Exhibit 10.1
Execution Copy
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
by and among
OXFORD INDUSTRIES, INC. and
TOMMY BAHAMA GROUP, INC.,
as the Borrowers,
The Persons party hereto as the Guarantors,
The financial institutions party hereto as the Lenders,
The financial institutions party hereto as the Issuing Banks,
SUNTRUST BANK,
as the Administrative Agent,
BANK OF AMERICA, N.A.,
as Syndication Agent,
and
SUNTRUST ROBINSON HUMPHREY, INC.,
as Lead Arranger and Bookrunner
August 15, 2008

 

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

 

INDEX

                      Page  
 
            ARTICLE 1. DEFINITIONS, ACCOUNTING PRINCIPLES AND OTHER INTERPRETIVE
MATTERS     3  
Section 1.1
  Definitions     3  
Section 1.2
  Accounting Principles     42  
Section 1.3
  Other Interpretive Matters     42  
Section 1.4
  Certain Provisions Cumulative     42  
 
            ARTICLE 2. THE LOANS AND THE LETTERS OF CREDIT     43  
Section 2.1
  Extension of Credit     43  
Section 2.2
  Manner of Borrowing and Disbursement of Loans     45  
Section 2.3
  Interest     50  
Section 2.4
  Fees     52  
Section 2.5
  Prepayment/Reduction of Commitment     53  
Section 2.6
  Repayment     54  
Section 2.7
  Notes; Loan Accounts     55  
Section 2.8
  Manner of Payment     56  
Section 2.9
  Reimbursement     59  
Section 2.10
  Pro Rata Treatment     60  
Section 2.11
  Application of Payments     60  
Section 2.12
  Use of Proceeds     62  
Section 2.13
  All Obligations to Constitute One Obligation     62  
Section 2.14
  Maximum Rate of Interest     62  
Section 2.15
  Letters of Credit     63  
Section 2.16
  Bank Products     68  
Section 2.17
  Additional Increase of Commitments; Additional Lenders     68  
 
            ARTICLE 3. GUARANTY     70  
Section 3.1
  Guaranty     70  
Section 3.2
  Special Provisions Applicable to Subsidiary Guarantors     74  
 
            ARTICLE 4. CONDITIONS PRECEDENT     75  
Section 4.1
  Conditions Precedent to Initial Advance     75  
Section 4.2
  Conditions Precedent to Each Advance     78  

 

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

 

INDEX

                      Page  
 
           
Section 4.3
  Conditions Precedent to Each Letter of Credit     79  
 
            ARTICLE 5. REPRESENTATIONS AND WARRANTIES     80  
Section 5.1
  General Representations and Warranties     80  
Section 5.2
  Representations and Warranties Relating to Credit Card Receivables and        
 
  Accounts Receivables     88  
Section 5.3
  Representations and Warranties Relating to Inventory     88  
Section 5.4
  Survival of Representations and Warranties, etc.     88  
 
            ARTICLE 6. GENERAL COVENANTS     89  
Section 6.1
  Preservation of Existence and Similar Matters     89  
Section 6.2
  Compliance with Applicable Law     89  
Section 6.3
  Maintenance of Properties     89  
Section 6.4
  Accounting Methods and Financial Records     89  
Section 6.5
  Insurance     89  
Section 6.6
  Payment of Taxes and Claims     90  
Section 6.7
  Visits and Inspections     91  
Section 6.8
  Intentionally Omitted     91  
Section 6.9
  ERISA     91  
Section 6.10
  Lien Perfection     91  
Section 6.11
  Location of Collateral     92  
Section 6.12
  Protection of Collateral     92  
Section 6.13
  Assignments and Records of Accounts     93  
Section 6.14
  Administration of Accounts     93  
Section 6.15
  Blocked Account Agreements     94  
Section 6.16
  Further Assurances     95  
Section 6.17
  Intentionally Omitted     95  
Section 6.18
  Indemnity     95  
Section 6.19
  Environmental Matters     96  
Section 6.20
  Formation of Subsidiaries     96  
Section 6.21
  Intentionally Omitted     97  
Section 6.22
  Holding Company Dividends     97  
 
            ARTICLE 7. INFORMATION COVENANTS     97  

-2-

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

 

INDEX

                      Page  
 
           
Section 7.1
  Monthly and Quarterly Financial Statements and Information     97  
Section 7.2
  Annual Financial Statements and Information; Certificate of No Default     98
 
Section 7.3
  Compliance Certificates     98  
Section 7.4
  Access to Accountants     99  
Section 7.5
  Additional Reports     99  
Section 7.6
  Notice of Litigation and Other Matters     100  
 
            ARTICLE 8. NEGATIVE COVENANTS     102  
Section 8.1
  Funded Debt     102  
Section 8.2
  Guaranties     104  
Section 8.3
  Liens     104  
Section 8.4
  Restricted Payments     104  
Section 8.5
  Investments     105  
Section 8.6
  Affiliate Transactions     106  
Section 8.7
  Liquidation; Change in Ownership, Name, or Year; Disposition or Acquisition of
Assets; Etc.     106  
Section 8.8
  Fixed Charge Coverage Ratio     108  
Section 8.9
  Intentionally Omitted     109  
Section 8.10
  Intentionally Omitted     109  
Section 8.11
  Intentionally Omitted     109  
Section 8.12
  Sales and Leasebacks     109  
Section 8.13
  Amendment and Waiver     109  
Section 8.14
  ERISA Liability     109  
Section 8.15
  Prepayments     109  
Section 8.16
  Conduct of Business     110  
Section 8.17
  Inconsistent Agreements     110  
 
            ARTICLE 9. DEFAULT     110  
Section 9.1
  Events of Default     110  
Section 9.2
  Remedies     113  
 
            ARTICLE 10. THE ADMINISTRATIVE AGENT     115  
Section 10.1
  Appointment and Authorization     115  

-3-

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

 

INDEX

                      Page  
 
           
Section 10.2
  Interest Holders     115  
Section 10.3
  Consultation with Counsel     115  
Section 10.4
  Documents     115  
Section 10.5
  Administrative Agent and Affiliates     115  
Section 10.6
  Responsibility of the Administrative Agent     116  
Section 10.7
  Action by Administrative Agent     116  
Section 10.8
  Notice of Default     116  
Section 10.9
  Responsibility Disclaimed     117  
Section 10.10
  Indemnification     117  
Section 10.11
  Credit Decision     118  
Section 10.12
  Successor Administrative Agent     118  
Section 10.13
  Administrative Agent May File Proofs of Claim     119  
Section 10.14
  Collateral     119  
Section 10.15
  Release of Collateral     120  
 
            ARTICLE 11. MISCELLANEOUS     120  
Section 11.1
  Notices     120  
Section 11.2
  Expenses     122  
Section 11.3
  Waivers     123  
Section 11.4
  Set-Off     123  
Section 11.5
  Assignment     124  
Section 11.6
  Counterparts     126  
Section 11.7
  Governing Law     126  
Section 11.8
  Severability     126  
Section 11.9
  Headings     126  
Section 11.10
  Source of Funds     126  
Section 11.11
  Entire Agreement     127  
Section 11.12
  Amendments and Waivers     127  
Section 11.13
  Other Relationships     128  
Section 11.14
  Pronouns     129  
Section 11.15
  Disclosure     129  
Section 11.16
  Replacement of Lender     129  

-4-

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

 

INDEX

                      Page  
 
           
Section 11.17
  Confidentiality     129  
Section 11.18
  Revival and Reinstatement of Obligations     130  
Section 11.19
  Electronic Transmissions     130  
Section 11.20
  Assignment as of the Agreement Date     131  
Section 11.21
  Amendment and Restatement     133  
 
            ARTICLE 12. YIELD PROTECTION     134  
Section 12.1
  Eurodollar Rate Basis Determination     134  
Section 12.2
  Illegality     135  
Section 12.3
  Increased Costs     135  
Section 12.4
  Effect On Other Advances     137  
Section 12.5
  Capital Adequacy     137  
 
            ARTICLE 13. JURISDICTION, VENUE AND WAIVER OF JURY TRIAL     138  
Section 13.1
  Jurisdiction and Service of Process     138  
Section 13.2
  Consent to Venue     139  
Section 13.3
  Waiver of Jury Trial     139  
Section 13.4
  The Administrative Borrower     139  
Section 13.5
  All Obligations to Constitute Joint and Several Obligations     140  

EXHIBITS

         
Exhibit A
  —   Form of Administrative Questionnaire
Exhibit B
  —   Form of Assignment and Acceptance
Exhibit C
  —   Form of Borrowing Base Certificate
Exhibit D-1
  —   Form of Collateral Access Agreement — Landlord
Exhibit D-2
  —   Form of Collateral Access Agreement — Bailee
Exhibit E
  —   Form of Compliance Certificate
Exhibit F
  —   Form of Notice of Conversion/Continuation
Exhibit G
  —   Form of Request for Advance
Exhibit H
  —   Form of Request for Issuance of Letter of Credit
Exhibit I
  —   Form of Revolving Loan Note
Exhibit J
  —   Form of Guaranty Supplement
Exhibit K
  —   Form of Notice of Requested Commitment Increase
Exhibit L
  —   Form of Daily Letter of Credit Report
Exhibit M
  —   Form of Issuing Bank Joinder Agreement

-5-

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

 

INDEX

         

      Page  

SCHEDULES        
Schedule 1(a)
  —   Commitment Ratios
Schedule 1(b)
  —   Liens
Schedule 1(c)
  —   Excluded Subsidiaries
Schedule L-1
  —   Existing Letters of Credit
Schedule P-1
  —   HSBC Letters of Credit
Schedule 5.1(c)-1
  —   Subsidiaries
Schedule 5.1(c)-2
  —   Partnerships/Joint Ventures
Schedule 5.1(d)
  —   Outstanding Capital Stock Ownership
Schedule 5.1(h)
  —   Material Contracts
Schedule 5.1(i)
  —   Labor Matters
Schedule 5.1(j)
  —   Taxes
 
       
Schedule 5.1(n)
  —   Litigation
Schedule 5.1(p)
  —   Intellectual Property; Licenses and Certifications
Schedule 5.1(v)
  —   Insurance
Schedule 5.1(x)-1
  —   Leased Real Property
Schedule 5.1(x)-2
  —   Owned Real Property
Schedule 5.1(y)
  —   Environmental Matters
Schedule 5.1(aa)
  —   Change of Name
Schedule 5.1(gg)
  —   License Agreements
Schedule 6.11
  —   Location of Collateral
Schedule 6.15
  —   Bank and Investment Accounts
Schedule 8.1
  —   Funded Debt as of the Agreement Date
Schedule 8.5
  —   Investments/Guaranties as of the Agreement Date
Schedule 8.6
  —   Affiliate Transactions
Schedule 8.7
  —   Scheduled Assets

-6-

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

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT
     THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 15,
2008, is made by and among OXFORD INDUSTRIES, INC., a Georgia corporation
(“Parent”), TOMMY BAHAMA GROUP, INC., a Delaware corporation (“TBG”; together
with Parent, each referred to herein individually as a “Borrower” and,
collectively, as the “Borrowers”), the Persons party hereto from time to time as
Guarantors, the financial institutions party hereto from time to time as
Lenders, the financial institutions party hereto from time to time as the
Issuing Banks, and SUNTRUST BANK, as the Administrative Agent.
WITNESSETH:
     WHEREAS, a credit facility was extended to Parent and certain of its
Subsidiaries, as borrowers (the “2003 Borrowers”), pursuant to the terms and
conditions of that certain Credit Agreement dated as of June 13, 2003 (as
amended, restated, supplemented or otherwise modified from time to time prior to
July 28, 2004, the “2003 Credit Agreement”), by and among the 2003 Borrowers,
certain subsidiaries of the 2003 Borrowers party thereto as Guarantors (as
defined in the 2003 Credit Agreement), certain financial institutions party
thereto as Lenders (as defined in the 2003 Credit Agreement), the financial
institutions party thereto as Issuing Banks (as defined in the 2003 Credit
Agreement), Merrill Lynch Capital (a division of Merrill Lynch Business
Financial Services Inc.), as Syndication Agent (as defined in the 2003 Credit
Agreement), and SunTrust Bank, as Administrative Agent;
     WHEREAS, the 2003 Credit Agreement was amended and restated on July 28,
2004 by that certain Amended and Restated Credit Agreement dated as of July 28,
2004 (as amended, restated, supplemented or otherwise modified from time to time
prior to date hereof, the “Existing Credit Agreement”) by and among Parent,
certain Subsidiaries of Parent as borrowers or guarantors, certain financial
institutions parties thereto as Lenders, the Issuing Banks party thereto and the
Administrative Agent;
     WHEREAS, in connection with the Existing Credit Agreement, Borrowers and
certain of their subsidiaries executed and delivered the Security Documents (as
defined in the Existing Credit Agreement) in favor of the Administrative Agent
to secure the payment and performance of the Obligations (as defined under the
Existing Credit Agreement);
     WHEREAS, certain Lenders (as defined in the Existing Credit Agreement) do
not desire to be a party to this Agreement and therefore such Lenders, as
assignors, and SunTrust Bank, as assignee, have entered into an Assignment and
Acceptance of even date herewith, pursuant to which such Lenders have assigned
all of their respective Revolving Loan Commitments (as defined in the Existing
Credit Agreement) held by

 

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

 

them under the Existing Credit Agreement to SunTrust Bank, and SunTrust Bank has
assumed each of such Lenders’ Revolving Loan Commitments (as defined in the
Existing Credit Agreement) thereunder;
     WHEREAS, upon the execution and delivery of this Agreement, pursuant to
Section 11.20 of this Agreement, to the extent necessary to achieve the
allocation of the Revolving Loan Commitments, SunTrust Bank has assigned a
portion of its Revolving Loan Commitment to the other Lenders party hereto;
     WHEREAS, each Borrower Party (as defined herein) acknowledges and agrees
that the security interests and Liens (as defined in the Existing Credit
Agreement) granted to the Administrative Agent pursuant to the Existing Credit
Agreement and the other Security Documents (as defined in the Existing Credit
Agreement), shall remain outstanding and in full force and effect, without
interruption or impairment of any kind, in accordance with the Existing Credit
Agreement except to the extent such Security Documents are amended, restated,
supplemented, terminated, released, satisfied or otherwise modified in
connection with this Agreement, and shall continue to secure the Obligations (as
defined herein);
     WHEREAS, each Borrower Party acknowledges and agrees that (a) the
Obligations (as defined herein) represent, among other things, the amendment,
restatement, renewal, extension, consolidation and modification of the
Obligations (as defined in the Existing Credit Agreement) arising in connection
with the Existing Credit Agreement and other Loan Documents (as defined in the
Existing Credit Agreement) executed in connection therewith; (b) the Borrower
Parties intend that the Existing Credit Agreement and the other Loan Documents
(as defined in the Existing Credit Agreement) executed in connection therewith
and the collateral pledged thereunder shall secure, without interruption or
impairment of any kind except to the extent the Security Documents (as defined
in the Existing Credit Agreement) are amended, restated, supplemented,
terminated, released, satisfied or otherwise modified in connection with this
Agreement, all existing Obligations (as defined in the Existing Credit
Agreement) under the Existing Credit Agreement and the other Loan Documents (as
defined in the Existing Credit Agreement) executed in connection therewith, as
they may be amended, restated, renewed, extended, consolidated and modified
hereunder, together with all other obligations hereunder; (c) all Liens (as
defined in the Existing Credit Agreement) evidenced by the Loan Documents (as
defined in the Existing Credit Agreement) executed in connection therewith are
hereby ratified, confirmed and continued except to the extent such Loan
Documents are amended, restated, supplemented, terminated, released, satisfied
or otherwise modified in connection with this Agreement; and (d) the Loan
Documents (as defined herein) are intended to restate, renew, extend,
consolidate, amend and modify the Existing Credit Agreement and the other Loan
Documents (as defined in the Existing Credit Agreement) executed in connection
therewith;

2

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

 

     WHEREAS, each party hereto intends that (a) the provisions of the Existing
Credit Agreement and the other Loan Documents (as defined in the Existing Credit
Agreement) executed in connection therewith, to the extent restated, renewed,
extended, consolidated, amended and modified hereby and by the other Loan
Documents (as defined herein), are hereby superseded and replaced by the
provisions hereof and of the other Loan Documents (as defined herein); (b) the
Revolving Loan Notes (as defined herein) restate, renew, extend, consolidate,
amend, modify, replace, are substituted for and supersede in their entirety, but
do not extinguish, the Obligations (as defined in the Existing Credit Agreement)
arising under the Revolving Loan Notes (as defined in the Existing Credit
Agreement) issued pursuant to the Existing Credit Agreement; and (c) by entering
into and performing their respective obligations hereunder, this transaction
shall not constitute a novation or an accord and satisfaction;
     NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree that the Existing Credit Agreement is hereby amended and restated as
follows:
ARTICLE 1.
DEFINITIONS, ACCOUNTING PRINCIPLES AND
OTHER INTERPRETIVE MATTERS
     Section 1.1 Definitions. For the purposes of this Agreement:
     “Account Debtor” shall mean any Person who is obligated to make payments in
respect of an Account.
     “Accounts” shall mean all “accounts,” as such term is defined in the UCC,
of each Borrower Party whether now existing or hereafter created or arising,
including, without limitation, (a) all accounts receivable, other receivables,
book debts and other forms of obligations (other than forms of obligations
evidenced by chattel paper (as defined in the UCC) or instruments (as defined in
the UCC)) (including any such obligations that may be characterized as an
account or contract right under the UCC), (b) all of each Borrower Party’s
rights in, to and under all purchase orders or receipts for goods or services,
(c) all of each Borrower Party’s rights to any goods represented by any of the
foregoing (including unpaid sellers’ rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed or repossessed goods),
(d) all rights to payment due to a Borrower Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Borrower Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Borrower Party), (e) all health care insurance receivables and (f) all
collateral security of

3

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

 

any kind, given by any Account Debtor or any other Person with respect to any of
the foregoing.
     “ACH Transactions” shall mean any cash management or related services
including the automated clearinghouse transfer of funds by any Lender (or any
Affiliate of any Lender) for the account of the Borrower Parties pursuant to
agreement or overdrafts.
     “Activation Event” shall have the meaning specified in Section 6.15(a).
     “Activation Notice” shall have the meaning specified in Section 6.15(a).
     “additional amounts” shall have the meaning specified in Section 2.8(b)(i).
     “Administrative Agent” shall mean SunTrust Bank, acting as administrative
agent for the Lender Group, and any successor Administrative Agent appointed
pursuant to Section 10.12.
     “Administrative Agent Indemnified Person” shall have the meaning specified
in Section 10.10.
     “Administrative Agent’s Office” shall mean the office of the Administrative
Agent located at 303 Peachtree Street, Twenty-Third Floor, Atlanta, Georgia
30308, Attention: Kevin Harrison, or such other office as may be designated by
the Administrative Agent pursuant to the provisions of Section 11.1.
     “Administrative Borrower” shall have the meaning specified in Section 13.4.
     “Administrative Questionnaire” shall mean a questionnaire substantially in
the form of Exhibit A.
     “Advance” or “Advances” shall mean amounts of the Loans advanced by the
Lenders to, or on behalf of, the Borrowers pursuant to Section 2.2 on the
occasion of any borrowing and shall include, without limitation, all Agent
Advances and Swing Loans.
     “Affiliate” shall mean, with respect to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with such Person, or that is a director, officer, manager or partner of
such Person. For purposes of this definition, “control”, when used with respect
to any Person, shall mean the direct or indirect beneficial ownership of twenty
percent (20%) or more of the outstanding Equity Interests of such Person. For
purposes of this definition, “officer,” when used with respect to any Person,
shall mean its president, any vice president of such Person in charge of a
principal business unit, division or function (such as sales, administration or
finance) and any other Person who performs policy making functions for such
Person.

4

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

 

     “Agent Advances” shall have the meaning specified in Section 2.1(f).
     “Aggregate Commitment Ratio” shall mean, with respect to any Lender, the
ratio, expressed as a percentage, of (a) the unutilized Revolving Loan
Commitment plus Loans (other than Swing Loans and Agent Advances) outstanding
plus participation interests in Letter of Credit Obligations, Swing Loans and
Agent Advances outstanding of such Lender, divided by (b) the sum of the
aggregate unutilized Revolving Loan Commitment plus Loans (other than Swing
Loans and Agent Advances) outstanding plus participation interests in Letter of
Credit Obligations, Swing Loans and Agent Advances of all Lenders, which, as of
the Agreement Date, are set forth (together with Dollar amounts of the Revolving
Loan Commitments) on Schedule 1(a).
     “Aggregate Letter of Credit Commitment” shall mean the several obligations
of the Issuing Banks to issue (or arrange with a Foreign Issuer for the issuance
of) Letters of Credit for the account of any Borrower Party from time to time in
an aggregate face amount not to exceed $175,000,000 pursuant to the terms of
this Agreement; provided, however, the aggregate face amount of all outstanding
Standby Letters of Credit shall not at any time exceed $20,000,000.
     “Aggregate Revolving Credit Obligations” shall mean, as of any particular
time, the sum of (a) the aggregate principal amount of all Revolving Loans then
outstanding, plus (b) the aggregate principal amount of all Swing Loans then
outstanding, plus (c) the aggregate principal amount of all Agent Advances then
outstanding, plus (d) the aggregate principal amount of all Letter of Credit
Obligations then outstanding.
     “Agreement” shall mean this Second Amended and Restated Credit Agreement,
together with all Exhibits and Schedules hereto.
     “Agreement Date” shall mean the date as of which this Agreement is dated.
     “Anti-Terrorism Laws” shall mean any Applicable Laws relating to terrorism
or money laundering, including Executive Order No. 13224 and the USA Patriot
Act.
     “Applicable Law” shall mean, in respect of any Person, all provisions of
constitutions, statutes, rules, regulations, and orders of governmental bodies
or regulatory agencies applicable, whether by law or by virtue of contract, to
such Person, and all orders and decrees of all courts and arbitrators in
proceedings or actions to which the Person in question is a party or by which it
is bound.
     “Applicable Margin” shall mean that per annum rate of interest determined
as follows: with respect to each Advance and issuance of Letters of Credit, the
applicable margin shall be (a) from the Agreement Date through (and including)
the date two (2) Business Days after the delivery of the Borrowing Base
Certificate required pursuant to Section 7.5(a) for the period ended August 2,
2008, (i) 2.00% for Eurodollar Advances, (ii) 0.00% for Base Rate Advances,
(iii) 2.00% for Standby Letters of Credit and (iv)

5

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

 

1.25% for Documentary Letters of Credit and (b) thereafter, the applicable
margin determined by the Administrative Agent based upon the Average
Availability for the fiscal quarter most recently ended (with respect to which
the Borrowing Base Certificate referred to below is delivered), effective as of
the third Business Day after the Borrowing Base Certificate referred to in
Section 7.5(a) is delivered by Parent to the Administrative Agent for such
fiscal quarter most recently ended, expressed as a per annum rate of interest as
follows:

                                                                      Letter of
Credit Fee             Applicable Margin   Standby Letters of   Documentary
Letters Level   Average Availability   LIBOR Loans   Base Rate Loans   Credit  
of Credit   I    
Greater than $112,500,000
    1.75 %     0.00 %     1.75 %     1.00 % II  
Greater than $35,000,000 but less than or equal to $112,500,000
    2.00 %     0.00 %     2.00 %     1.25 % III  
Less than or equal to $35,000,000
    2.25 %     0.00 %     2.25 %     1.50 %

     In the event that Parent fails to timely provide the Borrowing Base
Certificate referred to above in accordance with the terms of Section 7.5(a),
and without prejudice to any additional rights under Section 9.2, as of the
second Business Day after delivery of such Borrowing Base Certificate was due
until the date two (2) Business Days following the date such Borrowing Base
Certificate was delivered, the applicable margin shall be the highest pricing
level (i.e. Level III). In the event that the information contained in any
Borrowing Base Certificate referred to above is shown to be inaccurate, and such
inaccuracy, if corrected, would have led to the application of a higher interest
rate for any period (an “Applicable Period”) than the applicable margin actually
applied for such Applicable Period, then (i) Borrowers shall immediately deliver
to the Administrative Agent a correct Borrowing Base Certificate for such
Applicable Period, (ii) such higher applicable margin shall be deemed to have
been in effect for such Applicable Period, and (iii) the Borrowers shall
immediately deliver to the Administrative Agent full payment in respect of the
accrued additional interest on the Loans and Letters of Credit as a result of
such increased applicable margin for such Applicable Period, which payment shall
be promptly applied by the Administrative Agent in accordance with Section 2.11
(it being understood that nothing contained in this paragraph shall limit the
rights of the Administrative Agent and the other Lenders to exercise their
rights under Section 2.3(b) or Section 9.2).
     “Approved Freight Handler” shall mean any Freight Handler that has
delivered a Lien Acknowledgement Agreement in favor of the Administrative Agent
(including, without limitation, any Freight Handler that has delivered a Lien
Acknowledgement Agreement in connection with the Existing Credit Agreement), so
long as such Lien

6

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

 

Acknowledgement remains in full force and effect and the Administrative Agent
has not received any notice of termination with respect thereto.
     “Approved Fund” shall mean any Fund that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity that administers or
manages a Lender.
     “Assignment and Acceptance” shall mean that certain form of Assignment and
Acceptance attached hereto as Exhibit B, pursuant to which each Lender may, as
further provided in Section 11.5, sell a portion of its Loans or Revolving Loan
Commitment.
     “Authorized Signatory” shall mean, with respect to any Borrower Party, such
senior personnel of such Borrower Party as may be duly authorized and designated
in writing to the Administrative Agent by such Borrower Party to execute
documents, agreements, and instruments on behalf of such Borrower Party.
     “Availability” shall mean, as of any date of determination, the amount (if
any) by which (a) the lesser of (i) the Revolving Loan Commitment, and (ii) the
Borrowing Base as most recently reported by the Borrower Parties on or prior to
such date of determination, exceeds (b) the Aggregate Revolving Credit
Obligations on such date of determination.
     “Available Letter of Credit Amount” shall mean, as of any particular time,
an amount equal to the lesser of (a) the Aggregate Letter of Credit Commitment
at such time less the aggregate amount of all Letter of Credit Obligations then
outstanding and (b) Availability at such time.
     “Average Availability” shall mean, as of any date of determination with
respect to any period, the sum of daily Availability on each day during the
applicable period, divided by the number of days in such period.
     “Bank Product Reserves” shall mean all reserves that the Administrative
Agent, from time to time, establishes in its Permitted Discretion for Bank
Products then provided or outstanding.
     “Bank Products” shall mean any one or more of the following types of
services or facilities extended to the Borrower Parties by a Person who at the
time such services or facilities were extended was a Lender (or an Affiliate of
any Lender): (a) credit cards; (b) ACH Transactions; (c) Cash Management
Services; and (d) the Lender Hedge Agreements.
     “Bank Products Documents” shall mean all agreements entered into from time
to time by the Borrower Parties in connection with any of the Bank Products and
shall include the Lender Hedge Agreements.

7

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

 

     “Bankruptcy Code” shall mean the United States Bankruptcy Code (11 U.S.C.
Section 101 et seq.), as now or hereafter amended, and any successor statute.
     “Base Rate” shall mean the higher of (i) the rate which the Administrative
Agent announces from time to time as its prime lending rate, as in effect from
time to time, or (ii) the Federal Funds Rate, as in effect from time to time,
plus one-half of one percent (1/2%) per annum (any changes in such rates to be
effective as of the date of any change in such rate). The Administrative Agent’s
prime lending rate is a reference rate and does not necessarily represent the
lowest or best rate of interest actually charged to any customer of the
Administrative Agent. The Administrative Agent may make commercial loans or
other loans at rates of interest at, above, or below the Administrative Agent’s
prime lending rate.
     “Base Rate Advance” shall mean an Advance which the Borrowers request to be
made as a Base Rate Advance or which is converted to a Base Rate Advance, in
accordance with the provisions of Section 2.2(b).
     “Ben Sherman” shall mean Ben Sherman Limited, a private company limited by
shares incorporated under the laws of England.
     “Blocked Account” shall have the meaning specified in Section 6.15(b).
     “Blocked Account Agreement” shall mean any agreement executed by a
depository bank or securities intermediary and the Administrative Agent, for the
benefit of the Lender Group, and acknowledged and agreed to by the applicable
Borrower Party, in form acceptable to the Administrative Agent in its sole
discretion.
     “Borrower” and “Borrowers” shall have the meanings specified in the
preamble.
     “Borrower Parties” shall mean, collectively, the Borrowers and the
Guarantors; and “Borrower Party” shall mean any one of the foregoing Borrower
Parties.
     “Borrower Payments” shall have the meaning specified in Section 2.8(b)(i).
     “Borrowing Base” shall mean, at any particular time, the sum of:

  (a)   90% of Eligible Credit Card Receivables; plus     (b)   85% of Eligible
Accounts; plus     (c)   90% of the appraised NOLV of Eligible Domestic
Inventory; plus     (d)   an amount equal to the lesser of (i) the In-Transit
Inventory Limit or (ii) 90% of the appraised NOLV of Eligible In-Transit
Inventory; plus

8

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

 

  (e)   an amount equal to the lesser of (i) $65,000,000 or (ii) 90% of the
amount of Eligible L/C Inventory; plus     (f)   100% of Qualified Cash; minus  
  (g)   any Reserves.

     “Borrowing Base Certificate” shall mean a certificate of an Authorized
Signatory of the Administrative Borrower substantially in the form of Exhibit C.
     “Business Day” shall mean any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of Georgia or is a day on
which banking institutions located in such state are closed; provided, however,
that when used with reference to a Eurodollar Advance (including the making,
continuing, prepaying or repaying of any Eurodollar Advance), the term “Business
Day” shall also exclude any day in which banks are not open for dealings in
deposits of Dollars on the London interbank market.
     “Capital Expenditures” shall mean, for any period, on a consolidated basis
for the Borrower Parties and their Subsidiaries, the aggregate of all
expenditures made by the Borrower Parties and their Subsidiaries during such
period that, in conformity with GAAP, are required to be included in or
reflected on the consolidated balance sheet as a capital asset of Parent,
including, without limitation, Capitalized Lease Obligations of the Borrower
Parties and their Subsidiaries, but, for the avoidance of doubt, excluding EITF
97-10 Capital Lease Obligations.
     “Capitalized Lease Obligation” shall mean that portion of any obligation of
a Person as lessee under a lease which at the time would be required to be
capitalized on the balance sheet of such lessee in accordance with GAAP, other
than EITF 97-10 Capital Lease Obligations.
     “Cash Equivalents” shall mean, collectively, (a) marketable, direct
obligations of the US and its agencies maturing within three hundred sixty-five
(365) days of the date of purchase, (b) commercial paper issued by corporations,
each of which shall have a consolidated net worth of at least $500,000,000,
which commercial paper will mature within one hundred eighty (180) days from the
date of the original issue thereof and is rated “P-1” or better by Moody’s or
“A-1” or better by S&P, (c) certificates of deposit maturing within three
hundred sixty-five (365) days of the date of purchase and issued by a US
national or state bank having deposits totaling more than $500,000,000, and
whose short-term debt is rated “P-1” or better by Moody’s or “A-1” or better by
S&P, (d) up to $100,000 per institution and up to $1,000,000 in the aggregate in
(i) short-term obligations issued by any local commercial bank or trust company
located in those areas where the Borrower conducts its business, whose deposits
are insured by the Federal Deposit Insurance Corporation, or (ii) commercial
bank-insured money market funds, or

9

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

 

any combination of the types of investments described in this clause (d), and
(e) overnight investments with such financial institutions having a short term
deposit rating of “P-1” or better by Moody’s, or “A-1” or better by S&P.
     “Cash Management Bank” shall have the meaning specified in Section 6.15(a).
     “Cash Management Services” shall mean any services provided from time to
time by a Person who at the time such services or facilities were extended was a
Lender (or an Affiliate of any Lender) to any Borrower Party in connection with
operating, collections, payroll or other depository or disbursement accounts,
including automatic clearinghouse, controlled disbursement, depository, electric
funds transfer, information reporting, lockbox, stop payment, overdraft and/or
wire transfer services.
     “Change in Control” shall mean the occurrence of one or more of the
following events: (a) any sale, lease, exchange or other transfer (in a single
transaction or a series of related transactions) of all or substantially all of
the assets of Parent to any person or “group” (within the meaning of the SEA);
(b) the acquisition of ownership, directly or indirectly, beneficially or of
record, by any person or “group” (within the meaning of the SEA) of thirty-five
percent (35%) or more of the outstanding shares of the voting Equity Interests
of Parent; (c) as of any date a majority of the board of directors of Parent
consists (other than vacant seats) of individuals who were not either
(i) directors of Parent as of the Agreement Date, (ii) selected or nominated to
become directors by the board of directors of Parent of which a majority
consisted of individuals described in clause (i), or (iii) selected or nominated
to become directors by the board of directors of Parent of which a majority
consisted of individuals described in clause (i) and individuals described in
clause (ii); or (d) Parent shall cease to own and control, directly or
indirectly, 100% of the outstanding Equity Interests of TBG.
     “Code” shall mean the Internal Revenue Code of 1986, as amended from time
to time.
     “Collateral” shall mean all property pledged as collateral security for the
Obligations pursuant to the Security Documents or otherwise, and all other
property of any Borrower Party that is now or hereafter in the possession or
control of any member of the Lender Group, or on which any member of the Lender
Group has been granted a Lien.
     “Collateral Access Agreement” shall mean any agreement of any lessor,
warehouseman, processor, consignee or other Person in possession of, having a
Lien upon or having rights or interests in, any of the Collateral in favor of
the Administrative Agent, for the benefit of the Lender Group, substantially in
the form of Exhibit D-1 or Exhibit D-2 or otherwise in form and substance
satisfactory to the Administrative Agent, waiving or subordinating Liens or
certain other rights or interests such Person may hold in regard to the property
of any of the Borrower Parties and providing the Administrative Agent access to
its Collateral.

10

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

 

     “Commitment Increase” shall have the meaning specified in
Section 2.17(a)(i).
     “Commitment Increase Cap” shall have the meaning specified in Section
2.17(a)(i).
     “Compliance Certificate” shall mean a certificate executed by an Authorized
Signatory of the Administrative Borrower substantially in the form of Exhibit E.
     “Confidential Information” shall have the meaning specified in
Section 11.17.
     “Controlled Disbursement Account” shall have the meaning specified in
Section 2.2(f).
     “Credit Card Issuer” shall mean any Person (other than a Borrower Party)
who issues or whose members issue credit cards, including without limitation,
MasterCard or VISA bank credit or debit cards or other bank credit or debit
cards issued through MasterCard International, Inc., Visa, U.S.A., Inc. or Visa
International and American Express, Discover, Diners Club, Carte Blanche and
other non-bank credit or debit cards, including, without limitation, credit or
debit cards issued by or through American Express Travel Related Services
Company, Inc., Novus Services, Inc., or any proprietary card issuer reasonably
acceptable to the Administrative Agent.
     “Credit Card Receivables” shall mean each Account together with all income,
payments and proceeds thereof, owed by a Credit Card Issuer or Credit Card
Processor to a Borrower Party resulting from charges by a customer of a Borrower
Party on credit or debit cards issued or processed by such Credit Card Issuer or
Credit Card Processor in connection with the sale of goods by a Borrower Party,
or services performed by a Borrower Party, in each case in the ordinary course
of its business.
     “Credit Card Processor” shall mean any servicing or processing agent or any
factor or financial intermediary who facilitates, services, processes or manages
the credit authorization, billing transfer and/or payment procedures with
respect to any Borrower Party’s sales transactions involving credit card or
debit card purchases by customers using credit cards or debit cards issued by
any Credit Card Issuer.
     “Customer Dispute” shall mean all instances in which (a) a customer of a
Borrower has rejected or returned the goods and such return or rejection has not
been accepted by such Borrower as a valid return or rejection, or (b) a customer
of a Borrower has otherwise affirmatively asserted grounds for nonpayment of an
Account, including, without limitation, any repossession of goods by such
Borrower, or any claim by an Account Debtor of total or partial failure of
delivery, set-off, counterclaim, or breach of warranty.

11

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

 

     “Date of Issue” shall mean the date on which an Issuing Bank issues (or, at
the direction of an Issuing Bank, a Foreign Issuer issues) a Letter of Credit
pursuant to Section 2.15.
     “Default” shall mean any Event of Default, and any of the events specified
in Section 9.1 regardless of whether there shall have occurred any passage of
time or giving of notice (or both) that would be necessary in order to
constitute such event an Event of Default.
     “Default Rate” shall mean a simple per annum interest rate equal to,
(a) with respect to all outstanding principal, the sum of (i) the applicable
Interest Rate Basis, plus (ii) the highest Applicable Margin, plus (iii) two
percent (2.00%), and (b) with respect to all other Obligations (other than
Obligations from Bank Products), the sum of (i) the Base Rate, plus (ii) the
Applicable Margin applicable to Base Rate Advances plus (iii) two percent
(2.00%); provided, however, that (y) as to any Eurodollar Advance outstanding on
the date that the Default Rate becomes applicable, the Default Rate shall be
based on the then applicable Eurodollar Basis until the end of the current
Eurodollar Advance Period and thereafter the Default Rate shall be based on the
Base Rate as in effect from time to time and (z) as to any Base Rate Advance
outstanding on the date that the Default Rate becomes applicable, the Default
Rate shall be based on the Base Rate as in effect from time to time.
     “Dilution” shall mean, as of any date of determination, a percentage, based
upon the experience of the immediately prior twelve month period, that is the
result of dividing the Dollar amount of (a) bad debt write downs, discounts,
advertising allowances, credits or other dilutive items with respect to each
Borrower Party’s Accounts during such period, by (b) each Borrower Party’s
billings with respect to Accounts during such period.
     “Dilution Reserve” shall mean, as of any date of determination, an amount
sufficient to reduce the advance rate against Eligible Accounts by the amount
which Dilution is in excess of five percent (5.00%), rounded down to the nearest
one-tenth of a percentage point (0.10%).
     “Disbursement Account” shall mean account number 8800828975 maintained at
SunTrust Bank, or as otherwise designated to the Administrative Agent by the
Administrative Borrower.
     “Dividends” shall mean any direct or indirect distribution, dividend, or
payment to any Person on account of any Equity Interests of any Borrower Party.
     “Documentary Letter of Credit” shall mean a documentary Letter of Credit
issued in respect of the purchase of goods or services by any Borrower Party in
the ordinary course of its business.

