Exhibit 10.1

 
 
CREDIT AGREEMENT
 
dated as of
 
December 21, 2005
 
among
 
THE DRESS BARN, INC.
 
The Lenders Party Hereto
 
and
 
JPMORGAN CHASE BANK, N.A.,
 
as Administrative Agent
 
___________________________
 
J.P. MORGAN SECURITIES INC.,
as Sole Lead Arranger and Sole Bookrunner,
 
BANK OF AMERICA, N.A.,
 
as Syndication Agent
 
and
 
THE BANK OF NEW YORK,
 
WELLS FARGO RETAIL FINANCE, LLC
 
and
 
CITIBANK, N.A.,
 
as Co-Documentation Agents
 
 
 
 

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TABLE OF CONTENTS

 
 
 Page
 
     
ARTICLE I 
 
 
 
Definitions
 
 
SECTION 1.01.
Defined Terms
1
SECTION 1.02.
Classification of Loans and Borrowings
22
SECTION 1.03.
Terms Generally
22
SECTION 1.04.
Accounting Terms; GAAP
22
SECTION 1.05.
Pro Forma Calculations
 
23
 
ARTICLE II 
 
 
 
 The Credits
 
 
SECTION 2.01.
Commitments
23
SECTION 2.02.
Loans and Borrowings
23
SECTION 2.03.
Requests for Borrowings
24
SECTION 2.04.
Swingline Loans
24
SECTION 2.05.
Letters of Credit
26
SECTION 2.06.
Funding of Borrowings
31
SECTION 2.07.
Interest Elections
32
SECTION 2.08.
Termination and Reduction of Commitments;
Increse of Commitments; 
33
SECTION 2.09.
Repayment of Loans; Evidence of Debt
35
SECTION 2.10.
Prepayment of Loans
36
SECTION 2.11.
Fees
37
SECTION 2.12.
Interest
38
SECTION 2.13.
Alternate Rate of Interest
39
SECTION 2.14.
Increased Costs
39
SECTION 2.15.
Break Funding Payments
41
SECTION 2.16.
Taxes
41
SECTION 2.17.
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
43
SECTION 2.18.
Mitigation Obligations; Replacement of Lenders
45
 
 
 
 
ARTICLE III
 
 
 
Representations and Warranties
 
 
SECTION 3.01.
Organization; Powers
3
SECTION 3.02.
Authorization; Enforceability
3
SECTION 3.03.
Governmental Approvals; No Conflicts
3
SECTION 3.04.
Financial Condition; No Material Adverse Change
3
SECTION 3.05.
Properties
3

 
 

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SECTION 3.06.
Litigation and Environmental Matters
47
SECTION 3.07.
Compliance with Laws and Agreements
48
SECTION 3.08.
Investment and Holding Company Status
48
SECTION 3.09.
Taxes
48
SECTION 3.10.
ERISA; Margin Regulations
48
SECTION 3.11.
Disclosure
49
SECTION 3.12.
Subsidiaries
49
SECTION 3.13.
Insurance
49
SECTION 3.14.
Labor Matters
49
SECTION 3.15.
Solvency
50
SECTION 3.16.
Collateral Matters
50
SECTION 3.17.
Use of Proceeds
51
SECTION 3.18.
Termination of Guarantees
51
 
 
   
ARTICLE IV
 
 
 
Conditions
 
 
SECTION 4.01.
Effective Date
51
SECTION 4.02.
Each Credit Event
53
 
 
   
ARTICLE V
 
 
 
Affirmative Covenants
 
 
SECTION 5.01.
Financial Statements and Other Information
54
SECTION 5.02.
Notices of Material Events
56
SECTION 5.03.
Information Regarding Collateral
56
SECTION 5.04.
Existence; Conduct of Business
57
SECTION 5.05.
Payment of Obligations
57
SECTION 5.06.
Maintenance of Properties
57
SECTION 5.07.
Insurance
57
SECTION 5.08.
Casualty and Condemnation
57
SECTION 5.09.
Books and Records; Inspection and Audit Rights
58
SECTION 5.10.
Compliance with Laws
58
SECTION 5.11.
Use of Proceeds and Letters of Credit
58
SECTION 5.12.
Additional Subsidiaries
58
SECTION 5.13.
Further Assurances
58
 
 
 
 
ARTICLE VI
 
 
 
Negative Covenants
 
 
SECTION 6.01.
Indebtedness; Certain Equity Securities
59
SECTION 6.02.
Liens
60
SECTION 6.03.
Fundamental Changes; SPE Restrictions
61
SECTION 6.04.
Investments, Loans, Advances, Guarantees and Acquisitions
62

 
 

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SECTION 6.05.
Asset Sales
64
SECTION 6.06.
Sale and Leaseback Transactions
65
SECTION 6.07.
Hedging Agreements
65
SECTION 6.08.
Restricted Payments; Certain Payments of Indebtedness
65
SECTION 6.09.
Transactions with Affiliates
66
SECTION 6.10.
Restrictive Agreements
66
SECTION 6.11.
Amendment of Material Documents
67
SECTION 6.12.
Adjusted Leverage Ratio
67
SECTION 6.13.
Fixed Charge Coverage Ratio
67
SECTION 6.14.
Consolidated Net Worth
67
SECTION 6.15.
Capital Expenditures
68
SECTION 6.16.
Total Tangible Assets
68
 
 
   
ARTICLE VII
 
 
 
Events of Default
 
 
 
ARTICLE VIII
 
   
The Administrative Agent
 
 
 
 
 
 
ARTICLE IX
 
   
Miscellaneous
 
 
SECTION 9.01.
Notices
73
SECTION 9.02.
Waivers; Amendments
74
SECTION 9.03.
Expenses; Indemnity; Damage Waiver
75
SECTION 9.04.
Successors and Assigns
76
SECTION 9.05.
Survival
79
SECTION 9.06.
Counterparts; Integration; Effectiveness
80
SECTION 9.07.
Severability
80
SECTION 9.08.
Right of Setoff
80
SECTION 9.09.
Governing Law; Jurisdiction; Consent to Service of Process
80
SECTION 9.10.
WAIVER OF JURY TRIAL
81
SECTION 9.11.
Headings
81
SECTION 9.12.
Confidentiality
81
SECTION 9.13.
Patriot Act
82
SECTION 9.14.
Interest Rate Limitation
82
SECTION 9.15.
Release of Collateral
82

 

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SCHEDULES:
 
Schedule 2.01 — Commitments
 
Schedule 2.05 — Existing Letters of Credit
 
Schedule 3.05 — Real Properties
 
Schedule 3.06 — Disclosed Matters
 
Schedule 3.12 — Subsidiaries
 
Schedule 3.13 — Insurance
 
Schedule 3.16 — Mortgaged Properties
 
Schedule 6.01 — Existing Indebtedness
 
Schedule 6.02 — Existing Liens
 
Schedule 6.04 — Existing Investments
 
Schedule 6.09 — Transactions with Affiliates
 
Schedule 6.10 — Existing Restrictions and Conditions
 
EXHIBITS:
 
Exhibit A  — Form of Assignment and Assumption
 
Exhibit B-1  — Form of Opinion of Proskauer Rose LLP
 
Exhibit B-2  — Form of Opinion of Christopher J. McDonald, Esq.
 
Exhibit C  — Form of Collateral Agreement
 
Exhibit D  — Form of Perfection Certificate
 
Exhibit E  — Form of Issuing Bank Agreement
 
Exhibit F — Form of Note
 

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CREDIT AGREEMENT dated as of December 21, 2005, among THE DRESS BARN, INC., a
Connecticut corporation, the LENDERS party hereto and JPMORGAN CHASE BANK, N.A.,
a national banking association, as administrative agent and collateral agent for
such lenders.
 
The parties hereto agree as follows:
 
     ARTICLE I  
 
Definitions
 
 
SECTION 1.01.   Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
 
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
 
“Adjusted Consolidated Debt” means, as of any date, the sum, without
duplication, of (a) Total Indebtedness at such date and (b) an amount equal to
six times Consolidated Rental Expense for the then current fiscal year of the
Borrower, as reflected in the footnotes to the most recent audited financial
statements of the Borrower.
 
“Adjusted Leverage Ratio” means, on any date, the ratio of (a) Adjusted
Consolidated Debt as of such date to (b) Consolidated EBITDAR for the period of
four consecutive fiscal quarters of the Borrower ended as of such date (or, if
such date is not the last day of a fiscal quarter, ended as of the last day of
the fiscal quarter of the Borrower most recently ended prior to such date).
 
“Adjusted LIBO Rate” means, with respect to any Eurocurrency Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
 
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent and collateral agent for the Lenders hereunder and under
the Loan Documents.
 
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
 
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
 
“Agreement” means this Credit Agreement, as modified, amended or restated from
time to time.
 

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“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1%. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.
 
“Applicable Percentage” means, with respect to any Revolving Lender, the
percentage of the total Commitments represented by such Lender’s Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
 
“Applicable Rate” means, for any day, with respect to any ABR Loan or
Eurocurrency Loan that is a Revolving Loan, or with respect to the commitment
fees payable hereunder, or with respect to any Standby Letters of Credit or
Commercial Letters of Credit issued hereunder, as the case may be, the
applicable rate per annum set forth below under the caption “ABR Spread”,
“Eurocurrency Spread”, “Commitment Fee Rate”, “Standby LC Spread” or “Commercial
LC Spread”, as the case may be, based upon the Adjusted Leverage Ratio as of the
most recent determination date; provided that until the first date upon which
the consolidated financial statements required to be delivered to it pursuant to
Section 5.01(a) or (b) are delivered to the Administrative Agent, the
“Applicable Rate” shall be the applicable rate per annum set forth below in
Category 1:
 
 
Adjusted Leverage Ratio:
 
 
ABR Spread
 
 
Eurocurrency Spread
 
 
Commitment Fee Rate
 
 
Standby LC Spread
 
 
Commercial LC Spread
 
Category 1
 
greater than or equal to 4.00 to 1.00
 
0.50%
 
1.50%
 
0.25%
 
1.50%
 
0.25%
 
Category 2
 
less than 4.00 to 1.00, but greater than or equal to 3.50 to 1.00
 
0.25%
 
1.25%
 
0.20%
 
1.25%
 
0.20%
 
Category 3
 
less than 3.50 to 1.00
 
0.00%
 
1.00%
 
0.20%
 
1.00%
 
0.20%
 

 
For purposes of the foregoing, (i) the Adjusted Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Borrower’s fiscal year
based upon the Borrower’s consolidated financial statements delivered pursuant
to Section 5.01(a) or (b) and (ii) each change in the Applicable Rate resulting
from a change in the Adjusted Leverage Ratio shall be effective during the
period commencing on and including the date of delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change; provided that the Adjusted Leverage Ratio shall be deemed to be in
Category 1 (A) at any time that an Event of Default has occurred and is
continuing or (B) at the option of the Administrative Agent or at the request of
the Required Lenders if the Borrower fails to deliver the consolidated financial
statements required to be delivered by it pursuant to Section 5.01(a) or (b),
during the period from the expiration of the time for delivery thereof until
such consolidated financial statements are delivered.
 
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“Approved Fund” has the meaning assigned to such term in Section 9.04.
 
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.
 
“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.
 
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.
 
“Borrower” means The Dress Barn, Inc., a Connecticut corporation.
 
“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurocurrency Loans, as to which a
single Interest Period is in effect, or (b) a Swingline Loan.
 
“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
 
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurocurrency Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
 
“Capital Expenditures” means, for any period, (a) the additions to property,
plant and equipment and other capital expenditures of the Borrower and its
Subsidiaries that are (or would be) set forth in a consolidated statement of
cash flows of the Borrower for such period prepared in accordance with GAAP and
(b) Capital Lease Obligations or Synthetic Lease Obligations incurred by the
Borrower and its consolidated Subsidiaries during such period.
 
“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
 
“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) other than
the Permitted Investors, of Equity Interests representing more than 30% of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of the Borrower and the percentage of the aggregate ordinary voting
power represented by Equity Interests owned by such Person or group then exceeds
the percentage of the aggregate ordinary voting power represented by Equity
Interests owned by the Permitted Investors; (b) occupation of a majority of the
seats (other than vacant seats) on the board of directors of the Borrower by
Persons who were neither (i) nominated by the board of directors of the Borrower
nor (ii) appointed by directors so nominated; or (c) the occurrence of a “change
of control”, as defined in the Convertible Note Documents.
 
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“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or,
for purposes of Section 2.14(b), by any lending office of such Lender or by such
Lender’s or such Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
 
“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
 
“Collateral” means any and all “Collateral”, as defined in any applicable
Security Document.
 
“Collateral Agreement” means the Collateral Agreement between the Borrower and
the Administrative Agent, substantially in the form of Exhibit C.
 
“Collateral Requirement” means the requirement that:
 
(a) the Administrative Agent shall have received a counterpart of the Collateral
Agreement duly executed and delivered on behalf of the Borrower;
 
(b) all outstanding Equity Interests of each Subsidiary directly owned by the
Borrower shall have been pledged pursuant to the Collateral Agreement (except
that the Borrower shall not be required to pledge more than 65% of the
outstanding voting Equity Interests of any Foreign Subsidiary) and the
Administrative Agent shall have received certificates or other instruments
representing all such Equity Interests (to the extent such Equity Interests are
evidenced by physical certificates or other instruments), together with stock
powers or other instruments of transfer with respect thereto endorsed in blank;
 
-4-

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(c) all Indebtedness of each Subsidiary that is owing to the Borrower shall be
evidenced by a promissory note and shall have been pledged pursuant to the
Collateral Agreement and the Administrative Agent shall have received all such
promissory notes, together with instruments of transfer with respect thereto
endorsed in blank;
 
(d) all documents and instruments, including Uniform Commercial Code financing
statements, required by law or reasonably requested by the Administrative Agent
to be filed, registered or recorded to create the Liens intended to be created
by the Collateral Agreement and perfect such Liens to the extent required by,
and with the priority required by, the Collateral Agreement, shall have been
filed, registered or recorded or delivered to the Administrative Agent for
filing, registration or recording;
 
(e) the Administrative Agent shall have received (i) counterparts of a Mortgage
with respect to each Mortgaged Property duly executed and delivered by the
record owner of such Mortgaged Property, (ii) a policy or policies of title
insurance issued by a nationally recognized title insurance company insuring the
Lien of each such Mortgage as a valid first Lien on the Mortgaged Property
described therein, free of any other Liens except as expressly permitted by
Section 6.02, together with such endorsements, coinsurance and reinsurance as
the Administrative Agent or the Required Lenders may reasonably request, and
(iii) such surveys, abstracts, appraisals, legal opinions and other documents as
the Administrative Agent or the Required Lenders may reasonably request with
respect to any such Mortgage or Mortgaged Property; and
 
(f) the Borrower shall have obtained all material consents and approvals
required to be obtained by it in connection with the execution and delivery of
all Security Documents, the performance of its obligations thereunder and the
granting by it of the Liens thereunder.
 
“Commercial Letter of Credit” means a letter of credit that is (a) designated as
a Commercial Letter of Credit by the Borrower at the time of, or prior to, the
issuance thereof, (b) issued to provide for the payment of the purchase price
for goods or services purchased by the Borrower or a Subsidiary and (c) intended
to be drawn when such purchase price is due and payable and not merely upon the
occurrence of a default or similar contingency.
 
“Commitment” means, with respect to each Lender, the commitment, if any, of such
Lender to make Revolving Loans and to acquire participations in Letters of
Credit and Swingline Loans hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender’s Revolving Exposure hereunder, as such
commitment may be (a) reduced or increased from time to time pursuant to Section
2.08 and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 9.04. The initial amount of each Lender’s
Commitment is set forth on Schedule 2.01, in the documentation pursuant to which
an Increasing Lender that is not a Lender hereunder shall have executed to
evidence its Commitment hereunder pursuant to Section 2.08(d) or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable. The initial aggregate amount of the Lenders’
Commitments is $100,000,000.
 
