,
PARASOLS AND WALKING STICKS; WHIPS, HARNESS AND SADDLERY; LUGGAGE, HANDBAGS,
DUFFEL BAGS, TOTE BAGS, WEEKENDER BAGS, BACKPACKS, PURSES, COSMETIC CASES (SOLD
EMPTY), SHAVING KITS (SOLD EMPTY), BILLFOLDS, COIN CASES, KEY CASES, AND
EYEGLASS CASES 25: CLOTHING, FOOTWEAR, HEADGEAR; SHIRTS, T-SHIRTS, JERSEYS,
SWEATERS, SWEATSHIRTS, UNDERWEAR, UNDERSHIRTS, SOCKS, BLOUSES, DRESSES, SKIRTS,
KNIT TOPS, ROBES, SHORTS, SLACKS, TROUSERS, PANTS, BELTS, JACKETS, SUITS, VESTS,
COATS, RAINCOATS, SLICKERS, NAUTICAL CLOTHING, GYMNASTIC CLOTHING, SPORT AND
LEISURE CLOTHING, PERSONAL LINENS AND ACCESSORIES, TIES, NECKTIES, SCARVES,
BANDANNAS, ATHLETIC SHOES, BOOTS, CAPS AND HATS

35: ADVERTISING; BUSINESS MANAGEMENT; BUSINESS ADMINISTRATION: OFFICE FUNCTIONS;
RETAIL SERVICES: RETAIL STORE SERVICES FOR APPAREL, SHOES, ACCESSORIES, JEWELRY,
COSMETICS, TOILETRIES, FRAGRANCES AND HOME FURNISHINGS; BUSINESS MANAGEMENT
CONSULTANCY, INCLUDING GIVING ASSISTANCE AND ADVICE IN THE ESTABLISHMENT OF
RETAIL STORES IN THE FIELD OF APPAREL, SHOES, ACCESSORIES, JEWELRY, COSMETICS,
TOILETRIES, FRAGRANCES AND HOME FURNISHINGS, THE BRINGING TOGETHER FOR THE
BENEFIT OF OTHERS, OF APPAREL, SHOES, ACCESSORIES, JEWELRY, COSMETICS,
TOILETRIES, FRAGRANCES AND HOME FURNISHINGS, EXCLUDING THE TRANSPORT THEREOF,
ENABLING CONSUMERS TO CONVENIENTLY VIEW AND PURCHASE THOSE GOODS

 

SENIORITY CLAIMED: AUSTRIA, BENELUX, FRANCE, GERMANY, GREECE, IRELAND, ITALY,
PORTUGAL, SPAIN AND SWITZERLAND

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

European Union    J. CREW    173210    04-01-96    173210    3/9/1999   
Registered 16: PRINTED MATTER. MAGAZINES, MAIL ORDER CATALOGS FOR ALL KINDS OF
GOODS: 18: LEATHER AND IMITATION LEATHER AND GOODS MADE OF THESE MATERIALS:
ANIMAL SKINS, HIDES, LUGGAGE, HANDBAGS, DUFFEL BAGS, TOTE BAGS, WEEKENDER BAGS,
BACKPACKS, PURSES, COSMETIC CASES (SOLD EMPTY) SHAVING KITS (SOLD EMPTY)
BILLFOLDS, PASSPORT CASES, COIN CASES, KEY CASES, EYEGLASS CASES, CHECK BOOK
CASES, TRUNKS AND TRAVELING BAGS; UMBRELLAS: PARASOLS; AND WALKING STICKS; 25:
CLOTHING NAMELY SHIRTS, T-SHIRTS, JERSEYS, SWEATERS, SWEATSHIRTS, UNDERWEAR,
UNDERSHIRTS, SOCKS, BLOUSES, DRESSES, SKIRTS, KNIT TOPS, ROBES, SHORTS, SLACKS,
TROUSERS, PANTS, BELTS, JACKETS, SUITS, VESTS, COATS, RAINCOATS, SLICKERS,
NAUTICAL CLOTHING, GYMNASTIC CLOTHING, SPORT AND LEISURE CLOTHING, PERSONAL
LINENS AND ACCESSORIES, TIES, NECKTIES, HANDKERCHIEFS, SCARVES, BANDANNAS:
FOOTWEAR NAMELY SHOES, ATHLETIC SHOES, BOOTS: HEADWEAR NAMELY CAPS AND HATS
SENIORITY CLAIMED: AUSTRIA, BENELUX, FRANCE, GERMANY, GREECE, IRELAND, ITALY,
PORTUGAL, SPAIN AND SWITZERLAND European Union    J. CREW    1372903    11-04-99
         FILED 3: BLEACHING PREPARATIONS AND OTHER SUBSTANCES FOR LAUNDRY USE;
CLEANING, POLISHING, SCOURING AND ABRASIVE PREPARATIONS: SOAPS; PERFUMERY,
ESSENTIAL OILS, COSMETICS, HAIR LOTIONS: DENTIFRICES: INCLUDING PERFUME, EAU DE
PERFUME, EAU DE TOILETTE, FRAGRANCED BODY LOTION, FRAGRANCED BODY CREAM, FACE
CREAM, BODY CREAM, ANTI-WRINKLE CREAM, SKIN RENEWAL CREAM, EYE CREAM, SKIN
MOISTURIZER, BODY LOTION, BODY OIL, SKIN BALANCING LOTION, FACIAL SKIN OIL
CONTROLLER, SKIN WRINKLE TREATMENT LOTIONS AND CREAMS, SKIN BLEMISH TREATMENT
LOTIONS AND CREAMS, FACIAL TONER, BODY TONER, FACIAL AND BODY EXFOLIATING
PREPARATION, FACIAL AND BODY MASK, FACIAL AND BODY OIL SPRAY, TOILET SOAPS,
LIQUID SOAPS, CREAM SOAPS, PAPER SOAPS, COSMETIC SOAPS, FACIAL CLEANSER, BODY
CLEANSER, CLEANSING LOTION, CLEANSING GEL, BATH POWDER, BATH OIL, BODY POWDER,
SHAVING FOAM, PRE-SHAVE LOTIONS AND CREAMS, AFTER-SHAVE LOTIONS AND CREAMS,
AFTER SHAVE BALM, ANTI-PERSPIRANT/DEODORANT, POTPOURRI, ESSENTIAL OILS FOR
PERSONAL USE AND MASSAGE OILS 4: INDUSTRIAL OILS AND GREASES; LUBRICANTS; DUST
ABSORBING, WETTING AND BINDING COMPOSITIONS: FUELS (INCLUDING MOTOR SPRIT) AND
ILLUMINANTS: CANDLES, WICKS, SCENTED AND UNSCENTED CANDLES 24: TEXTILES AND
TEXTILE GOODS, NOT INCLUDED IN OTHER CLASSES: BED AND TABLE COVERS; HOME
FURNISHINGS NAMELY PILLOW CASES, PILLOW SHAMS, DUST RUFFLES, SHEETS, BED SKIRTS,
COMFORTERS, BLANKET COVERS, DUVET COVERS, COMFORTER COVERS, BLANKETS,
BEDSPREADS, QUILTS, TOWELS, WASH CLOTHS, SHOWER CURTAINS, TEXTILE BATH MATS,
TEXTILE PLACE MATS, TEXTILE TABLE CLOTHS, TEXTILE NAPKINS, TABLE LINENS, WINDOW
CURTAINS, AND DRAPERIES. European Union    J. CREW    1510601    02-16-00   
1510601    3/14/2002    REGISTERED 35: BUSINESS MANAGEMENT: BUSINESS
ADMINISTRATION: OFFICE FUNCTIONS; RETAIL STORE SERVICES FOR APPAREL, SHOES,
ACCESSORIES, JEWELRY, COSMETICS, TOILETRIES, FRAGRANCES AND HOME FURNISHINGS;
BUSINESS MANAGEMENT CONSULTANCY, INCLUDING GIVING ASSISTANCE AND ADVICE IN THE
ESTABLISHMENT OF RETAIL STORES IN THE FIELD OF APPAREL, SHOES, ACCESSORIES,
JEWELRY, COSMETICS, TOILETRIES, FRAGRANCES AND HOME FURNISHINGS, THE BRINGING
TOGETHER FOR THE BENEFIT OF OTHERS, OF APPAREL, SHOES, ACCESSORIES, JEWELRY,
COSMETICS, TOILETRIES, FRAGRANCES AND HOME FURNISHINGS, EXCLUDING THE TRANSPORT
THEREOF, ENABLING CONSUMERS TO CONVENIENTLY VIEW AND PURCHASE THOSE GOODS 42:
TECHNICAL CONSULTANCY AND ADVISING IN THE ESTABLISHMENT OF RETAIL STORES IN THE
HELD OF APPAREL, SHOES, ACCESSORIES, JEWELRY, COSMETICS, TOILETRIES, FRAGRANCES
AND HOME FURNISHINGS European Union    J. CREW    1561141    03-16-00    1561141
   6/25/2001    REGISTERED 14: PRECIOUS METALS AND THEIR ALLOYS AND GOODS IN
PRECIOUS METALS OR COATED THEREWITH, NOT INCLUDED IN OTHER CLASSES-JEWELRY,
PRECIOUS STONES: HOROLOGICAL AND CHRONOMETRIC INSTRUMENTS

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REQ. DATE

  

STATUS

European Union    J. CREW    1659325    05-16-00    1659325    8/21/2001   
REGISTERED

 

9: SCIENTIFIC, NAUTICAL, SURVEYING, ELECTRIC, PHOTOGRAPHIC, CINEMATOGRAPHIC,
OPTICAL, WEIGHING, MEASURING SIGNALLING, CHECKING (SUPERVISION), LIFE SAVING AND
TEACHING APPARATUS AND INSTRUMENTS: SUNGLASSES; APPARATUS FOR RECORDING,
TRANSMISSION OR REPRODUCTION OF SOUND OR IMAGES; MAGNETIC DATA CARRIERS,
RECORDING DISCS; AUTOMATIC VENDING MACHINES AND MECHANISMS FOR COIN OPERATED
APPARATUS, CASH REGISTERS, CALCULATING MACHINES, DATA PROCESSING EQUIPMENT AND
COMPUTERS; FIRE EXTINGUISHING APPARATUS

 

European Union    J. CREW    3431103    10-30-03          FILED

 

18: LEATHER AND IMITATION LEATHER AND GOODS MADE OF THESE MATERIALS AND NOT
INCLUDED IN OTHER CLASSES; ANIMAL SKINS. HIDES, TRUNKS AND TRAVELLING BAGS;
UMBRELLAS, PARASOLS AND WALKING STICKS; WHIPS, HARNESS AND SADDLERY: LUGGAGE,
HANDBAGS, DUFFEL BAGS, TOTE BAGS, WEEKENDER BAGS, BACKPACKS, PURSES, COSMETIC
CASES (SOLD EMPTY), SHAVING KITS (SOLD EMPTY), BILLFOLDS, COIN CASES AND KEY
CASES

 

25: CLOTHING, FOOTWEAR, HEADGEAR; SHIRTS, T-SHIRTS, JERSEYS, SWEATERS,
SWEATSHIRTS, UNDERWEAR, UNDERSHIRTS, SOCKS, BLOUSES DRESSES, SKIRTS, KNIT TOPS,
ROBES, SHORTS, SLACKS, TROUSERS, PANTS, BELTS, JACKETS, SUITS, VESTS, COATS,
RAINCOATS, SLICKERS, NAUTICAL CLOTHING, GYMNASTIC CLOTHING, SPORT AND LEISURE
CLOTHING, PERSONAL LINES AND ACCESSORIES, TIES, NECKTIES, SCARVES, BANDANNAS,
ATHLETIC SHOES, BOOTS, CAPS AND HATS

 

35: ADVERTISING; BUSINESS MANAGEMENT; BUSINESS ADMINISTRATION; OFFICE FUNCTIONS;
RETAIL SERVICES; RETAIL STORE SERVICES FOR APPAREL, SHOES, ACCESSORIES, JEWELRY,
COSMETlCS, TOILETRIES, FRAGRANCES AND HOME FURNISHINGS; BUSINESS MANAGEMENT
CONSULTANCY, INCLUDING GIVING ASSISTANCE AND ADVICE IN THE ESTABLISHMENT OR
RETAIL STORIES IN THE FIELD OF APPAREL, SHOES ACCESSORIES, JEWELRY, COSMETICS,
TOILETRIES, FRAGRANCES AND HOME FURNISHINGS, THE BRINGING TOGETHER FOR THE
BENEFIT OF OTHERS, OF APPAREL, SHOES, ACCESSORIES, JEWELRY, COSMETCS,
TOILETRIES, FRAGRANCES AND HOME FURNISHINGS, EXCLUDING THE TRANSPORT THEREOF,
ENABLING CONSUMERS TO CONVENIENTLY VIEW AND PURCHASE THOSE GOODS

 

SENIORITY CLAIMED: AUSTRIA. BENELUX FRANCE. GERMANY. GREECE. IRELAND. ITALY.
PORTUGAL. SPAIN AND SWITZERLAND

European Union    J. CREW and Design (in box with oarsman)    3431806   
10-30-03          FILED    LOGO [g24244jcrew_box.jpg]               

18: LEATHER AND IMITATION LEATHER AND GOODS MADE OF THESE MATERIALS AND NOT
INCLUDED IN OTHER CLASSES; ANIMAL SKINS, HIDES, TRUNKS AND TRAVELLING BAGS;
UMBRELLAS, PARASOLS AND WALKING STICKS; WHIPS, HARNESS AND SADDLERY: LUGGAGE,
HANDBAGS, DUFFEL BAGS, TOTE BAGS, WEEKENDER BAGS, BACKPACKS, PURSES, COSMETIC
CASES (SOLD EMPTY), SHAVING KITS (SOLD EMPTY), BILLFOLDS, PASSPORT CASES, COIN
CASES, KEY CASES, EYEGLASS CASES, CHEQUE BOOK CASES.

