Exhibit 10.1

 

AMENDED AND RESTATED

 

CREDIT AGREEMENT

 

dated September 23, 2004

 

by and among

 

URBAN OUTFITTERS, INC.,

and its Subsidiaries listed on Schedule 1 hereto,

 

as Borrowers,

 

the Lenders referred to herein,

 

and

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent

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TABLE OF CONTENTS

 

          Page

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ARTICLE I DEFINITIONS    1

Section 1.1

  

Definitions

   1

Section 1.2

  

General

   15

Section 1.3

  

Other Definitions and Provisions

   15 ARTICLE II CREDIT FACILITY    15

Section 2.1

  

Loans

   15

Section 2.2

  

Procedure for Advances of Loans

   16

Section 2.3

  

Repayment of Loans

   17

Section 2.4

  

Notes

   17

Section 2.5

  

Change in Commitment

   18

Section 2.6

  

Termination of the Aggregate Commitment

   18

Section 2.7

  

Use of Proceeds

   18

Section 2.8

  

Joint and Several Obligations

   18

Section 2.9

  

Dollar Equivalent

   19 ARTICLE III LETTERS OF CREDIT    19

Section 3.1

  

L/C Commitment

   19

Section 3.2

  

Terms of Letters of Credit

   19

Section 3.3

  

Existing Letters of Credit issued by Wachovia

   20

Section 3.4

  

Cash Collateral for Letters of Credit

   20

Section 3.5

  

Procedure for Issuance of Letters of Credit

   21

Section 3.6

  

Commissions and Other Charges

   21

Section 3.7

  

L/C Participations

   21

Section 3.8

  

Reimbursement Obligation of the Borrowers

   22

Section 3.9

  

Obligations Absolute

   22

Section 3.10

  

General Terms of Documentary Letters of Credit

   23

Section 3.11

  

Effect of Application

   24

Section 3.12

  

Letter of Credit Documents

   24 ARTICLE IV GENERAL LOAN PROVISIONS    24

Section 4.1

  

Interest

   24

Section 4.2

  

Notice and Manner of Conversion or Continuation of Loans

   26

Section 4.3

  

Fees

   27

Section 4.4

  

Manner of Payment

   27

Section 4.5

  

Credit of Payments and Proceeds

   27

Section 4.6

  

Changed Circumstances

   28

Section 4.7

  

Indemnity

   29

Section 4.8

  

Capital Requirements

   30

Section 4.9

  

Taxes

   30

Section 4.10

  

Guaranty

   31

Section 4.11

  

Adjustments

   31

Section 4.12

  

Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by
the Administrative Agent

   32

Section 4.13

  

Currencies; Currency Equivalent and Related Provisions

   32

 

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ARTICLE V CLOSING; CONDITIONS OF CLOSING AND BORROWING    34

Section 5.1

  

Closing

   34

Section 5.2

  

Conditions to Closing and Initial Extensions of Credit

   34

Section 5.3

  

Conditions to All Extensions of Credit

   36 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWERS    37

Section 6.1

  

Representations and Warranties

   37

Section 6.2

  

Survival of Representations and Warranties, Etc.

   43 ARTICLE VII FINANCIAL INFORMATION AND NOTICES    43

Section 7.1

  

Financial Statements and Projections

   43

Section 7.2

  

Officer’s Compliance Certificate

   44

Section 7.3

  

Accountants’ Certificate

   44

Section 7.4

  

Other Reports

   44

Section 7.5

  

Notice of Litigation and Other Matters

   45

Section 7.6

  

Accuracy of Information

   45 ARTICLE VIII AFFIRMATIVE COVENANTS    45

Section 8.1

  

Preservation of Corporate Existence and Related Matters

   45

Section 8.2

  

Maintenance of Property

   46

Section 8.3

  

Insurance

   46

Section 8.4

  

Accounting Methods and Financial Records

   46

Section 8.5

  

Payment and Performance of Obligations

   46

Section 8.6

  

Compliance With Laws and Approvals

   46

Section 8.7

  

Environmental Laws

   46

Section 8.8

  

Compliance with ERISA

   47

Section 8.9

  

Compliance With Agreements

   47

Section 8.10

  

Conduct of Business

   47

Section 8.11

  

Visits and Inspections

   47

Section 8.12

  

Additional Guarantors

   47

Section 8.13

  

Maintain Cash Collateral Account

   47

Section 8.14

  

Subsequent Credit Terms

   47

Section 8.15

  

Opinions of Counsel to Non-U.S. Borrowers

   48

Section 8.16

  

Further Assurances

   48

Section 8.17

  

Bank Accounts

   48 ARTICLE IX FINANCIAL COVENANTS    48

Section 9.1

  

Fixed Charge Coverage Ratio

   48

Section 9.2

  

Adjusted Debt to EBITDAR Ratio

   48 ARTICLE X NEGATIVE COVENANTS    48

Section 10.1

  

Limitations on Debt

   48

Section 10.2

  

Limitations on Guaranty Obligations

   49

Section 10.3

  

Limitations on Liens

   50

Section 10.4

  

Limitations on Loans, Advances, Investments and Acquisitions

   50

Section 10.5

  

Limitations on Mergers and Liquidation

   51

Section 10.6

  

Limitations on Sale of Assets

   51

Section 10.7

  

Limitations on Dividends and Distributions

   52

Section 10.8

  

Limitations on Exchange and Issuance of Capital Stock

   52

Section 10.9

  

Transactions with Affiliates

   52

Section 10.10

  

Certain Accounting Changes

   52

Section 10.11

  

Amendments; Payments and Prepayments of Subordinated Debt

   53

Section 10.12

  

Restrictive Agreements

   53

 

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Section 10.13

  

Capital Expenditures

   53 ARTICLE XI DEFAULT AND REMEDIES    53

Section 11.1

  

Events of Default

   53

Section 11.2

  

Remedies

   55

Section 11.3

  

Rights and Remedies Cumulative; Non-Waiver, etc.

   55 ARTICLE XII THE ADMINISTRATIVE AGENT    56

Section 12.1

  

Appointment

   56

Section 12.2

  

Delegation of Duties

   56

Section 12.3

  

Exculpatory Provisions

   56

Section 12.4

  

Reliance by the Administrative Agent

   56

Section 12.5

  

Notice of Default

   57

Section 12.6

  

Non-Reliance on the Administrative Agent and Other Lenders

   57

Section 12.7

  

Indemnification

   58

Section 12.8

  

The Administrative Agent in Its Individual Capacity

   58

Section 12.9

  

Resignation of the Administrative Agent; Successor Administrative Agent

   58 ARTICLE XIII MISCELLANEOUS    58

Section 13.1

  

Notices

   58

Section 13.2

  

Expenses; Indemnity

   60

Section 13.3

  

Set-off

   60

Section 13.4

  

Governing Law

   60

Section 13.5

  

Consent to Jurisdiction; Service of Process

   60

Section 13.6

  

Waiver of Jury Trial; Preservation of Remedies

   61

Section 13.7

  

Reversal of Payments

   61

Section 13.8

  

Injunctive Relief; Punitive Damages

   62

Section 13.9

  

Accounting Matters

   62

Section 13.10

  

Successors and Assigns; Participations

   62

Section 13.11

  

Disclosure of Information; Confidentiality

   64

Section 13.12

  

Patriot Act Notice

   64

Section 13.13

  

Amendments, Waivers and Consents

   64

Section 13.14

  

Agreement Controls

   64

Section 13.15

  

Covenants Independent

   65

Section 13.16

  

Survival

   65

Section 13.17

  

Counterparts

   65

Section 13.18

  

Headings

   65

Section 13.19

  

Severability

   65

Section 13.20

  

Entirety

   65

Section 13.21

  

Termination

   65

Section 13.22

  

Payment of Borrowers’ Obligations

   65

Section 13.23

  

Powers of Attorney and Authorizations Irrevocable

   65

Section 13.24

  

Register

   66

Section 13.25

  

Judgment Currency

   66

 

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SCHEDULES           Schedule 1    -    Subsidiaries that are Borrowers Schedule
2    -    Lenders and Commitments Schedule 3    -    Guarantors Schedule 4    -
   Existing Letters of Credit Schedule 5    -    Import Letter of Credit Pricing
Schedule 6.1(a)    -    Jurisdictions of Organization and Qualification
Schedule 6.1(b)    -    Subsidiaries and Capitalization Schedule 6.1(i)    -   
ERISA Plans Schedule 6.1(l)    -    Material Contracts Schedule 6.1(m)    -   
Labor and Collective Bargaining Agreements Schedule 6.1(t)    -    Debt and
Guaranty Obligations Schedule 6.1(u)    -    Litigation Schedule 10.3    -   
Existing Liens Schedule 10.4(a)         Existing Loans, Advances and Investments
Schedule 10.4(b)    -    Investment Policy and Guidelines EXHIBITS          
Exhibit A    -    Form of Note Exhibit B    -    Form of Notice of Borrowing
Exhibit C    -    Form of Notice of Account Designation Exhibit D    -    Form
of Notice of Conversion/Continuation Exhibit E    -    Form of Officer’s
Compliance Certificate Exhibit F    -    Form of Termination Date Extension
Request Exhibit G    -    Form of Assignment Agreement Exhibit H    -    MLA
Costs Exhibit I    -    Form of Continuing Letter of Credit Agreement

 

-iv-

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AMENDED AND RESTATED CREDIT AGREEMENT (“Credit Agreement”), dated the
                 day of September, 2004, by and among URBAN OUTFITTERS, INC., a
Pennsylvania corporation (“Urban”), the Subsidiaries (as hereinafter defined) of
Urban listed on Schedule 1 hereto (including Urban, each individually a
“Borrower” and collectively, the “Borrowers”), the Lenders who are or may become
party to this Agreement, WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association, as Administrative Agent for the Lenders.

 

STATEMENT OF PURPOSE

 

On September 12, 2001, the Borrowers, the Administrative Agent and certain
Lenders entered into a credit agreement providing for a $25,000,000 revolving
credit facility to fund working capital (including capital expenditures), to
support the issuance of documentary and standby Letters of Credit and to finance
the general corporate purposes of the Borrowers (the “Existing Credit
Agreement”). The Existing Credit Agreement was subsequently amended by Amendment
No. 1 dated September 11, 2002, Amendment No. 2 dated November 15, 2002 and
Amendment No. 3 dated September 9, 2003.

 

The parties hereto have agreed to amend and restate the Existing Credit
Agreement (i) to increase the Aggregate Commitment to Thirty-five Million
Dollars ($35,000,000) and (ii) to make certain other modifications as set forth
herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, and intending to be
legally bound hereby, such parties hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1 Definitions. The following terms when used in this Agreement shall
have the meanings assigned to them below:

 

“Adjusted Debt” means, for any period of determination, as to Urban and its
Consolidated Subsidiaries, the sum of eight times (8x) Rents plus Funded Debt.

 

“Adjusted Debt to EBITDAR Ratio” means, as of any date of determination, as to
Urban and its Consolidated Subsidiaries, Adjusted Debt divided by EBITDAR, in
each case for the most recently ended Rolling Period.

 

“Administration Fee” shall have the meaning assigned thereto in Section 4.3(a)
hereof.

 

“Administrative Agent” means Wachovia in its capacity as Administrative Agent
hereunder, and any successor thereto appointed pursuant to Section 12.1 hereof.

 

“Administrative Agent’s Office” means the office of the Administrative Agent
specified or determined in accordance with the provisions of Section 13.1(c)
hereof.

 

“Affiliate” means, with respect to any Person, any other Person (other than a
Subsidiary) which directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such first
Person or any Subsidiary. The term control means (a) the power to vote five
percent (5%) or more of the securities or other equity interests of a Person
having ordinary voting power, or (b) the possession, directly or indirectly, of
any other power to direct or cause the direction of

 

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the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.

 

“Aggregate Commitment” means the aggregate amount of the Lenders’ Commitments
hereunder, as such amount may be reduced or modified at any time or from time to
time pursuant to the terms hereof. On the Closing Date, the Aggregate Commitment
shall be Thirty-five Million Dollars ($35,000,000), as such amount may be
increased in accordance with Section 2.5(b) hereof.

 

“Agreement” means this Credit Agreement including the schedules and exhibits
attached hereto, as amended, restated or otherwise modified from time to time.

 

“Alternate Currency” means as of the date hereof Pounds Sterling and the euro
and hereafter means such currencies or such other lawful currency other than
Dollars that is freely transferable and convertible into Dollars as each Lender
and Administrative Agent may mutually agree and from time to time designate as
an Alternate Currency, each such Alternate Currency specified herein or
hereafter designated to remain in effect as such until notice is given by any
Lender or Administrative Agent that such currency is no longer available as an
Alternate Currency.

 

“Alternate Currency Loan” means a Loan denominated in an Alternate Currency.

 

“Alternate Currency Exposure” means the aggregate outstanding principal balance
of all Alternate Currency Loans, plus the outstanding undrawn amount of, and all
unreimbursed draws under, all Alternate Currency Letters of Credit.

 

“Alternate Currency Letter of Credit” means a Letter of Credit denominated in an
Alternate Currency.

 

“Alternate Currency Sublimit” means the Dollar Equivalent of the portion of the
Aggregate Commitment up to which Lenders have agreed to make Alternate Currency
Loans and/or issue Alternate Currency Letters of Credit (subject to the L/C
Commitment), being Two Million Dollars ($2,000,000).

 

“Applicable Law” means all applicable provisions of constitutions, laws,
statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.

 

“Applicable Margin” means with respect to the Loans (i) on the Closing Date and
through the date of delivery of the completed Officer’s Compliance Certificate
for the fiscal quarter ending July 31, 2004, the percentages set forth for Level
IV in the chart below and (ii) for each fiscal quarter ending after July 31,
2004, the percentages determined by reference to the Adjusted Debt to EBITDAR
Ratio as of the end of the fiscal quarter immediately preceding the delivery of
the applicable Officer’s Compliance Certificate as follows:

 

Level

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Adjusted Debt to

EBITDAR Ratio

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

  

Applicable Base

Rate Margin

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

   

Applicable LIBO

Market Rate Index

Margin

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Applicable LIBOR

and Eurocurrency

Margin

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I

   >4.00    0 %   1.60 %   1.50 %

II

   > 3.50 and £ 4.00    0 %   1.35 %   1.25 %

III

   > 3.00 and £ 3.50    0 %   1.10 %   1.00 %

IV

   > 2.50 and £ 3.00    0 %   0.85 %   0.75 %

V

   £ 2.50    0 %   0.60 %   0.50 %

 

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Adjustments, if any, in the Applicable Margin shall be made by the
Administrative Agent on the fifth (5th) Business Day after receipt by the
Administrative Agent of quarterly financial statements for the Borrowers and the
accompanying Officer’s Compliance Certificate setting forth the Adjusted Debt to
EBITDAR Ratio of the Borrower as of the most recent fiscal quarter end.
Notwithstanding the remedies available to Lenders under Section 4.1(c) hereof,
in the event the Borrowers fail to deliver such financial statements and
certificate within the time required by Section 7.1 and 7.2 hereof, the
Applicable Margin shall be the percentage set forth in Level I in the above
chart until the delivery of such financial statements and certificate which
indicate that an adjustment is available.

 

“Application” means an application, in the form specified by the Issuing Lender
from time to time, requesting the Issuing Lender to issue a Letter of Credit.

 

“Assignment Agreement” shall have the meaning assigned thereto in Section 13.10.
hereof.

 

“Base Rate” means, at any time, the higher of (a) the Prime Rate and (b) the sum
of (i) the Federal Funds Rate plus (ii) 1/2 of 1%; each change in the Base Rate
applicable to the Loans bearing interest at such rate shall take effect
simultaneously with the corresponding change or changes in the Prime Rate or the
Federal Funds Rate.

 

“Base Rate Loan” means any Loan bearing interest at a rate based upon the Base
Rate as provided in Section 4.1(a) hereof.

 

“Borrower” means individually, and “Borrowers” means collectively, Urban
Outfitters, Inc., a Pennsylvania corporation, and each Subsidiary set forth on
Schedule 1 hereto, including without limitation each Non-U.S. Borrower, each in
its capacity as a borrower hereunder.

 

“Business Day” means (a) for all purposes other than as set forth in clause (b)
below, any day other than a Saturday, Sunday or legal holiday on which banks in
Philadelphia, Pennsylvania are open for the conduct of its commercial banking
business, and (b) with respect to all notices and determinations in connection
with, and payments of principal and interest on, any Alternate Currency Loan
LIBOR Rate Loan or LIBO Market Index Rate Loan, any day that is a Business Day
described in clause (a) and that is also a day on which commercial banks and the
London foreign exchange market set the payments in the Principal Financial
Center for any Alternate Currency.

 

“Capital Asset” means, with respect to the Borrowers and their Subsidiaries, any
asset that should, in accordance with GAAP, be classified and accounted for as a
capital asset on a Consolidated balance sheet of the Borrowers and their
Subsidiaries.

 

“Capital Expenditure Payment(s)” means capital expenditures, net of all
applicable tenant improvement allowances and any other amounts for fit-out and
other capital expenditures that will be reimbursed to any Borrower or Subsidiary
from any source, including state and local government grants, rebates and
incentives, on the annual audited financial statements of Urban and its
Consolidated Subsidiaries as prepared in accordance with GAAP.

 

-3-

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“Capital Lease” means, with respect to the Borrowers and their Subsidiaries, any
lease of any property that should, in accordance with GAAP, be classified and
accounted for as a capital lease on a Consolidated balance sheet of the
Borrowers and their Subsidiaries.

 

“Cash Taxes” means, cash taxes as calculated in accordance with GAAP.

 

“Change in Control” means the occurrence of any of the following events: (i)
Richard A. Hayne (“Hayne”) shall cease to own at least twenty percent (20%) of
the total shares of capital stock outstanding of Urban; (ii) any person or group
of persons (within the meaning of Section 13(d) of the Securities Exchange Act
of 1934, as amended) shall own more of Urban’s shares of capital stock
outstanding than are owned by Hayne at any one time; (iii) Hayne shall retire or
be removed from active management of Urban; (iv) any person or group of persons
(within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as
amended), other than Hayne, shall obtain ownership or control in one or more
series of transactions of more than fifty percent (50%) of the common stock or
fifty percent (50%) of the voting power of Urban entitled to vote in the
election of members of the board of directors of Urban; or (v) there shall have
occurred under any indenture or other instrument evidencing any Debt in excess
of $2,000,000 any change in control (as defined in such indenture or other
evidence of Debt) obligating any Borrower to repurchase, redeem or repay all or
any part of the Debt or capital stock provided for therein. For purposes of
clause (i), Hayne shall be deemed to own voting shares registered to members of
his immediate family and trusts for the benefit of members of his immediate
family, in each case, if Hayne continues to have voting control of such shares.

 

“Closing Adjusted Tangible Net Worth” means 85% of the Tangible Net Worth of
Urban and its Consolidated Subsidiaries on the Closing Date based on the most
recent quarterly or year-end balance sheet of Urban and its Consolidated
Subsidiaries.

 

“Closing Date” means the date of this Agreement or such later Business Day upon
which each condition described in Section 5.2 hereof shall be satisfied or
waived in all respects in a manner acceptable to the Administrative Agent, in
its sole discretion.

 

“Code” means the Internal Revenue Code of 1986, and the rules and regulations
thereunder, each as amended, supplemented or otherwise modified.

 

“Commitment” means, as to any Lender, the obligation of such Lender to make
Loans to, and, subject to the L/C Commitment, to issue or participate in Letters
of Credit for the account of, the Borrowers hereunder in an aggregate principal
or face amount at any time outstanding not to exceed the amount set forth
opposite such Lender’s name on Schedule 2 hereto, as the same may be reduced or
modified at any time or from time to time pursuant to the terms hereof.

 

“Commitment Percentage” means, as to any Lender at any time, the ratio of (a)
the amount of the Commitment of such Lender to (b) the Aggregate Commitment of
all the Lenders.

 

“Consolidated” means, when used with reference to financial statements or
financial statement items of the Borrowers and their Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.

 

“Continuing Letter of Credit Agreement” means the Continuing Letter of Credit
Agreement in the form of Exhibit I hereto to be entered into by the Borrowers,
Guarantors and Issuing Lender.

 

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“Corporate Headquarters” means the planned new corporate headquarters and
related improvements for Urban and its Subsidiaries to be located in the City of
Philadelphia in an area commonly known as “The Naval Yard.”

 

“Debt” means, with respect to the Borrowers and their Subsidiaries at any date
and without duplication, the sum of the following determined in accordance with
GAAP: (a) all liabilities, obligations and indebtedness for borrowed money,
including without limitation obligations evidenced by bonds, debentures, notes
or other similar instruments of any such Person, provided, however, that
liabilities, obligations and indebtedness under operating leases shall not
constitute Debt unless and until payments thereunder become past due or
accelerated in accordance with GAAP; (b) all obligations to pay the deferred
purchase price of property or services of any such Person, except trade payables
arising in the ordinary course of business not more than thirty (30) days past
due; (c) all obligations of any such Person as lessee under Capital Leases and
under “synthetic” or similar leases; (d) all Debt secured by any Lien upon
property or assets owned by such Person, notwithstanding that such Person has
not assumed or become liable for the payment of such Debt; (e) all Guaranty
Obligations of any such Person; (f) all obligations, contingent or otherwise, of
any such Person relative to the face amount of letters of credit, whether or not
drawn, including without limitation any Reimbursement Obligation, and banker’s
acceptances issued for the account of any such Person; (g) all obligations of
any such Person to redeem, repurchase, exchange, defease or otherwise make
payments in respect of capital stock or other securities of such Person; and (h)
all obligations incurred by any such Person pursuant to Hedging Agreements.