12

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

 

     “Dollars” or “$” shall mean the lawful currency of the United States of
America.
     “Domestic Subsidiary” shall mean any Subsidiary of a Borrower that is
organized and existing under the laws of the US or any state or commonwealth
thereof or under the laws of the District of Columbia, but shall not include US
Ben Sherman Holdco.
     “EBITDAR” shall mean, with respect to the Borrowers and their Subsidiaries
for any period, an amount equal to the sum of (a) Net Income for such period
plus (b) to the extent deducted in determining Net Income for such period,
(i) Interest Expense, (ii) income tax expense, (iii) Rent Expense, (iv) loss
from extraordinary items and (v) depreciation and amortization expense,
determined on a consolidated basis in accordance with GAAP in each case for such
period; provided, however, that if any such calculation includes any period in
which an acquisition or sale of a Person or all or substantially all of the
assets of a Person occurred, then such calculation shall be made on a Pro Forma
Basis.
     “E-Fax” means any system used to receive or transmit faxes electronically.
     “EITF 97-10 Capital Lease Obligations” means obligations that are
classified as “Capital Lease Obligations” under GAAP due to the application of
Emerging Issues Task Force Regulation 97-10, and that, but for such regulation,
would not constitute Capital Lease Obligations.
     “Electronic Transmission” means each document, instruction, authorization,
file, information and any other communication transmitted, posted or otherwise
made or communicated by e-mail or E-Fax, or otherwise to or from an E-System or
other equivalent service.
     “Eligible Accounts” shall mean, at any particular date, all Accounts of the
Borrower Parties that the Administrative Agent, in the exercise of its Permitted
Discretion, determines to be Eligible Accounts; provided, however, that, without
limiting the right of the Administrative Agent to establish other criteria of
ineligibility, Eligible Accounts shall not include any of the following
Accounts:
          (a) Accounts with respect to which more than one hundred twenty
(120) days have elapsed since the original invoice therefor or sixty (60) days
since the due date of the original invoice;
          (b) Accounts with respect to which any of the representations,
warranties, covenants and agreements contained in Section 5.2 are not or have
ceased to be complete and correct or have been breached;
          (c) Accounts with respect to which, in whole or in part, a check,
promissory note, draft, trade acceptance or other instrument for the payment of
money has been received, presented for payment and returned uncollected for any
reason, unless

13

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

 

the Account Debtor subsequently honors such check, note, draft, acceptance or
instrument or pays such Account or part thereof paid therewith;
          (d) Accounts as to which the Borrower Party has not performed, as of
the applicable date of calculation, all of its obligations then required to have
been performed, including, without limitation, the delivery of merchandise or
rendition of services applicable to such Accounts;
          (e) Accounts as to which any one or more of the following events has
occurred with respect to the Account Debtor on such Accounts: death or judicial
declaration of incompetency of such Account Debtor who is an individual; the
filing by or against such Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as a
bankrupt, winding-up, or other relief under the bankruptcy, insolvency, or
similar laws of the US, any state or territory thereof, or any foreign
jurisdiction, now or hereafter in effect; the making of any general assignment
by such Account Debtor for the benefit of creditors; the appointment of a
receiver or trustee for such Account Debtor or for any of the assets of such
Account Debtor, including, without limitation, the appointment of or taking
possession by a “custodian,” as defined in Bankruptcy Code; the institution by
or against such Account Debtor of any other type of insolvency proceeding (under
the bankruptcy laws of the US or otherwise) or of any formal or informal
proceeding for the dissolution or liquidation of, settlement of claims against,
or winding up of affairs of, such Account Debtor; the sale, assignment, or
transfer of all or substantially all of the assets of such Account Debtor unless
the obligations of such Account Debtor in respect of the Accounts are assumed by
and assigned to such purchaser or transferee; the nonpayment generally by such
Account Debtor of its debts as they become due; or the cessation of the business
of such Account Debtor as a going concern; provided, however, that the foregoing
shall not include post-petition Accounts of an Account Debtor to the extent that
(i) such Accounts constitute Accounts of such Account Debtor as a
“debtor-in-possession” and (ii) such Accounts have been approved by the
Administrative Agent in its Permitted Discretion;
          (f) Accounts of an Account Debtor for whom fifty percent (50%) or more
of the aggregate Dollar amount of such Account Debtor’s outstanding Accounts are
classified as ineligible under the criteria set forth in clause (a) hereof;
          (g) Accounts which represent the remaining obligations for partially
paid invoices;
          (h) Accounts owed by an Account Debtor which: (i)(A) does not maintain
its chief executive office or have a material presence in the US or in Canada
and (B) is not organized under the laws of the US or any state or territory
thereof or of Canada or any province thereof; or (ii) is the government of any
foreign country or sovereign state, or of any state, municipality, or other
political subdivision thereof, or of any department, agency, public corporation,
or other instrumentality thereof; except to the extent that such Accounts are
secured or payable by a letter of credit or acceptance, or

14

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

 

insured under foreign credit insurance in each case, on terms and conditions
satisfactory to the Administrative Agent in its Permitted Discretion;
          (i) Accounts owed by an Account Debtor which is an Affiliate or
employee of any Borrower Party;
          (j) Accounts which are owed by an Account Debtor to which the Borrower
Party is indebted in any way, or which are subject to any right of setoff by the
Account Debtor, including, without limitation, for co-op advertising, rebates,
incentives and promotions, to the extent of such indebtedness or right of setoff
and without duplication of any such indebtedness or right of setoff accounted
for in the calculation of Dilution;
          (k) Accounts which are subject to any Customer Dispute, but only to
the extent of the amount in dispute;
          (l) Accounts which are owed by the government of the US, or any
department, agency, public corporation, or other instrumentality thereof
(excluding Accounts owed by the Army & Air Force Exchange Service (“AAFES”) to
the extent such AAFES Accounts do not exceed $2,000,000), unless all required
procedures for the effective collateral assignment of the Accounts under the
Federal Assignment of Claims Act of 1940 have been complied with to the
Administrative Agent’s reasonable satisfaction with respect to such Accounts;
          (m) Accounts which are owed by any state, municipality, territory or
other political subdivision of the US, or any department, agency, public
corporation, or other instrumentality thereof and as to which the Administrative
Agent determines in its Permitted Discretion that the Administrative Agent’s
security interest therein is not or cannot be perfected or cannot be enforced
against the applicable Account Debtor;
          (n) Accounts which represent third-party leasing transactions;
          (o) Accounts which represent sales on a bill-and-hold, guaranteed
sale, sale and return, sale on approval, consignment or other repurchase or
return basis;
          (p) Accounts which represent any contractual obligation, based on a
percentage of sales or otherwise, that must be collected from the Account Debtor
and paid by the Borrower Party to a third party as a “pass-through” item, but
only to the extent of the amount of such pass-through;
          (q) Accounts which are evidenced by a promissory note or other
instrument or by chattel paper;
          (r) Accounts as to which the applicable Account Debtor has not been
sent an invoice or for which are partially billed;

15

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

 

          (s) Accounts with respect to which the Account Debtor is located in a
state or jurisdiction that requires, as a condition to access to the courts of
such jurisdiction, that a creditor qualify to transact business, file a business
activities report or other report or form, or take one or more other actions,
unless the Borrower Party has so qualified, filed such reports or forms, or
taken such actions (and, in each case, paid any required fees or other charges),
except to the extent that the Borrower Party may qualify subsequently as a
foreign entity authorized to transact business in such state or jurisdiction and
gain access to such courts, without incurring any cost or penalty viewed by the
Administrative Agent to be significant in amount, and such later qualification
cures any bar to access to such courts to enforce payment of such Account;
          (t) Accounts which are not a bona fide, valid and, to the best of the
Borrower Parties’ knowledge, enforceable obligation of the Account Debtor
thereunder;
          (u) Accounts which are owed by an Account Debtor with whom any
Borrower Party has any agreement or understanding for deductions from the
Accounts, except for discounts or allowances which are made in the ordinary
course of business for prompt payment or volume purchases and which discounts or
allowances are reflected in the calculation of the face value of each invoice
related to such Accounts, or Accounts with respect to which a debit or
chargeback has been issued or generated, in each case to the extent of such
deduction and without duplication of any such deduction accounted for in the
calculation of Dilution;
          (v) Accounts which are not subject to a valid and continuing first
priority Lien in favor of the Administrative Agent, for the benefit of the
Lender Group, pursuant to the Security Documents as to which all action
necessary or desirable to perfect such security interest shall have been taken,
and to which the Borrower Party has good and marketable title, free and clear of
any Liens (other than Liens in favor of the Administrative Agent, for the
benefit of the Lender Group, and Permitted Liens);
          (w) Accounts which are owed by an Account Debtor to the extent that
such Account, together with all other Accounts owing by the same Account Debtor
and its Affiliates, exceed twenty-five percent (25%) of all Eligible Accounts;
          (x) Accounts which represent rebates, refunds or other similar
transactions, but only to the extent of the amount of such rebate, refund or
similar transaction;
          (y) Accounts as to which a security agreement, financing statement,
equivalent security or Lien instrument or continuation statement is on file or
of record in any public office, except any such as may have been filed in favor
of the Administrative Agent, for the benefit of the Lender Group, pursuant to
the Security Documents, any such evidencing or relating to a Permitted Lien, and
any such with respect to a Lien granted by an Account Debtor in favor of a
Borrower Party; or

16

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

 

          (z) Accounts which constitute Eligible Credit Card Receivables.
     “Eligible Assignee” shall mean (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; or (d) any other Person approved by (i) the Administrative
Agent, (ii) with respect to any proposed assignee of the Revolving Loan
Commitment, the Issuing Banks, and (iii) unless (x) such Person is taking
delivery of an assignment in connection with physical settlement of a credit
derivatives transaction or (y) a Default exists, the Administrative Borrower,
such approvals of the Administrative Agent, the Issuing Banks and the
Administrative Borrower not to be unreasonably withheld or delayed; provided,
however, that if the consent of the Administrative Borrower to an assignment or
to an Eligible Assignee is required hereunder (including a consent to an
assignment which does not meet the minimum assignment thresholds specified in
Section 11.5(b)), the Administrative Borrower shall be deemed to have given its
consent five (5) Business Days after the date notice thereof has been delivered
by the assigning Lender (through the Administrative Agent) unless such consent
is expressly refused by the Administrative Borrower prior to such fifth (5th)
Business Day.
     “Eligible Credit Card Receivables” shall mean, at any particular date, each
Credit Card Receivable that satisfies the following criteria at the time of
creation and continues to meet the same at the time of such determination: such
Credit Card Receivable (i) has been earned by performance, represents the bona
fide amounts due to a Borrower Party from a Credit Card Issuer or from a Credit
Card Processor, and was originated in the ordinary course of business of such
Borrower Party, and (ii) is not ineligible for inclusion in the calculation of
the Borrowing Base pursuant to any of clauses (a) through (k) below. Without
limiting the foregoing, to qualify as an Eligible Credit Card Receivable, an
Account shall indicate no Person other than a Borrower Party as payee or
remittance party. In determining the amount to be so included, the face amount
of an Account shall be reduced by, without duplication, to the extent not
reflected in such face amount, (i) the amount of all accrued and actual
discounts, claims, credits or credits pending, promotional program allowances,
price adjustments, finance charges or other allowances (including any amount
that a Borrower Party may be obligated to rebate to a customer, a Credit Card
Issuer or a Credit Card Processor pursuant to the terms of any agreement or
understanding) and (ii) the aggregate amount of all cash received in respect of
such Account but not yet applied by the applicable Borrower Party to reduce the
amount of such Credit Card Receivable. Any Credit Card Receivables meeting the
foregoing criteria shall be deemed Eligible Credit Card Receivables but only as
long as such Credit Card Receivable is not included within any of the following
categories, in which case such Credit Card Receivable shall not constitute an
Eligible Credit Card Receivable:
          (a) Credit Card Receivables which do not constitute an “Account” (as
defined in the UCC);

17

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

 

          (b) Credit Card Receivables that have been outstanding for more than
five (5) Business Days from the date of sale of goods or services giving rise to
such Credit Card Receivables;
          (c) Credit Card Receivables with respect to which a Borrower Party
does not have good, and valid title, free and clear of any Lien (other than
Liens granted to the Administrative Agent and other Permitted Liens);
          (d) Credit Card Receivables that are not subject to a first priority
security interest in favor of the Administrative Agent (other than Permitted
Liens having priority over the Lien of the Administrative Agent under Applicable
Law) (it being the intent that chargebacks in the ordinary course by such Credit
Card Processors and Credit Card Issuers shall not be deemed violative of this
clause);
          (e) Credit Card Receivables which are disputed, are with recourse, or
with respect to which a claim, counterclaim, offset or chargeback has been
asserted (but only to the extent of such claim, counterclaim, offset or
chargeback);
          (f) Credit Card Receivables as to which the Credit Card Processor has
the right under certain circumstances to require a Borrower Party to repurchase
the Accounts from such Credit Card Processor;
          (g) Credit Card Receivables due from a Credit Card Issuer or Credit
Card Processor of the applicable credit card which is the subject of any
bankruptcy or insolvency proceedings;
          (h) Credit Card Receivables which are not a valid, legally enforceable
obligation of the applicable Credit Card Issuer with respect thereto;
          (i) Credit Card Receivables which do not conform in all material
respects to all representations, warranties or other provisions in the Loan
Documents relating to Credit Card Receivables;
          (j) Credit Card Receivables which are evidenced by “chattel paper” or
an “instrument” of any kind unless such “chattel paper” or “instrument” is in
the possession of the Administrative Agent and, to the extent necessary or
appropriate, endorsed to the Administrative Agent;
          (k) Credit Card Receivables arising from the use of a private label
credit card (i.e., any Credit Card Receivable where a Borrower Party or an
Affiliate of a Borrower Party is the Credit Card Issuer); or

18

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

 

          (l) Credit Card Receivables arising from the use of a “co-branded”
credit card which are deemed ineligible for inclusion in the Borrowing Base by
the Administrative Agent in the exercise of its Permitted Discretion.
          “Eligible Domestic Inventory” shall mean, as of any particular date,
the portion of the Inventory of each Borrower Party that the Administrative
Agent, in the exercise of its Permitted Discretion, determines to be Eligible
Domestic Inventory; provided, however, that without limiting the right of the
Administrative Agent to establish other criteria of ineligibility, Eligible
Domestic Inventory shall not include any of the following Inventory:
          (a) Inventory that is not owned solely by a Borrower Party;
          (b) Inventory that does not conform to all of the warranties and
representations regarding the same which are set forth in this Agreement or any
of the other Loan Documents;
          (c) Inventory that is not located in the US or Canada (excluding the
Province of Quebec) either (i) on real property owned by a Borrower Party,
(ii) at any leased premises where the fair market value of the Inventory stored
or located at such leased premises is $100,000 or less, (iii) on leased premises
in regard to which the landlord thereof shall have executed and delivered to the
Administrative Agent a Collateral Access Agreement or with respect to which the
Administrative Agent has established a Rent Reserve, or (iv) at premises where a
bailee, warehouseman or similar party is in possession of such Inventory and
shall have executed and delivered to the Administrative Agent a Collateral
Access Agreement; provided, however, the aggregate amount of all Eligible
Domestic Inventory located in Canada shall not exceed $5,000,000 in the
aggregate at any time of determination; provided, further, Eligible Domestic
Inventory shall not include any Inventory at any location where the aggregate
fair market value of all Inventory at such location, together with all other
Inventory located within a reasonable proximity to such location, is less than
$50,000;
          (d) Inventory that is subject to any asserted claim of reclamation,
Lien, adverse claim, interest or right (other than Liens in favor of the
Administrative Agent, Permitted Liens and claims, interests, rights or other
encumbrances arising from a licensing, patent, royalty, trademark, trade name or
copyright agreement with a third party so long as, if requested by the
Administrative Agent in its Permitted Discretion, any such Inventory is subject
to a Licensor Consent) of any other Person, but solely to the extent of the
amount of such Lien, claim, interest or right;
          (e) Inventory that has been consigned for sale to or by any Person;

19

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

 

          (f) Inventory that is not in good condition or does not meet all
standards imposed by any Person having regulatory authority over such goods or
their use and/or sale, or Inventory that is not currently saleable in the normal
course of a Borrower Party’s business;
          (g) Inventory that consists of work-in-process;
          (h) Inventory scheduled for return to vendors, Inventory which is
obsolete or slow-moving (for purposes of this subsection, what constitutes
“obsolete or slow-moving” Inventory shall be determined by the Administrative
Agent in its Permitted Discretion), display items, packaging materials, labels
or name plates or similar supplies;
          (i) Inventory that is not personal property in which a Borrower Party
has granted a valid and continuing first priority Lien in favor of the
Administrative Agent, for the benefit of the Lender Group, pursuant to the
Security Documents, or as to which all action necessary to perfect such security
interest has not been taken;
          (j) Inventory that is covered, in whole or in part, by any security
agreement, financing statement, equivalent security or Lien instrument or
continuation statement which is on file or of record in any public office,
except (i) such as may have been filed in favor of the Administrative Agent, for
the benefit of the Lender Group, pursuant to the Security Documents or (ii) such
as may have been filed with respect to Permitted Liens;
          (k) Inventory which constitutes In-Transit Inventory or Eligible L/C
Inventory; and
          (l) Inventory that is subject to any licensing, patent, royalty,
trademark, trade name or copyright agreement with any third party requiring the
payment of royalties or fees or requiring the consent of the licensor for a sale
thereof by the Administrative Agent and is not subject to a Licensor Consent
that has been requested by the Administrative Agent in its Permitted Discretion.
     “Eligible Inventory” shall mean, collectively, Eligible Domestic Inventory,
Eligible In-Transit Inventory and Eligible L/C Inventory.
     “Eligible In-Transit Inventory” means all finished goods which constitute
In-Transit Inventory (without duplication of any Eligible L/C Inventory or
Eligible Domestic Inventory) owned any Borrower Party, which such Inventory is
in transit to a Borrower Party’s location in the US or Canada (excluding the
Province of Quebec) or to a customer of a Borrower Party that will take delivery
of such Inventory at the port of destination located in the US or Canada
(excluding the Province of Quebec) and as to which such In-Transit Inventory:
(i) shall be the subject of a bill of lading or a cargo receipt that (A)(x) in
the case of a negotiable bill of lading or negotiable cargo receipt, is

20

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

 

consigned to the Administrative Agent or an Issuing Bank (either directly or by
means of endorsement) or (y) in the case of a non-negotiable bill of lading or
non-negotiable cargo receipt, is consigned to the Administrative Agent or an
Issuing Bank (either directly or by means of endorsements) or to a Borrower
Party if such bill of lading or cargo receipt shall state “[Name of applicable
Borrower Party], subject to the security interest of SunTrust Bank, as agent,
303 Peachtree Street, N.E., Atlanta, Georgia 30308” thereon and (B) was issued
by the carrier respecting the subject In-Transit Inventory, (ii) is insured in
accordance with Section 6.5, (iii) with respect to In-Transit Inventory that is
subject to a non-negotiable bill of lading or non-negotiable cargo receipt, such
In-Transit Inventory shall be in the physical possession of an Approved Freight
Handler and (iv) would not be deemed ineligible for inclusion in the Borrowing
Base under clauses (a), (b), (d) (other than in respect of any possessory Lien
of the related common carrier or any Lien in favor of a related Approved Freight
Handler), (e), (f), (g), (h), (j) or (l) of the definition of Eligible Domestic
Inventory, treating such eligibility criteria as applicable to such In-Transit
Inventory. Upon the request of the Administrative Agent, the Borrower Parties
shall promptly deliver to the Administrative Agent copies of all such bills of
lading or cargo receipts.
     “Eligible L/C Inventory” shall mean an amount equal to the aggregate face
amount of all Documentary Letters of Credit (other than Letters of Credit
covering Eligible In-Transit Inventory or Eligible Domestic Inventory) issued
and outstanding on behalf of a Borrower Party in connection with the purchase of
goods that would constitute Eligible Domestic Inventory or Eligible In-Transit
Inventory upon delivery to the applicable Borrower Party, or would result in
Eligible Accounts upon sale, (and to the extent such goods underlying any such
Documentary Letters of Credit are in the possession of a Freight Handler, such
Freight Handler is an Approved Freight Handler) excluding the portion of the
face amount of any Documentary Letter of Credit relating to goods that are or
are to become Inventory which are scheduled to be shipped by the seller or
manufacturer more than sixty (60) days after such date of determination.
     “Environmental Laws” shall mean, collectively, any and all applicable
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any Governmental Authority
regulating, relating to or imposing liability or standards of conduct concerning
environmental protection matters, including without limitation, Hazardous
Materials or human health, as now or may at any time during the term of this
Agreement be in effect.
     “Equity Interests” shall mean, as applied to any Person, any capital stock,
membership interests, partnership interests or other equity interests of such
Person, regardless of class or designation, and all warrants, options, purchase
rights, conversion or exchange rights, voting rights, calls or claims of any
character with respect thereto.

21

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

 

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
in effect on the Agreement Date and as such Act may be amended thereafter from
time to time.
     “ERISA Affiliate” shall mean, with respect to any Borrower Party, any trade
or business (whether or not incorporated) that together with such Borrower
Party, are treated as a single employer under Section 414 of the Code.
     “ERISA Event” shall mean, with respect to any Borrower Party or any ERISA
Affiliate, (a) a Reportable Event; (b) the withdrawal of any Borrower Party or
ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any
Borrower Party or any ERISA Affiliate from any Multiemployer Plan; (d) the
filing of a notice of intent to terminate a Title IV Plan or the treatment of a
Title IV Plan amendment as a termination under Section 4041 or 4041A of ERISA;
(e) the institution of proceedings to terminate a Title IV Plan or Multiemployer
Plan by the PBGC; (f) the reorganization or insolvency of a Multiemployer Plan
under Section 4241 or 4245 of ERISA; (g) the failure by any Borrower Party or
ERISA Affiliate to make when due required contributions to a Multiemployer Plan
or Title IV Plan unless such failure is cured within thirty (30) days; (h) any
other event or condition that would reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA; (i) the
revocation of a Plan’s tax-qualified status under Code Section 401(a); (j) the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; (k) a Title IV Plan is in “at risk status” within the meaning of Code
Section 430(i); or (l) a Multiemployer Plan is in “endangered status” or
“critical status” within the meaning of Code Section 432(b).
     “E-System” means any electronic system, including Intralinks® and any other
internet or extranet-based site, whether such electronic system is owned,
operated or hosted by the Administrative Agent, any of its Affiliates or any
other Person, providing for access to data protected by passcodes or other
security system.
     “Eurodollar Advance” shall mean an Advance which the Administrative
Borrower requests to be made as a Eurodollar Advance or which is continued as or
converted to a Eurodollar Advance, in accordance with the provisions of
Section 2.2(c).
     “Eurodollar Advance Period” shall mean, for each Eurodollar Advance, each
one (1), two (2), three (3), or six (6) month period, as selected by the
Administrative Borrower pursuant to Section 2.2(c), during which the applicable
Eurodollar Rate (but not the Applicable Margin) shall remain unchanged.
Notwithstanding the foregoing, however: (a) any applicable Eurodollar Advance
Period which would otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day, unless such Business Day falls in
another calendar month, in which case such Eurodollar

22

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

 

Advance Period shall end on the next preceding Business Day; (b) any applicable
Eurodollar Advance Period which begins on a day for which there is no
numerically corresponding day in the calendar month during which such Eurodollar
Advance Period is to end shall (subject to clause (a) above) end on the last day
of such calendar month; and (c) no Eurodollar Advance Period shall extend beyond
the Maturity Date or such earlier date as would interfere with the repayment
obligations of the Borrowers under Section 2.6.
     “Eurodollar Basis” shall mean, with respect to each Eurodollar Advance
Period, a simple per annum interest rate equal to the quotient of (a) the
Eurodollar Rate divided by (b) one minus the Eurodollar Reserve Percentage,
stated as a decimal. The Eurodollar Basis shall remain unchanged during the
applicable Eurodollar Advance Period, except for changes to reflect adjustments
in the Eurodollar Reserve Percentage.
     “Eurodollar Rate” shall mean, for any Eurodollar Advance Period, the rate
per annum quoted on the display designated on that page of the Bloomberg
reporting service, or similar service as determined by the Administrative Agent,
that displays British Banker’s Association Interest Settlement Rates for Dollar
deposits as of 11:00 a.m. (London, England time) two (2) Business Days prior to
the applicable date of determination; provided, however, that if no such quoted
rate appears on such page, the rate used for such Eurodollar Advance Rate shall
be the per annum rate of interest determined by the Administrative Agent to be
the rate at which Dollar deposits for such Eurodollar Advance Period are offered
to the Administrative Agent as of 11:00 a.m. (London, England time) two
(2) business days prior to such date of determination.
     “Eurodollar Reserve Percentage” shall mean the aggregate of the maximum
reserve percentages (including, without limitation, any emergency, supplemental,
special or other marginal reserves) expressed as a decimal (rounded upwards to
the next one one-hundredth of one percent (1/100th of 1%)) in effect on any day
to which the Administrative Agent is subject with respect to the Eurodollar
Basis pursuant to regulations issued by the Board of Governors of the Federal
Reserve System (or any Governmental Authority succeeding to any of its principal
functions) (“Regulation D”) with respect to Eurocurrency Liabilities (as that
term is defined in Regulation D). Eurodollar Advances shall be deemed to
constitute Eurocurrency Liabilities 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 the Administrative Agent under
Regulation D. The Eurodollar Reserve Percentage shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage. The
Eurodollar Basis for any Eurodollar Advance shall be adjusted as of the
effective date of any changes in the Eurodollar Reserve Percentage.
     “Event of Default” shall mean any of the events specified in Section 9.1,
provided that any requirement for notice or lapse of time, or both, has been
satisfied.

23

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

 

     “Excluded Deposit Accounts” shall mean, collectively, (i) each disbursement
account that has a balance no greater than the amount necessary to cover
outstanding checks drawn on such account, (ii) petty cash deposit accounts for
retail stores of Retail Borrower Parties that have a balance (determined on an
average basis for all retail stores as of any date of determination) no greater
than $5,000 per retail store, (iii) the employee benefit trust account number
8801663496 at SunTrust Bank or such other similar employee benefit trust
account, so long as the balance therein does not exceed as of any date of
determination the Administrative Borrower’s estimate of employee benefit claims
to be paid in the remaining portion of such fiscal year (or, with respect to any
date of determination in the last fiscal month of any fiscal year, the
Administrative Borrower’s estimate of employee benefit claims to be paid in the
remaining portion of such fiscal year and during the next succeeding fiscal
year) from such date of determination (provided, that at any time that a Default
exists, Borrower Parties shall not deposit additional funds into such account
except to the extent necessary to pay accrued and unpaid employee benefit claims
that are then due and payable) and (iv) other deposit accounts with balances not
to exceed $1,000,000 in the aggregate.
     “Excluded Subsidiary” shall mean any Person acquired or formed after the
Agreement Date which (i) would be a Subsidiary of a Borrower Party but for the
exclusion of “Excluded Subsidiaries” in the proviso of the definition of
Subsidiary, (ii) is not a Wholly Owned Subsidiary of a Borrower Party and
(iii) is (or whose parent is) contractually prohibited from executing a Guaranty
Supplement, granting a Lien in favor of the Administrative Agent as required
under Section 6.20 or having its Equity Interest pledged to secure the
Obligations; provided, however, if such Subsidiary is not contractually
prohibited from taking all of the actions described in clause (iii) above, then
it shall be deemed an “Excluded Subsidiary” only with respect to the actions
which it or its parent is contractually prohibited from taking.
     “Executive Order No. 13224” shall mean Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as the same has been, or
shall hereafter be, renewed, extended, amended or replaced.
     “Existing Credit Agreement” has the meaning ascribed to such term in the
recitals to this Agreement.
     “Existing Letters of Credit” shall mean the letters of credit listed on
Schedule L-1.
     “Federal Funds Rate” shall mean, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, “H.15(519)”) on the preceding Business Day opposite the caption
“Federal Funds (Effective)”; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 12:00 noon

24

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

 

(Atlanta, Georgia time) on that day by each of three (3) leading brokers of
Federal funds transactions in New York, New York selected by the Administrative
Agent.
     “Fee Letter” shall mean that certain fee letter dated as of the Agreement
Date, executed by the Borrowers and addressed to SunTrust Bank.
     “Financial Covenant” shall mean the financial covenant applicable to the
Borrower Parties from time to time pursuant to Section 8.8.
     “Fixed Charge Coverage Ratio” shall mean, with respect to the Borrowers and
their Subsidiaries on a consolidated basis for any period, calculated on a Pro
Forma Basis during such period, the ratio of (a) the greater of (i) (x) EBITDAR
for such period minus (y) the sum of (A) Capital Expenditures made during such
period and not financed with the proceeds of Funded Debt (other than the
proceeds of a Loan) and (B) cash income taxes paid during such period, or (ii)
zero, to (b) Fixed Charges.
     “Fixed Charges” shall mean, for Borrowers and their Subsidiaries for any
period, the sum (without duplication) of (a) Interest Expense for such period,
(b) Rent Expense for such period, (c) scheduled principal payments made on Total
Funded Debt during such period (which, for purposes of clarification, exclude
(i) principal payments (other than scheduled amortization payments, if any) made
on the Senior Notes prior to maturity and (ii) prepayments under the Revolving
Loans), and (d) Restricted Payments (other than Dividends paid in kind) to
holders of Equity Interests paid by Parent during such period.
     “Foreign IP Transfer” shall mean the sale, disposition or other transfer by
one or more of the Borrower Parties of any foreign patents, trademarks, service
marks or copyrights and any licenses and other rights related thereto, including
without limitation the right to sue for past, present and future infringement
thereof and the goodwill associated with any trademarks and service marks, and
so long as (a) such sale, disposition or other transfer is for fair market value
(provided that a capital contribution to a Wholly-Owned Subsidiary of a Borrower
Party shall be deemed to be for fair market value), (b) such sale, disposition
or other transfer is made to a Foreign Subsidiary that is a Wholly Owned
Subsidiary of a Borrower Party, and such Wholly-Owned Subsidiary is directly
owned by a Borrower Party and the Equity Interests of such Foreign Subsidiary
have been pledged to the Administrative Agent in accordance with Section 6.20
unless such direct ownership or pledge is prohibited by Applicable Law, would
impose material taxes that otherwise would not be payable, materially increase
taxes, or otherwise thwart or materially impair a tax objective or benefit
expected to be obtained or available as a result of such sale, disposition or
other transfer, (c) no Default or Event of Default shall have occurred and be
continuing or result therefrom and (d) a senior officer of Parent shall have
delivered a certificate to the Administrative Agent certifying that any such
sale, disposition or other transfer satisfies the conditions of clauses (a),
(b) and (c) above.

25

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

 

     “Foreign Issuer” shall mean any foreign bank engaged by an Issuing Bank to
issue Documentary Letters of Credit on behalf of such Issuing Bank so long as
(a) such foreign bank has agreed to hold any and all documents, instruments or
other Collateral in its possession in connection with the issuance of any
Documentary Letter of Credit as bailee on behalf of the Administrative Agent to
perfect the Administrative Agent’s security interest in such documents,
instruments or other Collateral and (b) the agreement between such Issuing Bank
and the Foreign Issuer is satisfactory to the Administrative Agent in its
reasonable discretion.
     “Foreign Lender” shall have the meaning specified in Section 2.8(b)(v).
     “Foreign Subsidiary” shall mean any Subsidiary of a Borrower Party that
does not constitute a Domestic Subsidiary.
     “Freight Handler” shall mean any freight forwarder, customs broker, customs
agent, shipper, shipping company or similar Person utilized by a Borrower Party
from time to time in connection with the importation of Inventory.
     “Fund” shall mean any Person that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.
     “Funded Debt” of any Person shall mean, without duplication,
(i) obligations of such Person for borrowed money, (ii) obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) obligations of such Person in respect of the deferred purchase price of
property or for services (other than trade payables incurred in the ordinary
course of business on terms customary in the trade), (iv) obligations of such
Person under any conditional sale or other title retention agreement(s) relating
to property acquired by such person, (v) Capitalized Lease Obligations of such
Person as determined in accordance with GAAP, (vi) obligations, contingent or
otherwise, of such Person in respect of letters of credit, acceptances or
similar extensions of credit, (vii) guaranties by such Person of the type of
indebtedness described in clauses (i) through (vi) above, (viii) all
indebtedness of a third party secured by any Lien on property owned by such
Person, whether or not such indebtedness has been assumed by such Person,
(ix) all obligations of such Person, contingent or otherwise, to purchase,
redeem, retire or otherwise acquire for value any Equity Interest of such
Person, (x) off-balance sheet liability retained in connection with asset
securitization programs, synthetic leases, sale and leaseback transactions or
other similar obligations arising with respect to any other transaction which is
the functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheet of such Person and its
Subsidiaries and (xi) obligations under any Hedge Agreement.
     “Funding Losses” shall mean expenses incurred by any Lender or any
participant of such Lender permitted hereunder in connection with the
re-employment of funds prepaid, repaid, not borrowed, or paid, as the case may
be, and any lost profit of such

26

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

 

Lender or any participant of such Lender over the remainder of the Eurodollar
Advance Period for such prepaid Advance. For purposes of calculating amounts
payable to a Lender hereunder with respect to Funding Losses, each Lender shall
be deemed to have actually funded its relevant Eurodollar Advance through the
purchase of a deposit bearing interest at the Eurodollar Rate in an amount equal
to the amount of that Eurodollar Advance and having a maturity and repricing
characteristics comparable to the relevant Eurodollar Advance Period; provided,
however, that each Lender may fund each of its Eurodollar Advances in any manner
it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable hereunder.
     “GAAP” shall mean generally accepted accounting principles and practices
set forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or
such statements by such other entities as may be approved by a significant
segment of the accounting profession in the United States, that are applicable
to the circumstances as of the date of determination, consistently applied.
     “Governmental Authority” shall mean any nation or government, any state or
other political subdivision thereof and any entity to the extent exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to any government.
     “Guarantors” shall mean, collectively, the Subsidiary Guarantors and any
other Person that has executed a Guaranty Supplement or other document
guaranteeing the Obligations; and “Guarantor” shall mean any one of the
foregoing Guarantors.
     “Guaranty” or “guaranteed,” as applied to an obligation (each a “primary
obligation”), shall mean and include (a) any guaranty, direct or indirect, in
any manner, of any part or all of such primary obligation, and (b) any
agreement, direct or indirect, contingent or otherwise, the practical effect of
which is to assure in any way the payment or performance (or payment of damages
in the event of non-performance) of any part or all of such primary obligation,
including, without limiting the foregoing, any reimbursement obligations as to
amounts drawn down by beneficiaries of outstanding letters of credit, and any
obligation of any Person, whether or not contingent, (i) to purchase any such
primary obligation or any property or asset constituting direct or indirect
security therefor, (ii) to advance or supply funds (A) for the purchase or
payment of such primary obligation or (B) to maintain working capital, equity
capital or the net worth, cash flow, solvency or other balance sheet or income
statement condition of any other Person, (iii) to purchase property, assets,
securities or services primarily for the purpose of assuring the owner or holder
of any primary obligation of the ability of the primary obligor with respect to
such primary obligation to make payment thereof or (iv) otherwise to assure or
hold harmless the owner or holder of such primary obligation

27

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

 

against loss in respect thereof. All references in this Agreement to “this
Guaranty” shall be to the Guaranty provided for pursuant to the terms of
Article 3.
     “Guaranty Supplement” shall have the meaning specified in Section 6.20.
     “Hazardous Materials” shall mean any hazardous materials, hazardous wastes,
hazardous constituents, hazardous or toxic substances, petroleum products
(including crude oil or any fraction thereof), friable asbestos containing
materials defined or regulated as such in or under any Environmental Law.
     “Hedge Agreement” shall mean any and all transactions, agreements or
documents now existing or hereafter entered into between or among any Borrower
Party, on the one hand, and a third party, on the other hand, which provides for
an interest rate, credit or equity swap, cap, floor, collar, forward foreign
exchange transaction, currency swap, cross currency rate swap, currency option,
or any combination of, or option with respect to, these or similar transactions,
for the purpose of hedging such Borrower Party’s exposure to fluctuations in
interest or exchange rates, loan, credit exchange, security or currency
valuations.
     “Indemnified Person” shall mean each member of the Lender Group, each
Affiliate thereof and each of their respective employees, representatives,
officers and directors.
     “Indenture” shall mean that certain Indenture dated as of May 16, 2003
between Parent, as issuer, and the Indenture Trustee governing the issuance of
the Senior Notes, as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with Section 8.13, and any
replacement indenture, credit or loan agreement, note or securities purchase
agreement, or other similar governing agreement executed in connection with any
new note offering or other financing described in clause (b) of the definition
of Senior Notes.
     “Indenture Trustee” shall mean U.S. Bank N.A., together with any successor
trustee appointed in accordance with the Indenture or any trustee or similar
party with respect to any replacement indenture, credit or loan agreement, note
or securities purchase agreement, or other similar governing agreement executed
in connection with any new note offering or other financing described in clause
(b) of the definition of Senior Notes.
     “Interest Expense” shall mean, for Borrowers and their Subsidiaries for any
period determined on a consolidated basis in accordance with GAAP, the sum of
(i) total interest expense including, without limitation, the interest component
in respect of Capitalized Lease Obligations for such period (whether or not
actually paid during such period) plus (ii) the net amount payable (or minus the
net amount receivable) under Hedging Agreements with respect to interest rates
during such period (whether or not actually paid or received during such
period).

28

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

 

     “Interest Rate Basis” shall mean the Base Rate or the Eurodollar Basis, as
applicable.
     “In-Transit Inventory” shall mean Inventory of a Borrower Party that is
currently in transit (whether by vessel, air or land) from (i) a location
outside the United States or Canada to a location in the United States or Canada
(other than the Province of Quebec) or (ii) a location in the United States or
Canada to another location in the United States or Canada (other than the
Province of Quebec).
     “In-Transit Inventory Limit” shall mean (i) during Parent’s fiscal months
of January and February, $40,000,000 and (ii) at all other times, $30,000,000.
     “Inventory” shall mean all “inventory,” as such term is defined in the UCC,
of each Borrower Party, whether now existing or hereafter acquired, wherever
located, and in any event including inventory, merchandise, goods and other
personal property that are held by or on behalf of a Borrower Party for sale or
lease or are furnished or are to be furnished (but only when so furnished) under
a contract of service, goods that are leased by a Borrower Party as lessor, or
that constitute raw materials, samples, work-in-process, finished goods,
returned goods, promotional materials or materials or supplies of any kind,
nature or description used or consumed or to be used or consumed in such
Borrower Party’s business or in the processing, production, packaging,
promotion, delivery or shipping of the same, including all supplies and embedded
software.
     “Investment” shall mean, with respect to any Person, any loan, advance or
extension of credit by such Person to, or any Guaranty with respect to the
Equity Interests, Funded Debt or other obligations of, or any contributions to
the capital of, any other Person, or any ownership, purchase or other
acquisition by such Person of any Equity Interests of any other Person, other
than any acquisition of all or substantially all of the Equity Interests of a
Person.
     “Issuing Bank Joinder Agreement” shall have the meaning specified in
Section 2.15(i).
     “Issuing Banks” shall mean (a) SunTrust Bank and (b) any other Person
(consented to by the Administrative Agent and, so long as no Default exists, the
Administrative Borrower) who hereafter may be designated as an Issuing Bank
pursuant to an Assignment and Acceptance or pursuant to an Issuing Bank Joinder
Agreement; provided, however, under no circumstances shall there be more than
four (4) Issuing Banks at any one time.
     “Lender Group” shall mean, collectively, the Administrative Agent, the
Issuing Banks and the Lenders. In addition, if any Person ceases to be a Lender,
then for any Lender Hedge Agreement entered into by any Borrower Party with such
Person while it was a Lender, such Person shall be a deemed to be a member of
the Lender Group for purposes of determining the secured parties under any
Security Documents.

29

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

 

     “Lender Hedge Agreement” shall mean any and all Hedge Agreements now
existing or hereafter entered into between or among any Borrower Party, on the
one hand, and any Person that is a Lender (or an Affiliate of a Lender) at the
time such Hedge Agreement was entered into, on the other hand.
     “Lenders” shall mean those lenders whose names are set forth on the
signature pages to this Agreement under the heading “Lenders” and any assignees
of the Lenders who hereafter become parties hereto pursuant to and in accordance
with Section 11.5; and “Lender” shall mean any one of the foregoing Lenders.
     “Letter of Credit Commitment” shall mean, with respect to any Issuing Bank,
the obligation of such Issuing Bank to issue, or arrange for the issuance of,
Letters of Credit pursuant to the terms of this Agreement in an aggregate face
amount from time to time not to exceed the amount set forth on Schedule 1(a) or
any applicable Assignment and Acceptance; provided, however, the aggregate face
amount of all outstanding Standby Letters of Credit shall not at any time exceed
$20,000,000.
     “Letter of Credit Obligations” shall mean, at any time, the sum of (a) an
amount equal to one hundred percent (100%) of the aggregate undrawn and
unexpired stated amount (including the amount to which any such Letter of Credit
can be reinstated pursuant to its terms) of the then outstanding Letters of
Credit, plus (b) an amount equal to one hundred percent (100%) of the aggregate
drawn, but unreimbursed drawings of any Letters of Credit (excluding, for the
avoidance of doubt, such drawings that have been reimbursed with Advances made
pursuant to Section 2.15(e)).
     “Letter of Credit Reserve Account” shall mean any account maintained by the
Administrative Agent for the benefit of any Issuing Bank, the proceeds of which
shall be applied as provided in Section 9.2(d).
     “Letters of Credit” shall mean (a) either Standby Letters of Credit or
Documentary Letters of Credit issued by Issuing Banks or arranged by an Issuing
Bank for the account of any Borrower Party from time to time in accordance with
Section 2.15 and (b) the Existing Letters of Credit.
     “License Agreement” shall mean any license agreement or other agreement
between a Borrower Party and a Person duly holding rights in a trademark, trade
name or service mark pursuant to which such Borrower Party is granted a license
to use such trademark, trade name or service mark on Inventory of such Borrower
Party.
     “Licensor Consent Agreement” shall mean an agreement among the applicable
Borrower Party, the Administrative Agent and the applicable licensor in form and
substance reasonably acceptable to the Administrative Agent pursuant to which,
among other things, the licensor acknowledges the Lien of the Administrative
Agent in the Inventory that is subject to the applicable License Agreement and
agrees to permit the

30

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

 

Administrative Agent to sell the Inventory that is subject to the License
Agreement upon and during the continuance of an Event of Default.
     “Lien” shall mean, with respect to any property, any mortgage, lien,
pledge, assignment for security purposes, charge, security interest, title
retention agreement, levy, execution, seizure, attachment, garnishment, any
documents, notice, instruments or other filings under the Federal Assignment of
Claims Act of 1940, or other encumbrance of any kind in respect of such
property, whether or not choate, vested, or perfected.
     “Lien Acknowledgement Agreement” shall mean an agreement between a Freight
Handler and the Administrative Agent, in form and substance satisfactory to the
Administrative Agent, pursuant to which, among other things, the Freight Handler
(a) acknowledges the Lien of the Administrative Agent in the Collateral in the
possession of the Freight Handler and any documents evidencing same, (b) agrees
to hold any documents of title evidencing the Collateral as Administrative
Agent’s agent and bailee for purposes of perfecting the Administrative Agent’s
Lien on such Collateral and (c) if so instructed by the Administrative Agent,
agrees to return to the Administrative Agent or otherwise deliver at its
direction, all of the Collateral in its custody, control or possession.
     “Loan Account” shall have the meaning specified in Section 2.7(b).
     “Loan Documents” shall mean this Agreement, any Revolving Loan Notes, the
Security Documents, the Blocked Account Agreements, the Fee Letter, the
Post-Closing Agreement, the Guaranty Supplements, all reimbursement agreements
relating to Letters of Credit issued hereunder, all Lien Acknowledgement
Agreements, all Collateral Access Agreements, all Compliance Certificates, all
Requests for Advance, all Requests for Issuance of Letters of Credit, all
Notices of Conversion/Continuation, all Notices of Requested Commitment
Increase, all Borrowing Base Certificates, all documents executed in connection
with the Federal Assignment of Claims Act of 1940 (if any), and all other
documents, lockbox agreements, instruments, certificates, and agreements
executed or delivered by a Borrower Party in connection with or contemplated by
this Agreement, including, without limitation, any security agreements or
guaranty agreements from any Borrower’s Subsidiaries to the Lender Group, or any
of them; provided, however, that, notwithstanding the foregoing, none of the
Bank Product Documents shall constitute Loan Documents.
     “Loans” shall mean, collectively, the Revolving Loans, the Swing Loans and
the Agent Advances.
     “Majority Lenders” shall mean, as of any date of calculation, Lenders the
sum of whose unutilized Revolving Loan Commitments plus Loans (other than Swing
Loans and Agent Advances) outstanding plus participation interests in Letter of
Credit Obligations, Swing Loans and Agent Advances outstanding on such date of
calculation exceeds fifty percent (50%) of the sum of the aggregate unutilized
Revolving Loan Commitment plus Loans (other than Swing Loans and Agent Advances)
outstanding plus participation

31

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

 

interests in Letter of Credit Obligations, Swing Loans and Agent Advances
outstanding of all of the Lenders as of such date of calculation.
     “Margin Stock” shall have the meaning specified in Section 5.1(t).
     “Material Contracts” shall mean, collectively, all contracts, leases,
instruments, guaranties, licenses or other arrangements (other than the Loan
Documents) to which any Borrower Party or any Subsidiary of a Borrower Party is
or becomes a party and which are required to be filed with the U.S. Securities
and Exchange Commission under Item 601(b)(4) or 601(b)(10) of Regulation S-K
(other than those required to be filed as a result of Item 601(b)(10)(ii)(A),
601(b)(10)(iii)(A) or 601(b)(10)(iii)(B) of Regulation S-K).
     “Materially Adverse Effect” shall mean, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration or governmental investigation or proceeding), a
material adverse change in, or a material adverse effect on: (a) the business,
operations, properties, condition (financial or otherwise), assets or income of
the Borrowers and their Subsidiaries, taken as a whole; (b) the ability of the
Borrowers and their Subsidiaries, taken as a whole, to perform any material
obligations under the Loan Documents, taken as a whole; or (c) (i) the validity,
binding effect or enforceability of the Loan Documents, taken as a whole,
(ii) the rights, remedies or benefits available to the Administrative Agent, the
Issuing Banks or any Lender under the Loan Documents, taken as a whole, or
(iii) the attachment, perfection or priority of any Lien of the Administrative
Agent under the Security Documents on a material portion of the Collateral. In
determining whether any individual event, act, condition or occurrence of the
foregoing types would result in a Materially Adverse Effect, notwithstanding
that a particular event, act, condition or occurrence does not itself have such
effect, a Materially Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event, act, condition or occurrence and all other
events, acts, conditions or occurrences of the foregoing types which have
occurred would result in a Materially Adverse Effect.
     “Maturity Date” shall mean August 15, 2013, or such earlier date as payment
of the Loans shall be due (whether by acceleration or otherwise); provided,
however, if the Borrowers’ outstanding Senior Notes are (a) not repaid in full
on or prior to November 16, 2010 or (b) refinanced in full on or prior to
November 16, 2010 pursuant to a new note offering or other financing that has a
maturity date at least six (6) months after August 15, 2013, then the maturity
date of this Agreement shall be the date that is six (6) months prior to the
maturity date of the Senior Notes (or such new notes or other financing).
     “Maximum Guaranteed Amount” shall have the meaning specified in Section
3.1(g).
     “Moody’s” shall mean Moody’s Investor Service, Inc., or any successor
thereto.

32

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

 

     “Multiemployer Plan” shall mean a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA, and to which any Borrower Party or ERISA Affiliate
is making, is obligated to make, has made or has been obligated to make at any
time within the past five (5) years, contributions on behalf of participants who
are or were employed by any of them.
     “Necessary Authorizations” shall mean all material authorizations,
consents, permits, approvals, licenses, and exemptions from, and all filings and
registrations with, and all reports to, any Governmental Authority whether
federal, state, local, and all agencies thereof, which are required for the
transactions contemplated by the Loan Documents and the conduct of the
businesses and the ownership (or lease) of the properties and assets of the
Borrower Parties.
     “Net Cash Proceeds” shall mean, with respect to any sale, lease, transfer,
casualty loss or other disposition or loss of assets by any Borrower Party or
any issuance by any Borrower Party of any Equity Interests or the incurrence by
any Borrower Party of any Funded Debt (other than the Obligations), the
aggregate amount of cash received for such assets or Equity Interests, or as a
result of such Funded Debt, net of reasonable and customary transaction costs
properly attributable to such transaction and payable by such Borrower Party to
a non-Affiliate in connection with such sale, lease, transfer or other
disposition of assets or the issuance of any Equity Interests or the incurrence
of any Funded Debt, including, without limitation, sales commissions and
underwriting discounts.
     “Net Income” shall mean, for any period, the net income (or loss) of the
Borrowers and their Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP, but excluding therefrom (to the extent otherwise
included therein) (i) any extraordinary gains or losses, (ii) any gains
attributable to write-ups of assets, (iii) any non-cash losses attributable to
write-downs of intangible assets, (iv) any Equity Interest of any Borrower or
any Subsidiary of any Borrower in the unremitted earnings of any Person that is
not a Subsidiary, (v) any income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary or is merged into or consolidated with any Borrower
or any Subsidiary on the date that such Person’s assets are acquired by such
Borrower or such Subsidiary and (vi) non-cash expenses in connection with stock
compensation.
     “New Lender” shall have the meaning specified in Section 2.17(a)(i).
     “NOLV” shall mean, as to any particular asset, the value determined by
multiplying (a) the estimated percentage recoverable for such class of Eligible
Inventory in an orderly liquidation thereof net of all liquidation costs and
expenses, as determined based on the most recent appraisal conducted by a
qualified appraiser selected by the Administrative Agent, times (b) the
Perpetual Inventory Cost of such asset. In respect of the determination of the
NOLV of Eligible In-Transit Inventory, the “estimated percentage recoverable”
shall take into account, among other things, the respective

33

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

 

amounts necessary to obtain the release of any possessory Lien of any related
common carrier and any Lien in favor of any related Approved Freight Handler, as
well as any costs of demurrage.
     “Notice of Conversion/Continuation” shall mean a notice in substantially
the form of Exhibit F.
     “Notice of Requested Commitment Increase” shall mean a notice substantially
in the form of Exhibit K.
     “Obligations” shall mean (a) all payment and performance obligations as
existing from time to time of the Borrower Parties to the Lender Group, or any
of them, under this Agreement and the other Loan Documents (including all Letter
of Credit Obligations and including any interest, fees and expenses that, but
for the provisions of the Bankruptcy Code, would have accrued), or as a result
of making the Loans or issuing the Letters of Credit, (b) the obligation to pay
an amount equal to the amount of any and all damages which the Lender Group, or
any of them, may suffer by reason of a breach by any Borrower Party of any
obligation, covenant, or undertaking with respect to this Agreement or any other
Loan Document, and (c) any debts, liabilities and obligations as existing from
time to time of any Borrower Party to any Lender (or an Affiliate of any Lender)
arising from or in connection with any Bank Products and, if such Lender ceases
to be a Lender, any debts, liabilities and obligations as existing from time to
time of any Borrower Party to such Lender (or an Affiliate of such Lender)
arising from or in connection with any Bank Products Documents entered into at a
time when such Person was a Lender hereunder.
     “OFAC” shall mean the Office of Foreign Assets Control of the United States
Department of the Treasury.
     “Other Taxes” shall have the meaning specified in Section 2.8(b)(ii).
     “Overadvance” shall have the meaning specified in Section 2.1(e).
     “Parent” shall mean Oxford Industries, Inc., a Georgia corporation.
     “Participant” shall have the meaning specified in Section 11.5(d).
     “Payment Date” shall mean the last day of each Eurodollar Advance Period
for a Eurodollar Advance.
     “PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
     “Perfection Certificate” shall mean, collectively, the perfection
certificates delivered by each of the Borrower Parties to the Administrative
Agent.

