GUARANTEE AND COLLATERAL AGREEMENT
dated as of
June 20, 2014
among

J. C. PENNEY COMPANY, INC.,
J. C. PENNEY CORPORATION, INC.,
J. C. PENNEY PURCHASING CORPORATION,

the Subsidiaries of J. C. Penney Company, Inc.
parties hereto,

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent

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Table of Contents

Page
ARTICLE I
Definitions
SECTION 1.01. Credit Agreement
.................................................................................................1
SECTION 1.02. Other Defined Terms
............................................................................................1

ARTICLE II
Guarantee
SECTION 2.01. Guarantee
.............................................................................................................3
SECTION 2.02. Guarantee of Payment
..........................................................................................4
SECTION 2.03. No Limitations, Etc
..............................................................................................4
SECTION 2.04. Reinstatement
.......................................................................................................5
SECTION 2.05. Agreement To Pay;
Subrogation...........................................................................5
SECTION 2.06.
Information...........................................................................................................5

ARTICLE III
Security Interest
SECTION 3.01. Security Interest
...................................................................................................5
SECTION 3.02. Representations and Warranties
...........................................................................7
SECTION 3.03.
Covenants.............................................................................................................9

ARTICLE IV
Remedies
SECTION 4.01. Remedies upon Default
........................................................................................12
SECTION 4.02. Application of Proceeds
........................................................................................14
SECTION 4.03. Grantor’s Obligations Upon Default
.....................................................................14
SECTION 4.04. Grant of License to Use Intellectual
Property.......................................................14

ARTICLE V
Indemnity, Subrogation and Subordination

SECTION 5.01. Indemnity and Subrogation
................................................................................15
SECTION 5.02. Contribution and Subrogation
............................................................................16
SECTION 5.03. Subordination
.....................................................................................................16

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ARTICLE VI
Miscellaneous
SECTION 6.01. Notices
........................................................................................................................17
SECTION 6.02. Rights
Absolute............................................................................................................17
SECTION 6.03. Survival of Agreement
................................................................................................17
SECTION 6.04. Binding Effect; Several Agreement
............................................................................17
SECTION 6.05. Successors and
Assigns................................................................................................18
SECTION 6.06. Administrative Agent’s Fees and Expenses; Indemnification
.....................................18
SECTION 6.07. Administrative Agent Appointed Attorney-in-Fact
.....................................................18
SECTION 6.08. Applicable Law
...........................................................................................................19
SECTION 6.09. Waivers; Amendment
..................................................................................................19
SECTION 6.10. WAIVER OF JURY TRIAL
........................................................................................19
SECTION 6.11. Severability
..................................................................................................................20
SECTION 6.12. Counterparts
................................................................................................................20
SECTION 6.13.
Headings.......................................................................................................................20
SECTION 6.14. Jurisdiction; Consent to Service of Process
................................................................20
SECTION 6.15. Termination or Release
................................................................................................21
SECTION 6.16. Additional
Guarantors..................................................................................................21
SECTION 6.17. Additional
Grantors......................................................................................................22
SECTION 6.18. Right of
Setoff..............................................................................................................22

SCHEDULE I        Subsidiary Grantors
SCHEDULE II    Subsidiary Guarantors

EXHIBIT A        Form of Guarantee Supplement
EXHIBIT B        Form of Grantor Supplement
EXHIBIT C        Form of Perfection Certificate

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GUARANTEE AND COLLATERAL AGREEMENT dated as of June 20, 2014 (this “Agreement”),
among J. C. PENNEY COMPANY, INC. (“Holdings”), J. C. PENNEY CORPORATION, INC.
(the “Parent Borrower”), J. C. PENNEY PURCHASING CORPORATION (“Purchasing”), the
Subsidiaries of Holdings identified on the signature pages hereof and WELLS
FARGO BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders and
the Issuing Banks (each as defined in the Credit Agreement (as defined below))
(in such capacity, the “Administrative Agent”).

The Credit Agreement (defined below) is conditioned upon, among other things,
the execution and delivery of this Agreement.
ARTICLE I
Definitions

SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this Agreement and
not otherwise defined herein have the meanings specified in the Credit Agreement
(as defined herein). All terms defined in the New York UCC (as defined herein)
and not defined in this Agreement have the meanings specified therein; the term
“instrument” shall have the meaning specified in Article 9 of the New York UCC.

(b) The rules of construction specified in Section 1.03 of the Credit Agreement
also apply to this Agreement.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“Accounts” means all Accounts of any Grantor.

“Agents” means the Administrative Agent, the Revolving Agent, the Term Agent,
the LC Agent and the Co-Collateral Agents, as each such term is defined in the
Credit Agreement.

“Collateral” has the meaning assigned to such term in Section 3.01.

“Collateral Report” means any certificate (including any Borrowing Base
Certificate), report or other document delivered by any Grantor to the
Administrative Agent or any Lender with respect to the Collateral pursuant to
any Loan Document.

“Copyrights” means, with respect to any Person, all of the following now owned
or hereafter acquired by such Person: (a) all copyright rights in any work
subject to the copyright laws of the United States of America or any other
country, whether as author, assignee, transferee or otherwise, and (b) all
registrations and applications for registration of any such copyright in the
United States of America or any other country, including

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registrations, recordings, supplemental registrations and pending applications
for registration in the United States Copyright Office (or any similar office in
any other country).

“Credit Agreement” means the Credit Agreement dated as of June 20, 2014, among
Holdings, the Parent Borrower, Purchasing, the Lenders party thereto, Wells
Fargo Bank, National Association, as administrative agent and revolving agent,
Bank of America, N.A., as term agent, and the other agents thereunder.

“Excluded Asset” shall mean any asset of any Grantor excluded from the security
interest hereunder by virtue of Section 3.01(b) hereof but only to the extent,
and for so long as, so excluded thereunder.

“Existing Intercreditor Agreement” has the meaning given to it in the Credit
Agreement.

“Governmental Authority” has the meaning given to it in the Credit Agreement.

“Grantors” means Holdings, the Parent Borrower, Purchasing and the Subsidiary
Grantors.

“Guarantors” means Holdings, the Parent Borrower, Purchasing and the Subsidiary
Guarantors.

“Intellectual Property” means all Patents, Copyrights, Trademarks and trade
secrets.

“Inventory” means all inventory of any Grantor other than consignment inventory.

“Loan Document Obligations” has the meaning assigned to such term in the Credit
Agreement.

“New York UCC” means the Uniform Commercial Code as from time to time in effect
in the State of New York.

“Obligations” has the meaning assigned to such term in the Credit Agreement.

“Parties” means the Grantors and the Guarantors.

“Patents” means, with respect to any Person, all of the following now owned or
hereafter acquired by such Person: (a) all letters patent of the United States
of America or the equivalent thereof in any other country, all registrations and
recordings thereof, and all applications for letters patent of the United States
of America or the equivalent thereof in any other country, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office or any similar offices in any other country, and (b) all
reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof.

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“Payment Intangibles” means payment intangibles arising from the sale of
inventory or arising out of a credit card, debit card, prepaid card, or other
payment card transaction.
“Perfection Certificate” means a certificate substantially in the form of
Exhibit C, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by an executive officer or a Financial
Officer of the Parent Borrower or the applicable Additional Grantor(s).

“Proceeds” has the meaning specified in Section 9-102 of the New York UCC.

“Secured Parties” has the meaning assigned to such term in the Credit Agreement.

“Security Interest” has the meaning assigned to such term in Section 3.01.

“Subsidiary Grantors” means (a) the Subsidiaries identified on Schedule I and
(b) each Additional Grantor that becomes a party to this Agreement as
contemplated by Section 6.17.

“Subsidiary Guarantors” means (a) the Subsidiaries identified on Schedule II and
(b) each other Subsidiary that becomes a party to this Agreement as contemplated
by Section 6.16.

“Subsidiary Parties” means the Subsidiary Grantors and the Subsidiary
Guarantors.

“Term Loan Exclusive Collateral” has the meaning assigned to it in the Existing
Intercreditor Agreement.

“Trademarks” means, with respect to any Person, all of the following now owned
or hereafter acquired by such Person: (a) all trademarks, service marks, trade
names, trade dress, logos and other similar source or business identifiers, all
registrations and recordings thereof, and all registration and recording
applications filed in connection therewith, including registrations and
registration applications in the United States Patent and Trademark Office or
any similar offices in any State of the United States of America or any other
country or any political subdivision thereof, and all extensions or renewals
thereof and (b) all goodwill connected with the use thereof or symbolized
thereby.