 

“Default” means any of the events specified in Section 11.1 hereof which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.

 

“Defaulting Lender” has the meaning assigned to such term in Section 4.6(d)
hereof.

 

“Distribution Center” means the planned new distribution center and call center
in Pennsylvania for Urban and its Subsidiaries.

 

“Dollar Equivalent” means, on any date of determination with respect to any
Alternate Currency Loan or Alternate Currency Letter of Credit, the amount, as
determined by Administrative Agent, of Dollars which could be purchased with the
amount of the relevant Alternate Currency involved in such computation at the
spot rate at which Dollars may be exchanged into such Alternate Currency as set
forth on such date on the applicable Dow Jones Telerate page (or any successor
pages) or, if such rate does not appear on such pages, at the rate of exchange
quoted by the Administrative Agent in Philadelphia, Pennsylvania at 11:00 a.m.
on the date of determination, to prime banks in New York City for the spot
purchase in the New York foreign exchange market of such amount of Dollars with
such Alternate Currency, as the case may be.

 

“Dollars or $” means, unless otherwise qualified, the lawful currency of the
United States of America.

 

“EBIT” means, for any period of determination, as to Urban and its Consolidated
Subsidiaries, net income for such period, plus Interest Expense and taxes, in
each case as determined in accordance with GAAP and, if applicable, to the
extent each has been deducted in determining net income.

 

“EBITDAR” means, for any period of determination, as to Urban and its
Consolidated Subsidiaries, EBIT plus depreciation expense, amortization expense
and Rents for such period, in each case as determined in accordance with GAAP
(except Rents, which shall be determined on a cash rather than an accrual basis)
and, if applicable, to the extent each has been deducted in determining net
income.

 

-5-

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“Eligible Assignee” means, with respect to any assignment of the rights,
interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment: (a) a commercial bank organized under the laws of the United
States or any state thereof, having combined capital and surplus in excess of
$500,000,000; (b) a commercial bank organized under the laws of any other
country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000; (c) a finance company, insurance
company or other financial institution which in the ordinary course of business
extends credit of the type extended hereunder and that has total assets in
excess of $1,000,000,000; (d) already a Lender hereunder (whether as an original
party to this Agreement or as the assignee of the Lender); (e) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially all
of the commercial lending business of the assigning Lender; or (f) any other
Person that has been approved in writing as an Eligible Assignee by the
Borrowers and the Administrative Agent.

 

“Employee Benefit Plan” means any employee benefit plan within the meaning of
Section 3(3) of ERISA which (a) is maintained for employees of any Borrower or
any ERISA Affiliate or (b) has at any time within the preceding six years been
maintained for the employees of any Borrower or any current or former ERISA
Affiliate.

 

“Environmental Laws” means any and all federal, state and local laws, statutes,
ordinances, rules, regulations, permits, licenses, approvals, interpretations
and orders of courts or Governmental Authorities, relating to the protection of
human health or the environment, including without limitation requirements
pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Materials.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, and the rules
and regulations thereunder, each as amended, supplemented or otherwise modified.

 

“ERISA Affiliate” means any Person who together with any Borrower or Subsidiary
is treated as a single employer within the meaning of Section 414(b), (c), (m)
or (o) of the Code or Section 4001(b) of ERISA.

 

“euro” means the single currency of the Participating Member States of the
European Union.

 

“Eurocurrency Rate” shall mean, with respect to any Eurocurrency Loan, a rate
per annum (rounded to the next higher 1/100 of 1%) at which deposits in the
relevant Alternate Currency are offered to the Administrative Agent at its
principal office in London, England by prime banks in the London Interbank
Market, in each case, as of 11:00 a.m. London time, on the second Business Day
prior to the commencement of the relevant Interest Period in amounts
substantially equal to the Alternate Currency Loan as to which Borrowers may
elect the Eurocurrency Rate to be applicable and with a maturity of comparable
duration to the Interest Period selected by Borrowers for such Alternate
Currency Loan, as may be adjusted for reserves by dividing that rate by 1.00
minus the Eurodollar Reserve Percentage, and as may be further adjusted for MLA
Costs.

 

“Eurodollar Reserve Percentage” means, for any day, the percentage (expressed as
a decimal and rounded upwards, if necessary, to the next higher one-hundredth of
one percent (1/100%)) which is in effect for such day as prescribed by the
Federal Reserve Board (or any successor) for determining the maximum reserve
requirement (including without limitation any basic, supplemental or emergency
reserves) in respect of eurocurrency liabilities or any similar category of
liabilities for a member bank of the Federal Reserve System in New York City.

 

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“Event of Default” means any of the events specified in Section 11.1 hereof,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.

 

“Excluded Projects” means the acquisition, leasing, planning, development,
construction (including demolition, rehabilitation, renovation and/or expansion
of existing buildings) and fit-out (but excluding any long-term and equipment
financing thereof) of the Corporate Headquarters and the Distribution Center.

 

“Existing Wachovia Facility” means that certain standby letter of credit
facility, documentary letter of credit facility and forward contract foreign
exchange facility by and between Urban Outfitters UK Limited, as the borrower,
and Wachovia, London Branch, as the lender, as in effect from time to time.

 

“Existing Letters of Credit” has the meaning assigned thereto in Section 3.3
hereof.

 

“Extensions of Credit” means an amount equal to the sum of: (a) the aggregate
principal amount of all Loans then outstanding, and (b) the L/C Obligations then
outstanding.

 

“Executive Order” has the meaning assigned thereto in Section 6.1(z) hereof.

 

“FDIC” means the Federal Deposit Insurance Corporation, or any successor
thereto.

 

“Federal Funds Rate” means, the rate per annum (rounded upwards, if necessary,
to the next higher one-hundredth of one percent (1/100%)) representing the daily
effective federal funds rate as quoted by the Administrative Agent and confirmed
in Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then “Federal Funds Rate” shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m.(Philadelphia time). Rates for weekends or holidays shall be
the same as the rate for the most immediate preceding Business Day.

 

“Fiscal Year” means the fiscal year of the Borrowers and their Subsidiaries
ending on January 31.

 

“Fixed Charge Coverage Ratio” means, as of any date of determination, as to
Urban and its Consolidated Subsidiaries, the ratio of (a) EBITDAR to (b) Fixed
Charges, in each case for the most recently ended Rolling Period.

 

“Fixed Charges” means the sum of Interest Expense, Cash Taxes, Rents, stock
repurchases, and dividends and other equity distributions.

 

“Foreign Assets Control Regulations” has the meaning assigned thereto in Section
6.1(z) hereof.

 

“Funded Debt” means, for any period of determination, the aggregate principal
amount of all Debt of the Borrowers and their Consolidated Subsidiaries for: (i)
borrowed money (including without limitation the face amount of Letters of
Credit whether or not drawn); (ii) installment purchases of real or personal
property; (iii) the principal portion of obligations owing under Capital Leases,
determined in accordance with GAAP; (iv) “synthetic leases” and other similar
lease arrangements; and (v) guaranties of Funded Debt of others, without
duplication.

 

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“FX Calculation Date” means (a) each date of delivery of a Notice of Borrowing
or Application, (b) each date of delivery of an Officer’s Compliance
Certificate, and (c) each other date on which Administrative Agent shall, in its
discretion, calculate the Dollar Equivalent of outstanding Alternate Currency
Exposure, provided, that Administrative Agent agrees to make such calculation
upon receipt of written notice from any Lender that such Lender believes the
Aggregate Commitment or Alternate Currency Sublimit may be exceeded as a result
of currency fluctuations affecting the Dollar Equivalent of outstanding
Alternate Currency Exposure, provided further, that, except as set forth in the
foregoing proviso, Administrative Agent shall have no obligation to calculate
the Dollar Equivalent of outstanding Alternate Currency Exposure other than on
an FX Calculation Date as set forth in clauses (a) and (b).

 

“GAAP” means generally accepted accounting principles, as recognized by the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board, consistently applied and maintained on a consistent basis for
the Borrowers and their Subsidiaries throughout the period indicated and
consistent with the prior financial practice of the Borrowers and their
Subsidiaries.

 

“Governmental Approvals” means all authorizations, consents, approvals, licenses
and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.

 

“Governmental Authority” means any nation, province, state or political
subdivision thereof, and any government, agency, instrumentality regulatory
body, court, central bank or other Person exercising executive, legislative,
regulatory, administrative or judicial functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.

 

“Guaranty Agreement” means that certain Guaranty Agreement, dated the date of
this Agreement, executed by the Guarantors in favor of the Administrative Agent
for the benefit of Lenders, pursuant to which the Guarantors have agreed to
unconditionally guaranty, on a joint and several basis, the full, prompt and
complete performance of all of the Borrowers’ duties, covenants and obligations
under this Agreement, the Notes and the other Loan Documents. The term “Guaranty
Agreement” shall also be deemed to mean and refer to all amendments,
modifications, extensions, renewals, refinancings and/or supplements to said
agreement made and/or entered into subsequent to the Closing Date, including
without limitation all amendments which are consummated for the purposes of
adding any new and/or additional Persons as Guarantors, as provided for in
Section 8.12 of this Agreement.

 

“Guarantors” means collectively those direct and indirect Subsidiaries of the
Borrowers set forth on Schedule 3 hereto, and “Guarantor” means any of such
Guarantors and each additional entity whether now owned or hereafter acquired
that becomes a Guarantor pursuant to Section 8.12 hereof; provided, however,
that Urban Outfitters Canada, Inc., a corporation formed under the laws of
Canada, shall not be a Guarantor.

 

“Guaranty Obligation” means, with respect to the Borrowers and their
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, with
respect to such Debt: (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt (whether arising by virtue of partnership
arrangements, by agreement to keep well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement condition or
otherwise), or (b) entered into for the purpose of assuring in any other manner
the obligee of such Debt of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided, that the term
“Guaranty Obligation” shall not include (i) endorsements for collection or
deposit in the ordinary

 

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course of business, or (ii) obligations under real estate leases to the extent
that such obligations do not constitute Debt.

 

“Hayne” has the meaning assigned thereto in the definition of Change of Control
above.

 

“Hazardous Materials” means any substances or materials: (a) which are or become
defined as hazardous wastes, hazardous substances, pollutants, contaminants,
chemical substances or mixtures or toxic substances under any Applicable Law;
(b) which are toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise harmful to human health or the environment
and are or become regulated by any Governmental Authority; (c) the presence of
which require investigation or remediation under any Applicable Law; (d) the
discharge or emission or release of which requires a permit or license under any
Applicable Law or other Governmental Approval; (e) which are deemed to
constitute a nuisance, a trespass or pose a health or safety hazard to persons
or neighboring properties; (f) which consist of underground or aboveground
storage tanks, whether empty, filled or partially filled with any substance; or
(g) which contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.

 

“Hedging Agreement” means any agreement with respect to an interest rate or
currency exchange rate swap, collar, cap, floor or forward rate agreement or
other agreement regarding the hedging of interest rate risk exposure or currency
exchange rate risk exposure executed in connection with hedging the interest
rate exposure or exchange rate exposure of any Borrower, and any confirming
letter executed pursuant to such hedging agreement, all as amended, restated or
otherwise modified.

 

“Intangible Assets” means for Urban and its Consolidated Subsidiaries, all
assets which would be classified in accordance with GAAP as intangible assets,
including without limitation, all franchises, licenses, permits, patents, patent
applications, copyrights, trademarks, tradenames, goodwill, experimental or
organization expenses and other like intangibles, the cash surrender value and
other like intangibles of any life insurance policy, treasury stock and
unamortized debt discount.

 

“Interest Expense” means, for any period of determination, as to Urban and its
Consolidated Subsidiaries, total interest expense (including without limitation
interest expense attributable to Capital Leases), without duplication,
determined in accordance with GAAP.

 

“Interest Period” shall have the meaning assigned thereto in Section 4.1(b)
hereof.

 

“Issuing Lender” means Wachovia in its capacity as issuer of any Letter of
Credit, or any successor thereto.

 

“L/C Commitment” means: (a) in the case of documentary Letters of Credit, the
Aggregate Commitment, and (b) in the case of standby Letters of Credit, the
lesser of (i) the Aggregate Commitment and (ii) One Million Dollars
($1,000,000).

 

“L/C Obligations” means at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.8 hereof.

 

“L/C Participants” means the collective reference to all Lenders participating
in the issuance of Letters of Credit.

 

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“Lender” means each Person executing this Agreement as a Lender set forth on the
signature pages hereto and each Person that hereafter becomes a party to this
Agreement as a Lender pursuant to Section 13.10 hereof.

 

“Lending Office” means, with respect to any Lender, the office of such Lender
maintaining such Lender’s Commitment Percentage of the Loans.

 

“Letters of Credit” shall have the meaning assigned thereto in Section 3.1
hereof.

 

“LIBO Market Index Rate” means for any day, [(a)] for borrowings in Dollars, the
rate for one (1) month U.S. Dollar deposits [and (b) for borrowings in an
Alternate Currency, the rate for one (1) month deposits of such Alternate
Currency,] as reported on the Telerate page 3750 [or similar page for Alternate
Currency] as of 11:00 a.m. London time, for such day, provided that, if such day
is not a London Business Day, then the immediately preceding London Business Day
(or if not so reported, then as determined by the Administrative Agent from
another recognized source or interbank quotation); each change in the LIBO
Market Index Rate applicable to the Loans bearing interest at such rate shall
take effect simultaneously with the corresponding change in the LIBO Market
Index Rate.

 

“LIBO Market Index Rate Loan” means any Loan bearing interest at a rate based
upon the LIBO Market Index Rate as provided in Section 4.1(a) hereof.

 

“LIBOR” means the rate of interest per annum determined on the basis of the rate
for deposits in Dollars, in amounts substantially equal to the amount of the
LIBOR Rate Loan to which such LIBOR Rate will apply, for a period equal to the
applicable Interest Period which appears on the Telerate Page 3750 at
approximately 11:00 a.m.(London time) two (2) Business Days prior to the first
day of the applicable Interest Period (rounded upwards, if necessary, to the
next higher one-hundredth of one percent (1/100%)). If, for any reason, such
rate does not appear on Telerate Page 3750, then LIBOR shall be determined by
the Administrative Agent to be the arithmetic average (rounded upwards, if
necessary, to the next higher one-hundredth of one percent (1/100%)) of the rate
per annum at which deposits in Dollars would be offered by first class banks in
the London interbank market to the Administrative Agent approximately 11:00
a.m.(London time) two (2) Business Days prior to the first day of the applicable
Interest Period for a period equal to such Interest Period and in an amount
substantially equal to the amount of the applicable Loan.

 

“LIBOR Rate” means a rate per annum (rounded upwards, if necessary, to the next
higher one-hundredth of one percent (1/100%)) determined by the Administrative
Agent pursuant to the following formula:

 

LIBOR Rate =    LIBOR         1.00 - Eurodollar Reserve Percentage     

 

“LIBOR Rate Loan” means any Loan bearing interest at a rate based upon the LIBOR
Rate as provided in Section 4.1(a) hereof.

 

“Lien” means, with respect to any asset, any mortgage, lien pledge, charge,
security interest or encumbrance of any kind in respect of such asset, including
without limitation acquiring or holding any asset subject to the interest of a
vendor, lessor or other creditor under any conditional sale agreement, Capital
Lease or other title retention agreement relating to such asset.

 

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“Loans” means any revolving loan made to the Borrowers pursuant to Section 2.1
hereof, including without limitation all Alternate Currency Loans, and all such
revolving loans collectively as the context requires, and “Loan” means any of
such Loans.

 

“Loan Documents” means, collectively, this Agreement, the Note, the Guaranty
Agreement, the Applications, the Letters of Credit and each other document,
instrument, certificate and agreement executed and delivered by any Borrower,
any Subsidiary, any Guarantor or their counsel in connection with this Agreement
or otherwise referred to herein or contemplated hereby, all as may be amended,
restated or otherwise modified.

 

“London Business Day” means any Business Day on which banks in London, England
are open for business.

 

“Management Report” means that certain memorandum entitled “Material Weaknesses
in Internal Control” furnished to the Borrowers by their auditors, or any
similar successor report, in its entirety, as required to be delivered in
accordance with Generally Accepted Auditing Standards.

 

“Material Adverse Effect” means, with respect to the Borrowers and their
Subsidiaries taken as a whole, a material adverse effect on the properties,
business, prospects, operations or condition (financial or otherwise) of the
Borrowers and their Subsidiaries or the ability of the Borrowers and their
Subsidiaries to perform their obligations under the Loan Documents or Material
Contracts, in each case to which they are a party.

 

“Material Contract” means (a) any contract or other agreement, written or oral,
of any Borrower or any Subsidiary involving monetary liability of or to any such
Person in an amount in excess of $5,000,000 per annum, or (b) any other contract
or agreement, written or oral, of any Borrower or any Subsidiary the failure to
comply with which could reasonably be expected to have a Material Adverse
Effect; provided, however, that operating leases in the aggregate, in and of
themselves, shall not be deemed a Material Contract; provided, further, however,
that any single operating lease may constitute a Material Contract in accordance
with the foregoing definition of Material Contract; and provided, further that
no contracts (other than contracts relating to any aspect of the financing of
the Corporate Headquarters and/or the Distribution Center) entered into in
connection with Excluded Projects will be deemed to be a Material Contract.

 

“MLA Cost” shall mean, with respect to any Alternate Currency Loan made by any
Lender, the cost imputed to such Lender of compliance with the Mandatory Liquid
Assets requirements of the Bank of England during the Interest Period applicable
to such Alternate Currency Loan, expressed as a rate per annum and determined in
accordance with Exhibit H hereto.

 

“Multiemployer Plan” means a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA to which any Borrower, any Subsidiary or any ERISA Affiliate
is making, or is accruing an obligation to make, contributions within the
preceding six years.

 

“national currency unit” means the unit of currency (other than a euro unit) of
a Participating Member State.

 

“Non-U.S. Borrowers” means collectively all Borrowers formed under a
jurisdiction outside of the United States, including without limitation Urban
Outfitters UK Limited, a corporation formed under the laws of England and Wales,
and Urban Outfitters Ireland Limited, a corporation formed under the laws of the
Republic of Ireland, and “Non-U.S. Borrower” means any of such Non-U.S.
Borrowers.

 

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“Non-U.S. Sublimit” means the maximum amount which may be outstanding at any
time, in the aggregate, for: (i) Loans borrowed by or on behalf of any Non-U.S.
Borrower, (ii) intercompany loans to any Non-U.S. Borrower permitted under
Section 10.4(d) hereof and (iii) L/C Obligations for Letters of Credit issued
for the account of any Non-U.S. Borrower, being Eight Million Dollars
($8,000,000) on the date hereof.

 

“Note(s)” means the collective reference to the Notes executed by the Borrowers
payable to the order of each Lender, substantially in the form of Exhibit A
hereto, evidencing the Commitments, and any amendments and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extension thereof, in whole or in part.

 

“Note 10” shall have the meaning assigned thereto in Section 6.1(t) hereof.

 

“Notice of Account Designation” shall have the meaning assigned thereto in
Section 2.2(c) hereof.

 

“Notice of Borrowing” shall have the meaning assigned thereto in Section 2.2
hereof.

 

“Notice of Conversion/Continuation” shall have the meaning assigned thereto in
Section 4.2 hereof.

 

“Obligations” means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including without limitation
interest accruing after the filing of any bankruptcy or similar petition) the
Loans; (b) the L/C Obligations; (c) all payment and other obligations owing by
the Borrowers and Guarantors to any Lender or the Administrative Agent under any
Hedging Agreement with any Lender; and (d) all other fees and commissions
(including without limitation attorney’s fees), charges, indebtedness, loans,
liabilities, financial accommodations, obligations, covenants and duties owing
by the Borrowers and Guarantors to the Lenders or the Administrative Agent, of
every kind, nature and description, direct or indirect, absolute or contingent,
due or to become due, contractual or tortious, liquidated or unliquidated, and
whether or not evidenced by any note, in each case under or in respect of this
Agreement, the Note, any Letter of Credit or any of the other Loan Documents, or
any Hedging Agreement with any Lender or the Administrative Agent.

 

“Officer’s Compliance Certificate” shall have the meaning assigned thereto in
Section 7.2 hereof.

 

“Other Taxes” shall have the meaning assigned thereto in Section 4.9(b) hereof.

 

“Participants” shall have the meaning assigned thereto in Section 13.10 hereof.

 

“Participating Member State” means each state so described in any legislation
enacted by the European Union.

 

“Participations” shall have the meaning assigned thereto in Section 13.10
hereof.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

 

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412 of the
Code and which (a) is maintained for employees of any Borrower, Subsidiary or
ERISA Affiliate or (b) has at any time within

 

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the preceding six years been maintained for the employees of any Borrower,
Subsidiary or current or former ERISA Affiliate.

 

“Person” means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.

 

“Pounds Sterling” means the lawful currency of the United Kingdom.

 

“Prime Rate” means, at any time, the rate of interest per annum publicly
announced from time to time by Wachovia as its prime rate. Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. The parties hereto acknowledge that the rate
announced publicly by Wachovia as its Prime Rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers or
other banks.

 

“Principal Financial Center” means, in the case of any Alternate Currency, the
principal financial center with such Alternate Currency is cleared and settled,
as determined by the Administrative Agent.

 

“Reimbursement Obligation” means the obligation of the Borrowers to reimburse
the Issuing Lender pursuant to Section 3.8 hereof for amounts drawn under
Letters of Credit.