34

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

 

     “Permitted Discretion” shall mean a determination made in the exercise of
reasonable commercial discretion in accordance with the Administrative Agent’s
customary or generally applicable credit policies.
     “Permitted Liens” shall mean, as applied to any Person:
     (a) Any Lien in favor of the Administrative Agent or any other member of
the Lender Group given to secure the Obligations;
     (b) (i) Liens on real estate for real estate taxes not yet delinquent and
(ii) Liens for taxes, assessments, judgments, governmental charges or levies, or
claims not yet delinquent or the non-payment of which is being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves have been set aside on such Person’s books;
     (c) Liens of carriers, warehousemen, mechanics, laborers, suppliers,
workers and materialmen incurred in the ordinary course of business for sums not
yet due or being diligently contested in good faith, if such reserve or
appropriate provision, if any, as shall be required by GAAP shall have been made
therefor;
     (d) Liens incurred in the ordinary course of business in connection with
worker’s compensation and unemployment insurance or other types of social
security benefits;
     (e) Easements, rights-of-way, restrictions (including zoning or deed
restrictions), and other similar encumbrances on the use of real property which
in the reasonable opinion of the Administrative Agent do not interfere with the
ordinary conduct of the business of such Person;
     (f) Purchase money security interests and Liens securing Capitalized Lease
Obligations provided that such Lien attaches only to the asset (which asset
shall not constitute Inventory) so purchased or leased by such Person and
secures only Funded Debt incurred by such Person in order to purchase or lease
such asset, but only to the extent permitted by Section 8.1(d);
     (g) Deposits to secure the performance of bids, trade contracts, tenders,
sales, leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;
     (h) Liens on assets of the Borrower Parties and their Subsidiaries existing
as of the Agreement Date which are set forth on Schedule 1(b);
     (i) With respect to real property, Liens that are exceptions to the
commitments for title insurance issued in connection with any mortgage thereon;

35

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

 

     (j) Liens on the assets of Ben Sherman and its Subsidiaries securing Funded
Debt under the UK Credit Facility;
     (k) Liens on the assets of Ben Sherman and its Subsidiaries that are
permitted under the UK Credit Facility;
     (l) Statutory Liens in favor of landlords with respect to Inventory at
leased premises in a state that provides for statutory Liens in favor of
landlords or Liens arising under leases entered into by a Borrower Party in the
ordinary course of business;
     (m) Liens on real property and Intellectual Property (as defined in the
Security Agreement) and Liens on the Collateral which are subordinated to the
Liens on the Collateral in favor of the Administrative Agent, for the benefit of
the Lender Group, securing Funded Debt permitted under Section 8.1(c) in an
aggregate principal amount not to exceed $200,000,000 so long as (i) any such
Liens and the related Funded Debt are subject to an intercreditor agreement, to
the extent required by the Administrative Agent, which shall be on terms and
conditions reasonably acceptable to the Administrative Agent and the Majority
Lenders and (ii) if any such subordinated Lien is granted on the Collateral to
any other Person, then the Administrative Agent, for the benefit of the Lender
Group, shall have also been granted a subordinated Lien on any assets or
property of the Borrower Parties and their Subsidiaries securing such other
Funded Debt owing to such other Person to the extent that such assets or
property, but for the granting of such subordinated Lien, do not constitute
Collateral; and
     (n) Liens on cash collateral in an aggregate amount not to exceed
$10,150,000 provided to HSBC Bank USA, National Association (“HSBC”) pursuant to
a reimbursement agreement (or otherwise) with respect to letters of credit
issued by HSBC or its Affiliates on behalf of one or more of the Borrower
Parties under the Existing Credit Agreement as listed on Schedule P-1.
     “Perpetual Inventory Cost” shall mean the cost of such Inventory as
maintained by the Borrower Parties in their wholesale or retail perpetual
inventory systems, in each case consistent with the methodology used by the
Borrower Parties as of the most recent appraisal conducted by or on behalf of
the Administrative Agent with respect to such Inventory.
     “Person” shall mean an individual, corporation, partnership, trust, joint
stock company, limited liability company, unincorporated organization, other
legal entity or joint venture or a government or any agency or political
subdivision thereof.
     “Plan” shall mean an employee benefit plan within the meaning of
Section 3(3) of ERISA that any Borrower Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to or has maintained,
contributed to or had an obligation to contribute to at any time within the past
six (6) years on behalf of participants who were employed by any Borrower Party
or ERISA Affiliate.

36

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

 

     “Post-Closing Agreement” shall mean that certain letter agreement dated as
of the Agreement Date among the Borrowers and the Administrative Agent with
respect to certain post closing matters to be completed by the Borrower Parties.
     “Pounds Sterling” shall mean the lawful currency of the United Kingdom and,
if the United Kingdom adopts the Euro as its lawful currency, includes the
equivalent amount of Euros.
     “Pro Forma Basis” shall mean for purposes of determining compliance with
the Financial Covenant and the defined terms relating thereto, giving pro forma
effect to any acquisition or sale of a Person, all or substantially all of the
business or assets of a Person, and any related incurrence, repayment or
refinancing of Funded Debt, Capital Expenditures or other related transactions
which would otherwise be accounted for as an adjustment permitted by
Regulation S-X under the Securities Act or on a pro forma basis under GAAP, in
each case, as if such acquisition or sale and related transactions were realized
on the first day of the relevant period.
     “Property” shall mean any real property or personal property, plant,
building, facility, structure, underground storage tank or unit, equipment,
Inventory or other asset owned, leased or operated by the Borrower Parties,
their Subsidiaries or any of them (including, without limitation, any surface
water thereon or adjacent thereto, and soil and groundwater thereunder).
     “Qualified Cash” shall mean, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of the Borrower Parties that is in
deposit accounts or in securities accounts, or any combination thereof, and
which such deposit account or securities account is the subject of a Blocked
Account Agreement and is maintained by a branch office of a bank or securities
intermediary located within the United States; provided, however, the aggregate
amount included in the calculation of “Qualified Cash” for cash and Cash
Equivalents maintained with any bank or other financial institution other than
the Administrative Agent shall not at any time exceed $2,000,000.
     “Register” shall have the meaning specified in Section 11.5(c).
     “Reimbursement Obligations” shall mean the payment obligations of the
Borrowers under Section 2.15(d).
     “Rent Expense” shall mean, for any period, the sum of all base and
percentage rental expense (but excluding any expense payable for leasehold
improvements, common area maintenance, taxes, insurance, utilities, marketing
costs and similar charges) for real property of the Borrowers and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
     “Rent Reserve” shall mean, with respect to any leased real property other
than (a) leased premises at which the book value of Inventory at such location
is less than or equal

37

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

 

to $100,000 or (b) leased premises in regard to which the landlord thereof shall
have executed and delivered to the Administrative Agent a Collateral Access
Agreement, an amount equal to three (3) months rental expense for such leased
real property (or such other amount as the Administrative Agent may deem
appropriate in its Permitted Discretion based on the circumstances).
     “Replacement Event” shall have the meaning specified in Section 11.16.
     “Replacement Lender” shall have the meaning specified in Section 11.16.
     “Reportable Event” shall mean any “reportable event” within the meaning of
Section 4043 of ERISA with respect to a Title IV Plan for which the thirty
(30) day notice period has not been waived.
     “Request for Advance” shall mean any certificate signed by an Authorized
Signatory of the Administrative Borrower requesting a new Advance hereunder,
which certificate shall be denominated a “Request for Advance,” and shall be in
substantially the form of Exhibit G. Each Request for Advance shall, among other
things, specify the date of the Advance, which shall be a Business Day, the
amount of the Advance, and the type of Advance.
     “Request for Issuance of Letter of Credit” shall mean any certificate
signed by an Authorized Signatory of the Administrative Borrower requesting that
an Issuing Bank issue a Letter of Credit hereunder, which certificate shall be
in substantially the form of Exhibit H, and shall, among other things,
(a) specify that the requested Letter of Credit is either a Documentary Letter
of Credit or a Standby Letter of Credit, (b) the stated amount of the Letter of
Credit (which shall be in Dollars), (c) the effective date (which shall be a
Business Day) for the issuance of such Letter of Credit, (d) the date on which
such Letter of Credit is to expire (which shall be a Business Day and which
shall be subject to Section 2.15(a)), (e) the Person for whose benefit such
Letter of Credit is to be issued, (f) other relevant terms of such Letter of
Credit, and (g) the Available Letter of Credit Amount as of the scheduled date
of issuance of such Letter of Credit.
     “Reserves” shall mean reserves that the Administrative Agent may establish
from time to time in its Permitted Discretion for such purposes as the
Administrative Agent shall deem necessary (without duplication of any amounts
accounted for in the definitions of Eligible Accounts, Eligible Credit Card
Receivables, Eligible Domestic Inventory, Eligible In-Transit Inventory,
Eligible L/C Inventory or NOLV). Without limiting the generality of the
foregoing, the following reserves (without duplication) shall be deemed an
exercise of the Administrative Agent’s Permitted Discretion: (a) reserves for
accrued but unpaid ad valorem, excise and personal property tax liability;
(b) Bank Product Reserves; (c) reserves for warehousemen’s, bailees’, shippers’
or carriers’ charges; (d) reserves for any other matter that has a negative
impact on the value of the Collateral; (e) the Dilution Reserve; (f) the Rent
Reserve; (g) with respect to Eligible In-Transit Inventory and Eligible L/C
Inventory, reserves for duties, customs brokers, insurance and

38

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

 

other incidental charges pertaining thereto; and (h) with respect to Eligible
Inventory, reserves for any required royalty or similar licensing payments.
     “Restricted Payment” shall mean (a) any Dividend, or (b) any redemption,
purchase, retirement, defeasance, sinking fund or similar payment or any claim
of rescission of or with respect to the Equity Interests of Parent.
     “Retail Borrower Parties” shall mean, collectively, all Domestic
Subsidiaries of Parent that are parties to this Agreement and whose principal
business is the operation of retail stores.
     “Retiree Welfare Plan” shall mean a Plan that is an “employee welfare
benefit plan” within the meaning of Section 3(1) of ERISA that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant’s termination of employment, other than
continuation coverage provided pursuant to Code Section 4980B (or applicable
state law mandating health insurance continuation coverage for employees) and at
the sole expense of the participant or the beneficiary.
     “Revolving Commitment Ratio” shall mean, with respect to any Lender, the
ratio, expressed as a percentage, of (a) the Revolving Loan Commitment of such
Lender, divided by (b) the Revolving Loan Commitment of all Lenders, which, as
of the Agreement Date, are set forth (together with Dollar amounts thereof) on
Schedule 1(a).
     “Revolving Loan Commitment” shall mean the several obligations of the
Lenders to advance to the Borrowers on or after the Agreement Date, in
accordance with their respective Revolving Commitment Ratios, pursuant to the
terms of this Agreement, the aggregate amount of up to $175,000,000, as such
amount may be reduced from time to time pursuant to the terms of this Agreement
or increased pursuant to Section 2.17.
     “Revolving Loan Notes” shall mean those certain promissory notes issued by
the Borrowers to each of the Lenders that requests a promissory note, in
accordance with each such Lender’s Revolving Commitment Ratio of the Revolving
Loan Commitment, in substantially in the form of Exhibit I.
     “Revolving Loans” shall mean, collectively, the amounts (other than Agent
Advances and Swing Loans) advanced from time to time by the Lenders to the
Borrowers under the Revolving Loan Commitment, not to exceed the amount of the
Revolving Loan Commitment.
     “S&P” shall mean Standard & Poor’s Ratings Group, a division of
McGraw-Hill, Inc., or any successor thereto.
     “Sanctioned Country” shall mean a country subject to a sanctions program
identified on the list maintained by OFAC and available at

39

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

 

http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwise
published from time to time.
     “Sanctioned Person” shall mean (i) a Person named on the list of “Specially
Designated Nationals and Blocked Persons” maintained by OFAC available at
http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as otherwise
published from time to time, or (ii) (A) an agency of the government of a
Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or
(C) a person resident in a Sanctioned Country, to the extent subject to a
sanctions program administered by OFAC.
     “SEA” shall mean the Securities and Exchange Act of 1934 and the rules
promulgated thereunder by the Securities and Exchange Commission, as amended
from time to time or any similar Federal law then in force.
     “Securities Act” shall mean the Securities Act of 1933, as amended, or any
similar Federal law then in force.
     “Security Agreement” shall mean that certain Amended and Restated Pledge
and Security Agreement dated as of the Agreement Date among the Borrower Parties
and the Administrative Agent, on behalf of, and for the benefit of, the Lender
Group.
     “Security Documents” shall mean, collectively, the Security Agreement, all
UCC-1 financing statements and any other document, instrument or agreement
granting Collateral for the Obligations, as the same may be amended or modified
from time to time.
     “Senior Notes” shall mean the senior debt securities of Parent issued under
and pursuant to the terms of the Indenture and due June 11, 2011, as amended,
restated, supplemented or otherwise modified from time to time in accordance
with Section 8.13, and shall include (a) any note or notes issued in exchange,
substitution or replacement thereof pursuant to the Indenture or (b) any new
note offering or other financing used, in material part, to repay all or a
portion of such senior debt securities of Parent so long as any such new note
offering or other financing (i) is on market terms and conditions determined as
of the date any such Funded Debt is incurred and (ii) has a maturity date not
earlier than the date that is six months following the stated Maturity Date.
     “Senior Notes Debt” shall mean Funded Debt evidenced by the Senior Notes
Documents.
     “Senior Notes Documents” shall mean the Senior Notes, the Indenture and any
other document, instrument or other agreement executed in connection therewith,
as the same may be amended, restated, supplemented or otherwise modified from
time to time in accordance with Section 8.13.

40

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

 

     “Standby Letter of Credit” shall mean a Letter of Credit issued to support
obligations of any Borrower Party incurred in the ordinary course of its
business, and which is not a Documentary Letter of Credit.
     “Subsidiary” shall mean, as applied to any Person, (a) any corporation of
which more than fifty percent (50%) of the outstanding stock (other than
directors’ qualifying shares) having ordinary voting power to elect a majority
of its board of directors, regardless of the existence at the time of a right of
the holders of any class or classes of securities of such corporation to
exercise such voting power by reason of the happening of any contingency, or any
partnership or limited liability company of which more than fifty percent (50%)
of the outstanding partnership interests or membership interests, as the case
may be, is at the time owned by such Person, or by one or more Subsidiaries of
such Person, or by such Person and one or more Subsidiaries of such Person, and
(b) any other entity which is controlled or capable of being controlled by such
Person, or by one or more Subsidiaries of such Person, or by such Person and one
or more Subsidiaries of such Person; provided, however, that as applied to
Parent or its Subsidiaries, the term “Subsidiary” shall not include the Persons
listed on Schedule 1(c) or any Excluded Subsidiary.
     “Subsidiary Guarantors” shall mean all Subsidiaries of the Borrowers
signatory to this Agreement as a “Guarantor” and all Subsidiaries of the
Borrowers that have executed and delivered a Guaranty Supplement.
     “Swing Bank” shall mean SunTrust Bank, or any other Lender who shall agree
with the Administrative Agent and the Administrative Borrower to act as Swing
Bank.
     “Swing Loan Commitment” shall mean the obligation of the Swing Bank in
accordance with Section 2.1(d) to make Swing Loans in the aggregate amount of up
to $15,000,000, as such amount may be reduced from time to time pursuant to this
Agreement.
     “Swing Loans” shall mean, collectively, the amounts advanced from time to
time by the Swing Bank to the Borrowers under the Swing Loan Commitment, not to
exceed the amount of the Swing Loan Commitment.
     “Taxes” shall have the meaning specified in Section 2.8(b)(i).
     “TBG” shall mean Tommy Bahama Group, Inc., a Delaware corporation.
     “Title IV Plan” shall mean a Plan that is an “employee pension benefit
plan,” within the meaning of Section 3(2) of ERISA, that is covered by Title IV
of ERISA.
     “Total Funded Debt” shall mean, as of any date of determination, all Funded
Debt of the Borrowers and their Subsidiaries measured on a consolidated basis as
of such date, but excluding Funded Debt of the type described in subsection
(xi) of the definition

41

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

 

thereof.
     “UCC” shall mean the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of New York; provided, that to the
extent that the UCC is used to define any term herein and such term is defined
differently in different Articles or Divisions of the UCC, the definition of
such term contained in Article or Division 9 shall govern; provided further,
that in the event that, by reason of mandatory provisions of law, any or all of
the attachment, perfection or priority of, or remedies with respect to, the
Administrative Agent’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term “UCC” shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority or remedies and for
purposes of definitions related to such provisions.
     “UK Credit Facility” shall mean one or more credit facilities in favor of
Ben Sherman or any of its Subsidiaries, whether now existing or hereafter
created or established, and any refinancing or replacement credit facilities.
     “UK Credit Facility Documents” shall mean all documents executed by Ben
Sherman or any of its Subsidiaries in connection with the UK Credit Facility, as
the same may be amended, restated, supplemented or otherwise modified from time
to time in accordance with Section 8.13.
     “Uniform Customs” shall mean the Uniform Customs and Practice for
Documentary Credits (2007 Revision), International Chamber of Commerce
Publication No. 600 (or such later revision as may be published by the
International Chamber of Commerce on any date any Letter of Credit may be
issued).
     “Unused Line Fee” shall have the meaning specified in Section 2.4(b).
     “US” or “United States” shall mean the United States of America.
     “US Ben Sherman Holdco” shall mean Oxford Private Limited of Delaware,
Inc., a Delaware corporation.
     “USA Patriot Act” shall mean the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT ACT) Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001), as the same
has been, or shall hereafter be, renewed, extended, amended or replaced.
     “Voidable Transfer” shall have the meaning specified in Section 11.18.
     “Wholly Owned Subsidiary” means, with respect to any Person, any
corporation, partnership or other entity of which all of the Equity Interests
(other than directors’

42

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

 

qualifying shares and other de minimus Equity Interests that are required to be
issued to natural Persons, local residents or nationals or to a minimum number
of holders of Equity Interests, in order to satisfy any requirements of
Applicable Law) are directly or indirectly owned or controlled by such Person or
one or more Wholly Owned Subsidiaries of such Person or by such Person and one
or more Wholly Owned Subsidiaries of such Person.
     Section 1.2 Accounting Principles. The classification, character and amount
of all assets, liabilities, capital accounts and reserves and of all items of
income and expense to be determined, and any consolidation or other accounting
computation to be made, and the interpretation of any definition containing any
financial term, pursuant to this Agreement shall be determined and made in
accordance with GAAP consistently applied, unless such principles are
inconsistent with the express requirements of this Agreement; provided that if
because of a change in GAAP after the date of this Agreement any Borrower or any
of its Subsidiaries would be required to alter a previously utilized accounting
principle, method or policy in order to remain in compliance with GAAP, such
determination shall continue to be made in accordance with such Borrower’s or
such Subsidiary’s previous accounting principles, methods and policies. All
accounting terms used herein without definition shall be used as defined under
GAAP. All financial calculations hereunder shall, unless otherwise stated, be
determined for the Borrowers on a consolidated basis with their Subsidiaries.
     Section 1.3 Other Interpretive Matters. Each definition of an agreement in
this Article 1 shall include such instrument or agreement as amended, restated,
supplemented or otherwise modified from time to time with, if required, the
prior written consent of the Majority Lenders, except as provided in
Section 11.12 and otherwise to the extent permitted under this Agreement and the
other Loan Documents. Except where the context otherwise requires, definitions
imparting the singular shall include the plural and vice versa. Except where
otherwise specifically provided herein, each reference to a “Section”,
“Article”, “Exhibit” or “Schedule” shall be to a Section or Article of this
Agreement or an Exhibit or Schedule attached to this Agreement. Except where
otherwise specifically restricted, reference to a party to a Loan Document
includes that party and its successors and assigns. All terms used herein which
are defined in Article 9 of the UCC and which are not otherwise defined herein
shall have the same meanings herein as set forth therein.
     Section 1.4 Certain Provisions Cumulative. The permissive subsections and
clauses in each Section of Article 8 are intended to be and are to be construed
as cumulative provisions. To the extent that any item, transaction, event, fact
or circumstance would be permitted under more than one such subsection or clause
of any Section of Article 8, such item, transaction, event, fact or circumstance
shall be deemed permitted under one such subsection or clause without reducing
the amount permitted under or otherwise limiting any other subsection or clause
of such Section. In any such case, the Borrowers may elect which such subsection
or clause shall be deemed to permit

43

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

 

any item, transaction, event, fact or circumstance, and notwithstanding any such
election, may thereafter elect that such item, transaction, event, fact or
circumstance be deemed permitted under another such subsection or clause that
otherwise permits such item, transaction, event, fact or circumstance.
ARTICLE 2.
THE LOANS AND THE LETTERS OF CREDIT
     Section 2.1 Extension of Credit. Subject to the terms and conditions of,
and in reliance upon the representations and warranties made in, this Agreement
and the other Loan Documents, the Lenders have extended and agree, severally in
accordance with their respective Revolving Commitment Ratios, and not jointly,
to extend credit to the Borrowers in an aggregate principal amount not to exceed
$175,000,000.
          (a) The Revolving Loans. Each Lender agrees, severally in accordance
with its Revolving Commitment Ratio and not jointly with the other Lenders, upon
the terms and subject to the conditions of this Agreement, to lend and relend to
the Borrowers, from time to time on any Business Day prior to the Maturity Date,
amounts which do not exceed such Lender’s ratable share (based upon such
Lender’s Revolving Commitment Ratio) of Availability as of such Business Day.
Subject to the terms and conditions hereof and prior to the Maturity Date,
Advances under the Revolving Loan Commitment may be repaid and reborrowed from
time to time on a revolving basis.
          (b) Intentionally Omitted.
          (c) The Letters of Credit. Subject to the terms and conditions of this
Agreement, each Issuing Bank agrees, severally in accordance with its Letter of
Credit Commitment and not jointly, to issue Letters of Credit (or to arrange
with a Foreign Issuer for the issuance of a Letter of Credit on behalf of such
Issuing Bank) for the account of the Borrowers, from time to time on any
Business Day prior to the date thirty (30) days prior to the Maturity Date,
pursuant to Section 2.15 (i) in an aggregate outstanding face amount (A) for all
Issuing Banks, not to exceed the Aggregate Letter of Credit Commitment at any
time (B) for an individual Issuing Bank, not to exceed such Issuing Bank’s
Letter of Credit Commitment and (ii) not to exceed, with respect to the issuance
of any individual Letter of Credit as of any Business Day, the Available Letter
of Credit Amount as of such Business Day.
          (d) The Swing Loans. Subject to the terms and conditions of this
Agreement, the Swing Bank, in its sole discretion, may from time to time on any
Business Day after the Agreement Date but prior to the Maturity Date, make Swing
Loans to the Borrowers (i) in an amount not to exceed Availability as of such
Business Day and (ii) in an aggregate amount (including all Swing Loans
outstanding as of such Business Day) not to exceed $15,000,000.

44

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

 

          (e) Overadvances. If at any time the amount of the Aggregate Revolving
Credit Obligations exceeds the Revolving Loan Commitment, the Borrowing Base or
any other applicable limitation set forth in this Agreement (including, without
limitation, the limitations on Swing Loans, Agent Advances and Letters of
Credit) such excess (an “Overadvance”) shall nevertheless constitute a portion
of the Obligations that are secured by the Collateral and are entitled to all
benefits thereof. For the avoidance of doubt, under no circumstances shall any
Lender be required to make Loans (or be deemed to have purchased and received
interests and participations in Letters of Credit) in an aggregate amount in
excess of its Revolving Loan Commitment. In no event, however, shall the
Borrowers have any right whatsoever to (i) receive any Revolving Loan,
(ii) receive any Swing Loan, or (iii) request the issuance of any Letter of
Credit if, before or after giving effect thereto, there shall exist a Default or
an Overadvance. In the event that (1) the Lenders shall make any Revolving
Loans, (2) the Swing Bank shall make any Swing Loan, (3) the Administrative
Agent shall make any Agent Advances or (4) the Issuing Banks shall agree to the
issuance of any Letter of Credit, which in any such case gives rise to an
Overadvance or an Overadvance should otherwise exist, the Borrowers shall make,
on demand, a payment on the Obligations to be applied to the Revolving Loans,
the Swing Loans, the Agent Advances and the Letter of Credit Reserve Account, as
appropriate, in an aggregate principal amount equal to such Overadvance.
          (f) Agent Advances.
          (i) Subject to the limitations set forth below and notwithstanding
anything else in this Agreement to the contrary, the Administrative Agent is
authorized by the Borrowers and the Lenders, from time to time in the
Administrative Agent’s sole discretion, (A) at any time that a Default exists,
or (B) at any time that any of the other conditions precedent set forth in
Article 4 have not been satisfied, to make Base Rate Advances to the Borrowers
on behalf of the Lenders in an aggregate amount outstanding at any time not to
exceed the lesser of (y) the Revolving Loan Commitment minus all Aggregate
Revolving Credit Obligations and (z) $10,000,000, which the Administrative
Agent, in its reasonable business judgment, deems necessary or desirable (1) to
preserve or protect the Collateral, or any portion thereof, (2) to enhance the
likelihood of, or maximize the amount of, repayment of the Loans and other
Obligations, or (3) to pay any other amount chargeable to the Borrowers pursuant
to the terms of this Agreement, including costs, fees and expenses as provided
under this Agreement (any of such advances are herein referred to as “Agent
Advances”); provided, that (i) such amount shall not be outstanding more than
30 days and (ii) the Majority Lenders may at any time revoke the Administrative
Agent’s authorization to make Agent Advances. Any such revocation must be in
writing and shall become effective prospectively upon the Administrative Agent’s
receipt thereof. The Administrative Agent shall promptly provide to the
Administrative Borrower written notice of any Agent Advance.

45

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

 

          (ii) The Agent Advances shall be secured by the Collateral and shall
constitute Obligations hereunder. Each Agent Advance shall bear interest as a
Base Rate Advance. Each Agent Advance shall be subject to all terms and
conditions of this Agreement and the other Loan Documents applicable to
Revolving Loans, except that all payments thereon shall be made to the
Administrative Agent solely for its own account and the making of any Agent
Advance shall not require the consent of the Borrowers. The Administrative Agent
shall have no duty or obligation to make any Agent Advance hereunder.
          (iii) The Administrative Agent shall notify each Lender no less
frequently than weekly, as determined by the Administrative Agent, of the
principal amount of Agent Advances outstanding as of 12:00 noon (Atlanta,
Georgia time) as of such date, and each Lender’s pro rata share thereof. Each
Lender shall before 3:00 p.m. (Atlanta, Georgia time) on such Business Day make
available to the Administrative Agent, in immediately available funds, the
amount of its pro rata share of such principal amount of Agent Advances
outstanding. Upon such payment by a Lender, such Lender shall be deemed to have
made a Revolving Loan to the Borrowers, notwithstanding any failure of the
Borrowers to satisfy the conditions in Section 4.2. The Administrative Agent
shall use such funds to repay the principal amount of Agent Advances.
Additionally, if at any time any Agent Advances are outstanding, any of the
events described in clauses (g) or (h) of Section 9.1 shall have occurred, then
each Lender shall automatically, upon the occurrence of such event, and without
any action on the part of the Administrative Agent, the Borrowers or the
Lenders, be deemed to have purchased an undivided participation in the principal
and interest of all Agent Advances then outstanding in an amount equal to such
Lender’s Revolving Commitment Ratio and each Lender shall, notwithstanding such
Event of Default, immediately pay to the Administrative Agent in immediately
available funds, the amount of such Lender’s participation (and upon receipt
thereof, the Administrative Agent shall deliver to such Lender, a loan
participation certificate dated the date of receipt of such funds in such
amount). The disbursement of funds in connection with the settlement of Agent
Advances hereunder shall be subject to the terms and conditions of this
Section 2.1(f).
     Section 2.2 Manner of Borrowing and Disbursement of Loans.
          (a) Choice of Interest Rate, etc. Any Advance shall, at the option of
the Borrowers, be made either as a Base Rate Advance or as a Eurodollar Advance
(except for the first three (3) Business Days after the Agreement Date, during
which period the Loans shall bear interest as a Base Rate Advance); provided,
however, that (i) if the Administrative Borrower fails to give the
Administrative Agent written notice specifying whether a Eurodollar Advance is
to be repaid, continued or converted on a Payment Date, such Advance shall be
converted to a Base Rate Advance on the Payment Date in accordance with
Section 2.3(a)(iii), (ii) the Administrative Borrower may not

46

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

 

select a Eurodollar Advance (A) with respect to Swing Loans, (B) with respect to
an Advance, the proceeds of which are to reimburse an Issuing Bank pursuant to
Section 2.15, or (C) if, at the time of such Advance or at the time of the
continuation of, or conversion to, a Eurodollar Advance pursuant to
Section 2.2(c), a Default exists and (iii) all Agent Advances shall be made as
Base Rate Advances. Any notice given to the Administrative Agent in connection
with a requested Advance hereunder shall be given to the Administrative Agent
prior to 11:00 a.m. (Atlanta, Georgia time) in order for such Business Day to
count toward the minimum number of Business Days required.
          (b) Base Rate Advances.
          (i) Initial and Subsequent Advances. The Administrative Borrower shall
give the Administrative Agent in the case of Base Rate Advances irrevocable
notice by telephone not later than 11:00 a.m. (Atlanta, Georgia time) on the
Business Day of such Base Rate Advance and shall immediately confirm any such
telephone notice with a written Request for Advance; provided, however, that the
failure by the Administrative Borrower to confirm any notice by telephone with a
written Request for Advance shall not invalidate any notice so given.
          (ii) Repayments and Conversions. The Borrowers may (A) subject to
Section 2.5, at any time without prior notice repay a Base Rate Advance, or
(B) upon at least three (3) Business Days’ irrevocable prior written notice by
the Administrative Borrower to the Administrative Agent in the form of a Notice
of Conversion/Continuation, convert all or a portion of the principal thereof to
one or more Eurodollar Advances. Upon the date indicated by the Administrative
Borrower, such Base Rate Advance shall be so repaid or converted.
          (c) Eurodollar Advances.
          (i) Initial and Subsequent Advances. The Administrative Borrower shall
give the Administrative Agent in the case of Eurodollar Advances irrevocable
notice by telephone not later than 11:00 a.m. (Atlanta, Georgia time) three
(3) Business Days prior to the date of such Eurodollar Advance and shall
immediately confirm any such telephone notice with a written Request for
Advance; provided, however, that the failure by the Administrative Borrower to
confirm any notice by telephone with a written Request for Advance shall not
invalidate any notice so given.
          (ii) Repayments, Continuations and Conversions. At least three
(3) Business Days prior to each Payment Date for a Eurodollar Advance, the
Administrative Borrower shall give the Administrative Agent written notice in
the form of a Notice of Conversion/Continuation specifying whether all or a
portion of such Eurodollar Advance outstanding on such Payment Date is to be
continued

47

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

 

in whole or in part as one or more new Eurodollar Advances and also specifying
the new Eurodollar Advance Period applicable to each such new Eurodollar Advance
(and subject to the provisions of this Agreement, upon such Payment Date, such
Eurodollar Advance shall be so continued). Upon such Payment Date, any
Eurodollar Advance (or portion thereof) not so continued shall be converted to a
Base Rate Advance or, subject to Section 2.5, be repaid.
          (iii) Miscellaneous. Notwithstanding any term or provision of this
Agreement which may be construed to the contrary, each Eurodollar Advance shall
be in a principal amount of no less than $1,000,000 and in an integral multiple
of $500,000 in excess thereof, and at no time shall the aggregate number of all
Eurodollar Advances then outstanding exceed six (6).
          (d) Notification of Lenders. Upon receipt of a (i) Request for Advance
or a telephone or telecopy request for Advance, (ii) notification from an
Issuing Bank that a draw has been made under any Letter of Credit (unless such
Issuing Bank will be reimbursed through the funding of a Swing Loan), or
(iii) notice from the Administrative Borrower with respect to the prepayment of
any outstanding Eurodollar Advance prior to the Payment Date for such Advance,
the Administrative Agent shall promptly notify each Lender by telephone or
telecopy of the contents thereof and the amount of each Lender’s portion of any
such Advance. Each Lender shall, not later than 3:00 p.m. (Atlanta, Georgia
time) on the date specified for such Advance (under clause (i) or (ii) above) in
such notice, make available to the Administrative Agent at the Administrative
Agent’s Office, or at such account as the Administrative Agent shall designate,
the amount of such Lender’s portion of the Advance in immediately available
funds.
          (e) Disbursement. Prior to 4:00 p.m. (Atlanta, Georgia time) on the
date of an Advance hereunder, the Administrative Agent shall, subject to the
satisfaction of the conditions set forth in Article 4, disburse the amounts made
available to the Administrative Agent by the Lenders in like funds by
(i) transferring the amounts so made available by wire transfer to the
Borrowers’ Disbursement Account or (ii) in the case of an Advance the proceeds
of which are to reimburse an Issuing Bank pursuant to Section 2.15, transferring
such amounts to such Issuing Bank. Unless the Administrative Agent shall have
received notice from a Lender prior to 1:00 p.m. (Atlanta, Georgia time) on the
date of any Advance that such Lender will not make available to the
Administrative Agent such Lender’s ratable portion of such Advance, the
Administrative Agent may assume that such Lender has made or will make such
portion available to the Administrative Agent on the date of such Advance and
the Administrative Agent may, in its sole discretion and in reliance upon such
assumption, make available to the Borrowers or the appropriate Issuing Bank, as
applicable, on such date a corresponding amount. If and to the extent such
Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender agrees to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrowers or the
appropriate Issuing Bank,

48

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

 

as applicable, until the date such amount is repaid to the Administrative Agent,
(x) for the first two (2) Business Days, at the Federal Funds Rate for such
Business Days, and (y) thereafter, at the Base Rate. If such Lender shall repay
to the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Lender’s portion of the applicable Advance for purposes of
this Agreement and if both such Lender and the Borrowers shall pay and repay
such corresponding amount, the Administrative Agent shall promptly relend to the
Borrowers such corresponding amount. If such Lender does not repay such
corresponding amount immediately upon the Administrative Agent’s demand
therefor, the Administrative Agent shall notify the Administrative Borrower and
the Borrowers shall immediately pay such corresponding amount to the
Administrative Agent. The failure of any Lender to fund its portion of any
Advance shall not relieve any other Lender of its obligation, if any, hereunder
to fund its respective portion of the Advance on the date of such borrowing, but
no Lender shall be responsible for any such failure of any other Lender. In the
event that a Lender for any reason fails or refuses to fund its portion of an
Advance in violation of this Agreement, then, until such time as such Lender has
funded its portion of such Advance, or all other Lenders have received payment
in full (whether by repayment or prepayment) of the principal and interest due
in respect of such Advance, such non-funding Lender shall not (i) have the right
to vote regarding any issue on which voting is required or advisable under this
Agreement or any other Loan Document and, with respect to any such Lender, the
amount of the Revolving Loan Commitments or Loans, as applicable, held by such
Lender shall not be counted as outstanding for purposes of determining “Majority
Lenders” hereunder, and (ii) be entitled to receive any payments of principal,
interest or fees from the Borrowers or the Administrative Agent (or the other
Lenders) in respect of its Loans.
          (f) Deemed Requests for Advance. Unless payment is otherwise timely
made by the Borrowers, the becoming due of any amount required to be paid under
this Agreement or any of the other Loan Documents as principal, interest,
reimbursement obligations in connection with Letters of Credit, premiums, fees,
reimbursable expenses or other sums payable hereunder shall be deemed
irrevocably to be a Request for Advance on the due date of, and in an aggregate
amount required to pay, such principal, interest, reimbursement obligations in
connection with Letters of Credit, premiums, fees, reimbursable expenses or
other sums payable hereunder, and the proceeds of a Revolving Loan made pursuant
thereto may be disbursed by way of direct payment of the relevant Obligation and
shall bear interest as a Base Rate Advance. The Lenders shall have no obligation
to the Borrowers to honor any deemed Request for Advance under this
Section 2.2(f) unless all the conditions set forth in Section 4.2 have been
satisfied, but, with the consent of the Lenders required under the last sentence
of Section 4.2, may do so in their sole discretion and without regard to the
existence of, and without being deemed to have waived, any Default and without
regard to the existence or creation of an Overadvance or the failure by the
Borrowers to satisfy any of the conditions set forth in Section 4.2. No further
authorization, direction or approval by the Borrowers shall be required to be
given by the Borrowers for any deemed Request for Advance under this
Section 2.2(f). The Administrative Agent shall promptly provide to

49

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

 

the Administrative Borrower written notice of any Advance pursuant to this
Section 2.2(f). The Borrowers have established with the Administrative Agent a
master disbursement account into which the Administrative Agent wires proceeds
of Advances from time to time (the “Controlled Disbursement Account”). Until
such time as the Administrative Agent in its sole discretion delivers written
notice to the contrary, the presentation for payment by the Administrative Agent
of any check or other item of payment drawn on the Controlled Disbursement
Account at a time when there are insufficient funds in such account to cover
such check or other item of payment shall be deemed irrevocably to be a request
(without any requirement for the submission of a Request for Advance) for an
Advance on the date of such presentation and in an amount equal to the aggregate
amount of the items presented for payment, and the proceeds of such Advances may
be disbursed to the Controlled Disbursement Account and shall bear interest as a
Base Rate Advance.
          (g) Special Provisions Pertaining to Swing Loans.
          (i) The Administrative Borrower shall give the Swing Bank written
notice in the form of a Request for Advance, or notice by telephone no later
than 1:00 p.m. (Atlanta, Georgia time) on the date on which the Borrowers wish
to receive an Advance of any Swing Loan followed immediately by a written
Request for Advance, with a copy to the Administrative Agent; provided, however,
that the failure by the Administrative Borrower to confirm any notice by
telephone with a written Request for Advance shall not invalidate any notice so
given; provided further, however, that any request by the Administrative
Borrower of a Base Rate Advance under the Revolving Loan Commitment shall be
deemed to be a request for a Swing Loan unless the Administrative Borrower
specifically requests otherwise. Each Swing Loan shall bear interest at the rate
equal to the sum of (A) the Base Rate and (B) the Applicable Margin with respect
to Base Rate Advances. If the Swing Bank, in its sole discretion, elects to make
the requested Swing Loan, the Swing Loan shall be made on the date specified in
the notice or the Request for Advance and such notice or Request for Advance
shall specify (i) the amount of the requested Swing Loan, and (ii) instructions
for the disbursement of the proceeds of the requested Swing Loan. Each Swing
Loan shall be subject to all the terms and conditions applicable to Revolving
Loans, except that all payments thereon shall be payable to the Swing Bank
solely for its own account. The Swing Bank shall have no duty or obligation to
make any Swing Loans hereunder. The Swing Bank shall not make any Swing Loans if
the Swing Bank has received written notice from any Lender (or the Swing Bank
has actual knowledge) that one or more applicable conditions precedent set forth
in Section 4.2 will not be satisfied (or waived pursuant to the last sentence of
Section 4.2) on the requested Advance date. In the event the Swing Bank in its
sole and absolute discretion elects to make any requested Swing Loan, the Swing
Bank shall make the proceeds of such Swing Loan available to the Borrowers by
deposit of Dollars in same day funds by wire transfer to the Disbursement

50

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

 

Account. In the event that the Swing Bank informs the Administrative Agent that
it will not make the requested Advance as a Swing Loan, then such request will
be deemed a request for a Base Rate Advance under the Revolving Loan Commitment.
          (ii) The Swing Bank shall notify the Administrative Agent and in turn
the Administrative Agent shall notify each Lender no less frequently than
weekly, as determined by the Administrative Agent, of the principal amount of
Swing Loans outstanding as of 12:00 noon (Atlanta, Georgia time) as of such date
and each Lender’s pro rata share (based on its Revolving Commitment Ratio)
thereof. Each Lender shall before 3:00 p.m. (Atlanta, Georgia time) on such date
of notice make available to the Administrative Agent, in immediately available
funds, the amount of its pro rata share (based on its Revolving Commitment
Ratio) of such principal amount of Swing Loans outstanding. Upon such payment by
a Lender, such Lender shall be deemed to have made a Revolving Loan to the
Borrowers, notwithstanding any failure of the Borrowers to satisfy the
conditions in Section 4.2. The Administrative Agent shall use such funds to
repay the principal amount of Swing Loans to the Swing Bank. Additionally, if at
any time any Swing Loans are outstanding, any of the events described in clauses
(g) or (h) of Section 9.1 shall have occurred, then each Lender shall
automatically upon the occurrence of such event and without any action on the
part of the Swing Bank, the Borrowers, the Administrative Agent or the Lenders
be deemed to have purchased an undivided participation in the principal and
interest of all Swing Loans then outstanding in an amount equal to such Lender’s
Revolving Commitment Ratio of the principal and interest of all Swing Loans then
outstanding and each Lender shall, notwithstanding such Event of Default,
immediately pay to the Administrative Agent for the account of the Swing Bank in
immediately available funds, the amount of such Lender’s participation (and upon
receipt thereof, the Swing Bank shall deliver to such Lender a loan
participation certificate dated the date of receipt of such funds in such
amount). The disbursement of funds in connection with the settlement of Swing
Loans hereunder shall be subject to the terms and conditions of Section 2.2(e).
     Section 2.3 Interest.
          (a) On Loans. Interest on the Loans, subject to Sections 2.3(b) and
(c), shall be payable as follows:
          (i) On Base Rate Advances. Interest on each Base Rate Advance shall be
computed for the actual number of days elapsed on the basis of a hypothetical
year of three hundred sixty (360) days and shall be payable monthly in arrears
on the second Business Day of each calendar month for the prior calendar month,
commencing with calendar month ending August 31, 2008. Interest on Base Rate
Advances then outstanding shall also be due and payable on

51

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

 

the Maturity Date (or the date of any earlier prepayment in full of the
Obligations). Interest shall accrue and be payable on each Base Rate Advance at
a per annum interest rate equal to the sum of (A) the Base Rate and (B) the
Applicable Margin with respect to Base Rate Advances.
          (ii) On Eurodollar Advances. Interest on each Eurodollar Advance shall
be computed for the actual number of days elapsed on the basis of a hypothetical
year of three hundred sixty (360) days and shall be payable in arrears on
(x) the Payment Date for such Advance, and (y) if the Eurodollar Advance Period
for such Advance is greater than three (3) months, on the last day of each three
month period prior to the expiration of the applicable Eurodollar Advance Period
for such Advance. Interest on Eurodollar Advances then outstanding shall also be
due and payable on the Maturity Date (or the date of any earlier prepayment in
full of the Obligations). Interest shall accrue and be payable on each
Eurodollar Advance at a rate per annum equal to the sum of (A) the Eurodollar
Basis applicable to such Eurodollar Advance and (B) the Applicable Margin with
respect to Eurodollar Advances.
          (iii) If No Notice of Selection of Interest Rate. If the
Administrative Borrower fails to give the Administrative Agent timely notice of
its selection of a Eurodollar Basis, or if for any reason a determination of a
Eurodollar Basis for any Advance is not timely concluded, the Base Rate shall
apply to such Advance. If the Administrative Borrower fails to elect to continue
any Eurodollar Advance then outstanding prior to the last Payment Date
applicable thereto in accordance with the provisions of Section 2.2, as
applicable, the Base Rate shall apply to such Advance commencing on and after
such Payment Date.
          (b) Upon Default. Upon the occurrence and during the continuance of an
Event of Default, at the Administrative Agent’s discretion or upon the request
of the Majority Lenders, interest on the outstanding Obligations shall accrue at
the Default Rate. Interest accruing at the Default Rate shall be payable on
demand and in any event on the Maturity Date (or the date of any earlier
prepayment in full of the Obligations) and shall accrue until the earliest to
occur of (i) waiver of the applicable Event of Default in accordance with
Section 11.12, (ii) agreement by the Majority Lenders to rescind the charging of
interest at the Default Rate, or (iii) payment in full of the Obligations. The
Lenders shall not be required to (A) accelerate the maturity of the Loans,
(B) terminate the Revolving Loan Commitments, or (C) exercise any other rights
or remedies under the Loan Documents in order to charge interest hereunder at
the Default Rate.
          (c) Computation of Interest. In computing interest on any Advance, the
date of making the Advance shall be included and the date of payment shall be
excluded; provided, however, that if an Advance is repaid on the date that it is
made, one (1) day’s interest shall be due with respect to such Advance.