ARTICLE II
Guarantee
SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with
the other Guarantors and severally, as a primary obligor and not merely as a
surety, the due and punctual payment and performance of the Obligations. Each
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any

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extension or renewal of any Obligation. Each of the Guarantors waives
presentment to, demand of payment from and protest to any Loan Party of any of
the Obligations, and also waives notice of acceptance of its guarantee and
notice of protest for nonpayment.

SECTION 2.02. Guarantee of Payment. Each of the Guarantors further agrees that
its guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Administrative Agent or any other Secured Party to any security held for the
payment of the Obligations or to any balance of any deposit account or credit on
the books of the Administrative Agent or any other Secured Party in favor of any
Borrower, any Account Party or any other Person.

SECTION 2.03. No Limitations, Etc. (a) Except for termination of a Guarantor’s
obligations hereunder as expressly provided in Section 6.15, the obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Obligations or
otherwise, other than the defense of payment of such obligations in accordance
with the terms thereof. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by (i) the failure of the Administrative Agent or any other
Secured Party to assert any claim or demand or to enforce any right or remedy
under the provisions of any Loan Document or otherwise; (ii) any rescission,
waiver, amendment or modification of, or any release from any of the terms or
provisions of, any Loan Document or any other agreement, including with respect
to any other Guarantor under this Agreement; (iii) the release of any security
held by the Administrative Agent or any other Secured Party for the Obligations
or any of them; (iv) any default, failure or delay, willful or otherwise, in the
performance of the Obligations; or (v) any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or otherwise
operate as a discharge of any Guarantor as a matter of law or equity (other than
the payment in full of all the Loan Document Obligations (other than unasserted
indemnification, tax gross up, expense reimbursement or yield protection
obligations, in each case for which no claim has been made)). Each Guarantor
expressly authorizes the Secured Parties to take and hold security for the
payment and performance of the Obligations, to exchange, waive or release any or
all such security (with or without consideration), to enforce or apply such
security (in accordance with the Loan Documents) and direct the order and manner
of any sale thereof in their sole discretion or to release or substitute any one
or more other guarantors or obligors upon or in respect of the Obligations, in
each case in accordance with the Loan Documents, all without affecting the
obligations of any Guarantor (in its capacity as such) hereunder.

(b) To the fullest extent permitted by applicable law, each Guarantor waives any
defense based on or arising out of any defense of any Loan Party or the
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any Loan Party, other than the
payment in full of all the Loan Document Obligations (other than unasserted
indemnification, tax gross up, expense reimbursement or yield protection
obligations, in each case for which no claim has been

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made). The Administrative Agent and the other Secured Parties may, at their
election, and in each case in accordance with the Loan Documents, foreclose on
any security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any other accommodation
with any Loan Party or exercise any other right or remedy available to them
against any Loan Party, without affecting or impairing in any way the liability
of any Guarantor (in its capacity as such) hereunder except to the extent the
Loan Document Obligations have been paid in full (other than unasserted
indemnification, tax gross up, expense reimbursement or yield protection
obligations, in each case for which no claim has been made). To the fullest
extent permitted by applicable law, each Guarantor (in its capacity as such)
waives any defense arising out of any such election even though such election
operates, pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
any Loan Party, as the case may be, or any security.

SECTION 2.04. Reinstatement. Each of the Guarantors agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Obligation is rescinded or
must otherwise be restored to any Loan Party by the Administrative Agent or any
other Secured Party upon the bankruptcy or reorganization of any Loan Party or
otherwise.

SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and
not in limitation of any other right that the Administrative Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of any Loan Party to pay any Obligation when and as the same
shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each Guarantor hereby promises to and will forthwith
pay, or cause to be paid, to the Administrative Agent for distribution to the
applicable Secured Parties in cash the amount of such unpaid Obligation. Upon
payment by any Guarantor of any sums to the Administrative Agent as provided
above, all rights of such Guarantor against such Loan Party or any other
Guarantor arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subject to Article V.

SECTION 2.06. Information. Each Guarantor assumes all responsibility for being
and keeping itself informed of each Loan Party’s financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks that such Guarantor
assumes and incurs hereunder, and agrees that none of the Administrative Agent
or the other Secured Parties will have any duty to advise such Guarantor of
information known to it or any of them regarding such circumstances or risks.

ARTICLE III
Security Interest

SECTION 3.01. Security Interest. (a) As security for the payment or performance,
as the case may be, in full of the Obligations, each Grantor hereby assigns and
pledges to the Administrative Agent, its successors and assigns, for the ratable
benefit of the

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Secured Parties, and hereby grants to the Administrative Agent, its successors
and assigns, for the ratable benefit of the Secured Parties, a security interest
(the “Security Interest”) in, all of its right, title and interest in, to and
under any and all of the following assets now owned or at any time hereafter
acquired by such Grantor or in, to or under which such Grantor now has or at any
time hereafter may acquire any right, title or interest (collectively, the
“Collateral”):

(i)     all Accounts (other than Accounts that are identifiable proceeds of the
sale or other disposition of Term Loan Exclusive Collateral);

(ii)     all Deposit Accounts and all cash credited thereto, including, without
limitation, the Concentration Account and the Control Accounts and all cash
credited thereto (other than any Deposit Account that contains solely the
identifiable cash proceeds of property that was Term Loan Exclusive Collateral
when such cash proceeds arose);

(iii) all Inventory;

(iv) all Payment Intangibles;

(v) all books and records pertaining to any and/or all of the Collateral; and

(vi) to the extent not otherwise included, all Proceeds and products of any and
all of the foregoing and all supporting obligations given by any Person with
respect to the foregoing.

(b) Anything herein to the contrary notwithstanding, in no event shall the
security interest granted under this Section 3.01 attach to and the term
“Collateral” shall not include (A) any lease, license, contract or agreement to
which any Grantor is a party (other than contracts between or among Holdings and
its subsidiaries), and any of its rights or interest thereunder, if and to the
extent that a security interest is prohibited by or in violation of (i) any law,
rule or regulation applicable to such Grantor or any asset or property of any
Grantor (with no requirement to obtain the consent of any Governmental
Authority, including without limitation, no requirement to comply with the
Federal Assignment of Claims Act or any similar statute), or (ii) a term,
provision or condition of any such lease, license, contract or agreement (unless
such law, rule, regulation, term, provision or condition would be rendered
ineffective with respect to the creation of the security interest hereunder
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC (or any
successor provision or provisions) of any relevant jurisdiction or any other
applicable law (including the Bankruptcy Code) or principles of equity);
provided however that the Collateral shall include (and such security interest
shall attach) immediately at such time as the contractual or legal prohibition
shall no longer be applicable and to the extent severable, shall attach
immediately to any portion of such lease, license, contract or agreement not
subject to the prohibitions specified in (i) or (ii) above; provided further
that the exclusions referred to in clause (A) of this Section 3.01(b) shall not
include any Proceeds of any such lease, license, contract or agreement unless
such Proceeds also constitute Excluded Assets; (B) any assets

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the pledge of or granting a security interest in which would (i) violate any
law, rule or regulation applicable to such Grantor (with no requirement to
obtain the consent of any Governmental Authority) or (ii) require a consent,
approval, or other authorization of a landlord or other third party, in the case
of this subclause (ii) only, if such consent, approval or other authorization
cannot be obtained after the use of commercially reasonable efforts by the
Grantors (provided that there shall be no requirement to obtain the consent of
any Governmental Authority); (C) any Deposit Accounts specifically and
exclusively used (1) for payroll, payroll taxes, workers’ compensation or
unemployment compensation, pension benefits and other similar expenses to or for
the benefit of any Grantor’s employees and accrued and unpaid employee
compensation (including salaries, wages, benefits and expense reimbursements),
(2) as zero balance deposit accounts, (3) for trust or fiduciary purposes in the
ordinary course of business and (4) for all taxes required to be collected or
withheld (including, without limitation, federal and state withholding taxes
(including the employer’s share thereof), taxes owing to any governmental unit
thereof, sales, use and excise taxes, customs duties, import duties and
independent customs brokers’ charges) for which any Grantor may become liable;
(D) any other Excluded Accounts (as defined in the Credit Agreement); (E) any
interest of a Grantor in any “Bank Property” (as defined in that certain Amended
and Restated Consumer Credit Card Program Agreement dated November 5, 2009, by
and between J. C. Penney Corporation, Inc. and GE Money Bank (as in effect on
the date hereof, the “GE Agreement”)); and (F) any assets, if in the reasonable
judgment of the Administrative Agent and the Parent Borrower, the burden, cost
or consequences of creating or perfecting such pledges or security interests in
such assets shall be excessive in view of the benefits to be obtained by the
Lenders therefrom.