-5-

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“Company” means Maurices Incorporated, a Delaware corporation.
 
“Consolidated Cash Interest Expense” means, for any period, the excess of (a)
the sum of (i) the cash interest expense (including imputed interest expense in
respect of Capital Lease Obligations and Synthetic Lease Obligations) of the
Borrower and the Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP, (ii) any interest accrued during such period in
respect of Indebtedness of the Borrower or any Subsidiary that is required to be
capitalized rather than included in consolidated interest expense for such
period in accordance with GAAP, plus (iii) any cash payments made during such
period in respect of obligations referred to in clause (b)(iii) below that were
amortized or accrued in a previous period, minus (b) the sum of (i) interest
income of the Borrower and the Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP, (ii) to the extent included in such
consolidated interest expense for such period, non-cash amounts attributable to
amortization of financing costs paid in a previous period, plus (iii) to the
extent included in such consolidated interest expense for such period, non-cash
amounts attributable to amortization of debt discounts or accrued interest
payable in kind for such period.
 
“Consolidated EBITDA” means, for any period, Consolidated Net Income for such
period plus (a) without duplication and to the extent deducted in determining
such Consolidated Net Income, the sum of (i) consolidated interest expense for
such period, (ii) consolidated income tax expense for such period, (iii) all
amounts attributable to depreciation and amortization for such period, (iv) any
extraordinary charges for such period, (v) any non-cash compensation charges,
including arising from restricted stock and stock-option grants, for such
period, (vi) any other non-cash charges (other than the write-down of current
assets) for such period, (vii) fees and expenses paid in connection with the
consummation of the Transactions in an aggregate amount not to exceed $500,000,
(viii) fees and expenses paid in connection with the consummation of the
“Transactions” (as defined in the Existing Credit Agreement) in an aggregate
amount not to exceed $15,000,000 and (ix) charges attributable to the
integration of the business of the Company with the business of the Borrower
that are paid or otherwise accounted for prior to January 3, 2007, in an amount
not to exceed $1,000,000 in any period or $2,000,000 in the aggregate, and minus
(b) without duplication (i)  to the extent not deducted in determining such
Consolidated Net Income, all cash payments made during such period on account of
non-cash charges added to Consolidated Net Income pursuant to clauses (a)(iv),
(a)(v) or (a)(vi) above in such period or in a previous period and (ii) to the
extent included in determining such Consolidated Net Income, any extraordinary
gains and all non-cash items of income (other than normal accruals in the
ordinary course of business) for such period, all determined on a consolidated
basis in accordance with GAAP. In the event that the Borrower or any Subsidiary
shall have completed an acquisition (including a Permitted Acquisition) or
disposition of any material Person, division or business unit since the
beginning of the relevant period, Consolidated EBITDA shall be determined for
such period on a pro forma basis as if such acquisition or disposition, and any
related incurrence or repayment of Indebtedness, had occurred at the beginning
of such period.
 
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“Consolidated EBITDAR” means, for any period, Consolidated EBITDA for such
period plus, without duplication and to the extent deducted in determining such
Consolidated EBITDA, Consolidated Rental Expense for such period, all as
determined on a consolidated basis in accordance with GAAP.
 
“Consolidated Fixed Charges” means, for any period, the sum of (a) Consolidated
Cash Interest Expense for such period and (b) Consolidated Rental Expense for
such period.
 
“Consolidated Net Income” means, for any period, the net income or loss of the
Borrower and the Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the income of
any Person (other than the Borrower) in which any other Person (other than the
Borrower or any Subsidiary or any director holding qualifying shares in
compliance with applicable law) owns an Equity Interest, except to the extent of
the amount of dividends or other distributions actually paid to the Borrower or
any of the Subsidiaries during such period, (or, so long as the declaration or
payment of dividends or other distributions by such first Person is not at the
time restricted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, statute, rule or regulation applicable to such
Person, to the extent cash equal to such income (or the Borrower’s or any
Subsidiary’s ratable portion thereof) is readily procurable by the Borrower or
such Subsidiary from such Person by causing such Person to dividend or otherwise
distribute such income (or such portion) to the Borrower or such Subsidiary) and
(b) the income or loss of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary
or the date that such Person’s assets are acquired by the Borrower or any
Subsidiary.
 
“Consolidated Net Worth” means, at any date of determination, the consolidated
stockholders’ equity of the Borrower and the Subsidiaries, determined on a
consolidated basis as at such date in accordance with GAAP.
 
“Consolidated Rental Expense” shall mean, for any period, the aggregate minimum
rental expense of the Borrower and the Subsidiaries for such period, determined
on a consolidated basis in accordance with GAAP, in respect of all rental
obligations under operating leases.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.
 
“Convertible Notes” means the Borrower’s 2.50% Convertible Senior Notes due
2024, in an initial aggregate principal amount of $115,000,000.
 
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“Convertible Note Documents” means the indenture under which the Convertible
Notes are issued and all other instruments, agreements and other documents
evidencing or governing the Convertible Notes or providing for any other right
in respect thereof.
 
“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
 
“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
 
“Distribution Center” means the distribution and office facility owned by the
SPE and located at 22 Hemion Road and 30 Dunnigan Drive, Suffern, New York
10901.
 
“Disqualified Stock” means any capital stock which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, or
requires the payment of any cash dividend or any other scheduled payment
constituting a return of capital, in each case at any time on or prior to the
first anniversary of the Maturity Date, or (b) is convertible into or
exchangeable (unless at the sole option of the issuer thereof) for (i) debt
securities or (ii) any capital stock referred to in (a) above, in each case at
any time prior to the first anniversary of the Maturity Date.
 
“dollars” or “$” refers to lawful money of the United States of America.
 
“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
 
“Environmental Laws” means all applicable federal, state, and local laws
(including common law), regulations, rules, ordinances, codes, decrees,
judgments, directives, orders (including consent orders), and binding agreements
with any Governmental Authority in each case, relating to pollution or
protection of the environment, natural resources, human health and safety, or
the presence, Release of, or exposure to, Hazardous Materials, or the
generation, manufacture, processing, distribution, use, treatment, storage,
transport, recycling or handling of, or the arrangement for such activities with
respect to, Hazardous Materials.
 
“Environmental Liability” means any liability, claim, action, suit, agreement,
judgment or order arising under or relating to any Environmental Law for any
damages, injunctive relief, losses, fines, penalties, fees, expenses (including
reasonable fees and expenses of attorneys and consultants) or costs, whether
contingent or otherwise, including those arising from or relating to:
(a) compliance or non-compliance with any Environmental Law or permit, license
or approval issued thereunder, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the Release of any Hazardous
Materials or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
 
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“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.
 
“Equity Issuance” means the issuance by the Borrower or any Subsidiary of any
Equity Interests, or the receipt by the Borrower or any Subsidiary of any
capital contribution, other than (a) any such issuance of Equity Interests to,
or receipt of any such capital contribution from, the Borrower or a Subsidiary,
(b) any issuance of Equity Interests by the Borrower, to the extent the net
proceeds thereof are used to finance a Permitted Acquisition, and (c) sales or
issuances of Equity Interests of the Borrower to management or employees of the
Borrower or any Subsidiary under any employee stock option or stock purchase
plan or other employee benefit plan in existence from time to time.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
 
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under Section
414 of the Code.
 
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability (or that could reasonably be
expected to result in Withdrawal Liability) or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
 
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“Eurocurrency”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
 
“Event of Default” has the meaning assigned to such term in Article VII.
 
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
any Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of America
or by any state or political subdivision thereof, or by the jurisdiction under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction described in clause (a)
above and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.18(b)), any withholding tax that
(i) is in effect and would apply to amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to any withholding tax pursuant to Section 2.16(a), or (ii) is
attributable to such Foreign Lender’s failure to comply with Section 2.16(e).
 
“Existing Credit Agreement” means the Credit Agreement dated as of January 3,
2005, as amended, among the Borrower, the lenders party thereto and JPMCB, as
administrative agent and collateral agent for such lenders.
 
“Existing Letters of Credit” means each letter of credit previously issued for
the account of the Borrower pursuant to the Existing Credit Agreement that is
(a) outstanding on the Effective Date and (b) listed on Schedule 2.05, but shall
not include any renewal or extension of any Existing Letter of Credit unless
such Issuing Bank would otherwise be entitled to issue Letters of Credit
hereunder.
 
“Existing Mortgage” means the Mortgage, Assignment of Leases and Rents and
Security Agreement dated as of June 24, 2003, given by the SPE, as assignor, to
John Hancock Life Insurance Company, as assignee, in the principal amount of
$34,000,000, covering the Distribution Center and securing the Existing Mortgage
Loan.
 
“Existing Mortgage Loan” means the mortgage loan in the initial principal amount
of $34,000,000 made by John Hancock Life Insurance Company to the SPE, the
proceeds of which were used by the SPE to finance the purchase of the
Distribution Center, which loan matures in July 2023.
 
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
 
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“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.
 
“Fixed Charge Coverage Ratio” means, for any period, the ratio of (a) (i)
Consolidated EBITDAR for such period minus (ii) Capital Expenditures for such
period, to (b) Consolidated Fixed Charges for such period.
 
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
 
“Foreign Subsidiary” means any Subsidiary that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the
District of Columbia.
 
“GAAP” means generally accepted accounting principles in the United States of
America.
 
“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
 
“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment
thereof, (c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or (d) as an account party in respect
of any letter of credit or letter of guaranty issued to support such
Indebtedness; provided, that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of business.
 
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“Hazardous Materials” means any chemical, material, substance or waste that is
prohibited, limited or regulated by or pursuant to any applicable Environmental
Law, including, without limitation, any petroleum products or byproducts and all
other hydrocarbons, coal ash, radon gas, asbestos-containing materials, urea
formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons and
all other ozone-depleting substances or mold.
 
“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
 
“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding trade accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed (but only to the extent of the lesser of (x) the amount of such
Indebtedness and (y) the fair market value of such property, if such
Indebtedness has not been assumed), (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations and Synthetic Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor by
contract, as a matter of law or otherwise as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
 
“Indemnified Taxes” means Taxes other than Excluded Taxes.
 
“Intangible Assets” means, on any date, the intangible assets of the Borrower,
as such amount would be reflected on an unconsolidated balance sheet of the
Borrower prepared in accordance with GAAP.
 
“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.07.
 
“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), the last day of each March, June, September and December, (b)
with respect to any Eurocurrency Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurocurrency Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
 
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“Interest Period” means, with respect to any Eurocurrency Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter (or nine or twelve months thereafter if, at the time of the relevant
Borrowing, all Lenders participating therein agree to make an interest period of
such duration available), as the Borrower may elect; provided, that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
 
“Issuing Bank” means each of JPMorgan Chase Bank, N.A., Bank of America, N.A.,
The Bank of New York and each other Lender acceptable to the Administrative
Agent that has entered into an Issuing Bank Agreement, in each case in its
capacity as an issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.05(i) and, in respect of the Existing Letters
of Credit only, the issuers of such Existing Letters of Credit, as set forth in
Schedule 2.05; provided that no Person shall at any time become an Issuing Bank
if after giving effect thereto there would at such time be more than four
Issuing Banks (computed without regard to the issuers of Existing Letters of
Credit). Each Issuing Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case
the term “Issuing Bank” shall include any such Affiliate with respect to Letters
of Credit issued by such Affiliate.
 
“Issuing Bank Agreement” means an agreement in the form of Exhibit E, or in any
other form reasonably satisfactory to the Administrative Agent, pursuant to
which a Lender agrees to act as an Issuing Bank.
 
“LC Disbursement” means a payment made by an Issuing Bank pursuant to a Letter
of Credit.
 
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Revolving Lender at any time shall
be its Applicable Percentage of the total LC Exposure at such time.
 
“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to (a) Section 2.08(d) or (b) an
Assignment and Assumption, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Assumption. Unless the context otherwise
requires, the term “Lenders” includes the Swingline Lender.
 
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“Letter of Credit” means each Existing Letter of Credit and any letter of credit
issued pursuant to this Agreement.
 
“LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the “LIBO Rate” with respect to such
Eurocurrency Borrowing for such Interest Period shall be the rate at which
dollar deposits of $5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
 
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
 
“Loan Documents” means this Agreement, the Collateral Agreement and the other
Security Documents.
 
“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.
 
“Margin Stock” shall have the meaning assigned to such term in Regulation U of
the Board.
 
“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, properties, condition (financial or otherwise), results of
operations or liabilities (including contingent liabilities), of the Borrower
and the Subsidiaries taken as a whole, (b) the ability of the Borrower to
perform any of its material obligations under any Loan Document or (c) the
rights of or benefits available to the Lenders under any Loan Document (other
than, in the case of this clause (c) only, a material adverse effect caused by
any improper action or omission of any Lender or the Administrative Agent).
 
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“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $10,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Borrower or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.
 
“Maturity Date” means December 21, 2010, or if such date is not a Business Day,
the next preceding Business Day.
 
“Moody’s” means Moody’s Investors Service, Inc. (or any successor thereto).
 
“Mortgage” means a mortgage, deed of trust, assignment of leases and rents,
leasehold mortgage or other security document granting a Lien on any Mortgaged
Property to secure the Obligations. Each Mortgage shall be reasonably
satisfactory in form and substance to the Administrative Agent.
 
“Mortgaged Property” means, initially, each parcel of real property and the
improvements thereto owned by the Borrower and identified on Schedule 3.16, and
includes each other parcel of real property and improvements thereto with
respect to which a Mortgage is granted pursuant to Section 5.13.
 
“Multiemployer Plan” means a multiemployer plan as defined in Sections 3(37)
and 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making
or is obligated to make contributions.
 
“Net Proceeds” means, with respect to any event (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
customary fees and out-of-pocket expenses paid by the Borrower and the
Subsidiaries to third parties (other than Affiliates) in connection with such
event (including fees and out-of-pocket expenses attributable to claiming such
proceeds), (ii) in the case of a sale, transfer or other disposition of an asset
(including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made by the Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event and (iii) the amount of all taxes
paid (or reasonably estimated to be payable) by the Borrower and the
Subsidiaries, and the amount of any reserves established by the Borrower and the
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case, that are directly attributable to such event (as determined
reasonably and in good faith by a Financial Officer), including any such
reserves established in respect of indemnification, pension and other
post-employment benefit liabilities, workers compensation liabilities,
liabilities associated with retiree benefits or liabilities relating to
environmental matters.
 
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“Obligations” has the meaning assigned to such term in the Collateral Agreement.
 
“Other Taxes” means any and all present or future recording, stamp, documentary,
excise, transfer, sales, property or similar taxes, charges or levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
 
“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).
 
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
 
“Perfection Certificate” means a certificate in the form of Exhibit D or any
other form approved by the Administrative Agent.
 
“Permitted Acquisition” has the meaning assigned to such term in
Section 6.04(g).
 
“Permitted Encumbrances” means:
 
(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.05;
 
(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.05;
 
(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;
 
(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
 
(e) judgment liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII;
 
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(f) easements, zoning and other restrictions, rights-of-way and similar
encumbrances on real property imposed by law, arising in the ordinary course of
business or in the ordinary operation of such real property that do not secure
any monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary;
 
(g) customary rights of setoff upon deposits of cash in favor of banks and other
depository institutions and Liens of a collecting bank arising under the Uniform
Commercial Code in respect of payment items in the course of collection;
 
(h) Liens arising from precautionary Uniform Commercial Code financing
statements regarding operating leases or consignments;
 
(i) Liens in favor of custom and forwarding agents and similar Persons in
respect of imported goods and merchandise; and
 
(j) setoff or credit balances of the Borrower or any Subsidiary with credit card
issuers to secure obligations of the Borrower or such Subsidiary, as the case
may be, to any such credit card issuers incurred in the ordinary course of
business as a result of fees and chargebacks;
 
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.
 