52

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

 

     Section 2.4 Fees.
          (a) Fee Letter. The Borrowers jointly and severally agree to pay to
the Administrative Agent such fees as are set forth in the Fee Letter.
          (b) Unused Line Fee. The Borrowers jointly and severally agree to pay
to the Administrative Agent, for the account of the Lenders in accordance with
their respective Revolving Commitment Ratios, an unused line fee (“Unused Line
Fee”) on the aggregate amount by which the Revolving Loan Commitment exceeded
the sum of the average daily amount of Aggregate Revolving Credit Obligations
(other than with respect to any Swing Loans and Agent Advances) for each day
from the Agreement Date through the Maturity Date (or the date of any earlier
prepayment in full of the Obligations), at a per annum rate equal to
three-tenths of one percent (0.30%). Such Unused Line Fee shall be computed on
the basis of a hypothetical year of three hundred sixty (360) days for the
actual number of days elapsed, shall be payable in arrears on August 31, 2008,
for the calendar month then ended and thereafter shall be payable monthly in
arrears on the last day of each calendar month thereafter for the calendar month
then ended, and if then unpaid, on the Maturity Date (or the date of any earlier
prepayment in full of the Obligations), and shall be fully earned when due and
non-refundable when paid.
          (c) Letter of Credit Fees.
          (i) The Borrowers shall pay to the Administrative Agent for the
account of the Lenders, in accordance with their respective Revolving Commitment
Ratios, a fee on the stated amount of any outstanding Letters of Credit for each
day from the Date of Issue through the Maturity Date (or the date of any earlier
prepayment in full of the Obligations) at a rate per annum on the amount of the
Letter of Credit Obligations equal to the Applicable Margin in effect from time
to time with respect to Letter of Credit fees. Such Letter of Credit fee shall
be computed on the basis of a hypothetical year of three hundred sixty
(360) days for the actual number of days elapsed, shall be payable monthly in
arrears for each calendar month on the last day of such calendar month,
commencing on August 31, 2008, and if then unpaid, on the Maturity Date (or the
date of any earlier prepayment in full of the Obligations), and shall be fully
earned when due and non-refundable when paid.
          (ii) The Borrowers shall also pay to the Administrative Agent, for the
account of each applicable Issuing Bank, (A) a fee on the stated amount of each
Letter of Credit issued by or on behalf of such Issuing Bank for each day from
the Date of Issue through the expiration date of each such Letter of Credit (or
any earlier prepayment in full of the Obligations) at a rate of one-eighth of
one percent (0.125%) per annum which fee shall be computed on the basis of a
hypothetical year of three hundred sixty (360) days for the actual number of
days elapsed, shall be payable monthly in arrears on the last day of each
calendar month for the calendar month then ended, commencing on August 31, 2008,
and,

53

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

 

if unpaid on the Maturity Date (or any earlier prepayment in full of the
Obligations) and (B) any reasonable and customary fees charged by the Issuing
Banks for issuance and administration of such Letters of Credit. The foregoing
fees shall be fully earned when due, and non-refundable when paid.
          (d) Computation of Fees. In computing any fees payable under this
Section 2.4, the first day of the applicable period shall be included and the
date of the payment shall be excluded.
     Section 2.5 Prepayment/Reduction of Commitment.
          (a) The principal amount of any Base Rate Advance may be repaid in
full or in part at any time, without penalty or prior notice; and the principal
amount of any Eurodollar Advance may be prepaid prior to the applicable Payment
Date, provided that the Borrowers shall reimburse the Lenders and the
Administrative Agent, on the earlier of demand or the Maturity Date, for any
Funding Losses or reasonable out-of-pocket expense incurred by the Lenders or
the Administrative Agent in connection with such prepayment, as set forth in
Section 2.9. Each notice of prepayment of any Eurodollar Advance shall be
irrevocable, and each prepayment or repayment made under this Section 2.5(a)
shall include the accrued interest on the amount so prepaid or repaid. Upon
receipt of any notice of repayment or prepayment, the Administrative Agent shall
promptly notify each Lender of the contents thereof by telephone or telecopy and
of such Lender’s portion of the repayment or prepayment. Notwithstanding the
foregoing, the Borrowers shall not make any repayment or prepayment of the
Revolving Loans unless and until the balance of the Swing Loans and the Agent
Advances then outstanding is zero. Other than with respect to amounts required
to be applied to the Loans pursuant to the last sentence of Section 2.6(a) or
pursuant to Section 2.6(c) or Section 6.15, repayments or prepayments of
principal hereunder shall be in minimum amounts of $1,000,000 and integral
multiples of $100,000 in excess thereof. Except as provided in Section 2.5(b),
any repayment and prepayment of Advances outstanding under the Revolving Loan
Commitment shall not reduce the Revolving Loan Commitment. Any prepayment of the
Loans shall not affect the Borrowers’ obligation to continue to make payments
under any swap agreement (as defined in 11 U.S.C. §101), including, without
limitation any such swap agreement that is a Lender Hedge Agreement, which shall
remain in full force and effect notwithstanding such prepayment, subject to the
terms of the applicable swap agreement.
          (b) The Borrowers shall have the right, at any time and from time to
time after the Agreement Date and prior to the Maturity Date, upon at least
thirty (30) days’ prior written notice to the Administrative Agent, without
premium or penalty, to cancel or reduce permanently all or a portion of the
Revolving Loan Commitment on a pro rata basis among the Lenders in accordance
with their respective Revolving Commitment Ratios; provided, that (i) any such
partial reduction shall be made in an amount not less than $5,000,000 and in
integral multiples of $1,000,000 in excess thereof

54

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

 

and (ii) the Revolving Loan Commitment may not be reduced to an amount below the
then outstanding Letter of Credit Obligations. As of the date of cancellation or
reduction set forth in such notice, the Revolving Loan Commitment shall be
permanently canceled or reduced to the amount stated in the Administrative
Borrower’s notice for all purposes herein, and the Borrowers shall pay to the
Administrative Agent for the account of the Lenders the amount necessary to
repay in full the principal amount of the Revolving Loans, Swing Loans and Agent
Advances or reduce the principal amount of the Revolving Loans, Swing Loans and
Agent Advances then outstanding to not more than the amount of the Revolving
Loan Commitment as so reduced, together with accrued interest on the amount so
prepaid and the Unused Line Fee set forth in Section 2.4(b) accrued through the
date of the reduction with respect to the amount reduced, and shall reimburse
the Administrative Agent and the Lenders for any Funding Losses or out-of-pocket
expense incurred by any of them in connection with such payment as set forth in
Section 2.9 and, in the case of cancellation of the Revolving Loan Commitment,
shall secure the Letter of Credit Obligations through the delivery of cash
collateral in an amount equal to 105% of the Letters of Credit Obligations.
     Section 2.6 Repayment.
          (a) The Revolving Loans. All unpaid principal and accrued interest on
the Revolving Loans shall be due and payable in full on the Maturity Date.
Notwithstanding the foregoing, however, in the event that at any time and for
any reason there shall exist an Overadvance, the Borrowers shall pay to the
Administrative Agent, on demand, an amount equal to the Overadvance, which
payment shall constitute a mandatory payment of the Revolving Loans, Agent
Advances, Swing Loans and Letter of Credit Reserve Account, as appropriate.
          (b) Intentionally Omitted.
          (c) Other Mandatory Repayments.
          (i) In the event that after the Agreement Date, any Borrower Party
shall issue any Equity Interests or shall incur any Funded Debt other than
Funded Debt permitted under Section 8.1, one hundred percent (100%) of the Net
Cash Proceeds received by such Borrower Party from such issuance or incurrence
shall be paid within one (1) Business Day of receipt of the proceeds thereof by
such Borrower Party to the Lenders as a mandatory payment of the Loans. Any
payment due hereunder shall be applied first to repay outstanding Agent
Advances, second to outstanding Swing Loans and then to repay outstanding
Revolving Loans. So long as no Event of Default exists, all such other Net Cash
Proceeds shall be applied in the manner set forth in Section 2.11(a).
Notwithstanding the foregoing, if an Event of Default exists, all such Net Cash
Proceeds shall be applied in the manner set forth in Section 2.11(b). The
Revolving Loan Commitment shall not be permanently reduced by the amount of any
payment of the Agent Advances, Swing Loans or Revolving Loans due under

55

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

 

this Section 2.6(c)(i). Nothing in this Section shall authorize any Borrower
Party to incur any Funded Debt except as expressly permitted by this Agreement
or to issue any Equity Interests except to the extent not prohibited by this
Agreement.
          (ii) All Net Cash Proceeds from the sale (other than the sale of
Inventory in the ordinary course of business and other asset dispositions in a
aggregate amount not to exceed $500,000 per fiscal year) or casualty or
condemnation loss of any Collateral or other assets of any Borrower Party shall
be paid within one (1) Business Day of receipt of the proceeds thereof by the
Borrower Parties as a mandatory payment of the Obligations. So long as no Event
of Default exists, all such Net Cash Proceeds (other than Net Cash Proceeds from
the sale of Inventory in the ordinary course of business or other asset
dispositions in an aggregate amount not to exceed $500,000 per fiscal year)
shall be applied first to repay outstanding Agent Advances, second to
outstanding Swing Loans and then to repay outstanding Revolving Loans. So long
as no Event of Default exists, all such other Net Cash Proceeds shall be applied
in the manner set forth in Section 2.11(a). Notwithstanding the foregoing, if an
Event of Default exists, all such Net Cash Proceeds shall be applied in the
manner set forth in Section 2.11(b). The Revolving Loan Commitment shall not be
permanently reduced by the amount of any payment of the Agent Advances, Swing
Loans or Revolving Loans due under this Section 2.6(c)(ii).
          (d) The Other Obligations. In addition to the foregoing, the Borrowers
hereby promise to pay all Obligations (other than Obligations in respect of Bank
Products), including, without limitation, the principal amount of the Loans,
amounts drawn under Letters of Credit and interest and fees on the foregoing, as
the same become due and payable hereunder and, in any event, on the Maturity
Date.
     Section 2.7 Notes; Loan Accounts.
          (a) The Loans shall be repayable in accordance with the terms and
provisions set forth herein and, upon request by any Lender, the Loans owed to
such Lender shall be evidenced by Revolving Loan Notes. A Revolving Loan Note
shall be payable to the order of each Lender requesting such a Note in
accordance with the Revolving Commitment Ratio of such Lender. Each such Note
shall be issued by the Borrowers to the applicable Lender and shall be duly
executed and delivered by an Authorized Signatory of each Borrower.
          (b) The Administrative Agent shall open and maintain on its books in
the name of the Borrowers a loan account with respect to the Loans and interest
thereon (the “Loan Account”). The Administrative Agent shall debit such Loan
Account for the principal amount of each Advance made by it on behalf of the
Lenders, accrued interest thereon, and all other amounts which shall become due
from the Borrowers pursuant to this Agreement and shall credit the Loan Account
for each payment which the Borrowers shall make in respect to the Obligations.
The records of the Administrative Agent with

56

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

 

respect to such Loan Account shall be conclusive evidence of the Loans and
accrued interest thereon, absent manifest error.
     Section 2.8 Manner of Payment.
          (a) When Payments Due.
          (i) Each payment (including any prepayment) by the Borrowers on
account of the principal of or interest on the Loans, fees, and any other amount
owed to any member of the Lender Group under this Agreement or the other Loan
Documents shall be made not later than 12:00 noon (Atlanta, Georgia time) on the
date specified for payment under this Agreement or any other Loan Document to
the Administrative Agent at the Administrative Agent’s Office, for the account
of the Lenders, the Issuing Banks or the Administrative Agent, as the case may
be, in Dollars in immediately available funds. Any payment received by the
Administrative Agent after 12:00 noon (Atlanta, Georgia time) shall be deemed
received on the next Business Day. In the case of a payment for the account of a
Lender, the Administrative Agent will promptly thereafter distribute the amount
so received in like funds to such Lender. In the case of a payment for the
account of an Issuing Bank, the Administrative Agent will promptly thereafter
distribute the amount so received in like funds to such Issuing Bank. If the
Administrative Agent shall not have received any payment from the Borrowers as
and when due, the Administrative Agent will promptly notify the Lenders
accordingly.
          (ii) Except as provided in the definition of Eurodollar Advance
Period, if any payment under this Agreement or any other Loan Document shall be
specified to be made on a day which is not a Business Day, it shall be made on
the next succeeding day which is a Business Day, and such extension of time
shall in such case be included in computing interest and fees, if any, in
connection with such payment.
          (b) No Deduction.
          (i) Any and all payments of principal and interest, or of any fees or
indemnity or expense reimbursements by the Borrowers hereunder or under any
other Loan Documents (the “Borrower Payments”) shall be made without setoff or
counterclaim and free and clear of and without deduction for any and all current
or future taxes, levies, imposts, deductions, charges or withholdings with
respect to such Borrower Payments and all interest, penalties or similar
liabilities with respect thereto, excluding taxes imposed on the net income of
any member of the Lender Group by the jurisdiction under the laws of which such
member of the Lender Group is organized or conducts business or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges or withholdings and liabilities collectively or individually

57

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

 

“Taxes”). If any Borrower shall be required to deduct any Taxes from or in
respect of any sum payable to any member of the Lender Group hereunder or under
any other Loan Document, (i) the sum payable shall be increased by the amount
(an “additional amount”) necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.8(b)(i), such member of the Lender Group shall receive an amount equal
to the sum it would have received had no such deductions been made, (ii) such
Borrower shall make such deductions, and (iii) such Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
Applicable Law.
          (ii) In addition, the Borrowers shall pay to the relevant Governmental
Authority in accordance with Applicable Law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Document (such taxes being “Other Taxes”).
          (iii) The Borrowers shall indemnify the members of the Lender Group
for the full amount of Taxes and Other Taxes with respect to Borrower Payments
paid by such Person, and any liability (including penalties, interest and
expenses (including reasonable attorney’s fees and expenses)) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted by the relevant Governmental Authority. A certificate
setting forth and containing an explanation in reasonable detail of the manner
in which such amount shall have been determined and the amount of such payment
or liability prepared by a member of the Lender Group or the Administrative
Agent on its behalf, absent manifest error, shall be final, conclusive and
binding for all purposes. Such indemnification shall be made within thirty
(30) days after the date the Administrative Agent or such member, as the case
may be, makes written demand therefor. If any Taxes or Other Taxes for which the
Administrative Agent or any member of the Lender Group has received
indemnification from the Borrowers hereunder shall be finally determined to have
been incorrectly or illegally asserted and are refunded to the Administrative
Agent or such member, the Administrative Agent or such member, as the case may
be, shall promptly forward to the Borrowers any such refunded amount (after
deduction of any Tax or Other Tax paid or payable by any member of the Lender
Group as a result of such refund), not exceeding the increased amount paid by
the Borrowers pursuant to this Section 2.8(b).
          (iv) As soon as practicable after the date of any payment of Taxes or
Other Taxes by the Borrowers to the relevant Governmental Authority, the
Administrative Borrower will deliver to the Administrative Agent, at its

58

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

 

address, the original or a certified copy of a receipt issued by such
Governmental Authority evidencing payment thereof.
          (v) On or prior to the Agreement Date (or, in the case of any Lender
that becomes a party to this Agreement pursuant to an Assignment and Acceptance,
on or prior to the effective date of such Assignment and Acceptance), each
Lender which is organized in a jurisdiction other than the United States or a
political subdivision thereof (a “Foreign Lender”) shall provide each of the
Administrative Agent and the Administrative Borrower with 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 Administrative Borrower and the Administrative Agent, as the
case may be, certifying (1) as to such Foreign Lender’s status for purposes of
determining exemption from United States withholding taxes with respect to all
payments to be made to such Foreign Lender hereunder and under any other Loan
Documents or Bank Products Documents or (2) that all payments to be made to such
Foreign Lender hereunder and under any other Loan Documents and Bank Products
Documents are subject to such taxes at a rate reduced to zero by an applicable
tax treaty, or (B)(1) a certificate executed by such Lender certifying that such
Lender is not a “bank” and that such Lender qualifies for the portfolio interest
exemption under Section 881(c) of the Code, and (2) 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 or Bank Products Documents. Each such Foreign
Lender agrees to provide the Administrative Agent and the Administrative
Borrower 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 Administrative Agent and the Administrative Borrower.
          (vi) The Borrowers shall not be required to indemnify any Foreign
Lender, or to pay any additional amounts to such Foreign Lender pursuant to
Section 2.8(b)(i) or (b)(iii) above to the extent that (A) the obligation to
withhold amounts with respect to United States Federal, state or local
withholding tax existed on the date such Foreign Lender became a party to this
Agreement (or, in the case of a transferee, on the effective date of the
Assignment and Acceptance pursuant to which such transferee became a Lender) or,
with respect to payments to a new lending office, the date such Foreign Lender
designated such new lending office; provided, however, that this clause (A)
shall not apply to any Foreign Lender that became a Lender or new lending office
that became a new lending office as a result of an assignment or designation
made at the request of the Administrative Borrower; and provided further,
however, that this clause (A) shall not apply to the extent the indemnity
payment or additional

59

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

 

amounts, if any, that any member of the Lender Group through a new lending
office would be entitled to receive (without regard to this clause (A)) do not
exceed the indemnity payment or additional amounts that the Person making the
assignment or transfer to such member of the Lender Group making the designation
of such new lending office would have been entitled to receive in the absence of
such assignment, transfer or designation or (B) the obligation to pay such
additional amounts or such indemnity payments would not have arisen but for a
failure by such member of the Lender Group to comply with the provisions of
Section 2.8(b)(v) above.
          (vii) Nothing contained in this Section 2.8(b) shall require any
member of the Lender Group to make available to the Borrowers any of its tax
returns (or any other information) that it deems confidential or proprietary.
     Section 2.9 Reimbursement. Whenever any Lender shall sustain or incur any
Funding Losses or out-of-pocket expenses in connection with (a) failure by the
Borrowers to borrow or continue any Eurodollar Advance, or convert any Advance
to a Eurodollar Advance, in each case, after having given notice of their
intention to do so in accordance with Section 2.2 (whether by reason of the
election of the Borrowers not to proceed or the non-fulfillment of any of the
conditions set forth in this Agreement), or (b) prepayment of any Eurodollar
Advance in whole or in part for any reason or (c) failure by the Borrowers to
prepay any Eurodollar Advance after giving notice of its intention to prepay
such Advance, the Borrowers agree to pay to such Lender, promptly upon such
Lender’s demand therefor, an amount sufficient to compensate such Lender for all
such Funding Losses and out-of-pocket expenses. Such Lender’s good faith
determination of the amount of such Funding Losses and out-of-pocket expenses,
absent manifest error, shall be binding and conclusive. Losses subject to
reimbursement hereunder shall include, without limitation, expenses incurred by
any Lender or any participant of such Lender permitted hereunder in connection
with the re-employment of funds prepaid, repaid, not borrowed, or paid, as the
case may be, and any lost profit of such Lender or any participant of such
Lender over the remainder of the Eurodollar Advance Period for such prepaid
Advance. For purposes of calculating amounts payable to a Lender under this
paragraph, each Lender shall be deemed to have actually funded its relevant
Eurodollar Advance through the purchase of a deposit bearing interest at the
Eurodollar Rate in an amount equal to the amount of that Eurodollar Advance and
having a maturity and repricing characteristics comparable to the relevant
Eurodollar Advance Period; provided, however, that each Lender may fund each of
its Eurodollar Advances in any manner it sees fit, and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
Section.

60

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

 

     Section 2.10 Pro Rata Treatment.
          (a) Advances. Each Advance with respect to the Revolving Loans from
the Lenders under this Agreement shall be made pro rata on the basis of their
respective Revolving Commitment Ratios.
          (b) Payments. Each payment and prepayment of the principal of the
Revolving Loans and each payment of interest on the Revolving Loans received
from the Borrowers shall be made by the Administrative Agent to the Lenders pro
rata on the basis of their respective unpaid principal amounts thereof
outstanding immediately prior to such payment or prepayment (except in cases
when a Lender’s right to receive payments is restricted pursuant to
Section 2.2(e)). If any Lender shall obtain any payment (whether involuntary,
through the exercise of any right of set-off or otherwise) on account of the
Loans in excess of its ratable share of Loans under its Aggregate Commitment
Ratio (or in violation of any restriction set forth in Section 2.2(e)), such
Lender shall forthwith purchase from the other Lenders such participation in the
Loans made by them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery without interest thereon unless the Lender obligated to repay such
amount is required to pay interest. The Borrowers agree that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.10(b)
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrowers in the amount of such
participation.
     Section 2.11 Application of Payments.
          (a) Payments Prior to Event of Default. Prior to the occurrence and
continuance of an Event of Default, all amounts received by the Administrative
Agent from the Borrowers (other than payments specifically earmarked for
application to certain principal, interest, fees or expenses hereunder or
payments made pursuant to Section 2.6(c) (which shall be applied as earmarked
or, with respect to payments under Section 2.6(c), as set forth in Section
2.6(c))), shall be distributed by the Administrative Agent in the following
order of priority:
FIRST, to the payment of out-of-pocket costs and expenses (including without
limitation reasonable attorneys’ fees) of the Administrative Agent with
enforcing the rights of the Lenders under the Loan Documents, and any Agent
Advances made by the Administrative Agent under or pursuant to the terms of the
Loan Documents;
SECOND, to payment of any fees owed to the Administrative Agent, the Issuing
Banks or the Swing Bank hereunder or under any other Loan Document;

61

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

 

THIRD, to the payment of all obligations consisting of accrued fees and interest
payable to the Lenders hereunder;
FOURTH, to the payment of principal then due and payable on the Swing Loans;
FIFTH, to the payment of principal then due and payable on the Revolving Loans;
SIXTH, to the payment of the Obligations arising in respect of Bank Products
then due and payable; and
SEVENTH, to the payment of all other Obligations not otherwise referred to in
this Section 2.11(a) then due and payable.
          (b) Payments Subsequent to Event of Default. Notwithstanding anything
in this Agreement or any other Loan Documents which may be construed to the
contrary, subsequent to the occurrence and during the continuance of an Event of
Default, payments and prepayments with respect to the Obligations made to the
Lender Group, or any of them, or otherwise received by any member of the Lender
Group (from realization on Collateral or otherwise) shall be distributed in the
following order of priority (subject, as applicable, to Section 2.10):
FIRST, to the payment of out-of-pocket costs and expenses (including without
limitation reasonable attorneys’ fees) of the Administrative Agent with
enforcing the rights of the Lenders under the Loan Documents, and any Agent
Advances made by the Administrative Agent under or pursuant to the terms of the
Loan Documents (including, without limitation, any costs incurred in connection
with the sale or disposition of any Collateral);
SECOND, to payment of any fees owed to the Administrative Agent, the Issuing
Banks or the Swing Bank hereunder or under any other Loan Document;
THIRD, to the payment of out-of-pocket costs and expenses (including without
limitation reasonable attorneys’ fees) of the Lenders with enforcing the rights
of its rights under the Loan Documents;
FOURTH, to the payment of all obligations consisting of accrued fees and
interest payable to the Lenders hereunder;
FIFTH, to the payment of the principal of the Swing Loans then outstanding,
SIXTH, pro rata, to (i) the payment of principal on the Revolving Loans then
outstanding, and (ii) the Letter of Credit Reserve Account to the extent of one
hundred five percent (105%) of any Letter of Credit Obligations then
outstanding,

62

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

 

SEVENTH, to the payment of any Obligation arising in respect of the Bank
Products;
EIGHTH, to any other Obligations not otherwise referred to in this
Section 2.11(b); and
NINTH, upon satisfaction in full of all Obligations, to the Borrowers or as
otherwise required by law.
     Section 2.12 Use of Proceeds. The proceeds of the Loans shall be used by
the Borrowers as follows:
          (a) The proceeds of the initial Advance of Revolving Loans hereunder
shall be used on the Agreement Date to refinance existing Funded Debt and to
fund transaction costs.
          (b) The balance of the proceeds of the Loans shall be used (i) to fund
future acquisitions permitted hereunder, (ii) to provide for working capital and
(iii) for the Borrowers’ general corporate purposes.
     Section 2.13 All Obligations to Constitute One Obligation. All Obligations
shall constitute one general obligation of the Borrowers and shall be secured by
the Administrative Agent’s security interest (on behalf of, and for the benefit
of, the Lender Group) and Lien upon all of the Collateral, and by all other
security interests and Liens heretofore, now or at any time hereafter granted by
any Borrower Party to the Administrative Agent or any other member of the Lender
Group, to the extent provided in the Security Documents under which such Liens
arise.
     Section 2.14 Maximum Rate of Interest. The Borrowers and the Lender Group
hereby agree and stipulate that the only charges imposed upon the Borrowers for
the use of money in connection with this Agreement are and shall be the specific
interest and fees described in this Article 2 and in any other Loan Document.
Notwithstanding the foregoing, the Borrowers and the Lender Group further agree
and stipulate that all closing fees, agency fees, syndication fees, facility
fees, underwriting fees, default charges, late charges, funding or “breakage”
charges, increased cost charges, attorneys’ fees and reimbursement for costs and
expenses paid by any member of the Lender Group to third parties or for damages
incurred by the Lender Group, or any of them, are charges to compensate the
Lender Group for underwriting and administrative services and costs or losses
performed or incurred, and to be performed and incurred, by the Lender Group in
connection with this Agreement and the other Loan Documents and shall under no
circumstances be deemed to be charges for the use of money pursuant to Official
Code of Georgia Annotated Sections 7-4-2 and 7-4-18 or any other Applicable Law.
In no event shall the amount of interest and other charges for the use of money
payable under this Agreement exceed the maximum amounts permissible under any
law that a court of competent jurisdiction shall, in a final determination, deem
applicable. The Borrowers

63

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

 

and the Lender Group, in executing and delivering this Agreement, intend legally
to agree upon the rate or rates of interest and other charges for the use of
money and manner of payment stated within it; provided, however, that, anything
contained herein to the contrary notwithstanding, if the amount of such interest
and other charges for the use of money or manner of payment exceeds the maximum
amount allowable under Applicable Law, then, ipso facto as of the Agreement
Date, the Borrowers are and shall be liable only for the payment of such maximum
as allowed by law, and payment received from the Borrowers in excess of such
legal maximum, whenever received, shall be applied to reduce the principal
balance of the Revolving Loans to the extent of such excess.
     Section 2.15 Letters of Credit.
          (a) Subject to the terms and conditions of this Agreement, each
Issuing Bank, on behalf of the Lenders, and in reliance on the agreements of the
Lenders set forth in Section 2.15(c) below, hereby agrees to issue (or arrange
with a Foreign Issuer for the issuance of) one or more Letters of Credit up to
an aggregate face amount equal to such Issuing Bank’s Letter of Credit
Commitment; provided, however, that, except as described in the last sentence of
Section 4.3, the Issuing Banks shall not issue (or arrange with a Foreign Issuer
for the issuance of) any Letter of Credit unless the conditions precedent to the
issuance thereof set forth in Section 4.3 have been satisfied; provided,
however, that at no time shall the total Letter of Credit Obligations
outstanding hereunder exceed the Aggregate Letter of Credit Commitment. Each
Letter of Credit shall (i) be denominated in Dollars, and (ii) expire no later
than the earlier to occur of (A) the date thirty (30) days prior to the Maturity
Date, and (B) three hundred sixty (360) days after its date of issuance (but may
contain provisions for automatic renewal provided that no Default exists on the
renewal date or would be caused by such renewal and provided no such renewal
shall extend beyond the date thirty (30) days prior to the Maturity Date). Each
Letter of Credit shall be subject to the Uniform Customs and, to the extent not
inconsistent therewith, the laws of the State of New York. None of the Issuing
Banks shall at any time be obligated to issue, or cause to be issued, any Letter
of Credit if such issuance would conflict with, or cause such Issuing Bank to
exceed any limits imposed by, any Applicable Law.
          (b) The Administrative Borrower may from time to time request that an
Issuing Bank issue (or arrange with a Foreign Issuer for the issuance of) a
Letter of Credit. The Administrative Borrower shall execute and deliver to the
Administrative Agent and the applicable Issuing Bank a Request for Issuance of
Letter of Credit for each Letter of Credit to be issued by such Issuing Bank,
not later than 11:00 a.m. (Atlanta, Georgia time) one (1) Business Day preceding
the date on which the requested Letter of Credit is to be issued, or such
shorter notice as may be acceptable to the applicable Issuing Bank and the
Administrative Agent. Upon receipt of any such Request for Issuance of Letter of
Credit, subject to satisfaction of all conditions precedent thereto as set forth
in Section 4.3 or waiver of such conditions pursuant to the last sentence of
Section 4.3, the applicable Issuing Bank shall process such Request for Issuance
of Letter

64

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

 

of Credit and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue (or arrange with a Foreign Issuer for the
issuance of) the Letter of Credit requested thereby. Such Issuing Bank shall
furnish a copy of such Letter of Credit to the Administrative Borrower and the
Administrative Agent following the issuance thereof. In addition to the fees
payable pursuant to Section 2.4(c)(ii), the Borrowers shall pay or reimburse
each Issuing Bank for normal and customary costs and expenses incurred by such
Issuing Bank in issuing, effecting payment under, amending or otherwise
administering the Letters of Credit. On each Business Day on or before
10:00 a.m. (Atlanta, Georgia time) each Issuing Bank shall deliver to the
Administrative Agent and the Administrative Borrower a report in substantially
the form of Exhibit L (a “Daily Letter of Credit Report”) (A) setting forth the
opening balance of its Letters of Credit outstanding on the immediately
preceding Business Day, (B) identifying all Letters of Credit issued (or
amended) by it (or its Foreign Issuer) on such immediately preceding Business
Day, (C) identifying all Letters of Credit cancelled on such immediately
preceding Business Day, (D) identifying all draws on such immediately preceding
Business Day under Letters of Credit issued by it (or its Foreign Issuer),
(E) setting forth the ending balance of its Letters of Credit outstanding on
such immediately preceding Business Day and (E) identifying all requests for the
issuance of Letters of Credit cancelled on such immediately preceding Business
Day.
          (c) Immediately upon the issuance by an Issuing Bank of a Letter of
Credit and in accordance with the terms and conditions of this Agreement, such
Issuing Bank shall be deemed to have sold and transferred to each Lender, and
each Lender shall be deemed irrevocably and unconditionally to have purchased
and received from such Issuing Bank, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender’s Revolving Commitment
Ratio, in such Letter of Credit and the obligations of the Borrowers with
respect thereto (including, without limitation, all Letter of Credit Obligations
with respect thereto). The applicable Issuing Bank shall promptly notify the
Administrative Agent of any draw under a Letter of Credit. At such time as the
Administrative Agent shall be notified by the applicable Issuing Bank that the
beneficiary under any Letter of Credit has drawn on the same, the Administrative
Agent shall promptly notify the Administrative Borrower and the Swing Bank (or,
at its option, all Lenders), by telephone or telecopy, of the amount of the draw
and, in the case of each Lender, such Lender’s portion of such draw amount as
calculated in accordance with its Revolving Commitment Ratio.
          (d) The Borrowers hereby agree to immediately reimburse each Issuing
Bank for amounts paid by such Issuing Bank in respect of draws under each Letter
of Credit. In order to facilitate such repayment, the Borrowers hereby
irrevocably request the Lenders, and the Lenders hereby severally agree, on the
terms and conditions of this Agreement (other than as provided in Article 2 with
respect to the amounts of, the timing of requests for, and the repayment of
Advances hereunder and in Article 4 with respect to conditions precedent to
Advances hereunder), with respect to any drawing

65

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

 

under a Letter of Credit, to make a Base Rate Advance on each day on which a
draw is made under any Letter of Credit and in the amount of such draw, and to
pay the proceeds of such Advance directly to the applicable Issuing Bank to
reimburse such Issuing Bank for the amount paid by it upon such draw. Each
Lender shall pay its share of such Base Rate Advance by paying its portion of
such Advance to the Administrative Agent in accordance with Section 2.2(e) and
its Revolving Commitment Ratio, without reduction for any set-off or
counterclaim of any nature whatsoever and regardless of whether any Default
exists or would be caused thereby. The disbursement of funds in connection with
a draw under a Letter of Credit pursuant to this Section hereunder shall be
subject to the terms and conditions of Section 2.2(e). The obligation of each
Lender to make payments to the Administrative Agent, for the account of an
Issuing Bank, in accordance with this Section 2.15 shall be absolute and
unconditional and no Lender shall be relieved of its obligations to make such
payments by reason of noncompliance by any other Person with the terms of the
Letter of Credit or for any other reason (other than the gross negligence or
willful misconduct of such Issuing Bank in paying such Letter of Credit, as
determined by a final non-appealable judgment of a court of competent
jurisdiction). The Administrative Agent shall promptly remit to such Issuing
Bank the amounts so received from the other Lenders. Any overdue amounts payable
by the Lenders to an Issuing Bank in respect of a draw under any Letter of
Credit shall bear interest, payable on demand, (x) for the first two
(2) Business Days, at the Federal Funds Rate, and (y) thereafter, at the Base
Rate. Notwithstanding the foregoing, at the request of the Administrative Agent,
the Swing Bank may, at its option and subject to the conditions set forth in
Section 2.2(g) other than the condition that the applicable conditions precedent
set forth in Article 4 be satisfied, make Swing Loans to reimburse the Issuing
Banks for amounts drawn under Letters of Credit.
          (e) The Borrowers agree that each Advance by the Lenders to reimburse
an Issuing Bank for draws under any Letter of Credit, shall, for all purposes
hereunder, unless and until converted into a Eurodollar Advance pursuant to
Section 2.2(b)(ii), be deemed to be a Base Rate Advance under the Revolving Loan
Commitment and shall be payable and bear interest in accordance with all other
Base Rate Advances of Revolving Loans.
          (f) The Borrowers agree that any action taken or omitted to be taken
by any Issuing Bank or any Foreign Issuer in connection with any Letter of
Credit, except for such actions or omissions as shall constitute gross
negligence or willful misconduct on the part of such Issuing Bank as determined
by a final non-appealable judgment of a court of competent jurisdiction, shall
be binding on the Borrowers as between the Borrowers and such Issuing Bank, and
shall not result in any liability of such Issuing Bank to the Borrowers. The
obligation of the Borrowers to reimburse an Issuing Bank for a drawing under any
Letter of Credit or the Lenders for Advances made by them to the Issuing Banks
on account of draws made under the Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances whatsoever (except if arising
from the gross

66

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

 

negligence or willful misconduct on the part of such Issuing Bank as determined
by a final non-appealable judgment of a court of competent jurisdiction),
including, without limitation, the following circumstances:
          (i) Any lack of validity or enforceability of any Loan Document;
          (ii) Any amendment or waiver of or consent to any departure from any
or all of the Loan Documents;
          (iii) Any improper use which may be made of any Letter of Credit or
any improper acts or omissions of any beneficiary or transferee of any Letter of
Credit in connection therewith;
          (iv) The existence of any claim, set-off, defense or any right which
any Borrower may have at any time against any beneficiary or any transferee of
any Letter of Credit (or Persons for whom any such beneficiary or any such
transferee may be acting), any Lender or any other Person, whether in connection
with any Letter of Credit, any transaction contemplated by any Letter of Credit,
this Agreement, or any other Loan Document, or any unrelated transaction;
          (v) Any statement or any other documents presented under any Letter of
Credit proving to be insufficient, forged, fraudulent or invalid in any respect
or any statement therein being untrue or inaccurate in any respect whatsoever;
          (vi) The insolvency of any Person issuing any documents in connection
with any Letter of Credit;
          (vii) Any breach of any agreement between any Borrower and any
beneficiary or transferee of any Letter of Credit;
          (viii) Any irregularity in the transaction with respect to which any
Letter of Credit is issued, including any fraud by the beneficiary or any
transferee of such Letter of Credit;
          (ix) Any errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, wireless or otherwise,
whether or not they are in code;
          (x) Any act, error, neglect or default, omission, insolvency or
failure of business of any of the correspondents of the applicable Issuing Bank;

67

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

 

          (xi) Any other circumstances arising from causes beyond the control of
the applicable Issuing Bank;
          (xii) Payment by an Issuing Bank (or the Foreign Issuer) under any
Letter of Credit against presentation of a sight draft or a certificate which
does not comply with the terms of such Letter of Credit, provided that such
payment shall not have constituted gross negligence or willful misconduct of
such Issuing Bank or Foreign Issuer as determined by a final non-appealable
judgment of a court of competent jurisdiction; and
          (xiii) Any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
          (g) The Borrowers will indemnify and hold harmless each Indemnified
Person from and against any and all claims, liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including reasonable attorneys’ fees) which
may be imposed on, incurred by or asserted against such Indemnified Person in
any way relating to or arising out of the issuance of a Letter of Credit, except
that the Borrowers shall not be liable to an Indemnified Person for any portion
of such claims, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of such Indemnified Person as determined by a
final non-appealable judgment of a court of competent jurisdiction. This
Section 2.15(g) shall survive termination of this Agreement.
          (h) Each Lender shall be responsible (to the extent the Borrowers are
obligated to reimburse the applicable Issuing Bank under the Loan Documents and
such Issuing Bank is not reimbursed by the Borrowers) for its pro rata share
(based on such Lender’s Revolving Commitment Ratio) of any and all reasonable
out-of-pocket costs, expenses (including reasonable legal fees) and
disbursements which may be incurred or made by such Issuing Bank in connection
with the collection of any amounts due under, the administration of, or the
presentation or enforcement of any rights conferred by any Letter of Credit, any
Borrower’s or any guarantor’s obligations to reimburse draws thereunder or
otherwise. In the event the Borrowers shall fail to pay such expenses of an
Issuing Bank within fifteen (15) days of demand for payment by such Issuing
Bank, each Lender shall thereupon pay to such Issuing Bank its pro rata share
(based on such Lender’s Revolving Commitment Ratio) of such expenses within ten
(10) days from the date of such Issuing Bank’s notice to the Lenders of the
Borrowers’ failure to pay; provided, however, that if the Borrowers shall
thereafter pay such expenses, such Issuing Bank will repay to each Lender the
amounts received from such Lender hereunder.
          (i) Any Person that is to be a new Issuing Bank (other than pursuant
to the execution of an Assignment and Acceptance) is required to enter into this
Agreement by executing and delivering to the Administrative Agent and the
Administrative Borrower a joinder agreement in the form of Exhibit M (each an
“Issuing

68

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

 

Bank Joinder Agreement”). Upon the execution and delivery of any Issuing Bank
Joinder Agreement by such Person, such Person shall become an Issuing Bank
hereunder with the same force and effect as if originally named as an Issuing
Bank herein. The execution and delivery of any Issuing Bank Joinder Agreement
adding an additional Person as a party to this Agreement shall not require the
consent of any party hereto other than the Administrative Agent and, so long as
no Default exists, the Administrative Borrower.
          (j) Unless otherwise expressly agreed by the Issuing Bank and the
Borrowers when a Letter of Credit is issued and subject to Applicable Laws,
(i) each Standby Letter of Credit shall be governed by the “International
Standby Practices 1998” (ISP98) (or such later revision as may be published by
the Institute of International Banking Law & Practice on any date any Letter of
Credit may be issued) and (ii) each Documentary Letter of Credit shall be
governed by the Uniform Customs and (iii) in both cases, to the extent not
inconsistent therewith, the governing law of this Agreement set forth in
Section 11.7.
     Section 2.16 Bank Products. Any Borrower Party may request and each Lender
may, in its sole and absolute discretion, arrange for such Borrower Party to
obtain from such Lender or any Affiliate of such Lender, Bank Products although
no Borrower Party is required to do so. If any Bank Products are provided by an
Affiliate of a Lender, the Borrower Parties agree to indemnify and hold the
Lender Group, or any of them, harmless from any and all costs and obligations
now or hereafter incurred by the Lender Group, or any of them, which arise from
any indemnity given by such Lender to any of its Affiliates, as applicable,
related to such Bank Products; provided, however, nothing contained herein is
intended to limit the Borrower Parties’ rights, with respect to such Lender or
any of its Affiliates, as applicable, if any, which arise as a result of the
execution of documents by and between the Borrower Parties and such Person which
relate to any Bank Products. The agreement contained in this Section shall
survive termination of this Agreement. The Borrower Parties acknowledge and
agree that the obtaining of Bank Products from a Lender or its Affiliates (a) is
in the sole and absolute discretion of such Lender or such Affiliates, and
(b) is subject to all rules and regulations of such Lender or such Affiliates.
     Section 2.17 Additional Increase of Commitments; Additional Lenders.
          (a) Increase of the Revolving Loan Commitment.
               (i) So long as no Event of Default has occurred and is
continuing, Parent, on behalf of Borrowers, may request the right to effectuate
increases in the Revolving Loan Commitment (any such increase, a “Commitment
Increase”), in an aggregate amount of up to $100,000,000 for all such Commitment
Increases (the “Commitment Increase Cap”), during the term of this Agreement by
delivering a Notice of Requested Commitment Increase to the Administrative Agent
substantially in the form of Exhibit K (a “Notice of Requested Commitment
Increase”), provided that, in each case: (A) each Commitment Increase shall be
in minimum increments of $10,000,000;

69

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

 

(B) the proposed Commitment Increase shall have been consented to in writing by
the Administrative Agent (such consent not to be unreasonably withheld), each
Lender (if any) who is increasing its portion of the Revolving Loan Commitment
and any other bank or financial institution acceptable to the Borrowers and the
Administrative Agent that has agreed to become a Lender in respect of all or a
portion of the Commitment Increase (a “New Lender”); and (C) the proposed
Commitment Increase, together with any prior Commitment Increase, shall not
exceed the Commitment Increase Cap. Each Notice of Requested Commitment Increase
shall specify: (1) the amount of the proposed Commitment Increase and (2) the
requested date of the proposed Commitment Increase (which shall be at least
thirty (30) days from the date of delivery of the Notice of Requested Commitment
Increase). Each Notice of Requested Commitment Increase shall be binding on all
Borrowers. Upon the effective date of any Commitment Increase, Parent shall
deliver to the Administrative Agent a certificate of the chief financial officer
of Parent certifying that no Default or Event of Default then exists or would be
caused thereby. No Commitment Increase shall be effective until the
Administrative Agent shall have received amendments to this Agreement and the
other Loan Documents, commitments of Lenders or New Lenders in an aggregate
amount equal to such Commitment Increase, Lender Agreements for each Lender or
New Lender committing to such Commitment Increase, any upfront fees to be paid
to the Lenders committing to such Commitment Increase, and, if requested,
opinion letters, Revolving Loan Notes and such other agreements, documents and
instruments requested by and reasonably satisfactory to the Administrative Agent
in its Permitted Discretion evidencing and setting forth the conditions of such
Commitment Increase.
               (ii) If the Administrative Agent approves a proposed Commitment
Increase, the Administrative Agent shall deliver a copy of the Notice of
Requested Commitment Increase relating thereto to each Lender. No Lender (or any
successor thereto) shall have any obligation to increase its portion of the
Revolving Loan Commitment or its other obligations under this Agreement or the
other Loan Documents, and any decision by a Lender to increase its portion of
the Revolving Loan Commitment shall be made in its sole discretion independently
from any other Lender. If the Administrative Agent receives commitments from the
Lenders or the New Lenders in excess of the amount of the proposed Commitment
Increase, the Administrative Agent shall have the right, in its sole discretion,
to reduce and reallocate (within the minimum and maximum amounts specified by
each such Lender or New Lender in its notice to the Administrative Agent) the
shares of such Commitment Increase of the Lenders or New Lenders willing to fund
the proposed Commitment Increase so that the total committed shares of the
proposed Commitment Increase equals the proposed Commitment Increase. The
Administrative Agent shall notify each Lender or New Lender, as the case may be,
whether its proposed share of the proposed Commitment Increase has been accepted
and, if so, the amount of its share of such Commitment Increase, and such Lender
shall thereafter execute and deliver a Lender Agreement with respect to its
respective share of such Commitment Increase.