(c) Each Grantor hereby irrevocably authorizes the Administrative Agent at any
time and from time to time to file in any relevant jurisdiction any initial
financing statements with respect to the Collateral or any part thereof and
amendments thereto that (i) indicate the Collateral by any description that
reasonably approximates the description of such Collateral contained in this
Agreement and (ii) contain the information required by Article 9 of the Uniform
Commercial Code of each applicable jurisdiction for the filing of any financing
statement or amendment, including whether such Grantor is an organization, the
type of organization and any organizational identification number issued to such
Grantor. Each Grantor agrees to provide such information to the Administrative
Agent promptly upon request.

(d) Each Grantor also ratifies its authorization for the Administrative Agent to
file in any relevant jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof.

(e) The Security Interest is granted as security only and shall not subject the
Administrative Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Grantor with respect to or arising
out of the Collateral.

SECTION 3.02. Representations and Warranties. The Grantors jointly and severally
represent and warrant to the Administrative Agent and the other Secured Parties
that:

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(a)Each Grantor has good and valid rights in and title to the Collateral with
respect to which it has purported to grant a Security Interest hereunder and has
full power and authority to grant to the Administrative Agent the Security
Interest in such Collateral pursuant hereto and to execute, deliver and perform
its obligations in accordance with the terms of this Agreement, without the
consent or approval of any other Person other than any consent or approval that
has been obtained.

(b) The Perfection Certificate has been duly prepared, completed and executed
and the information set forth therein, including the exact legal name of each
Grantor, is correct and complete as of the date hereof. The Uniform Commercial
Code financing statements or other appropriate filings, recordings or
registrations containing a description of the Collateral that have been prepared
by the Administrative Agent based upon the information provided to the
Administrative Agent in the Perfection Certificate for filing in each
governmental, municipal or other office specified in Schedule 6 to the
Perfection Certificate, as modified, delivered, prepared or supplemented from
time to time pursuant to the Credit Agreement (or specified by notice from the
Parent Borrower to the Administrative Agent after the date hereof in the case of
filings, recordings or registrations required by Section 5.03(a), 5.11 or 5.12
of the Credit Agreement), are all the filings, recordings and registrations that
are necessary to establish a legal, valid and perfected security interest in
favor of the Administrative Agent (for the ratable benefit of the Secured
Parties) in respect of all Collateral in which the Security Interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and, to the extent applicable, the Commonwealth
of Puerto Rico, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.

(c)The Security Interest constitutes (i) a legal and valid security interest in
all the Collateral securing the payment and performance of the Obligations and
(ii) subject to the filings described in Section 3.02(b), a perfected security
interest in all Collateral in which a security interest may be perfected by
filing, recording or registering a financing statement or analogous document in
the United States (or any political subdivision thereof) and, to the extent
applicable, the Commonwealth of Puerto Rico pursuant to the Uniform Commercial
Code or other applicable law in the United States (or any political subdivision
thereof) and, to the extent applicable, the Commonwealth of Puerto Rico. The
Security Interest is and shall be prior to any other Lien on any of the
Collateral, other than Permitted Encumbrances that have priority as a matter of
law and Liens expressly permitted pursuant to clauses (c) and (h) of Section
6.02 of the Credit Agreement.

(d) The Collateral is owned by the Grantors free and clear of any Lien, other
than involuntary Permitted Encumbrances, Specified Involuntary Liens securing
obligations not in excess of $20,000,000 at any time and Liens expressly
permitted pursuant to clauses (a), (c), (g), (h) and (m) of Section 6.02 of the
Credit Agreement. None of the Grantors has filed or consented to the filing of
(i) any financing statement or analogous document under the Uniform Commercial
Code or any other applicable laws covering any Collateral except any such
filings made pursuant to the GE Agreement, or (ii) any assignment in which any
Grantor assigns any Collateral or any security agreement or similar

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instrument covering any Collateral with any foreign governmental, municipal or
other office, which financing statement or analogous document, assignment,
security agreement or similar instrument is still in effect, except, in each
case, for involuntary Permitted Encumbrances, Specified Involuntary Liens
securing obligations not in excess of $20,000,000 at any time and Liens
expressly permitted pursuant to clauses (a), (c), (g), (h) and (m) of Section
6.02 of the Credit Agreement.

(e)To the knowledge of each Grantor, (i) each Grantor owns, licenses or
otherwise has the rights to use, all Patents, Trademarks, Copyrights or other
Intellectual Property material to the preparing for sale or sale of the
Inventory, (ii) the use thereof by each Grantor for any such purpose does not
infringe upon the rights of any other Person and (iii) no such Intellectual
Property (other than Intellectual Property rights granted to such Grantor under
license agreements with third parties) is subject to any Lien or other
restriction (other than (A) any such Lien or other restriction with respect to
which a waiver or release has been obtained or (B) any such Lien or restriction
permitted under the Credit Agreement), in each case except to the extent (1) of
any defects in ownership or licenses and any such infringements that,
individually or in the aggregate, would not result in a Material Adverse Effect
or (2) that the failure to have such rights, such infringement or such Lien or
restriction would not materially adversely affect the exercise of the
Administrative Agent’s rights with respect to such Intellectual Property to
prepare for sale or to sell any Inventory under Article IV.

(f) Notwithstanding the foregoing, the representations and warranties set forth
in this Section as to perfection and priority of the Security Interest in
Proceeds are limited to the extent provided in Section 9-315 of the Uniform
Commercial Code.

SECTION 3.03. Covenants. (a) Each Grantor agrees to maintain, at its own cost
and expense, such complete and accurate records with respect to the Collateral
owned by it as is in accordance with such prudent and standard practices used in
industries that are the same as or similar to those in which such Grantor is
engaged, but in any event to include accounting records indicating all payments
and proceeds received with respect to any part of the Collateral, and, at such
time or times as the Administrative Agent may reasonably request, promptly to
prepare and deliver to the Administrative Agent a duly certified schedule or
schedules in form and detail reasonably satisfactory to the Administrative Agent
showing the identity, amount and location of any and all Inventory.

(b) (i) Each Grantor shall, at its own expense, take any and all commercially
reasonable actions to defend title to the Collateral against all Persons and to
defend the Security Interest of the Administrative Agent in the Collateral and
the priority thereof against any Lien other than involuntary Permitted
Encumbrances, Specified Involuntary Liens securing obligations not in excess of
$20,000,000 at any time and Liens expressly permitted by clauses (a), (c), (g),
(h) and (m) of Section 6.02 of the Credit Agreement (and, in the case of the
priority of the Security Interest of the Administrative Agent, other than
Permitted Encumbrances that have priority as a matter of law, Specified
Involuntary Liens securing obligations not in excess of $20,000,000 at any time
and those Liens expressly permitted pursuant to clauses (c) and (h) of Section
6.02 of the Credit Agreement).

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(ii) Each Grantor shall, at its own expense, use commercially reasonable efforts
to cause each bill of lading (or similar electronic document referring to the
goods represented by such bill of lading) to bear the following legend:

THE GOODS REFERENCED IN THIS [BILL OF LADING] ARE SUBJECT TO THE LIEN OF WELLS
FARGO BANK, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT.

(c) Each Grantor agrees, at its own expense, to execute, acknowledge, deliver
and cause to be duly filed all such further instruments and documents and take
all such actions as the Administrative Agent may from time to time reasonably
request to better assure, preserve, protect and perfect the Security Interest
and the rights and remedies created hereby, including paying any fees and taxes
required in connection with the execution and delivery of this Agreement, the
granting of the Security Interest and the filing of any financing statements or
other documents in connection herewith or therewith. Without limiting the
foregoing, at any time there is a Cash Dominion Period, upon the request of
Administrative Agent, each Grantor shall promptly give a written notice to the
credit card processors used by such Grantor of the arrangements under the Credit
Agreement (provided, that, foregoing shall not be construed to include the
arrangements under the GE Agreement), providing for the payment of the amounts
owing from such processor to a Control Account, limiting the right to change
where payments are made without the approval of Administrative Agent and with
such other terms and conditions as Administrative Agent may reasonably require.