 

25: CLOTHING, FOOTWEAR, HEADGEAR; SHIRTS, T-SHIRTS, JERSEYS, SWEATERS,
SWEATSHIRTS, UNDERWEAR, UNDERSHIRTS, SOCKS, BLOUSES, DRESSES, SKIRTS, KNIT TOPS,
ROBES, SHORTS, SLACKS, TROUSERS, PANTS, BELTS, JACKETS, SUITS, VESTS, COATS,
RAINCOATS, SLICKERS, NAUTICAL CLOTHING, GYMNASTICS CLOTHINGS, SPORT AND LEISURE
CLOTHING, SPORT AND LEISURE CLOTHING, PERSONAL LINES AND ACCESSORIES, TIES,
NECKTIES, HANDKERCHIEFS, SCARVES, BANDANNAS, ATHLETIC SHOES, BOOTS, CAPS AND
HATS

 

35: ADVERTISING; BUSINESS MANAGEMENT; ADMINISTRATION; OFFICE FUNCTIONS; RETAIL
SERVICES; RETAIL STORE SERVICES FOR APPAREL SHOES, ACCESSORIES, JEWELRY,
COSMETlCS, TOILETRIES, FRAGRANCES AND HOME FURNISHING: BUSINESS MANAGEMENT
CONSULTANCY, INCLUDING GIVING ASSISTANCE AND ADVICE IN THE ESTABLISHMENT OF
RETAIL STORE IN THE FIELD OF APPAREL, SHOES, ACCESSORIES, JEWELRY, COSMETICS,
TOILETRIES, FRAGRANCES AND HOME FURNISHINGS, THE BRINGING TOGETHER FOR THE
BENEFIT OF OTHERS, OF APPAREL, SHOES, ACCESSORIES, JEWELRY, COSMETCS,
TOILETRIES, FRAGRANCES AND HOME FURNISHINGS, EXCLUDING THE TRANSPORT THEREOF,
ENABLING CONSUMERS TO CONVENIENTLY VIEW AND PURCHASE THOSE GOODS

SENIORITY CLAIMED: AUSTRIA, BENELUX, FRANCE, GERMANY, GREECE, IRELAND, ITALY,
PORTUGAL, SPAIN AND SWITZERLAND

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REQ. DATE

  

STATUS

France    CREWCUTS    95589248    09-22-95    95589248    9/22/1995   
REGISTERED 25: CLOTHING, FOOTWEAR AND HEADGEAR France    J. CREW    916675   
03-28-88    1504964    3/28/1988    REGISTERED

 

25: SHIRTS, T-SHIRTS, JERSEYS, SWEATERS, FOOTWEAR, HATS, CAPS, NECKTIES, SHORTS,
SWEATSHIRTS, TROUSERS, PANTS, BELTS, SOCKS, VESTS, RAINCOATS, SKIRTS, BLOUSES,
ROBES

France    J. CREW    92/441116    11-09-92    92441116    5/21/1993   
REGISTERED

 

16: PRINTED MATTER, PROSPECTUS, MAGAZINES, CATALOGS, PAPER, CARDBOARD AND
PRODUCTS MADE OUT OF THESE MATERIALS (NOT INCLUDED IN OTHER CLASSES), PRODUCTS
FOR PRINTERS, BOOKBINDING MATERIALS, PHOTOGRAPHS, STATIONERY, ADHESIVES FOR
PAPER PRODUCTS OR HOUSEHOLD PRODUCTS, ARTISTS MATERIALS, PAINT BRUSHES,
TYPEWRITER AND OFFICE REQUISITES (OTHER THAN FURNITURE), INSTRUCTIONAL AND
TEACHING MATERIALS (OTHER THAN APPARATUS) PLASTICS (NOT INCLUDED IN OTHER
CLASSES): PLAYING CARDS, PRINTERS TYPE AND CLICHES

 

18: LEATHER AND IMITATIONS OF LEATHER. AND GOODS MADE OF THESE MATERIALS (NOT
INCLUDED IN OTHER CLASSES); ANIMAL SKINS, HIDES, TRUNKS, AND TRAVELING BAGS;
UMBRELLAS, PARASOLS, WALKING STICKS

 

24: TISSUES; BED AND TABLE COVERS; TEXTILE ARTICLE NOT INCLUDED IN OTHER CLASSES

 

25: CLOTHING, UNDERWEAR. HATS, HEADWEAR

France    J. CREW and Design (with oarsman and underline)    92/440446   
11-04-92    92440446    11/4/1992    REGISTERED    LOGO [g24244jcrew_line.jpg]
              

16: PRINTED MATTER, PROSPECT US, MAGAZINES, CATALOGS; PAPER, CARDBOARD AND
PRODUCTS MADE OUT OF THESE MATERIALS (NOT INCLUDED IN OTHER CLASSES); PRODUCTS
FOR PRINTERS. BOOKBINDING MATERIALS, PHOTOGRAPHS, STATIONERY, ADHESIVES FOR
PAPER PRODUCTS OR HOUSEHOLD PRODUCTS, ARTISTS MATERIALS. PAINT BRUSHES,
TYPEWRITER AND OFFICE REQUISITES (OTHER THAN FURNITURE); INSTRUCTIONAL AND
TEACHING MATERIALS (OTHER THAN APPARATUS); PLASTICS (NOT INCLUDED IN OTHER
CLASSES):

 

18: LEATHER AND IMITATIONS OF LEATHER AND GOODS MADE OF THESE MATERIALS (NOT
INCLUDED IN OTHER CLASSES): ANIMAL SKINS, HIDES, TRUNKS, AND TRAVELING BAGS;
UMBRELLAS, PARASOLS, WALKING STICKS

 

24: TISSUES; BED AND TABLE COVERS; TEXTILE ARTICLES NOT INCLUDED IN OTHER
CLASSES

 

25: CLOTHING, UNDERWEAR, HATS, HEAD WEAR

Germany    CREWCUTS    39538843.0    09-22-95    39538843    9/17/1996   
REGISTERED 25: SHIRTS, SWEATERS, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS,
PANTS, BELTS, SOCKS, JACKETS, SLICKERS, BLOUSES, DRESSES, SKIRTS, KNIT TOPS,
UNDERSHIRTS, SHOES, ATHLETIC SHOES, AND BOOTS

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Germany    J. CREW    P 36 427/25 WZ    04-09-88    1187930    4/9/1988   
REGISTERED 25: CLOTHES FOR MEN AND WOMEN, IN PARTICULAR SHIRTS, JACKETS, CAPS,
HATS, SCARPS, PANTS, SWEATSHIRTS, BELTS, SOCKS, COATS, RAIN COATS, SKIRTS,
BLOUSES, SUITS; FOOTWEAR Greece    CREWCUTS    126429    10-04-95    126429   
10/4/1995    Registered 25: SHIRTS, SWEATERS, CAPS, HATS, BANDANNAS, SHORTS,
SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS, BLOUSES, DRESSES, SKIRTS,
KNIT TOPS, UNDERSHIRTS, SHOES, ATHLETIC SHOES, BOOTS Hong Kong    CREWCUTS
(ENGLISH AND CHINESE CHARACTERS)    95/11697    09-19-95    03758/1997   
3/26/1997    REGISTERED    LOGO [g24244ex10_1pg190a.jpg]                25:
CLOTHING, FOOTWEAR AND HEADGEAR Hong Kong    J. CREW       04-13-88   
B678 OF 1990    4/13/1988    REGISTERED 25: CLOTHING, SHOES, CAPS, HATS,
BANDANNAS, BELTS, SOCKS, BUT NOT INCLUDING ANY OF THE AFORESAID GOODS ADAPTED
FOR SAILING OR ROWING Hong Kong    J. CREW (ENGLISH AND CHINESE CHARACTERS)   
95/01057    01-27-95    13561    1/27/1995    REGISTERED    LOGO
[g24244ex10_1pg190b.jpg]                25: CLOTHING, FOOTWEAR AND HEADGEAR, BUT
NOT INCLUDING ANY AFORESAID GOODS ADAPTED FOR SAILING OR ROWING

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

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REG. DATE

  

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HONG KONG    J. CREW (ENGLISH AND CHINESE CHARACTERS)    95/01058    01-27-95   
13562    1/27/1995    REGISTERED    LOGO [g24244ex10_1pg191.jpg]               
42: RETAIL, WHOLESALE, OUTLET STORE SERVICES AND MAIL ORDER SERVICES OF
CLOTHING, CLOTHING ACCESSORIES, JEWELRY, SUITCASES BRIEFCASES, HANDBAGS AND
BAGS; ALL INCLUDED MAIL ORDER SERVICES OF CLOTHING, CLOTHING ACCESSORIES,
SUITCASES, BRIEFCASES AND BAGS ADAPTED FOR SAILING OR ROWING Hong Kong    J.
CREW and Design (with oarsman and underline)    2392/88    03-47-88   
B677 OF 1990    3/7/1988    REGISTERED    LOGO [g24244jcrew_line.jpg]         
     

 

25: CLOTHING, SHOES CAPS, HATS, BANDANNAS, BELTS, SOCKS, BUT NOT INCLUDING ANY
OF THE AFORE SAID GOODS ADAPTED FOR SAILING

Indonesia    CREWCUTS    D96/14673    07-15-96    391235    9/22/1997   
REGISTERED 25: CLASS HEADING Indonesia    J. CREW    D9517581    09-26-95   
360979    5/30/1996    REGISTERED 25: SHIRTS, T-SHIRT, BLOUSES, CAMISOLES,
SWEATSHIRTS, SWEATERS, CARDIGANS, VESTS, TUNICS, COATS, JACKETS, SLICKERS,
BLAZERS, SUITS, BODYSUITS, TANK TOPS, ROMPERS, JUMPSUITS, PANTS, NIGHTGOWNS,
BELTS, SWIMWEAR, LINGERIE, PANTIES, BRAS, SLIPS, HOSTERY, SOCKS, LEGGINGS,
EXERCISE-WEAR, SCARVES, BANDANNAS, GLOVES, HATS, FOOTWEAR Ireland    CREWCUTS   
171095    09-22-95    171095    9/22/1995    REGISTERED 25: SHIRTS, SWEATERS,
CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS,
SLICKERS, BLOUSES, DRESSES, SKIRTS, KNIT TOPS, UNDERSHIRTS, SHOES, ATHLETIC
SHOES AND BOOTS

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

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Ireland    J. CREW    126811    03-25-88    B126811    3/25/1988    REGISTERED
25: MEN’S AND WOMEN’S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANAS, SHORTS,
SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES, DRESSES
ALL INCLUDED IN CLASS 25 Ireland    J. CREW    B159842    06-25-93    B159842   
6/25/1993    REGISTERED 9: SUNGLASSES, EYEGLASS FRAMES; CARRYING CASES FOR
SUNGLASSES AND EYEGLASSES; PARTS AND FITTINGS FOR SUNGLASSES AND EYEGLASSES 16:
PRINTED MATTER, CATALOGUES, MAGAZINES 18: LUGGAGE, HANDBAGS, DUFFEL BAGS; TOTE
BAGS, WEEKENDER BAGS. BACKPACKS, PURSES, COSMETIC CASES (SOLD EMPTY), SHAVING
KITS (SOLD EMPTY), BILLFOLDS, PASSPORT CASES, COINCASES, KEY CASES, EYEGLASS
CASES, CHECKBOOK CASES, AND UMBRELLAS 24: HOME FURNISHINGS, NAMELY PILLOW CASES,
PILLOW SHAMS, DUST RUFFLES, SHEETS, BED SKIRTS, COMFORTERS, BLANKET COVERS,
DUVET COVERS, COMFORTER COVERS, BLANKETS, BEDSPREADS, QUILTS, TOWELS, WASH
CLOTHS. SHOWER CURTAINS, TEXTILE BATH MATS, TEXTILE PLACEMATS, TEXTILE TABLE
CLOTHS, TEXTILE NAPKINS, TABLE LINENS, WINDOW CURTAINS, AND DRAPERIES Ireland   
J. CREW    202791    07-09-93    202791    7/1/1996    REGISTERED 39: RETAIL AND
MAIL ORDER CATALOG SERVICES IN THE FIELD OF CLOTHING, LUGGAGE, CLOTHING
ACCESSORIES AND HOME FURNISHINGS Ireland    J. CREW and Design (in box with
oarsman)    B159846    06-25-93    B159846    6/25/1993    REGISTERED    LOGO
[g24244jcrew_box.jpg]                9: SUNGLASSES, EYEGLASS FRAMES; CARRYING
CASES FOR SUNGLASSES AND EYEGLASSES; PARTS AND FITTINGS FOR SUN GLASSES AND
EYEGLASSES 16: PRINTED MATTER, CATALOGUES, MAGAZINES 18. LUGGAGE, HANDBAGS,
DUFFEL BAGS; TOTE BAGS, WEEKENDER BAGS, BACKPACKS, PURSES, COSMETIC CASES (SOLD
EMPTY), SHAVING KITS (SOLD EMPTY), BILLFOLDS, PASSPORT CASES, COIN CASES, KEY
CASES, EYEGLASS CASES, CHECKBOOK CASES, AND UMBRELLAS 24: HOME FURNISHINGS,
NAMELY PILLOW CASES, PILLOW SHAMS, DUST RUFFLES, SHEETS, BED SKIRTS, COMFORTERS,
BLANKET COVERS, DUVET COVERS, COMFORTER COVERS, BLANKETS, BEDSPREADS, QUILTS,
TOWELS, WASH CLOTHS, SHOWER CURTAINS, TEXTILE BATH MATS, TEXTILE PLACEMATS,
TEXTILE TABLE CLOTHS, TEXTILE NAPKINS, TABLE LINENS, WINDOW CURTAINS, AND
DRAPERIES 25: SHIRTS, T-SHIRTS. BLOUSES, SWEATSHIRTS, SWEATERS, VESTS, COATS,
JACKETS, BLAZERS, PARKAS, SLICKERS, APRONS, SUITS, JUMPSUITS, PANTS, SKI-PANTS,
JEANS, SHORTS, BOXER SHORTS, SKIRTS, DRESSES, ROBES, PAJAMAS, NIGHTGOWNS, SLIPS,
BELTS, SWIMWEAR, SOCKS, LEGGINGS, TIES, BANDANNAS, SCARVES, GLOVES, HEADBANDS,
CAPS, HATS, FOOTWEAR Israel    jerew.com.il                Registered

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

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STATUS

Italy    J. CREW    19818/C88    04-19-88    838874    3/8/2001    REGISTERED
25: MEN’S AND WOMEN’S CLOTHING CONSISTING OF NAUTICAL, GYMNASTIC, SPORT AND
LEISURE ARTICLES, PANTS, PERSONAL LINENS AND ACCESSORIES; MISCELLANEOUS
ACCESSORIES INCLUDING, TIES, HATS, SHOES, BELTS, HANDKER CHIEFS, SCARVES: 42:
CATALOG SALES OF ARTICLES OF TRAVEL AND RELATED ACCESSORIES Japan    CREW CUTS
   HO5-078322    07-28-93    3178959    7/31/1996    REGISTERED 6: METAL BUCKLES
Japan    CREW CUTS    HO5-078323    07-28-93    3178960    7/31/1996   
REGISTERED 9: CLASSES; RECORDS; HOME TELEVISION GAMES; WEIGHT BELTS (FOR SCUBA
DIVING); WET SUITS; AIR TANKS; FLOATING BOARDS (KICK BOARDS FOR SWIMMING); AIR
REGULATORS (FOR SCUBA DIVING) Japan    CREW CUTS    HO5-078324    07-28-93   
3187654    8/30/1996    REGISTERED 14: POUCHES/PURSES OF PRECIOUS METAL; SHOE
ORNAMENTS OF PRECIOUS METAL; COMPACTS OF PRECIOUS METAL; PERSONAL ORNAMENTS;
JEWELER/ROUGH GEMSTONES/IMITATIONS OF JEWELRY; CLOCKS/WATCHES Japan    CREW CUTS
   HO5-078325    07-28-93    3178961    7/31/1996    REGISTERED 16: PAPERS;
STATIONERY; PLAYING CARDS Japan    CREW CUTS    H05-078328    07-28-93   
3209580    10/31/1996    REGISTERED 25: CLOTHING; GARTER; STOCKING SUSPENDERS;
SUSPENDERS; WAISTBANDS; BELTS; FOOTWEAR; SPECIAL SPORTING/GYMNASTIC WEAR;
SPECIAL SPORTING/GYMNASTIC FOOTWEAR Japan    CREW CUTS    HO5-078329    07-28-93
   3256477    2/24/1997    REGISTERED 26: BUTTONS AND THE LIKE; EMBLEMS FOR
CLOTHING (NOT OF PRECIOUS METAL); BADGES (NOT OF PRECIOUS METAL); BUCKLES FOR
CLOTHING; BROOCHES FOR CLOTHING; SASH CLIPS; BONNET PINS (NOT OF PRECIOUS
METAL); STICKER; BRASSARD; ARMBANDS; FALSE BEARDS; FALSE MOUSTACHES;
NON-ELECTRIC HAIR CURLERS; SHOE ORNAMENTS (NOT OF PRECIOUS METAL); SHOE EYELETS;
SHOE LACES; METAL SHOE FASTENERS; ARTIFICIAL FLOWERS