70

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

 

               (iii) Notwithstanding anything to the contrary contained herein,
each Commitment Increase meeting the conditions set forth in Section 2.17(a)(i)
shall not require the consent of any Lender other than those Lenders, if any,
which have agreed to increase their portions of the Revolving Loan Commitment in
connection with such Commitment Increase and shall not constitute an amendment,
modification or waiver that is subject to Section 11.12 and shall be effective
as of the later of (a) the date specified in the applicable Notice of Requested
Commitment Increase and (b) the date upon which the foregoing conditions shall
have been satisfied or waived by the Administrative Agent and the Lenders which
have agreed to increase their portions of the Revolving Loan Commitment, or by
the requisite Lenders in accordance with Section 11.12 in the case of a waiver
of an Event of Default, as applicable.
          (b) Effect of Commitment Increase. After giving effect to any
Commitment Increase, the outstanding Revolving Loans may not be held pro rata in
accordance with the new Revolving Loan Commitment. In order to remedy the
foregoing, on the effective date of each Commitment Increase, the Lenders
(including any New Lenders) shall reallocate the Revolving Loans owed to them
among themselves so that, after giving effect thereto, the Revolving Loans will
be held by the Lenders (including any New Lenders) on a pro rata basis in
accordance with their respective Revolving Commitment Ratios (after giving
effect to such Commitment Increase). Each Lender agrees to wire immediately
available funds to the Administrative Agent in accordance with this Agreement as
may be required by the Administrative Agent in connection with the foregoing.
Notwithstanding the provisions of Section 11.5, the reallocations so made by
each Lender whose Revolving Commitment Ratio has increased shall be deemed to be
a purchase of a corresponding amount of the Revolving Loans of the Lender or
Lenders whose Revolving Commitment Ratio have decreased and shall not be
considered an assignment for purposes of Section 11.5.
ARTICLE 3.
GUARANTY
     Section 3.1 Guaranty.
          (a) Each Guarantor hereby guarantees to the Administrative Agent, for
the benefit of the Lender Group, the full and prompt payment of the Obligations,
including, without limitation, any interest therein (including, without
limitation, interest as provided in this Agreement, accruing after the filing of
a petition initiating any insolvency proceedings, whether or not such interest
accrues or is recoverable against the Borrowers after the filing of such
petition for purposes of the Bankruptcy Code or is an allowed claim in such
proceeding), plus reasonable attorneys’ fees and expenses if the obligations
represented by this Guaranty are collected by law, through an attorney-at-law,
or under advice therefrom.

71

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

 

          (b) Regardless of whether any proposed guarantor or any other Person
shall become in any other way responsible to the Lender Group, or any of them,
for or in respect of the Obligations or any part thereof, and regardless of
whether or not any Person now or hereafter responsible to the Lender Group, or
any of them, for the Obligations or any part thereof, whether under this
Guaranty or otherwise, shall cease to be so liable, each Guarantor hereby
declares and agrees that this Guaranty shall be a joint and several obligation,
shall be a continuing guaranty and shall be operative and binding until the
Obligations shall have been indefeasibly paid in full in cash (or in the case of
Letter of Credit Obligations, secured through delivery of cash collateral in an
amount equal to one hundred and five percent (105%) of the Letter of Credit
Obligations) and the Revolving Loan Commitments shall have been terminated.
          (c) Each Guarantor absolutely, unconditionally and irrevocably waives
any and all right to assert any defense (other than the defense of payment in
cash in full, to the extent of its obligations hereunder, or a defense that such
Guarantor’s liability is limited as provided in Section 3.1(g)), set-off,
counterclaim or cross-claim of any nature whatsoever with respect to this
Guaranty or the obligations of the Guarantors under this Guaranty or the
obligations of any other Person or party (including, without limitation, the
Borrowers) relating to this Guaranty or the obligations of any of the Guarantors
under this Guaranty or otherwise with respect to the Obligations in any action
or proceeding brought by the Administrative Agent or any other member of the
Lender Group to collect the Obligations or any portion thereof, or to enforce
the obligations of any of the Guarantors under this Guaranty.
          (d) The Lender Group, or any of them, may from time to time, without
exonerating or releasing any Guarantor in any way under this Guaranty, (i) take
such further or other security or securities for the Obligations or any part
thereof as they may deem proper, or (ii) release, discharge, abandon or
otherwise deal with or fail to deal with any Guarantor of the Obligations or any
security or securities therefor or any part thereof now or hereafter held by the
Lender Group, or any of them, or (iii) amend, modify, extend, accelerate or
waive in any manner any of the provisions, terms, or conditions of the Loan
Documents, all as they may consider expedient or appropriate in their sole
discretion. Without limiting the generality of the foregoing, or of
Section 3.1(e), it is understood that the Lender Group, or any of them, may,
without exonerating or releasing any Guarantor, give up, modify or abstain from
perfecting or taking advantage of any security for the Obligations and accept or
make any compositions or arrangements, and realize upon any security for the
Obligations when, and in such manner, and with or without notice, all as such
Person may deem expedient.
          (e) Each Guarantor acknowledges and agrees that no change in the
nature or terms of the Obligations or any of the Loan Documents, or other
agreements, instruments or contracts evidencing, related to or attendant with
the Obligations (including any novation), shall discharge all or any part of the
liabilities and obligations of such Guarantor pursuant to this Guaranty; it
being the purpose and intent of the

72

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

 

Guarantors and the Lender Group that the covenants, agreements and all
liabilities and obligations of each Guarantor hereunder are absolute,
unconditional and irrevocable under any and all circumstances. Without limiting
the generality of the foregoing, each Guarantor agrees that until each and every
one of the covenants and agreements of this Guaranty is fully performed, and
without possibility of recourse, whether by operation of law or otherwise, such
Guarantor’s undertakings hereunder shall not be released, in whole or in part,
by any action or thing which might, but for this paragraph of this Guaranty, be
deemed a legal or equitable discharge of a surety or guarantor, or by reason of
any waiver, omission of the Lender Group, or any of them, or their failure to
proceed promptly or otherwise, or by reason of any action taken or omitted by
the Lender Group, or any of them, whether or not such action or failure to act
varies or increases the risk of, or affects the rights or remedies of, such
Guarantor or by reason of any further dealings between the Borrowers, on the one
hand, and any member of the Lender Group, on the other hand, or any other
guarantor or surety, and such Guarantor hereby expressly waives and surrenders
any defense to its liability hereunder, or any right of counterclaim or offset
of any nature or description which it may have or may exist based upon, and
shall be deemed to have consented to, any of the foregoing acts, omissions,
things, agreements or waivers.
          (f) The Lender Group, or any of them, may, without demand or notice of
any kind upon or to any Guarantor, at any time or from time to time when any
amount shall be due and payable hereunder by any Guarantor, if the Borrowers
shall not have timely paid any of the Obligations (or in the case of Letter of
Credit Obligations, secured through delivery of cash collateral in an amount
equal to one hundred and five percent (105%) of the Letter of Credit
Obligations), set-off and appropriate and apply to any portion of the
Obligations hereby guaranteed, and in such order of application as the
Administrative Agent may from time to time elect in accordance with this
Agreement, any deposits, property, balances, credit accounts or moneys of any
Guarantor in the possession of any member of the Lender Group or under their
respective control for any purpose. If and to the extent that any Guarantor
makes any payment to the Administrative Agent or any other Person pursuant to or
in respect of this Guaranty, any claim which such Guarantor may have against any
Borrower by reason thereof shall be subject and subordinate to the prior payment
in full of the Obligations to the satisfaction of the Lender Group.
          (g) The creation or existence from time to time of Obligations in
excess of the amount committed to or outstanding on the date of this Guaranty is
hereby authorized, without notice to any Guarantor, and shall in no way impair
or affect this Guaranty or the rights of the Lender Group herein. It is the
intention of each Guarantor and the Administrative Agent that each Guarantor’s
obligations hereunder shall be, but not in excess of, the Maximum Guaranteed
Amount (as herein defined). The “Maximum Guaranteed Amount” with respect to any
Guarantor, shall mean the maximum amount which could be paid by such Guarantor
without rendering this Guaranty void or voidable as would otherwise be held or
determined by a court of competent jurisdiction in any

73

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

 

action or proceeding involving any state or Federal bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws relating
to the insolvency of debtors.
          (h) Upon the bankruptcy or winding up or other distribution of assets
of any Borrower, or of any surety or guarantor (other than the applicable
Guarantor) for any Obligations of the Borrowers to the Lender Group, or any of
them, the rights of the Administrative Agent against any Guarantor shall not be
affected or impaired by the omission of any member of the Lender Group to prove
its claim, or to prove the full claim, as appropriate, against the Borrowers, or
any such other guarantor or surety, and the Administrative Agent may prove such
claims as it sees fit and may refrain from proving any claim and in its
discretion may value as it sees fit or refrain from valuing any security held by
it without in any way releasing, reducing or otherwise affecting the liability
to the Lender Group of each of the Guarantors.
          (i) Each Guarantor hereby absolutely, unconditionally and irrevocably
expressly waives, except to the extent such waiver would be expressly prohibited
by Applicable Law, the following: (i) notice of acceptance of this Guaranty,
(ii) notice of the existence or creation of all or any of the Obligations,
(iii) presentment, demand, notice of dishonor, protest and all other notices
whatsoever (other than notices expressly required hereunder or under any other
Loan Document to which any Guarantor is a party), (iv) all diligence in
collection or protection of or realization upon the Obligations or any part
thereof, any obligation hereunder, or any security for any of the foregoing,
(v) all rights to enforce any remedy which the Lender Group, or any of them, may
have against any Borrower and (vi) any and all rights under Official Code of
Georgia Sections 10-7-23 and 10-7-24 and any analogous statute in any other
applicable jurisdiction. If a claim is ever made upon any member of the Lender
Group for the repayment or recovery of any amount or amounts received by such
Person in payment of any of the Obligations and such Person repays all or part
of such amount by reason of (A) any judgment, decree or order of any court or
administrative body having jurisdiction over such Person or any of its property,
or (B) any settlement or compromise of any such claim effected by such Person
with any such claimant, including any Borrower, then in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
the cancellation of any promissory note or other instrument evidencing any of
the Obligations, and such Guarantor shall be and remain obligated to such Person
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by such Person.
          (j) This Guaranty is a continuing guaranty of the Obligations and all
liabilities to which it applies or may apply under the terms hereof and shall be
conclusively presumed to have been created in reliance hereon. No failure or
delay by any member of the Lender Group in the exercise of any right, power,
privilege or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Administrative

74

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

 

Agent of any right or remedy shall preclude other or further exercise thereof or
the exercise of any other right or remedy and no course of dealing between any
Guarantor and any member of the Lender Group shall operate as a waiver thereof.
No action by any member of the Lender Group permitted hereunder shall in any way
impair or affect this Guaranty. For the purpose of this Guaranty, the
Obligations shall include, without limitation, all Obligations of the Borrowers
to the Lender Group, notwithstanding any right or power of any third party,
individually or in the name of any Borrower and the Lender Group, or any of
them, to assert any claim or defense as to the invalidity or unenforceability of
any such Obligation, and no such claim or defense shall impair or affect the
obligations of any Guarantor hereunder.
          (k) This is a guaranty of payment and not of collection. In the event
the Administrative Agent makes a demand upon any Guarantor in accordance with
the terms of this Guaranty, such Guarantor shall be held and bound to the
Administrative Agent directly as debtor in respect of the payment of the amounts
hereby guaranteed. All costs and expenses, including, without limitation,
reasonable attorneys’ fees and expenses, incurred by the Administrative Agent in
obtaining performance of or collecting payments due under this Guaranty shall be
deemed part of the Obligations guaranteed hereby.
          (l) Each Subsidiary Guarantor is a direct or indirect wholly owned
Domestic Subsidiary of a Borrower. Each Guarantor expressly represents and
acknowledges that any financial accommodations by the Lender Group to the
Borrowers, including, without limitation, the extension of credit, are and will
be of direct interest, benefit and advantage to such Guarantor.
          (m) Each Guarantor shall be entitled to subrogation and contribution
rights from and against the Borrowers the extent any Guarantor is required to
pay to any member of the Lender Group any amount in excess of the Loans advanced
directly to, or other Obligations incurred directly by, such Guarantor or as
otherwise available under Applicable Law; provided, however, that such
subrogation and contribution rights are and shall be subject to the terms and
conditions of this Section 3.1 and Section 13.5. The payment obligation of a
Guarantor to any other Guarantor under any Applicable Law regarding contribution
rights among co-obligors or otherwise shall be subordinate and subject in right
of payment to the prior payment in full of the obligations of such Guarantor
under the other provisions of this Guaranty, and such Guarantor shall not
exercise any right or remedy with respect to such rights until payment and
satisfaction in full of all such obligations.
     Section 3.2 Special Provisions Applicable to Subsidiary Guarantors.
Pursuant to Section 6.20 of this Agreement, any new Domestic Subsidiary of any
Borrower is required to enter into this Agreement by executing and delivering to
the Administrative Agent a Guaranty Supplement. Upon the execution and delivery
of a Guaranty Supplement by such new Domestic Subsidiary, such Domestic
Subsidiary shall become a

75

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

 

Guarantor and Borrower Party hereunder with the same force and effect as if
originally named as a Guarantor or Borrower Party herein. The execution and
delivery of any Guaranty Supplement (or any other supplement to any Loan
Document delivered in connection therewith) adding an additional Guarantor as a
party to this Agreement or any other Applicable Loan Document shall not require
the consent of any other party hereto. The rights and obligations of each party
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor hereunder.
ARTICLE 4.
CONDITIONS PRECEDENT
     Section 4.1 Conditions Precedent to Initial Advance. The obligations of the
Lenders to undertake the Revolving Loan Commitments and to make the initial
Advance hereunder, and the obligation of the Issuing Banks to issue (or arrange
for the issuance of) the initial Letter of Credit hereunder, are subject to the
prior fulfillment of each of the following conditions:
          (a) The Administrative Agent shall have received each of the
following, in form and substance satisfactory to the Administrative Agent:
          (i) This duly executed Agreement;
          (ii) A duly executed Revolving Loan Note to the order of each Lender
requesting a promissory note in the amount of such Lender’s Revolving Commitment
Ratio of the Revolving Loan Commitment;
          (iii) The Security Agreement duly executed by the Borrower Parties,
together with Uniform Commercial Code financing statements related thereto;
          (iv) Original stock certificates evidencing the issued and outstanding
shares of capital stock pledged to the Administrative Agent pursuant to the
Security Agreement, together with stock powers or other appropriate instruments
of transfer executed in blank;
          (v) The duly executed Blocked Account Agreements required by
Section 6.15;
          (vi) The Fee Letter duly executed by the Borrowers;
          (vii) The duly executed Post-Closing Agreement;
          (viii) A satisfactory field audit of all Accounts and Inventory, and
completion of satisfactory appraisals of all Inventory, in form and substance

76

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

 

reasonably satisfactory to the Administrative Agent and completed by auditors
and appraisers selected by the Administrative Agent;
          (ix) The legal opinion of King & Spalding LLP, counsel to the Borrower
Parties, addressed to the Lender Group;
          (x) The legal opinion of (A) Parker Poe Adams & Bernstein LLP and
(B) Gray Robinson, P.A., local counsel to the Borrower Parties, addressed to the
Lender Group;
          (xi) The duly executed Request for Advance for the initial Advance of
the Loans;
          (xii) A duly executed Borrowing Base Certificate dated as of the
Agreement Date and calculated as of July 5, 2008;
          (xiii) A loan certificate signed by an Authorized Signatory of each
Borrower Party, including a certificate of incumbency with respect to each
Authorized Signatory of such Borrower Party, together with appropriate
attachments which shall include, without limitation, the following: (A) a copy
of Certificate of Incorporation or Formation of such Borrower Party certified to
be true, complete and correct by the Secretary of State of the State of such
Borrower Party’s incorporation or formation, (B) a true, complete and correct
copy of the By-Laws of such Borrower Party, (C) a true, complete and correct
copy of the resolutions of such Borrower Party authorizing the execution,
delivery and performance by such Borrower Party of the Loan Documents and
authorizing the borrowings or guaranty, as applicable, hereunder,
(D) certificates of good standing from each jurisdiction in which such Borrower
Party does business, and (E) copies of all agreements among the shareholders of
such Borrower Party to which such Borrower Party is a party and plans and
agreements (other than agreements entered into pursuant to or in connection with
a disclosed plan) providing for the grant, issuance or sale of Equity Interests
of such Borrower Party;
          (xiv) A Solvency Certificate executed by an Authorized Signatory of
the Administrative Borrower regarding the solvency and financial condition of
Parent and its Subsidiaries, together with a pro forma balance sheet giving
effect to the incurrence of the initial Advance and the issuance of the initial
Letter of Credit hereunder;
          (xv) Parent and its Subsidiaries (a) 2008 business plan including its
12 month income statement, balance sheet, statement of cash flows and
availability forecast and (b) monthly projections, including income statement,
balance sheet and statement of cash flows, through January 31, 2009;

77

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

 

          (xvi) Consolidated financial statements of Parent and its Subsidiaries
for the eight-month transition period ended February 2, 2008 and the fiscal
year-to-date period ended July 5, 2008, including balance sheets, income and
cash flow statements prepared in conformity with GAAP, and with respect to the
financial statements for the eight-month transition period ended February 2,
2008, audited by independent public accountants of recognized national standing;
          (xvii) Certificates of insurance and loss payable endorsements with
respect to the Borrower Parties, in each case, meeting the requirements of
Section 6.5;
          (xviii) Pay-off letters, termination statements, canceled mortgages
and the like required by the Administrative Agent in connection with the removal
of any Liens (other than Permitted Liens), including, without limitation, all
tax Liens, against the assets of the Borrower Parties;
          (xix) Lien search results with respect to the Borrower Parties from
all appropriate jurisdictions and filing offices;
          (xx) Evidence satisfactory to the Administrative Agent that the Liens
granted pursuant to the Security Documents will be first priority perfected
Liens on the Collateral (subject only to Permitted Liens);
          (xxi) Payment of all fees and expenses payable to the Administrative
Agent, the Affiliates of the Administrative Agent, and the Lenders in connection
with the execution and delivery of this Agreement, including, without
limitation, fees and expenses of counsel to the Administrative Agent;
          (xxii) A flow of funds report duly executed by the Administrative
Borrower which report shall include a statement of all sources and uses of funds
on the Agreement Date; and
          (xxiii) All such other documents as the Administrative Agent may
reasonably request, certified by an appropriate governmental official or an
Authorized Signatory if so requested.
          (b) The Lender Group shall have received evidence satisfactory to them
that no change in the business assets, management, operations or financial
condition of the Borrower Parties shall have occurred since February 2, 2008,
which change has had or could be reasonably expected to have a Materially
Adverse Effect, and the Lender Group shall have received a certificate of an
Authorized Signatory of the Administrative Borrower so stating.

78

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

 

          (c) The Lender Group shall have received the financial statements
described in Section 5.1(k), each in form and substance reasonably acceptable to
the members of the Lender Group.
          (d) The Lender Group shall have received evidence satisfactory to them
that all Necessary Authorizations are in full force and effect and are not
subject to any pending or threatened reversal or cancellation, that no other
consents or approvals are required and that no Default exists, after giving
effect to the initial Advance hereunder, and the Lender Group shall have
received a certificate of an Authorized Signatory of the Administrative Borrower
so stating.
          (e) The Administrative Agent shall have received confirmation that the
original Uniform Commercial Code financing statements naming the respective
Borrower Parties as debtor and the Administrative Agent as secured party have
been duly filed in all appropriate jurisdictions, in such form as shall be
satisfactory to the Administrative Agent.
          (f) The Administrative Agent shall have received a Borrowing Base
Certificate, in form and substance satisfactory to the Lender Group, reflecting
that, among other things, as of the Agreement Date, after giving effect to the
borrowings hereunder on the Agreement Date and the issuance of any Letters of
Credit hereunder on the Agreement Date, Availability shall not be less than
$75,000,000 (with trade payables being paid currently, expenses and liabilities
being paid in the ordinary course of business and without acceleration of sales
and without deterioration in working capital).
          (g) The Administrative Agent shall have completed such other business
and legal due diligence with respect to the Borrowers and the results thereof
shall be acceptable to the Administrative Agent, in its sole discretion.
     Section 4.2 Conditions Precedent to Each Advance. The obligation of the
Lenders to make each Advance, including the initial Advance hereunder (but
excluding Advances, the proceeds of which are to reimburse (i) the Swing Bank
for Swing Loans, (ii) the Administrative Agent for Agent Advances or (iii) the
Issuing Banks for amounts drawn under a Letter of Credit), is subject to the
fulfillment of each of the following conditions immediately prior to or
contemporaneously with such Advance:
          (a) All of the representations and warranties of the Borrower Parties
under this Agreement and the other Loan Documents, which, pursuant to
Section 5.4, are made at and as of the time of such Advance, shall be true and
correct in all material respects (without duplication of any materiality
qualifier contained therein) at such time, both before and after giving effect
to the application of the proceeds of the Advance;
          (b) Since February 2, 2008, there shall have been no change that has
had or could be reasonably expected to have a Materially Adverse Effect;

79

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

 

          (c) There shall not exist on the date of such Advance and after giving
effect thereto, a Default; and
          (d) The Administrative Agent and the Lenders shall have received all
such other certificates, reports, statements, opinions of counsel, or other
documents as the Administrative Agent or Lenders may reasonably request and all
other conditions to the making of such Advance which are set forth in this
Agreement shall have been fulfilled.
The Borrowers hereby agree that the delivery of any Request for Advance
hereunder or any telephonic request for an Advance hereunder shall be deemed to
be the certification of the Authorized Signatory thereof that all of the
conditions set forth in this Section 4.2 have been satisfied. Notwithstanding
the foregoing, if the conditions, or any of them, set forth above are not
satisfied, such conditions may be waived by the requisite Lenders under
Section 11.12.
     Section 4.3 Conditions Precedent to Each Letter of Credit. The obligation
of the Issuing Banks to issue (or arrange for the issuance of) each Letter of
Credit (including the initial Letter of Credit) hereunder is subject to the
fulfillment of each of the following conditions immediately prior to or
contemporaneously with the issuance of such Letter of Credit:
          (a) All of the representations and warranties of the Borrower Parties
under this Agreement and the other Loan Documents, which, pursuant to
Section 5.4, are made at and as of the time of the issuance of such Letter of
Credit, shall be true and correct in all material respects (without duplication
of any materiality qualifier contained therein) at such time, both before and
after giving effect to the issuance of such Letter of Credit;
          (b) Since February 2, 2008, there shall have been no change that has
had or could be reasonably expected to have a Materially Adverse Effect;
          (c) There shall not exist on the date of issuance of such Letter of
Credit, and after giving effect thereto, a Default; and
          (d) The Administrative Agent and the applicable Issuing Bank shall
have received all such other certificates, reports, statements, opinions of
counsel, or other documents as the Administrative Agent or such Issuing Bank may
reasonably request and all other conditions to the issuance of such Letter of
Credit which are set forth in this Agreement shall have been fulfilled.
The Borrowers hereby agree that the delivery of any Request for Issuance of a
Letter of Credit hereunder shall be deemed to be the certification of the
Authorized Signatory thereof that all of the conditions set forth in this
Section 4.3 have been satisfied. Notwithstanding the foregoing, if the
conditions, or any of them, set forth above are not satisfied, such conditions
may be waived by the requisite Lenders under Section 11.12.

80

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

 

ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
     Section 5.1 General Representations and Warranties. In order to induce the
Lender Group to enter into this Agreement and to extend the Loans and issue the
Letters of Credit to the Borrowers, each Borrower Party hereby represents and
warrants that:
          (a) Organization; Power; Qualification. Each Borrower Party (i) is a
corporation, partnership or limited liability company duly organized, validly
existing, and in good standing under the laws of its state of incorporation or
formation, (ii) has the corporate or other company power and authority to own or
lease and operate its properties and to carry on its business as now being and
hereafter proposed to be conducted, and (iii) is duly qualified and is in good
standing as a foreign corporation or other company, and authorized to do
business, in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization except in
each case where the failure to have such power and authority described in clause
(ii) above or to be so qualified as described in clause (iii) above would not
reasonably be expected to have a Materially Adverse Effect.
          (b) Authorization; Enforceability. Each Borrower Party has the power
and has taken all necessary action, corporate or otherwise, to authorize it to
execute, deliver, and perform its obligations under this Agreement and each of
the other Loan Documents to which it is a party in accordance with the terms
thereof and to consummate the transactions contemplated hereby and thereby. Each
of this Agreement and each other Loan Document to which a Borrower Party is a
party has been duly executed and delivered by such Borrower Party, and (except
for Requests for Advance, Requests for Issuance of Letters of Credit, Notices of
Conversion/Continuation, Notices of Requested Commitment Increases and Uniform
Commercial Code financing statements solely to the extent they do not contain
any affirmative obligations of the Borrower Parties) is a legal, valid and
binding obligation of such Borrower Party, enforceable in accordance with its
terms except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditor’s rights generally or by general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
          (c) Partnerships; Joint Ventures; Subsidiaries. Except as disclosed on
Schedule 5.1(c)-1, as of the Agreement Date, no Borrower Party or any Subsidiary
of a Borrower Party has any Subsidiaries, which Subsidiaries are identified on
such Schedule as Domestic Subsidiaries or Foreign Subsidiaries. As of the
Agreement Date, no Borrower Party or any Subsidiary of a Borrower Party is a
partner or joint venturer in any partnership or joint venture other than (i) the
Subsidiaries listed on Schedule 5.1(c)-1 and (ii) the partnerships and joint
ventures (that are not Subsidiaries) listed on Schedule 5.1(c)-2.
Schedule 5.1(c)-1 and Schedule 5.1(c)-2 set forth, for each Person set forth

81

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

 

thereon, a complete and accurate statement of (i) the percentage ownership of
each such Person by the applicable Borrower Party or Subsidiary of a Borrower
Party as of the Agreement Date, (ii) the state or other jurisdiction of
incorporation or formation, as appropriate, of each such Person as of the
Agreement Date, (iii) each state in which each such Person is qualified to do
business on the Agreement Date and (iv) all of each such Person’s trade names,
trade styles, “doing business as” or fictitious names which such Person has used
or under which such Person has transacted business during the five (5) year
period immediately preceding the Agreement Date.
          (d) Capital Stock and Related Matters. The authorized Equity Interests
as of the Agreement Date of each Borrower Party and each Subsidiary of a
Borrower Party that is a corporation and the number of shares of such Equity
Interests that are issued and outstanding as of the Agreement Date are as set
forth on Schedule 5.1(d). All of the shares of such Equity Interests in Domestic
Subsidiaries that are issued and outstanding as of the Agreement Date have been
duly authorized and validly issued and are fully paid and non-assessable. None
of such Equity Interests in Domestic Subsidiaries have been issued in violation
of the Securities Act, or the securities, “Blue Sky” or other Applicable Laws of
any applicable jurisdiction. As of the Agreement Date, the Equity Interests of
each such Borrower Party (other than Parent) and each such Subsidiary of a
Borrower Party are owned by the parties listed on Schedule 5.1(d) in the amounts
set forth on such schedule and a description of the Equity Interests of each
such party is listed on Schedule 5.1(d). As of the Agreement Date, except as
described on Schedule 5.1(d), no Borrower Party (other than Parent) or any
Subsidiary of a Borrower Party has outstanding any stock or securities
convertible into or exchangeable for any shares of its Equity Interests, nor are
there any preemptive or similar rights to subscribe for or to purchase, or any
other rights to subscribe for or to purchase, or any options for the purchase
of, or any agreements providing for the issuance (contingent or otherwise) of,
or any calls, commitments, or claims of any character relating to, any Equity
Interests or any stock or securities convertible into or exchangeable for any
Equity Interests. Except as set forth on Schedule 5.1(d), as of the Agreement
Date, no Borrower Party or any Subsidiary of any Borrower Party is subject to
any obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its Equity Interests or to register any shares of its
Equity Interests, and there are no agreements restricting the transfer of any
shares of such Borrower Party’s or such Subsidiary’s Equity Interests.
          (e) Compliance with Law, Loan Documents, and Contemplated
Transactions. The execution, delivery, and performance of this Agreement and
each of the other Loan Documents in accordance with their respective terms and
the consummation of the transactions contemplated hereby and thereby do not and
will not (i) violate any Applicable Law, (ii) conflict with, result in a breach
of, or constitute a default under the certificate of incorporation or formation
or by-laws, partnership agreement or operating agreement of any Borrower Party
or under any indenture, agreement, or other instrument to which any Borrower
Party is a party or by which any Borrower Party or any of its properties may be
bound, or (iii) result in or require the

82

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

 

creation or imposition of any Lien upon or with any assets or property of any
Borrower Party except Permitted Liens.
          (f) Necessary Authorizations. Each Borrower Party and each Subsidiary
of a Borrower Party has obtained all Necessary Authorizations, and all such
Necessary Authorizations are in full force and effect except, other than with
respect to the transactions contemplated by the Loan Documents, where failure to
obtain such Necessary Authorizations, or the failure of such Necessary
Authorizations to be in full force and effect, could not reasonably be expected
to have a Materially Adverse Effect. None of such Necessary Authorizations is
the subject of any pending or, to the best of each Borrower Party’s knowledge,
threatened attack or revocation, by the grantor of the Necessary Authorization
except, other than with respect to the transactions contemplated by the Loan
Documents, where the revocation by the grantor of such Necessary Authorizations
could not reasonably be expected to have a Materially Adverse Effect.
          (g) Title to Properties. Each Borrower Party has good and marketable
title to, or a valid leasehold interest in, all of its properties and assets
except as could not, individually or in the aggregate, be expected to have a
Materially Adverse Effect, and none of such properties or assets is subject to
any Liens, other than Permitted Liens.
          (h) Material Contracts. Schedule 5.1(h) contains a complete list, as
of the Agreement Date, of each Material Contract, true, correct and complete
copies of which have been delivered to the Administrative Agent. Schedule 5.1(h)
further identifies, as of the Agreement Date, each Material Contract that
requires consent to the granting of a Lien in favor of the Administrative Agent
on the rights of any Borrower Party thereunder. No Borrower Party or any
Subsidiary of a Borrower Party is in default under or with respect to any
Material Contract to which it is a party or by which it or any of its properties
are bound which default gives rise to a right of termination by the
non-defaulting party and which Material Contract, if terminated, could
reasonably be expected to have a Materially Adverse Effect.
          (i) Labor Matters. Except as disclosed on Schedule 5.1(i): as of the
Agreement Date, (i) no Borrower Party is engaged in any unfair labor practice;
(ii) there is no unfair labor practice complaint pending against any Borrower
Party before the National Labor Relations Board and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement that is
so pending against any Borrower Party; and (iii) no strike or work stoppage is
in existence involving any employees of any Borrower Party, except (with respect
to any matter specified in clause (i) or (ii) above) such as could not
reasonably be expected to have a Materially Adverse Effect.
          (j) Taxes. Except as set forth on Schedule 5.1(j), all federal, state
and other material tax returns of each Borrower Party required by law to be
filed have been filed, and all federal, state and other material taxes
(including without limitation, all real estate and personal property, income,
franchise, transfer and gains taxes), assessments, governmental charges or
levies upon each Borrower Party and any of their respective

83

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

 

properties, income, profits, and assets, which are shown thereon to be due and
payable, have been paid, except any payment of any of the foregoing which such
Borrower Party or such Subsidiary, as applicable, is currently contesting in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of such Borrower Party or
such Subsidiary, as the case may be. As of the Agreement Date, no adjustment
relating to any tax returns has been proposed formally or informally by any
Governmental Authority and, to the knowledge of each Borrower Party, no basis
exists for any such adjustment, except as reflected in the charges, accruals and
reserves on the books of the Borrower Parties and their Subsidiaries. The
charges, accruals, and reserves on the books of the Borrower Parties and their
Subsidiaries in respect of taxes are, in the good faith judgment of the Borrower
Parties, adequate. Except as set forth on Schedule 5.1(j), as of the Agreement
Date, no Borrower Party or any Subsidiary of a Borrower Party has knowledge of
any pending audit by the Internal Revenue Service or any other taxing authority.
          (k) Financial Statements. The Borrowers have furnished, or have caused
to be furnished, to the Lenders (i) the audited consolidated financial
statements of Parent and its Subsidiaries which present fairly in accordance
with GAAP the financial position of Parent and its Subsidiaries as at
February 2, 2008, and the results of operations for the eight-month transition
period then ended, and (ii) the unaudited interim consolidated financial
statements of Parent and its Subsidiaries which present fairly in accordance
with GAAP, subject to normal year end adjustments, the financial position of
Parent and its Subsidiaries as at May 3, 2008, and the results of operations for
the three-month period then ended.
          (l) No Adverse Change. Since February 2, 2008, there has occurred no
event which has had or could reasonably be expected to have a Materially Adverse
Effect.
          (m) Intentionally Omitted .
          (n) Liabilities, Litigation, etc. As of the Agreement Date, except for
liabilities incurred in the normal course of business, no Borrower Party or any
Subsidiary of any Borrower Party has any liabilities exceeding (individually or
in the aggregate) $7,500,000, direct or contingent, except as disclosed or
referred to in the financial statements referred to in Section 5.1(k) or with
respect to the Obligations and the Senior Notes. As of the Agreement Date,
except as described on Schedules 5.1(n) and 5.1(y), there is no litigation,
legal or administrative proceeding, investigation, or other action of any nature
pending or, to the knowledge of the Borrower Parties, threatened against or
affecting any Borrower Party, any Subsidiary of any Borrower Party or any of
their respective properties which could reasonably be expected to result in any
judgment against or liability of such Borrower Party or Subsidiary in excess of
$7,500,000 individually and in the aggregate with respect to all Borrower
Parties and their Subsidiaries, or the loss of any certification or license the
loss of which could reasonably

84

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

 

be expected to have a Materially Adverse Effect. None of such litigation
disclosed on Schedules 5.1(n) and 5.1(y), individually or collectively, could
reasonably be expected to have a Materially Adverse Effect.
          (o) ERISA. Each Borrower Party and each Plan are in compliance in all
material respects with ERISA and the Code, and no Borrower Party nor any of its
ERISA Affiliates has incurred any accumulated funding deficiency within the
meaning of ERISA or the Code with respect to any such Plan that is subject to
the minimum funding requirements of ERISA or the Code. Each Borrower Party and
each of its ERISA Affiliates have complied with all material requirements of
Sections 601 through 608 of ERISA and Section 4980B of the Code. No Borrower
Party has made any promises of retirement or other benefits to employees, except
as set forth in the Plans. No Borrower Party has incurred any material liability
to the PBGC in connection with any such Plan. No Reportable Event has occurred
and is continuing with respect to any such Plan. No such Plan or trust created
thereunder, or party in interest (as defined in Section 3(14) of ERISA, or any
fiduciary (as defined in Section 3(21) of ERISA), has engaged in a non-exempt
“prohibited transaction” (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) which would subject any Borrower Party to any penalty
or tax on “prohibited transactions” imposed by Section 502 of ERISA or
Section 4975 of the Code that could reasonably be expected to have a Materially
Adverse Effect. No Borrower Party or any ERISA Affiliate is a participant in or
is obligated to make any payment to a Multiemployer Plan.
          (p) Intellectual Property; Licenses; Certifications. As of the
Agreement Date, except as set forth on Schedule 5.1(p), no Borrower Party owns
any registered patents, trademarks, service marks or copyrights, and has no
pending registration applications with respect to any of the foregoing. As of
the Agreement Date, the Borrower Parties own or otherwise have the right to use
all patents, trademarks, service marks or copyrights necessary for the operation
of the business of the Borrower Parties as currently conducted, except for any
such the failure to so own or have the right to use could not reasonably be
expected to have a Materially Adverse Effect.
          (q) Compliance with Law; Absence of Default. Each Borrower Party and
each Subsidiary of a Borrower Party is in compliance with all Applicable Laws
and with all of the provisions of its certificate of incorporation or formation
and by-laws or other governing documents except where the failure to be in
compliance could not reasonably be expected to have a Materially Adverse Effect,
and no event has occurred or has failed to occur which has not been remedied or
waived, the occurrence or non-occurrence of which constitutes a Default.
          (r) Intentionally Omitted.
          (s) Accuracy and Completeness of Information. All written information,
reports, other papers and data relating to the Borrower Parties and their
Subsidiaries furnished by or at the direction of the Borrower Parties to the
Lender Group

85

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

 

(other than projections, estimates and forecasts) were, at the time furnished,
complete and correct in all material respects. With respect to projections,
estimates and forecasts given to the Lender Group, such projections, estimates
and forecasts are based on the Borrower Parties’ good faith assessment of the
future of the business at the time made. The Borrower Parties had a reasonable
basis for such assessment at the time made.
          (t) Compliance with Regulations T, U, and X. No Borrower Party is
engaged principally in the business of, or has as one of its important
activities, extending credit for the purpose of purchasing or carrying, any
“margin security” or “margin stock” as defined in Regulations T, U and X of the
Board of Governors of the Federal Reserve System (herein called “Margin Stock”).
None of the proceeds of the Loans will be used, directly or indirectly, for the
purpose of purchasing or carrying any Margin Stock or for the purpose of
reducing or retiring any Funded Debt which was originally incurred to purchase
or carry Margin Stock or for any other purpose which might constitute this
transaction a “purpose credit” within the meaning of said Regulations T, U and
X. If so requested by the Administrative Agent, the Borrowers will furnish the
Administrative Agent with (i) a statement or statements in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation U of said
Board of Governors and (ii) other documents evidencing its compliance with the
margin regulations reasonably requested by the Administrative Agent. Neither the
making of the Loans nor the use of proceeds thereof will violate the provisions
of Regulation T, U or X of said Board of Governors.
          (u) Solvency. As of the Agreement Date and after giving effect to the
transactions contemplated by the Loan Documents (i) the property of each
Borrower, individually, and the Borrower Parties, taken as a whole, at a fair
valuation on a going concern basis, will exceed its or their, as applicable,
debt; (ii) the capital of each Borrower Party will not be unreasonably small to
conduct its business; and (iii) no Borrower Party will have incurred debts, or
have intended to incur debts, beyond its ability to pay such debts as they
mature. For purposes of this Section, “debt” shall mean any liability on a
claim, and “claim” shall mean (A) the right to payment, whether or not such
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, undisputed, legal, equitable, secured or unsecured, or
(B) the right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured,
undisputed, secured or unsecured.
          (v) Insurance. As of the Agreement Date, all material insurance
policies and coverages maintained by the Borrower Parties and their Subsidiaries
are described on Schedule 5.1(v).
          (w) Intentionally Omitted.
          (x) Real Property. All real property leased by each Borrower Party as
of the Agreement Date where Collateral is located is set forth in
Schedule 5.1(x)-1. All

86

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

 

real property owned by each Borrower Party as of the Agreement Date is set forth
in Schedule 5.1(x)-2.
          (y) Environmental Matters.
          (i) Except as specifically disclosed in Schedule 5.1(y) or as could
not, individually or in the aggregate, reasonably be expected to have a
Materially Adverse Effect, no Borrower Party or any Subsidiary thereof (A) 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,
(B) has received notice of any claim with respect to any Environmental Law or
(C) knows of any basis for any liability under any Environmental Law.
          (ii) Except in each case, as could not, individually or in the
aggregate, reasonably be expected to have a Materially Adverse Effect or as
otherwise set forth in Schedule 5.1(y), (A) there are no and never have been any
underground or above-ground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are being or have
been treated, stored or disposed on any property currently owned or, to the
knowledge of any Borrower Party, operated by any Borrower Party; (B) there is no
asbestos or asbestos-containing material on any property currently owned or, to
the knowledge of any Borrower Party, operated by any Borrower Party or; and
(C) to the knowledge of the Borrower Parties, Hazardous Materials have not been
released, discharged or disposed of on any property currently or formerly owned
or operated by any Borrower Party or any Subsidiary thereof.
          (iii) Except in each case, as could not, individually or in the
aggregate, reasonably be expected to have a Materially Adverse Effect or as
otherwise set forth on Schedule 5.1(y), (i) no Borrower Party or any Subsidiary
thereof is undertaking, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation, either voluntarily or
pursuant to the order of any Governmental Authority or the requirements of any
Environmental Law; and (ii) all Hazardous Materials generated, used, treated,
handled or stored at, or transported to or from, any property currently or
formerly owned or operated by any Borrower Party or any Subsidiary thereof have
been disposed of in a manner not reasonably expected to result in liability to
any Borrower Party or any Subsidiary thereof.
          (z) Intentionally Omitted.
          (aa) Name of Borrower Party. Except as set forth on Schedule 5.1(aa),
no Borrower Party has changed its name within the preceding five (5) years from
the Agreement Date.

87

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

 

          (bb) Investment Company Act. No Borrower Party or any Subsidiary of a
Borrower Party is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance by
the Borrower Parties of this Agreement nor the issuance of any Revolving Loan
Notes violates any provision of such Act or requires any consent, approval, or
authorization of, or registration with, any governmental or public body or
authority pursuant to any of the provisions of such Act.
          (cc) Permitted Debt and Permitted Lien Status. The Obligations as and
when incurred shall constitute permitted Indebtedness (as defined in the
Indenture) under the Senior Notes Documents, and all Liens granted to the
Administrative Agent under the Loan Documents shall constitute Permitted Liens
(as defined in the Indenture) under the Senior Notes Documents.
          (dd) Holding Company Status. US Ben Sherman Holdco does not (x) have
any material liabilities other than intercompany Funded Debt permitted hereunder
or (y) own any material assets or engage in any material activity or business
other than its ownership of the Equity Interests of Oxford Industries (UK 1) and
the intercompany Funded Debt permitted hereunder that is owed to it.
          (ee) OFAC. None of the Borrower Parties, any Subsidiary of Parent, any
Affiliate of the Borrower Parties (other than an Affiliate that is a shareholder
of Parent) or, to the knowledge of any Borrower Party as of the Agreement Date,
any Affiliate that is a shareholder of Parent (i) is a Sanctioned Person,
(ii) has more than 15% of its assets in Sanctioned Countries, or (iii) derives
more than 15% of its operating income from investments in, or transactions with
Sanctioned Persons or Sanctioned Countries. No part of the proceeds of any Loans
hereunder will be used directly or indirectly to fund any operations in, finance
any investments or activities in or make any payments to, a Sanctioned Person or
a Sanctioned Country or for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.
          (ff) Patriot Act. Neither any Borrower Party nor any of its
Subsidiaries is an “enemy” or an “ally of the enemy” within the meaning of
Section 2 of the Trading with the Enemy Act of the United States of America (50
U.S.C. App. §§ 1 et seq.), as amended or any enabling legislation or executive
order relating thereto. Neither any Borrower Party nor any or its Subsidiaries
is in violation of (a) the Trading with the Enemy Act, as amended, (b) any of
the foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto or (c) the USA Patriot Act. None of the
Borrower Parties (i) is a blocked person described in section 1 of the Executive

88

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

 

Order No. 13224 or (ii) to the best of its knowledge, engages in any dealings or
transactions, or is otherwise associated, with any such blocked person.
          (gg) License Agreements. As of the Agreement Date, all License
Agreements of the Borrower Parties are listed on Schedule 5.1(gg).
     Section 5.2 Representations and Warranties Relating to Credit Card
Receivables and Accounts Receivables. With respect to all Accounts of each
Borrower Party, such Borrower Party hereby warrants and represents to the Lender
Group that such Accounts are bona fide existing payment obligations of Account
Debtors created by the sale and delivery of Inventory or the rendition of
services to such Account Debtors in the ordinary course of such Borrower Party’s
business. As to each Account that was included by such Borrower Party as an
Eligible Account or an Eligible Credit Card Receivable in the most recent
Borrowing Base Certificate submitted to the Administrative Agent by the
Administrative Borrower, such Account was not ineligible (to the Administrative
Borrower’s knowledge with respect to any Account deemed ineligible by the
Administrative Agent in the exercise of its Permitted Discretion) by virtue of
one or more of the excluding criteria set forth in the definition of Eligible
Accounts or Eligible Credit Card Receivables, as applicable, as of the date of
such Borrowing Base Certificate.
     Section 5.3 Representations and Warranties Relating to Inventory. As to
Inventory that was included by such Borrower Party as Eligible Inventory in the
most recent Borrowing Base Certificate submitted to the Administrative Agent by
the Administrative Borrower, such Inventory was not ineligible (to the
Administrative Borrower’s knowledge with respect to any Account deemed
ineligible by the Administrative Agent in the exercise of its Permitted
Discretion) by virtue of one or more of the applicable excluding criteria set
forth in the definition of Eligible Domestic Inventory, Eligible In-Transit
Inventory and Eligible L/C Inventory, as the case may be, as of the date of such
Borrowing Base Certificate.
     Section 5.4 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made, and shall be true and correct, at and as
of the Agreement Date and the date of each Advance or issuance of a Letter of
Credit hereunder, except to the extent previously fulfilled in accordance with
the terms of this Agreement or the other Loan Documents and to the extent
subsequently inapplicable. All representations and warranties made under this
Agreement and the other Loan Documents shall survive, and not be waived by, the
execution hereof by the Lender Group, or any of them, any investigation or
inquiry by any member of the Lender Group, or the making of any Advance or the
issuance of any Letter of Credit under this Agreement.