(d) At its option, the Administrative Agent may discharge past due taxes,
assessments, charges, fees, Liens, security interests or other encumbrances at
any time levied or placed on the Collateral and not permitted pursuant to
Section 6.02 of the Credit Agreement or this Agreement, and may pay for the
maintenance and preservation of the Collateral to the extent any Grantor fails
to do so as required by the Credit Agreement or this Agreement, and each Grantor
jointly and severally agrees to reimburse the Administrative Agent on demand for
any payment made or any expense incurred by the Administrative Agent pursuant to
the foregoing authorization; provided that nothing in this paragraph shall be
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Administrative Agent or any Secured Party to cure or perform,
any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, Liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents. The
Administrative Agent will give notice to the Parent Borrower of any exercise of
the Administrative Agent’s rights or powers pursuant to this paragraph (d);
provided that any failure to give or delay in giving such notice shall not
operate as a waiver of, or preclude any other or further exercise of, such
rights or powers or the exercise of any other right or power pursuant to this
Agreement.

(e) Each Grantor shall remain liable to observe and perform all the conditions
and obligations to be observed and performed by it under each contract,
agreement or instrument relating to the Collateral, all in accordance with the
terms and conditions thereof, to the same extent as if the Security Interest had
not been granted to the

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Administrative Agent in the Collateral, and each Grantor jointly and severally
agrees to indemnify and hold harmless the Administrative Agent and the Secured
Parties from and against any and all liability for such performance.

(f) None of the Grantors shall (i) make or permit to be made a pledge or
hypothecation of the Collateral or (ii) grant any other Lien in respect of the
Collateral, except as expressly permitted by the Credit Agreement. None of the
Grantors shall make or permit to be made any transfer of the Collateral, except
that, unless and until the Administrative Agent shall notify the Grantors that
an Event of Default shall have occurred and be continuing and that during the
continuance thereof the Grantors shall not sell, convey, lease, assign, transfer
or otherwise dispose of any Collateral (which notice may be given by telephone
if promptly confirmed in writing), the Grantors may use and dispose of the
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document.

(g) The Grantors, at their own expense, shall maintain or cause to be maintained
insurance covering physical loss or damage to the Collateral in accordance with
the requirements set forth in Section 5.07 of the Credit Agreement. Each Grantor
irrevocably makes, constitutes and appoints the Administrative Agent (and all
officers, employees or agents designated by the Administrative Agent) as such
Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during
the continuance of an Event of Default, of (i) making, settling and adjusting
claims in respect of Collateral under policies of insurance, endorsing the name
of such Grantor on any check, draft, instrument or other item of payment for the
proceeds of such policies of insurance and (ii) making all determinations and
decisions with respect thereto. In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or to pay any premium in whole or part relating thereto, the
Administrative Agent may, without waiving or releasing any obligation or
liability of the Grantors hereunder or any Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such premium
and take any other actions with respect thereto as the Administrative Agent
reasonably deems advisable. All sums disbursed by the Administrative Agent in
connection with this paragraph, including reasonable attorneys’ fees, court
costs, expenses and other charges relating thereto, shall be payable, upon
demand, by the Grantors to the Administrative Agent and shall be additional
Obligations secured hereby.

(h) Upon the occurrence and during the continuance of any Event of Default, none
of the Grantors will, without the Administrative Agent’s prior written consent
(which shall be deemed given if the Administrative Agent has not responded
within 5 Business Days of a written request therefor), grant any extension of
the time of payment of any Accounts or Payment Intangibles included in the
Collateral, compromise, compound or settle the same for less than the full
amount thereof, release, wholly or partly, any Person liable for the payment
thereof or allow any credit or discount whatsoever thereon, other than
extensions, compromises, settlements, releases, credits or discounts granted or
made in the ordinary course of business and consistent with its current
practices and in accordance with such prudent and standard practice used in
industries that are the same as or similar to those in which such Grantor is
engaged.

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(i) Upon the occurrence and during the continuance of any Event of Default, each
of the Grantors will collect and enforce, in accordance with past practices and
in the ordinary course of business, all amounts due to such Grantor under the
Accounts and Payment Intangibles owned by it. Such Grantor will deliver to the
Administrative Agent promptly upon its reasonable request after the occurrence
and during the continuance of an Event of Default duplicate invoices with
respect to each Account and, to the extent applicable, each Payment Intangible
owned by it, bearing such language of assignment as the Administrative Agent
shall reasonably specify in connection with its exercise of remedies hereunder.

(j) Administrative Agent agrees that, except during the occurrence and
continuance of an Event of Default, it shall not (i) issue any instructions
(including, but not limited to, any directions in writing) to any customs
broker, freight forwarder or carrier party thereto (“Freight Forwarder”) under
any customs broker agreement or otherwise, nor shall it (ii) terminate or change
its consent to any Freight Forwarder continuing to release Collateral pursuant
to any instructions given to Freight Forwarder by the applicable Grantor or such
Grantor’s authorized agents. For the avoidance of doubt, so long as (i) no Event
of Default shall have occurred and be continuing and (ii) Administrative Agent
does not otherwise direct in writing to the applicable Grantor and Freight
Forwarder, Grantors may permit the sellers of inventory (or any freight
forwarder or other persons involved in the importing of any Collateral into the
United States) to deliver the original documents (including, without limitation,
bills of lading or cargo receipts) issued with respect to Collateral
(collectively, the “Import Documents”) to any Freight Forwarder, with copies of
such Import Documents, and any other document or instruction which may be
appropriate, to the applicable Grantor and Administrative Agent.

ARTICLE IV
Remedies

SECTION 4.01. Remedies upon Default. Each Grantor agrees that (a) upon the
occurrence and during the continuance of an Event of Default and upon the demand
of the Administrative Agent, it will make the Collateral available to the
Administrative Agent, and it is agreed that the Administrative Agent shall have
the right, to the extent permitted by applicable law, with or without legal
process and with or without prior notice or demand for performance, to take
possession of the Collateral and without liability for trespass to enter any
premises where the Collateral may be located for the purpose of taking
possession of or removing the Collateral and, generally, to exercise any and all
rights afforded to a secured party under the Uniform Commercial Code or other
applicable law and (b) upon the occurrence and during the continuance of a
Specified Event of Default and at the other times provided for in the Credit
Agreement, the Administrative Agent shall have the right to institute a Cash
Dominion Period to the extent permitted under the Credit Agreement. Without
limiting the generality of the foregoing, each Grantor agrees that the
Administrative Agent shall have the right, subject to the mandatory requirements
of applicable law, to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale, for cash, upon credit or for future
delivery as the Administrative Agent shall deem appropriate. Upon consummation
of any such sale the Administrative Agent shall

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have the right to assign, transfer and deliver to the purchaser or purchasers
thereof the Collateral so sold. Each such purchaser at any sale of the
Collateral shall hold the property sold absolutely, free from any claim or right
on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by law) all rights of redemption, stay and appraisal which such
Grantor now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted.

The Administrative Agent shall give the applicable Grantors 10 days’ written
notice (which each Grantor agrees is reasonable notice within the meaning of
Section 9-612 of the New York UCC or its equivalent in other jurisdictions) of
the Administrative Agent’s intention to make any sale of Collateral. Such
notice, in the case of a public sale, shall state the time and place for such
sale. Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Administrative Agent may fix
and state in the notice (if any) of such sale. At any such sale, the Collateral,
or any portion thereof, to be sold may be sold in one lot as an entirety or in
separate parcels, as the Administrative Agent may (in its sole and absolute
discretion) determine. The Administrative Agent shall not be obligated to make
any sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The
Administrative Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Administrative Agent
until the sale price is paid by the purchaser or purchasers thereof, but the
Administrative Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by law, private) sale made pursuant to this
Agreement, any Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may (with the consent of the Administrative Agent) make payment on
account thereof by using any Obligation then due and payable to such Secured
Party from any Grantor as a credit against the purchase price, and such Secured
Party may, upon compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to any Grantor therefor. For
purposes hereof, a written agreement to purchase the Collateral or any portion
thereof shall be treated as a sale thereof; the Administrative Agent shall be
free to carry out such sale pursuant to such agreement and no Grantor shall be
entitled to the return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Administrative Agent shall have entered
into such an agreement all Events of Default shall have been remedied and the
Obligations paid in full, in which case any excess proceeds thereof shall be
disposed of as set forth in Section 4.02 hereof. As an alternative to exercising
the power of sale herein conferred upon it, the Administrative Agent may proceed
by a suit or suits at law or in equity to foreclose this Agreement and to sell
the Collateral or any portion thereof pursuant to a judgment or decree of a
court or courts having competent jurisdiction or

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pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the
provisions of this Section 4.01 shall be deemed to conform to the commercially
reasonable standards as provided in Section 9-610(b) of the New York UCC or its
equivalent in other jurisdictions.