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Japan    CREW CUTS    HO5-078330    07-28-93    3161902    5/31/1996   
REGISTERED 28: GAME GOODS; BILLIARD EQUIPMENT; GO (JAPANESE BOARD GAME)
EQUIPMENT; SHOGI (JAPANESE CHESS) GAME EQUIPMENT; DICE; SUGOROKU (JAPANESE
PARCHEESI) GAMES; DICE CUPS; DIAMOND GAMES; CHESS GAMES; CHECKERS; CONJURING
APPARATUS; DOMINOES; MAHJONG EQUIPMENT; TOYS; DOLLS; SPORTING AND GYMNASTIC
GOODS; SKI WAX; FISHING TACKLE Japan    CREW CUTS          3187655    8/30/1996
   REGISTERED 18: BAGS/POUCHES AND THE LIKE; HANDY TOILET CASES; METAL FITTINGS
FOR BAGS OR POUCHES; PURSE CLASPS: PARASOLS AND UMBRELLAS; CANES, WALKING
STICKS; METAL FITTINGS FOR CANES: CANE HANDLES Japan    CREW CUTS         
3207639    10/31/1996    REGISTERED 20: CUSHIONS, JAPANESE CUSHIONS, PILLOWS,
MATTRESS; SLEEPING BAGS Japan    CREW CUTS          3227900    11/29/1996   
REGISTERED 3: SOAPS: PERFUMERY AND INCENSE; COSMETIC; DENTIFRICES Japan    CREWS
   S55-086794    10-28-80    1756925    4/23/1985    REGISTERED NA 21: PERSONAL
ORNAMENTS; COSMETIC UTENSILS AND TOILETRIES; AND OTHER GOODS IN CLASS 21
(EXCLUDING TOOTHBRUSHES) Japan    J. CREW    10063/4    02-04-92    2705939   
4/28/1995    REGISTERED NA 23: CLOCKS/WATCHES, EYEGLASSES AND THEIR PARTS AND
ACCESSORIES Japan    J. CREW    10065/4    02-04-92    4050142    8/29/1997   
REGISTERED NA 24: TOYS; DOLLS; RECREATIONAL EQUIPMENT; SPORTING GOODS; FISHING
TACKLES; MUSICAL INSTRUMENTS; MUSICAL PERFORMANCE AUXILIARY INSTRUMENTS;
GRAMOPHONES (EXCLUDING ELECTRIC PHONOGRAPH PLAYERS); RECORDS; THEIR PARTS AND
ACCESSORIES Japan    J. CREW    10067/4    02-04-92    2717325    10/31/1996   
REGISTERED NA 25: PAPERS; STATIONERY

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. DATE

  

REG. NO.

  

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STATUS

Japan    J. CREW    S63-048756    04-26-88    2709227    8/31/1995    REGISTERED
NA 21: PERSONAL ORNAMENTS: BUTTONS; BAGS/POUCHES AND THE LIKE; JEWELRY AND
IMITATION JEWELRY: ARTIFICIAL FLOWERS COSMETIC UTENSILS AND TOILETRIES Japan   
J. CREW    H11-105229    11-18-99    4481740    6/15/2001    REGISTERED 3: SOAPS
A THE LIKE; POTPOURRI. ESSENTIAL OILS AND OTHER PERFUMERY & INCENSES;
COSMETICS & TOILETRIES; ANTI-PERSPIRANT/DEODORANT; ADHESIVES FOR AFFIXING FALSE
HAIR; FALSE NAILS; FALSE EYELASHES; ADHESIVES FOR AFFIXING FALSE EYELASHES;
DENTRIFICE; HOUSEHOLD ANTI-STATIC AGENTS: HOUSEHOLD DEGREASING AGENTS; RUST
REMOVING PREPARATIONS; STAIN REMOVING BENZINE; FABRIC SOFTENER; LAUNDRY
STARCHES, LAUNDRY BLEACHES. FUNORI (SEAWEED GELATIN USED FOR WASHING AND
STRETCHING CLOTHES); POLISHING PREPARATIONS; ABRASIVE PAPERS; ABRASIVE CLOTHS;
ABRASIVE SANDS; ARTIFICIAL PUMICE; POLISHING PAPERS: POLISHING CLOTHS. SHOE
CREAMS; BOOT CREAMS; SHOE POLISHES/SHOE BLACKINGS; PAINT STRIPPING PREPARATIONS.
4: INDUSTRIAL OILS/GREASES/FATS; FUELS; WAXES. GREASES FOR SHOES/BOOTS: SOLID
LUBRICANTS: LEATHER OILS/GREASES; LAMP WICKS; SCENTED CANDLES AND OTHER CANDLES
Japan    J. CREW    2000-037936    03-22-00    4560661    4/19/2002   
REGISTERED 24: WOVEN FABRICS: KNITTED FABRICS; FELT AND NON-WOVEN TEXTILE
FABRICS; OIL CLOTHS, GUMMED CLOTHS: VINYL CLOTHS; RUBBERIZED CLOTHS; LEATHER
CLOTHS; FILTER CLOTHS; TOWEL AND OTHER FABRIC APPAREL ACCESSORIES; TEXTILE
NAPKINS: DISH CLOTHS; MOSQUITO NETS; BEDSHEETS, BEDQUILTS AND COTTON-STUFFED
MATTRESSES; COMFORTERS; BED QUILT/MATTRESS CASES, COMFORTER COVERS; TICKS;
PILLOWCASES/PILLOW SHAMS; BLANKETS; BLANKET COVER; DUST RUFFLES; BED SKIRTS;
BEDSPREADS; QUILTING BED COVER, AND OTHER BED COVERS; TEXTILE CHAIR COVERS; WALL
HANGINGS OF TEXTILE; BLINDS OF TEXTILE; CURTAINS; SHOWER CURTAINS: TEXTILE BED
MATS; TABLE CLOTHS/TABLE LINENS; TEXTILE PLACE MATS; THICK STAGE CURTAINS;
TEXTILE TOILET SHEET COVERS; SHROUDS; KYOKATABIRA (JAPANESE SHROUDS);
BLACK-AND-WHITE STRIPED CLOTH SCREENS; RED-AND-WHITE STRIPED CLOTH SCREENS;
LABELS OF CLOTH; BILLIARD CLOTHS; BANNERS & FLAGS (NOT OF PAPER) Japan    J.
CREW & DESIGN    S63-038486    04-04-88    4081550    11/14/1997    REGISTERED
NA 17: CLOTHING (EXCLUDING SPECIAL, SPORTING/GYMNASTIC WEAR); FABRIC APPAREL
ACCESSORIES (EXCLUDING THOSE BELONGING TO OTHER CLASSES); BEDDING (EXCLUDING
BEDS) Japan    J. CREW & DESIGN    S63-048757    04-26-88    2715288   
7/31/1996    REGISTERED NA 21: PERSONAL ORNAMENTS; BUTTONS: BAGS/POUCHES AND THE
LIKE: JEWELERY AND IMITATION JEWELERY; ARTIFICIAL FLOWERS; TOILETRIES Japan   
J. CREW & DESIGN    S63-048759    04-26-88    2713432    4/30/1996    REGISTERED
NA 22: FOOTWEAR (EXCLUDING SPECIAL SPORTING/GYMNASTIC FOOTWEAR); PARASOLS AND
UMBRELLAS; CANES; THEIR PARTS AND ACCESSORIES

 

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Japan    J. CREW & DESIGN (WITH LINE)    10064/4    02-04-92    2705940   
4/28/1995    REGISTERED    LOGO [g24244jcrew_line.jpg]                NA 23:
CLOCK/WATCHES, EYEGLASSES AND THEIR PARTS AND ACCESSORIES Japan    J. CREW &
DESIGN (WITH LINE)    1006614    02-04-92    4050143    8/29/1997    REGISTERED
   LOGO [g24244jcrew_line.jpg]                NA 24: TOYS; DOLLS; RECREATIONAL
EQUIPMENT; SPORTING GOODS; FISHING TACKLES: MUSICAL INSTRUMENTS: MUSICAL
PERFORMANCE AUXILIARY INSTRUMENTS; GRAMOPHONES (EXCLUDING ELECTRIC PHONOGRAPH
PLAYERS); RECORDS; THEIR PARTS AND ACCESSORIES Japan    J. CREW & DESIGN (WITH
LINE)    10068/4    02-04-92    2723636    11/21/1997    REGISTERED    LOGO
[g24244jcrew_line.jpg]                NA 25: PAPERS; STATIONERY Japan    J. CREW
+ KATAKANA CHARACTERS    2000-087382    07-24-00    4505612    9/14/2001   
REGISTERED 25: CLOTHING, GARTERS: STOCKING SUSPENDERS; BRACES; WAISTBANDS;
BELTS; FOOTWEAR: COSTUMES; SPECIAL SPORTING/GYMNASTIC WEAR; SPECIAL
SPORTING/GYMNASTIC FOOTWEAR Japan    J. CREW + KATAKANA CHARACTERS         
3318924    6/6/1997    REGISTERED 14: PRECIOUS METALS, TABLEWARE AND THE LIKE OF
PRECIOUS METAL. NUTCRACKERS. PEPPER POTS. SUGAR BOWLS SUGAR BOWLS, SALT SHAKER,
EGG CUPS, NAPKIN HOLDERS, NAPKIN RINGS. TRAYS AND TOOTHPICK HOLDERS OF PRECIOUS
METAL; VASES/FLOWER BOWLES OF PRECIOUS METAL; BOXES OF PRECIOUS METAL FOR
NEEDLES; JEWEL CASES OF PRECIOUS METAL; CANDLE METAL: POUCHES/PURSES OF PRECIOUS
METAL; SHOE ORNAMENTS OF PRECIOUS METAL; COMPACTS OF PRECIOUS METAL SMOKERS
ARTICLES OF PRECIOUS METAL: PERSONAL ORNAMENTS; JEWELRY

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

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Japan    J. CREW IN KATAKANA CHARACTERS    HO6-090670    09-08-94    4046705   
8/22/1997    REGISTERED 16: PAPERS; PACKAGING CONTAINERS OF PAPER; GARBAGE BAGS
OF PAPER; HYGIENIC PAPER; TOWELS, HANDKERCHIEFS, TABLE CLOTHS AND BLINDS OF
PAPER; DRESSMAKING PATTERNS; PAPER BANNERS AND FLAGS; BABIES’ DIAPERS OF PAPER;
BAGGAGE LABELS; PRINTED MATTER; CALLIGRAPHY AND PAINTINGS; PHOTOGRAPH STANDS;
KARUTA, UTAGARUTA AND HANAFUDA (JAPANESE PLAYING CARDS); PLAYING CARDS’
STATIONERY (EXCLUDING INSECT COLLECTING EQUIPMENT); ADHESIVES FOR STATIONERY OR
HOUSEHOLD PURPOSES; INKING RIBBONS TYPEWRITER RIBBONS; AUTOMATIC STAMP APPLYING
MACHINES; ELECTRIC STAPLERS; ENVELOPE SEALING MACHINES FOR OFFICES; DRAWING
INSTRUMENTS, MATERIALS: TYPEWRITERS; PAPER SHREDDERS; SEALING WAX Japan    J.
CREW IN KATAKANA CHARACTERS          3318925    6/6/1997    REGISTERED 18.
BAGS/POUCHES AND THE LIKE; HANDY TOILET CASES; METAL FITTING FOR BAGS OR
POUCHES; PURSE CLASPS; PARASOLS AND UMBRELLAS; WALKING STICKS; CANES; METAL
FITTINGS FOR CANES; CANE HANDLES Japan    J. CREW IN KATAKANA CHARACTERS   
HO6-090672    09-09-94    4102031    1/16/1998    REGISTERED 25: NON-JAPANESE
STYLE CLOTHING; COATS; SWEATERS AND THE LIKE; SHIRTS AND THE LIKE; NIGHTWEAR;
UNDERWEAR; SWIMSUITS; BATHING CAPS; JAPANESE STYLE CLOTHING; APRONS; COLLAR
PROTECTORS; SOCKS AND STOCKINGS; GAITERS; FUR STOLES; SHAWLS; SCARVES; TABI
(JAPANESE SOCKS) AND TABI COVERS; GLOVES; TEXTILE DIAPERS FOR BABIES; NECKTIES;
NECKERCHIEFS; MUFFLERS; EAR MUFFS; HOODS; NIGHT CAPS; HATS AND CAPS; GARTERS;
STOCKING SUSPENDERS; SUSPENDERS; WAISTBANDS; BELTS; SHOES AND BOOTS; SHOE
DOWELS, SHOE PEGS, SHOE HANDLES, HOBNAILS, METAL PIECES FOR PREVENTION OF SHOE
SOLE WEARING; JAPANESE CLOGS AND SANDALS; SPECIAL SPORTING, GYMNASTIC WEAR;
SPECIAL SPORTING, GYMNASTIC FOOTWEAR (EXCLUDING HORSERIDING BOOTS) Japan   
JCREW    S62-141640    12-21-87    2238080    6/28/1990    REGISTERED NA 26:
BOOKS; MAGAZINES; PRINTED MATTERS; ALL OTHER GOODS IN CLASS 26 Japan   
JCREW.CO.jp    H11-072667    08-13-99    4401515    7/21/200    REGISTERED 25;
CLOTHING; GARTERS; STOCKING SUSPENDER; BRACES; WAISTBANDS; BELTS ; FOOTWEAR;
COSTUMES; SPECIAL SPORTING/GYMNASTIC WEAR; SPECIAL SPORTING/GYMNASTIC FOOTWEAR
Japan    jcrew.co.jp                Registered Japan    JCREW    H11-072666   
08-13-99    4401514    7/21/2000    REGISTERED 25: CLOTHING; GARTERS; STOCKING
SUSPENDERS; BRACES; WAISTBANDS; BELTS ; FOOTWEAR; COSTUMES; SPECIAL
SPORTING/GYMNASTIC WEAR; SPECIAL SPORTING/GYMNASTIC FOOTWEAR

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Japan    jcrew.jp (english characters)                Registered Japan   
jcrew-japan.jp (english characters)                Registered Japan    JR CREW +
KATAKANA CHARACTERS    2000-035089    03-15-00    4453240    2/16/2001   
REGISTERED

 

25: CLOTHING; GARTERS; STOCKING SUSPENDERS; BRACES; WAISTBANDS; BELTS; COSTUMES;
FOOTWEAR; SPECIAL SPORTING/GYMNASTIC WEAR; SPECIAL SPORTING/GYMNASTIC FOOTWEAR

Japan    SO J. CREW + KATAKANA CHARACTERS    2000-063014    05-19-00    4480098
   6/8/2001    REGISTERED

3: SOAPS & THE LIKE; POTPOURRI, ESSENTIALS OILS AND OTHER PERFUMERY & INCENSE;
COSMETICS & TOILETRIES; ANTI-PERSPIRANT/DEODORANT; ADHESIVES FOR AFFIXING FALSE
HAIR; FALSE NAILS: FALSE EYELASHES; ADHESIVES FOR AFFIXING FALSE EYELASHES;
DENTRIFICE; HOUSEHOLD ANTI-STATIC AGENTS; HOUSELHOLD DEGREASING AGENTS; RUST
REMOVING PREPARATIONS, STAIN REMOVING BENZINE; FABRIC SOFTNER; LAUNDRY STARCHES,
LAUNDRY BLEACHES, FUNORI (SEAWEED GELATIN USED FOR WASHING AND STRETCHING
CLOTHES); POLISHING PREPARATIONS; ABRASIVE PAPERS; ABRASIVE CLOTHS; ABRASIVE
SANDS; ARTIFICIAL PUMICE; POLISHING PAPERS; POLISHING CLOTHS; SHOE CREAMS & BOOT
CREAMS; SHOE POLISHES/SHOE BLACKINGS; PAINT STRIPPING PREPARATIONS.