“Permitted Investments” means:
 
(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;
 
(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;
 
(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;
 
(d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above;
 
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(e) money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940,
(ii) are rated AAA by S&P or Aaa by Moody’s and (iii) have portfolio assets of
at least $5,000,000,000; and
 
(f) investments in the capital stock of Blue Tulip Corporation, a Delaware
corporation, and Nina McLemore, Inc., a Delaware corporation; provided that the
sum of all such investments shall not exceed $1,000,000 in the aggregate.
 
“Permitted Investors” means David Jaffe (or any member of his immediate family
that is actively involved in the management of the Borrower), Armand Correia,
Reid Hackney, Lisa Rhodes and George Goldfarb.
 
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
 
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
 
“Pro Forma Basis” means, with respect to compliance with any test or covenant
hereunder, compliance with such covenant or test after giving effect to any
proposed Permitted Acquisition (including pro forma adjustments arising out of
events which are directly attributable to the proposed Permitted Acquisition,
are factually supportable and are expected to have a continuing impact, in each
case as reasonably determined by the Borrower and as certified by a Financial
Officer of the Borrower and approved by the Administrative Agent) using, for
purposes of determining such compliance, the historical financial statements of
all entities or assets so acquired or to be acquired and the consolidated
financial statements of the Borrower and its Subsidiaries which shall be
reformulated as if such Permitted Acquisition, and all other Permitted
Acquisitions that have been consummated during the period, and any Indebtedness
or other liabilities incurred in connection with any such Permitted Acquisitions
had been consummated and incurred at the beginning of such period.
 
“Pro Forma Compliance” means, at any date of determination, that the Borrower
shall be in compliance with the covenants set forth in Sections 6.12 and 6.13 as
of the date of such determination or the last day of the most recent fiscal
quarter-end, as the case may be (computed on the basis of (a) balance sheet
amounts as of such date and (b) income statement amounts for the most recently
completed period of four consecutive fiscal quarters for which financial
statements shall have been delivered to the Administrative Agent and, in each
case, calculated on a Pro Forma Basis in respect of the event giving rise to
such determination).
 
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“Qualified Capital Stock” of any Person means any capital stock of such Person
that is not Disqualified Stock.
 
“Register” has the meaning set forth in Section 9.04.
 
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
 
“Release” means any actual release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into or through the environment or within or upon any building,
structure, facility or fixture.
 
“Required Lenders” means, at any time, Lenders having Revolving Exposures and
unused Commitments representing more than 50% of the sum of the total Revolving
Exposures and unused Commitments at such time.
 
“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancelation or termination of any
Equity Interests in the Borrower or any Subsidiary or any option, warrant or
other right to acquire any such Equity Interests in the Borrower or any
Subsidiary.
 
“Revolving Exposure” means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender’s Revolving Loans and its LC
Exposure and Swingline Exposure at such time.
 
“Revolving Lender” means a Lender with a Commitment or, if the Commitments have
terminated or expired, a Lender with Revolving Exposure.
 
“Revolving Loan” means a Loan made pursuant to Section 2.01.
 
“S&P” means Standard & Poor’s Ratings Services (or any successor thereto).
 
“Secured Parties” has the meaning assigned to such term in the Collateral
Agreement or any other applicable Security Document.
 
“Security Documents” means the Collateral Agreement, the Mortgages and each
other security agreement or other instrument or document executed and delivered
pursuant to the Collateral Requirement or pursuant to Section 5.12 or 5.13 to
secure any of the Obligations.
 
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“SPE” means Dunnigan Realty, LLC, a wholly owned Subsidiary that was formed
solely to purchase, own and operate the Distribution Center.
 
“Standby Letter of Credit” means a letter of credit that is not a Commercial
Letter of Credit.
 
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board or any other banking authority, domestic or foreign, to
which the Administrative Agent or any Lender (including any branch, Affiliate or
other fronting office making or holding a Loan) is subject with respect to
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurocurrency Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
 
“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, Controlled or held or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
 
“Subsidiary” means any subsidiary of the Borrower; provided, however, that the
SPE shall be deemed not to be a Subsidiary for any purpose of this Agreement or
other Loan Documents.
 
“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.
 
“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of
Swingline Loans hereunder.
 
“Swingline Loan” means a Loan made pursuant to Section 2.04.
 
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“Synthetic Lease” shall mean, as to any Person, any lease (including leases that
may be terminated by the lessee at any time) of any property (whether real,
personal or mixed) (a) that is accounted for as an operating lease under GAAP
and (b) in respect of which the lessee retains or obtains ownership of the
property so leased for U.S. federal income tax purposes, other than any such
lease under which such person is the lessor.
 
“Synthetic Lease Obligations” shall mean, as to any Person, an amount equal to
the sum of (a) the obligations of such person to pay rent or other amounts under
any Synthetic Lease which are attributable to principal and, without
duplication, (b) the amount of any purchase price payment under any Synthetic
Lease assuming the lessee exercises the option to purchase the leased property
at the end of the lease term.
 
“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
 
“Total Assets” means, on any date, the total assets of the Borrower, as such
amount would be reflected on an unconsolidated balance sheet of the Borrower
prepared as of such date in accordance with GAAP.
 
“Total Indebtedness” means, as of any date, the sum of (a) the aggregate
principal amount of Indebtedness of the Borrower and the Subsidiaries
outstanding as of such date, in the amount that would be reflected on a balance
sheet prepared as of such date on a consolidated basis in accordance with GAAP,
plus (b) the aggregate principal amount of Indebtedness of the Borrower and the
Subsidiaries outstanding as of such date that is not required to be reflected on
a balance sheet in accordance with GAAP, determined on a consolidated basis;
provided that, for purposes of clause (b) above, the term “Indebtedness” shall
not include contingent obligations of the Borrower or any Subsidiary as an
account party in respect of any letter of credit or letter of guaranty unless
such letter of credit or letter of guaranty supports an obligation that
constitutes Indebtedness.
 
“Total Tangible Assets” means, on any date, Total Assets minus the sum of (i)
Intangible Assets, (ii) the aggregate principal amount of Indebtedness of the
Subsidiaries to the Borrower on such date and (iii) investments by the Borrower
in Equity Interests in the Subsidiaries and the SPE, as such amounts would be
reflected on an unconsolidated balance sheet of the Borrower prepared as of such
date in accordance with GAAP.
 
“Transactions” means (a) the execution, delivery and performance by the Borrower
of the Loan Documents, the borrowing of Loans, the use of the proceeds thereof
and the issuance of Letters of Credit hereunder, (b) the termination of, and
repayment of all outstanding obligations under, the Existing Credit Agreement
and (c) the payment of all fees and expenses in connection with the foregoing.
 
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“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
 
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
 
SECTION 1.02.   Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a
“Eurocurrency Revolving Loan”). Borrowings also may be classified and referred
to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurocurrency
Borrowing”) or by Class and Type (e.g., a “Eurocurrency Revolving Borrowing”).
 
SECTION 1.03.   Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
 
SECTION 1.04.   Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision is amended in accordance herewith; provided that the
Borrower, on the one hand, and the Administrative Agent and Lenders, on the
other hand, agree to negotiate in good faith any proposed amendment to eliminate
or adjust for the effect of any such change in GAAP.
 
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SECTION 1.05.   Pro Forma Calculations. With respect to any period during which
any Permitted Acquisition of the type described in the definition of the term
“Pro Forma Basis” occurs as permitted pursuant to the terms of this Agreement,
the Adjusted Leverage Ratio and the Fixed Charge Coverage Ratio shall be
calculated with respect to such period and such Permitted Acquisition on a Pro
Forma Basis.
 
      ARTICLE II  
 
The Credits
 
SECTION 2.01.   Commitments. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Revolving Loans to the Borrower
from time to time during the Availability Period in an aggregate principal
amount that will not result in such Lender’s Revolving Exposure exceeding such
Lender’s Commitment. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans.
 
SECTION 2.02.   Loans and Borrowings. (a) Each Loan (other than a Swingline
Loan) shall be made as part of a Borrowing consisting of Loans of the same Type
made by the Lenders ratably in accordance with their respective Commitments. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender’s failure to make Loans as required.
 
(b)   Subject to Section 2.13, each Revolving Borrowing shall be comprised
entirely of ABR Loans or Eurocurrency Loans as the Borrower may request in
accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at
its option may make any Eurocurrency Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise
of such option shall not affect the obligation of the Borrower to repay such
Loan in accordance with the terms of this Agreement.
 
(c)   At the commencement of each Interest Period for any Eurocurrency Borrowing
(other than any Eurocurrency Borrowing resulting from written Interest Election
Requests made by the Borrower on and dated the Effective Date), such Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and
not less than $5,000,000. At the time that each ABR Revolving Borrowing is made,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $500,000; provided that an ABR Revolving Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
total Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.05(e). Each Swingline Loan shall be in
an amount that is an integral multiple of $100,000 and not less than $100,000.
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of 10 Eurocurrency
Borrowings outstanding.
 
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(d)   Notwithstanding any other provision of this Agreement, the Borrower shall
not be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Maturity
Date.
 
SECTION 2.03.   Requests for Borrowings. To request a Revolving Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurocurrency Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the date of the proposed Borrowing; provided that
any such notice of an ABR Revolving Borrowing to finance the reimbursement of an
LC Disbursement as contemplated by Section 2.05(e) may be given not later than
12:00 noon, New York City time, on the date of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
 
(i)  the aggregate amount of such Borrowing;
 
(ii)  the date of such Borrowing, which shall be a Business Day;
 
(iii)  whether such Borrowing is to be an ABR Borrowing or a Eurocurrency
Borrowing;
 
(iv)  in the case of a Eurocurrency Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and
 
(v)  the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.06.
 
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurocurrency Revolving Borrowing, then the Borrower
shall be deemed to have selected an Interest Period of one month’s duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.
 
SECTION 2.04.   Swingline Loans. (a) Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans to the
Borrower from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $10,000,000
or (ii) the sum of the total Revolving Exposures exceeding the total
Commitments; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Swingline Loans.
 
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(b)   To request a Swingline Loan, the Borrower shall notify the Administrative
Agent of such request by telephone (confirmed by telecopy), not later than 12:00
noon, New York City time, on the day of a proposed Swingline Loan. Each such
notice shall be irrevocable and shall specify the requested date (which shall be
a Business Day) and amount of the requested Swingline Loan. The Administrative
Agent will promptly advise the Swingline Lender of any such notice received from
the Borrower. The Swingline Lender shall make each Swingline Loan available to
the Borrower by means of a credit to the general deposit account of the Borrower
with the Swingline Lender (or, in the case of a Swingline Loan made to finance
the reimbursement of an LC Disbursement as provided in Section 2.05(e), by
remittance to the applicable Issuing Bank) by 2:00 p.m., New York City time, on
the requested date of such Swingline Loan.
 
(c)   The Swingline Lender may by written notice given to the Administrative
Agent not later than 12:00 noon, New York City time, on any Business Day require
the Revolving Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans outstanding. Such notice shall specify the
aggregate amount of Swingline Loans in which Revolving Lenders will participate.
Promptly upon receipt of such notice, the Administrative Agent will give notice
thereof to each Revolving Lender, specifying in such notice such Lender’s
Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender
hereby absolutely and unconditionally agrees, upon receipt of notice as provided
above, to pay to the Administrative Agent, for the account of the Swingline
Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans.
Each Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply,
mutatis mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. The Administrative Agent shall notify
the Borrower of any participations in any Swingline Loan acquired pursuant to
this paragraph, and thereafter payments in respect of such Swingline Loan shall
be made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear. The
purchase of participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Borrower of any default in the payment thereof.
 
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SECTION 2.05.   Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of
Credit for its own account or, so long as the Borrower is a joint and several
co-applicant with respect thereto, any of its Subsidiaries, in a form reasonably
acceptable to the Administrative Agent and the applicable Issuing Bank, at any
time and from time to time during the Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the
applicable Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control. On and after the Effective Date,
each Existing Letter of Credit shall be deemed to be a Letter of Credit for all
purposes hereof and shall be deemed to have been issued hereunder on the
Effective Date. Any Lender that issued an Existing Letter of Credit but shall
not have entered into an Issuing Bank Agreement shall nevertheless have the
rights of an Issuing Bank as to such Existing Letter of Credit for purposes of
this Section 2.05.
 
(b)   Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the applicable Issuing Bank) to an Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
and specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by an Issuing Bank, the Borrower also shall submit a
letter of credit application on such Issuing Bank’s standard form in connection
with any request for a Letter of Credit (other than an Existing Letter of
Credit). A Letter of Credit shall be issued, amended, renewed or extended only
if (and upon issuance, amendment, renewal or extension of each Letter of Credit
the Borrower shall be deemed to represent and warrant that), after giving effect
to such issuance, amendment, renewal or extension the total Revolving Exposures
shall not exceed the total Commitments.
 
(c)   Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date; provided that a Letter of Credit
may expire at a later date if the Borrower shall have deposited cash collateral
in an account with the Administrative Agent pursuant to Section 2.05(j) in an
amount equal to 105% of the undrawn face amount of such Letter or Credit. Any
Letter of Credit may provide by its terms that it may be automatically extended
(i.e., “evergreen”) for additional successive one year periods on terms
reasonably acceptable to the applicable Issuing Bank. Any Letter of Credit
providing for automatic extension shall be extended upon the then current
expiration date without any further action by any Person unless the applicable
Issuing Bank shall have given notice to the applicable beneficiary (with a copy
to the Borrower) of the election by such Issuing Bank not to extend such Letter
of Credit, such notice to be given not fewer than 30 days prior to the then
current expiration date of such Letter of Credit, provided that no Letter of
Credit may be extended automatically or otherwise beyond the date that is five
Business Days prior to the Maturity Date (other than in accordance with the
proviso to the first sentence of this paragraph (c)).
 
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(d)   Participations. By the issuance of a Letter of Credit (or an amendment to
a Letter of Credit increasing the amount thereof) and without any further action
on the part of the applicable Issuing Bank or the Lenders, such Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from such Issuing Bank, a participation in such Letter of Credit equal
to such Lender’s Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the applicable Issuing Bank,
such Lender’s Applicable Percentage of each LC Disbursement made by such Issuing
Bank and not reimbursed by the Borrower on the date due as provided in paragraph
(e) of this Section, or of any reimbursement payment required to be refunded to
the Borrower for any reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. On the Effective
Date and without any further action by any party hereto, each Issuing Bank that
has issued an Existing Letter of Credit shall be deemed to have granted to each
Revolving Lender, and each Revolving Lender shall be deemed to have acquired
from such Issuing Bank, a participation in each such Existing Letter of Credit
in accordance with the foregoing provisions of this paragraph (d).
 
(e)   Reimbursement. If an Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, it shall give prompt notice thereof to the
Borrower. The Borrower shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than 1:00
p.m., New York City time, on the date that such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m.,
New York City time, on such date, or, if such notice has not been received by
the Borrower prior to such time on such date, then not later than 1:00 p.m., New
York City time, on (i) the Business Day that the Borrower receives such notice,
if such notice is received prior to 10:00 a.m., New York City time, on the day
of receipt, or (ii) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior to such time
on the day of receipt; provided that, if such LC Disbursement is not less than
$500,000, the Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 or 2.04 that such payment be
financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent
amount and, to the extent so financed, the Borrower’s obligation to make such
payment shall be discharged and replaced by the resulting ABR Revolving
Borrowing or Swingline Loan. If the Borrower fails to make such payment when
due, the Administrative Agent shall notify each Revolving Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender’s Applicable Percentage thereof. Promptly following
receipt of such notice, each Revolving Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.06 with respect to Loans made by such
Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the applicable Issuing Bank the amounts so received by it from
the Revolving Lenders. Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this paragraph, the Administrative
Agent shall distribute such payment to the applicable Issuing Bank or, to the
extent that Revolving Lenders have made payments pursuant to this paragraph to
reimburse the applicable Issuing Bank, then to such Revolving Lenders and such
Issuing Bank as their interests may appear. Any payment made by a Revolving
Lender pursuant to this paragraph to reimburse the applicable Issuing Bank for
any LC Disbursement (other than the funding of ABR Revolving Loans or a
Swingline Loan as contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC Disbursement.
 