 

“Remaining Lenders” means the Lenders other than the Lender(s) which the
Borrowers have requested to be terminated, replaced or added under this
Agreement; provided, however, that such Remaining Lenders hold in the aggregate
at least sixty percent (60%) of the Aggregate Commitment immediately prior to
such termination, replacement or addition.

 

“Rents” means all cash payments made to a landlord in connection with a lease of
real property, including without limitation payments for rent, utilities and
taxes.

 

“Required Lenders” means: (i) if there are less than three Lenders, all Lenders,
or (ii) if there are three or more Lenders, at any date, any combination of
holders of at least sixty-six and two-thirds percent (66 2/3%) of the aggregate
unpaid principal amount of the Notes, or if no amounts are outstanding under the
Notes, any combination of Lenders whose Commitment Percentages aggregate at
least sixty-six and two-thirds percent (66 2/3%).

 

“Responsible Officer” means any of the following: the chief executive officer,
chief financial officer or treasurer of each Borrower or Guarantor or any other
officer of such Borrower or Guarantor reasonably acceptable to the
Administrative Agent.

 

“Rolling Period” means, as of any date, the most recent four (4) consecutive
fiscal quarters of Urban and its Consolidated Subsidiaries completed on or
before such date.

 

“Solvent” means, as to any Borrower or Guarantor on a particular date, that any
such Person (a) has capital sufficient to carry on its business and transactions
and all business and transactions in which it is about to engage and is able to
pay its debts as they mature, (b) owns property having a value, both at fair
valuation and at present fair saleable value, greater than the amount required
to pay its probable liabilities (including without limitation contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.

 

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“SPE” means one or more entities formed after the date of this Credit Agreement,
if any, created for the sole purpose of owning all or any portion of an Excluded
Project.

 

“Subordinated Debt” means the collective reference to Debt on Schedule 6.1(t)
hereto designated as Subordinated Debt and any other Debt of any Borrower or
Subsidiary subordinated in right and time of payment to the Obligations on terms
satisfactory to the Required Lenders.

 

“Subsidiary” means as to any Person, any corporation, partnership, limited
liability company or other entity of which more than fifty percent (50%) of the
outstanding capital stock or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other managers of such
corporation, partnership, limited liability company or other entity is at the
time, directly or indirectly, owned by or the management is otherwise controlled
by such Person (irrespective of whether, at the time, capital stock or other
ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency). Unless otherwise
qualified references to “Subsidiary” or “Subsidiaries” herein shall refer to
those of any Borrower.

 

“Tangible Net Worth” means Urban and its Consolidated Subsidiaries’ net worth,
as defined in accordance with GAAP, minus Intangible Assets.

 

“Taxes” has the meaning assigned thereto in Section 4.9 hereof.

 

“Termination Date” means the earliest of the dates referred to in Section 2.6
hereof.

 

“Termination Date Extension Request” means a request by Urban to the
Administrative Agent, substantially in the form of Exhibit F hereto, which shall
be submitted no earlier than one hundred fifty (150) days and no later than
forty-five days (45) days prior to the Termination Date referred to in
subsection (a) of Section 2.6 hereof.

 

“Termination Event” means one or more of any of the following: (a) a “Reportable
Event” described in Section 4043 of ERISA; (b) the withdrawal of any Borrower,
Subsidiary or any ERISA Affiliate from a Pension Plan during a plan year in
which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA;
(c) the termination of a Pension Plan, the filing of a notice of intent to
terminate a Pension Plan or the treatment of a Pension Plan amendment as a
termination under Section 4041 of ERISA; (d) the institution of proceedings to
terminate, or the appointment of a trustee with respect to, any Pension Plan by
the PBGC; (e) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of a trustee
to administer, any Pension Plan; (f) the partial or complete withdrawal of any
Borrower, Subsidiary or ERISA Affiliate from a Multiemployer Plan; (g) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302 of
ERISA; (h) any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA; or (i)
any event or condition which results in the termination of a Multiemployer Plan
under Section 4041A of ERISA or the institution by PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.

 

“Trading With the Enemy Act” has the meaning assigned thereto in Section 6.1(z)
hereto.

 

“Uniform Customs” means in the case of (a) standby Letters of Credit, the
International Standby Practices—ISP98 (1998), International Chamber of Commerce
Publication No. 590, as the same may be amended or revised from time to time,
and (b) documentary Letters of Credit, the Uniform Customs and Practice for
Documentary Credits (1994 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended or revised from time to time.

 

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“UCC” means the Uniform Commercial Code as in effect in the Commonwealth of
Pennsylvania, as amended, restated or otherwise modified.

 

“United States” means the United States of America.

 

“U.S. Borrowers” means collectively all Borrowers formed under the laws of a
jurisdiction within the United States, and “U.S. Borrower” means any of such
U.S. Borrowers.

 

“Wachovia” means Wachovia Bank, a national banking association, and its
successors.

 

“Wholly-Owned” means, with respect to a Subsidiary, that all of the shares of
capital stock or other ownership interests of such Subsidiary are, directly or
indirectly, owned or controlled by a Borrower and/or one or more of a Borrower’s
Wholly-Owned Subsidiaries.

 

Section 1.2 General. Unless otherwise specified, a reference in this Agreement
to a particular section, subsection, Schedule or Exhibit is a reference to that
section, subsection, Schedule or Exhibit of this Agreement. Wherever from the
context it appears appropriate, each term stated in either the singular or
plural shall include the singular and plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, the feminine
and the neuter. Any reference herein to “Philadelphia time” shall refer to the
applicable time of day in Philadelphia, Pennsylvania.

 

Section 1.3 Other Definitions and Provisions.

 

(a) Use of Capitalized Terms. Unless otherwise defined therein, all capitalized
terms defined in this Agreement shall have the defined meanings when used in
this Agreement, the Note and the other Loan Documents or any certificate, report
or other document made or delivered pursuant to this Agreement.

 

(b) Miscellaneous. The words hereof, herein and hereunder and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.

 

ARTICLE II

CREDIT FACILITY

 

Section 2.1 Loans. Subject to the terms and conditions of this Agreement, each
Lender severally agrees to make Loans to the Borrowers from time to time from
the Closing Date through the Termination Date as requested by the Borrowers in
accordance with the terms of hereof; provided, that

 

(a) the aggregate principal amount of all outstanding Loans (after giving effect
to any amount requested) shall not exceed the Aggregate Commitment less the sum
of all L/C Obligations,

 

(b) the principal amount of outstanding Loans from any Lender to the Borrowers
shall not at any time exceed such Lender’s Commitment as set forth on Schedule 2
hereto less such Lender’s Commitment Percentage of outstanding L/C Obligations,

 

(c) the aggregate principal amount of all outstanding Loans to Non-U.S.
Borrowers (after giving effect to any amount requested) shall not at any time
exceed the Non-U.S. Sublimit less the sum of: (i) the aggregate principal amount
of all outstanding intercompany loans to any

 

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Non-U.S. Borrower permitted under Section 10.4(d) hereof and (ii) all L/C
Obligations for Letters of Credit issued for the account of any Non-U.S.
Borrower,

 

(d) Lenders may make Alternate Currency Loans only to Non-U.S. Borrowers; and

 

(e) the Dollar Equivalent of the Alternate Currency Exposure shall not at any
time exceed the Alternate Currency Sublimit.

 

Each Loan by a Lender shall be in a principal amount equal to such Lender’s
Commitment Percentage of the aggregate principal amount of Loans requested on
such occasion. Subject to the terms and conditions hereof, the Borrowers may
borrow, repay and reborrow Loans hereunder until the Termination Date.

 

Section 2.2 Procedure for Advances of Loans.

 

(a) Requests for Borrowing. The Borrowers shall give the Administrative Agent
irrevocable prior written notice in the form attached hereto as Exhibit B (a
“Notice of Borrowing”) not later than 11:00 a.m.(Philadelphia time) (i) on the
same Business Day as each Base Rate Loan or LIBO Market Index Rate Loan, (ii) at
least three (3) Business Days before each LIBOR Rate Loan, and (iii) at least
three (3) London Business Days before each Alternate Currency Loan, of its
intention to borrow, specifying: (A) the date of such borrowing, which shall be
a Business Day (and a London Business Day with respect to an Alternate Currency
Loan); (B) the amount of such borrowing, which shall be in an amount equal to
the amount of the Aggregate Commitment then available to the Borrowers, or, if
less, (w) with respect to Base Rate Loans, in an aggregate principal amount of
$250,000 and increments of $250,000 in excess thereof, (x) with respect to LIBO
Market Index Rate Loans, in an aggregate principal amount of $500,000 and
increments of $250,000 in excess thereof, (y) with respect to LIBOR Rate Loans
in an aggregate principal amount of $1,000,000 and increments of $500,000 in
excess thereof and (z) with respect to Eurocurrency Loans, the Dollar Equivalent
of $100,000 and increments of $100,000 in excess thereof; (C) whether such Loans
are to be Base Rate Loans, LIBO Market Index Rate Loans, LIBOR Rate Loans or
Eurocurrency Loans, if a combination thereof, the amount allocated to each; and
(D) in the case of a LIBOR Rate Loan or a Eurocurrency Loan, the duration of the
Interest Period applicable thereto. Notices received after 11:00
a.m.(Philadelphia time) shall be deemed received on the next Business Day. The
Administrative Agent shall promptly notify the Lenders of each Notice of
Borrowing.

 

(b) Authority of Urban. Each Borrower hereby irrevocably authorizes and requests
that Urban execute all Notices of Borrowing, make all elections as to interest
rates and take any other actions required of or permitted by the Borrowers under
this Agreement, on its respective behalf, in each case, with the same force and
effect as if such Borrower had executed such Notice of Borrowing, made such
election or taken such other action itself. Any request, application, or other
communication by Urban may be relied on by the Administrative Agent and the
Lenders, and any communication by the Administrative Agent and the Lenders shall
be made to Urban, and shall be binding on each Borrower, jointly and severally,
as fully as if such request, application or other communication were made
directly by or to each such Borrower.

 

(c) Disbursement of Loans. Not later than 2:00 p.m.(Philadelphia time) on the
proposed borrowing date, each Lender will make available to the Administrative
Agent, for the account of the Borrowers, at the office of the Administrative
Agent, in funds immediately available to the Administrative Agent, such Lender’s
Commitment Percentage of the Loans to be made on such borrowing date. The
Borrowers hereby irrevocably authorize the Administrative Agent to disburse the
proceeds of each borrowing requested pursuant to this Section 2.2 in immediately
available funds by

 

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crediting or wiring such proceeds to the deposit account of the Borrowers
identified in the most recent notice substantially in the form of Exhibit C
hereto (a “Notice of Account Designation”) delivered by the Borrowers to the
Administrative Agent or as may be otherwise agreed upon by the Borrowers and the
Administrative Agent from time to time. Subject to Section 4.12 hereof, the
Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Loan requested pursuant to this Section 2.2 to the extent that
any Lender has not made available to the Administrative Agent its Commitment
Percentage of such Loan.

 

Section 2.3 Repayment of Loans.

 

(a) Repayment of Loans. The Borrowers shall repay the outstanding principal
amount of all Loans in full on the Termination Date, together with all accrued
but unpaid interest thereon and fees, costs and expenses.

 

(b) Mandatory Repayments. (i) If at any time the outstanding principal amount of
all Loans exceeds the Aggregate Commitment less the sum of all L/C Obligations,
the Borrowers shall repay immediately upon notice from the Administrative Agent,
by payment to the Administrative Agent for the account of the Lenders, the
Loans, and shall furnish cash collateral reasonably satisfactory to the
Administrative Agent and/or repay the L/C Obligations, in an amount equal to
such excess with each such repayment applied first to the aggregate amount of
drawings under Letters of Credit which have not then been reimbursed pursuant to
Section 3.8 hereof, second to the principal amount of outstanding Loans, and
third to the cash collateral account described in, and to be applied in
accordance with the terms of, Section 11.2(b) hereof. Each such repayment shall
be accompanied by any amount required to be paid pursuant to Section 4.7 hereof,
and (ii) if at any time the Dollar Equivalent of all Alternate Currency Exposure
exceeds the Alternate Currency Sublimit, then the Borrowers shall make a
prepayment of Alternate Currency Loans and/or furnish cash collateral reasonably
satisfactory to Administrative Agent or repay the L/C Obligations for the
Alternate Currency Letters of Credit in the amount of such excess.

 

(c) Optional Repayments; Limitation on Prepayment of LIBOR Rate Loans and
Eurocurrency Loans. The Borrowers: (i) may at any time and from time to time
repay all or any portion of the outstanding principal balance of any Base Rate
Loan or LIBO Market Index Rate Loan without premium or penalty, provided that
any such repayment shall include all accrued interest on the amount repaid; and
(ii) may not repay any LIBOR Rate Loan or Eurocurrency Loan on any day other
than on the last day of the Interest Period applicable thereto unless such
repayment is accompanied by all accrued interest on the amount repaid and by any
amount required to be paid pursuant to Section 4.7 hereof

 

(d) Survival of Hedging Agreements. Any prepayment shall not affect Borrower’s
obligation to continue making payments under any Hedging Agreement (including
any swap agreement, as defined in 11 U.S.C. §101) executed by any Borrower after
the date hereof (it being acknowledged that no Hedging Agreement is outstanding
as of the date hereof), which shall remain in full force and effect
notwithstanding such prepayment, subject to the terms of such Hedging Agreement.

 

Section 2.4 Notes. The Loans and the obligation of the Borrowers to repay such
Loans shall be evidenced by a Note executed by the Borrowers payable to the
order of each Lender representing the Borrowers’ obligation to pay such Lender’s
Commitment or, if less, the aggregate unpaid principal amount of all Loans made
and to be made by such Lender to the Borrowers hereunder, plus interest and all
other fees, charges and other amounts due thereon. Each Note shall be dated the
Closing Date and shall bear interest on the unpaid principal amount thereof at
the applicable interest rate per annum specified in Section 4.1 hereof.

 

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Section 2.5 Change in Commitment.

 

(a) Reductions. The Borrowers shall have the right at any time and from time to
time, upon at least five (5) Business Days prior written notice to the
Administrative Agent, to permanently reduce, without premium or penalty, (i) the
Aggregate Commitment at any time or (ii) portions of the Aggregate Commitment,
from time to time, in an aggregate principal amount not less than $1,000,000 or
any whole multiple of $1,000,000 in excess thereof. Each permanent reduction
permitted pursuant to this Section 2.5(a) shall be accompanied by a payment of
principal sufficient to reduce the aggregate outstanding Extensions of Credit
after such reduction to the Aggregate Commitment as so reduced and if the
Aggregate Commitment as so reduced is less than the aggregate amount of all
outstanding and unexpired Letters of Credit, the Borrowers shall be required to
deposit collateral, of the type and in the amounts required by Section 3.4
hereof, in a cash collateral account opened by the Administrative Agent. Any
reduction of the Aggregate Commitment to zero shall be accompanied by payment of
all outstanding Obligations thereunder (and furnishing of cash collateral
satisfactory to the Administrative Agent for all L/C Obligations) and shall
result in the termination of the Aggregate Commitment. Such cash collateral
shall be applied in accordance with Section 11.2(b) hereof. If the reduction of
the Aggregate Commitment requires the repayment of any LIBOR Rate Loan, such
repayment shall be accompanied by any amount required to be paid pursuant to
Section 4.7 hereof.

 

(b) Increases. So long as no Default or Event of Default has occurred and is
continuing hereunder, the Borrowers shall have the right at any time and from
time to time, upon at least seven (7) Business Days prior written notice to the
Administrative Agent, to increase the Aggregate Commitment, in one or more
tranches, by an aggregate principal amount not to exceed Fifteen Million Dollars
($15,000,000). Each such increase permitted pursuant to this Section 2.5(b)
shall be conditioned upon Borrowers’ compliance, as of the effective date of any
such increase, with the requirements of Section 5.2(b) hereto, as required by
the Administrative Agent, which requirements may include without limitation, the
execution and delivery of an amendment agreement in form and substance
satisfactory to the Required Lenders, the delivery of replacement or additional
promissory notes, and confirmations of Guaranty Agreements.

 

Section 2.6 Termination of the Aggregate Commitment. The Aggregate Commitment
shall terminate on the earliest of: (a) September     , 2007 [the third (3rd)
anniversary of the date hereof]; (b) the date of termination by the Borrowers
pursuant to Section 2.5(a) hereof; and (c) the date of termination by the
Administrative Agent on behalf of the Lenders pursuant to Section 11.2(a)
hereof; [provided, however, that Urban may submit to the Administrative Agent a
Termination Date Extension Request (which shall be submitted without limitation
with the annual business plan and financial projections required to be delivered
under Section 7.1(d) hereof), pursuant to which each Lender, at its sole
discretion, may agree to extend the Termination Date of its respective
Commitment set forth in subsection (a) of this Section 2.6 by an additional
three hundred sixty-four (364) day term.]

 

Section 2.7 Use of Proceeds. The Borrowers shall use the proceeds of the
Extensions of Credit: (a) to fund working capital (including expenditures for
Capital Assets); (b) to support the issuance of Letters of Credit for the
account of any Borrower (including for the benefit of a Guarantor); and (c) for
the general corporate requirements of the Borrowers (including without
limitation the payment of certain fees and expenses incurred in connection with
the transactions contemplated hereby).

 

Section 2.8 Joint and Several Obligations. The obligations of the Borrowers
hereunder are and shall be joint and several. It is the intent of Borrowers and
Lenders that Non-U.S. Borrowers shall not be liable hereunder, except with
respect to Loans made to Non-U.S. Borrowers and L/C Obligations for Letters of
Credit issued for the account of Non-U.S. Borrowers.

 

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Section 2.9 Dollar Equivalent. All limitations relating to the amount of
Alternate Currency Advances and Alternate Currency Letters of Credit shall be
calculated from time to time based on the Dollar Equivalent thereof as of the
most recent FX Calculation Date.

 

ARTICLE III

LETTERS OF CREDIT

 

Section 3.1 L/C Commitment. Subject to the terms and conditions hereof, the
Issuing Lender: (i) agrees to issue standby and documentary letters of credit
for the account of any Borrower or Guarantor and (ii) agrees to issue Alternate
Currency Letters of Credit for the account of any Non-U.S. Borrower
(collectively, “Letters of Credit”), on any Business Day from the Closing Date
through but not including the Termination Date in such form as may be approved
from time to time by the Issuing Lender; provided, that the Issuing Lender shall
have no obligation to issue any Letter of Credit if:

 

(a) there exists a Default or an Event of Default, or the issuance of such
Letter of Credit would give rise to a Default or an Event of Default;

 

(b) after giving effect to such issuance:

 

(i) the L/C Obligations would exceed the L/C Commitment,

 

(ii) the Aggregate Commitment minus the Extensions of Credit would be less than
zero,

 

(iii) any Lender’s Commitment minus such Lender’s Extensions of Credit would be
less than zero,

 

(iv) (A) the L/C Obligations for all Letters of Credit issued for the account of
any Non-U.S. Borrower plus (B) the aggregate principal amount of all Loans
outstanding to any Non-U.S. Borrower plus (C) the aggregate principal amount of
all outstanding intercompany loans to Non-U.S. Borrowers permitted under Section
10.4(d) hereof, would exceed the Non U.S. Sublimit, or

 

(v) at the time of issuance of any Alternate Currency Letter of Credit, the
amount available to be drawn under such Alternate Currency Letter of Credit and
all other Alternate Currency Letters of Credit then outstanding hereunder plus
any unreimbursed draws under Alternate Currency Letters of Credit, together with
the outstanding principal amount of all Alternate Currency Loans, shall not
exceed the Alternate Currency Sublimit.

 

(c) such issuance would conflict with, or cause the Issuing Lender or any L/C
Participant to exceed any limits imposed by, any Applicable Law.

 

References herein to “issue” and derivations thereof with respect to Letters of
Credit shall also include extensions or modifications of any existing Letters of
Credit, unless the context otherwise requires.

 

Section 3.2 Terms of Letters of Credit. Subject without limitation to Section
3.1 hereof, each Letter of Credit shall:

 

(a) be denominated in Dollars in a minimum amount of $1,500, or be denominated
in an Alternate Currency in a minimum amount of a Dollar Equivalent of $1,500;

 

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(b) be issued to support obligations of a Borrower or a Subsidiary, contingent
or otherwise, incurred in the ordinary course of business;

 

(c) expire on a date which shall be no later than the earlier of:

 

(i) in the case of standby Letters of Credit one (1) year from the date of
issuance and subject to Section 3.4, the Termination Date; or

 

(ii) in the case of documentary Letters of Credit, one hundred eighty (180) days
from the date of issuance, and subject to Section 3.4, the Termination Date.

 

(d) be subject to the Uniform Customs and, to the extent not inconsistent
therewith the laws of the Commonwealth of Pennsylvania.

 

Section 3.3 Existing Letters of Credit issued by Wachovia. Reference is made to
the letters of credit issued by Wachovia on behalf of one or more Borrowers
prior to the date of this Agreement, the face amount, beneficiary and number of
which are listed on Schedule 4 hereto (the “Existing Letters of Credit”). The
Borrowers and the Lenders hereby agree that as of the date of this Agreement:
(a) all such Existing Letters of Credit shall hereinafter be deemed Letters of
Credit, as if originally issued hereunder, and shall be subject to the terms of
this Agreement; provided, however, that the Borrowers shall not be obligated to
pay any additional issuance fees in connection with such Existing Letters of
Credit which are deemed to be Letters of Credit hereunder; and (b) each of (i)
the Existing Wachovia Facility, (ii) that certain Continuing Letter of Credit
Agreement executed by Urban dated                     ,             (iii) that
certain CyberImport International Operations Agreement executed by Urban on
January 8, 2004, and (iv) each other master letter of credit agreement
previously executed by any Borrower or Subsidiary with Wachovia, is hereby
deemed superseded in its entirety by the terms and conditions of this Agreement.