 

4: INDUSTRIAL OILS/GREASES/FATS; FUELS; WAXES; GREASES FOR SHOES/BOOTS; SOLID
LUBRICANTS; LEATHER OILS/GREASES; LAMP WICKS; SCENTED CANDLES AND OTHER CANDLES

Malaysia    J. CREW    88/03810    07-30-88          FILED

 

25: MEN’S AND WOMEN’S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANNAS, SHORTS,
SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES, DRESSES,
SKIRT, KNIT TOPS, UNDERSHIRT, SHOES, ATHLETIC SHOES AND BOOTS

Mexico    CREWCUTS    238457    07-26-95    502662    7/26/1995    REGISTERED
25: SHIRTS, SWEATERS, CAPS, HATS, BANDANNAS. SHORTS, SWEATSHIRTS, PANTS, BELTS,
SOCKS, JACKETS. SUCKERS, BLOUSES, DRESSES. SKIRTS, KNIT TOPS, UNDERSHIRTS,
SHOES, ATHLETIC SHOES AND BOOTS Mexico    J. CREW    134212    03-04-92   
427647    12/14/1992    REGISTERED 18: LUGGAGE, UMBRELLAS, HANDBAGS, DUFFEL BAGS
AND ALL OTHER ARTICLES OF CLASS 18 Mexico    J. CREW    134213    03-04-92   
427648    12/14/1992    REGISTERED 25: MEN’S AND WOMEN’S SHIRTS SWEATERS, SHOES,
CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS,
SLICKERS, SKIRTS, BLOUSES, DRESSES AND ALL OTHER ARTICLES OF CLASS 25

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

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STATUS

Mexico    jcrew.com.mx                Registered New Zealand    CREWCUTS   
255495    11-06-95    255495    11/6/1995    REGISTERED 25: CLOTHING. FOOTWEAR
AND HEADGEAR New Zealand    J. CREW    178507    03-29-88    B178507   
3/29/1988    REGISTERED 25: ARTICLES OF CLOTHING AND FOOTWEAR AND HEADGEAR;
MEN'S AND WOMEN'S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANNAS SHORTS,
SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES AND DRESSES
New Zealand    J. CREW    236676    05-06-94    B236676    5/6/1994   
REGISTERED 42: RETAIL AND MAIL ORDER CATALOG SERVICES IN THE FIELDS OF CLOTHING,
CLOTHING ACCESSORIES, HABERDASHERY, JEWELLERY, WATCHES, TIME PIECES, LEATHER
GOODS, PARASOLS, UMBRELLAS, WALKING STICKS, AND LUGGAGE; RETAIL AND WHOLESALE
OUTLET STORE SERVICES IN THE FILED OF CLOTHING, CLOTHING ACCESSORIES,
HABERDASHERY, JEWELLERY, WATCHES, TIME PIECES, LEATHER GOODS, PARASOLS,
UMBRELLAS, WALKING STICKS, AND LUGGAGE New Zealand    J. CREW    236675   
05-06-94    B236675    5/6/1994    REGISTERED 25: ARTICLES OF CLOTHING, FOOTWEAR
AND HEADGEAR; SHIRTS, T-SHIRTS, BLOUSES, CAMISOLES, SWEATSHIRTS, SWEATERS,
CARDIGANS, VESTS, TUNICS, COATS, JACKETS, SUCKERS, BLAZERS, SUITS, BODYSUITS,
TANK TOPS, ROMPERS, JUMPSUITS, PANTS, JEANS, SHORTS, STIRRUPS, SKIRTS, DRESSES,
CHEMISES, PAJAMAS, NIGHTGOWNS, BELTS, SWIMWEAR, LINGERIE, PANTIES, BRAS, SUPS,
HOSIERY SOCKS, LEGGINGS, EXERCISEWEAR, LEOTARDS, UNITARDS, BICYCLE SHORTS, BRA
TOPS, SCARVES, BANDANNAS, GLOVES, HATS, FOOTWEAR, SLIPPERS, SHOES, SNEAKERS,
MULES, SANDALS, MOCCASINS, ESPADRILLES, AND THONGS Panama    J. CREW    069848
   02-25-94    69848    2/25/1994    Registered 25: MEN’S WOMEN’S SWEATERS,
SHOES, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS,
SLICKERS, SKIRTS, BLOUSES AND DRESSES Paraguay    CREWCUTS    13306-1999   
06-30-99    223465    3/24/2000    REGISTERED 25: SHIRTS, SWEATERS, CAPS, HATS,
BANDANAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SUCKERS, BLOUSES,
DRESSES SKIRTS, KNIT TOPS, UNDERSHIRTS, SHOES, ATHLETIC SHOES AND BOOTS

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Paraguay    J. CREW    7821-94    05-03-94    173953    12/21/1994    Registered
25: ALL GOODS IN CLASS INCLUDING, SHIRTS, T-SHIRTS, BLOUSES, CAMISOLES,
SWEATSHIRTS, SWEATERS, CARDIGANS, VESTS, TUNICS, COATS, JACKETS, SLICKERS,
BLAZERS, SUITS, BODYSUITS, TANK TOPS, ROMPERS, JUMPSUITS, PANTS, JEANS, SHORTS,
STIRRUPS, SHIRTS, DRESSES, CHEMISES, PAJAMAS, NIGHTGOWNS, BELTS, SWIMWEAR,
LINGERIE, PANTIES, BRAS, SLIPS, HOSIERY, SOCKS, LEGGINGS, EXERCISE WEAR,
SCARVES, BANDANNAS, GLOVES, HATS AND FOOTWEAR Peru    CREWCUTS    284701   
11-15-95    023416    2/16/1996    REGISTERED 25: SHIRTS, SWEATERS, CAPS, HATS,
BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SUCKERS, BLOUSES,
DRESSES SKIRTS, KNIT TOPS, UNDERSHIRTS, SHOES, ATHLETIC SHOES AND BOOTS, AND IN
GENERAL ALL GOODS IN CLASS Peru    J. CREW    242018    05-10-94    021518   
7/20/1995    REGISTERED 25: SHIRTS, T-SHIRTS, BLOUSES, CAMISOLES, SWEATSHIRTS,
SWEATERS, CARDIGANS, VESTS, TUNICS, COATS, JACKETS, SLICKERS, BLAZERS, SUITS,
BODYSUITS, TANK TOPS, ROMPERS, JUMPSUTTS, PANTS, JEANS, SHORTS, STIRRUPS,
SKIRTS, DRESSES, CHEMISES, PAJAMAS, NIGHTGOWNS, BELTS, SWIMWEAR, LINGERIE,
PANTIES, BRAS, SLIPS, HOSIERY, SOCKS, LEGGINGS, EXERCISEWEAR, SCARVES,
BANDANNAS, GLOVES, HATS AND FOOTWEAR Peru    J. CREW    067163    07-24-98   
49416    10/9/1998    REGISTERED 9: CLASS HEADING Peru    J. CREW    067164   
07-24-98    49453    10/13/1998    REGISTERED 16: CLASS HEADING Peru    J. CREW
   067165    07-24-98    49417    10/9/1998    REGISTERED 18: CLASS HEADING Peru
   J. CREW    067166    07-24-98    16044    10/30/1998    REGISTERED 42:
PROVIDING OF FOOD AND DRINK; TEMPORARY ACCOMODATION, MEDICAL, HYGIENIC AND
BEAUTY CARE; VETERINARY AND AGRICULTURAL SERVICES; LEGAL SERVICES; SCIENTIFIC
AND INDUSTRIAL RESEARCH; COMPUTER PROGRAMMING AND IN GENERAL ALL THE SERVICES OF
THE CLASS

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Philippines    CREWCUTS    104170    11-21-95    106439    5/30/2003   
REGISTERED 25: CHILDRENS SHIRTS, SWEATERS, CAPS, HATS BANDANNAS, SHORTS,
SWEATSHIRTS, PANTS, BELTS SOCKS, JACKETS, SLICKERS, BLOUSES, DRESSES, SKIRTS,
SHOES, ATHLETIC SHOES, AND BOOTS Philippines    J. CREW    64503    04-21-88   
53979    11/16/1992    REGISTERED 25: MENS AND WOMEN’S SHIRTS, SWEATERS, SHOES,
CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS,
SLICKERS, SKIRTS, BLOUSES AND DRESSES Puerto Rico    J. CREW       11-23-93   
8015    12/11/1984    Registered 14: WATCHES Puerto Rico    J. CREW      
11-23-93    8028    12/1/1994    Registered 18: LUGGAGE, UMBRELLAS, HANDBAGS,
DUFFLE BAGS Puerto Rico    J. CREW       11-23-93    8029    12/11/1984   
Registered 25: MEN’S AND WOMEN’S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANNA,
SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES AND
DRESSES Puerto Rico    J. CREW       11-23-93    8030    12/1/1984    Registered
42: RETAIL CATALOG SERVICES IN THE FIELD OF CLOTHING, LUGGAGE AND CLOTHING
ACCESSORIES Puerto Rico    J. CREW and Design (with oarsman and underline)      
07-02-93    8016    9/19/1989    REGISTERED    LOGO [g24244jcrew_line.jpg]      
         18. LUGGAGE, UMBRELLAS HANDGABS AND DUFFEL BAGS

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Puerto Rico    J. CREW and Design (with oarsman and underline)       11-23-93   
8032    9/19/1989    REGISTERED    LOGO [g24244jcrew_line.jpg]          25: MENS
AND WOMENS SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANAS, SHORTS, SWEATSHIRTS,
PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES AND DRESSES Puerto Rico
   J. CREW and Design (with oarsman and underline)    8-27-93    8031   
9/19/1989    REGISTERED    LOGO [g24244jcrew_line.jpg]          42: RETAIL
CATALOG SERVICES IN THE FIELD OF CLOTHING, LUGGAGE AND CLOTHING ACCESSORIES
Russian Federation    jcrew.com.ru                Registered Russian Federation
   jcrew.ru                Registered Singapore    CREWCUTS    8790/95   
9-14-95    8790/95    9/14/1995    REGISTERED 25: SHIRTS, SWEATERS, CAPS, HATS,
BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS. JACKETS, SLICKERS, BLOUSES,
DRESSES, SKIRTS, KNIT TOPS, UNDER SHIRTS, SHOES, ATHLETIC SHOES AND BOOTS
Singapore    J. CREW    3448/88    7-6-88    3448/88    7/6/1988    REGISTERED
25: MEN’S AND WOMENS SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANNAS, SHORTS,
SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, RAINCOATS, SKIRTS, BLOUSES AND
DRESSES Singapore    J. CREW    3580/94    05-06-94    3580/94    5/6/1994   
Registered 35: DIRECT MAIL ADVERTISING. COMPILATION OF MAILING LISTS

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

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STATUS

Singapore    J. CREW and Design (with oarsman and no underline)    3443/94   
04-29-44    3443/94    4/29/1994    Registered    LOGO [g24244jcrew_no.jpg]   
            23: SHIRTS, T-SHIRTS, BLOUSES, CAMISOLES, SWEATSHIRTS, SWEATERS,
CARDIGANS, VESTS, TUNICS, COATS, JACKETS, SLICKERS, BLAZERS, SUITS, BODYSUITS,
TANK TOPS, ROMPERS, JUMPSUITS, PANTS, JEANS, SHORTS, STIRRUPS, SKIRTS, DRESSES,
CHEMISES, PAJAMAS, NIGHTGOWNS, BELTS, SWIMWEAR, LINGERIE, PANTIES, BRAS, SLIPS,
HOSIERY, SOCKS, LEGGINGS, EXERCISEWEAR, LEOTARDS, UNITARDS, BICYCLE SHORTS, BRA
TOPS, SCARVES, BANDANNAS, GLOVES, HATS, FOOTWEAR, SLIPPERS, SHOES, SNEAKERS,
MULES, SANDALS, MOCCASINS, ESPADRILLES, AND THONGS South Korea    CREWCUTS
(English And Korean Characters)    95/35304    09-15-95    368229    7/10/1997
   REGISTERED    LOGO [g24244ex10_1pg203a.jpg]                NA 45: DRESS
SHIRTS, SPORT SHIRTS, POLO SHIRTS, TEE SHIRTS, SWEATERS, CAPS, HATS, BANDANNAS,
SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS, BLOUSES, DRESSES,
SKIRTS, KNIT TOPS, UNDERSHIRTS AND GLOVES APPLICATION TO ADD GLOVES TO THIS
REGISTRATION WAS GRANTED 15 JA 1998 South Korea    CREWCUTS (English And Korean
Characters)    95/35305    09-15-95    360966    4/28/1997    REGISTERED    LOGO
[g24244ex10_1pg203b.jpg]                NA 27: LOW SHOES, BOOTS, LACE UP BOOTS,
LEATHER SHOES, RUBBER SHOES, VINYL SHOES, RAIN SHOES, ARCTIC SHOES, BASEBALL
SHOES, BASKETBALL SHOES, RUGBY SHOES, HANDBALL SHOES, FIELD AND TRACK SHOES,
HOCKEY SHOES, GOLF SHOES, BOXING SHOES, HIKING SHOES, ANGLER SHOES, WORK BOOTS,
OVERSHOES, STRAW SHOES, SLIPPERS, SANDALS, CLOGS, SOLES, INSOLES AND SHOE
PROTECTION ACCESSORY

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

South Korea    CREWCUTS (English And Korean Characters)    96/25393    06-14-96
   387995    12/24/1997    REGISTERED    LOGO [g24244ex10_1pg204a.jpg]         
      NA 25: HANDBAGS, OPERA BAGS, KNAPSACKS, DUFFEL BAGS, WALLETS, NAME CARD
CASES, CREDIT CARD CASES, TOILETRY CASES, CARDBOARD BOXES, PAPER BAGS AND
PLASTIC PACKING BAGS South Korea    CREWCUTS (English And Korean Characters)   
96/34994    08-09-96    388005    12/24/1997    REGISTERED    LOGO
[g24244ex10_1pg204b.jpg]                12: TOILETRY CASES THIS IS A DIVISIONAL
APPLICATION OF APP. NO. 96/25393 South Korea    J. CREW    88-10151    05-02-88
   179205    9/19/1989    REGISTERED NA 45: MEN’S AND WOMEN’S SHIRTS, SWEATERS,
CAPS AND HATS, BANDANAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS,
SLICKERS, SKIRTS, BLOUSES, DRESSES AND GLOVES South Korea    J. CREW    94/3637
   05-06-94    29728    12/22/1995    REGISTERED NA 112: RETAIL AND MAIL ORDER
CATALOG SERVICES IN THE FIELD OF CLOTHING, CLOTHING ACCESSORIES, JEWELRY AND
LUGGAGE; FACTORY, RETAIL AND WHOLESALE OUTLET STORE SERVICES IN THE FIELD OF
CLOTHING ACCESSORIES, JEWELRY AND LUGGAGE; MERCHANDISE BROKERAGE BUSINESS;
MARKETING SERVICES; MERCHANDISE EXHIBITION SERVICES; MERCHANDISE DELIVERY
SERVICES; TRADE GOODS BROKERAGE BUSINESS; CLOTHING MANAGEMENT SERVICE
South Korea    J. CREW    96/25392    06-14-96    421728    9/18/1998   
REGISTERED 18: HANDBAGS, OPERA BAGS, KNAPSACKS, DUFFEL BAGS, WALLETS, NAME CARD
CASES, CREDIT CARD CASES, CARDBOARD BOXES, PAPER BAGS AND PLASTIC PACKING BAGS
South Korea    J. CREW    96/34993    08-09-96    388004    12/24/1997   
REGISTERED 12: TOILETRY CASES THIS IS A DIVISIONAL APPLICATION OF APP. NO.
96/25392