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(f)   Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the applicable Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
substantially comply with the terms of such Letter of Credit or (iv) any other
event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders
nor the applicable Issuing Bank, nor any of their Related Parties, shall have
any liability or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit or any payment or failure to make any
payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of such Issuing Bank;
provided that the foregoing shall not be construed to excuse such Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by such Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or wilful misconduct on the part of the applicable Issuing
Bank (as finally determined by a court of competent jurisdiction), such Issuing
Bank shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, such
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
 
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(g)   Disbursement Procedures. The applicable Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The applicable Issuing Bank shall
promptly notify the Administrative Agent and the Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether such Issuing Bank
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse such Issuing Bank and the Revolving Lenders with respect
to any such LC Disbursement in accordance with the foregoing provisions of
paragraphs (e) and (f).
 
(h)   Interim Interest. If an Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but
excluding the date that the Borrower reimburses such LC Disbursement, at the
rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.12(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the applicable
Issuing Bank, except that interest accrued on and after the date of payment by
any Revolving Lender pursuant to paragraph (e) of this Section to reimburse such
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
 
(i)   Replacement of Issuing Banks. An Issuing Bank may resign at any time by
giving 30 days prior written notice to the Administrative Agent and the
Borrower, and an Issuing Bank may be replaced at any time by written agreement
among the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. The Administrative Agent shall notify the Lenders of any
such resignation or replacement of an Issuing Bank. At the time any such
resignation or replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the retiring or replaced Issuing Bank
pursuant to Section 2.11(b). From and after the effective date of any such
resignation or replacement, (i) the successor Issuing Bank shall have all the
rights and obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the resignation or replacement of an Issuing Bank
hereunder, the retiring or replaced Issuing Bank shall remain a party hereto and
shall continue to have all the rights and obligations of an Issuing Bank under
this Agreement with respect to Letters of Credit issued by it prior to such
resignation or replacement, but shall not be required to issue additional
Letters of Credit.
 
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(j)   Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the total LC Exposure as of
such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (h) or (i) of Article VII. The
Borrower also shall deposit cash collateral pursuant to this paragraph as and to
the extent required by Section 2.10(b). Each such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Administrative Agent and at the Borrower’s risk and expense,
such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Issuing Banks for LC
Disbursements for which they have not been reimbursed by or on behalf of the
Borrower and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Lenders with LC Exposure representing greater than 50% of
the total LC Exposure), be applied to satisfy other obligations of the Borrower
under this Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived. If the Borrower is required to provide an amount of cash collateral
hereunder pursuant to Section 2.10(b), such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower as and to the extent that, after
giving effect to such return, the Borrower would remain in compliance with
Section 2.10(b) and no Default shall have occurred and be continuing.
 
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(k)   Issuing Bank Agreements. Unless otherwise requested by the Administrative
Agent, each Issuing Bank shall report in writing to the Administrative Agent
(i) on the first Business Day of each week, the daily activity (set forth by
day) in respect of Letters of Credit during the immediately preceding week,
including all issuances, extensions, amendments and renewals, all expirations
and cancelations and all disbursements and reimbursements, (ii) on or prior to
each Business Day on which such Issuing Bank expects to issue, amend, renew or
extend any Letter of Credit, the date of such issuance, amendment, renewal or
extension, and the aggregate face amount of the Letters of Credit to be issued,
amended, renewed or extended by it and outstanding after giving effect to such
issuance, amendment, renewal or extension occurred (and whether the amount
thereof changed), it being understood that such Issuing Bank shall not permit
any issuance of any Letter of Credit, or any renewal, extension or amendment
resulting in an increase in the amount of any Letter of Credit to occur, without
first obtaining written confirmation from the Administrative Agent that it is
then permitted under this Agreement, (iii) on each Business Day on which such
Issuing Bank makes any LC Disbursement, the date of such LC Disbursement and the
amount of such LC Disbursement, (iv) on any Business Day on which the Borrower
fails to reimburse an LC Disbursement required to be reimbursed to such Issuing
Bank on such day, the date of such failure and the amount and currency of such
LC Disbursement and (v) on any other Business Day, such other information as the
Administrative Agent shall reasonably request.
 
SECTION 2.06.   Funding of Borrowings. (a) Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders; provided that Swingline Loans shall be made as provided
in Section 2.04. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request;
provided that ABR Revolving Loans or Swingline Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Administrative Agent to the applicable Issuing Bank.
 
(b)   Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans, but without prejudice to any claim the Borrower may
have against such Lender. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing.
 
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SECTION 2.07.   Interest Elections. (a) Each Revolving Borrowing initially shall
be of the Type specified in the applicable Borrowing Request and, in the case of
a Eurocurrency Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request. Thereafter, the Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided
in this Section. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Swingline Borrowings, which
may not be converted or continued.
 
(b)   To make an election pursuant to this Section, the Borrower shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
 
(c)   Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
 
(i)  the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);
 
(ii)  the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;
 
(iii)  whether the resulting Borrowing is to be an ABR Borrowing or a
Eurocurrency Borrowing; and
 
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(iv)  if the resulting Borrowing is a Eurocurrency Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.
 
If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.
 
(d)   Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.
 
(e)   If the Borrower fails to deliver a timely Interest Election Request with
respect to a Eurocurrency Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
 
SECTION 2.08.   Termination and Reduction of Commitments; Increase of
Commitments. (a) Unless previously terminated, the Commitments shall terminate
on the Maturity Date.
 
(b)   The Borrower may at any time terminate, or from time to time reduce, the
Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is an integral multiple of $1,000,000 and not less than $5,000,000
and (ii) the Borrower shall not terminate or reduce the Commitments if, after
giving effect to any concurrent prepayment of the Revolving Loans in accordance
with Section 2.10, the sum of the Revolving Exposures would exceed the total
Commitments.
 
(c)   The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
 
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(d)   The Borrower may from time to time, by written notice to the
Administrative Agent, executed by the Borrower and one or more financial
institutions (any such financial institution being called an “Increasing
Lender”), which may include any Lender, cause the Commitments of the Increasing
Lenders to be increased (or cause Commitments to be extended by the Increasing
Lenders, as the case may be) in an amount for each Increasing Lender set forth
in such notice; provided that (i) the amount of any such increase in the
aggregate Commitments shall be not less than $10,000,000, (ii) the aggregate
amount of increases in Commitments made pursuant to this paragraph shall not
exceed $50,000,000, (iii) each Increasing Lender, if not already a Lender
hereunder, shall be subject to the approval of the Administrative Agent and each
Issuing Bank (which approval shall not be unreasonably withheld or delayed) and
shall execute all such documentation as the Administrative Agent and the
Borrower shall reasonably specify to evidence the Commitment of such Increasing
Lender and its status as a Lender hereunder. Such notice shall set forth the
date (the “Increase Effective Date”) on which such increase is requested to
become effective (which shall not be less than 3 Business Days or more than 45
days after the date of such notice). On the Increase Effective Date, (A) the
aggregate principal amount of the Loans outstanding (the “Initial Loans”)
immediately prior to giving effect to the Commitment increase on the Increase
Effective Date shall be deemed to be repaid, (B) after the effectiveness of the
Commitment increase, the Borrower shall be deemed to have made new Borrowings
(the “Subsequent Borrowings”) in an aggregate principal amount equal to the
aggregate principal amount of the Initial Loans and of the Types and for the
Interest Periods specified in a Borrowing Request delivered to the
Administrative Agent in accordance with Section 2.03, (C) each Lender shall pay
to the Administrative Agent in same day funds an amount equal to the difference,
if positive, between (x) such Lender’s Applicable Percentage (calculated after
giving effect to the Commitment increase) of the Subsequent Borrowings and
(y) such Lender’s Applicable Percentage (calculated without giving effect to the
Commitment increase) of the Initial Loans, (D) after the Administrative Agent
receives the funds specified in clause (C) above, the Administrative Agent shall
pay to each Lender the portion of such funds that is equal to the difference, if
positive, between (1) such Lender’s Applicable Percentage (calculated without
giving effect to the Commitment increase) of the Initial Loans and (2) such
Lender’s Applicable Percentage (calculated after giving effect to the Commitment
increase) of the amount of the Subsequent Borrowings, (E) each Lender (including
each Increasing Lender) shall be deemed to hold its Applicable Percentage of
each Subsequent Borrowing (each calculated after giving effect to the Commitment
increase) and (F) the Borrower shall pay each Lender (other than any Increasing
Lender that was not a Lender before giving effect to the Commitment increase)
any and all accrued but unpaid interest on the Initial Loans. The deemed
payments made pursuant to clause (A) above in respect of each Eurodollar Loan
shall be subject to indemnification by the Borrower pursuant to the provisions
of Section 2.15 if the Increase Effective Date occurs other than on the last day
of the Interest Period relating thereto and breakage costs actually result
therefrom. Notwithstanding the foregoing, no increase in the Commitments (or in
any Commitment of any Lender) or addition of an Increasing Lender shall become
effective under this paragraph unless, (A) on the date of such increase, the
conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be
satisfied and the Administrative Agent shall have received a certificate to that
effect dated such date and executed by a Financial Officer of the Borrower, and
(B) the Administrative Agent shall have received (with sufficient copies for
each of the Lenders) documents consistent with those delivered pursuant to
Section 4.01 as to the corporate power and authority of the Borrower to borrow
hereunder after giving effect to such increase.
 
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SECTION 2.09.   Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account
of each Lender the then unpaid principal amount of each Revolving Loan of such
Lender on the Maturity Date and (ii) to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the earlier of the Maturity Date and
the first date after such Swingline Loan is made that is the 15th or last day of
a calendar month and is at least five Business Days after such Swingline Loan is
made; provided that on each date that a Revolving Borrowing is made, the
Borrower shall repay all Swingline Loans that were outstanding on the date such
Borrowing was requested.
 
(b)   Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
 
(c)   The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof.
 
(d)   The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
 
(e)   Any Lender may request that Loans of any Class made by it be evidenced by
a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
substantially in the form of Exhibit F. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
 
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SECTION 2.10.   Prepayment of Loans. (a) The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to the requirements of this Section.
 
(b)   In the event and on such occasion that the sum of the Revolving Exposures
exceeds the total Commitments, the Borrower shall prepay Revolving Borrowings or
Swingline Borrowings (or, if no such Borrowings are outstanding, deposit cash
collateral in an account with the Administrative Agent pursuant to Section
2.05(j)) in an aggregate amount equal to such excess.
 
(c)   Prior to any optional or mandatory prepayment of Borrowings hereunder, the
Borrower shall select the Borrowing or Borrowings to be prepaid and shall
specify such selection in the notice of such prepayment pursuant to
paragraph (e) of this Section.
 
(d)   The Borrower shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by
telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurocurrency Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of prepayment, (ii) in the case of prepayment of
an ABR Borrowing, not later than 11:00 a.m., New York City time, on the date of
prepayment or (iii) in the case of prepayment of a Swingline Loan, not later
than 12:00 noon, New York City time, on the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date, the principal amount
of each Borrowing or portion thereof to be prepaid and, in the case of a
mandatory prepayment, a reasonably detailed calculation of the amount of such
prepayment; provided that, if a notice of optional prepayment is given in
connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.08, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.08. Promptly
following receipt of any such notice (other than a notice relating solely to
Swingline Loans), the Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an amount
that would be permitted in the case of an advance of a Borrowing of the same
Type as provided in Section 2.02, except as necessary to apply fully the
required amount of a mandatory prepayment. Each prepayment of a Borrowing shall
be applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest and other amounts to the extent
required by Section 2.12.
 
(e) Amounts to be applied pursuant to this Section 2.10 to prepay any
Eurocurrency Borrowing shall be deposited in a Breakage Prepayment Account (as
defined below) if the Borrower so requests in order to avoid the incurrence of
costs under Section 2.15. On the last day of the Interest Period of such
Eurocurrency Borrowing, the Administrative Agent shall apply any cash on deposit
in such Breakage Prepayment Account to amounts due in respect of such
Eurocurrency Borrowing until all amounts due in respect thereof have been
satisfied (with any remaining funds being returned to the Borrower) or until all
the allocable cash on deposit has been exhausted. For purposes of this paragraph
(g), the term “Breakage Prepayment Account” shall mean an account established by
the Borrower with the Administrative Agent and over which the Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal for application in accordance with this paragraph (g). The
Administrative Agent will, at the request of the Borrower, invest amounts on
deposit in a Breakage Prepayment Account in short-term, cash equivalent
investments selected by the Administrative Agent in consultation with the
Borrower that mature prior to the last day of the Interest Period of the
applicable Eurocurrency Borrowing; provided, however, that the Administrative
Agent shall have no obligation to invest amounts on deposit in a Breakage
Prepayment Account if a Default or an Event of Default shall have occurred and
be continuing. The Borrower shall indemnify the Administrative Agent for any
losses relating to the investments made at the request or direction of the
Borrower so that the amount available to prepay amounts due in respect of the
applicable Eurocurrency Borrowing on the last day of the applicable Interest
Period is not less than the amount that would have been available had no
investments been made pursuant thereto. Other than any interest earned on such
investments (which shall be for the account of the Borrower, to the extent not
necessary for the prepayment of Eurocurrency Borrowings in accordance with this
Section), the Breakage Prepayment Account shall not bear interest. Interest or
profits, if any, on such investments in any Breakage Prepayment Account shall be
deposited in such Breakage Prepayment Account and reinvested and disbursed as
specified above. If the maturity of the Loans and all amounts due hereunder has
been accelerated pursuant to Article VII, the Administrative Agent may, in its
sole discretion, apply all amounts on deposit in the Breakage Prepayment
Accounts to satisfy any of the Obligations (and the Borrower has pursuant to the
Collateral Agreement or another Security Document granted to the Administrative
Agent a security interest in each of its Breakage Prepayment Accounts to secure
such Obligations).
 
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SECTION 2.11.   Fees. (a) The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a commitment fee, which shall accrue at the
Applicable Rate on the average daily unused amount of each Commitment of such
Lender during the period from and including the date hereof to but excluding the
date on which such Commitment terminates. Accrued commitment fees shall be
payable in arrears on the last day of March, June, September and December of
each year and on the date on which the Commitments terminate, commencing on the
first such date to occur after the Effective Date. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). For
purposes of computing commitment fees with respect to Commitments, a Commitment
of a Lender shall be deemed to be used to the extent of the outstanding
Revolving Loans and LC Exposure of such Lender (and the Swingline Exposure of
such Lender shall be disregarded for such purpose).
 
(b)   The Borrower agrees to pay (i) to the Administrative Agent for the account
of each Revolving Lender a participation fee with respect to its participations
in Commercial Letters of Credit or Standby Letters of Credit, as the case may
be, which shall accrue at the Applicable Rate therefor, in each case, on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender’s Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to each Issuing Bank a fronting fee, which shall
accrue at the rate or rates per annum separately agreed upon between the
Borrower and such Issuing Bank on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
attributable to Letters of Credit issued by such Issuing Bank during the period
from and including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any such
LC Exposure, as well as such Issuing Bank’s standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; provided that all such fees
shall be payable on the date on which the Commitments terminate and any such
fees accruing after the date on which the Commitments terminate shall be payable
on demand. Any other fees payable to any Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
 
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(c)   The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
 
(d)   All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to the applicable Issuing Bank,
in the case of fees payable to it) for distribution, in the case of commitment
fees and participation fees, to the Lenders entitled thereto. Fees paid shall
not be refundable under any circumstances (absent manifest error).
 
SECTION 2.12.   Interest. (a) The Loans comprising each ABR Borrowing (including
each Swingline Loan) shall bear interest at the Alternate Base Rate plus the
Applicable Rate.
 