89

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

 

ARTICLE 6.
GENERAL COVENANTS
     Until the later of the date the Obligations are repaid in full or the date
the Borrowers no longer have the right to borrow, or have Letters of Credit
issued, hereunder (whether or not the conditions to borrowing have been or can
be fulfilled), and unless the Majority Lenders shall otherwise give their prior
consent in writing:
     Section 6.1 Preservation of Existence and Similar Matters. Each Borrower
Party will, and will cause each of its Subsidiaries to (i) except as expressly
permitted by Section 8.7, preserve and maintain its existence, and, solely with
respect to its Domestic Subsidiaries, maintain its due organization, valid
existence and good standing, in each case in its jurisdiction of incorporation
or organization, (ii) qualify and remain qualified and authorized to do business
in each jurisdiction in which the character of its properties or the nature of
its business requires such qualification or authorization except where the
failure to be so qualified would not reasonably be expected to have a Materially
Adverse Effect, and (iii) maintain all Necessary Authorizations except where the
failure to maintain such Necessary Authorizations would not reasonably be
expected to have a Materially Adverse Effect.
     Section 6.2 Compliance with Applicable Law. Each Borrower Party will, and
will cause each of its Subsidiaries to, comply, in all material respects, with
the requirements of all Applicable Law, except where the failure to so comply
could not reasonably be expected to have a Materially Adverse Effect.
     Section 6.3 Maintenance of Properties. Each Borrower Party will, and will
cause each of its Domestic Subsidiaries to, maintain or cause to be maintained
in the ordinary course of business in good repair, working order and condition,
normal wear and tear and disposal of obsolete equipment excepted, all properties
used or useful in its business (whether owned or held under lease), and from
time to time make or cause to be made all needed and appropriate repairs,
renewals, replacements, additions, betterments, and improvements thereto, except
where the failure to do so could not reasonably be expected to have a Materially
Adverse Effect.
     Section 6.4 Accounting Methods and Financial Records. Each Borrower Party
will, and will cause each of its Domestic Subsidiaries to, maintain a system of
accounting established and administered in accordance with GAAP and will keep
adequate records and books of account in which complete entries will be made in
accordance with such accounting principles consistently applied and reflecting
all transactions required to be reflected by such accounting principles.
     Section 6.5 Insurance. Each Borrower Party will, and will cause each of its
Subsidiaries to, maintain insurance including, but not limited to, public
liability, property insurance, comprehensive general liability, product
liability, business interruption and

90

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

 

fidelity coverage insurance, in such amounts and against such risks as would be
customary for companies in the same industry and of comparable size as the
Borrower Parties and their Subsidiaries from financially sound and reputable
insurance companies having and maintaining an A.M. Best rating of “A minus” or
better and being in a size category of VI or larger or otherwise acceptable to
the Administrative Agent. Without limitation to the foregoing, each Borrower
Party further agrees to maintain and pay for, or cause to be paid for, insurance
upon all goods constituting Collateral wherever located, in storage or in
transit in vehicles, vessels or aircraft, including goods evidenced by
documents, covering casualty, hazard, public liability and such other risks and
in such amounts as would be customary for companies in the same industry and of
comparable size as the Borrower Parties, from financially sound and reputable
insurance companies having and maintaining an A.M. Best rating of “A minus” or
better and being in a size category of VI or larger or otherwise acceptable to
the Administrative Agent to insure the Lender Group’s interest in such
Collateral. All such insurance policies covering goods that constitute
Collateral shall name the Administrative Agent as loss payee and all general
liability insurance policies of the Borrower Parties shall name the
Administrative Agent as additional insured (other than insurance policies
subject to the terms and conditions of the Post-Closing Agreement). Subject to
the terms and conditions of the Post-Closing Agreement with respect to insurance
policies of the Borrower Parties in foreign jurisdictions, each Borrower Party
shall deliver the original certificates of insurance or banker’s endorsements
evidencing that the required liability insurance policies of the Borrower
Parties naming the Administrative Agent as additional insured is in force
together with satisfactory lender’s loss payable endorsements or banker’s
endorsements with respect to insurance covering goods that constitute
Collateral. Each policy of insurance or endorsement with respect to property
coverage shall contain a clause requiring the insurer to give not less than
thirty (30) days’ prior written notice (or ten (10) days’ prior written notice
with respect to any cancellation for non-payment of premium) to the
Administrative Agent in the event of cancellation or modification of the policy
for any reason whatsoever and a clause that the interest of the Administrative
Agent shall not be impaired or invalidated by any act or neglect of any Borrower
Party or owner of the Collateral. If any Borrower Party fails to provide and pay
for such insurance, the Administrative Agent may, at the Borrowers’ expense,
procure the same, but shall not be required to do so. Each Borrower Party agrees
to deliver to the Administrative Agent, promptly as rendered, true copies of all
reports made in any reporting forms to insurance companies.
     Section 6.6 Payment of Taxes and Claims. Each Borrower Party will, and will
cause each of its Subsidiaries to, pay and discharge all taxes, assessments, and
governmental charges or levies imposed upon it or its income or profit or upon
any properties belonging to it prior to the date on which penalties attach
thereto, and all lawful claims for labor, materials and supplies which have
become due and payable and which by law have or may become a Lien upon any of
its Property; except that, no such tax, assessment, charge, levy, or claim need
be paid which is being contested in good faith by appropriate proceedings and
for which adequate reserves shall have been set

91

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

 

aside on the appropriate books, but only so long as such tax, assessment,
charge, levy, or claim does not become a Lien or charge other than a Permitted
Lien and no foreclosure, distraint, sale, or similar proceedings shall have been
commenced and remain unstayed for a period thirty (30) days after such
commencement. Each Borrower Party shall, and shall cause each of its
Subsidiaries to, timely file all information returns required by federal, state,
or local tax authorities.
     Section 6.7 Visits and Inspections. Each Borrower Party will, and will
permit each of its Subsidiaries to, permit representatives of the Administrative
Agent to (a) visit and inspect the properties of the Borrower Parties and their
Subsidiaries during normal business hours, (b) inspect and make extracts from
and copies of the Borrower Parties’ and their Subsidiaries’ books and records,
and (c) discuss with the Borrower Parties’ and their Subsidiaries’ respective
principal officers the Borrower Parties’ or such Subsidiaries’ businesses,
assets, liabilities, financial positions, results of operations, and business
prospects relating to the Borrower Parties or such Subsidiaries; provided,
however, Borrowers shall only be obligated to pay for one field audit and one
appraisal in any twelve (12) month period unless (i) Availability is less than
or equal to twenty percent (20%) of the amount of the Revolving Loan Commitment
then in effect, in which case the Borrowers shall be obligated to pay for two
field audits and two appraisals during any twelve (12) month period or (ii) an
Event of Default has occurred and is continuing, in which case, the Borrowers
shall pay for all field audits and appraisals, as determined by the
Administrative Agent in its sole and absolute discretion; provided, further, any
field exam or appraisal conducted pursuant to Section 8.7(d) shall not count
against the limitations on field exams and appraisals described above. Any other
member of the Lender Group may, at its expense, accompany the Administrative
Agent on any regularly scheduled visit (or at any time that a Default exists any
visit regardless of whether it is regularly scheduled) to the Borrower Parties
and their Subsidiaries’ properties.
     Section 6.8 Intentionally Omitted .
     Section 6.9 ERISA. Each Borrower Party shall at all times make, or cause to
be made, prompt payment of contributions required to meet the minimum funding
standards set forth in ERISA with respect to each Borrower Party’s and its ERISA
Affiliates’ Plans that are subject to such funding requirements; furnish to the
Administrative Agent, promptly upon the Administrative Agent’s request therefor,
copies of any annual report required to be filed pursuant to ERISA in connection
with each such Plan of each Borrower Party and its ERISA Affiliates; notify the
Administrative Agent as soon as practicable of any ERISA Event that could
reasonably be expected to have a Materially Adverse Effect; and furnish to the
Administrative Agent, promptly upon the Administrative Agent’s request therefor,
such additional information concerning any such Plan as may be reasonably
requested by the Administrative Agent.

92

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

 

     Section 6.10 Lien Perfection. Each Borrower Party agrees to take such
action as may be reasonably requested by the Administrative Agent to perfect or
continue the perfection of the Administrative Agent’s (on behalf of, and for the
benefit of, the Lender Group) security interest in the Collateral. Each Borrower
Party hereby authorizes the Administrative Agent to file any such financing
statement on such Borrower Party’s behalf describing the Collateral as “all
assets of the debtor” or “all personal property of the debtor.”
     Section 6.11 Location of Collateral. All tangible property owned by a
Borrower Party constituting Collateral, other than Inventory in transit,
Inventory sold or consigned for sale in the ordinary course of business and raw
materials and work-in-process located at manufacturing sites outside the US and
Canada, is on the Agreement Date kept by the Borrower Parties at one or more of
the business locations of the Borrower Parties set forth in Schedule 6.11. The
Inventory shall not, without the prior written approval of the Administrative
Agent, be moved from the locations set forth on Schedule 6.11 except for
(a) Inventory in transit, (b) raw materials and work-in-process located at
manufacturing sites outside the US and Canada, (c) sales or other dispositions
of assets permitted pursuant to Section 8.7 or consignments for sale in the
ordinary course of business and (d) locations within the US or Canada (other
than the Province of Quebec) other than those specified in the first sentence of
this Section 6.11 if (i) the Administrative Borrower gives the Administrative
Agent reasonable notice of the new location and (ii) the Lender Group’s security
interest in such Inventory is and continues to be a duly perfected, first
priority Lien thereon.
     Section 6.12 Protection of Collateral. All insurance expenses and expenses
of protecting, storing, warehousing, insuring, handling, maintaining and
shipping the Collateral (including, without limitation, all rent payable by any
Borrower Party to any landlord of any premises where any of the Collateral may
be located), and any and all excise, property, sales, and use taxes imposed by
any state, federal, or local authority on any of the Collateral or in respect of
the sale thereof, shall be borne and paid by the Borrower Parties. If the
Borrower Parties fail to promptly pay any portion thereof when due, the Lenders
may, at their option during the existence of an Event of Default, but shall not
be required to, make a Base Rate Advance for such purpose and pay the same
directly to the appropriate Person. The Borrower Parties agree to reimburse the
Lenders promptly therefor with interest accruing thereon daily at the Default
Rate provided in this Agreement. All sums so paid or incurred by the Lenders for
any of the foregoing and all reasonable costs and expenses (including attorneys’
fees, legal expenses, and court costs) which the Lenders may incur in enforcing
or protecting the Lien on or rights and interest in the Collateral or any of
their rights or remedies under this or any other agreement between the parties
hereto or in respect of any of the transactions to be had hereunder until paid
by the Borrowers to the Lenders with interest at the Default Rate, shall be
considered Obligations owing by the Borrowers to the Lenders hereunder. Such
Obligations shall be secured by all Collateral and by any and all other
collateral, security, assets, reserves, or funds of the Borrower Parties in or
coming into the hands or inuring to

93

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

 

the benefit of the Lenders. Neither the Administrative Agent nor the Lenders
shall be liable or responsible in any way for the safekeeping of any of the
Collateral or for any loss or damage thereto (except for reasonable care in the
custody thereof while any Collateral is in the Administrative Agent’s or the
Lenders’ actual possession) or for any diminution in the value thereof, or for
any act or default of any warehouseman, carrier, forwarding agency, or other
person whomsoever, but the same shall be at the Borrower Parties’ sole risk.
     Section 6.13 Assignments and Records of Accounts. If so requested by the
Administrative Agent during the continuance of an Event of Default, each
Borrower Party shall execute and deliver to the Administrative Agent, for the
benefit of the Lender Group, formal written assignments of all of the Accounts
constituting Collateral daily, which shall include all such Accounts that have
been created since the date of the last assignment, together with copies of
invoices or invoice registers related thereto. Each Borrower Party shall keep in
all material respects accurate and complete records of the Accounts and all
payments and collections thereon.
     Section 6.14 Administration of Accounts.
          (a) The Administrative Agent retains the right after the occurrence
and during the continuance of an Event of Default to notify the Account Debtors
to pay all amounts owing on Accounts constituting Collateral to the
Administrative Agent, for the benefit of the Lender Group, and to collect the
Accounts directly in its own name and to charge the collection costs and
expenses, including attorneys’ fees, to the Borrower Parties. The Administrative
Agent has no duty to protect, insure, collect or realize upon the Accounts or
preserve rights in them. Each Borrower Party irrevocably makes, constitutes and
appoints the Administrative Agent as such Borrower Party’s true and lawful
attorney and agent-in-fact to endorse such Borrower Party’s name on any checks,
notes, drafts or other payments relating to the Accounts which come into the
Administrative Agent’s possession or under the Administrative Agent’s control as
a result of its taking any of the foregoing actions. Additionally, upon the
occurrence and during the continuance of an Event of Default, the Administrative
Agent, for the benefit of the Lender Group, shall have the right to collect and
settle or adjust all disputes and claims directly with the Account Debtor and to
compromise the amount or extend the time for payment of the Accounts upon such
terms and conditions as the Administrative Agent may deem advisable, and to
charge the deficiencies, reasonable costs and expenses thereof, including
attorney’s fees, to the Borrower Parties.
          (b) If an Account includes a charge for any tax payable to any
governmental taxing authority, upon the occurrence and during the continuance of
an Event of Default, the Administrative Agent on behalf of the Lenders is
authorized, in its sole discretion, to pay the amount thereof to the proper
taxing authority for the account of the applicable Borrower Party and to make a
Base Rate Advance to the Borrowers to pay therefor. The Borrower Parties shall
notify the Administrative Agent if any Account

94

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

 

includes any tax due to any governmental taxing authority and, in the absence of
such notice, the Administrative Agent shall have the right to retain the full
proceeds of the Account and shall not be liable for any taxes to any
governmental taxing authority that may be due by any Borrower Party by reason of
the sale and delivery creating the Account.
          (c) Whether or not a Default has occurred, any of the Administrative
Agent’s officers, employees or agents shall have the right after prior notice to
the Administrative Borrower (provided no prior notice shall be required if an
Event of Default shall have occurred and be continuing), at any time or times
hereafter, in the name of the Lenders, or any designee of the Lenders or the
Borrower Parties, to verify the validity, amount or other matter relating to any
Accounts by mail, telephone, telegraph or otherwise. The Borrower Parties shall
cooperate fully with the Administrative Agent and the Lenders in an effort to
facilitate and promptly conclude any such verification process.
     Section 6.15 Blocked Account Agreements.
          (a) Each deposit account and securities account owned or maintained by
the Borrower Parties (other than an Excluded Deposit Account) shall be
maintained at a bank or financial institution which is reasonably acceptable to
the Administrative Agent (each such bank, a “Cash Management Bank”). As of the
Agreement Date, each deposit account and securities account of the Borrower
Parties are listed on Schedule 6.15 and such schedule designates which accounts
are deposit accounts. Except with respect to Excluded Accounts or with the prior
written consent of the Administrative Agent, each deposit account and securities
account maintained by any Borrower Party shall be subject to a control agreement
in form and substance satisfactory to the Administrative Agent and such bank or
financial institution (each such account, a “Blocked Account Agreement”). Each
such Blocked Account Agreement shall provide, among other things, that from and
after the Agreement Date, the relevant Cash Management Bank, agrees, from and
after the receipt of a notice (an “Activation Notice”) from the Administrative
Agent (which Activation Notice shall be given by the Administrative Agent at any
time at which (i) an Event of Default has occurred and is continuing or
(ii) Availability for three (3) consecutive Business Days is less than the
greater of (A) $26,250,000 and (B) fifteen percent (15%) of the amount of the
Revolving Loan Commitment then outstanding (the foregoing being referred to
herein as an “Activation Event”)), to forward immediately all amounts in each
deposit account or securities account, as the case may be to the Administrative
Agent per its instructions and to commence the process of daily sweeps from such
account to the Administrative Agent.
          (b) The Borrower Parties shall take all steps to ensure that all of
their Account Debtors and all of their Credit Card Processors forward all items
of payment to lockboxes established with the Cash Management Banks. The Borrower
Parties shall irrevocably instruct such Credit Card Processors to forward all
items of payment owing to the Borrower Parties directly to a deposit account
subject to a Blocked Account

95

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

 

Agreement (a “Blocked Account”).
          (c) In the event that any Borrower Party shall at any time receive any
remittances of any of the foregoing directly or shall receive any other funds
representing proceeds of the Collateral, such Borrower Party shall hold the same
as trustee for the Administrative Agent, shall segregate such remittances from
its other assets, and shall promptly deposit the same into a Blocked Account.
All cash, cash equivalents, checks, notes, drafts or similar items of payment
received by any Borrower Party shall be deposited into a Blocked Account
promptly upon receipt thereof by such Borrower Party.
     Section 6.16 Further Assurances. Upon the request of the Administrative
Agent, each Borrower Party will promptly cure, or cause to be cured, defects in
the creation and issuance of any Revolving Loan Notes and the execution and
delivery of the Loan Documents (including this Agreement), resulting from any
act or failure to act by any Borrower Party or any employee or officer thereof.
Each Borrower Party at its expense will promptly execute and deliver to the
Administrative Agent and the Lenders, or cause to be executed and delivered to
the Administrative Agent and the Lenders, all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the
covenants and agreements of the Borrower Parties in the Loan Documents
(including this Agreement), or to correct any omissions in the Loan Documents,
or more fully to state the obligations set out herein or in any of the Loan
Documents, or to obtain any consents, all as may be necessary or appropriate in
connection therewith.
     Section 6.17 Intentionally Omitted .
     Section 6.18 Indemnity. Each Borrower Party will indemnify and hold
harmless each Indemnified Person from and against any and all claims,
liabilities, investigations, losses, damages, actions, demands, penalties,
judgments, suits, investigations and costs, expenses (including reasonable fees
and expenses of experts, agents, consultants and counsel) and disbursements, in
each case, of any kind or nature (whether or not the Indemnified Person is a
party to any such action, suit or investigation) whatsoever which may be imposed
on, incurred by, or asserted against an Indemnified Person resulting from any
breach by the Borrower Parties of any representation or warranty made hereunder,
or otherwise in any way relating to or arising out of the Revolving Loan
Commitments, this Agreement, the other Loan Documents or any other document
contemplated by this Agreement, the making, administration or enforcement of the
Loan Documents and the Loans, any transaction contemplated hereby or any related
matters unless, with respect to any of the above, such Indemnified Person is
determined by a final non-appealable judgment of a court of competent
jurisdiction to have acted or failed to act with gross negligence or willful
misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY
OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS

96

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

 

DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT. This
Section 6.18 shall survive termination of this Agreement.
     Section 6.19 Environmental Matters. Each Borrower Party shall (a) conduct
its operations and keep and maintain its Properties in compliance with all
Environmental Laws, except where the failure to do so could not reasonably be
expected to have a Materially Adverse Effect; (b) obtain and renew all
environmental permits necessary for its operations and Properties, except where
the failure to do so could not reasonably be expected to have a Materially
Adverse Effect; and (c) implement any and all investigation, remediation,
removal and response actions that are appropriate or necessary to maintain the
value and marketability of its Properties or to otherwise comply with
Environmental Laws pertaining to the presence, generation, treatment, storage,
use, disposal, transportation or release of any Hazardous Materials on, at, in,
under, above, to, from or about any of its Properties, provided, however, that
no Borrower Party shall be required to undertake any such investigation,
remediation, removal or response action to the extent that (i) its obligation to
do so is being contested in good faith and by proper proceedings and adequate
reserves have been set aside and are being maintained by the Borrower Parties
with respect to such circumstances in accordance with GAAP, or (ii) failure to
undertake any investigation, remediation, removal or response action could not
reasonably be expected to have a Materially Adverse Effect.
     Section 6.20 Formation of Subsidiaries. At the time of the formation of any
direct or indirect Subsidiary of any Borrower (other than an Excluded
Subsidiary) after the Agreement Date or the acquisition of any direct or
indirect Subsidiary of any Borrower (other than an Excluded Subsidiary) after
the Agreement Date, the Borrower Parties, as appropriate, shall (a) cause such
new Domestic Subsidiary to provide to the Administrative Agent, for the benefit
of the Lender Group, a joinder and supplement to this Agreement substantially in
the form of Exhibit J (each, a “Guaranty Supplement”), pursuant to which such
new Domestic Subsidiary shall agree to join as a Guarantor of the Obligations
under Article 3 and as a Borrower Party under this Agreement, a supplement to
the Security Agreement, and such other security documents, together with
appropriate Uniform Commercial Code financing statements, all in form and
substance reasonably satisfactory to the Administrative Agent, (b) provide to
the Administrative Agent, for the benefit of the Lender Group, a pledge
agreement and appropriate certificates and powers or Uniform Commercial Code
financing statements, pledging all direct or beneficial ownership interest in
such new Subsidiary (regardless of whether owned by a Borrower Party or a
Subsidiary of a Borrower Party or a minority shareholder), in form and substance
reasonably satisfactory to the Administrative Agent, provided, however, with
respect to any Foreign Subsidiary (including US Ben Sherman Holdco), such pledge
will

97

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

 

only be required to the extent the Equity Interests of such Foreign Subsidiary
are directly owned and held by a Borrower Party, and with respect to any such
Foreign Subsidiary, such pledge shall be limited to sixty-five percent (65%) of
the Equity Interests of such Foreign Subsidiary, and (c) provide to the
Administrative Agent, for the benefit of the Lender Group, all other
documentation, including one or more opinions of counsel satisfactory to the
Administrative Agent, which in its reasonable opinion is appropriate with
respect to such formation and the execution and delivery of the applicable
documentation referred to above. Nothing in this Section 6.20 shall authorize
any Borrower Party or any Subsidiary of a Borrower Party to form or acquire any
Subsidiary to the extent the formation or acquisition of such Subsidiary is
prohibited pursuant to Article 8. Any document, agreement or instrument executed
or issued pursuant to this Section 6.20 shall be a “Loan Document” for purposes
of this Agreement.
     Section 6.21 Intentionally Omitted.
     Section 6.22 Holding Company Dividends. In the event Ben Sherman or any of
its Foreign Subsidiaries pays any Dividend to US Ben Sherman Holdco, Parent
shall cause US Ben Sherman Holdco to distribute immediately the amount of such
Dividend to Parent.
ARTICLE 7.
INFORMATION COVENANTS
     Until the earlier of the date the Obligations are repaid in full or the
date the Borrowers no longer have a right to borrow, or have Letters of Credit
issued, hereunder (whether or not the conditions to borrowing have been or can
be fulfilled) and unless the Majority Lenders shall otherwise give their prior
consent in writing, the Administrative Borrower will furnish or cause to be
furnished to each member of the Lender Group at their respective offices the
following items; provided, however, that the Administrative Borrower, at its
option, may deliver such items described in Sections 7.1, 7.2, 7.3, 7.5(c) and
7.6(h) to the Administrative Agent with instructions to post such items on
“IntraLinks” or any similar website for viewing by the Lenders or to send such
items to the Lenders via electronic mail and the Administrative Agent shall post
or send via electronic mail such items within a reasonable period of time after
delivery thereby by the Administrative Borrower to it and such posting or
sending via electronic mail shall constitute delivery of such items to the
Lenders:
     Section 7.1 Monthly and Quarterly Financial Statements and Information.
          (a) Within thirty (30) days after the last day of the first two
(2) fiscal months of each fiscal quarter of Parent and its Subsidiaries, the
consolidated balance sheet of Parent as at the end of such fiscal month, and the
related statement of income and related statement of cash flows for such fiscal
month and for the fiscal year to date period ended with the last day of such
fiscal month, which financial statements shall set forth in

98

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

 

comparative form such figures (i) as at the end of such month during the
previous fiscal year and for such month during the previous fiscal year and
(ii) the figures for the applicable period set forth in the projections provided
by the Borrower Parties pursuant to Section 4.1, as amended or superseded by
projections delivered pursuant to Section 7.5(d), as modified by amendments to
such projections delivered pursuant to Section 7.6(e), all of which shall be on
a consolidated basis and shall be certified by an Authorized Signatory of the
Administrative Borrower, in his or her opinion, to present fairly in accordance
with GAAP the financial position of Parent and its Subsidiaries, as at the end
of such period and the results of operations for such period, and for the
elapsed portion of the year ended with the last day of such period, subject only
to normal year-end adjustments and lack of footnotes.
          (b) Within forty-five (45) days after the last day of each fiscal
quarter in each fiscal year of the Borrowers, the consolidated balance sheet of
Parent and its Subsidiaries as at the end of such fiscal quarter, and the
related statement of income and related statement of cash flows for such fiscal
quarter and for the fiscal month then ended which financial statements shall set
forth in comparative form (i) such figures as at the end of such quarter and
month during the previous fiscal year and for such quarter during the previous
fiscal year and (ii) the figures for the applicable period set forth in the
projections provided by the Borrower Parties pursuant to Section 4.1, as amended
or superseded by projections delivered pursuant to Section 7.5(d), as modified
by amendments to such projections delivered pursuant to Section 7.6(e), all of
which shall be on a consolidated basis and shall be certified by an Authorized
Signatory of the Administrative Borrower, in his or her opinion, to present
fairly in accordance with GAAP the financial position of Parent and its
Subsidiaries, as at the end of such period and the results of operations for
such period, subject only to normal year-end adjustments and lack of footnotes.
     Section 7.2 Annual Financial Statements and Information; Certificate of No
Default. Within ninety (90) days after the end of each fiscal year of Parent,
the audited balance sheet of Parent and its Subsidiaries as at the end of such
year and the related audited statements of income and retained earnings and
related audited statements of cash flows for such year, all of which shall be on
a consolidated basis with the other Borrower Parties, which financial statements
shall set forth in comparative form such figures as at the end of and for the
previous year, and shall be accompanied by an opinion of independent certified
public accountants of recognized standing satisfactory to the Administrative
Agent, stating that such financial statements are unqualified and prepared in
all material respects in accordance with GAAP, without any explanatory
paragraphs.
     Section 7.3 Compliance Certificates.
          (a) Compliance Certificates. At the time the financial statements are
furnished pursuant to Section 7.1(b) and Section 7.2, a Compliance Certificate:

99

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

 

          (b) If at the end of such period the Financial Covenant is applicable,
setting forth at the end of such period the arithmetical calculations required
to establish whether or not the Borrower Parties were in compliance with the
requirements of the Financial Covenant;
          (c) Stating whether any material change in GAAP or the application
thereof has occurred since the date of the Borrowers’ audited financial
statements delivered on the Agreement Date, and, if any change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate; and
          (d) Stating that, to the best of his or her knowledge, no Default has
occurred as at the end of such period, or, if a Default has occurred, disclosing
each such Default and its nature, when it occurred and whether it is continuing.
     Section 7.4 Access to Accountants. Each Borrower Party hereby authorizes
the Administrative Agent to communicate directly with the Borrower Parties’ and
their Subsidiaries’ independent public accountants and authorizes these
accountants to disclose to the Administrative Agent any and all financial
statements and other supporting financial data, including matters relating to
the annual audit and copies of any management letter with respect to its
business, financial condition and other affairs. On or before the Agreement
Date, the Administrative Borrower, on behalf of all of the Borrower Parties,
shall deliver to their independent public accountants a letter authorizing them
to comply with the provisions of this Section 7.4.
     Section 7.5 Additional Reports.
          (a) Within (i) fifteen (15) days after the end of each fiscal month if
Average Availability exceeds twenty percent (20%) of the amount of the Revolving
Loan Commitment and (ii) three (3) Business Days after the end of each fiscal
week if Average Availability is less than or equal to twenty percent (20%) of
the amount of the Revolving Loan Commitment, Administrative Borrower shall
deliver to the Administrative Agent a Borrowing Base Certificate, as of the last
day of the preceding fiscal month or fiscal week, as the case may be, which
shall be in the form of Exhibit C, and shall be correct and complete in all
material respects, setting forth a categorical breakdown of all Accounts and
Inventory of the Borrower Parties, a calculation of Eligible Accounts, Eligible
Credit Card Receivables and Eligible Inventory as of such last day of the
preceding fiscal period and a calculation of Average Availability for the
preceding fiscal month or fiscal week, as the case may be.
          (b) Together with the delivery of the Borrowing Base Certificate as
required under Section 7.5(a) or as may otherwise be requested by the
Administrative Agent, the Administrative Borrower shall deliver to the
Administrative Agent, in form acceptable to the Administrative Agent, such
reports and other supporting documentation regarding the calculation of the
Borrowing Base as the Administrative Agent may

100

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

 

reasonably request, in each case existing as of the last day of the preceding
fiscal month or such other date reasonably required by the Administrative Agent.
          (c) Promptly upon receipt thereof, the Administrative Borrower shall
deliver to the Administrative Agent and the Lenders copies of all final reports,
if any, submitted to any Borrower Party or any Domestic Subsidiary of a Borrower
Party by its independent public accountants in connection with any annual or
interim audit of the Borrower Parties, or any of them, including, without
limitation, any final management report, as applicable, prepared in connection
with the annual audit referred to in Section 7.2;
          (d) On or before the date forty-five (45) days following the
commencement of each fiscal year, the Administrative Borrower shall deliver to
the Administrative Agent and the Lenders the annual budget for the Borrower
Parties and their Subsidiaries approved by the chief financial officer or
treasurer of Parent, including forecasts of the income statement, the balance
sheet and a cash flow statement for such fiscal year on a month by month basis;
          (e) To the extent not covered elsewhere in this Article 7, promptly
after the sending thereof, the Borrower Parties shall deliver to the
Administrative Agent copies of all financial statements, reports and other
information which any Borrower Party sends to any holder of the Senior Notes
Debt or Parent’s securities (or any agent or trustee acting for any such holder)
or which any Borrower Party files with the Securities and Exchange Commission
(other than periodic reports filed on Form 10Q or Form 10K or current reports
filed on Form 8K);
          (f) If there is a material change in GAAP after February 2, 2008 that
affects the presentation of the financial statements referred to in Sections 7.1
and 7.2, then, in addition to delivery of such financial statements, and on the
date such financial statements are required to be delivered, the Administrative
Borrower shall furnish the adjustments and reconciliations necessary to enable
the Borrowers and each Lender to determine compliance with the Financial
Covenant, if at such time the Financial Covenant is applicable, all of which
shall be determined in accordance with GAAP consistently applied;
          (g) At any time that a Default exists and on and after any date of
request by the Administrative Agent in its reasonable discretion, the
Administrative Borrower shall provide to the Administrative Agent notice of the
termination of any lease of real property where Inventory is located promptly
upon termination of such lease; and
          (h) From time to time and promptly upon each request the Borrower
Parties shall, and shall cause their Subsidiaries to, deliver to the
Administrative Agent on behalf of the Lender Group such data, certificates,
reports, statements, opinions of counsel, documents, or further information
regarding the business, assets, liabilities, financial position, projections,
results of operations, or business prospects of each of the

101

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

 

Borrower Parties, or such Subsidiaries, or any of them, as the Administrative
Agent may reasonably request.
     Section 7.6 Notice of Litigation and Other Matters.
          (a) Promptly upon (and in any event within five (5) Business Days of)
any Borrower Party’s obtaining knowledge of the institution of, or a written
threat of, any action, suit, governmental investigation or arbitration
proceeding against any Borrower Party, any Subsidiary of a Borrower Party or any
Property, which action, suit, governmental investigation or arbitration
proceeding, if adversely determined, would expose, in such Borrower Party’s
reasonable judgment, any Borrower Party or any Subsidiary of a Borrower Party to
liability in an aggregate amount in excess of $7,500,000, the Administrative
Borrower shall notify the Lender Group of the occurrence thereof, and the
Administrative Borrower shall provide such additional information with respect
to such matters as the Lender Group, or any of them, may reasonably request.
          (b) Promptly upon (and in any event within five (5) Business Days of)
the occurrence of any default (whether or not any Borrower Party or any
Subsidiary of a Borrower Party, as applicable, has received notice thereof from
any other Person) on Funded Debt of any Borrower Party or any Subsidiary of a
Borrower Party which singly, or in the aggregate, exceeds $7,500,000, the
Administrative Borrower shall notify the Administrative Agent of the occurrence
thereof;
          (c) Promptly upon (and in any event within five (5) Business Days of)
any Borrower Party’s receipt of notice of the pendency of any proceeding for the
condemnation or other taking of any material Property of any Borrower Party
constituting Collateral, the Administrative Borrower shall notify the
Administrative Agent of the occurrence thereof;
          (d) Promptly upon (and in any event within five (5) Business Days of)
any Borrower Party’s receipt of notice of any event that could reasonably be
expected to have a Materially Adverse Effect, the Administrative Borrower shall
notify the Administrative Agent of the occurrence thereof;
          (e) Promptly (and in any event within five (5) Business Days)
following any material amendment or change approved by the board of directors of
Parent to the budget submitted to the Lender Group pursuant to Section 7.5(d),
the Administrative Borrower shall notify the Administrative Agent of the
occurrence thereof;
          (f) Promptly (and in any event within five (5) Business Days)
following any officer of Parent becoming aware of any (i) Default under any Loan
Document, default by any Borrower Party under the Senior Notes Documents, or
default by Ben Sherman or any of its Subsidiaries under the UK Credit Facility,
or (ii) default under any other agreement (other than those referenced in clause
(i) of this Section 7.6(f)) to which any Borrower Party or any Subsidiary of a
Borrower Party is a party or by

102

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

 

which any Borrower Party’s or any such Subsidiary’s properties is bound which
could reasonably be expected to have a Materially Adverse Effect, then the
Administrative Borrower shall notify the Administrative Agent of the occurrence
thereof giving in each case the details thereof and specifying the action
proposed to be taken with respect thereto;
          (g) Promptly (but in any event within five (5) Business Days)
following the occurrence of (i) any ERISA Event or (ii) a “prohibited
transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of
the Code) with respect to any Plan of any Borrower Party or any of its ERISA
Affiliates which would subject any Borrower Party to any penalty or tax on
“prohibited transactions” imposed by Section 502 of ERISA or Section 4975 of the
Code, the Borrower Parties shall notify the Administrative Agent and the Lenders
of the occurrence thereof, provided such occurrence, proceeding, or failure
exposes such Borrower Party or ERISA Affiliate to liability in an aggregate
amount in excess of $7,500,000.
          (h) The Administrative Borrower shall deliver updates or supplements
to the following schedules (i) within sixty (60) days after the end of the end
of each fiscal year, as of the last day of such fiscal year: Schedule 5.1(c)-1,
Schedule 5.1(c)-2, Schedule 5.1(d), Schedule 5.1(h), Schedule 5.1(p),
Schedule 5.1(gg), Schedule 6.11 and Schedule 6.15, in each case, as may be
required to render correct the representations and warranties contained in the
applicable sections to which such schedules relate as of the last day of such
fiscal year without giving effect to any references therein to the “Agreement
Date” in each case, appropriately marked to show the changes made therein;
provided that no such supplement to any such Schedules or representation shall
be deemed a waiver of any Default resulting from the matters disclosed therein,
except as consented to by the Majority Lenders in writing.
          (i) Promptly upon (and in any event within five (5) Business Days of)
any Borrower Party’s obtaining knowledge that any Affiliate of the Borrower
Parties: (i) is a Sanctioned Person, (ii) has more than 15% of its assets in
Sanctioned Countries, or (iii) derives more than 15% of its operating income
from investments in, or transactions with Sanctioned Persons or Sanctioned
Countries.
ARTICLE 8.
NEGATIVE COVENANTS
     Until the earlier of the date the Obligations are repaid in full or the
date the Borrowers no longer have a right to borrow, or have Letters of Credit
issued, hereunder (whether or not the conditions to borrowing have been or can
be fulfilled) and unless the Majority Lenders shall otherwise give their prior
consent in writing:

103

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

 

     Section 8.1 Funded Debt. No Borrower Party will, or will permit any of its
Subsidiaries to, create, assume, incur, or otherwise become or remain obligated
in respect of, or permit to be outstanding, any Funded Debt except:
          (a) Funded Debt under this Agreement and the other Loan Documents and
the Bank Products Documents;
          (b) Funded Debt existing on the Agreement Date and listed on
Schedule 8.1;
          (c) (i) the Senior Notes Debt and (ii) Funded Debt which shall be on
market terms and conditions (determined as of the date any such Funded Debt is
incurred) and shall have a maturity date not earlier than the date that is six
months following the stated Maturity Date, so long as the aggregate outstanding
principal amount of all Funded Debt permitted pursuant to this Section 8.1(c)
shall not at any time exceed $375,000,000;
          (d) Funded Debt of a Borrower Party or any Subsidiary of a Borrower
Party that is unsecured or secured by Permitted Liens described in clause (f) of
the definition of Permitted Liens set forth in Article 1 (including without
limitation Capitalized Lease Obligations), collectively, not to exceed the
aggregate principal amount of $25,000,000 at any time outstanding;
          (e) Guaranties permitted by Section 8.2;
          (f) Unsecured Funded Debt of any Borrower Party owed to another
Borrower Party;
          (g) Obligations under Hedge Agreements not entered into for
speculative purposes and not exceeding the aggregate notional amounts of
$75,000,000 with respect thereto;
          (h) (i) Unsecured Funded Debt of the Foreign Subsidiaries owed to the
Borrower Parties or any of their Subsidiaries existing on the Agreement Date,
(ii) unsecured Funded Debt of the Foreign Subsidiaries owed to the Borrower
Parties or any of their Subsidiaries incurred after the Agreement Date to the
extent that such unsecured Funded Debt constitutes an Investment permitted under
Section 8.5(e), and (iii) unsecured Funded Debt of the Borrower Parties owed to
the Foreign Subsidiaries;
          (i) Funded Debt incurred by Ben Sherman or its Subsidiaries pursuant
to the UK Credit Facility in an aggregate principal amount not to exceed
12,000,000 Pounds Sterling at any time outstanding; and
          (j) Other unsecured Funded Debt of Oxford Industries (UK 3) Limited, a
private company limited by shares incorporated in England, to Oxford

104

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

 

Industries (UK 2), a private company limited by shares incorporated in England,
and of Oxford Industries (UK 1) Limited, a private company limited by shares
incorporated in England to US Ben Sherman Holdco, in each case, in an amount not
to exceed 63,000,000 Pounds Sterling at any time outstanding.
     Section 8.2 Guaranties. No Borrower Party will, or will permit any of its
Subsidiaries to, at any time guarantee or enter into or assume any Guaranty, or
be obligated with respect to, or permit to be outstanding, any Guaranty, other
than (a) guaranties of the Obligations, (b) guaranties of obligations under
repurchase agreements of any Borrower Party entered into in connection with the
sale of products in the ordinary course of business of such Borrower Party,
(c) guaranties of obligations under agreements of any Borrower Party entered
into in connection with the acquisition of services, supplies, and equipment in
the ordinary course of business of such Borrower Party, (d) endorsements of
instruments in the ordinary course of business, (e) guaranties of the Senior
Notes Debt as long as such guarantor is also a Guarantor of the Obligations;
(f) guaranties of Funded Debt permitted under clauses (b), (c)(ii), (d) and
(g) of Section 8.1, (g) guaranties by any Borrower Party of any obligation of
any other Borrower Party to the extent such obligation is not prohibited
hereunder, (h) guaranties of the obligations of Ben Sherman and its Subsidiaries
under the UK Credit Facility by Ben Sherman and its Foreign Subsidiaries, and
(i) other Guaranties with respect to obligations in an aggregate amount not to
exceed $15,000,000 at any time outstanding.
     Section 8.3 Liens. No Borrower Party will, or will permit any Subsidiary of
a Borrower Party to, create, assume, incur, or permit to exist or to be created,
assumed, or permitted to exist, directly or indirectly, any Lien on any of its
property, real or personal, now owned or hereafter acquired, except for
Permitted Liens.
     Section 8.4 Restricted Payments. No Borrower Party shall, or shall permit
any Subsidiary of a Borrower Party to, directly or indirectly declare or make
any Restricted Payment, or set aside any funds for any such purpose, other than
dividends on common stock which accrue (but are not paid in cash) or are paid in
kind or dividends on preferred stock which accrue (but are not paid in cash) or
are paid in kind; provided, however, that (a) any Subsidiary of Parent may make
Restricted Payments to Parent or any other Subsidiary of Parent that owns Equity
Interests of such Subsidiary making such Restricted Payment; (b) Parent may make
regularly scheduled payments of interest due on the Senior Notes to the holders
thereof; and (c) Parent may make Restricted Payments after the Agreement Date if
(i) such Restricted Payments do not exceed $15,000,000 in the aggregate during
any fiscal year of Parent, so long as before and after giving effect to such
Restricted Payment, no Default has occurred and is continuing or would result
from the making of such Restricted Payment, and (ii) such Restricted Payments
exceed $15,000,000 in the aggregate during any fiscal year of Parent, so long as
(A) no Default has occurred and is continuing or would result from the making of
such Restricted Payment and (B) Parent, on behalf of the Borrower Parties,
delivers to the Administrative

105

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

 

Agent a certificate, together with supporting documents in form and substance
satisfactory to the Administrative Agent, executed by an Authorized Signatory
certifying that, after giving pro forma effect to such Restricted Payment,
(1) Availability is not projected to be less than the greater of (y) twenty
percent (20%) of the amount of the Revolving Loan Commitment then in effect and
(z) $35,000,000, at all times during the twelve (12) month period immediately
following such Restricted Payment and (2) Borrower Parties and their
Subsidiaries have, on a consolidated basis, a Fixed Charge Coverage Ratio of at
least 1.20:1.00 as of such date of determination.
     Section 8.5 Investments. No Borrower Party will, or will permit any of its
Subsidiaries to, make any Investment, except that (a) any Borrower Party or any
Subsidiary of a Borrower Party may purchase or otherwise acquire and own and may
permit any of its Subsidiaries to purchase or otherwise acquire and own Cash
Equivalents provided that to the extent required by Section 6.15, any such
Investments in Cash Equivalents shall be subject to a Blocked Account Agreement
or other control agreement in form and substance reasonably satisfactory to the
Administrative Agent; (b) any Borrower Party or Subsidiary of a Borrower Party
may hold the Investments in existence on the Agreement Date and described on
Schedule 8.5; (c) so long as no Default shall have occurred and be continuing or
would result therefrom, any Borrower Party or Subsidiary of a Borrower Party may
convert any of its Accounts that are in excess of ninety (90) days past due into
notes or Equity Interests from the applicable Account Debtor so long as the
Administrative Agent, for the benefit of the Lender Group, is granted a first
priority security interest in such Equity Interests or notes held by a Borrower
Party which Lien is perfected contemporaneously with the conversion of such
Account to Equity Interests or notes; (d) the Borrower Parties and their
Subsidiaries may hold the Equity Interests of their respective Subsidiaries in
existence as of the Agreement Date and their Subsidiaries created or acquired
after the Agreement Date in accordance with Section 6.20; (e) the Borrower
Parties and their Subsidiaries may make additional Investments in their Foreign
Subsidiaries in the form of loans or additional equity contributions if (i) the
aggregate Investment is less than or equal to $25,000,000, so long as (A) no
Default or Event of Default shall have occurred or is continuing or results
therefrom and (B) the Administrative Agent shall have received a pro forma
Borrowing Base Certificate giving effect to such transaction if any Collateral
included in the most recent Borrowing Base Certificate (other than Qualified
Cash so long as any such Qualified Cash used to fund such Investment, if
deducted from the most recent Borrowing Base Certificate, would not result in an
Overadvance) was contributed to such Foreign Subsidiary as part of such
Investment, or (ii) the aggregate Investment is greater than $25,000,000, so
long as (A) no Default or Event of Default shall have occurred or is continuing
or results therefrom and (B) Administrative Borrower delivers a certificate,
together with supporting documentation (including a pro forma Borrowing Base
Certificate giving effect to such transaction if any Collateral included in the
most recent Borrowing Base Certificate was contributed to such Foreign
Subsidiary as part of such Investment) in form and substance reasonably
satisfactory to the Administrative Agent, to the Administrative Agent executed
by an Authorized Signatory evidencing that after