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

South Korea    J. CREW (Korean characters)    94/32517    08-12-94    344259   
7/29/1996    REGISTERED    LOGO [g24244ex10_1pg205.jpg]                NA 45:
SHIRTS, T-SHIRTS, DRESS SHIRTS, BLOUSES, CAMISOLES, SWEATSHIRTS, SWEATERS,
CARDIGANS, VESTS, TUNICS, COATS, JACKETS, PARKAS, SLICKERS, BLAZERS, SUITS,
BODYSUITS, TANKTOPS, ROMPERS, JUMPSUITS, PANTS, JEANS, SHORTS, STIRRUPS, SKIRTS,
DRESSES, CHEMISES, ROBES, PAJAMAS, HOSIERY, SOCKS, LEGGINGS, TIES, SCARVES,
BANDANNAS, GLOVES, NIGHTGOWNS, BELTS, SWIMWEAR, LINGERIE, PANTIES, BRAS, SLIPS,
APRONS, LEOTARDS, UNITARDS, BICYCLE SHORTS, BRA TOPS, CAPS, HATS, AND HEADBANDS
South Korea    J. CREW (Korean Characters)    94/6435    08-12-94    32389   
7/22/1996    REGISTERED    LOGO [g24244ex10_1pg205.jpg]                NA 112:
RETAIL AND MAIL ORDER CATALOG SERVICES IN THE HELD OF CLOTHING, CLOTHING
ACCESSORIES, JEWELRY AND LUGGAGE; FACTORY, RETAIL AND WHOLESALE OUTLET STORE
SERVICES IN THE FIELD OF CLOTHING, CLOTHING ACCESSORIES, JEWELRY AND LUGGAGE
South Korea    J. CREW and Design (with oarsman and underline)    88-11564   
05-24-88    179206    9/19/1989    REGISTERED    LOGO [g24244jcrew_line.jpg]   
            45: MEN’S AND WOMEN’S SHIRTS, SWEATERS, CAPS AND HATS, BANDANNAS,
SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS SLICKERS, SKIRTS, BLOUSES,
DRESSES AND GLOVES South Korea    J. CREW and Design (with oarsman and
underline)    96/25394    06-14-96    421727    9/18/1998    REGISTERED    LOGO
[g24244jcrew_line.jpg]                18: HANDBAGS, OPERA BAGS, KNAPSACKS,
DUFFEL BAGS, WALLETS, NAME CARD CASES, CREDIT CARD CASES, TOILETRY CASES,
CARDBOARD BOXES, PAPER BAGS AND PLASTIC PACKING BAGS THIS APPLICATION IS
ASSOCIATED WITH APP. NO. 25392

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

South Korea    J. CREW and Design (with oarsman and underline)    96/34995   
08-09-96    400578    3/26/1998    REGISTERED    LOGO [g24244jcrew_line.jpg]   
            12: TOILETRY CASES THIS IS A DIVISIONAL APPLICATION FOR APP. NO.
96/25394 Spain    CREWCUTS    1988210    10-02-95    1988210    4/3/1996   
REGISTERED 25: CLASS HEADING Spain    J. CREW    1244666    04-06-88    1244666
   11/30/1992    REGISTERED 25: CLOTHING, SHOES, HATS Sri Lanka    J. CREW &
DESIGN (WITH LINE)    56666    12-29-88    56666    12/29/1998    REGISTERED   
LOGO [g24244jcrew_line.jpg]                25: MEN’S AND WOMEN’S SHIRTS,
SWEATERS, SHOES, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS,
SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES AND DRESSES Sri Lanka    J. CREW
(STYLIZED)    56665    12-29-88    56665    12/29/1998    REGISTERED 25: MEN’S
AND WOMEN’S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS,
PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES AND DRESSES Switzerland
   CREWCUTS    11254/1995    09-25-95    432432    9/25/1995    REGISTERED 25:
CLOTHING, FOOTWEAR, HEADGEAR

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Switzerland    J. CREW    9598/1993.4    08-04-93    416467    8/4/1993   
REGISTERED 9: SUNGLASSES, EYEGLASS FRAMES; CARRYING CASES FOR SUN-GLASSES AND
EYEGLASSES; PARTS AND FITTINGS FOR SUNGLASSES AND EYEGLASSES, EYEGLASS CASES;
16: RETAIL AND MAIL ORDER CATALOGS IN THE FIELD OF CLOTHING, LUGGAGE AND
CLOTHING ACCESSORIES; 18: LUGGAGE, HANDBAGS, DUFFEL BAGS, TOTE BAGS, WEEKENDER
BAGS, BACKPACKS, PURSES, COSMETICS CASES (SOLD EMPTY), SHAVING KITS (SOLD
EMPTY), BILLFOLDS, PASSPORT CASES, COIN CASES, KEY CASES, CHECKBOOK CASES, AND
UMBRELLAS; 21: DUST RUFFLES; 24: HOME FURNISHINGS, INCLUDING PILLOW CASES,
PILLOW SHAMS, SHEETS, BED SKIRTS, CONFORTERS, BLANKET COVERS, DUVET COVERS,
CONFORTER COVERS, BLANKETS, BED SPREADS, QUILTS, TOWELS, WASH CLOTHS, SHOWER
CURTAINS, BATH MATS, PLACEMATS, TABLECLOTHS, NAPKINS, TABLE LINENS, WINDOW
CURTAINS, AND DRAPERIES; 25: SHIRTS, T-SHIRTS, BLOUSES, SWEATSHIRTS, SWEATERS,
VESTS, COATS, JACKETS, TEXT TYPE: GD2 BLAZERS, PARKAS, SLICKERS, APRONS, SUITS,
JUMPSUITS, PANTS, SKI-PANTS, JEANS, SHORTS, BOXER SHORTS, SKIRTS, DRESSES,
ROBES, PAJAMAS, NIGHTGOWNS, SLIPS, BELTS, SWIMWEAR, SOCKS, LEGGINGS, TIES,
BANDANNAS, SCARVES, GLOVES, HEADBANDS, CAPS, HATS, AND FOOTWEAR; 42: RETAIL AND
MAIL ORDER CATALOG SERVICES IN THE FIELD OF CLOTHING, LUGGAGE, CLOTHING
ACCESSORIES, AND HOME FURNISHINGS; RETAIL SERVICES IN THE FIELD OF CLOTHING,
LUGGAGE, CLOTHING ACCESSORIES AND HOME FURNISHINGS Taiwan    CREWCUTS (ENGLISH
AND CHINESE CHARACTERS)    84047363    09-19-95    00761644    5/16/1997   
Registered    LOGO [g24244ex10_1pg207.jpg]                25: SKIRTS, SWEATERS,
CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS,
SLICKERS, BLOUSES, DRESSES, SKIRTS, KNIT TOPS, UNDERSHIRTS, SHOES, ATHLETIC
SHOES AND BOOTS Taiwan    J. CREW    77/44943    09-30-88    00524921   
6/1/1991    REGISTERED 40: MEN’S AND WOMENS SHIRTS, PANTS, SHORTS, SKIRTS,
JACKETS, SWEATERS, SWEAT SHIRTS, SLICKERS AND BLOUSES Taiwan    J. CREW   
83032577    05-09-94    00079957    12/15/1995    REGISTERED 42: ACTING AS
AGENCY FOR DISTRIBUTION OF CLOTHING, CLOTHING ACCESSORIES, JEWELRY AND LUGGAGE,
MAIL ORDER SERVICES IN THE FIELD OF CLOTHING, CLOTHING ACCESSORIES, JEWELRY AND
LUGGAGE; SERVICES IN IMPORT-EXPORT TRADING AND AGENT FOR QUOTATIONS, TENDERS AND
SALES OF VARIOUS PRODUCTS FOR DOMESTIC AND FOREIGN MANUFACTURES (FORMERLY LOCAL
CLASS 8) Taiwan    J. CREW    88023665    05-18-99    00917471    1/1/2001   
REGISTERED 25: BANDANAS, NECKTIES, SOCKS, BOOTS, SHOES, HOSIERY AND BELTS; CAPS,
NECKTIES, GLOVES, HOSIERY, SOCKS AND PANTYHOSE

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Taiwan    J. CREW    88023663    05-18-99    00901593    8/16/2000    REGISTERED
24: TOWELS Taiwan    J. CREW (ENGLISH AND CHINESE CHARACTERS)    83063797   
10-14-94    78559    9/16/1995    REGISTERED    LOGO [g24244ex10_1pg208.jpg]   
            42: RETAIL AND MAIL ORDER CATALOG SERVICES IN THE FIELD OF CLOTHING,
CLOTHING ACCESSORIES, JEWELRY AND LUGGAGE: FACTORY RETAIL AND WHOLESALE OUTLET
STORE SERVICES IN THE FIELD OF CLOTHING, CLOTHING ACCESSORIES, JEWELRY AND
LUGGAGE Taiwan    J. CREW (ENGLISH AND CHINESE CHARACTERS)    83063798   
10-14-94    00711340    5/31/1991    REGISTERED    LOGO [g24244ex10_1pg208.jpg]
               25: CLOTHING; NAMELY SHIRTS, T-SHIRTS, BLOUSES, CAMISOLES,
SWEATSHIRTS, SWEATERS, CARDIGANS, VESTS, TUNICS, COATS, JACKETS, PARKAS,
SLICKERS, BLAZERS, SUITS, BODYSUITS, TANKTOPS, ROMPERS, JUMPSUITS, PANTS, JEANS,
SHORTS, STIRRUPS, SKIRTS, DRESSES, CHEMISES, ROBES, PAJAMAS, HOSIERY, SOCKS,
LEGGINGS, TIES, SCARVES, BANDANNAS, GLOVES, NIGTHGOWNS, BELTS, SWIMWEAR,
LINGERIE, PANTIES, BRAS, SLIPS, APRONS, EXERCISE WEAR (LEOTARDS, UNITARDS,
BICYCLE SHORTS, BRA TOPS), HEADGEAR (CAPS, HATS, HEADBANDS); FOOTWEAR (SLIPPERS,
SHOES, SNEAKERS, MULES, SANDALS, MOCASSINS, ESPADRILLES, AND THONGS) (FORMERLY
LOCAL CLASS 40) Taiwan    J. CREW and Design (with oarsman and underline)   
88023664    05-18-99    00908257    9/30/2000    REGISTERED    LOGO
[g24244jcrew_line.jpg]                24: TOWELS

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Taiwan    J. CREW and Design (with oarsman and underline)    88023666   
05-18-99    00920845    12/16/2000    REGISTERED    LOGO [g24244jcrew_line.jpg]
               BANDANAS, NECKTIES, SOCKS, BOOTS, SHOES, HOSIERY AND BELTS; CAPS,
NECKTIES, GLOVES, HOSIERY, SOCKS AND PANTYHOSE Thailand    CREWCUTS    293676   
10-16-95    KOR50574    10/16/1995    REGISTERED 25: SHIRTS, SWEATERS, CAPS,
HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS,
BLOUSES, DRESSES, SKIRTS, KNIT TOPS, UNDERSHIRTS, SHOES, ATHLETIC SHOES, AND
BOOTS Thailand    J. CREW and Design (with oarsman and underline)    359724   
05-12-98    73859    5/12/1988    REGISTERED    LOGO [g24244jcrew_line.jpg]   
            NA 38: ARTICLES OF CLOTHING; GOODS AS RECLASSIFIED IN INTERNATIONAL
CLASS 25: SHIRTS, T-SHIRTS, SWEATERS, CARDIGANS, TUNICS, CAPS, HATS, SCARVES,
TIES, BANDANNAS, HEADBANDS, SHORTS, BOXER SHORTS, PANTS (EXCEPT UNDERPANTS AND
SPORT PANTS), JEANS, STIRRUPS, SWEATSHIRTS, SWEATPANTS, BELTS, SOCKS, COATS,
JACKETS, VESTS, BLAZERS, SUITS, COATS, RAINCOATS, SLICKERS, PARKAS, SKIRTS,
BLOUSES, CHEMISES, CAMISOLES, ROBES, DRESSES, KNIT TOPS, PAJAMAS, SOCKS,
LEGGINGS, TIGHTS, GLOVES, NIGHTGOWNS LINGERIE, PANTIES, BRAS, SLIPS, APRONS,
SPORTSWEAR, BODYSUITS, TANK TOPS, ROMPERS, JUMPSUITS, SKI-PANTS, EXERCISE WEAR,
LEOTARDS, UNITARDS, BICYCLE SHORTS, BRA TOPS, JOGGING SUITS, SLIPPERS, SHOES
(EXCEPT SPORT SHOES), SPORTSHOES, BOOTS SNEAKERS, MULES, (CONTINUED GDS 2) TEXT
TYPE: GD2 SANDALS, MOCCASINS, ESPADRILLES AND THONGS SWIMWEAR Turkey    J.CREW
   97/11849    08-14-97    1997011849    8/14/1997    REGISTERED 18: ANIMAL
SKINS, HIDES, UMBRELLAS, PARASOLS AND WALKING STICKS United Kingdom    CREWCUTS
   2037650    09-22-95    2037650    9/22/1995    REGISTERED 25: OUTER CLOTHING,
SHIRTS, SWEATERS, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, TROUSERS
SLACKS, BELTS, SOCKS, JACKETS, SLICKERS, BLOUSES, DRESSES, SKIRTS, KNIT TOPS;
UNDERSHIRTS, SHOES, ATHLETIC SHOES AND BOOTS

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

United Kingdom    J. CREW and Design (with oarsman)    B1340825    04-08-88   
B1340825    4/8/1988    REGISTERED    LOGO [g24244jcrew_oarsman.jpg]            
   25: SHIRTS FOR MEN AND WOMEN; SHOES, CAPS, HATS, BANDANNAS, SHORTS, PANTS,
TROUSERS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES AND DRESSES United
Kingdom    J. CREW and Design (with oarsman)    B1545162    08-17-93    B1545162
   8/17/1993    REGISTERED    LOGO [g24244jcrew_oarsman.jpg]                9:
SUNGLASSES, SUNGLASS AND EYEGLASS FRAMES; CARRYING CASES FOR SUNGLASSES AND
EYEGLASSES; PARTS AND FITTING FOR SUNGLASSES AND EYEGLASSES 18: LUGGAGE,
HANDBAGS, DUFFEL BAGS, TOTE BAGS, WEEKENDER BAGS, BACKPACKS, PURSES, COSMETICS
CASES AND SHAVING CASES, ALL BEING SOLD EMPTY, BILLFOLDS, PASSPORTS CASES,
COINCASES, KEY CASES, CHECKBOOK CASES AND UMBRELLAS 24: PILLOW CASES, PILLOW
SHAMS, DUST RUFFLES, SHEETS, BED SKIRTS, COMFORTERS, BLANKET COVERS, DUVET
COVERS, COMFORTER COVERS, BLANKETS, BED SPREADS, QUILTS, TOWELS, WASH CLOTHS,
SHOWER CURTAINS, TEXTILE BATH MATS, TEXTILE PLACEMATS, TEXTILE TABLE CLOTHS,
TEXTILE NAPKINS, TABLE LINEN, WINDOW CURTAINS AND DRAPERIES United States   
CREW    73/465087    02-10-84    1348064    7/9/1985    REGISTERED 25: DRESS
SHIRTS, VESTS, SKIRTS, PANTS AND SHORTS United States    CREW    76/014732   
03-31-00    2431701    2/27/2001    REGISTERED 25: SHIRTS, VEST, PULLOVERS,
TOPS, SKIRTS, DRESSES, JACKETS, COATS, PANTS, JEANS, TROUSERS, SHORTS, SWEATERS,
HATS, CAPS, SCARVES, NECKTIES, BELTS, COATS, PARKAS, PONCHOS, ROBES, PAJAMAS,
NIGHTGOWNS, BRAS, PANTIES, BRIEFS, BOXER SHORTS, SWIMWEAR, SOCKS AND FOOTWEAR
United States    crew.com                Registered