(b)   The Loans comprising each Eurocurrency Borrowing shall bear interest at
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Rate.
 
(c)   Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by the Borrower hereunder is not paid when
due (after giving effect to any applicable grace period), whether at stated
maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2% plus the rate otherwise applicable
to such Loan as provided in the preceding paragraphs of this Section or (ii) in
the case of any other amount, 2% plus the rate applicable to ABR Revolving Loans
as provided in paragraph (a) of this Section.
 
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(d)   Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and, in the case of Revolving Loans, upon termination
of the Commitments; provided that (i) interest accrued pursuant to paragraph (c)
of this Section shall be payable on demand, (ii) in the event of any repayment
or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan
prior to the end of the Availability Period), accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurocurrency Loan
prior to the end of the current Interest Period therefor, accrued interest on
such Loan shall be payable on the effective date of such conversion.
 
(e)   All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate or Adjusted
LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
 
SECTION 2.13.   Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurocurrency Borrowing:
 
(a)   the Administrative Agent determines in good faith (which determination
shall be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
 
(b)   the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included
in such Borrowing for such Interest Period;
 
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist (which notice shall be
promptly given following the termination of any such circumstances), (i) any
Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective,
and such Borrowing shall be converted to or continued on the last day of the
Interest Period applicable thereto as an ABR Borrowing, and (ii) if any
Borrowing Request requests a Eurocurrency Borrowing, such Borrowing shall be
made as an ABR Borrowing.
 
SECTION 2.14.   Increased Costs. (a) If any Change in Law shall:
 
(i)  impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or any Issuing Bank; or
 
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(ii)  impose on any Lender or any Issuing Bank or the London interbank market
any other condition affecting this Agreement or Eurocurrency Loans made by such
Lender or any Letter of Credit or participation therein;
 
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or any
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
 
(b)   If any Lender or any Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or such Issuing Bank’s capital or on the capital of
such Lender’s or such Issuing Bank’s holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a
level below that which such Lender or such Issuing Bank or such Lender’s or such
Issuing Bank’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or such Issuing Bank’s policies and the
policies of such Lender’s or such Issuing Bank’s holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
or such Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or such Issuing Bank or such Lender’s or such
Issuing Bank’s holding company for any such reduction suffered.
 
(c)   A certificate of a Lender or an Issuing Bank setting forth in reasonable
detail the amount or amounts necessary to compensate such Lender or such Issuing
Bank or its holding company, as the case may be, as specified in paragraph (a)
or (b) of this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or such
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 30 days after receipt thereof.
 
(d)   Failure or delay on the part of any Lender or any Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or such Issuing Bank’s right to demand such compensation; provided that
the Borrower shall not be required to compensate a Lender or an Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 270 days prior to the date that such Lender or such Issuing Bank, as the
case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or such Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
 
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SECTION 2.15.   Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Revolving Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.10(d) and is revoked in accordance therewith), or (d) the assignment of any
Eurocurrency Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.18, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurocurrency Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurocurrency market. A
certificate of any Lender setting forth in reasonable detail any amount or
amounts that such Lender is entitled to receive pursuant to this Section shall
be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 30 days after receipt thereof.
 
SECTION 2.16.   Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
 
(b)   In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
 
(c)   The Borrower shall indemnify the Administrative Agent, each Lender and
each Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or such Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder or under
any other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section), and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate containing reasonable detail as to the amount of such payment or
liability delivered to the Borrower by a Lender or an Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or an Issuing
Bank, shall be conclusive absent manifest error.
 
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(d)   As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
 
(e)   Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), on or prior to the date of this Agreement (or, in the
case of any Lender that becomes a party to this Agreement pursuant to an
Assignment and Assumption, on or prior to the effective date of such Assignment
and Assumption), either (a) two (2) properly executed originals of Form W-8ECI
or Form W-8BEN (or any successor forms) prescribed by the Internal Revenue
Service or other documents satisfactory to the Borrower and the Administrative
Agent, as the case may be, certifying (i) that all payments to be made to such
Foreign Lender hereunder and under any other Loan Documents are exempt from
United States withholding taxes because such payments are effectively connected
with the conduct by such Lender of a trade or business within the United States
and are included in such Lender’s gross income or (ii) that all payments to be
made to such Foreign Lender hereunder and under any other Loan Documents are
completely exempt from taxes or are subject to such taxes at a reduced rate by
an applicable tax treaty, or (b)(i) a certificate executed by such Lender
certifying that such Lender is not a “bank” within the meaning of Section
881(c)(3)(A) of the Code and that such Lender qualifies for the portfolio
interest exemption under Section 881(c) of the Code, and (ii) two (2) properly
executed originals of Internal Revenue Service Form W-8BEN (or any successor
form), in each case, certifying such Lender’s entitlement to an exemption from
United States withholding tax with respect to payments of interest to be made
hereunder or under any other Loan Documents. Each Lender that is not a Foreign
Lender shall deliver to the Borrower (with a copy to the Administrative Agent)
two (2) properly executed originals of Internal Revenue Service Form W-9 (or any
successor form). Each such Lender agrees to provide the Borrower (with a copy to
the Administrative Agent) with new forms prescribed by the Internal Revenue
Service upon the expiration or obsolescence of any previously delivered form, or
after the occurrence of any event requiring a change in the most recent forms
delivered by it to the Borrower and the Administrative Agent.
 
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(f)   If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section 2.16, it shall pay
over such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 2.16 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person.
 
SECTION 2.17.   Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a)
The Borrower shall make each payment required to be made by it hereunder or
under any other Loan Document (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.14,
2.15 or 2.16, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 12:00 noon, New York City time), on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York or such other location as the Administrative Agent may reasonably
specify, except payments to be made directly to an Issuing Bank or the Swingline
Lender as expressly provided herein and except that payments pursuant to
Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments under each Loan Document shall be made in
dollars. Any payment required to be made by the Administrative Agent hereunder
shall be deemed to have been made by the time required if the Administrative
Agent shall, at or before such time, have taken the necessary steps to make such
payment in accordance with the regulations or operating procedures of the
clearing or settlement system used by the Administrative Agent to make such
payment.
 
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(b)   If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
 
(c)   If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Revolving Loans or participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in LC Disbursements
and Swingline Loans and accrued interest thereon than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Revolving Loans and
participations in LC Disbursements and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
 
(d)   Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or any Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the applicable
Issuing Bank, as the case may be, the amount due. In such event, if the Borrower
has not in fact made such payment, then each of the Lenders or such Issuing
Bank, as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or Issuing Bank
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.
 
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(e)   If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(b), 2.17(d) or 9.03(c), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.
 
SECTION 2.18.   Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.14, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the good faith judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
 
(b)   If (i) any Lender requests compensation under Section 2.14, (ii) the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
(iii) any Lender defaults in its obligation to fund Loans hereunder or (iv) any
Lender refuses to consent to any amendment, waiver or other modification of any
Loan Document requested by the Borrower that requires the consent of a greater
percentage of the Lenders than the Required Lenders and such amendment, waiver
or other modification is consented to by Lenders having Revolving Exposures and
unused Commitments representing more than 66-2/3% of the sum of the total
Revolving Exposures and unused Commitments at such time, then the Borrower may,
at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations and, with respect to clause (iv)
above, shall consent to such requested amendment, waiver or other modification
of any Loan Document (which assignee may be another Lender, if a Lender accepts
such assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and, if a Commitment is being
assigned, each Issuing Bank (subject to the provisions of clause (2) of the
proviso to Section 9.04(b)(i)(C)) and the Swingline Lender), which consent in
each case shall not unreasonably be withheld or delayed, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans and funded participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal, funded
participations and accrued interest and fees) or the Borrower (in the case of
all other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.14 or payments required to be made
pursuant to Section 2.16, such assignment will result in a material reduction in
such compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
 
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ARTICLE III  
 
 
Representations and Warranties
 
The Borrower represents and warrants to the Lenders that:
 
SECTION 3.01.   Organization; Powers. The Borrower and each of its Subsidiaries
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
 
SECTION 3.02.   Authorization; Enforceability. The Transactions to be entered
into by the Borrower are within the Borrower’s corporate powers and have been
duly authorized by all necessary corporate and, if required, stockholder action.
This Agreement has been duly executed and delivered by the Borrower and
constitutes, and each other Loan Document, when executed and delivered by the
Borrower, will constitute, a legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
 
SECTION 3.03.   Governmental Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect and except filings necessary to perfect
Liens created under the Loan Documents, (b) will not violate any applicable law
or regulation or the charter, by-laws or other organizational documents of the
Borrower or any of its Subsidiaries or any order of any Governmental Authority,
except, in the case of any applicable law or regulation, a violation which could
not reasonably be expected to result in a Material Adverse Effect, (c) will not
violate or result in a default under any indenture, material agreement or other
material instrument binding upon the Borrower or any of its Subsidiaries or its
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any of its Subsidiaries, and (d) will not result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries, except Liens created under the Loan Documents.
 
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SECTION 3.04.   Financial Condition; No Material Adverse Change. (a) The
Borrower has heretofore furnished to the Lenders (i) the consolidated balance
sheets and related statements of earnings, shareholders’ equity and cash flows
of the Borrower and its consolidated Subsidiaries as of and for the fiscal years
ended July 31, 2004, and July 30, 2005, each audited by and accompanied by the
unqualified opinion of Deloitte & Touche LLP, an independent registered public
accounting firm. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP.
 
(b)   Except as disclosed in the financial statements referred to above or the
notes thereto and except for the Disclosed Matters, after giving effect to the
Transactions, none of the Borrower or its Subsidiaries has, as of the Effective
Date, any material contingent liabilities, unusual long-term commitments or
unrealized losses.
 
(c)   Since July 30, 2005, there has been no material adverse change in the
business, assets, operations, properties, condition (financial or otherwise),
results of operations or liabilities (including contingent liabilities), of the
Borrower and its Subsidiaries, taken as a whole.
 
SECTION 3.05.   Properties. (a) The Borrower and each of its Subsidiaries has
good title to, or valid leasehold interests in, all its real and personal
property material to its business (including its Mortgaged Properties), except
for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes and Liens expressly permitted by Section 6.02.
 
(b)   The Borrower and each of its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
 
(c)   Schedule 3.05 sets forth the address of each real property that will be
owned, and each material parcel of property that will be leased, by the Borrower
as of the Effective Date after giving effect to the Transactions.
 
(d)   As of the Effective Date, neither the Borrower nor any of its Subsidiaries
has received written notice of, or has knowledge of, any pending or contemplated
condemnation proceeding affecting any Mortgaged Property or any sale or
disposition thereof in lieu of condemnation. Neither any Mortgaged Property nor
any interest therein is subject to any right of first refusal, option or other
contractual right to purchase such Mortgaged Property or interest therein.
 
SECTION 3.06.   Litigation and Environmental Matters. (a) There are no actions,
suits or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of the Borrower, threatened against or
affecting the Borrower or any of its Subsidiaries (i) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or
(ii) that involve any of the Loan Documents or the Transactions.
 
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(b)   Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability,
(iii) has received written notice of any claim with respect to any Environmental
Liability or (iv) knows of any basis for any Environmental Liability.
 
(c)   Since the date of this Agreement, there has been no change in the status
of the Disclosed Matters that, individually or in the aggregate, has resulted
in, or materially increased the likelihood of, a Material Adverse Effect.
 
SECTION 3.07.   Compliance with Laws and Agreements. The Borrower and each of
its Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect (it being understood and agreed
that this Section 3.07 does not apply to any law which is the subject of Section
3.06, 3.08, 3.09, 3.10 or 3.14). No Default has occurred and is continuing.
 
SECTION 3.08.   Investment and Holding Company Status. Neither the Borrower nor
any of its Subsidiaries is (a) an “investment company” as defined in, or subject
to regulation under, the Investment Company Act of 1940 or (b) a “holding
company” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.
 
SECTION 3.09.   Taxes. The Borrower and each of its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) any Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves or (b) to the extent that the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect.
 
SECTION 3.10.   ERISA; Margin Regulations. (a) No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the date of the most recent financial statements reflecting such amounts,
exceed by more than $2,000,000 the fair market value of the assets of such Plan.
 
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(b)   None of the Borrower or any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of buying or carrying Margin Stock. No part of the proceeds of any Loan
or any Letter of Credit will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, in any manner or for any
purpose that would entail a violation of the Regulations T, U or X of the Board.
 
SECTION 3.11.   Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, if, in the case of any such
agreement, instrument or restriction, the same is not complied with in
accordance with its terms or is otherwise violated, could reasonably be expected
to result in a Material Adverse Effect. None of the reports, financial
statements, certificates or other information furnished by or on behalf of the
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document or delivered hereunder
or thereunder (as modified or supplemented by other information so furnished,
taken as a whole) contains any material misstatement of fact or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
 
SECTION 3.12.   Subsidiaries. Schedule 3.12 sets forth the name of, and the
ownership interest of the Borrower in, each Subsidiary of the Borrower as of the
Effective Date.
 
SECTION 3.13.   Insurance. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of the Borrower and its Subsidiaries as of
the Effective Date. As of the Effective Date, all premiums then due and payable
in respect of such insurance have been paid. The Borrower believes that the
insurance maintained by or on behalf of the Borrower and its Subsidiaries is
adequate.
 
SECTION 3.14.   Labor Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the
knowledge of the Borrower, threatened. The hours worked by and payments made to
employees of the Borrower and the Subsidiaries have not been in violation of the
Fair Labor Standards Act or any other applicable Federal, state, local or
foreign law dealing with such matters, except for any such violation that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. All payments due from the Borrower or any Subsidiary,
or for which any claim may be made against the Borrower or any Subsidiary, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of the Borrower or such
Subsidiary to the extent required by GAAP. The consummation of the Transactions
will not give rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to which the
Borrower or any Subsidiary is bound.
 
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SECTION 3.15.   Solvency. Immediately after the consummation of the Transactions
to occur on the Effective Date and immediately following the making of each Loan
made on the Effective Date and after giving effect to the application of the
proceeds of such Loans, (a) the fair value of the assets of the Borrower and its
consolidated Subsidiaries, at a fair valuation, will exceed their debts and
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the property of the Borrower and its consolidated Subsidiaries
will be greater than the amount that will be required to pay the probable
liability of their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured; (c)
the Borrower and its consolidated Subsidiaries will be able to pay their debts
and liabilities, subordinated, contingent or otherwise (it being understood and
agreed that for purposes of this Section 3.15, contingent liabilities mean the
maximum amount of liability which could reasonably be likely to result from
pending litigation, asserted claims and assessments, guaranties, indemnification
obligations, adjustment of purchase price or other post-closing payment
adjustments (including earn-outs and other similar arrangements) and uninsured
risks of the Borrower and its Subsidiaries), as such debts and liabilities
become absolute and matured; and (d) the Borrower and its consolidated
Subsidiaries will not have unreasonably small capital with which to conduct the
businesses in which they are engaged as such businesses are now conducted and
are proposed to be conducted following the Effective Date.
 
SECTION 3.16.   Collateral Matters. (a) When executed and delivered, the
Collateral Agreement will be effective to create in favor of the Administrative
Agent for the ratable benefit of the Secured Parties a valid and enforceable
security interest in the Collateral (as defined therein) and (i) when the
Collateral (as defined therein) constituting certificated securities (as defined
in the Uniform Commercial Code) is delivered to the Administrative Agent
thereunder together with instruments of transfer duly endorsed in blank, the
Collateral Agreement will constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the pledgors thereunder in such
Collateral, prior and superior in right to any other Person, and (ii) when
financing statements in appropriate form are filed in the offices specified in
the Perfection Certificate, the Collateral Agreement will constitute a fully
perfected Lien on and security interest in all right, title and interest of the
grantors in the remaining Collateral (as defined therein) to the extent
perfection can be obtained by filing Uniform Commercial Code financing
statements, prior and superior to the rights of any other Person, except Liens
expressly permitted by Section 6.02.
 