106

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

 

giving pro forma effect to such Investment (y) Availability is not projected to
be less than the greater of (a) twenty percent (20%) of the amount of the
Revolving Loan Commitment then in effect and (b) $35,000,000 at all times during
the twelve (12) month period immediately following such Investment and
(C) Borrowers and their Subsidiaries have, on a consolidated basis, a Fixed
Charge Coverage Ratio of at least 1.20:1.00 as of such date of determination;
(f) any Borrower Party may make Investments in another Borrower Party; (g) the
Borrower Parties and their Subsidiaries may make Investments permitted under
Section 8.7(d); (h) the Borrower Parties and their Subsidiaries may make loans
to employees in an aggregate amount not to exceed $1,000,000 at any time
outstanding; (i) the Foreign Subsidiaries of the Borrower Parties may make loans
to the Borrower Parties to the extent permitted under Section 8.1(h)(iii);
(j) the Borrower Parties and their Subsidiaries may make Investments for the
purpose of consummating an acquisition permitted under Section 8.7(d); (k) the
Borrower Parties and their Subsidiaries may make travel advances and advances on
sales commissions in the ordinary course of business; and (l) the Borrower
Parties and their Subsidiaries may make additional Investments if (i) the
aggregate Investment is less than or equal to $25,000,000, so long as no Default
or Event of Default shall have occurred or is continuing or results therefrom,
or (ii) the aggregate Investment is greater than $25,000,000, so long as (A) no
Default or Event of Default shall have occurred or is continuing or results
therefrom and (B) Administrative Borrower delivers a certificate, together with
supporting documentation in form and substance reasonably satisfactory to the
Administrative Agent, to the Administrative Agent executed by an Authorized
Signatory evidencing that after giving pro forma effect to such Investment
(y) Availability is not projected to be less than the greater of (a) twenty
percent (20%) of the amount of the Revolving Loan Commitment then in effect and
(b) $35,000,000 at all times during the twelve (12) month period immediately
following such Investment and (C) Borrowers and their Subsidiaries have, on a
consolidated basis, a Fixed Charge Coverage Ratio of at least 1.20:1.00.
     Section 8.6 Affiliate Transactions. No Borrower Party shall, or shall
permit any Subsidiary of a Borrower Party to, enter into or be a party to any
agreement or transaction with any Affiliate (other than a Borrower Party or a
Subsidiary of a Borrower Party) except (a) as described on Schedule 8.6,
(b) upon fair and reasonable terms that are no less favorable to such Borrower
Party or such Subsidiary than it would obtain in a comparable arms length
transaction with a Person not an Affiliate of such Borrower Party or such
Subsidiary or (c) as permitted by Sections 8.4 and 8.5(h) and (k).
     Section 8.7 Liquidation; Change in Ownership, Name, or Year; Disposition or
Acquisition of Assets; Etc. No Borrower Party shall, or shall permit any
Subsidiary to, at any time:
          (a) Liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up its business, except that any Subsidiary of
Parent (other than TBG) may liquidate or dissolve itself in accordance with
Applicable Law so long as

107

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

 

no Default or Event of Default has occurred and is continuing (or would result
therefrom) and such liquidation or dissolution would not reasonably be expected
to cause a Materially Adverse Effect;
          (b) Sell, lease, abandon, transfer or otherwise dispose of, in a
single transaction or a series of related transactions, any assets, property or
business (including any Equity Interests) except for (i) the sale of Inventory
in the ordinary course of business at the fair market value thereof and for cash
or cash equivalents, (ii) the sale, lease, sublease, abandonment, transfer or
other disposition of assets, property or business in the ordinary course of
business, (iii) the sale, lease or transfer of any assets, property or business
by any Borrower Party to any other Borrower Party or from any Foreign Subsidiary
to another Foreign Subsidiary, (iv) the sale, lease, sublease, transfer or other
disposal of real property (including any buildings, machinery and equipment
located thereon) so long as (A) no Default or Event of Default shall have
occurred and be continuing or result therefrom and (B) in the case of any sale
of real property, the purchase price paid for such assets shall be at least
equal to the amount at which such assets are carried on the books of the
applicable Borrower Party, (v) additional sales of assets, property or business
that do not exceed $10,000,000 in the aggregate during any trailing twelve
(12) month period so long as (A) no Default or Event of Default shall have
occurred and be continuing or result therefrom and (B) the purchase price paid
for such assets shall be equal to the fair market value of such assets as
determined by Parent in good faith, (vi) other sales of assets, property or
business that exceed $10,000,000 in the aggregate but do not exceed (A)
$30,000,000 in the aggregate during any twelve (12) month period or (B)
$50,000,000 in the aggregate during the term of this Agreement so long as (1) no
Default or Event of Default shall have occurred and be continuing or result
therefrom, (2) the purchase price paid for such assets shall be at least equal
to (y) the fair market value of such assets as determined by the board of
directors of Parent acting in good faith and (z) the Availability generated
under the Borrowing Base by such assets and (3) Parent, on behalf of the
Borrowers, delivers a certificate, together with supporting documentation in
form and substance reasonably satisfactory to the Administrative Agent, to the
Administrative Agent executed by an Authorized Signatory certifying that, after
giving pro forma effect to such sale, Availability is not projected to be less
than the greater of (i) twenty percent (20%) of the amount of the Revolving Loan
Commitment then in effect and (ii) $35,000,000 at all times during the twelve
(12) month period immediately following the consummation of such sale,
(vii) sales of assets listed on Schedule 8.7 in accordance with the terms and
conditions set forth therein, (viii) any Foreign IP Transfer, and (ix) the
Borrower Parties and their Subsidiaries may make Restricted Payments to the
extent permitted by Section 8.4;
          (c) Become a partner or joint venturer with any third party after the
Agreement Date; provided, however, that, subject to the limitations set forth in
Sections 8.1 and 8.5, the Borrower Parties and their Subsidiaries may enter into
partnerships and joint ventures after the Agreement Date;

108

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

 

          (d) Acquire (i) all or substantially all of the assets, property or
business of any other Person, (ii) all or substantially all of the Equity
Interests of any other Person or (iii) any assets that constitute a division or
operating unit of the business of any other Person; provided, however, that the
Borrower Parties and their Subsidiaries shall be permitted to consummate an
acquisition described above if (A) the aggregate purchase price is less than or
equal to $25,000,000, so long as no Default or Event of Default shall have
occurred or is continuing or results therefrom, or (B) the aggregate purchase
price is greater than $25,000,000, so long as (1) no Default or Event of Default
shall have occurred or is continuing or results therefrom and (2) Administrative
Borrower delivers a certificate, together with supporting documentation in form
and substance reasonably satisfactory to the Administrative Agent, to the
Administrative Agent executed by an Authorized Signatory evidencing that after
giving pro forma effect to such acquisition (y) Availability is not projected to
be less than the greater of (a) twenty percent (20%) of the amount of the
Revolving Loan Commitment then in effect and (b) $35,000,000 at all times during
the twelve (12) month period immediately following the consummation of such
acquisition and (z) Borrowers and their Subsidiaries have, on a consolidated
basis, a Fixed Charge Coverage Ratio of at least 1.20:1.00 as of such date of
determination; provided, further, that the acquired assets shall not be eligible
for inclusion in the Borrowing Base until the Administrative Agent has
successfully completed a field audit with respect to such acquired assets (at
Borrowers’ sole cost and expense) and shall only be included thereafter to the
extent such assets satisfy the applicable eligibility criteria (and upon request
by the Administrative Borrower, the Administrative Agent shall conduct any such
field audit in a reasonably expedient manner);
          (e) Merge or consolidate with any other Person; provided, however,
that (i) any Borrower may merge into another Borrower so long as, with respect
to any merger with Parent, Parent is the surviving entity after such merger,
(ii) any Subsidiary of Parent may merge into any Borrower Party so long as, with
respect to any merger with a Borrower, such Borrower shall be the surviving
entity after such merger and, with respect to any merger with any other Borrower
Party, such other Borrower Party shall be the surviving entity after such
merger, (iii) any Foreign Subsidiary may merge into another Foreign Subsidiary,
(iv) any Borrower Party or any Subsidiary of a Borrower Party may merge with any
Person in order to consummate an acquisition permitted under Section 8.7(d) so
long as, with respect to any merger with a Borrower, such Borrower shall be the
surviving entity after such merger, and, with respect to any merger with any
other Borrower Party, such other Borrower Party shall be the surviving entity
after such merger, and (v) any Borrower Party or any Subsidiary of a Borrower
Party may merge with any Person in order to consummate a sale, transfer or
disposition permitted under Section 8.7(b);
          (f) Change its corporate name without giving the Administrative Agent
thirty (30) days prior written notice of its intention to do so and complying
with all reasonable requirements of the Lenders in regard thereto;

109

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

 

          (g) Change its year-end for accounting purposes from the fiscal year
ending on the Saturday occurring closest to each January 31 without giving the
Administrative Agent thirty (30) days written notice prior to the end of the new
year-end for accounting purposes and complying with all reasonable requirements
of the Lenders in regard thereto; or
          (h) With respect to US Ben Sherman Holdco, incur or maintain any
material liability other than intercompany Funded Debt permitted hereunder or
own any material assets or engage in any material activity or business, except
its ownership of the Equity Interests of Oxford Industries (UK 1) and the
intercompany Funded Debt permitted hereunder that is owed to it.
     Section 8.8 Fixed Charge Coverage Ratio. If Availability for three
(3) consecutive Business Days is less than the greater of (a) $26,250,000 and
(b) fifteen percent (15%) of the amount of the Revolving Loan Commitment then in
effect (a “Trigger Event”), the Borrower Parties shall not permit, as of the
last day of the most recently ended fiscal month for which financial statements
have been delivered pursuant to Section 7.1 or 7.2, the Fixed Charge Coverage
Ratio for the immediately preceding twelve (12) fiscal month period then ended
to be less than 1.00 to 1.00; provided, however, if after a Trigger Event
occurs, Availability is greater than the greater of (a) $26,250,000 and
(b) fifteen percent (15%) of the amount of the Revolving Loan Commitment then in
effect for thirty (30) consecutive days, then the Borrower Parties shall no
longer be subject to the requirements of this Section 8.8 unless a subsequent
Trigger Event shall occur.
     Section 8.9 Intentionally Omitted.
     Section 8.10 Intentionally Omitted.
     Section 8.11 Intentionally Omitted.
     Section 8.12 Sales and Leasebacks. No Borrower Party shall enter into any
arrangement, directly or indirectly, with any third party whereby such Borrower
Party shall sell or transfer any property, real or personal, whether now owned
or hereafter acquired, and whereby such Borrower Party shall then or thereafter
rent or lease as lessee such property or any part thereof or other property
which such Borrower Party intends to use for substantially the same purpose or
purposes as the property sold or transferred which would result in the sale or
transfer of assets of the Borrower Parties in an aggregate amount exceeding
$15,000,000 during the term of the Agreement.
     Section 8.13 Amendment and Waiver. Except as permitted hereunder, no
Borrower Party shall, or shall permit any Subsidiary of a Borrower Party to
(a) enter into any amendment of, or agree to or accept any waiver, which would
adversely affect the rights of such Borrower Party or such Subsidiary, as
applicable, or any member of the Lender Group, of (i) its articles or
certificate of incorporation or formation and by-laws,

110

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

 

partnership agreement or other governing documents or (ii) the Indenture or any
of the other Senior Note Documents, or (b) permit any Material Contract to be
cancelled or terminated prior to its stated maturity if such cancellation or
termination could reasonably be likely to result in a Materially Adverse Effect.
     Section 8.14 ERISA Liability. No Borrower Party shall fail to meet all of
the applicable minimum funding requirements of ERISA and the Code, without
regard to any waivers thereof, to the extent such failure could reasonably be
expected to have a Materially Adverse Effect and, to the extent that the assets
of any of their Plans would be less (by $1,000,000 or more) than an amount
sufficient to provide all accrued benefits payable under such Plans, the
Borrower Parties shall make the maximum deductible contributions allowable under
the Code (based on the Borrower’s current actuarial assumptions). No Borrower
Party shall, or shall cause or permit any ERISA Affiliate to, (a) cause or
permit to occur any event that could result in the imposition of a Lien under
Section 430 of the Code or Section 302 or 4068 of ERISA or (b) cause or permit
to occur an ERISA Event to the extent the event described in (a) or
(b) individually or in the aggregate could reasonably be expected to have a
Materially Adverse Effect.
     Section 8.15 Prepayments. No Borrower Party shall, or shall permit any of
its Subsidiaries to, prepay, redeem, defease or purchase in any manner, or
deposit or set aside funds for the purpose of any of the foregoing, make any
payment in respect of principal of, or make any payment in respect of interest
on, any Funded Debt (other than Funded Debt under the UK Credit Facility),
except the Borrowers may (a) make regularly scheduled payments of principal or
interest required in accordance with the terms of the instruments governing any
Funded Debt permitted hereunder, (b) make payments, including prepayments
permitted or required hereunder, with respect to the Obligations and as
expressly permitted by Section 8.4(b), (c) prepay the Senior Notes as described
in clause (a) or (b) of the definition of Senior Notes, and (d) make such other
payments or prepayments of Funded Debt so long as (i) no Default or Event of
Default shall have occurred or is continuing or results therefrom and
(ii) Administrative Borrower delivers a certificate, together with supporting
documentation in form and substance reasonably satisfactory to the
Administrative Agent, to the Administrative Agent executed by an Authorized
Signatory evidencing that (A) immediately after giving effect to such payment,
Availability is not less than the greater of (x) twenty percent (20%) of the
amount of the Revolving Loan Commitment then in effect and (y) $35,000,000, and
(B) at all times during the twelve (12) month period immediately following such
payment, Availability is not projected to be less than the greater of
(x) fifteen percent (15%) of the amount of the Revolving Loan Commitment then in
effect and (y) $26,250,000.
     Section 8.16 Conduct of Business. The Borrower Parties shall not engage
substantially in any line of business substantially different from the lines of
business conducted by the Borrower Parties and their Subsidiaries on the
Agreement Date or from any lines of business reasonably related, complementary,
ancillary or incidental thereto.

111

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

 

     Section 8.17 Inconsistent Agreements. No Borrower Party shall, or shall
permit any Subsidiary of any Borrower Party to, enter into any contract or
agreement which would violate the terms hereof or any other Loan Document.
ARTICLE 9.
DEFAULT
     Section 9.1 Events of Default. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule, or regulation of any
governmental or non-governmental body:
          (a) Any representation or warranty made under this Agreement or any
other Loan Document shall prove incorrect or misleading in any material respect
when made or deemed to have been made pursuant to Section 5.4;
          (b) (i) Any payment of any principal hereunder, or any reimbursement
obligations with respect to any Letter of Credit shall not be received by the
Administrative Agent on the date such payment is due, or (ii) any payment of any
interest hereunder or any fees payable hereunder or under the other Loan
Documents by any Borrower Party shall not be received by the Administrative
Agent within three (3) Business Days from the date on which such payment is due;
          (c) (i) Any Borrower Party shall default in the performance or
observance of any agreement or covenant contained in Section 2.12, 6.1, 6.5 or
6.15 or in Article 7 or Article 8 (other than Section 8.16); or (ii) any
Borrower Party shall default in the performance or observance of any agreement
or covenant contained in Section 6.7 or 6.20, and such default, if curable,
shall not be cured within the earlier of (i) a period of five (5) days from the
date that an officer of either Borrower knew or should have known of the
occurrence of such default, or (ii) a period of five (5) days after written
notice of such default is given by the Administrative Agent to the
Administrative Borrower;
          (d) Any Borrower Party shall default in the performance or observance
of any other agreement or covenant contained in this Agreement not specifically
referred to elsewhere in this Section 9.1, and such default, if curable, shall
not be cured within the earlier of (i) a period of thirty (30) days from the
date that an officer of a Borrower knew or should have known of the occurrence
of such default, or (ii) a period of thirty (30) days after written notice of
such default is given by the Administrative Agent to the Administrative
Borrower;
          (e) There shall occur any default in the performance or observance by
any Borrower Party of any agreement or covenant contained in any of the other
Loan Documents (other than this Agreement or as otherwise provided in this
Section 9.1)

112

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

 

which, if curable, shall not be cured within the applicable cure period, if any,
provided for in such Loan Document, or, if there is no applicable cure period
set forth in such Loan Document, within the earlier of (i) a period of thirty
(30) days from the date that an officer of a Borrower knew of the occurrence of
such default, or (ii) a period of thirty (30) days after written notice of such
default is given by the Administrative Agent to the Administrative Borrower;
          (f) There shall occur any Change in Control;
          (g) (i) There shall be entered a decree or order for relief in respect
of any Borrower Party or any Subsidiary of a Borrower Party under the Bankruptcy
Code, or any other applicable federal or state bankruptcy law or other similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator, or similar official of any Borrower Party or of any Subsidiary of
a Borrower Party or of any substantial part of its properties, or ordering the
winding-up or liquidation of the affairs of any Borrower Party or any Subsidiary
of a Borrower Party, or (ii) an involuntary petition shall be filed against any
Borrower Party or any Subsidiary of a Borrower Party and a temporary stay
entered and (A) such petition and stay shall not be diligently contested, or
(B) any such petition and stay shall continue undismissed for a period of sixty
(60) consecutive days;
          (h) Any Borrower Party or any Subsidiary of a Borrower Party shall
commence an insolvency proceeding or any Borrower Party or any Subsidiary of a
Borrower Party shall consent to the institution of an insolvency proceeding or
to the appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator, or other similar official of such Borrower
Party or any Subsidiary of a Borrower Party or of any substantial part of its
properties, or any Borrower Party or any Subsidiary of a Borrower Party shall
fail generally to pay its debts as they become due, or any Borrower Party or any
Subsidiary of a Borrower Party shall take any action in furtherance of any such
action;
          (i) A final judgment (other than a money judgment or judgments fully
covered (except for customary deductibles or copayments not to exceed $7,500,000
in the aggregate) by insurance as to which the insurance company is not
currently disputing or has not denied coverage) shall be entered by any court
against any Borrower Party or any Subsidiary of any Borrower Party for the
payment of money which exceeds in value $7,500,000, or a warrant of attachment
or execution or similar process shall be issued or levied against property of
any Borrower Party or any Subsidiary of a Borrower Party pursuant to a final
judgment which, together with all other such property of the Borrower Parties
and their Subsidiaries subject to other such process, exceeds in value
$7,500,000 in the aggregate, and if, within thirty (30) days after the entry,
issue, or levy thereof, such judgment, warrant, or process shall not have been
paid or discharged or stayed pending appeal, or if, after the expiration of any
such stay, such judgment, warrant, or process shall not have been paid or
discharged;

113

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

 

          (j) There shall be at any time (i) any “accumulated funding
deficiency,” as defined in ERISA or in Section 412 of the Code, with respect to
any Plan maintained by any Borrower Party or any ERISA Affiliate of a Borrower
Party, or to which any Borrower Party or any of its ERISA Affiliates has any
liabilities; (ii) a trustee shall be appointed by a United States District Court
to administer any Plan maintained by any Borrower Party or any ERISA Affiliate
of a Borrower Party, or to which any Borrower Party or any of its ERISA
Affiliates has any liabilities; (iii) the PBGC shall institute proceedings to
terminate any such Plan; (iv) any Borrower Party or any ERISA Affiliate of any
Borrower Party shall incur any liability to the PBGC in connection with the
termination of any such Plan; (v) any Plan or trust created under any Plan of
any Borrower Party or any ERISA Affiliate of any Borrower Party shall engage in
a non-exempt “prohibited transaction” (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) which would subject any such Plan, any trust
created thereunder, any trustee or administrator thereof, or any party dealing
with any such Plan or trust to any tax or penalty on “prohibited transactions”
imposed by Section 502 of ERISA or Section 4975 of the Code; (vi) any Borrower
Party or any ERISA Affiliate of any Borrower Party shall enter into or become
obligated to contribute to a Multiemployer Plan; (vii) there shall be at any
time a Lien imposed against the assets of a Borrower Party or ERISA Affiliate
under Code Section 430, or ERISA Sections 302 or 4068; or (viii) there shall
occur at any time an ERISA Event; provided, however that no Event of Default
shall occur as a result of an event described in clauses (i), (ii), (iii), (iv),
(v), (vii) or (viii) of this Section 9.1(j) unless such event either
individually or in the aggregate with other events described therein could
reasonably be expected result in an aggregate liability greater than $7,500,000;
          (k) There shall occur any default (after the expiration of any
applicable grace or cure period) under the Senior Notes Documents, the UK Credit
Facility Documents or any other indenture, credit or loan agreement, note or
securities purchase agreement, or other similar governing agreement for Funded
Debt of any Borrower Party or any Subsidiary of a Borrower Party in an aggregate
principal amount exceeding $7,500,000 (determined singly or in the aggregate
with other Funded Debt); or
          (l) All or any material provision of any material Loan Document shall
at any time and for any reason be declared to be null and void, the effect of
which is to render any such material Loan Document inadequate for the practical
realization of the rights and benefits afforded thereby, or a proceeding shall
be commenced by any Borrower Party, any Subsidiary of a Borrower Party or any
Affiliate thereof, or by any governmental authority having jurisdiction over any
Borrower Party or any Subsidiary of a Borrower Party or any Affiliate thereof,
seeking to establish the invalidity or unenforceability thereof (exclusive of
questions of interpretation of any provision thereof), or any Borrower Party,
any Subsidiary of a Borrower Party shall deny that it has any liability or
obligation for the payment of any Obligation provided under any Loan Document.

114

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

 

     Section 9.2 Remedies. If an Event of Default shall have occurred and shall
be continuing, in addition to the rights and remedies set forth elsewhere in
this Agreement and the other Loan Documents:
          (a) With the exception of an Event of Default specified in
Section 9.1(g) or (h), the Administrative Agent may in its discretion (unless
otherwise instructed by the Majority Lenders) or shall at the direction of the
Majority Lenders, (i) terminate the Revolving Loan Commitment and the Letter of
Credit Commitment, or (ii) declare the principal of and interest on the Loans
and all other Obligations (other than any Obligations existing from time to time
of any Borrower Party arising in connection with any Bank Products Documents) to
be forthwith due and payable without presentment, demand, protest, or notice of
any kind, all of which are hereby expressly waived, anything in this Agreement
or in any other Loan Document to the contrary notwithstanding.
          (b) Upon the occurrence and continuance of an Event of Default
specified in Sections 9.1(g) or (h), such principal, interest, and other
Obligations (other than any Obligations existing from time to time of any
Borrower Party arising in connection with any Bank Products Documents) shall
thereupon and concurrently therewith become due and payable, and the Revolving
Loan Commitment and the Letter of Credit Commitment, shall forthwith terminate,
all without any action by the Lender Group, or any of them and without
presentment, demand, protest, or other notice of any kind, all of which are
expressly waived, anything in this Agreement or in any other Loan Document to
the contrary notwithstanding.
          (c) The Administrative Agent may in its discretion (unless otherwise
instructed by the Majority Lenders) or shall at the direction of the Majority
Lenders exercise all of the post-default rights granted to the Lender Group, or
any of them, under the Loan Documents or under Applicable Law. The
Administrative Agent, for the benefit of the Lender Group, shall have the right
to the appointment of a receiver for the Property of the Borrower Parties, and
the Borrower Parties hereby consent to such rights and such appointment and
hereby waive any objection the Borrower Parties may have thereto or the right to
have a bond or other security posted by the Lender Group, or any of them, in
connection therewith.
          (d) In regard to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of any acceleration of
the Obligations pursuant to the provisions of this Section 9.2 or, upon the
request of the Administrative Agent, after the occurrence of an Event of Default
and prior to acceleration, the Borrowers shall promptly upon demand by the
Administrative Agent deposit in a Letter of Credit Reserve Account opened by the
Administrative Agent for the benefit of the Lender Group an amount equal to one
hundred and five percent (105%) of the aggregate then undrawn and unexpired
amount of such Letter of Credit Obligations. Amounts held in such Letter of
Credit Reserve Account shall be applied by the Administrative Agent to

115

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

 

the payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other Obligations in the manner set
forth in Section 2.11. Pending the application of such deposit to the payment of
the Reimbursement Obligations, the Administrative Agent shall, to the extent
reasonably practicable, invest such deposit in an interest bearing open account
or similar available savings deposit account and all interest accrued thereon
shall be held with such deposit as additional security for the Obligations.
After all such Letters of Credit shall have expired or been fully drawn upon,
all Reimbursement Obligations shall have been satisfied, and all other
Obligations shall have been paid in full, the balance, if any, in such Letter of
Credit Reserve Account shall be returned to the Borrowers. Except as expressly
provided hereinabove, presentment, demand, protest and all other notices of any
kind are hereby expressly waived by the Borrowers.
     (e) The rights and remedies of the Lender Group hereunder shall be
cumulative, and not exclusive.
ARTICLE 10.
THE ADMINISTRATIVE AGENT
     Section 10.1 Appointment and Authorization. Each member of the Lender Group
hereby irrevocably appoints and authorizes, and hereby agrees that it will
require any transferee of any of its interest in this Agreement and the other
Loan Documents and its Loans, Revolving Loan Commitment and, if applicable,
Letter of Credit Commitment irrevocably to appoint and authorize, the
Administrative Agent to take such actions as its agent on its behalf and to
exercise such powers hereunder and under the other Loan Documents as are
delegated by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. Without limiting the foregoing, each member of
the Lender Group hereby authorizes the Administrative Agent to execute and
deliver each Loan Document to which the Administrative Agent is, or is required
to be, a party. Neither the Administrative Agent nor any of its directors,
officers, employees, or agents shall be liable for any action taken or omitted
to be taken by it hereunder or in connection herewith, except for its own gross
negligence or willful misconduct as determined by a final non-appealable order
of a court of competent jurisdiction.
     Section 10.2 Interest Holders. The Administrative Agent may treat each
Lender, or the Person designated in the last notice filed with the
Administrative Agent under this Section 10.2, as the holder of all of the
interests of such Lender in this Agreement and the other Loan Documents and its
Loans and Revolving Loan Commitment until written notice of transfer, signed by
such Lender (or the Person designated in the last notice filed with the
Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall
have been filed with the Administrative Agent.

116

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

 

     Section 10.3 Consultation with Counsel. The Administrative Agent may
consult with legal counsel selected by it and shall not be liable to any Lender
or any Issuing Bank for any action taken or suffered by it in good faith in
reliance on the advice of such counsel.
     Section 10.4 Documents. The Administrative Agent shall not be under any
duty to examine, inquire into, or pass upon the validity, effectiveness, or
genuineness of this Agreement, any other Loan Document, or any instrument,
document, or communication furnished pursuant hereto or in connection herewith,
and the Administrative Agent shall be entitled to assume that they are valid,
effective, and genuine, have been signed or sent by the proper parties, and are
what they purport to be.
     Section 10.5 Administrative Agent and Affiliates. With respect to the
Revolving Loan Commitment and Loans, the Administrative Agent shall have the
same rights and powers hereunder as any other Lender, and the Administrative
Agent and its Affiliates, as the case may be, may accept deposits from, lend
money to, and generally engage in any kind of business with the Borrower Parties
or any Affiliates of, or Persons doing business with, the Borrower Parties, as
if it were not the Administrative Agent or affiliated with the Administrative
Agent and without any obligation to account therefor. The Lenders and the
Issuing Banks acknowledge that the Administrative Agent and its Affiliates have
other lending and investment relationships with the Borrower Parties and their
Affiliates and in the future may enter into additional such relationships.
     Section 10.6 Responsibility of the Administrative Agent. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any other member of the Lender Group, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term “agent” in this Agreement with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. The Administrative Agent shall be entitled to assume that
no Default exists unless it has actual knowledge, or has been notified by any
Borrower Party, of such fact, or has been notified by a Lender that such Lender
considers that a Default exists, and such Lender shall specify in detail the
nature thereof in writing. The Administrative Agent shall provide each Lender
with copies of such documents received from any Borrower Party as such Lender
may reasonably request.
     Section 10.7 Action by Administrative Agent.

117

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

 

          (a) The Administrative Agent shall be entitled to use its discretion
with respect to exercising or refraining from exercising any rights which may be
vested in it by, and with respect to taking or refraining from taking any action
or actions which it may be able to take under or in respect of, this Agreement,
unless the Administrative Agent shall have been instructed by the Majority
Lenders to exercise or refrain from exercising such rights or to take or refrain
from taking such action. The Administrative Agent shall incur no liability under
or in respect of this Agreement with respect to anything which it may do or
refrain from doing in the reasonable exercise of its judgment or which may seem
to it to be necessary or desirable in the circumstances.
          (b) The Administrative Agent shall not be liable to the Lenders and
the Issuing Banks, or any of them, in acting or refraining from acting under
this Agreement or any other Loan Document in accordance with the instructions of
the Majority Lenders (or all Lenders if expressly required by Section 11.12) and
in the absence of its own gross negligence or willful misconduct, and any action
taken or failure to act pursuant to such instructions shall be binding on all
Lenders and the Issuing Banks.
     Section 10.8 Notice of Default. In the event that any member of the Lender
Group shall acquire actual knowledge, or shall have been notified in writing, of
any Default, such member of the Lender Group shall promptly notify the other
members of the Lender Group, and the Administrative Agent shall take such action
and assert such rights under this Agreement as the Majority Lenders shall
request in writing, and the Administrative Agent shall not be subject to any
liability by reason of its acting pursuant to any such request. If the Majority
Lenders shall fail to request the Administrative Agent to take action or to
assert rights under this Agreement in respect of any Default after their receipt
of the notice of any Default from a member of the Lender Group, or shall request
inconsistent action with respect to such Default, the Administrative Agent may,
but shall not be required to, take such action and assert such rights (other
than rights under Article 9) as it deems in its discretion to be advisable for
the protection of the Lender Group, except that, if the Majority Lenders have
instructed the Administrative Agent not to take such action or assert such
right, in no event shall the Administrative Agent act contrary to such
instructions.
     Section 10.9 Responsibility Disclaimed. The Administrative Agent shall not
be under any liability or responsibility whatsoever as Administrative Agent:
          (a) To any Borrower Party or any other Person or entity as a
consequence of any failure or delay in performance by or any breach by, any
member of the Lender Group of any of its obligations under this Agreement;
          (b) To any Lender Group, or any of them, as a consequence of any
failure or delay in performance by, or any breach by, any Borrower Party or any
other obligor of any of its obligations under this Agreement or any other Loan
Document; or

118

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

 

          (c) To any Lender Group, or any of them, for any statements,
representations, or warranties in this Agreement, or any other document
contemplated by this Agreement or any information provided pursuant to this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement, or for the validity, effectiveness, enforceability, or sufficiency of
this Agreement, any other Loan Document, or any other document contemplated by
this Agreement.
     Section 10.10 Indemnification. The Lenders agree to indemnify (to the
extent that the Borrowers are obligated to reimburse the Administrative Agent
under the Loan Documents and the Administrative Agent is not reimbursed by the
Borrowers) and hold harmless the Administrative Agent and each of its
Affiliates, employees, representatives, officers and directors (each an
“Administrative Agent Indemnified Person”) pro rata in accordance with their
Aggregate Commitment Ratios from and against any and all claims, liabilities,
investigations, losses, damages, actions, demands, penalties, judgments, suits,
investigations, costs, expenses (including fees and expenses of experts, agents,
consultants and counsel) and disbursements, in each case, of any kind or nature
(whether or not an Indemnified Person is a party to any such action, suit or
investigation) whatsoever which may be imposed on, incurred by, or asserted
against an Indemnified Person resulting from any breach or alleged breach by the
Borrower Parties of any representation or warranty made hereunder, or otherwise
in any way relating to or arising out of the Revolving Loan Commitments, this
Agreement, the other Loan Documents or any other document contemplated by this
Agreement or any action taken or omitted by the Administrative Agent under this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement (other than Bank Products Documents), the making, administration or
enforcement of the Loan Documents and the Loans or any transaction contemplated
hereby or any related matters unless, with respect to any of the above, such
Indemnified Person is determined by a final non-appealable judgment of a court
of competent jurisdiction to have acted or failed to act with gross negligence
or willful misconduct. This Section 10.10 is for the benefit of the
Administrative Agent and shall not in any way limit the obligations of the
Borrower Parties under Section 6.18. The provisions of this Section 10.10 shall
survive the termination of this Agreement.
     Section 10.11 Credit Decision. Each member of the Lender Group represents
and warrants to each other member of the Lender Group that:
          (a) In making its decision to enter into this Agreement and to make
its Advances it has independently taken whatever steps it considers necessary to
evaluate the financial condition and affairs of the Borrower Parties and that it
has made an independent credit judgment, and that it has not relied upon
information provided by the Administrative Agent or any of its Affiliates;
          (b) So long as any portion of the Obligations remains outstanding, it
will continue to make its own independent evaluation of the financial condition
and affairs of the Borrower Parties; and

119

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

 

          (c) Except for notices, reports and other documents expressly herein
required to be furnished to the Lenders by the Administrative Agent, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
Borrower Parties which may come into the possession of any of the Administrative
Agent or any Affiliates of the Administrative Agent.
     Section 10.12 Successor Administrative Agent. Subject to the appointment
and acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving written notice thereof to
the Lenders and the Administrative Borrower. Upon any such resignation, the
Majority Lenders shall have the right to appoint a successor Administrative
Agent (with the consent of the Administrative Borrower if no Event of Default
then exists). If no successor Administrative Agent shall have been so appointed
by the Majority Lenders, and shall have accepted such appointment within thirty
(30) days after the retiring Administrative Agent’s giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be any Lender or a
Person organized under the laws of the US, a State or any political subdivision
thereof which has combined capital and reserves in excess of $250,000,000. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges,
duties, and obligations of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of Article 10 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as the Administrative Agent.
     Section 10.13 Administrative Agent May File Proofs of Claim. The
Administrative Agent may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent, its agents,
financial advisors and counsel), the Lenders and the Issuing Banks allowed in
any judicial proceedings relative to any Borrower Party, or any of their
respective creditors or property, and shall be entitled and empowered to
collect, receive and distribute any monies, securities or other property payable
or deliverable on any such claims and any custodian in any such judicial
proceedings is hereby authorized by each Lender and each Issuing Bank to make
such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to
the Lenders and the Issuing Banks, to pay to the Administrative Agent any amount
due to the Administrative Agent for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent, its agents, financial
advisors and counsel, and any other amounts

120

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

 

due the Administrative Agent under Section 11.2. Nothing contained in this
Agreement or the Loan Documents shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender or
any Issuing Bank any plan of reorganization, arrangement, adjustment or
composition affecting this Agreement, any Revolving Loan Notes, the Letters of
Credit or the rights of any holder thereof, or to authorize the Administrative
Agent to vote in respect of the claim of any Lender or any Issuing Bank in any
such proceeding.
     Section 10.14 Collateral. The Administrative Agent is hereby authorized to
hold all Collateral pledged pursuant to any Loan Document and to act on behalf
of the Lender Group, in its own capacity and through other agents appointed by
it, under the Security Documents; provided, that the Administrative Agent shall
not agree to the release of any Collateral except in accordance with the terms
of this Agreement. The Lender Group acknowledges that the Loans, any
Overadvances, all Obligations with respect to Bank Products Documents and all
interest, fees and expenses hereunder constitute one Funded Debt, secured by all
of the Collateral. The Administrative Agent hereby appoints each Lender and each
Issuing Bank as its agent (and each Lender and each Issuing Bank hereby accepts
such appointment) for the purpose of perfecting the Administrative Agent’s Liens
in assets which, in accordance with the UCC, can be perfected by possession.
Should any Lender or any Issuing Bank obtain possession of any such Collateral,
subject to the limitations set forth in the Blocked Account Agreements, promptly
upon the Administrative Agent’s request therefor shall deliver such Collateral
to the Administrative Agent or in accordance with the Administrative Agent’s
instructions.
     Section 10.15 Release of Collateral.
          (a) Each Lender and each Issuing Bank hereby directs, in accordance
with the terms of this Agreement, the Administrative Agent to release any Lien
held by the Administrative Agent for the benefit of the Lender Group:
          (i) against all of the Collateral, upon final and indefeasible payment
in full of the Obligations and termination of the Revolving Loan Commitments;
          (ii) against any part of the Collateral sold, transferred or disposed
of by the Borrower Parties if such sale, transfer or other disposition is
permitted by Section 8.7 or is otherwise consented to by the requisite Lenders
for such release as set forth in Section 11.12, as certified to the
Administrative Agent by the Administrative Borrower in a certificate of an
Authorized Signatory of the Administrative Borrower; and
          (iii) against any part of the Collateral consisting of (A) real
property or (B) trademarks, trade names, registered trademarks, trademark
applications, service marks, registered service marks, service mark applications
and copyrights

121

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

 

(whether or not registered) embodied in any of the foregoing or related to works
with which the goodwill of any Borrower Party has become associated, all
renewals thereof, all income, royalties, damages and payments now and hereafter
due and payable under and with respect thereto, including payments under all
licenses entered into in connection therewith and damages and payments for past
or future infringements or dilutions thereof, the right to sue for past, present
and future infringements and dilutions thereof, the goodwill of each Borrower
Party’s business symbolized by the foregoing and connected therewith, and all of
each Borrower Party’s licenses and other rights directly related thereto.
          (b) Each Lender and each Issuing Bank hereby directs the
Administrative Agent to execute and deliver or file or authorize the filing of
such termination and partial release statements and do such other things as are
necessary to release Liens to be released pursuant to this Section 10.15
promptly upon the effectiveness of any such release. Upon request by the
Administrative Agent at any time, the Lenders and the Issuing Banks will confirm
in writing the Administrative Agent’s authority to release particular types or
items of Collateral pursuant to this Section 10.15.
     Section 10.16 Additional Agents. None of the Lenders or other entities
identified on the facing page of this Agreement as a “Lead Arranger”,
“Co-Syndication Agents”, or “Documentation Agent” shall have any right, power,
obligation, liability, responsibility or duty under this Agreement or any other
Loan Document other than those applicable to all Lenders as such if such entity
is also a Lender. Without limiting the foregoing, none of the Lenders or other
entities so identified shall have or be deemed to have any fiduciary
relationship with any other Lender. Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders or other entities so identified
in deciding to enter into this Agreement or any other Loan Document or in taking
or not taking action hereunder or thereunder.
ARTICLE 11.
MISCELLANEOUS
     Section 11.1 Notices.
          (a) All notices and other communications under this Agreement shall be
in writing and shall be deemed to have been given five (5) days after deposit in
the mail, designated as certified mail, return receipt requested,
postage-prepaid, or one (1) day after being entrusted to a reputable commercial
overnight delivery service, (or to the extent specifically permitted under
Section 11.1(c) only, when sent out by electronic means) addressed to the party
to which such notice is directed at its address determined as in this
Section 11.1. All notices and other communications under this Agreement shall be
given to the parties hereto at the following addresses:

122

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

 

               (i) If to any Borrower Party, to such Borrower Party in care of
the Administrative Borrower at:
Oxford Industries, Inc.
222 Piedmont Avenue
Atlanta, Georgia 30308-1545
Attn: General Counsel
               with a copy to:
King & Spalding LLP
1180 Peachtree Street, NE
Atlanta, Georgia 30309-3521
Attn: Hector E. Llorens, Jr., Esq.
               (ii) If to the Administrative Agent, to it at:
SunTrust Bank
303 Peachtree Street
Twenty Third Floor
Atlanta, Georgia 30308
Attn: Oxford Account Manager
with a copy to:
Chris D Molen, Esq.
Paul, Hastings, Janofsky & Walker LLP
600 Peachtree Street, N.E.
Suite 2400
Atlanta, Georgia 30308
               (iii) If to the Lenders, to them at the addresses set forth on
the signature pages of this Agreement; and
               (iv) If to the Issuing Banks, at the addresses set forth on the
signature pages of this Agreement.
          (b) Any party hereto may change the address to which notices shall be
directed under this Section 11.1 by giving ten (10) days’ written notice of such
change to the other parties.
          (c) The Borrowers may make delivery of the items required by
Sections 7.1, 7.2 and 7.3 via Electronic Transmission to the Lender Group.

123

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

 

     Section 11.2 Expenses. The Borrowers agree to promptly pay or promptly
reimburse:
          (a) All reasonable out-of-pocket expenses of the Administrative Agent
and its Affiliates in connection with the preparation, negotiation, execution,
delivery and syndication of this Agreement and the other Loan Documents, the
transactions contemplated hereunder and thereunder, and the making of the
initial Advance hereunder, including, but not limited to, the reasonable fees
and disbursements of counsel for the Administrative Agent and its Affiliates;
          (b) All reasonable out-of-pocket expenses of the Administrative Agent
in connection with the administration of the transactions contemplated in this
Agreement and the other Loan Documents, and the preparation, negotiation,
execution, and delivery of any waiver, amendment, or consent by the Lenders
relating to this Agreement or the other Loan Documents, including, but not
limited to, all reasonable out-of-pocket expenses of the Administrative Agent in
connection with their periodic field audits, a fee of $1,000 per day (as may be
increased from time to time by the Administrative Agent), per auditor, plus
reasonable out-of-pocket expenses for each field audit of the Administrative
Agent performed by personnel employed by the Administrative Agent, and the
reasonable fees and disbursements of counsel for the Administrative Agent;
          (c) (i) All out-of-pocket costs and expenses of the Administrative
Agent in connection with any restructuring, refinancing, or “work out” of the
transactions contemplated by this Agreement, and of obtaining performance under
this Agreement and the other Loan Documents, and all out-of-pocket costs and
expenses of collection of the Administrative Agent if default is made in the
payment of the Obligations, which in each case shall include fees and
out-of-pocket expenses of counsel for the Administrative Agent, and the fees and
out-of-pocket expenses of any experts of the Administrative Agent, or
consultants of the Administrative Agent and (ii) in addition to the foregoing,
upon the occurrence and during the continuance of an Event of Default, the
Borrower Parties shall reimburse the other members of the Lender Group for their
out-of-pocket costs and expenses in connection with obtaining performance under
this Agreement and the other Loan Documents, and all out-of-pocket costs and
expenses of collection if default is made in the payment of the Obligations,
provided, however, out-of-pocket costs and expenses of counsel shall be limited
to one counsel for the Lender Group (in addition to the Administrative Agent’s
counsel referred to above); and
          (d) All taxes, assessments, general or special, and other charges
levied on, or assessed, placed or made against any of the Collateral, any
Revolving Loan Notes or the Obligations.
     Section 11.3 Waivers. The rights and remedies of the Lender Group under
this Agreement, the other Loan Documents and the Bank Products Documents shall
be cumulative and not exclusive of any rights or remedies which they would
otherwise have. No failure or delay by the Lender Group, or any of them, or the
Majority Lenders in

124

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

 

exercising any right shall operate as a waiver of such right. The Lender Group
expressly reserves the right to require strict compliance with the terms of this
Agreement in connection with any funding of a request for an Advance. In the
event the Lenders decide to fund a request for an Advance at a time when the
Borrowers are not in strict compliance with the terms of this Agreement, such
decision by the Lenders shall not be deemed to constitute an undertaking by the
Lenders to fund any further requests for Advances or preclude the Lenders from
exercising any rights available to the Lenders under the Loan Documents or at
law or equity. Any waiver or indulgence granted by the Lenders or by the
Majority Lenders shall not constitute a modification of this Agreement, except
to the extent expressly provided in such waiver or indulgence, or constitute a
course of dealing by the Lenders at variance with the terms of the Agreement
such as to require further notice by the Lenders of the Lenders’ intent to
require strict adherence to the terms of the Agreement in the future. Any such
actions shall not in any way affect the ability of the Lenders, in their
discretion, to exercise any rights available to them under this Agreement or
under any other agreement, whether or not the Lenders are party, relating to the
Borrowers.
     Section 11.4 Set-Off. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, except to
the extent limited by Applicable Law, at any time that an Event of Default
exists, each member of the Lender Group and each subsequent holder of the
Obligations is hereby authorized by the Borrower Parties at any time or from
time to time, without notice to the Borrower Parties or to any other Person, any
such notice being hereby expressly waived, to set-off and to appropriate and
apply any and all deposits (general or special, time or demand, including, but
not limited to, Funded Debt evidenced by certificates of deposit, in each case
whether matured or unmatured, but not including any amounts held by any member
of the Lender Group or any of its Affiliates in any escrow or custodial account)
and any other Funded Debt at any time held or owing by any member of the Lender
Group or any such holder to or for the credit or the account of any Borrower
Party, against and on account of the obligations and liabilities of the Borrower
Parties, to any member of the Lender Group or any such holder under this
Agreement, any Revolving Loan Notes, any other Loan Document and any Bank
Products Documents, including, but not limited to, all claims of any nature or
description arising out of or connected with this Agreement, any Revolving Loan
Notes, any other Loan Document or any Bank Products Document, irrespective of
whether or not (a) the Lender Group shall have made any demand hereunder or
(b) the Lender Group shall have declared the principal of and interest on the
Loans and any Revolving Loan Notes and other amounts due hereunder to be due and
payable as permitted by Section 9.2 and although said obligations and
liabilities, or any of them, shall be unmatured. Any sums obtained by any member
of the Lender Group or by any subsequent holder of the Obligations shall be
subject to the application of payments provisions of Article 2.