SECTION 4.02. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent shall apply the
proceeds of any collection or sale of Collateral, including any Collateral
consisting of cash, as specified in Section 2.17(h) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement and the Credit Agreement. Upon any sale of Collateral by the
Administrative Agent (including pursuant to a power of sale granted by statute
or under a judicial proceeding), the receipt of the Administrative Agent or of
the officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Administrative Agent or such officer or be answerable in any way for
the misapplication thereof.

SECTION 4.03. Grantor’s Obligations Upon Default. Upon the request of the
Administrative Agent after the occurrence and during the continuance of an Event
of Default, each Grantor will:

(a)assemble and make available to the Administrative Agent all books and records
relating to the Collateral at any place or places reasonably specified by the
Administrative Agent, whether at a Grantor’s premises or elsewhere;

(b) permit the Administrative Agent, by the Administrative Agent’s
representatives and agents, to enter any premises where all or any part of the
Collateral, or the books and records relating thereto, or both, are located, to
take possession of and/or remove all or any part of the Collateral or to make
copies of the books and records relating thereto, or both, and to conduct sales
of the Collateral, in accordance with the terms hereof, any applicable
Collateral Access Agreements and applicable law, without any obligation to pay
the Grantor for such use and occupancy;

(c)at its own expense, cause the independent certified public accountants then
engaged by each Grantor to prepare and deliver to the Administrative Agent, at
any time, and from time to time, promptly upon the Administrative Agent’s
request, the following reports with respect to the Accounts and Payment
Intangibles of the applicable Grantor: (i) a reconciliation of all Accounts and
Payment Intangibles; (ii) an aging of all Accounts and Payment Intangibles;
(iii) trial balances; and (iv) a test verification of such Accounts and Payment
Intangibles.

SECTION 4.04. Grant of License to Use Intellectual Property. Solely for the
purpose of enabling the Administrative Agent to exercise rights and remedies
under this Agreement during the continuance of an Event of Default with respect
to Collateral consisting of Inventory, each Grantor hereby (a) grants to the
Administrative Agent a nonexclusive license (exercisable without payment of
royalty or other compensation to the

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Grantor) to use, license or sublicense during the continuance of an Event of
Default any Intellectual Property rights now owned or hereafter acquired by such
Grantor, 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 software and
programs used for the compilation or printout thereof, solely for the purposes
of preparing for sale and selling (including by affixing Trademarks owned by or
licensed to such Grantor to) any of such Grantor’s Inventory directly to any
Person (in the case of Intellectual Property licensed to such Grantor by a third
party, to the extent permitted under the Intellectual Property licenses granting
such Grantor rights in such Intellectual Property), which license shall be
irrevocable prior to the Termination Point (as defined below) and (b) agrees
that, subject to the foregoing and in connection therewith, during the
continuance of an Event of Default, the Administrative Agent may sell Inventory
which bears any Trademark owned by or licensed to such Grantor (to the extent
permitted under the Intellectual Property licenses granting such Grantor rights
in such Trademark) and any Inventory that is covered by any Copyright owned by
or licensed to such Grantor (to the extent permitted under the Intellectual
Property licenses granting such Grantor rights in such Copyright), and the
Administrative Agent may affix any appropriate Trademark owned by or licensed to
such Grantor (to the extent permitted under the Intellectual Property license
granting such Grantor rights in such Trademark) and sell such Inventory as
provided herein; provided in each case that (i) such license shall be subject to
the rights of any licensee under a license permitted by the last proviso of
Section 6.05 of the Credit Agreement or by Section 6.02(b) of the Credit
Agreement, in each case granted while no Event of Default was continuing, or
under any licenses existing as of the date hereof, (ii) in connection with any
such sale of Inventory or otherwise, such licensed or sublicensed Trademarks
shall only be used in association with goods or services of a quality and nature
consistent with the quality and reputation with which such Trademarks were
associated when used by such Grantor prior to the exercise of the license rights
set forth herein, and (iii) no license shall be granted under this Section 4.04
to the extent that such grant would violate or constitute a default under any
agreement to which any Grantor is a party. Such license and rights to use such
Intellectual Property of any Grantor shall terminate automatically without
notice or other action, when all the Loan Document Obligations have been paid in
full (other than unasserted indemnification, tax gross up, expense reimbursement
or yield protection obligations, in each case for which no claim has been made)
and the Lenders have no further commitment to lend under the Credit Agreement,
the LC Exposure has been reduced to zero and no Issuing Bank has any further
obligations to issue Letters of Credit under the Credit Agreement (the
“Termination Point”). The use of such license by the Administrative Agent may
only be exercised upon the occurrence and during the continuance of an Event of
Default, provided that any license, sublicense or other transaction entered into
by the Administrative Agent in accordance herewith shall be binding upon the
Grantors notwithstanding any subsequent cure of an Event of Default.

ARTICLE V
Indemnity, Subrogation and Subordination

SECTION 5.01. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 5.03), each of the Borrowers and each of the Account Parties
agrees that (a) in the event a payment shall be made by any Guarantor under this
Agreement in respect of any

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Obligation of a Borrower or an Account Party, such Borrower or such Account
Party (as the case may be) shall indemnify such Guarantor for the full amount of
such payment and such Guarantor shall be subrogated to the rights of the Person
to whom such payment shall have been made to the extent of such payment and (b)
in the event any assets of any Grantor shall be sold pursuant to this Agreement
to satisfy in whole or in part an Obligation of a Borrower or an Account Party,
such Borrower or Account Party (as the case may be) shall indemnify such Grantor
in an amount equal to the greater of the book value or the fair market value of
the assets so sold.

SECTION 5.02. Contribution and Subrogation. Each Guarantor and Grantor (a
“Contributing Party”) agrees (subject to Section 5.03) that, in the event a
payment shall be made by any other Guarantor hereunder in respect of any
Obligation or assets of any other Grantor (other than Holdings or the Parent
Borrower) shall be sold pursuant to this Agreement to satisfy any Obligation of
a Borrower or an Account Party and such other Guarantor or Grantor (the
“Claiming Party”) shall not have been fully indemnified by the Borrowers or the
Account Parties as provided in Section 5.01, the Contributing Party shall
indemnify the Claiming Party in an amount equal to the amount of such payment or
the greater of the book value or the fair market value of such assets, as the
case may be, in each case multiplied by a fraction of which the numerator shall
be the net worth of the Contributing Party on the date hereof and the
denominator shall be the aggregate net worth of all the Guarantors and Grantors
on the date hereof (or, in the case of any Guarantor or Grantor becoming a party
hereto pursuant to Section 6.16 or Section 6.17, respectively, the date of the
supplement hereto executed and delivered by such Guarantor or Grantor). Any
Contributing Party making any payment to a Claiming Party pursuant to this
Section 5.02 shall (subject to Section 5.03) be subrogated to the rights of such
Claiming Party under Section 5.01 to the extent of such payment.

SECTION 5.03. Subordination. (a) Notwithstanding any provision of this Agreement
to the contrary, all rights of the Guarantors and Grantors under Sections 5.01
and 5.02 and all other rights of the Guarantors and Grantors of indemnity,
contribution or subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the Obligations. No
failure on the part of any Borrower, any Account Party or any Guarantor or
Grantor to make the payments required by Sections 5.01 and 5.02 (or any other
payments required under applicable law or otherwise) shall in any respect limit
the obligations and liabilities of any Guarantor or Grantor with respect to its
obligations hereunder, and each Guarantor and Grantor shall remain liable for
the full amount of the obligations of such Guarantor or Grantor hereunder.

(b) Each of the Guarantors and Grantors hereby agrees that all Indebtedness and
other monetary obligations owed by it to, or to it by, any other Guarantor,
Grantor or any other Subsidiary shall be fully subordinated to the payment in
full in cash of the Obligations.