(b)   Each Mortgage, upon execution and delivery by the parties thereto, will
create in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable Lien on all the applicable
mortgagor’s right, title and interest in and to the Mortgaged Properties subject
thereto and the proceeds thereof, and when the Mortgages have been filed in the
jurisdictions specified in Schedule 3.16, the Mortgages will constitute a fully
perfected Lien on all right, title and interest of the mortgagors in the
Mortgaged Properties and the proceeds thereof, prior and superior in right to
any other Person (but subject to Liens or other encumbrances for which
exceptions are taken in the policies of title insurance delivered in respect of
the Mortgaged Properties).
 
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(c)   Upon the recordation of the Collateral Agreement or a memorandum of such
Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, the Lien created under the Collateral Agreement will
constitute a fully perfected Lien on all right, title and interest of the
Borrower in the registered Intellectual Property (as defined in the Collateral
Agreement) in which a security interest may be fully perfected by filing in the
United States Patent and Trademark Office and the United States Copyright
Office, in each case prior and superior in right to any other Person, except
Liens expressly permitted under Section 6.02 (it being understood that
subsequent recordings in the United States Patent and Trademark Office or the
United States Copyright Office may be necessary to perfect a Lien on registered
trademarks and trademark applications or copyrights, respectively, acquired by
the Borrower after the Effective Date).
 
SECTION 3.17.   Use of Proceeds. The Borrower will use the proceeds of the Loans
and will request the issuance of Letters of Credit only for purposes set forth
in Section 5.11.
 
SECTION 3.18.   Termination of Guarantees. Upon the termination of the Existing
Credit Agreement and the related subsidiary guarantees on the Effective Date, no
Subsidiary will Guarantee the Convertible Notes or any other Material
Indebtedness of the Borrower.
 
      ARTICLE IV  
 
Conditions
 
SECTION 4.01.   Effective Date. The obligations of the Lenders to make Loans and
of the Issuing Banks to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):
 
(a)   The Administrative Agent (or its counsel) shall have received from each
party hereto either (i) a counterpart of this Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative Agent (which
may include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement.
 
(b)   The Administrative Agent shall have received a favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of (i) Proskauer Rose LLP, counsel to the Borrower, substantially in the
form of Exhibit B-1 and (ii)  Christopher J. McDonald, Esq., special Connecticut
counsel to the Borrower, substantially in the form of Exhibit B-2, and, in the
case of each such opinion required by this paragraph, covering such other
matters relating to the Borrower, the Loan Documents or the Transactions as the
Required Lenders shall reasonably request. The Borrower hereby requests such
counsel to deliver such opinions.
 
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(c)   The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Borrower, the
authorization of the Transactions and any other legal matters relating to the
Borrower, the Loan Documents or the Transactions, all in form and substance
reasonably satisfactory to the Administrative Agent and its counsel.
 
(d)   The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the President, a Vice President or a Financial
Officer of the Borrower, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.
 
(e)   The Administrative Agent shall have received all fees and other amounts
due and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses (including
reasonable fees, charges and disbursements of counsel) required to be reimbursed
or paid by the Borrower hereunder or under any other Loan Document.
 
(f)   The Collateral Requirement shall have been satisfied and the
Administrative Agent shall have received a completed Perfection Certificate
dated the Effective Date and signed by an executive officer or Financial Officer
of the Borrower, together with all attachments contemplated thereby, including
the results of a search of the Uniform Commercial Code (or equivalent) filings
made with respect to the Borrower in the jurisdictions contemplated by the
Perfection Certificate and copies of the financing statements (or similar
documents) disclosed by such search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by Section 6.02, have been released or have
lapsed.
 
(g)   The Administrative Agent shall have received evidence that the insurance
required by Section 5.07 and the Security Documents is in effect.
 
(h)   All requisite material Governmental Authorities shall have approved or
consented to the Transactions and the other transactions contemplated hereby to
the extent required, all applicable waiting or appeal periods (including any
extensions thereof) shall have expired and there shall not be any pending or
threatened litigation, governmental, administrative or judicial action that
could reasonably be expected to prevent or impose materially burdensome
conditions on the Transactions or the other transactions contemplated hereby.
 
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(i)   After giving effect to the Transactions, neither the Borrower nor any of
its Subsidiaries shall have outstanding any shares of preferred stock or any
Indebtedness, other than (i) Indebtedness incurred under the Loan Documents,
(ii) the Convertible Notes and (iii) other Indebtedness set forth on
Schedule 6.01 (provided that the terms and conditions of any such other
Indebtedness set forth on Schedule 6.01 (including those relating to interest
rates, fees, amortization, maturity, redemption, subordination, covenants,
events of default and remedies) shall be reasonably satisfactory in all respects
to Lenders).
 
(j)   Except for Disclosed Matters, there shall be no pending or, to the
knowledge of the Borrower, threatened litigation, arbitration, administrative
proceeding or consent decree that could reasonably be expected to (a) result in
Material Adverse Effect or (b) have a material adverse effect on the ability of
the parties to consummate the Transactions.
 
(k)   The Administrative Agent shall have received a solvency certificate from
the chief financial officer of the Borrower, in form and substance reasonably
satisfactory to the Administrative Agent, confirming the solvency of the
Borrower and its Subsidiaries after giving effect to the Transactions.
 
(l)   The Existing Credit Agreement and the commitments thereunder shall have
been terminated and all amounts outstanding or owed thereunder shall have been
repaid or shall be repaid substantially simultaneously with the making of the
initial Loans hereunder on the Effective Date, all letters of credit outstanding
thereunder (other than Existing Letters of Credit) shall have expired or been
terminated and all Liens and security interests securing obligations under the
Existing Credit Agreement shall have been released effective upon such
repayment, in each case pursuant to arrangements reasonably satisfactory to the
Administrative Agent.
 
(m)   The Lenders shall have received all documentation and other information
required by regulatory authorities under applicable “know your customer” and
anti-money laundering rules and regulations, including the Patriot Act.
 
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Banks to issue Letters of Credit hereunder shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to Section
9.02) at or prior to 5:00 p.m., New York City time, on December 30, 2005 (and,
in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time).
 
SECTION 4.02.   Each Credit Event. The obligation of each Lender to make a Loan
on the occasion of any Borrowing, and of each Issuing Bank to issue, amend,
renew or extend any Letter of Credit, is subject to receipt of the request
therefor in accordance herewith (which shall be deemed to have been made in
respect of the Existing Letters of Credit to be deemed to be issued herewith on
the Effective Date) and to the satisfaction of the following conditions:
 
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(a)   The representations and warranties of the Borrower set forth in the Loan
Documents shall be true and correct in all material respects on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or extension
of such Letter of Credit, as applicable.
 
(b)   At the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.
 
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
 
  ARTICLE V  
 
Affirmative Covenants
 
Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
 
SECTION 5.01.   Financial Statements and Other Information. The Borrower will
furnish to the Administrative Agent and each Lender:
 
(a)   within 90 days after the end of each fiscal year of the Borrower, its
audited consolidated balance sheet and related statements of earnings,
shareholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by Deloitte & Touche LLP or other independent registered public
accounting firm of recognized national standing (without a “going concern” or
like qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
 
(b)   within 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, its consolidated balance sheet and related
statements of earnings, shareholders’ equity and cash flows as of the end of and
for such fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding period
or periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
 
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(c)   concurrently with any delivery of financial statements under clause (a) or
(b) above, (i) a certificate of a Financial Officer of the Borrower
(x) certifying, to the knowledge of such Financial Officer after due inquiry, as
to whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (y) setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.12, 6.13, 6.14, 6.15 and 6.16 and (z) stating whether
any change in GAAP or in the application thereof has occurred since the date of
the Borrower’s audited financial statements referred to in Section 3.04 and, if
any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate, and (ii) an unaudited and
unconsolidated balance sheet of the Borrower as of the end of such fiscal
quarter, setting forth in each case in comparative form the figures as of the
end of the corresponding period of the previous fiscal year, certified by one of
its Financial Officers;
 
(d)   concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
 
(e)   at least 30 days prior to the commencement of each fiscal year of the
Borrower, a detailed consolidated budget for such fiscal year (including a
projected consolidated balance sheet and related statements of projected
earnings and cash flow as of the end of and for such fiscal year and setting
forth the assumptions used for purposes of preparing such budget) and, as
available, any significant revisions of such budget;
 
(f)   promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Borrower or
any Subsidiary with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be;
 
(g)   within a reasonable time following any written request therefor, all
documentation and other information required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including the Patriot Act; and
 
(h)   promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.
 
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Information required to be delivered pursuant to this Section 5.01 shall be
deemed to have been delivered if such information, or one or more annual or
quarterly reports containing such information, shall have been posted by the
Administrative Agent on an IntraLinks or similar site to which the Lenders have
been granted access or shall be available on the website of the Securities and
Exchange Commission at http://www.sec.gov (and a confirming electronic
correspondence shall have been delivered or caused to be delivered to the
Lenders providing notice of such posting or availability); provided that the
Borrower shall deliver paper copies of such information to any Lender that
requests such delivery. Information required to be delivered pursuant to this
Section 5.01 may also be delivered by electronic communications pursuant to
procedures approved by the Administrative Agent.
 
SECTION 5.02.   Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender written notice promptly upon any Financial
Officer, or other officer or employee responsible for compliance with the Loan
Documents, of the Borrower or any Subsidiary becoming aware of any of the
following:
 
(a)   the occurrence of any Default;
 
(b)   the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Borrower or
any Affiliate thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
 
(c)   the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$10,000,000; and
 
(d)   any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.
 
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
 
SECTION 5.03.   Information Regarding Collateral. (a) The Borrower will furnish
to the Administrative Agent prompt written notice of any change in its (i) legal
name, (ii) organizational identity, (iii) organizational identification number
or (iv) organizational structure. The Borrower agrees not to effect or permit
any change referred to in the preceding sentence unless all filings have been
made under the Uniform Commercial Code or otherwise that are required in order
for the Administrative Agent to continue at all times following such change to
have a valid, legal and perfected security interest in all the Collateral
affected thereby. The Borrower also agrees promptly to notify the Administrative
Agent if any material portion of the Collateral is damaged or destroyed.
 
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(b)   Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to clause (a) of Section 5.01, the
Borrower shall deliver to the Administrative Agent a certificate of a Financial
Officer of the Borrower setting forth the information required pursuant to
Sections 1 and 2 of the Perfection Certificate or confirming that there has been
no material change in such information since the date of the Perfection
Certificate delivered on the Effective Date or the date of the most recent
certificate delivered pursuant to this Section.
 
SECTION 5.04.   Existence; Conduct of Business. The Borrower will, and will
cause each of its Subsidiaries to, do or cause to be done all things reasonably
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03.
 
SECTION 5.05.   Payment of Obligations. The Borrower will, and will cause each
of its Subsidiaries to, pay its Indebtedness and other obligations, including
Tax liabilities, before the same shall become delinquent or in default, except
where (a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP, (c)
such contest effectively suspends collection of the contested obligation and the
enforcement of any Lien securing such obligation and (d) the failure to make
payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.
 
SECTION 5.06.   Maintenance of Properties. The Borrower will, and will cause
each of its Subsidiaries to, keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
 
SECTION 5.07.   Insurance. The Borrower will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurance
companies (a) insurance in such amounts (with no greater risk retention) and
against such risks as are customarily maintained by companies of established
repute engaged in the same or similar businesses operating in the same or
similar locations and (b) all insurance required to be maintained pursuant to
the Security Documents. The Borrower will furnish to the Lenders, upon request
of the Administrative Agent, information in reasonable detail as to the
insurance so maintained.
 
SECTION 5.08.   Casualty and Condemnation. The Borrower (a) will furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of any Collateral or the
commencement of any action or proceeding for the taking of any Collateral or any
part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the Net Proceeds of
any such event (whether in the form of insurance proceeds, condemnation awards
or otherwise) are collected and applied in accordance with the applicable
provisions of the Security Documents.
 
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SECTION 5.09.   Books and Records; Inspection and Audit Rights. The Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct (in all material respects) entries
are made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
upon reasonable prior notice (but in no event more than once each fiscal quarter
unless a Default has occurred and is continuing), to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and, accompanied
by one or more such officers or their designees if requested by the Borrower,
independent accountants, all at such reasonable times and as often as reasonably
requested.
 
SECTION 5.10.   Compliance with Laws. The Borrower will, and will cause each of
its Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
 
SECTION 5.11.   Use of Proceeds and Letters of Credit. The proceeds of the
Revolving Loans and Swingline Loans will be used only for working capital and
other general corporate purposes of the Borrower, including to finance Permitted
Acquisitions and the Transactions. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations T, U and X.
Letters of Credit will be issued only to support the general corporate purposes
and payment obligations of the Borrower and its Subsidiaries.
 
SECTION 5.12.   Additional Subsidiaries. If any additional Subsidiary is formed
or acquired after the Effective Date, the Borrower will, within ten Business
Days after such Subsidiary is formed or acquired, notify the Administrative
Agent and the Lenders thereof and cause the Collateral Requirement to be
satisfied with respect to all Equity Interests in and Indebtedness of such
Subsidiary owned by or on behalf of the Borrower.
 
SECTION 5.13.   Further Assurances. (a) The Borrower will execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
which may be required under any applicable law, or which the Administrative
Agent or the Required Lenders may reasonably request, to cause the Collateral
Requirement to be and remain satisfied, all at the Borrower’s expense. The
Borrower also agrees to provide to the Administrative Agent, from time to time
upon request, evidence reasonably satisfactory to the Administrative Agent as to
the perfection and priority of the Liens created or intended to be created by
the Security Documents.
 
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(b)   If any material assets (including any real property or improvements
thereto or any interest therein) are acquired by the Borrower after the
Effective Date (other than assets constituting Collateral under the Collateral
Agreement that become subject to the Lien of the Collateral Agreement upon
acquisition thereof), the Borrower will notify the Administrative Agent and the
Lenders thereof, and, if requested by the Administrative Agent or the Required
Lenders, the Borrower will cause such assets to be subjected to a Lien securing
the Obligations and will take such actions as shall be necessary or reasonably
requested by the Administrative Agent to grant and perfect such Liens, including
actions described in paragraph (a) of this Section, all at the Borrower’s
expense. It is understood and agreed that, notwithstanding anything to the
contrary in the foregoing provisions of this Section 5.13 or any Security
Document, the Borrower shall not be required to (i)(A) grant leasehold mortgages
or collateral assignments of leases and rents or (B) obtain landlord lien
waivers or collateral access rights agreements with respect to any of its
typical retail operating store locations (it being agreed that this exclusion is
not intended to cover any future “flagship” store or “megastore”) or (ii) enter
into deposit control agreements in respect of (A) any retail operating store
deposit account that is not a concentration or cash sweep account (unless any
such account has average balances above the threshold amount specified in the
Collateral Agreement), (B) payroll accounts or (C) medical or insurance
reimbursement accounts.
 