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

United States    crew.info                Registered United States    crew.us   
            Registered United States    CREWCUTS    76/240045    04-12-01      
   FILED 25: CHILDREN’S SHIRTS, SWEATERS, CAPS, HATS, SWEATSHIRTS, SOCKS,
JACKETS United States    CREWCUTS    78/417243    05/12/04          FILED 25:
SHIRTS, SWEATERS, SWEATSHIRTS, JACKETS, PANTS, SKIRTS, COATS, CAPS, HATS, SOCKS
AND FOOTWEAR United States    crewcuts.net                Registered United
States    itsmadewell.biz                Registered United States   
itsmadewell.com             Registered United States    itsmadewell.info      
      Registered United States    itsmadewell.net                Registered
United States    itsmadewell.org             Registered United States    J. CREW
   73/411531    01-31-83    1308888    12/11/1984    REGISTERED 18: LUGGAGE,
UMBRELLAS, HANDBAGS, DUFFEL BAGS; 25: MEN’S AND WOMEN’S SHIRTS, SWEATERS, SHOES,
CAPS, HATS, BANDANAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS,
SLICKERS, SKIRTS, BLOUSES, DRESSES: 42: RETAIL CATALOG SERVICES IN THE FIELD OF
CLOTHING, LUGGAGE AND CLOTHING ACCESSORIES

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

United States    J.CREW    74/710135    08-02-95    2169873    6/30/1998   
REGISTERED 25: WOMEN’S INTIMATE APPAREL, NAMELY, BRAS, BRA TOPS, TANKTOPS,
BRIEFS, BIKINI BOTTOMS AND THONGS United States    J.CREW    75/676905   
04-01-99    1351667    5/23/2000    REGISTERED 35: RETAIL OUTLET AND RETAIL
STORE SERVICES IN THE FIELD OF CLOTHING AND ACCESSORIES United States    J.CREW
   75/706219    05-14-99    2462509    6/19/2001    REGISTERED 14: NECKLACES,
BRACELETS, EARRINGS AND RINGS United States    J.CREW    75/841908    11-05-99
         FILED 3: PERFUME, EAU DE PARFUM, EAU DE TOILETTE, FRAGRANCED BODY
LOTION, FRAGRANCED BODY CREAM, FACE CREAM, BODY CREAM, ANTI-WRINKLE CREAM, SKIN
RENEWAL CREAM, EYE CREAM, SKIN MOISTURIZER, BODY LOTION, BODY OIL, SKIN
BALANCING LOTION, FACIAL SKIN OIL CONTROLLER, SKIN WRINKLE TREATMENT LOTIONS AND
CREAMS, SKIN BLEMISH TREATMENT LOTIONS AND CREAMS, FACIAL TONER, BODY TONER,
FACIAL AND BODY EXFOLIATING PREPARATION, FACIAL AND BODY BEAUTY MASKS, FACIAL
AND BODY OIL SPRAY TOILET SOAPS, LIQUID SOAPS, CREAM SOAPS, PAPER SOAPS FOR
HANDS, FACE AND BODY, COSMETIC SOAPS, FACIAL CLEANSER, BODY CLEANSER, SKIN
CLEANSING LOTION, SKIN CLEANSING GEL, BATH POWDER, BATH OIL, BODY POWDER,
SHAVING FOAM, PRE-SHAVE LOTIONS AND CREAMS, AFTER SHAVE LOTIONS AND CREAMS,
AFTER SHAVE BALM, DEODORANTS AND PERSPIRANTS, POTPOURRI ESSENTIAL OILS FOR
PERSONAL USE AND MASSAGE OILS 4: SCENTED AND UNSCENTED CANDLES United States   
J.CREW UNTUCKED    78/496989    10-08-04          FILED 14: NECKLACES,
BRACELETS, EARRINGS, WATCHES, BROOCHES AND RINGS 18: LUGGAGE, HANDBAGS, CLUTCH
PURSES, TOILETRY CASES SOLD EMPTY, WALLETS, TOTE BAGS, DUFFEL BAGS, BACKPACKS,
LUGGAGE TAGS AND LEATHER KEY CHAINS 25: SHIRTS, T-SHIRTS, BLOUSES, SWEATERS,
SWEAT SHIRTS, SWEAT PANTS, COATS, JACKETS, SHORTS, PANTS, SUITS, DRESSES SKIRTS,
SWIMWEAR, UNDERWEAR, SLEEPWEAR, LOUNGEWEAR, TIGHTS, CAPS, HATS, GLOVES, SCARVES,
TIES, POCKET SQUARES, BELTS SOCKS AND FOOTWEAR United States    JCG    75/47201
   08-26-97    2385964    9/12/2000    REGISTERED 25: MEN’S AND WOMEN’S
CLOTHING, NAMELY, SHIRTS, T-SHIRTS, SWEATERS, CARDIGANS, TUNICS, CAPS, HATS,
SCARVES, TIES, BANDANNAS SHORTS, BOXER SHORTS, PANTS, JEANS, STIRRUPS,
SWEATSHIRTS, SWEATPANTS, BELTS, SOCKS, COATS, JACKETS, VESTS, BLAZERS SUITS,
SLICKERS, SKIRTS, BLOUSES, CHEMISES, CAMISOLES, ROBES, DRESSES; PAJAMAS,
HOSIERY, SOCKS, LEGGINGS, TIGHTS, GLOVES, NIGHTGOWNS, LINGERIE, PANTIES, BRAS,
SLIPS; SPORTSWEAR, NAMELY, BODYSUITS, TANK TOPS, ROMPERS, JUMPSUITS, SKI-PANTS:
EXERCISE WEAR, NAMELY, LEOTARDS, UNITARDS, BICYCLE SHORTS, BRA TOPS, JOGGING
SUITS; SWIMWEAR, FOOTWEAR 35: RETAIL CATALOG, RETAIL OUTLET AND RETAIL STORE
SERVICES IN THE FIELD OF CLOTHING AND CLOTHING ACCESSORIES

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

United States    JCMG    75/347202    8-26-97    2272925    8/24/1999   
REGISTERED 25: MEN’S AND WOMEN’S CLOTHING, NAMELY, SHIRTS, T-SHIRTS, SWEATERS,
CARDIGANS, TUNICS, CAPS, HATS, SCARVES, TIES, BANDANNAS, SHORTS, BOXER SHORTS,
PANTS, JEANS, STIRRUPS, SWEATSHIRTS, SWEATPANTS, BELTS, SOCKS, COATS, JACKETS,
VESTS, BLAZERS, SUITS, SLICKERS, SKIRTS, BLOUSES, CHEMISES, CAMISOLES, ROBES,
DRESSES; PAJAMAS, HOSIERY, SOCKS, LEGGINGS, TIGHTS, GLOVES, NIGHTGOWNS,
LINGERIE, PANTIES, BRAS, SLIPS: SPORTSWEAR, NAMELY, BODYSUITS, TANK TOPS,
ROMPERS, JUMPSUITS, SKI-PANTS, EXERCISE WEAR, NAMELY, LEOTARDS, UNITARDS,
BICYCLE SHORTS, BRA TOPS, JOGGINGS SUITS; SWIMWEAR, FOOTWEAR 35: RETAIL CATALOG,
RETAIL OUTLET AND RETAIL STORE SERVICES IN THE FIELD OF CLOTHING AND CLOTHING
ACCESSORIES United States    jcrew.biz                Registered United States
   JCREW.COM    75/437555    02-20-98    2255255    6/22/1999    REGISTERED 41:
ON-LINE CATALOG FEATURING CLOTHING AND ACCESSORIES DISTRIBUTED BY MEANS OF A
GLOBAL COMPUTER INFORMATION NETWORK United States    jcrew.com               
Registered United States    j-crew.com                Registered United States
   jcrew.com (katakana characters)       Registered United States   
jcrew.eu.com             Registered United States    jcrew.info               
Registered United States    jcrew.net                Registered United States   
jcrew.net (chinese characters)          Registered

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

United States    jcrew.net (katakana characters)                Registered
United States    jcrew.org                Registered United States    jcrew.us
               Registered United States    jcrewbath.com               
Registered United States    jcrewbody.com                Registered United
States    jcrewcatalog.com                Registered United States   
jcrewcuts.com                Registered United States    jcrewfactory.com      
         Registered United States    jcrewgirl.com                Registered
United States    jcrewhome.com                Registered United States   
jcrewimage.com                Registered United States    jcrewimports.com      
         Registered

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

United States    jcrewmail.com                Registered United States   
jcrewonline.com                Registered United States    jcrewouclear.com   
            Registered United States    jcrewourdets.com               
Registered United States    jcrewshop.com                Registered United
States    jcrewsucks.com                Registered United States   
jcrew-sucks.com                Registered United States    jcrewsucks.org      
         Registered United States    jcrew-sucks.org                Registered
United States    jcrewuntucked.com                Registered United States   
MULTIGLISSE    75/370961    10/9/1997    2350570    5/16/2000    REGISTERED 25:
MEN’S AND WOMEN’S CLOTHING, NAMELY, SHIRTS, T-SHIRTS, SWEATERS, CARDIGANS,
TUNICS, CAPS, HATS, SCARVES TIES, BANDANNAS SHORTS, BOXER SHORTS, PANTS, JEANS,
STIRRUP PANTS, SWEATSHIRTS, SWEATPANTS, BELTS, SOCKS, COATS, JACKETS, VESTS
BLAZERS SUITS, SUCKERS, SKIRTS, BLOUSES, CHEMISES, CAMISOLES, ROBES, DRESSES;
PAJAMAS, HOSIERY, SOCKS, LEGGINGS TIGHTS, GLOVES, NIGHTGOWNS, LINGERIE, PANTIES,
BRAS, SUPS; SPORTSWEAR, NAMELY, BODYSUITS, TANK TOPS, ROMPERS, JUMPSUTIS,
SKI-PANTS; EXERCISE WEAR, NAMELY, LEOTARDS, UNI-TARDS, BICYCLE SHORTS, BRA TOPS,
JOGGING SUITS: SWIMWEAR AND FOOTWEAR

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

MARK

  

APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

United States    myjcrew.com                Registered United States   
shopjcrew.com                Registered United States    SO J. CREW    76/051252
   05-18-00    2735138    7/8/2003    REGISTERED 3: PERFUME. EAU DE PERFUME.
BODY LOTION, FACIAL AND BODY EXFOLIATING PREPARATION, FACIAL AND BODY MASK,
FACIAL AND BODY OIL SPRAY. TOILET SOAPS, CLEANSING GEL 4: SCENTED AND UNSCENTED
CANDLES United States    wwwjcrew.com                Registered United States   
wwwjcrewemail.com                Registered Uruguay    J. CREW    293323   
2/17/1997    293323    1/10/2002    REGISTERED 18: ALL GOODS IN CLASS 25: ALL
GOODS IN CLASS 42: ALL SERVICES IN CLASS Venezuela    CREWCUTS    018712/95   
11/23/1993    195374-9    3/7/1997    REGISTERED 25: CLASS HEADING Venezuela   
J. CREW    005841    3/25/1992          FILED NA 39: MEN’S AND WOMENS SHIRTS,
SWEATERS SHOES, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCK,
JACKETS, SLICKERS, SKIRTS, BLOUSES AND DRESSES Venezuela    J. CREW    005839   
3/25/1992    572    7/10/1994    Registered 42: RETAIL CATALOG SERVICES

 

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J. CREW INTERNATIONAL, INC.

Worldwide Registration and Application Report as of November 19, 2004

 

COUNTRY

  

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APPLN. NO.

  

APPLN. DATE

  

REG. NO.

  

REG. DATE

  

STATUS

Venezuela    J. CREW and Design (with oarsman and underline)    005838   
03-25-92          FILED    LOGO [g24244jcrew_line.jpg]                NA 39:
MEN’S AND WOMEN’S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANNAS, SHORTS,
SWEATSHIRTS PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES AND DRESSES
Virgin Islands (US)    J. CREW          6130    12/11/1984    Registered 18:
LUGGAGE UMBRELLAS, HANDBAGS, DUFFEL BAGS. 25: MEN’S AND WOMEN’S SHIRTS,
SWEATERS, SHOES, CAPS, HATS, BANDANNAS, SHORTS, SWEATSHIRTS, PANTS, BELTS,
SOCKS, JACKETS SLICKERS, SKIRTS, BLOUSES, DRESSES 42: RETAIL CATALOG SERVICES IN
THE FIELD OF CLOTHING, LUGGAGE AND CLOTHING ACCESSORIES Virgin Islands (US)   
J. CREW          6128    3/9/1993    REGISTERED 42: RETAIL OUTLET AND RETAIL
STORE SERVICES IN THE FIELD OF CLOTHING Virgin Islands (US)    J. CREW         
6128    3/9/1993    REGISTERED 42: RETAIL OUTLET AND RETAIL STORE SERVICES IN
THE FIELD OF CLOTHING AND ACCESSORIES Virgin Islands (US)    J. CREW and Design
(with oarsman and underline)          6129    9/19/1989    REGISTERED    LOGO
[g24244jcrew_line.jpg]                18: LUGGAGE UMBRELLAS, HANDBAGS, DUFFEL
BAGS, 25: MEN’S AND WOMEN’S SHIRTS, SWEATERS, SHOES, CAPS, HATS, BANDANAS,
SHORTS, SWEATSHIRTS, PANTS, BELTS, SOCKS, JACKETS, SLICKERS, SKIRTS, BLOUSES,
DRESSES: 42: RETAIL CATALOG SERVICES IN THE FIELD OF CLOTHING, LUGGAGE AND
CLOTHING ACCESSORIES

 

   Created by Cowan, Liebowitz & Latman, P.C.    Page:    39

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

SCHEDULE 8.12

to

INFORMATION CERTIFICATE

Subsidiaries; Affiliates; Investments

A. Subsidiaries (More than 50% owned by Company indicated)

 

Company

  

Subsidiary

  

Jurisdiction of
Incorporation

  

Percentage
Owned

J. Crew Group, Inc.    J. Crew Intermediate LLC    Delaware    100% J. Crew
Intermediate LLC    J. Crew Operating Corp.    Delaware    100% J. Crew
Operating Corp.    J. Crew, Inc.    New Jersey    100%    Grace Holmes, Inc.   
Delaware    100%    H.F.D. No. 55, Inc.    Delaware    100%    J. Crew Virginia,
Inc.    Virginia    100%    C&W Outlet, Inc.    New York    100% J. Crew Inc.   
J. Crew International, Inc.    Delaware    100%    J. Crew Services, Inc.   
Delaware    100%    ERL, Inc.    New Jersey    100% J. Crew International, Inc.
   J. Crew Japan, Inc.    Japan    100%

B. Affiliates (Less than 50% Owned by Company)

None

C. Affiliates (Subject to common ownership with Company)

See above

D. Shareholders (If widely held, only holders with more than 10%)

See attached list of shareholders for J. Crew Group, Inc.