 

Section 3.4 Cash Collateral for Letters of Credit.

 

(a) Notwithstanding the provisions of Section 3.2 hereof requiring that the
final expiry of each Letter of Credit be on or before the Termination Date, the
Issuing Lender may issue, upon the Borrowers’ request if required by a proposed
beneficiary, a Letter of Credit which by its terms may be extended beyond the
Termination Date. With respect to any such Letter of Credit issued hereunder,
the Borrowers hereby agree that they will deliver on or before the Termination
Date collateral, of the type and in the amounts required by subparagraph (b)
below and subject to subparagraph (c) below, in an amount equal to one hundred
five percent (105%) of the outstanding undrawn amount of each such Letter of
Credit.

 

(b) On the Termination Date, upon a reduction of the Aggregate Commitment in the
manner set forth in Section 2.5 hereof or upon the occurrence of and during the
continuance of an Event of Default, the Issuing Lender may require (and in the
case of an Event of Default occurring under Section 11.1(j) or Section 11.1(k)
it shall be required automatically) that the Borrowers deliver to the Issuing
Lender cash or U.S. Treasury Bills with maturities of not more than ninety (90)
days from the date of delivery (discounted in accordance with customary banking
practice to present value to determine amount) in an amount equal at all times
to one hundred five percent (105%) of the outstanding undrawn amount of all
Letters of Credit, such cash or U.S. Treasury Bills and all interest earned
thereon to constitute cash collateral for all such Letters of Credit.

 

(c) Any cash collateral deposited under subparagraph (b) above, and all interest
earned thereon, shall be held by the Issuing Lender and invested and reinvested
at the expense and

 

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the written direction of Borrowers, in U.S. Treasury Bills with maturities of no
more than ninety (90) days from the date of investment.

 

Section 3.5 Procedure for Issuance of Letters of Credit. The Borrowers may from
time to time request that the Issuing Lender issue a Letter of Credit, or
request that a Letter of Credit be amended or extended, by delivering to the
Issuing Lender at the Administrative Agent’s office, an Application therefor,
completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Application, the Issuing Lender shall process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall, subject to Section 3.1 and Article V hereof,
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any standby Letter of Credit earlier than
three (3) Business Days, or any documentary Letter of Credit earlier than one
(1) Business Day, after its receipt of the Application therefor and all such
other certificates, documents and other papers and information relating thereto)
by issuing the original of such Letter of Credit to the beneficiary thereof or
as otherwise may be agreed by the Issuing Lender and the Borrowers. The Issuing
Lender shall promptly furnish to the Borrowers a copy of such Letter of Credit.

 

Section 3.6 Commissions and Other Charges.

 

(a) The Borrowers shall pay to the Administrative Agent for the account of the
Issuing Lender and the L/C Participants on a pro rata basis (i) fees with
respect to documentary Letters of Credit as set forth on Schedule 5 attached
hereto and (iii) a letter of credit fee with respect to each standby Letter of
Credit in an amount equal to the Applicable Margin for a LIBOR Rate Loan as of
the date of the calculation of the fee on a per annum basis multiplied by the
face amount of each standby Letter of Credit as then in effect. Each such
commission shall be payable quarterly in arrears on the last Business Day of
each calendar quarter and on the Termination Date.

 

(b) In connection with the issuance, transfer, extension, modification or other
administration of any Letter of Credit, the Borrowers shall pay to the Issuing
Lender upon request all customary costs and expenses of the Issuing Lender
therefor.

 

(c) All fees, commissions, costs, expenses or other charges paid to an Issuing
Lender by Borrowers under this Section 3.6 shall be non-refundable.

 

Section 3.7 L/C Participations.

 

(a) The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C
Participant, and, to induce the Issuing Lender to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant’s own account and risk
an undivided interest equal to such L/C Participant’s Commitment Percentage in
the Issuing Lender’s obligations and rights under each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Lender thereunder.
Each L/C Participant unconditionally and irrevocably agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by the Borrowers in accordance with the terms
of this Agreement, such L/C Participant shall pay to the Issuing Lender upon
demand at the Issuing Lender’s address for notices specified herein an amount
equal to such L/C Participant’s Commitment Percentage of the amount of such
draft, or any part thereof, which is not so reimbursed.

 

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(b) Upon becoming aware of any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to Section 3.7(a) hereof in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
Funds Rate as determined by the Administrative Agent during the period from and
including the date such payment is due to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of the Issuing Lender with respect to
any amounts owing under this Section 3.7(b) shall be conclusive in the absence
of manifest error. With respect to payment to the Issuing Lender of the
unreimbursed amounts described in this Section 3.7(b), if the L/C Participants
receive notice that any such payment is due (A) prior to 1:00 p.m.(Philadelphia
time) on any Business Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m.(Philadelphia time) on any Business Day, such payment shall be
due on the following Business Day.

 

(c) Whenever, at any time after the Issuing Lender has made payment under any
Letter of Credit and has received from any L/C Participant its Commitment
Percentage of such payment in accordance with this Section 3.7, the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrowers or otherwise, or any payment of interest on account thereof,
the Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.

 

Section 3.8 Reimbursement Obligation of the Borrowers. The Borrowers agree to
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Borrowers of the date and amount of a draft paid under any Letter of Credit
for the amount of (a) such draft so paid or presented purporting to be drawn and
(b) any taxes, fees, charges or other costs or expenses incurred by the Issuing
Lender in connection with such payment. Each such payment shall be made to the
Issuing Lender at its address for notices specified herein in Dollars, (except
for payments in connection with Alternate Currency Letters of Credit which shall
be repaid in the currency in which such draft was paid) and in immediately
available funds. If the Borrowers fail to timely reimburse the Issuing Lender on
the date the Borrowers receive the notice referred to in this Section 3.8, the
Borrowers shall be deemed to have timely given a Notice of Borrowing hereunder
to the Administrative Agent requesting the Lenders to make a Base Rate Loan on
such date in an amount equal to the amount of such drawing and, regardless of
whether or not the conditions precedent specified in Article V have been
satisfied, the Lenders shall make Base Rate Loans in such amount, the proceeds
of which shall be applied to reimburse the Issuing Lender for the amount of the
related drawing and costs and expenses; provided, however, that absent an Event
of Default, the Borrowers may elect to convert amounts remaining unpaid by the
Borrowers (i) under any Letter of Credit denominated in Dollars to Base Rate
Loans, LIBO Market Index Rate Loans, or LIBOR Rate Loans, and (ii) any Letter of
Credit denominated in any Alternate Currency to Eurocurrency Loans [or LIBO
Market Index Rate Loans], subject to Section 4.2 hereof.

 

Section 3.9 Obligations Absolute. The Borrowers’ obligations under this Article
III (including without limitation the Reimbursement Obligation) shall be
absolute and unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment which any Borrower may have or
have had against the Issuing Lender or any beneficiary of a Letter of Credit.
The Borrowers also agree with the Issuing Lender that the Issuing Lender shall
not be responsible for, and the Borrowers’ Reimbursement Obligation under
Section 3.8 shall not be affected by, among other things, the

 

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validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among any Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of any Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Borrowers assume all risks of the acts or
omissions of the beneficiary of each Letter of Credit with respect to the use of
the Letter of Credit or with respect to the beneficiary’s obligations to any
Borrower. The Issuing Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Lender’s gross negligence or willful
misconduct. The Borrowers agree that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Customs and,
to the extent not inconsistent therewith, the UCC shall be binding on the
Borrowers and shall not result in any liability of the Issuing Lender to the
Borrowers. The responsibility of the Issuing Lender to the Borrowers in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit. The parties hereto expressly agree
that, in the absence of gross negligence or willful misconduct on the part of
the Issuing Bank (as finally determined by a court of competent jurisdiction),
the Issuing Bank shall be deemed to have exercised care in each determination of
whether drafts or other documents presented under a Letter of Credit comply with
the terms thereof. In furtherance of the foregoing, and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with their terms of a
Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in compliance with the terms of such Letter of Credit. In furtherance and not in
limitation of the foregoing, in accordance with the Uniform Customs, the Issuing
Lender may accept facially conforming documents.

 

Section 3.10 General Terms of Documentary Letters of Credit.

 

(a) To the extent any failure to comply with the provisions of this Section 3.10
would, either individually or in the aggregate, result in a Material Adverse
Effect, the Borrowers agree to procure or to cause the beneficiaries of each
documentary Letter of Credit to procure promptly any necessary import and export
or other licenses for the import or export or shipping of any goods referred to
in or pursuant to a Letter of Credit and to comply and to use its commercially
reasonable efforts to cause the beneficiaries to comply with all foreign and
domestic governmental regulations with respect to the shipment and warehousing
of such goods or otherwise relating to or affecting such Letter of Credit,
including without limitation governmental regulations pertaining to transactions
involving designated foreign countries or their nationals, and to furnish such
certificates in that respect as the Issuing Lender may at any time reasonably
require, and to keep such goods adequately covered by insurance in amounts, with
carriers and for such risks as shall be customary in the industry and to cause
the Issuing Lender’s interest to be endorsed on such insurance and to furnish
the Issuing Lender at its request with reasonable evidence thereof. Should such
insurance (or lack thereof) upon said goods for any reason not be reasonably
satisfactory to the Issuing Lender, the Issuing Lender may (but is not obligated
to) obtain, after notice, at the Borrowers’ expense, insurance satisfactory to
the Issuing Lender.

 

(b) In connection with each documentary Letter of Credit, neither the Issuing
Lender nor any correspondent shall be responsible for: (i) the existence,
character, quality, quantity, condition, packing, value or delivery of the
property purporting to be represented by documents; (ii) any

 

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difference in character, quality, condition or value of the property from that
expressed in documents; (iii) the time, place, manner or order in which shipment
of the property is made; (iv) partial or incomplete shipment referred to in such
Letter of Credit; (v) the character, adequacy or responsibility of any insurer,
or any other risk connected with insurance other than insurance procured by the
Issuing Lender; (vi) any deviation from instructions, delay, default or fraud by
the beneficiary or anyone else in connection with the property or the shipping
thereof; (vii) the solvency, responsibility or relationship to the property of
any party issuing any documents in connection with the property; (viii) delay in
arrival or failure to arrive of either the property or any of the documents
relating thereto; (ix) delay in giving or failure to give notice of arrival or
any other notice; (x) any breach of contract between the Letter of Credit
beneficiaries and any Borrower; (xi) any laws, customs, and regulations which
may be effective in any jurisdiction where any negotiation and/or payment of
such Letter of Credit occurs; (xii) failure of documents (other than documents
required by the terms of the Letter of Credit) to accompany any draft at
negotiation; or (xiii) failure of any entity to note the amount of any document
or draft on the reverse of such Letter of Credit or to surrender or to take up
such Letter of Credit or to forward documents other than documents required by
the terms of the Letter of Credit. In connection with each Letter of Credit, the
Issuing Lender shall not be responsible for any error, neglect or default of any
of its correspondents. None of the above shall affect, impair or prevent the
vesting of any of the Issuing Lender’s rights or powers hereunder. If a Letter
of Credit provides that payment is to be made by the Issuing Lender’s
correspondent, neither the Issuing Lender nor such correspondent shall be
responsible for the failure of any of the documents specified in such Letter of
Credit to come into the Issuing Lender’s hands, or for any delay in connection
therewith, and the Borrowers’ obligation to make reimbursements shall not be
affected by such failure or delay in the receipt of any such documents.

 

(c) To the extent not inconsistent with this Agreement, the Uniform Customs are
hereby made a part of this Agreement with respect to obligations in connection
with each documentary Letter of Credit.

 

Section 3.11 Effect of Application. To the extent that any provision of any
Application related to any Letter of Credit, or either of the documents
referenced in clauses (i) or (ii) of Section 3.12 hereof, is inconsistent with
the provisions of this Article III, or with Article XI hereof, the provisions of
this Article III or Article XI hereof, as applicable, shall apply. Article XI
alone shall govern with respect to Default and Events of Default in connection
with any Letter of Credit.

 

Section 3.12 Letter of Credit Documents. Subject to Section 3.11 hereof, Letters
of Credit and amendments thereto issued by Wachovia, as Issuing Lender, shall be
requested, processed and issued, and draws thereon shall be negotiated,
processed and paid, in accordance with and subject to the terms and procedures
of: (i) the Continuing Letter of Credit Agreement and/or (ii) the CyberImport
International Operations Agreement between Wachovia and Urban dated August
            , 2004.

 

ARTICLE IV

GENERAL LOAN PROVISIONS

 

Section 4.1 Interest.

 

(a) Interest Rate Options.

 

(i) Loans. Subject to the provisions of this Section 4.1, at the election of the
Borrowers, the aggregate principal balance of the Loans or any portion thereof
shall bear interest at:

 

(A) the Base Rate on a per annum basis;

 

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(B) the LIBO Market Index Rate plus the Applicable Margin on a per annum basis;
or

 

(C) the LIBOR Rate plus the Applicable Margin on a per annum basis;

 

provided that the LIBOR Rate shall not be available until three (3) Business
Days after the Closing Date. The Borrowers shall select the rate of interest and
Interest Period, if any, applicable to any Loan at the time a Notice of
Borrowing is given pursuant to Section 2.2 hereof or at the time a Notice of
Conversion/Continuation is given pursuant to Section 4.2 hereof. Each Loan or
portion thereof bearing interest based on: (x) the Base Rate shall be a “Base
Rate Loan;” (y) the LIBO Market Index Rate shall be a “LIBO Market Index Rate
Loan;” and (z) LIBOR Rate shall be a “LIBOR Rate Loan.” Any Loan or any portion
thereof as to which the Borrowers have not duly specified an interest rate as
provided herein shall be deemed a Base Rate Loan.

 

(ii) Alternate Currency Loans. Any Alternate Currency Loan shall bear interest
at the applicable Eurocurrency Rate plus the Applicable Margin on a per annum
basis. Each Alternate Currency Loan bearing interest based on the Eurocurrency
Rate shall be a “Eurocurrency Loan.”

 

(b) Interest Periods. In connection with each LIBOR Rate Loan, the Borrowers, by
giving notice at the times described in Section 4.1(a) hereof, shall elect an
interest period (each, an “Interest Period”) to be applicable to such Loan or
Alternate Currency Loan, which Interest Period shall be a period of one (1), two
(2) or three (3) months with respect to each LIBOR Rate Loan or Eurocurrency
Loan; provided that:

 

(i) the Interest Period shall commence on the date of advance of or conversion
to any LIBOR Rate Loan or Eurocurrency Loan and, in the case of immediately
successive Interest Periods, each successive Interest Period shall commence on
the date on which the next preceding Interest Period expires;

 

(ii) if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided, that if any Interest Period with respect to a LIBOR Rate Loan or
Eurocurrency Loan would otherwise expire on a day that is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;

 

(iii) any Interest Period with respect to a LIBOR Rate Loan or Eurocurrency Loan
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the relevant
calendar month at the end of such Interest Period;

 

(iv) no Interest Period shall extend beyond the Termination Date; and

 

(v) there shall be no more than six (6) Interest Periods outstanding at any
time.

 

(c) Default Rate. Subject to Section 11.3 hereof, at the discretion of the
Administrative Agent and the Required Lenders, upon the occurrence and during
the continuance of an Event of Default: (i) the Borrowers shall no longer have
the option to request LIBOR Rate Loans, Eurocurrency Loans or LIBO Market Index
Rate Loans; (ii) all amounts due and payable with respect to

 

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LIBOR Rate Loans shall bear interest at a rate per annum two percent (2%) in
excess of the rate then applicable to LIBOR Rate Loans until the end of the
applicable Interest Period and thereafter at a rate equal to two percent (2%) in
excess of the rate then applicable to Base Rate Loans; (iii) LIBO Market Index
Rate Loans shall convert to Base Rate Loans; and (iv) all amounts due and
payable with respect to Base Rate Loans shall bear interest at a rate per annum
equal to two percent (2%) in excess of the rate then applicable to Base Rate
Loans. Interest shall continue to accrue on the Notes at the rates set forth
above after the filing by or against the Borrowers of any petition seeking any
relief in bankruptcy or under any act or law pertaining to insolvency or debtor
relief, whether state, federal or foreign, as well as before and after any
judgment.

 

(d) Interest Payment and Computation. Interest on each Base Rate Loan and each
LIBO Market Index Rate Loan shall be payable in arrears on the last Business Day
of each calendar quarter commencing October 31, 2004, [or earlier, if such Base
Rate Loan or LIBO Market Index Rate Loan is repaid by the Borrower prior to the
end of any calendar quarter, on the date of such repayment;] and interest on
each LIBOR Rate Loans or Eurocurrency Loan shall be payable on the last day of
each Interest Period applicable thereto. Interest on LIBOR Rate Loans,
Eurocurrency Loans, LIBO Market Index Rate Loans and all fees payable hereunder
shall be computed on the basis of a 360-day year and assessed for the actual
number of days elapsed, and interest on Base Rate Loans shall be computed on the
basis of a 365/66-day year and assessed for the actual number of days elapsed.

 

(e) Maximum Rate. In no contingency or event whatsoever shall the aggregate of
all amounts deemed interest hereunder or under the Notes charged or collected
pursuant to the terms of this Agreement or pursuant to the Notes exceed the
highest rate permissible under any Applicable Law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that the Lenders have charged or received
interest hereunder in excess of the highest applicable rate, the rate in effect
hereunder shall automatically be reduced to the maximum rate permitted by
Applicable Law, and the Lenders shall at the Administrative Agent’s option: (i)
promptly refund to the Borrowers any interest received by the Lenders in excess
of the maximum lawful rate; or (ii) apply such excess to the principal balance
of the Obligations. It is the intent hereof that the Borrowers not pay or
contract to pay, and that neither the Administrative Agent nor any Lender
receive or contract to receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by the Borrowers under Applicable
Law.

 

Section 4.2 Notice and Manner of Conversion or Continuation of Loans. Provided
that no Event of Default has occurred and is then continuing, the Borrowers
shall have the option to: (a) convert at any time, but not earlier than the
third Business Day after the Closing Date, all or any portion of its outstanding
Base Rate Loans or LIBO Market Index Rate Loans in a principal amount equal to
$1,000,000 or any whole multiple of $500,000 in excess thereof into one or more
LIBOR Rate Loans; and (b) upon the expiration of any Interest Period, (i)
convert all or any part of its outstanding LIBOR Rate Loans in a principal
amount equal to $250,000 or a whole multiple of $250,000 in excess thereof into
Base Rate Loans, (ii) convert all or any part of its outstanding LIBOR Rate
Loans in a principal amount equal to $500,000 or a whole multiple of $250,000 in
excess thereof into LIBO Market Index Rate Loans, or (iii) continue such LIBOR
Rate Loans as LIBOR Rate Loans and Eurocurrency Loans as Eurocurrency Loans.
Whenever the Borrowers desire to convert or continue Loans as provided above,
the Borrowers shall give the Administrative Agent irrevocable prior written
notice in the form attached hereto as Exhibit D (a “Notice of
Conversion/Continuation”) not later than 11:00 a.m.(Philadelphia time) three (3)
Business Days before the day on which a proposed conversion or continuation of
such Loan is to be effective specifying: (A) the Loans to be converted or
continued, and, in the case of any LIBOR Rate Loan to be converted or continued,
the last day of the Interest Period therefor; (B) the effective date of such
conversion or continuation (which shall be a Business Day); (C) the principal
amount of such Loans to be converted or continued; and (D) the Interest Period
to be applicable to such converted or continued

 

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LIBOR Rate Loan. The Administrative Agent shall promptly notify the Lenders of
such Notice of Conversion/Continuation.

 

Section 4.3 Fees.

 

(a) Administration Fee. The Borrowers shall pay the Administrative Agent an
administration fee (the “Administration Fee”) equal to $15,000 payable on the
Closing Date.

 

Section 4.4 Manner of Payment. Each payment by the Borrowers on account of the
principal of or interest on the Loans or of any fee, commission or other amounts
(including without limitation the Reimbursement Obligation) payable to the
Lenders under this Agreement or the Notes shall be made not later than 1:00
p.m.(Philadelphia time) on the date specified for payment under this Agreement
to the Administrative Agent at the Administrative Agent’s Office for the account
of the Lenders (other than as set forth below) pro rata in accordance with their
respective Commitment Percentages (except as specified below), in Dollars
(except with respect to Alternate Currency Loans, as to which payments will be
made in the currency in which such Alternate Currency Loan was made) in
immediately available funds and shall be made without any set-off, counterclaim
or deduction whatsoever. Any payment received after such time but before 2:00
p.m.(Philadelphia time) on such day shall be deemed a payment on such date for
the purposes of Section 11.1 hereof, but for all other purposes shall be deemed
to have been made on the next succeeding Business Day. Any payment received
after 2:00 p.m.(Philadelphia time) shall be deemed to have been made on the next
succeeding Business Day for all purposes. Upon receipt by the Administrative
Agent of each such payment, the Administrative Agent shall distribute to each
Lender at its address for notices set forth herein its pro rata share of such
payment in accordance with such Lender’s Commitment Percentage (except as
specified below) and shall wire advice of the amount of such credit to each
Lender. Each payment to the Administrative Agent of the Issuing Lender’s fees or
L/C Participants commissions shall be made in like manner, but for the account
of the Issuing Lender or the L/C Participants, as the case may be. Each payment
to the Administrative Agent of Administrative Agent’s fees or expenses shall be
made for the account of the Administrative Agent, and any amount payable to any
Lender under Section 4.6, Section 4.7, Section 4.8, Section 4.9 or Section 13.2
hereof shall be paid to the Administrative Agent for the account of the
applicable Lender. Subject to Section 4.1(b)(ii) hereof, if any payment under
this Agreement or the Notes shall be specified to be made upon 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 any interest if payable along with such payment.