ARTICLE VI  
 
Negative Covenants
 
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, the Borrower covenants and agrees with the Lenders that:
 
SECTION 6.01.   Indebtedness; Certain Equity Securities. (a) The Borrower will
not, and will not permit any Subsidiary to, create, incur, assume or permit to
exist any Indebtedness, except:
 
(i)  Indebtedness created under the Loan Documents;
 
(ii)  Indebtedness of the Borrower in respect of the Convertible Notes and
extensions, renewals and replacements of such Indebtedness that do not increase
the outstanding principal amount thereof or result in an earlier maturity date
or decreased weighted average life thereof; provided that (a) any such
refinancing Indebtedness shall be unsecured and (b) only the Borrower may become
obligated with respect to any such refinancing Indebtedness
 
(iii)  Indebtedness existing on the Effective Date and set forth in
Schedule 6.01 and extensions, renewals and replacements of such Indebtedness
that do not increase the outstanding principal amount thereof or result in an
earlier maturity date or decreased weighted average life thereof or add any new
obligor or any security in respect thereof;
 
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(iv)  Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to
the Borrower or any other Subsidiary; provided that Indebtedness of any
Subsidiary to the Borrower shall be subject to Section 6.04;
 
(v)  Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary, in each case
subject to Section 6.04;
 
(vi)  Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets of the
Borrower or such Subsidiary, including Capital Lease Obligations, Synthetic
Lease Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to
the acquisition thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof or
result in an earlier maturity date or decreased weighted average life thereof;
provided that (A) such Indebtedness is incurred prior to or within 180 days
after such acquisition or the completion of such construction or improvement and
(B) the aggregate principal amount of Indebtedness permitted by this clause
(vi) shall not exceed $25,000,000 at any time outstanding;
 
(vii)  Indebtedness in respect of netting services, overdraft protections (in an
aggregate amount not to exceed $1,000,000 at any time outstanding) and otherwise
in connection with deposit and checking accounts;
 
(viii)  Indebtedness acquired or assumed by the Borrower or any Subsidiary in
connection with any Permitted Acquisition in an aggregate principal amount not
in excess of $5,000,000 at any time outstanding; provided that such Indebtedness
existed at the time of such Permitted Acquisition and was not created in
connection therewith or in contemplation thereof;
 
(ix)  Indebtedness of the Borrower in respect of letters of credit (other than
Existing Letters of Credit and Letters of Credit issued hereunder) issued by any
Lender or any Affiliate thereof with an aggregate face amount not in excess of
$50,000,000 at any time outstanding; and
 
(x)  other unsecured Indebtedness in an aggregate principal amount not exceeding
$5,000,000 at any time outstanding.
 
(b)   The Borrower will not, and will not permit any Subsidiary to, issue any
capital stock that is not Qualified Capital Stock.
 
SECTION 6.02.   Liens. (a) The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
 
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(i)  Liens created under the Loan Documents;
 
(ii)  Permitted Encumbrances;
 
(iii)  any Lien on any property or asset of the Borrower or any Subsidiary
existing on the Effective Date and set forth in Schedule 6.02; provided that (i)
such Lien shall not apply to any other property or asset of the Borrower or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the Effective Date and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;
 
(iv)  any Lien existing on any property or asset prior to the acquisition
thereof by the Borrower or any Subsidiary or existing on any property or asset
of any Person that becomes a Subsidiary after the Effective Date prior to the
time such Person becomes a Subsidiary (including pursuant to a Permitted
Acquisition); provided that (A) such Lien is not created in contemplation of or
in connection with such acquisition or such Person becoming a Subsidiary, as the
case may be, (B) such Lien shall not apply to any other property or assets of
the Borrower or any Subsidiary and (C) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof; and
 
(v)  Liens on fixed or capital assets acquired, constructed or improved by the
Borrower or any Subsidiary; provided that (A) such Liens secure Indebtedness
permitted by clause (vi) of Section 6.01(a), (B) such Liens and the Indebtedness
secured thereby are incurred prior to or within 180 days after such acquisition
or the completion of such construction or improvement, (C) the Indebtedness
secured thereby does not exceed the cost of acquiring, constructing or improving
such fixed or capital assets and (D) such Liens shall not apply to any other
property or assets of the Borrower, any Subsidiary or the SPE.
 
SECTION 6.03.   Fundamental Changes; SPE Restrictions. (a) The Borrower will
not, and will not permit any Subsidiary to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Default shall have occurred and be continuing
(i) any Subsidiary may merge into the Borrower in a transaction in which the
Borrower is the surviving corporation, (ii) any Subsidiary may merge into any
Subsidiary in a transaction in which the surviving entity is a Subsidiary, (iii)
any Subsidiary or the SPE may liquidate or dissolve if the Borrower determines
in good faith that such liquidation or dissolution is in the best interests of
the Borrower and is not materially disadvantageous to the Lenders (and, in the
case of the liquidation or dissolution of the SPE, its fee ownership interest in
the Distribution Center is transferred to the Borrower in connection therewith)
and (iv) the Borrower or any Subsidiary may effect a Permitted Acquisition by
means of any merger or consolidation of a type permitted by this Section 6.03 in
which the Borrower or a Subsidiary is the surviving entity in such transaction;
provided that any such merger involving a Person that is not a wholly owned
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.04.
 
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(b)   The Borrower will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses of the type
conducted by the Borrower and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto, including development,
operation and promotion of upscale women’s clothing in a specialty store
environment.
 
(c)   The Borrower will not permit the SPE to (a) engage in any business or
activity other than (i) the ownership of the Distribution Center and activities
incidental thereto (including the leasing of space therein), (ii) performance of
its obligations under and in connection with the Existing Mortgage Loan and
(iii) actions required by law to maintain its existence, (b) purchase, own, hold
or acquire any assets other than the Distribution Center, cash and Permitted
Investments, (c) sell, transfer, lease or otherwise dispose of any asset (other
than the leasing of space in the Distribution Center in the ordinary course of
business), (d) incur any liabilities other than liabilities under the Existing
Mortgage Loan, liabilities imposed by law, including tax liabilities, and other
liabilities incidental to its existence and permitted business and activities,
(e) create, incur, assume or permit to exist any Lien on any property or asset
owned by it, other than pursuant to the Existing Mortgage, judgment liens in
respect of judgments that do not constitute an Event of Default under clause (k)
of Article VII and other Liens that constitute Permitted Encumbrances or (f)
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or liquidate or dissolve (other then
permitted by Section 6.03(a)).
 
SECTION 6.04.   Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any Equity Interests in or
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
capital contributions or any loans or advances to, enter into or permit to exist
any Guarantee of the obligations of, or make or permit to exist any investment
or any other interest in, any other Person (all the foregoing being called
“investments”), or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person constituting a business unit,
except:
 
(a)   Permitted Investments;
 
(b)   investments existing on the Effective Date and set forth on Schedule 6.04;
 
(c)   investments by the Borrower and its Subsidiaries in Equity Interests in
their respective Subsidiaries and the SPE; provided that any such Equity
Interests (other than those of the SPE) held by the Borrower shall be pledged
pursuant to the Collateral Agreement (subject to the limitations applicable to
Equity Interests of a Foreign Subsidiary referred to in Section 5.12);
 
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(d)   loans or advances made by the Borrower to any Subsidiary and made by any
Subsidiary to the Borrower or any other Subsidiary; provided that any such loans
and advances made by the Borrower shall be evidenced by a promissory note (which
may be in the form of a grid note) pledged pursuant to the Collateral Agreement;
 
(e)   Guarantees constituting Indebtedness permitted by Section 6.01; provided
that no Subsidiary shall Guarantee the Convertible Notes or any other Material
Indebtedness of the Borrower;
 
(f)   investments received in connection with the bankruptcy or reorganization
of, or settlement of delinquent accounts and disputes with, customers and
suppliers, in each case in the ordinary course of business;
 
(g)   the acquisition of all or substantially all the assets of a Person or line
of business of such Person, or not less than 100% of the Equity Interests
(except for directors’ qualifying shares) of a Person (referred to herein as the
“Acquired Entity”); provided that (i) such acquisition was not preceded by an
unsolicited tender offer for such Equity Interests by, or proxy contest
initiated by, the Borrower or any Subsidiary; (ii) after giving effect to the
acquisition the Borrower shall be in compliance with Section 6.03(b); (iii) the
Acquired Entity is located, and substantially all of its operations are
conducted, in the United States of America; (iv) both before and after giving
effect to such acquisition no Default or Event of Default shall have occurred
and be continuing; (v) after giving effect to such acquisition (A) the Borrower
would be in Pro Forma Compliance and (B) there shall be at least $30,000,000 of
unused and available Commitments; (vi) the total cash and non-cash consideration
paid in connection with such acquisition and any other acquisitions pursuant to
this Section 6.04(g) (including the fair market value of all Equity Interests of
the Borrower or any Subsidiary issued or transferred to the seller or sellers in
any such acquisition, any Indebtedness of the Acquired Entity that is assumed,
refinanced or repaid by the Borrower or any Subsidiary in connection with or
following such acquisition) shall not exceed (A) $75,000,000 in any fiscal year
or (B) $150,000,000 in the aggregate; and (vii) the Borrower shall comply with
the applicable provisions of Sections 5.12 and 5.13 and the Security Documents
(any acquisition of an Acquired Entity meeting all the criteria of this
Section 6.04(g) being referred to herein as a “Permitted Acquisition”);
 
(h)   deposits, prepayments and other credits to suppliers, lessors and
landlords made in the ordinary course of business;
 
(i)   advances by the Borrower or any Subsidiary to employees for moving and
travel expenses and similar expenses in the ordinary course of business;
 
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(j)   the Borrower and its Subsidiaries may acquire and hold promissory notes
and/or Equity Interests issued by the purchaser or purchasers in connection with
the sale of assets to the extent permitted under Section 6.05 (provided that any
such promissory note issued to the Borrower in an amount in excess of $250,000
shall be pledged pursuant to the Collateral Agreement); and
 
(k)   the Borrower and its Subsidiaries may acquire individual retail store
locations and leases.
 
For the purposes of this Section, any unreimbursed payment by the Borrower for
goods or services delivered to a Subsidiary shall be deemed to be an investment
in such Subsidiary.
 
SECTION 6.05.   Asset Sales. The Borrower will not, and will not permit any of
its Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will the Borrower permit any of
it Subsidiaries to issue any additional Equity Interest in such Subsidiary,
except:
 
(a)   sales of inventory, used, surplus, obsolete or outmoded machinery or
equipment and Permitted Investments and contributions of merchandise to
charitable organizations, in each case in the ordinary course of business;
 
(b)   sales, transfers and other dispositions to the Borrower or a Subsidiary;
provided that any such sales, transfers or dispositions involving a Subsidiary
shall be made in compliance with Section 6.09;
 
(c)   the sale or discount accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof and
not in connection with any financing transaction;
 
(d)   leases or subleases granted by the Borrower or any of its Subsidiaries to
third Persons not interfering in any material respect with the business of the
Borrower or any of its Subsidiaries;
 
(e)   the sale, transfer or other disposition of patents, trademarks, copyrights
and know-how which, in the reasonable judgment of the Borrower or any
Subsidiary, are determined to be uneconomical, negligible or obsolete in the
conduct of business; or
 
(f)   sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary) that are not permitted by any other clause of this
Section; provided that the aggregate fair market value of all assets sold,
transferred or otherwise disposed of in reliance upon this clause (f) shall not
exceed $10,000,000 during any fiscal year of the Borrower;
 
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by clause (b) above) shall be made for fair
value and for at least 75% cash consideration.
 
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SECTION 6.06.   Sale and Leaseback Transactions. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred, except for any such sale of any fixed or capital assets that is
made for cash consideration in an amount not less than the cost of such fixed or
capital asset and is consummated within 180 days after the Borrower or such
Subsidiary acquires or completes the construction of such fixed or capital
asset.
 
SECTION 6.07.   Hedging Agreements. The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Borrower or any Subsidiary is exposed in the conduct of its
business or the management of its liabilities and not for speculative purposes.
 
SECTION 6.08.   Restricted Payments; Certain Payments of Indebtedness. (a) The
Borrower will not, and will not permit any Subsidiary to, declare or make, or
agree to pay or make, directly or indirectly, any Restricted Payment, or incur
any obligation (contingent or otherwise) to do so, except (i) the Borrower may
declare and pay dividends with respect to its capital stock payable solely in
additional shares of its common stock, (ii) Subsidiaries may declare and pay
dividends ratably with respect to their capital stock, (iii) the Borrower may
make Restricted Payments, not exceeding $1,000,000 during any fiscal year,
pursuant to and in accordance with stock option plans or other benefit plans for
management or employees of the Borrower and its Subsidiaries and (iv) the
Borrower may repurchase shares of its common stock (either in the open market or
through private transactions) pursuant to the Borrower’s Stock Buyback Program
originally announced on April 5, 2001, in an aggregate amount not to exceed
$50,000,000 in any fiscal year (it being agreed that any amount not utilized in
any fiscal year may be carried forward and utilized in any subsequent fiscal
year; provided that (x) at the time of and immediately after giving effect to
any such Restricted Payment, (i) the Borrower shall be in Pro Forma Compliance
and (ii) no Default or Event of Default shall have occurred and be continuing
and (y) the aggregate amount of Restricted Payments made pursuant to this clause
(iv) in any fiscal year shall not in any event exceed $75,000,000).
 
(b)   The Borrower will not, nor will it permit any Subsidiary to, make or agree
to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of
or interest on any Indebtedness, or any payment or other distribution (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any Indebtedness, except:
 
(i)  payment of Indebtedness created under the Loan Documents;
 
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(ii)  so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, payment of the cash portion of the
settlement amount required to be paid to any holder of Convertible Notes upon
the conversion thereof in accordance with the terms of the Convertible Note
Documents (provided that no such payment may be financed in whole or in part by
any Borrowings unless after giving pro forma effect thereto there shall be at
least $30,000,000 of unused and available Commitments);
 
(iii)  payment of regularly scheduled interest and principal payments as and
when due in respect of any Indebtedness, other than payments in respect of any
subordinated Indebtedness prohibited by the subordination provisions thereof;
 
(iv)  refinancings of Indebtedness to the extent permitted by Section 6.01;
 
(v)  payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;
and
 
(vi)  payment of Indebtedness solely by issuance of the common stock of the
Borrower.
 
SECTION 6.09.   Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions in the ordinary course of business at prices and on
terms and conditions not less favorable to the Borrower or such Subsidiary than
could be obtained on an arm’s-length basis from unrelated third parties, (b)
transactions between or among the Subsidiaries not involving the Borrower or any
other Affiliate, (c) any Restricted Payment permitted by Section 6.08,
(d) reasonable fees and compensation may be paid to, and reasonable indemnities
may be provided on behalf of, directors and officers of the Borrower, as
determined by the board of directors of the Borrower in good faith, (e) the
transactions described on Schedule 6.09 and (f) the lease between the SPE and
the Borrower in respect of the Distribution Center as in effect on the Effective
Date or any amendments thereto that (i) do not increase the Borrower’s
obligations thereunder in any material respect or (ii) would be permitted in
accordance with clause (a) of this Section 6.09.
 
SECTION 6.10.   Restrictive Agreements. The Borrower will not, and will not
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of the Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document or
Convertible Note Document, (ii) the foregoing shall not apply to restrictions
and conditions existing on the Effective Date identified on Schedule 6.10 (but
shall apply to any extension or renewal of, or any amendment or modification
expanding the scope of, any such restriction or condition), (iii) the foregoing
shall not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment thereof.
 
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SECTION 6.11.   Amendment of Material Documents. The Borrower will not, and will
not permit any Subsidiary to, amend, modify or waive any of its rights under (a)
any Convertible Note Document or (b) its certificate of incorporation, by-laws
or other organizational documents, in either case, to the extent such amendment,
modification or waiver would be adverse in any material respect to the rights or
interests of the Lenders hereunder or under any other Loan Document.
 
SECTION 6.12.   Adjusted Leverage Ratio. The Borrower will not permit the
Adjusted Leverage Ratio as of any date during any period set forth below to
exceed the ratio set forth opposite such period:
 
Period
 
Ratio
 
Effective Date through January 31, 2006
   
4.60 to 1.00
 
February 1, 2006 through July 29, 2006
   
4.55 to 1.00
 
July 30, 2006 through July 28, 2007
   
4.35 to 1.00
 
July 29, 2007 through July 26, 2008
   
4.20 to 1.00
 
Thereafter
   
4.05 to 1.00
 

 
SECTION 6.13.   Fixed Charge Coverage Ratio. The Borrower will not permit the
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
ending on any date during any period set forth below, to be less than the ratio
set forth below opposite such period:
 
Period
 
Ratio
 
Effective Date through July 29, 2006
   
1.30 to 1.00
 
August 1, 2006 through July 26, 2008
   
1.35 to 1.00
 
Thereafter
   
1.40 to 1.00
 

 
SECTION 6.14.   Consolidated Net Worth. The Borrower will not permit
Consolidated Net Worth at any time to be less than $250,000,000 plus the sum of
(a) 100% of the Net Proceeds received by or on behalf of the Borrower or any
Subsidiary in respect of any Equity Issuance and (b) 50% of cumulative
Consolidated Net Income for each fiscal quarter ended after the Effective Date
and for which the Borrower shall have delivered financial statements under
Section 5.01(a) or (b) (excluding any fiscal quarter for which Consolidated Net
Income shall have been negative).
 