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ARTICLE VI
Miscellaneous

SECTION 6.01. Notices. All communications and notices hereunder shall (except as
otherwise expressly permitted herein) be in writing and given as provided in
Section 9.01 of the Credit Agreement. All communications and notices hereunder
to any Subsidiary Party shall be given to it in care of the Parent Borrower as
provided in Section 9.01 of the Credit Agreement.

SECTION 6.02. Rights Absolute. All rights of the Administrative Agent hereunder,
the Security Interest and all obligations of each Guarantor and Grantor
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Credit Agreement, any other Loan Document
(other than this Agreement), any other agreement with respect to any of the
Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or
waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Obligations, or (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Guarantor or Grantor in respect of the Obligations or this Agreement, other than
payment in full of the Loan Document Obligations (other than unasserted
indemnification, tax gross up, expense reimbursement or yield protection
obligations, in each case for which no claim has been made). No breach by any
Grantor of any limitation with respect to Swap Obligations or Swap Agreements,
including without limitation the limitations of Section 6.01(m) of the Credit
Agreement, shall affect any lien granted with respect to such Swap Obligation or
Swap Agreement pursuant to any Security Document.

SECTION 6.03. Survival of Agreement. All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any Lender or on its
behalf and notwithstanding that the Administrative Agent, any other Agent, any
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended under
the Credit Agreement, and shall continue in full force and effect until
terminated as provided in Section 6.15(a).

SECTION 6.04. Binding Effect; Several Agreement. This Agreement shall become
effective as to any Party when a counterpart hereof executed on behalf of such
Party shall have been delivered to the Administrative Agent and a counterpart
hereof shall have been executed on behalf of the Administrative Agent, and
thereafter shall be binding upon such Party and the Administrative Agent and
their respective permitted successors and

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assigns, and shall inure to the benefit of such Party, the Administrative Agent
and the other Secured Parties and their respective successors and assigns,
except that no Party shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void) except as expressly contemplated by this
Agreement or the Credit Agreement. This Agreement shall be construed as a
separate agreement with respect to each Party and may be amended, modified,
supplemented, waived or released with respect to any Party without the approval
of any other Party and without affecting the obligations of any other Party
hereunder.

SECTION 6.05. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Guarantor or Grantor or the Administrative
Agent that are contained in this Agreement shall bind and inure to the benefit
of their respective successors and assigns.

SECTION 6.06. Fees and Expenses; Indemnification. The parties hereto agree that
the Administrative Agent and the other Agents shall be entitled to reimbursement
of their respective expenses incurred hereunder and thereunder and
indemnification, in each case as provided in Section 9.03 of the Credit
Agreement.

SECTION 6.07. Administrative Agent Appointed Attorney-in-Fact. Each Guarantor
and Grantor hereby appoints the Administrative Agent the attorney-in-fact of
such Guarantor or Grantor during the continuance of an Event of Default for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Administrative Agent may reasonably deem
necessary or advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, the Administrative Agent shall have the right, upon the occurrence
and during the continuance of an Event of Default, with full power of
substitution either in the Administrative Agent’s name or in the name of such
Guarantor or Grantor (a) to receive, endorse, assign and/or deliver any and all
notes, acceptances, checks, drafts, money orders or other evidences of payment
relating to the Collateral or any part thereof; (b) to demand, collect, receive
payment of, give receipt for and give discharges and releases of all or any of
the Collateral; (c) to sign the name of any Grantor on any invoice or bill of
lading relating to any of the Collateral; (d) to commence and prosecute any and
all suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect or otherwise realize on all or any of the Collateral or
to enforce any rights in respect of any Collateral; (e) to settle, compromise,
compound, adjust or defend any actions, suits or proceedings relating to all or
any of the Collateral; and (f) to use, sell, assign, transfer, pledge, make any
agreement with respect to or otherwise deal with all or any of the Collateral,
and to do all other acts and things necessary to carry out the purposes of this
Agreement, as fully and completely as though the Administrative Agent were the
absolute owner of the Collateral for all purposes; provided that nothing herein
contained shall be construed as requiring or obligating the Administrative Agent
to make any commitment or to present or file any claim or notice, or to take any
action with respect to the Collateral or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby, other than to
exercise commercially reasonable care in the custody

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and preservation of any Collateral in its possession. The Administrative Agent
and the Parent Borrower acknowledge that the exercise of the powers granted to
the Administrative Agent herein to deal with or dispose of the Collateral on a
basis in keeping with orderly business proceedings designed to preserve the
value of the Collateral to customers of the Grantor would be commercially
reasonable.

SECTION 6.08. Applicable Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York (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 State of New York).

SECTION 6.09. Waivers; Amendment. (a) No failure or delay by the Administrative
Agent, any other Agent, any Issuing Bank or any Lender in exercising any right
or power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the other
Agents, the Issuing Banks and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan or issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether the Administrative Agent, any
other Agent, any Lender or any Issuing Bank may have had notice or knowledge of
such Default at the time. No notice or demand on any Party in any case shall
entitle any Party to any other or further notice or demand in similar or other
circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Administrative Agent and the Parties with respect to which such waiver,
amendment or modification is to apply, subject to any consent required in
accordance with Section 9.02 of the Credit Agreement.

SECTION 6.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO (INCLUDING, FOR THE
AVOIDANCE OF DOUBT, THE ADMINISTRATIVE AGENT) HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(INCLUDING, FOR THE AVOIDANCE OF DOUBT, THE ADMINISTRATIVE AGENT) (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS

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REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

SECTION 6.11. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 6.12. Counterparts. This Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute a single contract (subject to Section 6.04), and shall become
effective as provided in Section 6.04. Delivery of an executed signature page to
this Agreement by telecopy or electronic transmission shall be effective as
delivery of a manually executed counterpart of this Agreement.

SECTION 6.13. Headings. Article and Section headings used herein are for the
purpose of reference only, are not part of this Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this
Agreement.

SECTION 6.14. Jurisdiction; Consent to Service of Process. (a) Each of the
parties hereto (including, for avoidance of doubt, the Administrative Agent)
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to any Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto (including, for the avoidance of doubt, the Administrative Agent) agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement or any other Loan Document
shall affect any right that the Administrative Agent, any other Agent, any
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against any Guarantor or
Grantor or its respective properties in the courts of any jurisdiction.

(b) Each of the parties hereto (including, for avoidance of doubt, the
Administrative Agent) hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the

20

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

laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in paragraph
(a) of this Section. Each of the parties hereto (including, for the avoidance of
doubt, the Administrative Agent) hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.

(c) Each party to this Agreement (including, for the avoidance of doubt, the
Administrative Agent) irrevocably consents to service of process in the manner
provided for notices in Section 6.01. Nothing in this Agreement or any other
Loan Document will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

SECTION 6.15. Termination or Release. (a) This Agreement, the Guarantees made
herein, the Security Interest and all other security interests granted hereby
shall automatically terminate when all the Loan Document Obligations have been
paid in full (other than unasserted indemnification, tax gross up, expense
reimbursement or yield protection obligations, in each case for which no claim
has been made) and the Lenders have no further commitment to lend under the
Credit Agreement, the LC Exposure has been reduced to zero and no Issuing Bank
has any further obligations to issue Letters of Credit under the Credit
Agreement.

(b) A Subsidiary Party shall automatically be released from its obligations
hereunder and, in the case of a Subsidiary Party that is a Subsidiary Grantor,
the Security Interest in the Collateral of such Subsidiary Grantor shall be
automatically released upon the consummation of any transaction not prohibited
by the Credit Agreement as a result of which such Subsidiary Party ceases to be
a Subsidiary of Holdings.

(c) Upon any sale or other transfer by any Grantor of any Collateral that is not
prohibited by the Credit Agreement to any Person that is not a Grantor, or upon
the effectiveness of any written consent to the release of the Security Interest
granted hereby in any Collateral pursuant to Section 9.02 of the Credit
Agreement, the Security Interest in such Collateral shall be automatically
released.

(d) In connection with any termination or release pursuant to paragraph (a), (b)
or (c) above, the Administrative Agent shall execute and deliver to any Grantor
at such Grantor’s expense, all documents that such Grantor shall reasonably
request to evidence such termination or release and shall authorize the filing
of any applicable documents evidencing such termination or release (including,
without limitation, UCC termination statements). Any execution and delivery of
documents pursuant to this Section 6.15 shall be without recourse to or warranty
by the Administrative Agent.