 

Section 4.5 Credit of Payments and Proceeds. In the event that the Borrowers
shall fail to pay any of the Obligations when due and the Obligations have been
accelerated pursuant to Section 11.2 hereof, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrowers hereunder, then to all indemnity obligations then
due and payable by the Borrowers hereunder, then to all Administrative Agent’s
and Issuing Lender’s fees then due and payable, then to all commitment and other
fees and commissions then due and payable, then to accrued and unpaid interest
on the Notes, the Reimbursement Obligations and any termination payments due in
respect of any Hedging Agreement with any Lender (pro rata in accordance with
all such amounts due), then to the principal amount of the Notes and
Reimbursement Obligations (pro rata in accordance with all such amounts due) and
then to the cash collateral account described in Section 11.2(b) hereof to the
extent of any L/C Obligations then outstanding, in that order.

 

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Section 4.6 Changed Circumstances.

 

(a) Circumstances Affecting LIBOR Rate and Eurocurrency Rate Availability. If
with respect to any Interest Period the Administrative Agent or any Lender shall
determine that, by reason of circumstances affecting the foreign exchange and
interbank markets generally, deposits in Eurodollars in the applicable amounts
are not being quoted via Telerate Page 3750 or offered to the Administrative
Agent or such Lender for such Interest Period, then the Administrative Agent
shall forthwith give notice thereof to the Borrowers. Thereafter, until the
Administrative Agent notifies the Borrowers that such circumstances no longer
exist, the obligation of the Lenders to make LIBOR Rate Loans, Eurocurrency
Loans or LIBO Market Index Rate Loans and the right of the Borrowers to convert
any Loan to or continue any Loan as a LIBOR Rate Loan, Eurocurrency Loan or a
LIBO Market Index Rate Loan shall be suspended, and the Borrowers shall: (i)
repay in full (or cause to be repaid in full) the then outstanding principal
amount of each such LIBOR Rate Loan or Eurocurrency Loan, together with accrued
interest thereon, on the last day of the then current Interest Period applicable
to such LIBOR Rate Loan or Eurocurrency Loan; (ii) repay in full (or cause to be
repaid in full) the then outstanding principal amount of each such LIBO Market
Index Rate Loan together with accrued interest thereon; or (iii) convert to a
Base Rate Loan the then outstanding principal amount of each such LIBO Market
Index Rate Loan and, as of the last day of each applicable Interest Period, the
then outstanding principal amount of each such LIBOR Rate Loan or Eurocurrency
Loan.

 

(b) Laws Affecting LIBOR Rate, Eurocurrency Rate and LIBO Market Index Rate
Availability. If, after the date hereof, the introduction of, or any change in,
any Applicable Law 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 any Lender (or
any of their respective Lending Offices) with any request or directive (whether
or not having the force of law) of any such Authority, central bank or
comparable agency, shall make it unlawful or impossible for any Lender (or any
of their respective Lending Offices) to honor its obligations hereunder to make
or maintain any LIBOR Rate Loan, Eurocurrency Loan or LIBO Market Index Rate
Loan, such Lender shall promptly give notice thereof to the Administrative
Agent, and the Administrative Agent shall promptly give notice to the Borrowers
and the other Lenders. Thereafter, until the Administrative Agent notifies the
Borrowers that such circumstances no longer exist, (i) the obligations of the
Lenders to make LIBOR Rate Loans, Eurocurrency Loans, or LIBO Market Index Rate
Loans and the right of the Borrowers to convert any Loan or continue any Loan as
a LIBOR Rate Loan, Eurocurrency Loan or LIBO Market Index Rate Loan shall be
suspended and thereafter the Borrowers may select only Base Rate Loans
hereunder, and (ii) if any of the Lenders may not lawfully continue to maintain
a LIBO Market Index Rate Loan, LIBOR Rate Loan or Eurocurrency Loan to the end
of the then current Interest Period applicable thereto, the applicable LIBO
Market Index Rate Loan shall immediately be converted to a Base Rate Loan or the
applicable LIBOR Rate Loan or Eurocurrency Loan shall immediately be converted
to a Base Rate Loan for the remainder of the Interest Period applicable thereto.

 

(c) Increased Costs. If, after the date hereof, the introduction of, or any
change in, any Applicable Law, or 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 any Lender
(or any of their respective Lending Offices) with any request or directive
(whether or not having the force of law) of such Authority, central bank or
comparable agency:

 

(i) shall subject any Lender (or any of their respective Lending Offices) to any
tax, duty or other charge with respect to any Note, any Letter of Credit or any
Application or shall change the basis of taxation of payments to any Lender (or
any of their respective Lending Offices) of the principal of or interest on any
Note, any Letter of Credit or any Application or any other amounts due under
this Agreement in respect thereof including MLA Costs (except for changes in the
rate

 

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of tax on the overall net income of any Lender or any of their respective
Lending Offices imposed by the jurisdiction in which such Lender is organized or
is or should be qualified to do business or such Lending Office is located); or

 

(ii) 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, insurance or capital or similar requirement against assets of,
deposits with or for the account of, or credit extended by any Lender (or any of
their respective Lending Offices) or shall impose on any Lender (or any of their
respective Lending Offices) or the foreign exchange and interbank markets any
other condition affecting any Note;

 

and the result of any of the foregoing is to increase the costs to any Lender of
maintaining any LIBOR Rate Loan, Eurocurrency Loan or LIBO Market Index Rate
Loan or issuing Letters of Credit or to reduce the yield or amount of any sum
received or receivable by any Lender under this Agreement or under the Notes in
respect of a LIBOR Rate Loan, Eurocurrency Loan, LIBO Market Index Rate Loan or
Letter of Credit or Application, then such Lender shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify the
Borrowers of such fact and demand compensation therefor and, within fifteen (15)
days after such notice by the Administrative Agent, the Borrowers shall pay to
such Lender such additional amount or amounts as will compensate such Lender for
such increased cost or reduction. The Lender will promptly notify the Borrowers
of any event of which it has knowledge which will entitle such Lender to
compensation pursuant to this Section 4.6(c); provided, that the Administrative
Agent shall incur no liability whatsoever to the Borrowers in the event it fails
to do so. The amount of such compensation shall be determined, in the applicable
Lender’s sole discretion, based upon the assumption that such Lender funded its
Commitment Percentage of the LIBOR Rate Loans, Eurocurrency Loans or the LIBO
Market Index Rate Loans in the London interbank market and using any reasonable
attribution or averaging methods which such Lender deems appropriate and
practical. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to
the Borrowers and shall be conclusively presumed to be correct save for manifest
error. The Lenders shall determine the applicability of, and the amount due
under, this Section 4.6 consistent with the manner in which they apply similar
provisions and calculate similar amounts payable to it by other borrowers having
in their credit agreements provisions comparable to this Section 4.6.

 

(d) Replacement of Defaulting Lenders. Any Lender that: (i) is unable to or is
prohibited from making LIBOR Rate Loans, Eurocurrency Loans or LIBO Market Index
Rate Loans to the Borrowers as set forth in Section 4.6(a) or Section 4.6(b)
above or (ii) incurs increased costs and demands compensation therefor as set
forth in Section 4.6(c) above, shall be referred to hereafter as a “Defaulting
Lender.” If any Lender is a Defaulting Lender, then Borrowers may elect to
remove such Defaulting Lender from this Agreement, and notwithstanding the
provisions of Section 13.13 hereof to the contrary, the consent of the Remaining
Lenders shall not be required for such removal, and so long as no Default or
Event of Default has occurred and is continuing, the consent of solely the
Borrowers and the Administrative Agent shall be required for the replacement
bank, if any, and the requirement that the Defaulting Lender’s Commitment must
be replaced, and the requisite documentation to effect such removal and
replacement, such consent not to be unreasonably withheld or delayed.

 

Section 4.7 Indemnity. The Borrowers hereby indemnify each of the Lenders
against any loss or expense which may arise or be attributable to each Lender’s
obtaining, liquidating or employing deposits or other funds acquired to effect,
fund or maintain any Loan: (a) as a consequence of any failure by the Borrowers
to make any payment when due of any amount due hereunder in connection with a
LIBOR Rate Loan or Eurocurrency Loan; (b) due to any failure of the Borrowers to
borrow on a date specified therefor in a Notice of Borrowing or Notice of
Continuation/Conversion; or (c) due to any

 

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payment, prepayment or conversion of any LIBOR Rate Loan or Eurocurrency Loan on
a date other than the last day of the Interest Period therefor. The amount of
such loss or expense shall be determined, in the applicable Lender’s sole
discretion, based upon the assumption that such Lender funded the LIBOR Rate
Loans or Eurocurrency Loans in the London interbank market and using any
reasonable attribution or averaging methods which such Lender deems appropriate
and practical. A certificate of such Lender setting forth the basis for
determining such amount or amounts necessary to compensate the Lender shall be
forwarded to the Borrowers through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error.

 

Section 4.8 Capital Requirements. If either (a) the introduction of, or any
change in, or in the interpretation of, any Applicable Law or (b) compliance
with any guideline or request from any central bank or comparable agency or
other Governmental Authority (whether or not having the force of law), has or
would have the effect of reducing the rate of return on the capital of, or has
affected or would affect the amount of capital required to be maintained by, any
Lender or any corporation controlling such Lender as a consequence of, or with
reference to the Commitments and other commitments of this type, below the rate
which the Lender or such other corporation could have achieved but for such
introduction, change or compliance, then within five (5) Business Days after
written demand by such Lender, the Borrowers shall pay to such Lender from time
to time as specified by such Lender additional amounts sufficient to compensate
such Lender or other corporation for such reduction. A certificate as to such
amounts submitted to the Borrowers and the Administrative Agent by such Lender,
shall, in the absence of manifest error, be presumed to be correct and binding
for all purposes. Lenders shall determine the applicability of, and the amount
due under, this Section 4.8 consistent with the manner in which it applies
similar provisions and calculates similar amounts payable to it by other
borrowers having in their credit agreements provisions comparable to this
Section 4.8.

 

Section 4.9 Taxes.

 

(a) Payments Free and Clear. Any and all payments by the Borrowers hereunder or
under the Notes or the Letters of Credit shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholding, and all liabilities with respect thereto
excluding, (i) in the case of each Lender and the Administrative Agent, income
and franchise taxes imposed by the jurisdiction under the laws of which such
Lender and the Administrative Agent (as the case may be) is organized or is or
should be qualified to do business or any political subdivision thereof and (ii)
in the case of each Lender, income and franchise taxes imposed by the
jurisdiction of such Lender’s Lending Office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as “Taxes”). If the
Borrowers shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note or Letter of Credit to any Lender or the
Administrative Agent: (A) the sum payable shall be increased as may be necessary
so that after making all required deductions (including without limitation
deductions applicable to additional sums payable under this Section 4.9) such
Lender or the Administrative Agent (as the case may be) receives an amount equal
to the amount it would have received had no such deductions been made; (B) the
Borrowers shall make such deductions; (C) the Borrowers shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law; and (D) the Borrowers shall deliver to the
Administrative Agent evidence of such payment to the relevant taxing authority
or other authority in the manner provided in Section 4.9(d) hereof.

 

(b) Stamp and Other Taxes. In addition, the Borrowers shall pay any present or
future stamp, registration, recordation or documentary taxes or any other
similar fees or charges or excise or property taxes, levies of the United States
or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,

 

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delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
“Other Taxes”).

 

(c) Indemnity. The Borrowers shall indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including without limitation
any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under
this Section 4.9) paid by such Lender or the Administrative Agent (as the case
may be) and any liability (including without limitation penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Such indemnification shall be
made within thirty (30) days from the date such Lender or the Administrative
Agent (as the case may be) makes written demand therefor.

 

(d) Evidence of Payment. Within thirty (30) days after the date of any payment
of Taxes or Other Taxes, the Borrowers shall furnish to the Administrative
Agent, at its address referred to in Section 13.1 hereof, the original or a
certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.

 

(e) Survival. Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of each Borrower contained
in this Section 4.9 shall survive the payment in full of the Obligations and the
termination of the Commitments.

 

(f) Delivery of Tax Forms. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall deliver to
the Borrower, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms W-8ECI or Forms
W-8BEN, as applicable (or successor forms), properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding taxes. Each such Lender further agrees to deliver to the Borrower,
with a copy to the Administrative Agent, a Form W-8ECI or W-8BEN and Form W-8 or
W-9, or successor applicable forms or manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower, certifying in the case of a Form
W-8ECI or W-8BEN that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes (unless in any such case an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders such forms inapplicable or
the exemption to which such forms relate unavailable and such Lender notifies
the Borrower and the Administrative Agent that it is not entitled to receive
payments without deduction or withholding of United States federal income taxes)
and, in the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax.

 

Section 4.10 Guaranty. The Obligations of the Borrowers shall be guaranteed by
the Guarantors as provided in the Guaranty Agreement.

 

Section 4.11 Adjustments. If any Lender (a “Benefited Lender”) shall at any time
receive any payment of all or part of the Obligations owing to it, or interest
thereon, or if any Lender shall at any time receive any collateral in respect to
the Obligations owing to it (whether voluntarily or involuntarily, by set-off or
otherwise) in a greater proportion than any such payment to and collateral
received by any other Lender, if any, in respect of the Obligations owing to
such other Lender, or interest

 

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thereon, such Benefited Lender shall purchase for cash from the other Lenders
such portion of each such other Lender’s Extensions of Credit, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such Benefited Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned to the extent of such
recovery, but without interest. The Borrowers agree that each Lender so
purchasing a portion of another Lender’s Extensions of Credit may exercise all
rights of payment (including without limitation rights of set-off) with respect
to such portion as fully as if such Lender were the direct holder of such
portion.

 

Section 4.12 Nature of Obligations of Lenders Regarding Extensions of Credit;
Assumption by the Administrative Agent. The obligations of the Lenders under
this Agreement to make the Loans and issue or participate in Letters of Credit
are several and are not joint or joint and several. Unless the Administrative
Agent shall have received notice from a Lender prior to a proposed borrowing
date that such Lender will not make available to the Administrative Agent such
Lender’s ratable portion of the amount to be borrowed on such date (which notice
shall not release such Lender of its obligations hereunder), the Administrative
Agent may assume that such Lender has made such portion available to the
Administrative Agent on the proposed borrowing date in accordance with Section
2.2(c) hereof, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrowers on such date a corresponding amount.
If such amount is made available to the Administrative Agent on a date after
such borrowing date, such Lender shall pay to the Administrative Agent on demand
an amount, until paid, equal to the product of (a) the amount not made available
by such Lender in accordance with the terms hereof, times (b) the daily average
Federal Funds Rate during such period as determined by the Administrative Agent,
times (c) a fraction the numerator of which is the number of days that elapse
from and including such borrowing date to the date on which such amount not made
available by such Lender in accordance with the terms hereof shall have become
immediately available to the Administrative Agent and the denominator of which
is 360. A certificate of the Administrative Agent with respect to any amounts
owing under this Section 4.12 shall be conclusive, absent manifest error. If
such Lender’s Commitment Percentage of such borrowing is not made available to
the Administrative Agent by such Lender within three (3) Business Days of such
borrowing date, the Administrative Agent shall be entitled to recover such
amount made available by the Administrative Agent with interest thereon at the
rate per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrowers. The failure of any Lender to make available its Commitment Percentage
of any Loan requested by the Borrowers shall not relieve it or any other Lender
of its obligation, if any, hereunder to make its Commitment Percentage of such
Loan available on the borrowing date, but no Lender shall be responsible for the
failure of any other Lender to make its Commitment Percentage of such Loan
available on the borrowing date.

 

Section 4.13 Currencies; Currency Equivalent and Related Provisions.

 

(a) Redenomination and Alternate Currencies. Each obligation of any party under
this Agreement which has been denominated in the fixed national currency unit of
a Participating Member State shall be redenominated into the euro in accordance
with the legislation of the European Union applicable to such currency,
provided, that if and to the extent that any such legislation provides that an
amount denominated either in the euro unit or in the national currency unit of a
Participating Member State and payable within the Participating Member State by
crediting an account of a creditor can be paid by a debtor either in the euro
unit or in that national currency unit, each party to this Agreement shall be
entitled to pay or repay any such amount either in the euro unit or in such
national currency unit.

 

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(b) Loans. Any portion of an Alternate Currency Loan in the currency of a
Participating Member State shall be made in the euro unit, provided that any
portion of such Alternate Currency Loan may, if so requested by Borrowers, be
made in the national currency unit of any Participating Member State so long as
such national currency unit continues to be available as legal tender for
obligations of the same type or character as the obligations set forth in this
Agreement, is freely convertible and is not subject to exchange controls.

 

(c) Payments by Borrowers. Those Sections of this Agreement providing for
payment or repayment in a national currency unit shall be construed so that, in
relation to the payment of any amount of euro units or national currency units,
such amount shall be made available to the Lenders in immediately available,
freely transferable, cleared funds to such account with Lenders (in such
principal financial center) as Lenders may from time to time in good faith
nominate for this purpose.

 

(d) Payments by Lenders Generally. With respect to the payment of any amount
denominated in the euro unit or in a national currency unit, no Lender shall be
liable to the Borrowers in any way whatsoever for any delay, or the consequences
of any delay, in the crediting to any account of any amount required by this
Agreement to be paid by a Lender if such Lender has made reasonable effort to
effect all relevant steps to achieve, on the date required by the Agreement, the
payment of such amount in immediately available, freely transferable, cleared
funds (in the euro unit or, as the case may be, in a national currency unit) to
the account with such Lender in the principal financial center in the
Participating Member State which the Borrowers shall have specified for such
purpose. In this paragraph, “all relevant steps” means all such steps as may be
prescribed from time to time by the regulations or operating procedures of such
clearing or settlement system as the Lender may from time to time reasonably
believe to be in effect for the purpose of clearing or settling payment in the
euro.

 

(e) Basis of Accrual. If the basis of accrual of interest or fees expressed in
this Agreement with respect to the currency of any state that becomes a
Participating State Member, in Administrative Agent’s judgment, shall not be
available because interest rate quotes for a national currency unit are no
longer provided, or shall be inconsistent with any convention or practice in the
London interbank market for the basis of accrual of interest or fees in respect
of the euro, such convention or practice shall replace such expressed basis
effective as of and from the date on which such state becomes a Participating
Member State; provided, however, if any or all of an Alternate Currency Loan in
the currency of such state is outstanding immediately prior to such date, such
replacement shall take effect, with respect to such portion of the Alternate
Currency Loan, on the last day of the current Interest Period.

 

(f) Rounding and Other Consequential Changes. Without prejudice and in addition
to any method of conversion or rounding prescribed by any applicable
legislation, and without prejudice to the respective liabilities for
indebtedness of the Borrowers to Lenders and the Lenders to the Borrowers under
or pursuant to this Agreement:

 

(i) each reference in this Agreement to a minimum amount (or an integral
multiple thereof) in a national currency unit to be paid to or by Lenders shall
be replaced by a reference to such reasonably comparable amount (or an integral
multiple thereof) in the euro unit as Administrative Agent may from time to time
specify; and

 

(ii) except as expressly provided in this Agreement, each provision of this
Agreement, including, without limitation, the right to combine currencies to
effect a set off, shall be subject to such reasonable changes of interpretation
as Administrative Agent, as applicable, may from time to time specify to be
necessary or appropriate to reflect the introduction of or change over to the
euro in Participating Member States.

 

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(g) Exchange Indemnification and Increased Costs. The Borrowers shall, upon
demand from Administrative Agent, pay to Lenders the amount of: (i) any loss or
cost or increased cost incurred by any Lender, (ii) any reduction in any amount
payable to or in the effective return on its capital to any Lender, (iii)
interest or other return, including principal, foregone by any Lender as a
result of the introduction of, change over to or operation of the euro in any
Participating Member State, or (iv) any currency exchange loss that any Lender
sustains as a result of the Borrowers’ election to borrow in national currency
units and repay in euro units or to borrow in euro units and repay in national
currency units. A certificate of a Lender setting forth the basis for
determining such additional amount or amounts necessary to compensate such
Lender shall be conclusively presumed to be correct save for manifest error.

 

ARTICLE V

CLOSING; CONDITIONS OF CLOSING AND BORROWING

 

Section 5.1 Closing. The closing shall take place at the offices of Pepper
Hamilton LLP at 10:00 a.m. on September         , 2004, or on such other date
and in such other manner as the parties hereto shall mutually agree.

 

Section 5.2 Conditions to Closing and Initial Extensions of Credit. The
obligation of the Administrative Agent and the Lenders to close this Agreement
and to make the initial Loan or to issue the initial Letter of Credit is subject
to the satisfaction of each of the following conditions:

 

(a) Executed Loan Documents. This Agreement, the Notes and the Guaranty
Agreement shall have been duly authorized, executed and delivered to the
Administrative Agent by the parties thereto, shall be in full force and effect
and no Default or Event of Default shall exist thereunder, and the Borrowers and
Guarantors, as applicable, shall have delivered original counterparts thereof to
the Administrative Agent.