See above for ownership of the other Companies

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

Updated Shareholder list

 

REPORT NUMBER:

   FWR00025    EQUISERVE    PAGE :    1 SOURCE PROGRAM:    FWR0025R   
SECURITY OWNER LIST REPORT    DATE:    12/20/2004          TIME:    10:44:27

 

CLIENT:   JCR  

J. CREW GROUP, INC.

  EFFECTIVE:   12/20/2004     ISSUE:   JCRCO  

J. CREW GROUP OLD COMMON

  CUSIP:      

 

ACCOUNT:     5932     ACCOUNT:   3724 REGISTRATION:    

ROXANE AL-FAYEZ

C/O J CREW INC

770 BROADWAY

NEW YORK, NY 100 103-9522

    REGISTRATION:  

BAIN SECURITES INC

2 COPLEY PLACE

ATTN BILL DOHERTY

BOSTON, MA 02116-6502

SHARES:     6,250.0000      

SHARES:

 

23,718.8000

PRE-EXCHANGED SHARES:     0.0000      

PRE-EXCHANGED SHARES:

 

         0.0000

ACCOUNT:     808     ACCOUNT:   4004 REGISTRATION:    

BANCBOSTON INVESTMENTS INC

ATTN: JEFF ARIMENTO

175 FEDERAL ST 75-10-01

BOSTON, MA 02110-2210

    REGISTRATION:  

CHARLOTTE BEERS

132 CLARKE AVE

PALM BEACH, FL 33460-6121

SHARES:     412,500.0000      

SHARES:

 

16,466.2760

PRE-EXCHANGED SHARES:     0.0000      

PRE-EXCHANGED SHARES:

 

         0.0000

ACCOUNT:     1825     ACCOUNT:   4107 REGISTRATION:    

PAULINE BOGHOSIAN

C/O CREDIT SUISSE FIRST BOSTON

ATTN: MATTHEW C KELLY

11 MADISON AVENUE

NEW YORK, NY 10010-3643

    REGISTRATION:  

GREGORY BRENNEMAN

31 HOLLYMEAD DRIVE THE WOODLANDS, TX 77381-5115

SHARES:     5,188.6000      

SHARES:

 

13,000.0000

PRE-EXCHANGED SHARES:     0.0000      

PRE-EXCHANGED SHARES:

 

         0.0000

ACCOUNT:     101     ACCOUNT:   4519 REGISTRATION:    

MAUD BRYT

21 ADAMS LN POUND RIDGE, NY 10576-1507

    REGISTRATION:  

JOHN W BURDEN III

PO BOX 1131

SANIBEL, FL 33957-1131

SHARES:     25,818.8000      

SHARES:

 

  4,466.2760

PRE-EXCHANGED SHARES:     0.0000      

PRE-EXCHANGED SHARES:

 

         0.0000

ACCOUNT:     2929     ACCOUNT:   1104 REGISTRATION:    

DLJ CAPITAL CORPORATION

C/O CREDIT SUISSE FIRST BOSTON

ATTN: MATTHEW C KELLY 11 MADISON AVENUE

NEW YORK, NY 10010-3629

    REGISTRATION:  

DLJ FUND INVESTMENT PARTNERS II LP

C/O CREDIT SUISSE

FIRST BOSTON ATTN: MATTHEW C KELLY

11 MADISON AVENUE NEW YORK, NY 10010-3629

SHARES:     296.4000      

SHARES:

 

105,549.0000

PRE-EXCHANGED SHARES:     0.0000      

PRE-EXCHANGED SHARES:

 

           0.0000

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

REPORT NUMBER:   FWR00025    EQUISERVE   PAGE :   2 SOURCE PROGRAM:   FWR0025R
   SECURITY OWNER LIST REPORT   DATE:   12/20/2004        TIME:   10:44:27

 

CLIENT:   JCR  

J. CREW GROUP, INC.

  EFFECTIVE:   12/20/2004   ISSUE:   JCRCO  

J. CREW GROUP OLD COMMON

  CUSIP:    

 

ACCOUNT:   5417     ACCOUNT:   3106 REGISTRATION:  

PEGGY F DREXLER &

MILLARD S DREXLER TR

MSD GRAT A 3/22/04

C/O J CREW GROUP, INC.

770 BROADWAY

NEW YORK, NY 10003-9522

    REGISTRATION:  

FARALLON CAPITAL INSTITUTIONAL PARTNERS LP

C/O FARALLON PARTNERS LLC

ATTN JOSEPH DOWNES

ONE MARITIME PLAZA SUITE 1325

SAN FRANCISCO,

CA 94111-3517

SHARES:   262,524.0000      

SHARES:

 

115,500.0000

PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES:

 

           0.0000

ACCOUNT:   3209     ACCOUNT:   3312 REGISTRATION:  

FARALLON CAPITAL INSTITUTIONAL PARTNERS II LP

C/O FARALLON PARTNERS LLC

ATTN JOSEPH DOWNES

ONE MARITIME PLAZA SUITE 1325

SAN FRANCISCO, CA 94111-3517

    REGISTRATION:  

FARALLON CAPITAL INSTITUTIONAL III LP

C/O FARALLON PARTNERS LLC

ATTN JOSEPH DOWNES

ONE MARI PLAZA STE 1325

SAN FRANCISCO,

CA 94111-0000

SHARES:   39,600.0000      

SHARES:

 

13,200.0000

PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES:

 

         0.0000

ACCOUNT:   3003     ACCOUNT:   2517 REGISTRATION:  

FARALLON CAPITAL PARTNERS LP

C/O FARALLON PARTNERS LLC

ATTN JOSEPH DOWNES

ONE MARITIME PLAZA SUITE 1325

SAN FRANCISCO, CA 94111-3517

    REGISTRATION:  

CHRISTINE PASANO

40 MORROW AVE APT 7FN SCARSDALE, NY 10883-8265

SHARES:   148,500.0000      

SHARES:

 

2,668.4000

PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES:

 

       0.0000

ACCOUNT:   303     ACCOUNT:   909 REGISTRATION:  

FULL & CO CRESCENT/MACH I PARTNERS LP

C/O US BANK NA

P O BOX 1787

MAIL CODE: MK-WI-S210 MILWAUKEE, WI 53201-1787

    REGISTRATION:  

GENERAL ELECTRIC CAPITAL CORPORATION

ATTN: ADB OMISORE

120 LONG RIDGE RD

STAMFORD, CT 06927-0001

SHARES:   34,375.0000      

SHARES:

 

389,618.0000

PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES:

 

           0.0000

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

REPORT NUMBER:   FWR00025    EQUISERVE   PAGE:   3 SOURCE PROGRAM:   FWR0025R   
SECURITY OWNER LIST REPORT   DATE:   12/20/2004       

TIME:

  10:44:27

 

CLIENT:   JCR  

J. CREW GROUP, INC.

  EFFECTIVE:   12/20/2004   ISSUE:   JCRCO  

J. CREW GROUP OLD COMMON

  CUSIP:    

 

ACCOUNT: REGISTRATION:  

5314

SCOTT GILBERTSON

1 UNION SQ S

#17H

NEW YORK, NY 10003-4183

    ACCOUNT: REGISTRATION:  

2105

BENNETT GOODMAN

C/O CREDIT SUISSE FIRST BOSTON

ATTN: MATTHEW C KELLY

11 MADISON AVENUE

NEW YORK, NY 10010-3643

SHARES:   27,896.0000  

SHARES:

 

4,002.6000

PRE-EXCHANGED SHARES:   0.0000  

PRE-EXCHANGED SHARES:

 

       0.0000

ACCOUNT: REGISTRATION:  

2414

ROB GRIEN

525 E 89TH ST

APT 18

NEW YORK, NY 10128-7836

    ACCOUNT: REGISTRATION:  

2826

STEVE MICKEY

24 MEADOW STREET

GREENWICH, CT 06831-0000

SHARES:   3,854.4000  

SHARES:

 

2,075.4000

PRE-EXCHANGE SHARES:   0 .0000  

PRE-EXCHANGED SHARES:

 

       0.0000

ACCOUNT: REGISTRATION:  

2002

SCOTT HONOUR

16612 CALLS JERMAINE

PACIFIC PALISADES, CA 90272-1936

    ACCOUNT: REGISTRATION:  

4622

J CREW GROUP INC

TREASURY SHARE ACCOUNT

770 BROADWAY

NEW YORK, NY 10003-9522

SHARES:   889.4000  

SHARES:

 

2,000.0000

PRE-EXCHANGED SHARES:   0.0000  

PRE-EXCHANGED SHARES:

 

       0.0000

ACCOUNT: REGISTRATION:  

1722

MARK LANIGAN

C/O CREDIT SUISSE FIRST BOSTON

ATTN: MATTHEW C KELLY

11 MADISON AVENUE

NEW YORK, NY 10010-3643

    ACCOUNT: REGISTRATION  

202

LINCHMEN & CO

C/O US BANK NA

P O BOX 1787

MAIL CODE MK-WI-S210

MILWAUKEE, WI 53201-1787

SHARES:   5,188.6000  

SHARES

 

618,750.0000

PRE-EXCHANGED SHARES:   0.0000  

PRE-EXCHANGED SHARES:

 

           0.0000

ACCOUNT: REGISTRATION:  

1619

KEN MOELIS

624 N ALPINE DRIVE

BEVERLY HILLS, CA 90210-3304

    ACCOUNT : REGISTRATION:  

2311

DOUG OSTROVER

C/O CREDIT SUISSE FIRST BOSTON

ATTN: MATTHEW C KELLY

11 MADISON AVENUE

        NEW YORK, NY 10010-3643 SHARES:   5,188.6000  

SHARES:

 

4,002.6000

PRE-EXCHANGED SHARES:   0.0000  

PRE-EXCHANGED SHARES:

 

       0.0000

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

REPORT NUMBER:    FWR00025    EQUISERVE    PAGE:    4 SOURCE PROGRAM:   
FWR0025R    SECURITY OWNER LIST REPORT    DATE:    12/20/2004          TIME:   
10:44:27

 

CLIENT:   JCR   

J. CREW GROUP, INC.

   EFFECTIVE:    12/20/2004    ISSUE:   JCRCO   

J. CREW GROUP OLD COMMON

   CUSIP:      

 

ACCOUNT:   4210     ACCOUNT:   1928 REGISTRATION:  

MICHAEL OVITZ

C/O MICHAEL S DREYER

DREYER EDMONDS & ASSOCIATES

355 SOUTH GRAND AVE

SUITE 4150

LOS ANGELES, CA 90071-3117

    REGISTRATION:  

STEPHEN PAUL

1236 SQUIRAL HILL AVE

PITTSBURGH, PA 15217-1148

                                        SHARES :   12,400.0000      

SHARES:

 

2,668.4000

PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES:

 

       0.0000

ACCOUNT:   5211     ACCOUNT:   4828 REGISTRATION:  

JEFFREY A PFEIFLE

C/O J.CREW GROUP, INC

770 BROADWAY

NEW YORK, NY 10003-9522

    REGISTRATION;  

KENNETH S PILOT

401 EAST 60TH ST #29A

NEW YORK, NY 10022-1596

                        SHARES:   40,451.0000      

SHARES:

 

105,000.0000

PRE-EXCHANGED SHARES   0.0000      

PRE-EXCHANGED SHARES:

 

           0.0000

ACCOUNT:   2208     ACCOUNT:   6109 REGISTRATION:  

STEVE RATTNER

C/O CREDIT SUISSE FIRST BOSTON

ATTN: MATTHEW C KELLY

11 MADISON AVENUE

NEW YORK, NY 10010-3643

    REGISTRATION:  

MARIO RODRIGUEZ

C/O J CREW GROUP INC

770 BROADWAY

NEW YORK, NY 10003-9522

                                SHARES:   4,002.6000      

SHARES:

 

250.0000

PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES:

 

    0.0000

ACCOUNT:   3518     ACCOUNT:   4725 REGISTRATION:  

RR CAPITAL PARTNERS LP

C/O FARALLON PARTNERS LLC

ATTENTION: JOSEPH DOWNES

ONE MARITIME PLAZA SUITE 1325

SAN FRANCISCO, CA 94111-3517

    REGISTRATION:  

DAVID M SCHWARZ

C/O DAVID M SCHWARZ

ARCHITECTURAL SERVICES

1707 L STREET NW STE 400

WASHINGTON, DC 20036-4213

                                SHARES:   13,200.0000      

SHARES:

 

4,751.0000

PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES:

 

       0.0000

ACCOUNT:   2723     ACCOUNT:   3621 REGISTRATION:  

KEVIN SMITH

C/O CREDIT SUISSE FIRST BOSTON

ATTN: MATTHEW C KELLY

11 MADISON AVENUE

NEW YORK, NY 10010-3643

    REGISTRATION:  

SQUAM LAKE INVESTORS II LP

% BAIN & COMPANY

2 COPLEY PLACE

ATTN BILL DOHERTY

BOSTON, MA 02116-6502

                                SHARES:   593.0000      

SHARES:

 

65,227.0000

PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES :

 

         0.0000

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

REPORT NUMBER:    FWR00025    EQUISERVE    PAGE:    5 SOURCE PROGRAM:   
FWR0025R    SECURITY OWNER LIST REPORT    DATE:    12/20/2004          TIME:   
10:44:27

 

CLIENT:

 

JCR

  

J. CREW GROUP, INC.

   EFFECTIVE:    12/20/2004   

ISSUE:

 

JCRCO

  

J. CREW GROUP OLD COMMON

   CUSIP:      

 

ACCOUNT:   2620     ACCOUNT:   3930 REGISTRATION:  

ERIC SWANSON

245 SOUTH LINDEN

BEVERLY HILLS, CA 90212-3704

    REGISTRATION:  

BRIAN SWETTE

1135 HILLSBORO MILE

HILLSBORO BEACH, FL 33062-1902

                SHARES:   2,075.4000      

SHARES:

 

22,945.2760

PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES:

 

         0.0000

ACCOUNT:   6006     ACCOUNT:   404 REGISTRATION:  

JONATHAN TAPPAN

C/O J CREW

770 BROADWAY

NEW YORK, NY 10003-9522

    REGISTRATION:  

TCW SHARED OPPORTUNITY

FUND II LP

C/O THE BANK OF NEW YORK

ATTN: CAROL GRAFALS

ONE WALL ST THIRD FLR WINDOW A

NEW YORK, NY 10005-2500

                                        SHARES:   250.0000      

SHARES:

 

34,375.0000

PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES:

 

         0.0000

ACCOUNT:   707     ACCOUNT:   606 REGISTRATION:  

TPG INVESTORS II LP

C/O TEXAS PACIFIC GROUP

ATTN: JOHN E VIOLA

301 COMMERCE ST SUITE 3300

FORT WORTH, TX 76102-4133

    REGISTRATION:  

TPG PARALLEL II LP

C/O TEXAS PACIFIC GROUP

ATTN: JOHN B VIOLA

301 COMMERCE ST SUITE 3300

FORT WORTH, TX 76102-4133

                                SHARES:   650,635.4000      

SHARES:

  425,663.0000 PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES:

 

0.0000

ACCOUNT:   505     ACCOUNT:  

  3827

REGISTRATION:  

TPG PARTNERS II LP

C/O TEXAS PACIFIC GROUP

ATTN: JOHN B VIOLA

301 COMMERCE ST SUITE 3300

FORT WORTH, TX 76102-4133

    REGISTRATION:  

JOSHUA WESTON

217 CHRISTOPHER ST

MONCLAIR, NJ 07042-4205

                                SHARES:   6,237,499.2000      

SHARES:

 

25,478.2760

PRE-EXCHANGED SHARES:   0.0000      

PRE-EXCHANGED SHARES:

 

         0.0000

ACCOUNT:   1001       REGISTRATION:  

EMILY WOODS

312 JOBS LN

WATER MILL, NY 11976-3509

                      SHARES:   2,265,176.6000           PRE-EXCHANGED SHARES:  
0.0000          

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

SCHEDULE 8.13

to

INFORMATION CERTIFICATE

Labor Matters

None

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

SCHEDULE 8.15

to

INFORMATION CERTIFICATE

Material Contracts

 

Company

  

Name of Agreement

   Date of
Agreement   

Parties to Agreement

J. Crew Operating Corp.    Merchant Services Bankcard Agreement and Schedule B
Debit Attachment    8/15/01
10/28/02    The Chase Manhattan Bank, Chase Merchant Services, L.L.C. J. Crew
Operating Corp.    Private Label Credit Card Program Agreement    10/29/04   
World Financial Network National Bank J. Crew Operating Corp.    Indenture
relating to 10  3/8% Senior Subordinated Notes Due 2007    10/17/97    U. S.
Bank (f/k/a State Street Bank and Trust Company), as Trustee J. Crew Inc.   
Printing Agreement    Under
Negotiation    R. R Donnelley & Sons J. Crew Inc.    Select Merchant Payment
Card Processing Agreement    10/3/01    Paymentech, L.L.C. J. Crew Group, Inc.
   Web Hosting Agreement    2/14/01    Digex, Inc. J. Crew Group, Inc.    Master
Hardware and Services Agreement    8/9/01    CRS Retail Systems, Inc. J. Crew
Group, Inc.    Master Software and Services Agreement    8/9/01    CRS Retail
Systems, Inc.