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SECTION 6.15.   Capital Expenditures. (a) The Borrower will not permit the
aggregate amount of Capital Expenditures made by the Borrower and the
Subsidiaries in any period set forth below to exceed the amount set forth below
for such period:
 
Period
 
Amount
         
Effective Date through July 30, 2006
 
$
75,000,000
 
Each fiscal year thereafter
 
$
75,000,000
 

(b)   The amount of permitted Capital Expenditures set forth in paragraph (a)
above in respect of any fiscal year commencing with the fiscal year ending on
July 29, 2006, shall be increased by an amount equal to 50% of the amount of
unused permitted Capital Expenditures for the immediately preceding fiscal year
(after giving effect to any adjustment thereto in accordance with this paragraph
(b)), with the amount of Capital Expenditures made in such succeeding fiscal
year being applied first to the amount of permitted Capital Expenditures carried
forward to such succeeding fiscal year; provided that in no event shall the
amount of the increase pursuant to this paragraph (b) in respect of any fiscal
year exceed $10,000,000.
 
SECTION 6.16.   Total Tangible Assets. The Borrower will not permit Total
Tangible Assets at any time to be less than an amount equal to 1.5 times the
total Commitments.
 
    ARTICLE VII  
 
Events of Default
 
If any of the following events (“Events of Default”) shall occur:
 
(a)   the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
 
(b)   the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement or any other Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three Business Days;
 
(c)   any representation or warranty made or deemed made by the Borrower in or
in connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, shall prove to have been
incorrect in any material respect when made or deemed made;
 
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(d)   The Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02, 5.04 (with respect to the existence of the
Borrower) or 5.11 or in Article VI;
 
(e)   the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in any Loan Document (other than those specified in clause
(a), (b) or (d) of this Article), and such failure shall continue unremedied for
a period of 30 days after the earlier of (i) the Borrower becoming aware of such
failure and (ii) notice thereof from the Administrative Agent to the Borrower
(which notice will be given at the request of any Lender);
 
(f)   the Borrower or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable (after giving
effect to any applicable grace period);
 
(g)   any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
 
(h)   an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Subsidiary or its debts, or of a substantial part
of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing shall
be entered;
 
(i)   the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
 
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(j)   the Borrower or any Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;
 
(k)   one or more judgments for the payment of money in an aggregate amount in
excess of $10,000,000 (to the extent not covered by independent third-party
insurance as to which the insurer has been notified of such judgment and has not
denied coverage) shall be rendered against the Borrower, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of the Borrower or any Subsidiary to enforce any such judgment;
 
(l)   an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding (i) $5,000,000 in any year or (ii)
$10,000,000 for all periods;
 
(m)   any Lien purported to be created under any Security Document shall cease
to be, or shall be asserted by the Borrower not to be, a valid and perfected
Lien on any Collateral, with the priority required by the applicable Security
Document, except (i) as a result of the sale or other disposition of the
applicable Collateral in a transaction permitted under the Loan Documents or
(ii) as a result of the Administrative Agent’s failure to (A) maintain
possession of any stock certificates, promissory notes or other instruments
delivered to it under the Collateral Agreement or (B) continue in accordance
with applicable law the effectiveness of any Uniform Commercial Code financing
statements; or
 
(n)   a Change in Control shall occur;
 
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (h) or (i)
of this Article, the Commitments shall automatically terminate and the principal
of the Loans then outstanding, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower to the
extent permitted by applicable law.
 
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   ARTICLE VIII  
 
The Administrative Agent
 
Each of the Lenders and each Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.
 
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
 
The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) the Administrative Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02) and (c) except as expressly
set forth in the Loan Documents, the Administrative Agent shall not have any
duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or wilful misconduct. The Administrative
Agent shall not be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Borrower or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document or (v) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
 
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The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
 
The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
 
Subject to the appointment and acceptance of a successor to the Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders, the Issuing Banks and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, in consultation with the Borrower, on
behalf of the Lenders and the Issuing Banks, appoint a successor Administrative
Agent which shall be a bank with an office in New York, New York, or an
Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
 
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or
related agreement or any document furnished hereunder or thereunder.
 
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   ARTICLE IX  
 
Miscellaneous
 
SECTION 9.01.   Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone and, subject to paragraph (b)
below, all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:
 
(i)   if to the Borrower, to it at 30 Dunnigan Drive, Suffern, New York, 10901,
Attention of Mr. Armand Correia, Chief Financial Officer (Telecopy No. (845)
369-4625);
 
(ii)   if to the Administrative Agent or to the Swingline Lender, to JPMorgan
Chase Bank, N.A., Loan and Agency Services Group, 131 S. Dearborn, 5th Floor,
Chicago, Illinois 60603, Attention of Kathie Blomquist (Telecopy No. (312)
661-1751), with a copy to JPMorgan Chase Bank, N.A., Two Corporate Drive,
Shelton, Connecticut 06484, Attention of Peter Killea (Telecopy No. (203)
944-8495);
 
(iii)   if to the Collateral Agent, to JPMorgan Chase Bank, N.A., Two Corporate
Drive, 7th Floor, Shelton, Connecticut 06484, Attention of Peter Killea
(Telecopy No. (203) 944-8495);
 
(iv)   if to any Issuing Bank, to the address most recently specified by it in a
notice delivered to the Administrative Agent and the Borrower; and
 
(v)   if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
 
(b)   Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.
 
(c)   Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
 
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SECTION 9.02.   Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, an Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
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 any Loan Document or consent to
any departure by the Borrower therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent, any
Lender or the applicable Issuing Bank may have had notice or knowledge of such
Default at the time.
 
(b)   None of this Agreement, any other Loan Document or any provision hereof or
thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Borrower and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent and the Borrower, in each case with the consent of the
Required Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii) reduce
the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the maturity of any
Loan, or the required date of reimbursement of any LC Disbursement, or any date
for the payment of any interest or fees payable hereunder, or reduce the amount
of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or the
percentage set forth in the definition of “Required Lenders” or any other
provision of any Loan Document specifying the number or percentage of Lenders
(or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (or each Lender of such Class, as the case
may be), (vi) release all or any substantial part of the Collateral from the
Liens of the Security Documents, without the written consent of each Lender or
(vii) change any provisions of any Loan Document in a manner that by its terms
adversely affects the rights in respect of Collateral of or in respect of
payments or prepayment due to Lenders holding Loans of any Class differently
than those holding Loans of any other Class, without the written consent of
Lenders holding a majority in interest of the outstanding Loans and unused
Commitments of the adversely affected Class; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, an Issuing Bank or the Swingline Lender without the prior
written consent of the Administrative Agent, such Issuing Bank or the Swingline
Lender, as the case may be. Notwithstanding any of the foregoing, this Agreement
may be amended to provide for increased Commitments in the manner contemplated
by Sections 2.08(d) and without any additional consents.
 
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SECTION 9.03.   Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay
(i) all reasonable out-of-pocket expenses incurred by the Administrative Agent
and its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the syndication of the
credit facilities provided for herein, the preparation and administration of the
Loan Documents or any amendments, modifications or waivers of the provisions
thereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Banks in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder (in the case of the
Existing Letters of Credit, without duplication of any fees or expenses
previously paid in connection with any issuance, amendment, renewal or extension
thereof) and (iii) all out-of-pocket expenses incurred by the Administrative
Agent, the Issuing Banks or any Lender, including the reasonable fees, charges
and disbursements of any counsel for the Administrative Agent, the Issuing Banks
or any Lender, in connection with the enforcement or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
 
(b)   The Borrower shall indemnify the Administrative Agent, each Issuing Bank
and each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of any Loan Document or any other agreement or instrument contemplated
hereby, the performance by the parties to the Loan Documents of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by an Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any Mortgaged Property or any other property currently or
formerly owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto
(and regardless of whether such matter is instituted by a third party or by the
Borrower); provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.
 
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(c)   To the extent that the Borrower fails to pay any amount required to be
paid by it to the Administrative Agent, an Issuing Bank or the Swingline Lender
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent, the applicable Issuing Bank or the Swingline
Lender, as the case may be, such Lender’s pro rata share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, the applicable Issuing Bank or the
Swingline Lender in its capacity as such. For purposes hereof, a Lender’s “pro
rata share” shall be determined based upon its share of the sum of the aggregate
Revolving Exposures and unused Commitments at the time.
 
(d)   To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.
 
(e)   All amounts due under this Section shall be payable not later than 10 days
after written demand therefor.
 
SECTION 9.04.   Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
an Issuing Bank that issues any Letter of Credit), except that (i) the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of an Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Banks and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
 
(b)   (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld or delayed) of:
 
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(A)   the Borrower; provided that no consent of the Borrower shall be required
for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if
an Event of Default has occurred and is continuing, any other assignee;
 
(B)   the Administrative Agent; and
 
(C)   each Issuing Bank, provided that if any Issuing Bank has not provided
written notice of its objection to any proposed assignment within three Business
Days of its receipt of notice thereof from the Administrative Agent, such
Issuing Bank shall be deemed to have consented to such proposed assignment.
 
(ii)   Assignments shall be subject to the following additional conditions:
 
(A)   except in the case of an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund, or an assignment of the entire remaining amount of the
assigning Lender’s Commitment, the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000, unless each of the
Borrower and the Administrative Agent otherwise consent; provided that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;
 
(B)   each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;
 
(C)   the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; and
 
(D)   the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.
 
For purposes of this Section 9.04(b), the term “Approved Fund” has the following
meaning:
 
“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by a Lender, an Affiliate of a Lender or an entity or an Affiliate of an
entity that administers or manages a Lender.
 
(iii)   Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.
 
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(iv)   The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Banks and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, any Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
 
(v)   Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
 
(c)   (i) Any Lender may, without the consent of the Borrower, the
Administrative Agent, any Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent, the Issuing Banks and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under the Loan Documents. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.14, 2.15 and 2.16 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.17(c) as though it were a Lender.
 
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(ii)   A Participant shall not be entitled to receive any greater payment under
Section 2.14 or 2.16 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.16(e) as
though it were a Lender.
 
(d)   Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
 
SECTION 9.05.   Survival. All covenants, agreements, representations and
warranties made by the Borrower in the Loan Documents and in the certificates or
other instruments delivered in connection with or pursuant to this Agreement or
any other Loan Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Banks or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
 
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SECTION 9.06.   Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
 
SECTION 9.07.   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 9.08.   Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of the Borrower
against any of and all the obligations of the Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
 
SECTION 9.09.   Governing Law; Jurisdiction; Consent to Service of Process. (a)
This Agreement shall be construed in accordance with and governed by the law of
the State of New York.
 
(a)   The Borrower 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 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 Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against the Borrower or its properties in the courts of any jurisdiction.
 
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(b)   The Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
 
(c)   Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
 
SECTION 9.10.   WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
 
SECTION 9.11.   Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
 
SECTION 9.12.   Confidentiality. Each of the Administrative Agent, the Issuing
Banks and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement acting in its capacity as such, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, or to any actual or
prospective counterparty (or its advisors) to any Hedging Agreement, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, any Issuing Bank or any
Lender on a nonconfidential basis from a source other than the Borrower. For
purposes of this Section, “Information” means all information received from the
Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, any Issuing Bank or
any Lender on a nonconfidential basis prior to disclosure by the Borrower;
provided that, in the case of information received from the Borrower after the
Effective Date, such information is clearly identified at the time of delivery
as confidential or is of a nature that the recipient should reasonably believe
to be confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
 
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SECTION 9.13.   Patriot Act. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the Patriot Act, it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender to identify the Borrower in accordance with such Act.
 
SECTION 9.14.   Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
 
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SECTION 9.15.   Release of Collateral. (a) Notwithstanding any contrary
provision herein or in any other Loan Document, (i) upon (A) any sale or other
transfer in the ordinary course of business by the Borrower of any Collateral
consisting of inventory or used, surplus, obsolete or outmoded machinery or
equipment or (B) the effectiveness of any written consent (pursuant to Section
9.02) to the release of all or any portion of the security interest granted in
any Collateral, the security interest in such Collateral shall automatically be
released and (ii) if the Borrower shall request the release under the Collateral
Agreement or any other Security Document of any Collateral to be sold or
otherwise disposed of to a Person in a transaction permitted under the terms of
this Agreement and shall deliver to the Administrative Agent a certificate to
the effect that such sale or other disposition and the application of the
proceeds thereof will comply with the terms of this Agreement, the
Administrative Agent, if satisfied that the applicable certificate is correct,
shall, without the consent of any Lender, execute and deliver all such
instruments, releases, financing statements or other agreements, and take all
such further actions, as shall be necessary to effectuate the release of such
Collateral substantially simultaneously with or at any time after the completion
of such sale or other disposition. Any such release shall be without recourse
to, or representation or warranty by, the Administrative Agent and shall not
require the consent of any Lender. The Administrative Agent shall execute and
deliver all such instruments, releases, financing statements or other
agreements, and take all such further actions, as shall be necessary to
effectuate the release of Collateral required by this paragraph.
 
(b)   Without limiting the provisions of Section 9.03, the Borrower shall
reimburse the Administrative Agent for all reasonable out-of-pocket expenses,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, incurred by it in connection with any action contemplated
by this Section 9.15.
 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

        THE DRESS BARN, INC.,  
   
   
    By:   /s/ ARMAND CORREIA  

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Name: Armand Correia
 
Title: Senior Vice President and
          Chief Financial Officer  

               
JPMORGAN CHASE BANK, N.A.,
individually and as Administrative Agent
and Collateral Agent,
 
   
   
    By:   /s/ PETER M. KILLEA  

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Name: Peter M. Killea   Title: Vice President

 

 
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LENDER SIGNATURE PAGE TO THE DRESS BARN, INC. CREDIT AGREEMENT
 

 
Signature
 
Title
 
Name of Institution
           
By:
/s/ DOUGLAS J. BOLT
 
Vice President
 
Bank of America, N.A.
 
Douglas J. Bolt
 
 
               
By:
/s/ JOHNA M. FIDANZA
 
Vice President
 
The Bank of New York
 
Johna M. Fidanza
                   
By:
/s/ JOHN V. RALEIGH
 
Vice President
 
Citibank, N.A.
 
John V. Raleigh
                   
By:
/s/ CORY LOFTUS
 
Assistant Vice President
 
Wells Fargo Retail Finance, LLC
 
Cory Loftus
 
Account Executive
               
By:
/s/ BRIAN STRAYTON
 
Senior Vice President
 
National City Bank
 
Brain Strayton
                   
By:
/s/ MATTHEW DEFRANCO
 
Assistant Vice President
 
The CIT Group/
 
Matthew DeFranco      
Business Credit, Inc.
           
By:
/s/ JENNIFER THURSTON
 
Assistant Vice President
 
U.S. Bank National Association
 
Jennifer Thurston
                   
By:
/s/ RON WALKER
 
Vice President
 
North Folk Business Capital Corp.
 
Ron Walker
                   
By:
/s/ RONALD J. BONGIOVANNI
 
Senior Vice President I
 
Israel Discount Bank of New York
 
Ronald J. Bongiovanni
                   
By:
/s/ ANDY BALLTA
 
First Vice President
 
Israel Discount Bank of New York
  Andy Ballta