 

(b) Closing Certificates; etc.

 

(i) Certificate of the Secretary of each Borrower and Guarantor. The
Administrative Agent shall have received a certificate of the secretary or
assistant secretary of each Borrower and each Guarantor certifying as to the
incumbency and genuineness of the signature of each officer of such Borrower
(including without limitation the Non-U.S. Borrowers) or Guarantor executing
Loan Documents to which it is a party and certifying (A) that either (1) since
the last delivery of such documents to Wachovia there have been no changes to
the articles, or certificate(s), of incorporation, the bylaws or other similar
formation or organizational documents of such Borrower or Guarantor as in effect
on the date of such certifications or, for each such Borrower or Guarantor to
which (1) does not apply, (2) that attached thereto is a true, correct and
complete copy of the articles, or certificate(s), of incorporation, the bylaws
or other similar formation or organizational documents and all amendments
thereto of such Borrower or Guarantor as in effect on the date of such
certifications; and (B) that attached thereto is a true, correct and complete
copy of resolutions duly adopted by the board of directors of such Borrower or
Guarantor authorizing the borrowings contemplated hereunder and the execution,
delivery and performance of this Agreement and the other Loan Documents to which
it is a party.

 

(ii) Certificates of Good Standing. The Administrative Agent shall have received
certificates as of a recent date of the good standing of each Borrower
(including without limitation the Non-U.S. Borrowers) and each Guarantor under
the laws of its jurisdiction of organization.

 

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(iii) Opinions of Counsel. The Administrative Agent shall have received
favorable opinions of counsel to the Borrowers and the Guarantors addressed to
the Administrative Agent and the Lenders with respect to such matters as the
Lenders shall request.

 

(c) Hazard and Liability Insurance. The Administrative Agent shall have received
certificates of current hazard, business interruption and liability insurance,
and, if requested by the Administrative Agent, evidence of payment of all
insurance premiums for the current policy period of each and copies (certified
by a Responsible Officer) of insurance policies in form and substance reasonably
satisfactory to the Administrative Agent.

 

(d) Consents; Defaults.

 

(i) Governmental and Third Party Approvals. The Borrowers shall have obtained
all necessary approvals, authorizations and consents of any Person and of all
Governmental Authorities and courts having jurisdiction with respect to the
transactions contemplated by this Agreement and the other Loan Documents.

 

(ii) No Injunction, Etc. No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any
Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, in the Administrative Agent’s sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.

 

(iii) No Event of Default. No Default or Event of Default shall have occurred
and be continuing.

 

(e) Financial Matters.

 

(i) Financial Statements. The Administrative Agent shall have received the most
recent audited Consolidated financial statements of Urban and its Consolidated
Subsidiaries, all in form and substance satisfactory to the Administrative
Agent.

 

(ii) Financial Condition Certificate. The Borrowers shall have delivered to the
Administrative Agent a certificate, in form and substance satisfactory to the
Administrative Agent, and certified as accurate by a Responsible Officer of
Urban, that: (A) each Borrower and each Subsidiary is Solvent; (B) each
Borrower’s uncontested payables are current and not past due in excess of sixty
(60) days; (C) attached thereto are the quarterly financial statements for the
second quarter of the current fiscal year, ending [July 31, 2004], setting forth
the financial condition of the Borrowers and their Consolidated Subsidiaries on
a Consolidated basis as of that date, and evidencing compliance with the
covenants contained in Articles IX and X of the Credit Agreement and (D)
attached thereto are the financial projections previously delivered to the
Administrative Agent representing the good faith opinions of the Borrowers and
senior management thereof as to the projected results contained therein.

 

(iii) Payments at Closing. The Borrowers shall have paid the fees due to Lenders
under Section 4.3 hereof and any other accrued and unpaid fees or commissions
due hereunder (including without limitation legal fees and expenses to the
Administrative Agent), and to any other Person such amount as may be due thereto
in connection with the transactions contemplated hereby,

 

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including without limitation all taxes, fees and other charges in connection
with the execution, delivery, recording, filing and registration of any of the
Loan Documents.

 

(f) Miscellaneous.

 

(i) Notice of Account Designation. The Administrative Agent shall have received
a Notice of Account Designation specifying the account or accounts to which the
proceeds of any Loans are to be disbursed.

 

(ii) Proceedings and Documents. All opinions, certificates and other instruments
and all proceedings in connection with the transactions contemplated by this
Agreement shall be satisfactory in form and substance to the Administrative
Agent. The Administrative Agent shall have received copies of all other
instruments and other evidence as the Administrative Agent may reasonably
request, in form and substance satisfactory to the Administrative Agent, with
respect to the transactions contemplated by this Agreement and the taking of all
actions in connection therewith.

 

(iii) Due Diligence and Other Documents. The Borrowers shall have delivered to
the Administrative Agent documentation evidencing the Existing Wachovia Facility
and such other documents, certificates and opinions as the Administrative Agent
may reasonably request.

 

(iv) Tax Forms. Lenders shall have delivered to Administrative Agent any U.S.
Internal Revenue Service tax forms required under Section 4.9(f) hereof.

 

Section 5.3 Conditions to All Extensions of Credit. The obligation of the
Administrative Agent and the Lenders to make any Extension of Credit is subject
to the satisfaction of the following conditions precedent on the relevant
borrowing or issue date, as applicable:

 

(a) Continuation of Representations and Warranties. The representations and
warranties contained in Article VI hereof shall be true and correct on and as of
such borrowing or issuance date with the same effect as if made on and as of
such date; except for any representation and warranty made as of an earlier
date, which representation and warranty shall remain true and correct as of such
earlier date.

 

(b) No Existing Default. No Default or Event of Default shall have occurred and
be continuing hereunder (i) on the borrowing date with respect to such Loan or
after giving effect to the Loans to be made on such date or (ii) on the issue
date with respect to such Letter of Credit or after giving effect to such
Letters of Credit on such date.

 

(c) Officer’s Compliance Certificate; Additional Documents. The Administrative
Agent shall have received the current Officer’s Compliance Certificate and each
additional document, instrument, legal opinion or other item of information, as
reasonably requested by the Administrative Agent.

 

(d) Conditions. Each borrowing by the Borrowers or request for the issuance of a
Letter of Credit shall constitute a representation and warranty by the Borrowers
as of the date of such Loan or issuance of such Letter of Credit that the
conditions of this Section 5.3 hereof have been satisfied.

 

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ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE BORROWERS

 

Section 6.1 Representations and Warranties. To induce the Administrative Agent
and the Lenders to enter into this Agreement and to induce the Lenders to make
Extensions of Credit, the Borrowers hereby represent and warrant to the
Administrative Agent and the Lenders both before and after giving effect to the
transactions contemplated hereunder that:

 

(a) Organization; Power; Qualification. Each Borrower and each Subsidiary is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, has the power and authority to
own its properties and to carry on its business as now being and hereafter
proposed to be conducted and is duly 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 and authorization, except where the failure
to obtain such qualification or authorization would not have a Material Adverse
Effect. The jurisdictions in which each Borrower and each Guarantor are
organized and qualified to do business as of the Closing Date are described on
Schedule 6.1(a) hereto.

 

(b) Ownership. Each Subsidiary of any Borrower and each of their respective
Subsidiaries, as of the Closing Date, as depicted on the organizational chart
attached hereto as Schedule 6.1(b). As of the Closing Date and unless otherwise
noted on Schedule 6.1(b), each “parent” entity depicted on Schedule 6.1(b)
hereto owns one hundred percent (100%) of the outstanding equity of any entity
shown to be a subsidiary. All of the outstanding shares representing the equity
ownership of the parent entities have been duly authorized and validly issued
and are fully paid and nonassessable. As of the Closing Date, there are no
outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of any Borrower.

 

(c) Authorization of Agreement, Loan Documents and Borrowing. Each Borrower,
each Subsidiary and each Guarantor has the right, power and authority and has
taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other Loan Documents
to which it is a party in accordance with their respective terms. This Agreement
and each of the other Loan Documents have been duly executed and delivered by
the duly authorized officers of each Borrower, each Subsidiary and each
Guarantor party thereto, and each such document constitutes the legal, valid and
binding obligation of each Borrower, each Subsidiary and each Guarantor party
thereto, enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
state or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors rights in general and the availability of equitable
remedies.

 

(d) Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc. The
execution, delivery and performance by each Borrower, each Subsidiary and each
Guarantor of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the borrowings hereunder and the
transactions contemplated hereby do not and will not, by the passage of time,
the giving of notice or otherwise, (i) require any Governmental Approval or
violate any Applicable Law relating to any Borrower, any Subsidiary or any
Guarantor, (ii) conflict with, result in a breach of or constitute a default
under the articles or certificate of incorporation, bylaws or other
organizational documents of any Borrower, any Subsidiary or any Guarantor or any
indenture, agreement or other instrument to which such Person is a party or by
which any of its properties may be bound or any Governmental Approval relating
to such Person, or (iii) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired by
such Person other than Liens (if any) arising under the Loan Documents.

 

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(e) Compliance with Law; Governmental Approvals. Each Borrower, each Subsidiary
and each Guarantor: (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, except where the failure to obtain any such Governmental
Approvals or the existence of any potential appeals or threatened attacks in
connection therewith would not, singly or in the aggregate, have a Material
Adverse Effect, and (ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws relating to it
or any of its respective properties, except for such failures to comply that
would not, singly or in the aggregate, have a Material Adverse Effect.

 

(f) Tax Returns and Payments. Each Borrower, each Subsidiary and each Guarantor
has duly filed or caused to be filed all federal, state, local and other tax
returns required by Applicable Law to be filed, and has paid, or made adequate
provision for the payment of, all federal, state, local and other taxes,
assessments and governmental charges or levies upon it and its property, income,
profits and assets which are due and payable, except such taxes that are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP. No Governmental Authority
has asserted any Lien or other claim against any Borrower, any Subsidiary or any
Guarantor with respect to unpaid taxes which has not been discharged or
resolved. The charges, accruals and reserves on the books of each Borrower, each
Subsidiary and each Guarantor in respect of federal, state, local and other
taxes for all Fiscal Years and portions thereof since the organization of each
Borrower, each Subsidiary and each Guarantor are in the judgment of the
Borrowers adequate, and the Borrowers do not anticipate any additional taxes or
assessments for any of such years.

 

(g) Intellectual Property Matters. Each Borrower, each Subsidiary and each
Guarantor owns or possesses rights to use all franchises, licenses, copyrights,
copyright applications, patents, patent rights or licenses, patent applications,
trademarks, trademark rights, trade names, trade name rights, copyrights and
rights with respect to the foregoing which are required to conduct its business.
No event has occurred which permits, or after notice or lapse of time or both
would permit, the revocation or termination of any such rights, and no Borrower
nor any Subsidiary is liable to any Person for infringement under Applicable Law
with respect to any such rights as a result of its business operations, except
to the extent any such event or liability, either singly or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

 

(h) Environmental Matters.

 

(i) To the knowledge of each Borrower, each Subsidiary and each Guarantor, the
properties owned, leased or operated by each Borrower, each Subsidiary and each
Guarantor do not contain, and to their knowledge have not previously contained,
any Hazardous Materials in amounts or concentrations which (A) constitute or
constituted a violation of applicable Environmental Laws or (B) could give rise
to Borrower liability under applicable Environmental Laws which, either singly
or in the aggregate, could reasonably be expected to cause a Material Adverse
Effect;

 

(ii) Each Borrower, each Subsidiary, each Guarantor and their properties and all
operations conducted in connection therewith are in compliance, and have been in
compliance (other than such instances which have been cured), with all
applicable Environmental Laws, except to the extent any instances of
noncompliance, either singly or in the aggregate, could not reasonably be
expected to cause a Material Adverse Effect;

 

(iii) No Borrower, Subsidiary or Guarantor has received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental

 

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matters, Hazardous Materials, or compliance with Environmental Laws, nor does
any Borrower, any Subsidiary or any Guarantor have knowledge or reason to
believe that any such notice will be received or is being threatened, except to
the extent any such notices, either singly or in the aggregate, could not
reasonably be expected to cause a Material Adverse Effect;

 

(iv) To the knowledge of each Borrower, Subsidiary or Guarantor, Hazardous
Materials have not been transported or disposed of to or from the properties
owned, leased or operated by any Borrower, any Subsidiary or any Guarantor in
violation of, or in a manner or to a location which could give rise to liability
under Environmental Laws which, either singly or in the aggregate, could
reasonably be expected to cause a Material Adverse Effect, nor have any
Hazardous Materials been generated, treated, stored or disposed of at, on or
under any of such properties in violation of, or in a manner that could give
rise to liability under, any applicable Environmental Laws which, either singly
or in the aggregate, could reasonably be expected to cause a Material Adverse
Effect;

 

(v) No judicial proceedings or governmental or administrative action is pending,
or, to the knowledge of any Borrower, any Subsidiary or any Guarantor,
threatened, under any Environmental Law to which any Borrower, any Subsidiary or
any Guarantor is or will be named as a party, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to any Borrower, any Subsidiary, any Guarantor or
such properties owned (or, to the knowledge of any Borrower, Subsidiary or
Guarantor, leased) by any Borrower, Subsidiary or Guarantor, or operations
conducted by any Borrower, Subsidiary or Guarantor, except to the extent any
such proceedings, actions, decrees, orders or requirements, either singly or in
the aggregate, could not reasonably be expected to cause a Material Adverse
Effect; and

 

(vi) To the knowledge of each Borrower, each Subsidiary and each Guarantor,
there has been no release or threat of release of Hazardous Materials at or from
properties owned, leased or operated by any Borrower, any Subsidiary or any
Guarantor, now or in the past, in violation of or in amounts or in a manner that
could give rise to liability to any Borrower, any Subsidiary, any Guarantor or
to any assignee thereof under Environmental Laws which, either singly or in the
aggregate, could reasonably be expected to cause a Material Adverse Effect.

 

(i) ERISA.

 

(i) As of the Closing Date, no Borrower, Subsidiary, Guarantor or ERISA
Affiliate maintains or contributes to, or has any obligation under, any Employee
Benefit Plans other than those identified on Schedule 6.1(i) hereto;

 

(ii) Each Borrower, Subsidiary, Guarantor and ERISA Affiliate is in compliance
with all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans except for
any required amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired. Each Employee Benefit Plan that
is intended to be qualified under Section 401(a) of the Code has been determined
by the Internal Revenue Service to be so qualified, and each trust related to
such plan has been determined to be exempt under Section 501(a) of the Code. No
liability has been incurred by any Borrower, any Subsidiary, any Guarantor or
any ERISA Affiliate which remains unsatisfied for any taxes or penalties with
respect to any Employee Benefit Plan or any Multiemployer Plan;

 

(iii) No Pension Plan has been terminated, nor has any accumulated funding
deficiency (as defined in Section 412 of the Code) been incurred (without regard
to any waiver granted under Section 412 of the Code), nor has any funding waiver
from the Internal Revenue Service

 

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been received or requested with respect to any Pension Plan, nor has any
Borrower, any Subsidiary, any Guarantor or any ERISA Affiliate failed to make
any contributions or to pay any amounts due and owing as required by Section 412
of the Code, Section 302 of ERISA or the terms of any Pension Plan prior to the
due dates of such contributions under Section 412 of the Code or Section 302 of
ERISA, nor has there been any event requiring any disclosure under Section
4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan;

 

(iv) No Borrower, Subsidiary, Guarantor or ERISA Affiliate has: (A) engaged in a
nonexempt prohibited transaction described in Section 406 of the ERISA or
Section 4975 of the Code; (B) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium payments
which are due and unpaid; (C) failed to make a required contribution or payment
to a Multiemployer Plan; or (D) failed to make a required installment or other
required payment under Section 412 of the Code;

 

(v) No Termination Event has occurred or is reasonably expected to occur; and

 

(vi) No proceeding, claim, lawsuit and/or investigation is existing or, to the
best knowledge of each Borrower, each Subsidiary and each Guarantor after due
inquiry, threatened, concerning or involving any (A) employee welfare benefit
plan (as defined in Section 3(1) of ERISA) currently maintained or contributed
to by any Borrower, any Subsidiary, any Guarantor or any ERISA Affiliate, (B)
Pension Plan or (C) Multiemployer Plan.

 

(j) Margin Stock. No Borrower, Subsidiary or Guarantor is engaged principally or
as one of its activities in the business of extending credit for the purpose of
purchasing or carrying any margin stock (as each such term is defined or used in
Regulation U of the Board of Governors of the Federal Reserve System). No part
of the proceeds of any of the Loans or Letters of Credit will be used for
purchasing or carrying margin stock or for any purpose which violates, or which
would be inconsistent with, the provisions of Regulation T, U or X of such Board
of Governors.

 

(k) Government Regulation. No Borrower, Subsidiary or Guarantor is an investment
company or a company controlled by an investment company (as each such term is
defined or used in the Investment Company Act of 1940, as amended), and no
Borrower, Subsidiary or Guarantor is, or after giving effect to any Extension of
Credit will be, subject to regulation under the Public Utility Holding Company
Act of 1935 or the Interstate Commerce Act, each as amended, or any other
Applicable Law which limits its ability to incur or consummate the transactions
contemplated hereby.

 

(l) Material Contracts. Schedule 6.1(l) hereto sets forth a complete and
accurate list of all Material Contracts of each Borrower, each Subsidiary and
each Guarantor in effect as of the Closing Date not listed on any other Schedule
hereto; other than as set forth in Schedule 6.1(l) hereto, each such Material
Contract is, and after giving effect to the consummation of the transactions
contemplated by the Loan Documents will be, in full force and effect in
accordance with the terms thereof.

 

(m) Employee Relations. Each Borrower, each Subsidiary and each Guarantor enjoys
good employee relations and is not, as of the Closing Date, party to any
collective bargaining agreement nor has any labor union been recognized as the
representative of its employees except as set forth on Schedule 6.1(m) hereto.
No Borrower, Subsidiary or Guarantor knows of any pending, threatened or
contemplated strikes, work stoppage or other collective labor disputes involving
its employees or those of any Subsidiary.

 

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(n) Burdensome Provisions. No Borrower, Subsidiary or Guarantor is a party to
any indenture, agreement, lease or other instrument, or subject to any corporate
or partnership restriction, Governmental Approval or Applicable Law which is so
unusual or burdensome as in the foreseeable future could be reasonably expected
to have a Material Adverse Effect. No Borrower, Subsidiary or Guarantor
presently anticipates that future expenditures needed to meet the provisions of
any statutes, orders, rules or regulations of a Governmental Authority will be
so burdensome as to have a Material Adverse Effect.

 

(o) Financial Statements. The Consolidated balance sheets of Urban and its
Consolidated Subsidiaries as of January 31, 2004 and the related statements of
income and retained earnings and cash flows for the Fiscal Years then ended,
copies of which have been furnished to the Lenders, are complete and correct and
fairly present the assets, liabilities and financial position of the Borrowers,
their Subsidiaries and the Guarantors as at such dates, and the results of the
operations and changes of financial position for the periods then ended. All
such financial statements, including without limitation the related schedules
and notes thereto, have been prepared in accordance with GAAP. No Borrower,
Subsidiary or Guarantor has any Debt, obligation or other unusual forward or
long-term commitment which is not fairly reflected in the foregoing financial
statements or in the notes thereto in accordance with GAAP.

 

(p) No Material Adverse Change. Since January 31, 2004, there has been no
material adverse change in the properties, business, operations, prospects, or
condition (financial or otherwise) of any Borrower, any Subsidiary or any
Guarantor, and no event, including without limitation any material pending or
threatened litigation, bankruptcy or other proceeding, has occurred or condition
arisen that could reasonably be expected to have a Material Adverse Effect.

 

(q) Solvency. As of the Closing Date and after giving effect to each Extension
of Credit made hereunder, each Borrower, each Subsidiary and each Guarantor will
be Solvent.

 

(r) Titles to Properties. Each Borrower, each Subsidiary and each Guarantor has
such title to the real property owned or leased by it as is necessary or
desirable to the conduct of its business and valid and legal title to all of its
personal property and assets, including without limitation those reflected on
the balance sheets of Urban and its Consolidated Subsidiaries delivered pursuant
to Section 6.1(o) hereof, except those which have been disposed of by any
Borrower, any Subsidiary or any Guarantor subsequent to such date which
dispositions have been in the ordinary course of business or as otherwise
expressly permitted hereunder.

 

(s) Liens. None of the properties and assets of any Borrower, any Subsidiary or
any Guarantor is subject to any Lien, except Liens permitted pursuant to Section
10.3 hereof. No financing statement under the Uniform Commercial Code of any
state which names any Borrower, any Subsidiary, any Guarantor or any of their
respective trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other jurisdiction, and no Borrower, Subsidiary
or Guarantor has signed any such financing statement or any security agreement
authorizing any secured party thereunder to file any such financing statement,
except to perfect those Liens permitted by Section 10.3 hereof.

 

(t) Debt and Guaranty Obligations. A complete and correct listing of all Debt
and Guaranty Obligations of each Borrower, each Subsidiary and each Guarantor as
of January 31, 2004 appears at Note 10 (page F-20) of the audited financial
statements included as part of Item 8 of the Form 10-K for the year ended
January 31, 2004 filed with the Securities and Exchange Commission on April 15,
2004 (“Note 10”). There is no Debt and no Guaranty Obligations of any Borrower,
any Subsidiary or any Guarantor other than those listed on Note 10 and Note 10
presents, in all material

 

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respects, an accurate listing of the Debt and Guaranty Obligations of each
Borrower, each Subsidiary and each Guarantor as of the Closing Date. Each
Borrower, each Subsidiary and each Guarantor has performed and is in compliance
with all of the terms of such Debt and Guaranty Obligations and all instruments
and agreements relating thereto, and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute such a
default or event of default on the part of any Borrower, any Subsidiary or any
Guarantor exists with respect to any such Debt or Guaranty Obligation.