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

J. Crew Group, Inc.    Services Agreement and Addendum No.1 (1/31/02)   
11/25/00    Electronic Data Systems Corporation J. Crew Group, Inc.    AT&T
Master Agreement and Addendums    7/1/02    AT&T Corp. J. Crew Group, Inc.   
Merchant Services Agreement    9/3/87    Discover Card Services, Inc. J. Crew
Group, Inc.    Amendment to Card Service Agreement for Retail Establishments   
1/1/93    American Express Travel Related Services Company, Inc. J. Crew Group,
Inc.    Indenture relating to 13  1/8% Discount Debentures Due 2008    10/17/97
   U. S. Bank (f/k/a Senior State Street Bank and Trust Company), as Trustee J.
Crew Group, Inc.    Supplemental Indenture relating to 13  1/8% Senior Discount
Debentures Due 2008    5/6/03    U. S. Bank, as Trustee J. Crew Intermediate LLC
   Indenture relating to 16.0% Senior Discount Contingent Principal Notes   
5/6/03    U.S. Bank, as Trustee J. Crew Group, Inc.    Credit Agreement, as
amended    2/4/03    TPG-MD Investment, LLC J. Crew Operating Corp. and
subsidiaries    Senior Subordinated Loan Agreement    11/21/04    U.S. Bank, as
Administrative Agent

Leases for retail and factory store locations with various landlords

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

SCHEDULE 9.9

to

INFORMATION CERTIFICATE

Existing Indebtedness

 

1. Direct Debt

 

Company

  

Name/Address

of Payee

  

Nature of Debt

  

Term

J. Crew Group, Inc.    Various holders    Series A Preferred stock    Mandatory
payment of accumulated unpaid dividends on 10/17/2009 J. Crew Group, Inc.   
Various holders    Series B Preferred Stock    Mandatory redemption on
10/17/2009

 

2. Guarantees

Substantially all of the retail and factory store leases are guaranteed by J.
Crew Group, Inc.

J. Crew Group, Inc. and J. Crew Operating Corp. also guarantee certain
obligations of other Companies in the ordinary course of their businesses.

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

SCHEDULE 9.10

to

INFORMATION CERTIFICATE

Loans and Advances

None

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

SCHEDULE I

to

INFORMATION CERTIFICATE

DIRECTORS AND OFFICERS

 

COMPANY

  

DIRECTORS

  

EXECUTIVE OFFICERS

J. Crew Group, Inc.   

Richard Boyce

Jonathan Coslet

James Coulter

Millard Drexler

Steven Grand-Jean

Emily Scott

Thomas Scott

Stuart Sloan

Josh Weston

  

Millard Drexler, Chief Executive Officer

 

Jeff Pfeifle, President

 

Amanda Bokman, Executive Vice President and Chief Financial Officer

 

Arlene Hong, Senior Vice President, General Counsel and Secretary

J. Crew

Intermediate LLC

  

Richard Boyce

Jonathan Coslet

James Coulter

Millard Drexler

Steven Grand-Jean

Emily Scott

Thomas Scott

Stuart Sloan

Josh Weston

  

Millard Drexler, Chief Executive Officer

 

Jeff Pfeifle, President

 

Amanda Bokman, Executive Vice President and Chief Financial Officer

 

Arlene Hong, Senior Vice President, General Counsel and Secretary

J. Crew

Operating Corp.

  

Richard Boyce

Jonathan Coslet

James Coulter

Millard Drexler

Steven Grand-Jean

Emily Scott

Thomas Scott

Stuart Sloan

Josh Weston

  

Millard Drexler, Chief Executive Officer

 

Jeff Pfeifle, President

 

Amanda Bokman, Executive Vice President and Chief Financial Officer

 

Arlene Hong, Senior Vice President, General Counsel and Secretary

J. Crew

International, Inc.

  

Arlene Hong

Melanie Andrews

Gordon Stewart

  

Arlene Hong, President

 

Melanie Andrews, Vice President, Treasurer and Assistant Secretary

 

Nick Lamberti, Vice President – Finance, Assistant Treasurer and Assistant
Secretary

 

Gordon Stewart, Secretary

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

Grace Holmes, Inc.   

Amanda Bokman

Nicholas Lamberti

Arlene Hong

  

Millard Drexler, President

 

Amanda Bokman, Executive Vice-President and Chief Financial Officer

 

Arlene Hong, Senior Vice President and Secretary

 

Nick Lamberti, Vice President, Controller and Assistant Secretary

H.F.D. No. 55, Inc.   

Amanda Bokman

Nicholas Lamberti

Arlene Hong

  

Millard Drexler, President

 

Amanda Bokman, Executive Vice-President and Chief Financial Officer

 

Arlene Hong, Senior Vice President and Secretary

 

Nick Lamberti, Vice President, Controller and Assistant Secretary

J. Crew Inc.   

Amanda Bokman

Nicholas Lamberti

Arlene Hong

  

Millard Drexler, President

 

Amanda Bokman, Executive Vice-President and Chief Financial Officer

 

Arlene Hong, Senior Vice President and Secretary

 

Nick Lamberti, Vice President, Controller and Assistant Secretary

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

EXHIBIT C

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Compliance Certificate

 

To: Congress Financial Corporation, as Agent

1133 Avenue of the Americas

New York, New York 10036

Ladies and Gentlemen:

I hereby certify to you in my capacity as [Chief Financial Officer] [Controller]
pursuant to Section 9.6 of the Loan Agreement (as defined below) as follows:

1. I am the duly elected [Chief Financial Officer] [Controller] of J. Crew
Operating Corp., J. Crew Inc., a New Jersey corporation, Grace Holmes, Inc. and
HFD No. 55, Inc. (collectively, “Borrowers”). Capitalized terms used herein
without definition shall have the meanings given to such terms in the Loan and
Security Agreement, dated             , 2002, by and among Congress Financial
Corporation as agent for the financial institutions party thereto as lenders (in
such capacity, “Agent”), Wachovia Bank, National Association, as arranger (in
such capacity “Arranger”) and the parties thereto as lenders (collectively,
“Lenders”), Borrowers and certain of their affiliates (as such Loan and Security
Agreement is amended, modified or supplemented, from time to time, the “Loan
Agreement”).

2. I have reviewed the terms of the Loan Agreement, and have made, or have
caused to be made under my supervision, a review in reasonable detail of the
transactions and the financial condition of Borrowers and Guarantors, during the
immediately preceding fiscal month.

3. The review described in Section 2 above did not disclose the existence during
or at the end of such fiscal month, and I have no knowledge of the existence and
continuance on the date hereof, of any condition or event which constitutes a
Default or an Event of Default, except as set forth on Schedule I attached
hereto. Described on Schedule I attached hereto are the exceptions, if any, to
this Section 3 listing, in detail, the nature of the condition or event, the
period during which it has existed and the action which any Borrower or
Guarantor has taken, is taking, or proposes to take with respect to such
condition or event.

4. I further certify that, based on the review described in Section 2 above, no
Borrower or Guarantor has not at any time during or at the end of such fiscal
month, except as specifically described on Schedule II attached hereto or as
permitted by the Loan Agreement, done any of the following:

 

  (a) Changed its respective corporate name, or transacted business under any
trade name, style, or fictitious name, other than those previously described to
you and set forth in the Financing Agreements.

 

C-1

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  (b) Changed the location of its chief executive office, changed its
jurisdiction of incorporation, changed its type of organization or changed the
location of or disposed of any of its properties or assets (other than pursuant
to the sale of Inventory in the ordinary course of its business or as otherwise
permitted by Section 9.7 of the Loan Agreement), or established any new asset
locations.

 

  (c) Materially changed the terms upon which it sells goods (including sales on
consignment) or provides services, nor has any vendor or trade supplier to any
Borrower or Guarantor during or at the end of such period materially adversely
changed the terms upon which it supplies goods to any Borrower or Guarantor.

 

  (d) Permitted or suffered to exist any security interest in or liens on any of
its properties, whether real or personal, other than as specifically permitted
in the Financing Agreements.

 

  (e) Received any notice of, or obtained knowledge of any of the following not
previously disclosed to Agent: (i) the occurrence of any event involving the
release, spill or discharge of any Hazardous Material in violation of applicable
Environmental Law in a material respect or (ii) any investigation, proceeding,
complaint, order, directive, claims, citation or notice with respect to: (A) any
non-compliance with or violation of any applicable Environmental Law by any
Borrower or Guarantor in any material respect or (B) the release, spill or
discharge of any Hazardous Material in violation of applicable Environmental Law
in a material respect or (C) the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous
Materials in violation of applicable Environmental Laws in a material respect or
(D) any other environmental, health or safety matter, which has a material
adverse effect on any Borrower or Guarantor or its business, operations or
assets or any properties at which such Borrower or Guarantor transported, stored
or disposed of any Hazardous Materials.

 

  (f) Become aware of, obtained knowledge of, or received notification of, any
breach or violation of any material covenant contained in any instrument or
agreement in respect of Indebtedness for money borrowed by any Borrower or
Guarantor.

5. Attached hereto as Schedule III are the calculations used in determining, as
of the end of such fiscal month whether Borrowers and Guarantors are in
compliance with the covenants set forth in Sections 9.18 and 9.19 of the Loan
Agreement for such fiscal month.

The foregoing certifications are made and delivered this day of
                    , 200    .

 

C-2

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Very truly yours,

 

By:  

 

Title:  

 

 

C-3

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EXHIBIT D

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Form of Borrowing Base Certificate

000’s omitted

Date: December     , 2004

Number:                                 

Pursuant to the Amended and Restated Loan and Security Agreement, dated December
    , 2004 by and among Wachovia Bank, National Association, as administrative
agent (“Administrative Agent”), Bank of America, N.A., as syndication agent
(“Syndication Agent”) and Congress Financial Corporation, as collateral agent
(“Agent”), the parties thereto as lenders (“Lenders”), J. Crew Operating Corp.,
and certain of its affiliates, and any amendments thereto (“Loan Agreement”),
each of J. Crew Operating Corp. for itself and its Affiliates party to the Loan
Agreement hereby certifies to Agent and Lenders, as of the above date, as
follows:

 

Credit Card Accounts Receivables

           

Assigned to CFC

   $           

Less: Ineligibles

           

Total Ineligibles

   $                           

Eligible Credit Card A/R

   $                    

Availability from Credit Card A/R

     @    % =    $              

Total Gross Retail Inventory as of:

   $           

Less: Ineligibles

           

Total Ineligibles

   $                           

Eligible Inventory

   $           

Availability from Retail Inventory

     @    % =    $     

Total Gross Factory Inventory as of:

   $           

Less: Ineligibles

           

Total Ineligibles

   $                           

Eligible Inventory

   $           

Availability from Inventory

     @    % =    $     

Total Gross Direct Inventory as of:

   $           

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Less: Ineligibles

           

Total Ineligibles

   $                                    

Eligible Inventory

   $           

Availability from Inventory

     @    % =    $     

Availability from Term Loans (RE)

   $                                 @    % =    $     

Total Availability Before Loans

            $           

Outstanding Loan

         $     

Import (Documentary) LCs

   $      @% =    $              

Standby LCs

   $      @% =    $     

Landlord Reserves

         $     

Permanent Availability Block

         $     

Total Reserves

            $                  

NET AVAILABILITY AFTER LOANS AND L.C. RESERVES

            $  

Plus: Qualified Cash

         $     

Less: Outstanding Checks

         $     

Net Availability including Cash in Bank

            $                  

As of the date of this Certificate, no Event of Default exists or has occurred
and is continuing Borrower Agent, for itself and each of the Borrowers
acknowledges that the Loans and Letter of Credit Accommodations by Agent and
Lenders to Borrowers are based upon the reliance of Agent and Lenders on the
information contained herein and all representations and warranties with respect
to Accounts and Inventory in the Loan Agreement are applicable to the Accounts
and Inventory included in this Certificate. The reliance by Agent and Lenders on
this Certificate should not be deemed to limit the right of Agent to establish
or revise criteria of eligibility or Reserves or otherwise limit, impair, or
affect in any manner the rights of Agent under the Loan Agreement. In the event
of any conflict between the determination of Agent of the amount of the Loans
and Letter of Credit Accommodations available to Borrowers in accordance with
the terms of the Loan Agreement and the determination by Borrowers of such
amounts, the determination of Agent shall govern, absent manifest error. All
capitalized terms used in this Certificate shall have the meaning assigned to
them in the Loan Agreement.

 

J. Crew Operating Corp, as Borrower Agent

By:

 

 

Title:

 

 

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Schedule 1.43

Customs Brokers

 

1. Vandergrift Forwarding Company, Inc.

 

2. W.M. Stone & Co., Inc.

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Schedule 8.9

Credit Card Agreements

1. Card Services Agreement by and between American Express Travel Related
Services Company, Inc. and J. Crew Group, Inc.

2. Merchant Services Agreement, dated as of September 3, 1987, by and between
Discover Financial Services, Inc. and J. Crew Group, Inc.

3. Private Label Credit Card Program Agreement, dated October 29, 2004, by and
between World Financial Network National Bank and J. Crew Operating Corp.

4. Merchant Payment Card Processing Agreement, dated on or about October 3,
2001, by and between Paymentech, LLC and J. Crew Inc.

5. Merchant Services Bankcard Agreement, dated on or about August 15, 2001, by
and among Chase Merchant Services, LLC, JP Morgan Chase, J. Crew Operating Corp.
and its subsidiaries, and the Schedule B Debit Attachment thereto.