125

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

 

     Section 11.5 Assignment.
          (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, except that no Borrower Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by any Borrower Party
without such consent shall be null and void). 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
and, to the extent expressly contemplated hereby, the Affiliates of the
Administrative Agent) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
          (b) Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Revolving Loan Commitment and the Loans at the time owing to it
and, if applicable, all or a portion of its Letter of Credit Commitment and
excluding rights and obligations with respect to Bank Products Documents);
provided that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender’s portion of the Revolving Loan Commitment and
the Loans at the time owing to it or in the case of an assignment to a Lender or
an Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Revolving Loan Commitment of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent), shall not be less than $5,000,000, unless each of the Administrative
Agent and, so long as no Default exists, the Administrative Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed), and
(ii) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500 (unless such assignment is to a Lender, an
Affiliate of a Lender or an Approved Fund), and the Eligible Assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire. Subject to acceptance and recording thereof by the
Administrative Agent pursuant to paragraph (c) of this Section, from and after
the effective date specified in each Assignment and Acceptance, the Eligible
Assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, 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 Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance 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 2.8(b), 2.9, 6.18, 12.3 and 12.5).
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for purposes
of this Agreement as a sale by such Lender of a

126

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

 

participation in such rights and obligations in accordance with paragraph (d) of
this Section.
          (c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrowers, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the portion of the
Revolving Loan Commitment of, and principal amount of the Loans 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 Borrowers, the
Administrative Agent 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 Borrowers and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
          (d) Any Lender may, without the consent of, or notice to, the Borrower
Parties or the Administrative Agent, sell participations to one or more banks or
other entities (a “Participant”) in all or a portion of such Lender’s rights
and/or obligations under this Agreement (including all or a portion of its
Revolving Loan Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrowers and the Lender Group
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in Section 11.12(a)(i) that affects such
Participant. Subject to paragraph (e) of this Section, the Borrowers agree that
each Participant shall be entitled to the benefits of Sections 2.8(b), 2.9,
6.18, 6.19(c) and 12.3 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 11.4 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.8(b) as though it were a Lender.
          (e) A Participant shall not be entitled to receive any greater payment
under Section 2.8(b) or Section 12.3 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
Administrative 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 2.8(b) unless the Administrative Borrower is notified of

127

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

 

the participation sold to such Participant and such Participant agrees, for the
benefit of the Borrowers, to comply with Section 2.8(b) as though it were a
Lender.
          (f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including without limitation (i) any pledge or assignment to secure
obligations to a Federal Reserve Bank and (ii) in the case of any Lender that is
a Fund, any pledge or assignment of all or any portion of such Lender’s rights
under this Agreement to any holders of obligations owed, or securities issued,
by such Lender as security for such obligations or securities, or to any trustee
for, or any other representative of, such holders, 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 11.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
In proving this Agreement or any other Loan Document in any judicial
proceedings, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is sought.
Any signatures delivered by a party by facsimile transmission or by e-mail
transmission shall be deemed an original signature hereto.
     Section 11.7 Governing Law. This Agreement and the other Loan Documents
shall be construed in accordance with and governed by the laws of the State of
New York, without regard to the conflict of laws principles thereof, except to
the extent otherwise provided in the Loan Documents.
     Section 11.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
     Section 11.9 Headings. Headings used in this Agreement are for convenience
only and shall not be used in connection with the interpretation of any
provision hereof.
     Section 11.10 Source of Funds. Notwithstanding the use by the Lenders of
the Base Rate and the Eurodollar Rate as reference rates for the determination
of interest on the Loans, the Lenders shall be under no obligation to obtain
funds from any particular source in order to charge interest to the Borrowers at
interest rates tied to such reference rates.
     Section 11.11 Entire Agreement. THIS WRITTEN AGREEMENT, TOGETHER WITH THE
OTHER LOAN DOCUMENTS, REPRESENTS THE

128

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

 

FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Each Borrower Party represents
and warrants to the Lender Group that it has read the provisions of this
Section 11.11 and discussed the provisions of this Section 11.11 and the rest of
this Agreement with counsel for such Borrower Party, and such Borrower Party
acknowledges and agrees that the Lender Group is expressly relying upon such
representations and warranties of such Borrower Party (as well as the other
representations and warranties of such Borrower Party set forth in this
Agreement and the other Loan Documents) in entering into this Agreement.
     Section 11.12 Amendments and Waivers.
          (a) Neither this Agreement, any other Loan Document nor any term
hereof or thereof may be amended orally, nor may any provision hereof be waived
orally but only by an instrument in writing signed by the Majority Lenders, or
in the case of Loan Documents executed by the Administrative Agent (and not the
other members of the Lender Group), signed by the Administrative Agent and
approved by the Majority Lenders and, in the case of an amendment, also by the
Borrowers, except that: (i) the consent of each of the Lenders and, in the case
of an amendment, the Borrowers, shall be required for (A) any sale or release
of, or the subordination of the Administrative Agent’s security interest in, any
material Collateral except in conjunction with sales or transfers of Collateral
permitted hereunder, (B) except in conjunction with sales or transfers of
Collateral or Subsidiaries or other transactions permitted hereunder, any
release of any guarantor of the Obligations, (C) any extensions, postponements
or delays of the Maturity Date or the scheduled date of payment of interest or
principal or fees, or any reduction of principal (without a corresponding
payment with respect thereto), or reduction in the rate or amount of interest or
fees due to the Lenders hereunder or under any other Loan Documents, (D) any
amendment of this Section 11.12 or of the definition of “Majority Lenders” or
any other provision of the Loan Documents specifying the number or percentage of
Lenders required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, (E) any amendment increasing the
Revolving Loan Commitments (it being understood and agreed that a waiver of any
Default or Event of Default or modification of any of the defined terms
contained herein (other than those defined terms specifically addressed in this
Section 11.12) shall not constitute a change in the terms of the Revolving Loan
Commitments of any Lender), (F) any amendment to the definition of Borrowing
Base (including, without limitation, increasing the amounts or percentages set
forth therein) or any amendment to any of the defined terms used therein,
(G) any amendment to the definition of “Availability” or any of the defined
terms used therein, (H) any amendment to Section 2.10 or Section 2.11 and
(I) any amendment to the definition of Revolving Commitment Ratio or any of the
defined terms used therein; (ii) the consent of the Administrative Agent, the
Majority Lenders and the Borrowers shall be required for any amendment to
Section 2.1(f) or

129

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

 

Article 10; (iii) the consent of the Issuing Banks, the Majority Lenders and the
Borrowers shall be required for any amendment to Sections 2.1(c) or 2.15 or the
definition of “Letter of Credit Commitment”; (iv) the consent of the Guarantors
and the Majority Lenders shall be required for any amendment to Article 3;
(v) the consent of the Swing Bank, the Majority Lenders and the Borrowers shall
be required for any amendment to Section 2.1(d) or Section 2.2(g); (vi) the
consent of the Administrative Agent only shall be required to amend
Schedule 1(a) to reflect assignments of the Revolving Loan Commitments and Loans
in accordance with this Agreement. In addition to the required consents set
forth above, if SunTrust Bank or any Affiliate thereof has entered into a Lender
Hedge Agreement with any Borrower Party and SunTrust Bank is no longer the
Administrative Agent or a Lender, the consent of SunTrust Bank or such Affiliate
shall be required for any amendment to Section 2.11 or any amendment described
in clause (i)(A) above. Any amendment, modification, waiver, consent,
termination or release of any Bank Products Documents may be effected by the
parties thereto without the consent of the Lender Group.
          (b) Each Lender grants to the Administrative Agent the right to
purchase all (but not less than all) of such Lender’s portion of the Revolving
Loan Commitment, Letter of Credit Commitment, the Loans and Letter of Credit
Obligations owing to it and any Revolving Loan Notes held by it and all of its
rights and obligations hereunder and under the other Loan Documents at a price
equal to the outstanding principal amount of the Loans payable to such Lender
plus any accrued but unpaid interest on such Loans and accrued but unpaid
commitment fees and letter of credit fees owing to such Lender plus the amount
necessary to cash collateralize any Letters of Credit issued by such Lender,
which right may be exercised by the Administrative Agent if such Lender refuses
to execute any amendment, waiver or consent which requires the written consent
of all of the Lenders and to which the Majority Lenders, the Administrative
Agent and the Borrowers have agreed. Each Lender agrees that if the
Administrative Agent exercises its option hereunder, it shall promptly execute
and deliver an Assignment and Acceptance and other agreements and documentation
necessary to effectuate such assignment. The Administrative Agent may assign its
purchase rights hereunder to any assignee if such assignment complies with the
requirements of Section 11.5(b).
          (c) If any fees are paid to the Lenders as consideration for
amendments, waivers or consents with respect to this Agreement, at
Administrative Agent’s election, such fees may be paid only to those Lenders
that agree to such amendments, waivers or consents within the time specified for
submission thereof.
     Section 11.13 Other Relationships. No relationship created hereunder or
under any other Loan Document shall in any way affect the ability of any member
of the Lender Group to enter into or maintain business relationships with the
Borrowers, or any of its Affiliates, beyond the relationships specifically
contemplated by this Agreement and the other Loan Documents.

130

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

 

     Section 11.14 Pronouns. The pronouns used herein shall include, when
appropriate, either gender and both singular and plural, and the grammatical
construction of sentences shall conform thereto.
     Section 11.15 Disclosure. The Borrower Parties agree that the
Administrative Agent shall have the right, with the consent of the
Administrative Borrower (such consent not to be unreasonably withheld), to issue
press releases regarding the making of the Loans and the issuance and the
Revolving Loan Commitment to the Borrowers pursuant to the terms of this
Agreement.
     Section 11.16 Replacement of Lender. In the event that a Replacement Event
(as defined below) occurs and is continuing with respect to any Lender, the
Administrative Borrower may designate another financial institution (such
financial institution being herein called a “Replacement Lender”) acceptable to
the Administrative Agent, and which is not a Borrower or an Affiliate of any
Borrower, to assume such Lender’s Revolving Loan Commitment hereunder, to
purchase the Loans and participations of such Lender and such Lender’s rights
hereunder and (if such Lender is an Issuing Bank) to issue Letters of Credit in
substitution for all outstanding Letters of Credit issued by such Lender,
without recourse to or representation or warranty by, or expense to, such Lender
for a purchase price equal to the outstanding principal amount of the Loans
payable to such Lender plus any accrued but unpaid interest on such Loans and
accrued but unpaid commitment fees and letter of credit fees owing to such
Lender plus amounts necessary to cash collateralize any Letters of Credit issued
by such Lender, and upon such assumption, purchase and substitution, and subject
to the execution and delivery to the Administrative Agent by the Replacement
Lender of documentation satisfactory to the Administrative Agent (pursuant to
which such Replacement Lender shall assume the obligations of such original
Lender under this Agreement), the Replacement Lender shall succeed to the rights
and obligations of such Lender hereunder and such Lender shall no longer be a
party hereto or have any rights hereunder provided that the obligations of the
Borrowers to indemnify such Lender with respect to any event occurring or
obligations arising before such replacement shall survive such replacement.
“Replacement Event” shall mean, with respect to any Lender, (a) the commencement
of or the taking of possession by, a receiver, custodian, conservator, trustee
or liquidator of such Lender, or the declaration by the appropriate regulatory
authority that such Lender is insolvent or (b) the making of any claim by any
Lender under Sections 2.8(b), 12.3 or 12.5, unless the changing of the lending
office by such Lender would obviate the need of such Lender to make future
claims under such Sections.
     Section 11.17 Confidentiality. No member of the Lender Group shall disclose
any non-public, confidential information regarding the Borrower Parties or their
Subsidiaries (“Confidential Information”) to any other Person without the
consent of the Administrative Borrower, other than (i) to such member of the
Lender Group’s Affiliates and their officers, directors, employees, agents and
advisors, to other members of the Lender Group and, as contemplated by
Section 11.5, to actual or prospective assignees

131

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

 

and participants, and then only on a confidential basis, (ii) as required by any
law, rule or regulation or judicial process, (iii) to any rating agency when
required by it, provided, that, prior to any such disclosure, such rating agency
shall undertake to preserve the confidentiality of any Confidential Information
relating to the Borrower Parties received by it from such member of the Lender
Group, (iv) as requested or required by any state, federal or foreign authority
or examiner regulating banks or banking, and (v) in connection with the exercise
of any remedy hereunder or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder.
     Section 11.18 Revival and Reinstatement of Obligations. If the incurrence
or payment of the Obligations by any Borrower or any Guarantor, or the transfer
to the Lender Group of any property, should for any reason subsequently be
declared to be void or voidable under any state or federal law relating to
creditors’ rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences or other voidable or recoverable payments of
money or transfers of property (collectively, a “Voidable Transfer”), and if the
Lender Group, or any of them, is required to repay or restore, in whole or in
part, any such Voidable Transfer, or elects to do so upon the reasonable advice
of its counsel, then, as to any such Voidable Transfer, or the amount thereof
that the Lender Group, or any of them, is required or elects to repay or
restore, and as to all reasonable costs, expenses and attorneys fees of the
Lender Group related thereto, the liability of the Borrowers or such Guarantor,
as applicable, automatically shall be revived, reinstated and restored and shall
exist as though such Voidable Transfer had never been made.
     Section 11.19 Electronic Transmissions. (a) Authorization. Subject to the
provisions of this Section 11.19(a), each of the Administrative Agent, the
Borrower Parties, the Lenders, each Issuing Bank and each of their Affiliates is
authorized (but not required) to transmit, post or otherwise make or
communicate, in its sole discretion, Electronic Transmissions in connection with
any Loan Document and the transactions contemplated therein. Each of the
Borrower Parties hereby acknowledges and agrees, and each of the Borrower
Parties shall cause each of their Subsidiaries to acknowledge and agree, that
the use of Electronic Transmissions is not necessarily secure and that there are
risks associated with such use, including risks of interception, disclosure and
abuse and each indicates it assumes and accepts such risks by hereby authorizing
the transmission of Electronic Transmissions.
          (b) Separate Agreements. All uses of an E-System shall be governed by
and subject to, in addition to the terms and conditions of this Agreement,
separate terms and conditions posted or referenced in such E-System and related
Contractual Obligations executed by Borrower Parties or the members of the
Lender Group in connection with the use of such E-System.

132

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

 

          (c) Limitation of Liability. All E-Systems and Electronic
Transmissions shall be provided “as is” and “as available”. None of
Administrative Agent, the Lenders or any of their respective Affiliates warrants
the accuracy, adequacy or completeness of any E-Systems or Electronic
Transmission, and each disclaims all liability for errors or omissions therein.
No warranty of any kind is made by the Administrative Agent, the Lenders or any
of their respective Affiliates in connection with any E-Systems or Electronic
Communication, including any warranty of merchantability, fitness for a
particular purpose, non-infringement of third-party rights or freedom from
viruses or other code defects. Each of the Borrowers and the other Borrower
Parties agrees that the Lender Group has no responsibility for maintaining or
providing any equipment, software, services or any testing required in
connection with any Electronic Transmission or otherwise required for any
E-System.
     Section 11.20 Assignment as of the Agreement Date.
     (a) In accordance with the terms and conditions of Section 11.5, SunTrust
Bank (the “Assignor”) hereby sells and assigns to Branch Banking & Trust
Company, Credit Suisse, Cayman Islands Branch, Regions Bank and UPS Capital
Corporation (collectively, the “Assignees” and each an “Assignee”), and each
Assignee hereby irrevocably purchases and assumes from the Assignor, that
interest in and to the Assignor’s rights and obligations under the Loan
Documents as of the date hereof with respect to the Assignor’s Revolving Loan
Commitment and the assigned portion of such Revolving Loan Commitment set forth
in Section 11.20(f) (as to each Assignee, the “Assigned Interest” and
collectively, the “Assigned Interests”). After giving effect to such sale and
assignment, each Assignee’s and the Assignor’s Revolving Loan Commitment will be
set forth in Schedule 1(a). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Section 11.20, without
representation or warranty by the Assignor.
     (b) The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of its Assigned Interest, and (ii) its Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (b) assumes
no responsibility with respect to (i) any statements, warranties or
representations made in or in connection with this Agreement or any other Loan
Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any Collateral thereunder,
(iii) the financial condition of the Borrowers, any of their respective
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by the Borrowers, any of their
respective Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan Document.
     (c) Each Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Agreement and to consummate the transactions contemplated hereby and to become a
Lender hereunder,

133

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

 

(ii) it meets all requirements of an Eligible Assignee hereunder (subject to
receipt of such consents as may be required hereunder), (iii) from and after the
Agreement Date, it shall be bound by the provisions of this Agreement as a
Lender hereunder and, to the extent of its Assigned Interest, shall have the
obligations of a Lender hereunder, (iv) it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Sections 7.1 and 7.2, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Agreement and to purchase its Assigned
Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Administrative Agent or any other
Lender, and (v) if it is a Lender that is organized in a jurisdiction other than
the United States or a political subdivision thereof, it has delivered to the
Administrative Agent any documentation required to be delivered by it pursuant
to the terms of this Agreement including, without limitation, under
Section 2.8(b), duly completed and executed by the Assignee; and (b) agrees that
(i) it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
     (d) The effective date of the assignment provided for in this Section 11.20
shall be the Agreement Date. The Administrative Agent hereby waives payment of
the processing fee with respect to each assignment provided for under this
Section 11.20.
     (e) As of the Agreement Date (i) each Assignee shall be a party to this
Agreement and, to the extent of the interest assigned pursuant to this
Agreement, have the rights and obligations of a Lender hereunder and under the
other Loan Documents, and (ii) the Assignor shall, to the extent of the interest
assigned pursuant to this Section 11.20, relinquish its rights and be released
from its obligations under this Agreement and the other Loan Documents.
     (f) From and after the Agreement Date, the Administrative Agent shall make
all payments in respect of each Assigned Interest (including payments of
principal, interest, fees and other amounts) to the applicable Assignee whether
such amounts have accrued prior to, on or after the Agreement Date. On the
Agreement Date, each Assignee shall pay to the Administrative Agent, for the
benefit of the Assignor, its Revolving Commitment Ratio (as set forth on
Schedule 1(a)) of the principal amount of any outstanding Revolving Loans under
this Agreement and the other Loan Documents. The Assignor and each Assignee
shall make all appropriate adjustments in payments under this Agreement and the
other Loan Documents for periods prior to the Agreement Date directly between
themselves on the Agreement Date.

134

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

 

          (i) The Assignor’s Revolving Loan Commitment and Revolving Commitment
Ratio immediately prior to the assignment contemplated by this Section 11.20:

         
SunTrust Bank:
  $ 105,000,000/60.0000000 %

          (ii) Each Assignee’s Revolving Loan Commitment and Revolving
Commitment Ratio immediately prior to the assignment contemplated by this
Section 11.20:

     
Branch Banking & Trust Company:
  $0.00/0.00%
Credit Suisse, Cayman Islands Branch:
  $0.00/0.00%
Regions Bank:
  $0.00/0.00%
UPS Capital Corporation:
  $0.00/0.00%

          (iii) Each Assignee’s Revolving Loan Commitment and Revolving
Commitment Ratio immediately after the assignment contemplated by this
Section 11.20:

     
Branch Banking & Trust Company:
  $20,000,000/11.4285714%
Credit Suisse, Cayman Islands Branch:
  $10,000,000/5.7142857%
Regions Bank:
  $20,000,000/11.4285714%
UPS Capital Corporation:
  $15,000,000/8.5714286%

          (iv) The Assignor’s Revolving Loan Commitment and Revolving Commitment
Ratio immediately after the assignment to Assignees contemplated by this
Section 11.20:

     
SunTrust Bank:
  $40,000,000/22.8571429%

     Section 11.21 Amendment and Restatement.
     (a) Each Borrower Party acknowledges and agrees that the security interests
and Liens (as defined in the Existing Credit Agreement) granted to the
Administrative Agent pursuant to the Existing Credit Agreement and the other
Security Documents (as defined in the Existing Credit Agreement), shall remain
outstanding and in full force and effect, without interruption or impairment of
any kind, in accordance with the Existing Credit Agreement and shall continue to
secure the Obligations except to the extent such Security Documents are amended,
restated, modified or otherwise supplemented on the Agreement Date.

135

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

 

     (b) Each Borrower Party acknowledges and agrees that (i) the Obligations
represent, among other things, the amendment, restatement, renewal, extension,
consolidation and modification of the Obligations (as defined in the Existing
Credit Agreement) arising in connection with the Existing Credit Agreement and
other Loan Documents (as defined in the Existing Credit Agreement) executed in
connection therewith; (ii) the Borrower Parties intend that the Existing Credit
Agreement and the other Loan Documents (as defined in the Existing Credit
Agreement) executed in connection therewith and the collateral pledged
thereunder shall secure, without interruption or impairment of any kind, all
existing Obligations (as defined in the Existing Credit Agreement) under the
Existing Credit Agreement and the other Loan Documents (as defined in the
Existing Credit Agreement) executed in connection therewith, as they may be
amended, restated, renewed, extended, consolidated and modified hereunder,
together with all other obligations hereunder; (iii) all Liens (as defined in
the Existing Credit Agreement) evidenced by the Loan Documents (as defined in
the Existing Credit Agreement) executed in connection therewith are hereby
ratified, confirmed and continued; and (iv) the Loan Documents are intended to
restate, renew, extend, consolidate, amend and modify the Existing Credit
Agreement and the other Loan Documents (as defined in the Existing Credit
Agreement) executed in connection therewith.
Each Borrower Party intends that (i) the provisions of the Existing Credit
Agreement and the other Loan Documents (as defined in the Existing Credit
Agreement) executed in connection therewith, to the extent restated, renewed,
extended, consolidated, amended and modified hereby and by the other Loan
Documents, be hereby superseded and replaced by the provisions hereof and of the
other Loan Documents; (ii) the Revolving Loan Notes restate, renew, extend,
consolidate, amend, modify, replace, are substituted for and supersede in their
entirety, but do not extinguish, the Obligations (as defined in the Existing
Credit Agreement) arising under the Revolving Loan Notes (as defined in the
Existing Credit Agreement) issued pursuant to the Existing Credit Agreement; and
(iii) by entering into and performing their respective obligations hereunder,
this transaction shall not constitute a novation.
ARTICLE 12.
YIELD PROTECTION
     Section 12.1 Eurodollar Rate Basis Determination. Notwithstanding anything
contained herein which may be construed to the contrary, if with respect to any
proposed Eurodollar Advance for any Eurodollar Advance Period, the
Administrative Agent determines that deposits in Dollars (in the applicable
amount) are not being offered to leading banks in the London interbank market
for such Eurodollar Advance Period, the Administrative Agent shall forthwith
give notice thereof to the Administrative Borrower and the Lenders, whereupon
until the Administrative Agent notifies the Administrative

136

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

 

Borrower that the circumstances giving rise to such situation no longer exist,
the obligations of the Lenders to make Eurodollar Advances shall be suspended.
     Section 12.2 Illegality. If any change in Applicable Law, any change in the
interpretation or administration of any Applicable Law by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or any change in compliance with Applicable Law as a
result of compliance by any Lender with any request or directive (whether or not
having the force of law) of any such authority, central bank, or comparable
agency after the Agreement Date, shall make it unlawful for any Lender to make,
maintain, or fund its Eurodollar Advances, such Lender shall so notify the
Administrative Agent, and the Administrative Agent shall forthwith give notice
thereof to the other Lenders and the Administrative Borrower. Before giving any
notice to the Administrative Agent pursuant to this Section 12.2, such Lender
shall designate a different lending office if such designation will avoid the
need for giving such notice and will not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender. Upon receipt of such notice,
notwithstanding anything contained in Article 2, the Borrowers shall repay in
full the then outstanding principal amount of each affected Eurodollar Advance
of such Lender, together with accrued interest thereon, either (a) on the last
day of the then current Eurodollar Advance Period applicable to such Eurodollar
Advance if such Lender may lawfully continue to maintain and fund such
Eurodollar Advance to such day or (b) immediately if such Lender may not
lawfully continue to fund and maintain such Eurodollar Advance to such day.
Concurrently with repaying each affected Eurodollar Advance of such Lender,
notwithstanding anything contained in Article 2, the Borrowers shall borrow a
Base Rate Advance from such Lender, and such Lender shall make such Advance in
an amount such that the outstanding principal amount of the Revolving Loans held
by such Lender shall equal the outstanding principal amount of such Revolving
Loans immediately prior to such repayment.
     Section 12.3 Increased Costs.
          (a) If any change in Applicable Law, any change in the interpretation
or administration of any Applicable Law by any governmental authority, central
bank, or comparable agency charged with the interpretation or administration
thereof or any change in compliance with Applicable Law as a result of any
request or directive (whether or not having the force of law) of such
governmental authority, central bank, or comparable agency after the Agreement
Date:
          (i) Shall subject any Lender to any tax, duty, or other charge with
respect to its obligation to make Eurodollar Advances, or its Eurodollar
Advances, or shall change the basis of taxation of payments to any Lender of the
principal of or interest on its Eurodollar Advances or in respect of any other
amounts due under this Agreement in respect of its Eurodollar Advances or its

137

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

 

obligation to make Eurodollar Advances (except for changes in the rate of tax on
the overall net income of such Lender);
          (ii) Shall impose, modify, or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System, but excluding any included in an applicable Eurodollar Reserve
Percentage), special deposit, assessment, or other requirement or condition
against assets of, deposits (other than as described in Section 12.5) with or
for the account of, or commitments or credit extended by any Lender, or shall
impose on any Lender or the eurodollar interbank borrowing market any other
condition affecting its obligation to make such Eurodollar Advances or its
Eurodollar Advances; and the result of any of the foregoing is to increase the
cost to such Lender of making or maintaining any such Eurodollar Advances, or to
reduce the amount of any sum received or receivable by the Lender under this
Agreement or under any Revolving Loan Notes with respect thereto, and such
increase is not given effect in the determination of the Eurodollar Rate;
          (iii) Shall subject any Issuing Bank or any Lender to any tax, duty or
other charge with respect to the obligation to issue Letters of Credit, maintain
Letters of Credit or participate in Letters of Credit, or shall change the basis
of taxation of payments to any Issuing Bank or any Lender in respect of amounts
drawn under Letters of Credit or in respect of any other amounts due under this
Agreement in respect of Letters of Credit or the obligation of the Issuing Banks
to issue Letters of Credit or maintain Letters of Credit or the obligation of
the Lenders to participate in Letters of Credit (except for changes in the rate
of tax on the overall net income of such Issuing Bank or any Lender); or
          (iv) Shall impose, modify, or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System), special deposit, assessment, or other requirement or condition against
assets of, deposits (other than as described in Section 12.5) with or for the
account of, or commitments or credit extended by any Issuing Bank, or shall
impose on any Issuing Bank or any Lender any other condition affecting the
obligation to issue Letters of Credit, maintain Letters of Credit or participate
in Letters of Credit; and the result of any of the foregoing is to increase the
cost to such Issuing Bank or any Lender of issuing, maintaining or participating
in any such Letters of Credit or to reduce the amount of any sum received or
receivable by such Issuing Bank or any Lender under this Agreement with respect
thereto,
then promptly upon demand by such Lender or such Issuing Bank, the Borrowers
agree to pay, without duplication of amounts due under Section 2.8(b), to such
Lender or such Issuing Bank such additional amount or amounts as will compensate
such Lender or such Issuing Bank for such increased costs. Each Lender or each
Issuing Bank will promptly notify the Administrative Borrower and the
Administrative Agent of any event of which

138

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

 

it has knowledge, occurring after the date hereof, which will entitle such
Lender or the such Issuing Bank to compensation pursuant to this Section 12.3
and will designate a different lending office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the sole
judgment of such Lender or such Issuing Bank, be otherwise disadvantageous to
such Lender or such Issuing Bank.
          (b) A certificate of any Lender or any Issuing Bank claiming
compensation under this Section 12.3 and setting forth the additional amount or
amounts to be paid to it hereunder and calculations therefor shall be conclusive
in the absence of manifest error. In determining such amount, such Lender or
such Issuing Bank may use any reasonable averaging and attribution methods. If
any Lender or any Issuing Bank demands compensation under this Section 12.3, the
Borrowers may at any time, upon at least five (5) Business Days’ prior notice to
such Lender, prepay in full the then outstanding affected Eurodollar Advances of
such Lender, together with accrued interest thereon to the date of prepayment,
along with any reimbursement required under Section 2.9. Concurrently with
prepaying such Eurodollar Advances, the Borrowers shall borrow a Base Rate
Advance, or a Eurodollar Advance not so affected, from such Lender, and such
Lender shall make such Advance in an amount such that the outstanding principal
amount of the Revolving Loans held by such Lender shall equal the outstanding
principal amount of such Revolving Loans immediately prior to such prepayment.
     Section 12.4 Effect On Other Advances. If notice has been given pursuant to
Sections 12.1, 12.2 or 12.3 suspending the obligation of any Lender to make any,
or requiring Eurodollar Advances of any Lender to be repaid or prepaid, then,
unless and until such Lender (or, in the case of Section 12.1, the
Administrative Agent) notifies the Administrative Borrower that the
circumstances giving rise to such repayment no longer apply, all Advances which
would otherwise be made by such Lender as to the Eurodollar Advances affected
shall, at the option of the Administrative Borrower, be made instead as Base
Rate Advances.
     Section 12.5 Capital Adequacy. If after the Agreement Date, any Lender or
any Issuing Bank (or any Affiliate of the foregoing) shall have reasonably
determined that the adoption of any applicable law, governmental rule,
regulation or order regarding the capital adequacy of banks or bank holding
companies, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender or such Issuing Bank (or any Affiliate of the foregoing) with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such governmental authority, central bank or comparable agency
(but only if such adoption, change, request or directive occurs after the
Agreement Date), has or would have the effect of reducing the rate of return on
such Lender’s or such Issuing Bank’s (or any Affiliate of the foregoing) capital
as a consequence of such Lender’s or such Issuing Bank’s Revolving Loan
Commitment or obligations hereunder to a level below that which it could have
achieved but for such

139

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

 

adoption, change or compliance (taking into consideration such Lender’s or such
Issuing Bank’s (or any Affiliate of the foregoing) policies with respect to
capital adequacy immediately before such adoption, change or compliance and
assuming that such Lender’s or such Issuing Bank’s (or any Affiliate of the
foregoing) capital was fully utilized prior to such adoption, change or
compliance), then, promptly upon demand by such Lender or such Issuing Bank, the
Borrowers shall immediately pay to such Lender or such Issuing Bank such
additional amounts as shall be sufficient to compensate such Lender or such
Issuing Bank for any such reduction actually suffered; provided, however, that
there shall be no duplication of amounts paid to a Lender pursuant to this
sentence and Section 12.3. A certificate of such Lender or such Issuing Bank
setting forth the amount to be paid to such Lender or such Issuing Bank by the
Borrowers as a result of any event referred to in this paragraph shall, absent
manifest error, be conclusive.
ARTICLE 13.
JURISDICTION, VENUE AND WAIVER OF JURY TRIAL
     Section 13.1 Jurisdiction and Service of Process. FOR PURPOSES OF ANY LEGAL
ACTION OR PROCEEDING BROUGHT BY ANY MEMBER OF THE LENDER GROUP WITH RESPECT TO
THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY BANK PRODUCTS DOCUMENT, EACH
BORROWER PARTY HEREBY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF THE
FEDERAL AND STATE COURTS SITTING IN THE COUNTY OF NEW YORK, STATE OF NEW YORK
AND HEREBY IRREVOCABLY DESIGNATES AND APPOINTS, AS ITS AUTHORIZED AGENT FOR
SERVICE OF PROCESS IN THE STATE OF NEW YORK, THE ADMINISTRATIVE BORROWER, OR
SUCH OTHER PERSON AS SUCH BORROWER PARTY SHALL DESIGNATE HEREAFTER BY WRITTEN
NOTICE GIVEN TO THE ADMINISTRATIVE AGENT (THE “DESIGNEE”). THE CONSENT TO
JURISDICTION HEREIN SHALL NOT BE EXCLUSIVE. THE LENDER GROUP SHALL FOR ALL
PURPOSES AUTOMATICALLY, AND WITHOUT ANY ACT ON THEIR PART, BE ENTITLED TO TREAT
SUCH DESIGNEE OF EACH BORROWER PARTY AS THE AUTHORIZED AGENT TO RECEIVE FOR AND
ON BEHALF OF SUCH BORROWER PARTY SERVICE OF WRITS, OR SUMMONS OR OTHER LEGAL
PROCESS IN THE STATE OF NEW YORK, WHICH SERVICE SHALL BE DEEMED EFFECTIVE
PERSONAL SERVICE ON SUCH BORROWER PARTY SERVED WHEN DELIVERED TO THE DESIGNEE,
WHETHER OR NOT SUCH DESIGNEE GIVES NOTICE TO SUCH BORROWER PARTY; AND DELIVERY
OF SUCH SERVICE TO ITS AUTHORIZED AGENT SHALL BE DEEMED TO BE MADE WHEN
PERSONALLY DELIVERED. IF THE DESIGNEE IS THE ADMINISTRATIVE BORROWER OR AN
AFFILIATE OF THE ADMINISTRATIVE BORROWER, SERVICE SHALL BE MADE ON DESIGNEE BY
DELIVERY TO THE DESIGNEE’S AGENT REGISTERED WITH THE NEW YORK SECRETARY OF STATE
FOR SERVICE OF PROCESS. IN THE EVENT THAT, FOR ANY

140

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

 

REASON, SUCH DESIGNEE SHALL NO LONGER SERVE AS DESIGNEE FOR A BORROWER PARTY TO
RECEIVE SERVICE OF PROCESS IN THE STATE OF NEW YORK, SUCH BORROWER PARTY SHALL
SERVE AND ADVISE THE ADMINISTRATIVE AGENT THEREOF SO THAT AT ALL TIMES EACH
BORROWER PARTY WILL MAINTAIN AN AGENT TO RECEIVE SERVICE OF PROCESS IN THE STATE
OF NEW YORK ON BEHALF OF SUCH BORROWER PARTY WITH RESPECT TO THIS AGREEMENT, ALL
OTHER LOAN DOCUMENTS AND THE BANK PRODUCTS DOCUMENTS. IN THE EVENT THAT, FOR ANY
REASON, SERVICE OF LEGAL PROCESS CANNOT BE MADE IN THE MANNER DESCRIBED ABOVE,
SUCH SERVICE MAY BE MADE IN SUCH MANNER AS PERMITTED BY LAW.
     Section 13.2 Consent to Venue. EACH BORROWER PARTY HEREBY IRREVOCABLY
WAIVES ANY OBJECTION IT WOULD MAKE NOW OR HEREAFTER FOR THE LAYING OF VENUE OF
ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
ANY OTHER LOAN DOCUMENT OR ANY BANK PRODUCTS DOCUMENT BROUGHT IN THE FEDERAL
COURTS OF THE UNITED STATES SITTING IN NEW YORK COUNTY, NEW YORK, AND HEREBY
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION, OR PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
     Section 13.3 Waiver of Jury Trial. EACH BORROWER PARTY AND EACH MEMBER OF
THE LENDER GROUP TO THE EXTENT PERMITTED BY APPLICABLE LAW WAIVES, AND OTHERWISE
AGREES NOT TO REQUEST, A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM OF ANY TYPE IN WHICH ANY BORROWER PARTY, ANY MEMBER
OF THE LENDER GROUP OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY,
AS TO ALL MATTERS AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, THE BANK PRODUCTS DOCUMENTS AND THE
RELATIONS AMONG THE PARTIES LISTED IN THIS ARTICLE 13.
     Section 13.4 The Administrative Borrower. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers
(the “Administrative Borrower”), which appointment shall remain in full force
and effect unless and until the Administrative Agent shall have received prior
written notice signed by each Borrower that such appointment has been revoked
and that another Borrower has been appointed the Administrative Borrower. Each
Borrower hereby irrevocably appoints and authorizes the Administrative Borrower
(i) to provide the Administrative Agent with all notices with respect to Loans
and Letters of Credit obtained for the benefit of any Borrower and all other
notices and instructions under this Agreement and (ii) to take such action as
the Administrative Borrower deems appropriate on its behalf to obtain

141

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

 

Loans and Letters of Credit and to exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement.
     Section 13.5 All Obligations to Constitute Joint and Several Obligations.
     (a) All Obligations shall constitute joint and several obligations of the
Borrowers and shall be secured by the Administrative Agent’s Lien upon all of
the Collateral, and by all other Liens heretofore, now or at any time hereafter
granted by each Borrower to the Administrative Agent, for the benefit of the
Lender Group, to the extent provided in the Loan Documents or Bank Product
Documents under which such Lien arises. Each Borrower expressly represents and
acknowledges that it is part of a common enterprise with the other Borrowers and
that any financial accommodations by the Administrative Agent, and the other
members of the Lender Group to any other Borrower hereunder and under the other
Loan Documents and the Bank Product Documents are and will be of direct and
indirect interest, benefit and advantage to all Borrowers. Each Borrower
acknowledges that any Request for Advance, Notice of Conversion/Continuation,
Notice of Requested Commitment Increase, Request for Issuance of Letter of
Credit or other notice or request given by any Borrower (including the
Administrative Borrower) to the Administrative Agent shall bind all Borrowers,
and that any notice given by the Administrative Agent or any other member of the
Lender Group to any Borrower shall be effective with respect to all Borrowers.
Each Borrower acknowledges and agrees that each Borrower shall be liable, on a
joint and several basis, for all of the Loans and other Obligations, regardless
of which Borrower actually may have received the proceeds of any of the Loans or
other extensions of credit or have had Letters of Credit issued hereunder or the
amount of such Loans received, Letters of Credit issued or the manner in which
the Administrative Agent or any other member of the Lender Group accounts among
the Borrowers for such Loans, Letters of Credit or other extensions of credit on
its books and records, and further acknowledges and agrees that Loans and other
extensions of credit to any Borrower inure to the mutual benefit of all of the
Borrowers and that the Administrative Agent and the other members of the Lender
Group are relying on the joint and several liability of the Borrowers in
extending the Loans and other financial accommodations hereunder. Each Borrower
shall be entitled to subrogation and contribution rights from and against the
other Borrowers to the extent any Borrower is required to pay to any member of
the Lender Group any amount in excess of the Loans advanced directly to, or
other Obligations incurred directly by, such Borrower or as otherwise available
under Applicable Law; provided, however, that such subrogation and contribution
rights are and shall be subject to the terms and conditions of this
Section 13.5.
     (b) In the event any Borrower Party (a “Funding Borrower Party”) shall make
any payment or payments under this Agreement or shall suffer any loss as a
result of any realization upon any collateral granted by it to secure its
obligations hereunder, such Funding Borrower Party shall have the right to seek
contribution payments from each other Borrower Party (each, a “Contributing
Borrower Party”) to the extent permitted by

142

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

 

Applicable Law. Nothing in this Section 13.5(b) shall affect any Borrower
Party’s joint and several liability to the Lender Group for the entire amount of
its Obligations. Each Borrower Party covenants and agrees that (i) its right to
receive any contribution hereunder from a Contributing Borrower Party shall be
subordinate and junior in right of payment to all obligations of the Borrower
Parties to the Lender Group hereunder and (ii) it shall not exercise any such
contribution rights unless and until the Obligations shall have been paid in
full in cash (or, with respect to Letters of Credit, cash collateralized or
supported by a letter of credit) and the Revolving Loan Commitments terminated.
     (c) Nothing in this Section 13.5 shall affect any Borrower’s joint and
several liability to the Lender Group for the entire amount of its Obligations.
Each Borrower Party covenants and agrees that its right to receive any
contribution hereunder from a contributing Borrower Party shall be subordinate
and junior in right of payment to all Obligations of the Borrowers to the Lender
Group hereunder. No Borrower Party will exercise any rights that it may acquire
by way of subrogation hereunder or under any other Loan Document or any Bank
Product Document or at law by any payment made hereunder or otherwise, nor shall
any Borrower Party seek or be entitled to seek any contribution or reimbursement
from any other Borrower Party in respect of payments made by such Borrower Party
hereunder or under any other Loan Document or under any Bank Product Document,
until all amounts owing to the Lender Group on account of the Obligations are
paid in full in cash (or, with respect to Letters of Credit, are either cash
collateralized or supported by a letter of credit) and the Revolving Loan
Commitments are terminated. If any amounts shall be paid to any Borrower Party
on account of such subrogation or contribution rights at any time when all of
the Obligations shall not have been paid in full, such amount shall be held by
such Borrower Party in trust for the Lender Group segregated from other funds of
such Borrower Party, and shall, forthwith upon receipt by such Borrower Party,
be turned over to the Administrative Agent in the exact form received by such
Borrower Party (duly endorsed by such Borrower Party to the Administrative
Agent, if required), to be applied against the Obligations, whether matured or
unmatured, as provided for herein.
[remainder of page intentionally left blank]

143

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

 

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

          BORROWERS:  OXFORD INDUSTRIES, INC.
      By:           Name:           Title:           TOMMY BAHAMA GROUP, INC.
      By:           Name:           Title:         GUARANTORS:  BEN SHERMAN
CLOTHING, INC.
      By:           Name:           Title:           LIONSHEAD CLOTHING COMPANY
      By:           Name:           Title:           OXFORD CARIBBEAN, INC.
      By:           Name:           Title:        

CREDIT AGREEMENT

 

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

 

            OXFORD GARMENT, INC.
      By:           Name:           Title:           OXFORD INTERNATIONAL, INC.
      By:           Name:           Title:           OXFORD OF SOUTH CAROLINA,
INC.
      By:           Name:           Title:           PIEDMONT APPAREL
CORPORATION
      By:           Name:           Title:           SFI OF OXFORD ACQUISITION
CORPORATION
      By:           Name:           Title:           TOMMY BAHAMA BEVERAGES, LLC
      By:           Name:           Title:        

CREDIT AGREEMENT

 

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

 

            TOMMY BAHAMA R&R HOLDINGS, INC.
      By:           Name:           Title:           TOMMY BAHAMA TEXAS
BEVERAGES, LLC
By: Tommy Bahama Beverages, LLC, its sole member
      By:           Name:           Title:           VIEWPOINT MARKETING, INC.
      By:           Name:           Title:           OXFORD LOCKBOX, INC.
      By:           Name:           Title:        

CREDIT AGREEMENT

 

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

 

          ADMINISTRATIVE AGENT,
ISSUING BANK AND LENDER:   SUNTRUST BANK, as the Administrative Agent, an
Issuing Bank, a Lender and the Swing Bank
      By:           Name:           Title:        

CREDIT AGREEMENT

 

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

 

Schedule 1(a)
Commitment Ratios

          Lender   Revolving Loan Commitment   Revolving Commitment Ratio
 
  $[___________]   [_____]%
 
       
Totals
  $175,000,000   100%