 

(u) Litigation. Except for matters existing on the Closing Date and set forth on
Schedule 6.1(u) hereto and those as to which the insurer has not disclaimed
liability coverage, there are no actions, suits or proceedings pending nor, to
the knowledge of any Borrower, any Subsidiary or any Guarantor, threatened,
against or in any other way relating adversely to or affecting any Borrower, any
Subsidiary, any Guarantor or any of their respective properties in any court or
before any arbitrator of any kind or before or by any Governmental Authority,
which, either singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

(v) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of Default, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a default
or event of default by any Borrower, any Subsidiary or any Guarantor under any
Material Contract or judgment, decree or order to which any Borrower, any
Subsidiary or any Guarantor is a party or by which any Borrower, any Subsidiary,
any Guarantor or any of their respective properties may be bound or which would
require any Borrower, any Subsidiary or any Guarantor to make any payment
thereunder prior to the scheduled maturity date therefor.

 

(w) Accuracy and Completeness of Information. All written information, reports
and other papers and data produced by or on behalf of each Borrower, each
Subsidiary and each Guarantor and furnished to the Lenders were, at the time the
same were so furnished, complete and correct in all respects to the extent
necessary to give the recipient a true and accurate knowledge of the subject
matter. No document, including without limitation any financial statement,
furnished or written statement made to the Lenders by any Borrower, any
Subsidiary and any Guarantor in connection with the negotiation, preparation or
execution of this Agreement or any of the Loan Documents contains or will
contain any untrue statement of a fact material to the creditworthiness of any
Borrower, any Subsidiary or any Guarantor or omits or will omit to state a fact
necessary in order to make the statements contained therein not misleading. No
Borrower is aware of any facts which it has not disclosed in writing to the
Lenders having a Material Adverse Effect, or insofar as such Borrower can now
foresee, could reasonably be expected to have a Material Adverse Effect.

 

(x) Fees and Commissions. No Borrower owes any fees or commissions of any kind,
and no Borrower knows of any claim for any fees or commissions, in connection
with the Borrowers’ obtaining the Commitments or the Loans from the Lenders,
except those provided herein.

 

(y) Public Utility Holding Company Act. No Borrower is a “public utility holding
company” within the meaning of the Public Utility Holding Company Act of 1935,
as amended (the “1935 Act”), nor does the execution, delivery and performance of
this Agreement and the Note require any filing, authorization or consent under
the 1935 Act.

 

(z) Foreign Assets Control Regulations, Etc. None of the requesting or borrowing
of the Loans, the requesting or issuance, extension or renewal of any Letters of
Credit or the use of the proceeds of any thereof will violate the Trading with
the Enemy Act (50 U.S.C. §1 et seq., as amended) (the “Trading With the Enemy
Act”) or any of the foreign assets control regulations of the United States
Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) (the “Foreign
Assets

 

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Control Regulations”) or any enabling legislation or executive order relating
thereto (which for the avoidance of doubt shall include, but shall not be
limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, or Support Terrorism (66 Fed.
Reg. 49079 (2001) (the “Executive Order”) and (b) the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56)). Furthermore, none of the Borrowers
nor any of their Subsidiaries or other Affiliates (a) is or will become a
“blocked person” as described in the Executive Order, the Trading with the Enemy
Act or the Foreign Assets Control Regulations or (b) engages or will engage in
any dealings or transactions, or be otherwise associated, with any such “blocked
person.”

 

Section 6.2 Survival of Representations and Warranties, Etc. All representations
and warranties set forth in this Article VI and all representations and
warranties contained in any certificate, or any of the Loan Documents (including
without limitation any such representation or warranty made in or in connection
with any amendment thereto) shall constitute representations and warranties made
under this Agreement. All representations and warranties made under this
Agreement shall be made or deemed to be made at and as of the Closing Date,
shall survive the Closing Date and shall not be waived by the execution and
delivery of this Agreement, any investigation made by or on behalf of the
Administrative Agent or the Lenders or any borrowing hereunder.

 

ARTICLE VII

FINANCIAL INFORMATION AND NOTICES

 

Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 13.13 hereof, the Borrowers will furnish or cause to be furnished to
the Administrative Agent and the Lenders at the Administrative Agent’s Office,
or such other office as may be designated by the Administrative Agent and the
Lenders from time to time:

 

Section 7.1 Financial Statements and Projections.

 

(a) [Intentionally Omitted]

 

(b) Quarterly Financial Statements. As soon as practicable and in any event
within forty-five (45) days after the end of the first three (3) fiscal quarters
of each Fiscal Year, an unaudited Consolidated balance sheet of Urban and its
Consolidated Subsidiaries as of the close of such fiscal quarter and unaudited
Consolidated statements of income, retained earnings and cash flows for the
fiscal quarter then ended and that portion of the Fiscal Year then ended,
including without limitation the notes thereto, all in reasonable detail setting
forth in comparative form the corresponding figures for the preceding Fiscal
Year and prepared by Urban in accordance with GAAP and, if applicable,
containing disclosure of the effect on the financial position or results of
operations of any change in the application of accounting principles and
practices during the period, and certified by a Responsible Officer of Urban to
present fairly in all material respects the financial condition of Urban and its
Consolidated Subsidiaries as of their respective dates and the results of
operations of Urban and its Consolidated Subsidiaries for the respective periods
then ended, subject to normal year end adjustments.

 

(c) Annual Financial Statements. As soon as practicable and in any event within
ninety (90) days after the end of each Fiscal Year, an audited Consolidated
balance sheet of Urban and its Consolidated Subsidiaries as of the close of such
Fiscal Year and audited Consolidated statements of income, retained earnings and
cash flows for the Fiscal Year then ended, including without limitation the
notes thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and examined by an
independent certified public accounting firm acceptable to

 

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the Administrative Agent in accordance with GAAP and, if applicable, containing
disclosure of the effect on the financial position or results of operation of
any change in the application of accounting principles and practices during the
year, and accompanied by a report thereon by such certified public accountants
that is not qualified with respect to scope limitations imposed by any Borrower,
any Subsidiary or any Guarantor or with respect to accounting principles
followed by any Borrower, any Subsidiary or any Guarantor not in accordance with
GAAP.

 

(d) Annual Business Plan and Financial Projections. If the Borrowers submit a
Termination Date Extension Request pursuant to Section 2.6 hereof, then as soon
as practicable but not less than forty-five (45) days prior to the Termination
Date, a business plan of Urban and its Consolidated Subsidiaries for the ensuing
six (6) fiscal quarters, such plan to be prepared in accordance with GAAP and to
include, on a quarterly basis, the following: a quarterly operating and capital
budget, a projected income statement, statement of cash flows and balance sheet
and a report containing management’s discussion and analysis of such
projections, accompanied by a certificate from a Responsible Officer of Urban to
the effect that, to the best of such Responsible Officer’s knowledge, such
projections are good faith estimates of the financial condition and operations
of Urban and its Consolidated Subsidiaries for such six (6) quarter period.

 

Section 7.2 Officer’s Compliance Certificate. At each time financial statements
are delivered pursuant to Section 7.1(b) or Section 7.1(c) hereof and at such
other times as the Administrative Agent shall reasonably request, a certificate
of the chief financial officer or the treasurer of Urban in the form of Exhibit
E attached hereto (an “Officer’s Compliance Certificate”).

 

Section 7.3 Accountants’ Certificate. At each time financial statements are
delivered pursuant to Section 7.1(c) hereof, a certificate of the independent
public accountants certifying such financial statements addressed to the
Administrative Agent:

 

(a) stating that in making the examination necessary to issue the report of
independent public accountants of such financial statements, nothing came to
their attention that caused them to believe that Urban and its Consolidated
Subsidiaries were not in compliance with any of the terms, covenants, provisions
or conditions of Article IX of the Agreement as they relate to accounting
matters; and

 

(b) attaching the calculations prepared by Urban and its Consolidated
Subsidiaries that were provided to the accountants in connection with Section
7.3(a) hereof.

 

Section 7.4 Other Reports.

 

(a) Promptly upon receipt thereof, copies of all Management Reports, if any,
submitted to any Borrower, any Subsidiary or any Guarantor or to its respective
board of directors by its independent public accountants in connection with
their auditing function, and copies of any management responses thereto; and

 

(b) Such other information regarding the operations, business affairs and
financial condition of any Borrower, any Subsidiary or any Guarantor as the
Administrative Agent may reasonably request.

 

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Section 7.5 Notice of Litigation and Other Matters. Prompt (but in no event
later than ten (10) Business Days after an officer of any Borrower or any
Subsidiary obtains knowledge thereof) telephonic and written notice of:

 

(a) the commencement of all proceedings and investigations by or before any
Governmental Authority and all actions and proceedings in any court or before
any arbitrator against or involving any Borrower or any Subsidiary or any of
their respective properties, assets or businesses, which in any such case could
reasonably be expected to have a Material Adverse Effect;

 

(b) any notice of any violation received by any Borrower or any Subsidiary from
any Governmental Authority including without limitation any notice of violation
of Environmental Laws, which in any such case could reasonably be expected to
have a Material Adverse Effect;

 

(c) any labor controversy that has resulted in, or threatens to result in, a
strike or other work action against any Borrower or any Subsidiary, which in any
such case could reasonably be expected to have a Material Adverse Effect;

 

(d) any attachment, judgment, levy or order exceeding $1,000,000 (in any such
case, which is not covered by insurance, or as to which the insurer has
disclaimed insurance coverage, or which is not stayed or bonded) that may be
assessed against any Borrower or any Subsidiary;

 

(e) any Default or Event of Default, or any event which constitutes or which
with the passage of time or giving of notice or both would constitute a default
or event of default under any Material Contract to which any Borrower or any
Subsidiary is a party or by which any Borrower or any Subsidiary or any of their
respective properties may be bound;

 

(f) (i) any unfavorable determination letter from the Internal Revenue Service
regarding the qualification of an Employee Benefit Plan under Section 401(a) of
the Code (along with a copy thereof), (ii) all notices received by any Borrower,
any Subsidiary or any ERISA Affiliate of the PBGC’s intent to terminate any
Pension Plan or to have a trustee appointed to administer any Pension Plan,
(iii) all notices received by any Borrower, any Subsidiary or any ERISA
Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount
of withdrawal liability pursuant to Section 4202 of ERISA and (iv) any Borrower
obtaining knowledge or reason to know that any Borrower, any Subsidiary or any
ERISA Affiliate has filed or intends to file a notice of intent to terminate any
Pension Plan under a distress termination within the meaning of Section 4041(c)
of ERISA; and

 

(g) any event which makes any of the representations set forth in Section 6.1
hereof inaccurate in any material respect.

 

Section 7.6 Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of any Borrower,
any Subsidiary or any Guarantor to the Administrative Agent (other than
financial forecasts), whether pursuant to this Article VII, any other provision
of this Agreement or the Guaranty Agreement, shall be, at the time the same is
so furnished, complete and correct in all material respects to the extent
necessary to give the Lenders complete, true and accurate knowledge of the
subject matter based on the Borrowers’ knowledge thereof.

 

ARTICLE VIII

AFFIRMATIVE COVENANTS

 

Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner provided
for in Section 13.13 hereof, each Borrower will, and will cause each Subsidiary
and each Guarantor to:

 

Section 8.1 Preservation of Corporate Existence and Related Matters. Except as
permitted by Section 10.5 hereof, preserve and maintain its separate corporate
existence and all rights,

 

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franchises, licenses and privileges necessary to the conduct of its business,
and qualify and remain qualified as a foreign corporation and authorized to do
business in each jurisdiction in which the failure to so qualify would have a
Material Adverse Effect.

 

Section 8.2 Maintenance of Property. Protect and preserve all properties useful
in and material to its business, including without limitation copyrights,
patents, trade names and trademarks; maintain in good working order and
condition all buildings, equipment and other tangible real and personal
property; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.

 

Section 8.3 Insurance. Maintain insurance with financially sound and reputable
insurance companies against such risks and in such amounts as are customarily
maintained by similar businesses and as may be required by Applicable Law, and
on the Closing Date and from time to time thereafter deliver to the
Administrative Agent upon its request a detailed list of the insurance then in
effect, stating the names of the insurance companies, the amounts and rates of
the insurance, the dates of the expiration thereof and the properties and risks
covered thereby.

 

Section 8.4 Accounting Methods and Financial Records. Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and
complete in all material respects) as may be required or as may be necessary to
permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.

 

Section 8.5 Payment and Performance of Obligations. Pay and perform all
Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that a Borrower or Subsidiary may contest any item
described in clauses (a) or (b) of this Section 8.5 in good faith so long as
adequate reserves are maintained with respect thereto in accordance with GAAP.

 

Section 8.6 Compliance With Laws and Approvals. Observe and remain in compliance
with all Applicable Laws and maintain in full force and effect all Governmental
Approvals, in each case applicable to the conduct of its business, except where
the failure to do so would not have a Material Adverse Effect.

 

Section 8.7 Environmental Laws. In addition to and without limiting the
generality of Section 8.6 hereof, (a) comply with, and ensure such compliance by
all tenants and subtenants with all applicable Environmental Laws and obtain and
comply with and maintain, and ensure that all tenants and subtenants obtain and
comply with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws, (b) conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws, and
promptly comply with all lawful orders and directives of any Governmental
Authority regarding Environmental Laws, and (c) defend, indemnify and hold
harmless the Lenders, and their respective parents, Subsidiaries, Affiliates,
employees, agents, officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to the presence of Hazardous Materials, or the
violation of, noncompliance with or liability under any Environmental Laws
applicable to the operations of such Borrower or such Subsidiary, or any orders,
requirements or demands of Governmental Authorities related thereto, including
without limitation

 

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reasonable attorney’s and consultant’s fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing directly result from the gross negligence or willful
misconduct of the party seeking indemnification therefor.

 

Section 8.8 Compliance with ERISA. In addition to and without limiting the
generality of Section 8.6 hereof, (a) comply with all applicable provisions of
ERISA and the regulations and published interpretations thereunder with respect
to all Employee Benefit Plans, (b) not take any action or fail to take action
the result of which could be a liability to the PBGC or to a Multiemployer Plan,
(c) not participate in any prohibited transaction that could result in any civil
penalty under ERISA or tax under the Code, (d) operate each Employee Benefit
Plan in such a manner that will not incur any tax liability under Section 4980B
of the Code or any liability to any qualified beneficiary as defined in Section
4980B of the Code and (e) furnish to the Administrative Agent upon the
Administrative Agent’s request such additional information about any Employee
Benefit Plan as may be reasonably requested by the Administrative Agent.

 

Section 8.9 Compliance With Agreements. Comply with each term, condition and
provision of all leases, agreements and other instruments entered into in the
conduct of its business, except to the extent any failure to comply, either
singly or in the aggregate, would not have a Material Adverse Effect; provided,
that a Borrower or Subsidiary may: (a) contest any such lease, agreement or
other instrument in good faith through applicable actions or proceedings so long
as adequate reserves are maintained in accordance with GAAP; or (b) cancel any
Material Contract so long as written notice thereof is provided to the
Administrative Agent not more than twenty-five (25) Business Days thereafter.

 

Section 8.10 Conduct of Business. Engage only in businesses in substantially the
same fields as the businesses conducted by the Borrowers and their Subsidiaries
on the Closing Date and in lines of business reasonably related thereto.

 

Section 8.11 Visits and Inspections. Permit representatives of the
Administrative Agent, from time to time, to visit and inspect its properties;
inspect, audit and make extracts from its books, records and files, including
without limitation management letters prepared by independent accountants; and
discuss with its principal officers, and its independent accountants, its
business, assets, liabilities, financial condition, results of operations and
business prospects.

 

Section 8.12 Additional Guarantors. Within ten (10) days after any Subsidiary of
any Borrower with at least $20,000,000 of equity is created or acquired after
the Closing Date, give notice thereof to the Administrative Agent of such
creation or acquisition and whether such Subsidiary shall be formed under a
jurisdiction outside of the United States, and cause to be executed and
delivered to the Administrative Agent: (a) a duly executed Guaranty Agreement or
supplement thereto, with such changes as the Administrative Agent may reasonably
request, and (b) favorable legal opinions addressed to the Administrative Agent
and the Lenders in form and substance satisfactory thereto with respect to such
Guaranty Agreement and such other documents and closing certificates as may be
requested by the Administrative Agent.

 

Section 8.13 Maintain Cash Collateral Account. On the Termination Date,
establish and maintain with the Issuing Lender an account and deposit in such
account cash collateral for Letters of Credit as required under Section 3.4(b)
hereof.

 

Section 8.14 Subsequent Credit Terms.

 

(a) Notify the Administrative Agent in writing not less than ten (10) Business
Days prior to its entering into any amendment or modification of any credit
arrangement other

 

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than any construction financing in connection with any Excluded Project (but
excluding long-term or permanent financing in connection with the Corporate
Headquarters and/or the Distribution Center), whether now in effect or hereafter
incurred, pursuant to which any Borrower or any Subsidiary agrees to financial
covenants or events of default which are more restrictive to such Borrower or
Subsidiary than those contained in this Agreement. Upon entering into any such
amendment or modification, and with respect to the covenants and events of
default in this Agreement, the corresponding covenants, terms and conditions of
this Agreement are and shall be deemed to be automatically and immediately
amended to conform with and to include the applicable covenants, terms and/or
conditions of such other agreement; provided, however, that the foregoing shall
not be applicable to or be deemed to affect any provision of this Agreement to
the extent that any amendment or modification is less restrictive than the
corresponding provisions of this Agreement.

 

(b) Each Borrower and Subsidiary hereby agrees promptly to execute and deliver
any and all such documents and instruments and to take all such further actions
as Administrative Agent may, in its sole discretion, deem necessary or
appropriate to effectuate the provisions of this Section 8.14.

 

Section 8.15 Opinions of Counsel to Non-U.S. Borrowers. Deliver to
Administrative Agent, within 30 days of the Closing Date, favorable opinions of
counsel to the Non-U.S. Borrowers addressed to the Administrative Agent and the
Lenders with respect to such matters as the Lenders shall request.

 

Section 8.16 Further Assurances. Make, execute and deliver all such additional
and further acts, things, deeds and instruments as the Administrative Agent may
reasonably require to document and consummate the transactions contemplated
hereby and to vest completely in and insure the Lenders their rights under this
Agreement, the Notes, the Letters of Credit and the other Loan Documents.

 

Section 8.17 Bank Accounts. Use Wachovia as its primary provider of trade/import
letter of credit services.

 

ARTICLE IX

FINANCIAL COVENANTS

 

Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 13.13 hereof, no Borrower or Subsidiary will:

 

Section 9.1 Fixed Charge Coverage Ratio. As of any fiscal quarter end, permit
the Fixed Charge Coverage Ratio of Urban and its Consolidated Subsidiaries to be
less than 1.3 to 1.0.

 

Section 9.2 Adjusted Debt to EBITDAR Ratio. As of any fiscal quarter end, permit
the Adjusted Debt to EBITDAR Ratio of Urban and its Consolidated Subsidiaries to
be more than 4.0 to 1.0.

 

ARTICLE X

NEGATIVE COVENANTS

 

Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 13.13 hereof, no Borrower has or will, and no Borrower will permit
any Subsidiary to:

 

Section 10.1 Limitations on Debt. Create, incur, assume or suffer to exist any
Debt except:

 

(a) the Obligations;

 

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(b) Debt incurred in connection with a Hedging Agreement with a counterparty and
upon terms and conditions (including without limitation interest rate)
reasonably satisfactory to the Administrative Agent;

 

(c) Subordinated Debt;

 

(d) Debt existing on the Closing Date and not otherwise permitted under this
Section 10.1 hereof, as set forth on Schedule 6.1(t) hereto and the renewal and
refinancing (but not the increase at the aggregate principal amount thereof)
thereof;

 

(e) purchase money Debt of the Borrowers and their Subsidiaries and Debt of the
Borrowers and their Subsidiaries incurred in connection with Capitalized Leases
in an aggregate principal amount not to exceed $2,000,000 outstanding on any
date of determination;

 

(f) Debt consisting of Guaranty Obligations permitted by Section 10.2 hereof;

 

(g) Debt of the Non-U.S. Borrowers to Borrowers under loans and advances
permitted by Section 10.4(d);

 

(h) so long as no Event of Default has occurred and is continuing or would
result therefrom, unsecured Debt of Borrowers and their Subsidiaries in an
aggregate principal amount not to exceed $500,000 at any time outstanding,
provided that such Debt is not senior in right of payment to the payment of the
Debt arising under this Agreement and the other Loan Documents; and

 

(i) Debt owing by an SPE in connection with the Excluded Projects, up to an
aggregate principal amount not to exceed $50,000,000;

 

provided, that no agreement or instrument with respect to Debt permitted to be
incurred by this Section 10.1 shall restrict, limit or otherwise encumber (by
covenant or otherwise) the ability of any Subsidiary of any Borrower to make any
payment to any Borrower or any other Subsidiary (in the form of dividends,
intercompany advances or otherwise) for the purpose of enabling the Borrowers to
pay the Obligations.