SECTION 6.16. Additional Guarantors. (a) Pursuant to, and to the extent provided
in, Section 5.11 of the Credit Agreement, additional Subsidiaries may be
required to enter into this Agreement as Guarantors. Upon execution and delivery
by the Administrative Agent and any such Subsidiary of an instrument in the form
of Exhibit A

21

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

hereto, such Subsidiary shall become a Subsidiary Guarantor hereunder with the
same force and effect as if originally named as a Subsidiary Guarantor herein.

(b) The execution and delivery of any such instrument described in paragraph (a)
above shall not require the consent of any other party hereto. The rights and
obligations of each party hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantee Party as a party to this
Agreement.

SECTION 6.17. Additional Grantors. Pursuant to the terms of the Credit
Agreement, Additional Grantors may enter into this Agreement as Subsidiary
Grantors. Upon execution and delivery by the Administrative Agent and any such
Additional Grantor of an instrument in the form of Exhibit B hereto, such
Additional Grantor shall become an a Subsidiary Grantor hereunder with the same
force and effect as if originally named as an Subsidiary Grantor herein. The
execution and delivery of any such instrument shall not require the consent of
any other party hereto or any Secured Party. The rights and obligations of each
party hereto shall remain in full force and effect notwithstanding the addition
of any new Subsidiary Grantor as a party to this Agreement.

SECTION 6.18. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Issuing Bank and Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Issuing Bank or Lender to or for the credit or the account of any
Guarantor against any of and all the obligations of such Guarantor now or
hereafter existing under this Agreement owed to such Issuing Bank or Lender,
irrespective of whether or not such Issuing Bank or Lender shall have made any
demand under this Agreement and although such obligations may be unmatured;
provided that in the event that any Defaulting Lender shall exercise any such
right of set-off, (x) all amounts so set off shall be paid over immediately to
the Administrative Agent for further application in accordance with the
provisions of Section 4.02 and, pending such payment, shall be segregated by
such Defaulting Lender from its other funds and deemed held in trust for the
benefit of the Administrative Agent and the Lenders and (y) the Defaulting
Lender shall provide promptly to the Administrative Agent a statement describing
in reasonable detail the Obligations owing to such Defaulting Lender as to which
it exercised such right of set-off. The rights of each Issuing Bank and Lender
under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Issuing Bank or Lender may have. Any Lender or
Issuing Bank exercising its rights under this Section shall give notice thereof
to the relevant Guarantor on or prior to the day of the exercise of such rights.

[The remainder of this page has been left blank intentionally.]

22

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

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

J. C. PENNEY COMPANY, INC.,

by     /s/ Edward Record
Name: Edward Record
Title: Executive Vice President and
Chief Financial Officer

J. C. PENNEY CORPORATION, INC.,

by     /s/ Michael Porter
Name: Michael Porter
Title: Vice President, Treasurer

J. C. PENNEY PURCHASING CORPORATION,

by     /s/ Michael Porter
Name: Michael Porter
Title: Vice President, Treasurer of
J. C. Penney Corporation, Inc.

JCP REAL ESTATE HOLDINGS, INC.,

by     /s/ Michael Porter
Name: Michael Porter
Title: Vice President, Treasurer of
J. C. Penney Corporation, Inc.

J. C. PENNEY PROPERTIES, INC.,

by /s/ Michael Porter
Name: Michael Porter
Title: Vice President, Treasurer of
J. C. Penney Corporation, Inc.

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

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent,

by /s/ Irene Rosen Marks
Name: Irene Rosen Marks
Title: Managing Director

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

SCHEDULE I
to the Guarantee and Collateral Agreement

Subsidiary Grantors

JCP Real Estate Holdings, Inc.

J. C. Penney Properties, Inc.

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

SCHEDULE II
to the Guarantee and Collateral Agreement

Subsidiary Guarantors

JCP Real Estate Holdings, Inc.

J. C. Penney Properties, Inc.

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

EXHIBIT A
to the Guarantee and Collateral Agreement

GUARANTEE SUPPLEMENT NO. __ dated as of [•], to the Guarantee and Collateral
Agreement dated as of June 20, 2014, among J. C. PENNEY COMPANY, INC., a
Delaware corporation (“Holdings”), J. C. PENNEY CORPORATION, INC., a Delaware
corporation (the “Parent Borrower”), J. C. PURCHASING CORPORATION, a New York
corporation (“Purchasing”), each subsidiary of Holdings listed on Schedule I
thereto (together with Holdings, the Parent Borrower and Purchasing, the
“Parties”)), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent
(in such capacity, the “Administrative Agent”) for the Secured Parties (as
defined therein).

A. Reference is made to the Credit Agreement dated as of June 20, 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Holdings, the Parent Borrower, Purchasing, the lenders from
time to time party thereto (the “Lenders”), the Administrative Agent and the
other agents thereunder (collectively, the “Agents”).

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Collateral
Agreement referred to therein.

C. The Parties have entered into the Collateral Agreement in order to induce the
Lenders to make Loans and the Issuing Banks to issue Letters of Credit. Section
6.16 of the Collateral Agreement provides that additional Subsidiaries of
Holdings may become Subsidiary Guarantors under the Collateral Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the “New Subsidiary”) is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Subsidiary
Guarantor under the Collateral Agreement in order to induce the Lenders to make
additional Loans and the Issuing Banks to issue additional Letters of Credit and
as consideration for Loans previously made and Letters of Credit previously
issued.

Accordingly, the Administrative Agent and the New Subsidiary agree as follows:
SECTION 1. In accordance with Section 6.16 of the Collateral Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Guarantor (and
accordingly, becomes a Guarantor) under the Collateral Agreement with the same
force and effect as if originally named therein as a Guarantor and the New
Subsidiary hereby (a) agrees to all the terms and provisions of the Collateral
Agreement applicable to it as a Guarantor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Guarantor
thereunder are true and correct on and as of the date hereof. Each reference to
a “Loan Party”, “Subsidiary Guarantor” or “Guarantor” in the

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

Collateral Agreement shall be deemed to include the New Subsidiary. The
Collateral Agreement is hereby incorporated herein by reference.

SECTION 2. The New Subsidiary represents and warrants to the Administrative
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.

SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when (a) the Administrative
Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and (b) the Administrative Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by
facsimile or electronic transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement.

SECTION 4. Except as expressly supplemented hereby, the Collateral Agreement
shall remain in full force and effect.

SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK (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 State of New York).

SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Collateral Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 6.01 of the Collateral Agreement.

SECTION 8. The New Subsidiary agrees that the Administrative Agent and the other
Agents shall be entitled to reimbursement for their respective expenses in
connection with this Supplement, in each case as provided in Section 9.03 of the
Credit Agreement.

[The remainder of this page has been left blank intentionally.]

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

IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly
executed this Supplement to the Collateral Agreement as of the day and year
first above written.

[Name Of New Subsidiary],

by
Name:
Title:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent,

by
Name:
Title:

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

EXHIBIT B to the Guarantee and Collateral Agreement

GRANTOR SUPPLEMENT NO. ___ dated as of [•], to
the Guarantee and Collateral Agreement dated as of June 20, 2014, among J. C.
PENNEY COMPANY, INC., a Delaware corporation (“Holdings”), J. C. PENNEY
CORPORATION, INC., a Delaware corporation (the “Parent Borrower”), J. C.
PURCHASING CORPORATION, a New York corporation (“Purchasing”), each subsidiary
of Holdings listed on Schedule I thereto (together with Holdings, the Parent
Borrower and Purchasing, the “Parties”)), and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as administrative agent (in such capacity, the “Administrative
Agent”) for the Secured Parties (as defined therein).

A. Reference is made to the Credit Agreement dated as of June 20, 2014 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Holdings, the Parent Borrower, Purchasing, the lenders from
time to time party thereto (the “Lenders”), the Administrative Agent and the
other agents thereunder (collectively, the “Agents”).

B.Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement and the Collateral
Agreement referred to therein.

C.The Parties have entered into the Collateral Agreement in order to induce the
Lenders to make Loans and the Issuing Banks to issue Letters of Credit. Section
6.17 of the Collateral Agreement provides that Additional Grantors may become
Subsidiary Grantors under the Collateral Agreement by execution and delivery of
an instrument in the form of this Supplement. The undersigned Additional Grantor
(the “New Subsidiary”) is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Subsidiary Grantor under the
Collateral Agreement in order to induce the Lenders to make additional Loans and
the Issuing Banks to issue additional Letters of Credit and as consideration for
Loans previously made and Letters of Credit previously issued.

Accordingly, the Administrative Agent and the New Subsidiary agree as follows:

SECTION 1. In accordance with Section 6.17 of the Collateral Agreement, the New
Subsidiary by its signature below becomes a Subsidiary Grantor (and accordingly,
becomes a Grantor) under the Collateral Agreement with the same force and effect
as if originally named therein as a Grantor and the New Subsidiary hereby (a)
agrees to all the terms and provisions of the Collateral Agreement applicable to
it as a Subsidiary Grantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Subsidiary Grantor thereunder are
true and correct on and as of the date hereof. In

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

furtherance of the foregoing, the New Subsidiary, as security for the payment or
performance, as the case may be, in full of the Obligations, hereby assigns and
pledges to the Administrative Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Administrative Agent,
its successors and assigns, for the ratable benefit of the Secured Parties, a
security interest in, all of its right, title and interest in, to and under the
Collateral of the New Subsidiary. Each reference to a “Loan Party”, “Subsidiary
Grantor” or “Grantor” in the Collateral Agreement shall be deemed to include the
New Subsidiary. The Collateral Agreement is hereby incorporated herein by
reference.

SECTION 2. The New Subsidiary represents and warrants to the Administrative
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.

SECTION 3. This Supplement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when (a) the Administrative
Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and (b) the Administrative Agent has executed a
counterpart hereof. Delivery of an executed signature page to this Supplement by
facsimile or electronic transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement.

SECTION 4. The New Subsidiary hereby represents and warrants that Schedule I
attached hereto is a completed Perfection Certificate in the form of Exhibit C
to the Collateral Agreement (but solely with respect to such New Subsidiary and
its assets and not with respect to any other Grantor or its assets) dated the
date hereof and signed by an executive officer or Financial Officer of the New
Subsidiary.

SECTION 5. Except as expressly supplemented hereby, the Collateral Agreement
shall remain in full force and effect.

SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK (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 State of New York).

SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Collateral Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

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

SECTION 8. All communications and notices hereunder shall be in writing and
given as provided in Section 6.01 of the Collateral Agreement.

SECTION 9. The New Subsidiary agrees that the Administrative Agent and the other
Agents shall be entitled to reimbursement for their respective expenses in
connection with this Supplement, in each case as provided in Section 9.03 of the
Credit Agreement.

[The remainder of this page has been left blank intentionally.]

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

IN WITNESS WHEREOF, the New Subsidiary and the Administrative Agent have duly
executed this Supplement to the Collateral Agreement as of the day and year
first above written.

[Name Of New Subsidiary],

by
Name:
Title:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent,

by
Name:
Title:

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

SCHEDULE I
to Grantor Supplement No.
to the Guarantee and
Collateral Agreement

Executed Perfection Certificate
[See attached]

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

EXHIBIT C
to the Guarantee and
Collateral Agreement

PERFECTION CERTIFICATE

Reference is made to the Credit Agreement dated as of June 20, 2014 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among J. C. Penney Company, Inc. (“Holdings”), J. C. Penney Corporation, Inc.
(the “Parent Borrower”), J. C. Penney Purchasing Corporation (“Purchasing”), the
lenders from time to time party thereto (the “Lenders”), Wells Fargo Bank,
National Association, as administrative agent (the “Administrative Agent”),
Wells Fargo Bank, National Association and Bank of America, N.A., as
co-collateral agents, and the other agents thereunder. Capitalized terms used
but not defined herein have the meanings assigned in the Credit Agreement or the
Collateral Agreement referred to therein, as applicable. [As used herein the
term “Grantors” shall mean Holdings, the Parent Borrower, Purchasing, the
Subsidiary Grantors and, to the extent there are any Additional Grantors, such
Additional Grantors.] [As used herein the term “Grantors” means [each Additional
Grantor].]

The undersigned, an executive officer or Financial Officer of [the Parent
Borrower] [applicable Additional Grantor(s)], hereby certifies to the
Administrative Agent and each other Secured Party as follows:

1.Names. (a) The exact legal name and the type of entity of each Grantor, as
such appears in its respective certificate of formation or incorporation, is as
follows:

Exact Legal Name of Each Grantor        Type of Entity of Such Grantor

(b) Set forth below is each other legal name each Grantor has had in the past
five years, together with the date of the relevant change:

Grantor

Other Legal Name in Past 5
Years

Date of Name
Change
 
 
 
 
 
 
 
 
 
 
 
 

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

(c) Except as set forth below, no Grantor has changed its identity or corporate
structure in any way within the past five years. Changes in identity or
corporate structure would include mergers, consolidations and acquisitions, as
well as any change in the form, nature or jurisdiction of corporate
organization.

(d) The following is a list of all other names (including trade names or similar
appellations) used by each Grantor or any of its divisions or other business
units in connection with the conduct of its business or the ownership of its
properties at any time during the past five years:

Grantor
Other Name Used
 
 
 
 
 
 
 
 

(e) Set forth below is the organizational identification number, if any, issued
by the jurisdiction of formation of each Grantor:

Grantor
Organizational Identification Number
 
 
 
 
 
 
 
 

(f) Set forth below is the Federal Taxpayer Identification Number of each
Grantor:

Grantor
Federal Taxpayer Identification Number
 
 
 
 
 
 
 
 

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

2. Current Locations. (a) The chief executive office of each Grantor is located
at the address set forth opposite its name below:

Grantor     Mailing Address    County     State

(b) The jurisdiction of formation of each Grantor is set forth opposite its name
below: Grantor             Jurisdiction

(c) The jurisdiction(s) in which each Grantor is qualified to do business is set
forth opposite its name below:
Grantor             Jurisdiction

(d) Set forth below opposite the name of each Grantor are all the locations
where a Grantor maintains any Inventory not located at the chief executive
offices listed in 2(a) above:

Grantor     Mailing Address    County     State

(e) Set forth below opposite the name of each Grantor are all the locations
where the Grantor maintains any books or records relating to any Collateral not
located at the chief executive offices listed in 2(a) above:

Grantor         Mailing Address        County         State

(f) Set forth below are the names and addresses of all Persons other than a
Grantor (and other than any international transportation service provider to
whom Inventory has been temporarily delivered for final receipt by a Grantor or
any port authority while inventory is pending clearance and entry into U.S.
commerce) that have possession of any of Inventory

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

with an aggregate retail value of more than $30,000,000 as of [the end of
immediately preceding fiscal quarter].

Name     Mailing Address    County     State

3. Unusual Transactions. All Inventory has been acquired by the Grantors in the
ordinary course of business.

4. File Search Reports. As of the Closing Date, file search reports have been
obtained from each Uniform Commercial Code filing office identified with respect
to each Grantor in Section 2(b) hereof, and as of the Closing Date such search
reports reflect no liens against any of the Collateral other than those
permitted under the Credit Agreement.

5. UCC Filings. As of the Closing Date, UCC financing statements in
substantially the form of Schedule 5 hereto have been prepared for filing in the
proper Uniform Commercial Code filing office in the jurisdiction in which each
Grantor is organized as set forth with respect to such Grantor in Section 2(b)
hereof.

6. Schedule of Filings. As of the Closing Date, attached hereto as Schedule 6 is
a schedule setting forth, with respect to the filings described in Section 5
above, each filing and the filing office in which such filing is to be made.

7.Deposit Accounts. Set forth on Schedule 7 is a complete and correct list of
all Deposit Accounts maintained by each Grantor that meet the description set
forth on Schedule 5.16 of the Credit Agreement as of the date hereof (the
“Initial Control Accounts”). The amounts received in the Initial Control
Accounts represent more than 95% of the aggregate proceeds from the sale of
Inventory and the collections of Accounts (including in respect of credit card
receivables, whether or not constituting Eligible Credit Card Receivables) of
the Grantors.

8. Securities Accounts. None of the accounts described on Schedule 5.16 of the
Credit Agreement are Securities Accounts as of the date hereof.

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

IN WITNESS WHEREOF, the undersigned has duly executed this Perfection
Certificate on this      day of         , 2014.

[J. C. PENNEY CORPORATION, INC.] [ADDITIONAL GRANTOR],

by

Name:
Title:

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SCHEDULE 5
to Perfection Certificate

UCC Financing Statements

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

SCHEDULE 6
to Perfection Certificate

UCC Filings and Filing Offices

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

SCHEDULE 7
to Perfection Certificate

Initial Control Accounts