 

Section 10.2 Limitations on Guaranty Obligations. Create, incur, assume or
suffer to exist any Guaranty Obligations except:

 

(a) Guaranty Obligations in favor of the Lenders; and

 

(b) Guaranty Obligations of Urban for the benefit of any Subsidiary of Debt
permitted by Section 10.1(a), Section 10.1(b), Section 10.1(c), Section 10.1(d),
Section 10.1(e), Section 10.1(f) and Section 10.1(g) and Section 10.1(i) hereof.

 

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Section 10.3 Limitations on Liens. Create, incur, assume or suffer to exist, any
Lien on or with respect to any of its assets or properties (including without
limitation shares of capital stock or other ownership interests or commercial
tort claims), real or personal, whether now owned or hereafter acquired, except:

 

(a) Liens for taxes, assessments and other governmental charges or levies
(excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;

 

(b) the claims of materialmen, mechanics, carriers, warehousemen, processors or
landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business: (i) each of which, as to the underlying indebtedness
thereof, is not overdue for a period of more than sixty (60) days; or (ii) which
claims are being contested in good faith and by appropriate actions or
proceedings or are stayed or bonded;

 

(c) Liens consisting of deposits or pledges made in the ordinary course of
business in connection with, or to secure payment of, obligations under workers
compensation, unemployment insurance or similar legislation or obligations under
customer service contracts;

 

(d) Liens constituting encumbrances in the nature of zoning restrictions,
easements and rights or restrictions of record on the use of real property,
which in the aggregate are not substantial in amount and which do not, in any
case, detract from the value of such property or impair the use thereof in the
ordinary conduct of business;

 

(e) Liens of the Lenders;

 

(f) Liens not otherwise permitted by this Section 10.3 and in existence on the
Closing Date and described on Schedule 10.3 hereto; and

 

(g) Liens securing Debt permitted under Section 10.1(e) or Section 10.1(i)
hereof; provided that (i) such Liens shall be created substantially
simultaneously with the acquisition of the related asset or in connection with
the refinancing of Liens created substantially simultaneously, (ii) such Liens
do not at any time encumber any property other than the property financed by
such Debt, (iii) the amount of Debt secured thereby is not increased and (iv)
the principal amount of Debt secured by any such Lien shall at no time exceed
one hundred percent (100%) of the original purchase price of such property at
the time it was acquired.

 

Section 10.4 Limitations on Loans, Advances, Investments and Acquisitions.
Purchase, own, invest in or otherwise acquire, directly or indirectly, any
capital stock, interests in any partnership or joint venture (including without
limitation the creation or capitalization of any Subsidiary), evidence of Debt
or other obligation or security, substantially all or a portion of the business
or assets of any other Person or any other investment or interest whatsoever in
any other Person, or make or permit to exist, directly or indirectly, any loans,
advances or extensions of credit to, or any investment in cash or by delivery of
property in, any Person except:

 

(a) investments not otherwise permitted by this Section 10.4 in Subsidiaries
existing on the Closing Date and the other existing loans, advances and
investments not otherwise permitted by this Section 10.4 described on Schedule
10.4(a) hereto;

 

(b) investments made in accordance with the Investment Policy and Guidelines
attached hereto as Schedule 10.4(b) as in effect on the date hereof, which
Investment Policy and Guidelines may be updated or amended by the Borrowers
without the consent of Wachovia; provided, that such updates or amendments shall
not become a part of this Credit Agreement without ten (10) days prior written
notice to Wachovia;

 

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(c) investments by any Borrower or any Subsidiary in the form of acquisitions of
all or substantially all of the business or a line of business (whether by the
acquisition of capital stock, assets or any combination thereof) of any other
Person if such acquisition has been previously approved in writing by the
Required Lenders;

 

(d) the making by any Borrower or any Guarantor of loans or advances to or
investments in any Subsidiary, provided that such Subsidiary is joined as a
Guarantor pursuant to Section 8.12 hereof, and provided, further, that: (i) the
aggregate principal amount of intercompany loans to Non-U.S. Borrowers may not
exceed the Non-U.S. Sublimit less: (A) the amount of L/C Obligations for Letters
of Credit issued for the account of Non-U.S. Borrowers and (B) the aggregate
principal amount of outstanding Loans borrowed by or on behalf of any Non-U.S.
Borrower and (ii) intercompany loans and advances to Non-U.S. Borrowers from
U.S. Borrowers together with investments by U.S. Borrowers in Non-U.S. Borrowers
shall not exceed, in the aggregate, without duplication, $50,000,000 at any time
outstanding.

 

(e) the creation of accounts receivable in the ordinary course of business;

 

(f) the making of loans and advances to employees in the ordinary course of
business, which loans and advances: (i) shall not exceed $1,000,000 in the
aggregate outstanding at any one time, (ii) shall not remain outstanding in
excess of 366 days, and (iii) shall otherwise be in compliance with Section 10.9
hereof; and

 

(g) advances to any SPE which, in the aggregate, shall not exceed $65,000,000
less the amount of any long-term or permanent financing obtained in connection
with the Corporate Headquarters and/or the Distribution Center.

 

Section 10.5 Limitations on Mergers and Liquidation. Merge, consolidate or enter
into any similar combination with any other Person or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution) except:

 

(a) any Wholly-Owned Subsidiary of any Borrower may merge with any other
Wholly-Owned Subsidiary of any Borrower;

 

(b) any Wholly-Owned Subsidiary may merge into the Person such Wholly-Owned
Subsidiary was formed to acquire in connection with an acquisition permitted by
Section 10.4(c) hereof; and

 

(c) any Wholly-Owned Subsidiary of any Borrower may wind-up into any Borrower or
any other Wholly-Owned Subsidiary of any Borrower.

 

Section 10.6 Limitations on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including without limitation the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:

 

(a) the sale of inventory in the ordinary course of business;

 

(b) the sale of obsolete assets no longer used or usable in the business of any
Borrower or any Subsidiary;

 

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(c) the transfer of assets to any Borrower or any Wholly-Owned Subsidiary of any
Borrower pursuant to Section 10.5(c) hereof;

 

(d) the transfer of assets to any Guarantor pursuant to Section 10.4(d) hereof;
and

 

(e) the sale or discount without recourse of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof.

 

Section 10.7 Limitations on Dividends and Distributions. Declare or pay any
dividends upon any of its capital stock; purchase, redeem, retire or otherwise
acquire, directly or indirectly, any shares of its capital stock, or make any
distribution of cash, property or assets among the holders of shares of its
capital stock, or make any change in its capital structure that could reasonably
be expected to have a Material Adverse Effect; provided that:

 

(a) any Borrower or any Subsidiary may pay dividends in shares of its own
capital stock;

 

(b) any Subsidiary may pay cash dividends to any Borrower; and

 

(c) with the approval of the board of directors of Urban, Urban may: (i)
repurchase shares of its capital stock, provided that the Fixed Charge Coverage
Ratio of Urban and its Consolidated Subsidiaries as of the most recently ended
fiscal quarter is not less than 1.3 to 1.0, and that each such repurchase of
shares of capital stock would not cause the Fixed Charge Coverage Ratio to be
less than the minimum required to be maintained for the next succeeding fiscal
quarter; and (ii) repurchase fractional shares of its capital stock in
connection with any stock split or reverse stock split of Urban’s capital stock,
the purchase price (based on fair market value) of which does not exceed
$1,000,000 in the aggregate.

 

Section 10.8 Limitations on Exchange and Issuance of Capital Stock. Issue, sell
or otherwise dispose of any class or series of capital stock that, by its terms
or by the terms of any security into which it is convertible or exchangeable,
is, or upon the happening of an event or passage of time would be, (a)
convertible or exchangeable into Debt or (b) required to be redeemed or
repurchased, including without limitation at the option of the holder, in whole
or in part, or has, or upon the happening of an event or passage of time would
have, a redemption or similar payment due.

 

Section 10.9 Transactions with Affiliates. Directly or indirectly: (a) make any
loan or advance to, or purchase or assume any note or other obligation to or
from, any of its officers, directors, shareholders or other Affiliates, or to or
from any member of the immediate family of any of its officers, directors,
shareholders or other Affiliates, or subcontract any operations to any of its
Affiliates, or (b) enter into, or be a party to, any other transaction with any
of its Affiliates, except pursuant to the reasonable requirements of its
business and upon fair and reasonable terms that are fully disclosed to and
approved in writing by the Administrative Agent prior to the consummation
thereof and are no less favorable to it than it would obtain in a comparable
arm’s length transaction with a Person not its Affiliate; provided, however,
that this Section 10.9 shall not be construed to prohibit or limit the terms of
employee compensation provided in the ordinary course of business, including
without limitation salaries and benefits, relocation packages and, subject to
Section 10.4(f) hereof, loans and advances to employees.

 

Section 10.10 Certain Accounting Changes. Change its Fiscal Year end, or make
any change in its accounting treatment and reporting practices except as
required by GAAP.

 

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Section 10.11 Amendments; Payments and Prepayments of Subordinated Debt. Amend
or modify (or permit the modification or amendment of) any of the terms or
provisions of any Subordinated Debt, or cancel or forgive, make any voluntary or
optional payment or prepayment on, or redeem or acquire for value (including
without limitation by way of depositing with any trustee with respect thereto
money or securities before due for the purpose of paying when due) any
Subordinated Debt.

 

Section 10.12 Restrictive Agreements. Enter into any Debt which contains any
negative pledge on assets or any covenants more restrictive than the provisions
of Articles VIII, IX and X hereof, or which restricts, limits or otherwise
encumbers its ability to incur Liens on or with respect to any of its assets or
properties other than the assets or properties securing such Debt.

 

Section 10.13 Capital Expenditures. Make Capital Expenditure Payments exceeding:
(a) $75,000,000 in the aggregate in the Fiscal Year ending January 31, 2005; (b)
$110,000,000 in the aggregate in the Fiscal Year ending January 31, 2006; and
(c) $90,000,000 in the aggregate in the Fiscal Year ending January 31, 2007.

 

ARTICLE XI

DEFAULT AND REMEDIES

 

Section 11.1 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
Authority or otherwise:

 

(a) Default in Payment of Principal of Loans and Reimbursement Obligations. The
Borrowers shall default in any payment of principal of any Loan, Note or
Reimbursement Obligation when and as due (whether at maturity, by reason of
acceleration or otherwise).

 

(b) Other Payment Default. The Borrowers shall default in the payment when and
as due (whether at maturity, by reason of acceleration or otherwise) of interest
on any Loan, Note or Reimbursement Obligation or the payment of any other
Obligation, and such default shall continue unremedied for three (3) Business
Days.

 

(c) Misrepresentation. Any representation or warranty made or deemed to be made
by any Borrower or any Subsidiary under this Agreement, any Loan Document or any
amendment hereto or thereto, shall at any time prove to have been incorrect or
misleading in any material respect when made or deemed made.

 

(d) Default in Performance of Certain Covenants. Any Borrower shall default in
the performance or observance of any covenant or agreement contained in Section
7.1, Section 7.2 or Section 7.5(e) or Article IX or Article X of this Agreement.

 

(e) Default in Performance of Other Covenants and Conditions. Any Borrower or
any Subsidiary shall default in the performance or observance of any term,
covenant, condition or agreement contained in this Agreement (other than as
specifically provided for otherwise in this Section 11.1) or any other Loan
Document and such default shall continue for a period of thirty (30) days after
written notice thereof has been given to the Borrowers by the Administrative
Agent.

 

(f) Hedging Agreement. Any termination payment shall be due by any Borrower
under any Hedging Agreement and such amount is not paid by the due date thereof;
provided,

 

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however, that in the case of any Hedging Agreement with a counterparty other
than Wachovia or any Lender, no Event of Default shall exist hereunder unless
the termination payment exceeds $5,000,000.

 

(g) Debt Cross-Default. Any Borrower or any Subsidiary shall (i) default in the
payment of any Debt (other than (x) any Note or any Reimbursement Obligation,
which occurrence is governed by Section 11.1(a), and (y) any non-recourse Debt
permitted pursuant to Section 10.1(i) hereof so long as such Debt has not been
guaranteed by any Borrower or Guarantor) the aggregate outstanding amount of
which Debt is in excess of $5,000,000 or any of such Debt in excess of
$5,000,000 shall be accelerated or demanded or declared due and payable, or (ii)
default in the observance or performance of any other agreement or condition
relating to any Debt (other than any Note or any Reimbursement Obligation) the
aggregate outstanding amount of which Debt is in excess of $5,000,000 or
contained in any instrument or agreement evidencing, securing or relating
thereto or any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Debt (or a trustee or agent on behalf of such holder or holders)
to cause, with the giving of notice if required, any such Debt to become due
prior to its stated maturity (any applicable grace period having expired).

 

(h) Other Cross-Defaults. Any Borrower or any Subsidiary shall default in the
payment when due, or in the performance or observance, of any material
obligation or condition of any Material Contract unless, but only as long as,
the existence of any such default is being contested by such Borrower or such
Subsidiary in good faith by appropriate actions or proceedings and adequate
reserves in respect thereof have been established on the books of such Borrower
or such Subsidiary to the extent required by GAAP.

 

(i) Change in Control. A Change in Control shall have occurred.

 

(j) Voluntary Bankruptcy Proceeding. Any Borrower or any Subsidiary shall: (i)
commence a voluntary case under the federal bankruptcy laws (as now or hereafter
in effect); (ii) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition for adjustment of debts; (iii) consent to or fail to contest
in a timely and appropriate manner any petition filed against it in an
involuntary case under such bankruptcy laws or other laws; (iv) apply for or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
or liquidator of itself or of a substantial part of its property, domestic or
foreign; (v) admit in writing its inability to pay its debts as they become due;
(vi) make a general assignment for the benefit of creditors; or (vii) take any
corporate action for the purpose of authorizing any of the foregoing.

 

(k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
commenced against any Borrower or any Subsidiary in any court of competent
jurisdiction seeking: (i) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts; or
(ii) the appointment of a trustee, receiver, custodian, liquidator or the like
for such Borrower or Subsidiary or for all or any substantial part of their
respective assets, domestic or foreign, and such case or proceeding shall
continue without dismissal or stay for a period of sixty (60) consecutive days,
or an order granting the relief requested in such case or proceeding (including
without limitation an order for relief under such federal bankruptcy laws) shall
be entered.

 

(l) Termination Event. The occurrence of any of the following events: (i) any
Borrower, any Subsidiary or any ERISA Affiliate fails to make full payment when
due of all amounts which, under the provisions of any Pension Plan or Section
412 of the Code, such Borrower, Subsidiary or ERISA Affiliate is required to pay
as contributions thereto; (ii) an accumulated funding deficiency in

 

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excess of $100,000 occurs or exists, whether or not waived, with respect to any
Pension Plan, (iii) a Termination Event or (iv) any Borrower, any Subsidiary or
any ERISA Affiliate as employers under one or more Multiemployer Plan makes a
complete or partial withdrawal from any such Multiemployer Plan and the plan
sponsor of such Multiemployer Plans notifies such withdrawing employer that such
employer has incurred a withdrawal liability requiring payments in an amount
exceeding $100,000.

 

(m) Judgment. A judgment or order for the payment of money which causes the
aggregate amount of all such judgments to exceed $7,500,000 in any Fiscal Year
shall be entered against any Borrower or any Subsidiary by any court and such
judgment or order shall continue without discharge or stay for a period of
thirty (30) days; provided, however, that any such judgment or order shall not
constitute an Event of Default if bonded or if otherwise covered by insurance
which shall have not been disclaimed by the insurer.

 

Section 11.2 Remedies. Upon the occurrence of an Event of Default, with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrowers:

 

(a) Acceleration; Termination of Facilities. Declare the principal of and
interest on the Loans, the Notes and the Reimbursement Obligations at the time
outstanding, and all other amounts owed to the Lenders and the Administrative
Agent under this Agreement or any of the other Loan Documents (other than any
Hedging Agreement) (including without limitation all L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) and all other Obligations (other
than obligations owing under any Hedging Agreement), to be forthwith due and
payable, whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or the other Loan Documents to the
contrary notwithstanding, and terminate the Aggregate Commitment and Commitments
and any right of the Borrowers to request borrowings or Letters of Credit
thereunder; provided, that upon the occurrence of an Event of Default specified
in Section 11.1(j) or Section 11.1(k) hereof, the Aggregate Commitment and
Commitments shall be automatically terminated and all Obligations (other than
obligations owing under any Hedging Agreement) shall automatically become due
and payable.

 

(b) Letters of Credit. With respect to all Letters of Credit with respect to
which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrowers at such
time to deposit in a cash collateral account opened by the Issuing Lender an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Issuing Lender to the payment of drafts drawn under such Letters of Credit, and
the unused portion thereof after all such Letters of Credit shall have expired
or been fully drawn upon, if any, shall be applied to repay the other
Obligations. After all such Letters of Credit shall have expired or been fully
drawn upon, the Reimbursement Obligation shall have been satisfied and all other
Obligations shall have been paid in full, the balance, if any, in such cash
collateral account shall be returned to the Borrowers.

 

(c) Rights of Collection. Exercise on behalf of the Lenders of all of their
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrowers’ Obligations.

 

Section 11.3 Rights and Remedies Cumulative; Non-Waiver, etc. The enumeration of
the rights and remedies of the Administrative Agent and the Lenders set forth in
this Agreement is not intended to be exhaustive, and the exercise by the
Administrative Agent and the Lenders of any right or remedy shall not preclude
the exercise of any other rights or remedies, all of which shall be cumulative,

 

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and shall be in addition to any other right or remedy given hereunder or under
the Loan Documents or that may now or hereafter exist in law or in equity or by
suit or otherwise. No delay or failure to take action on the part of the
Administrative Agent or the Lenders in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude other or further exercise thereof or
the exercise of any other right, power or privilege or shall be construed to be
a waiver of any Event of Default. No course of dealing between the Borrowers,
the Administrative Agent and the Lenders or their respective agents or employees
shall be effective to change, modify or discharge any provision of this
Agreement or any of the other Loan Documents or to constitute a waiver of any
Event of Default.

 

ARTICLE XII

THE ADMINISTRATIVE AGENT

 

Section 12.1 Appointment. Each of the Lenders hereby irrevocably designates and
appoints Wachovia as Administrative Agent of such Lender under this Agreement
and the other Loan Documents for the term hereof, and each such Lender
irrevocably authorizes Wachovia as Administrative Agent for such Lender, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and such other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against the Administrative Agent. Any reference to the Administrative Agent in
this Article XII shall be deemed to refer to the Administrative Agent solely in
its capacity as Administrative Agent and not in its capacity as a Lender.

 

Section 12.2 Delegation of Duties. The Administrative Agent may execute any of
its respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by the Administrative Agent with reasonable care.

 

Section 12.3 Exculpatory Provisions. Neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for actions occasioned solely by its or such
Person’s own gross negligence or willful misconduct), or (b) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Borrower or any Subsidiary or any officer thereof
contained in this Agreement or the other Loan Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or the
other Loan Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the other Loan Documents or
for any failure of any Borrower to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of any.

 

Section 12.4 Reliance by the Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice,

 

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consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
without limitation counsel to the Borrowers), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes unless
such Note shall have been transferred in accordance with Section 13.10 hereof.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement and the other Loan Documents unless it shall
first receive such advice or concurrence of the Required Lenders (or, when
expressly required hereby or by the relevant other Loan Document, all the
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action
except for its own gross negligence or willful misconduct. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Notes in accordance with a request of the
Required Lenders (or, when expressly required hereby, all the Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.

 

Section 12.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Lender or the Borrowers referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a notice of default. In the event that the Administrative Agent
receives such a notice, it shall promptly give notice thereof to the Lenders.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders, except to the extent that other provisions of this Agreement expressly
require that any such action be taken or not be taken only with the consent and
authorization or the request of the Lenders or Required Lenders, as applicable.

 

Section 12.6 Non-Reliance on the Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates has made any representations or warranties to it and
that no act by the Administrative Agent hereinafter taken, including without
limitation any review of the affairs of the Borrowers, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers and made its own decision to make its Loans and issue or participate
in Letters of Credit hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrowers. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder or by the other Loan Documents,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrowers which may come into the possession of the

 

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Administrative Agent or any of its respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates.

 

Section 12.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such and (to the extent not reimbursed by the Borrowers
and without limiting the obligation of the Borrowers to do so), ratably
according to the respective amounts of their Commitment Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including without limitation at any time
following the payment of the Notes or any Reimbursement Obligation) be imposed
on, incurred by or asserted against the Administrative Agent in any way relating
to or arising out of this Agreement or the other Loan Documents, or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent’s bad faith, gross negligence or willful misconduct. The agreements in
this Section 12.7 shall survive the payment of the Notes, any Reimbursement
Obligation and all other amounts payable hereunder and the termination of this
Agreement.

 

Section 12.8 The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrowers as though the Administrative Agent were not an Administrative
Agent hereunder. With respect to any Loans made or renewed by it and any Note
issued to it and with respect to any Letter of Credit issued by it or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Administrative Agent, and the terms
“Lender” and “Lenders” shall include the Administrative Agent in its individual
capacity.

 

Section 12.9 Resignation of the Administrative Agent; Successor Administrative
Agent. Subject to the appointment and acceptance of a successor as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Borrowers. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative Agent, which
successor shall be an Eligible Assignee. If no successor Administrative Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the Administrative Agent’s giving
of notice of resignation, then the Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which successor shall have
minimum capital and surplus of at least $500,000,000. 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 rights, powers, privileges and duties 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 this
Section 12.9 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 Administrative Agent.

 

ARTICLE XIII

MISCELLANEOUS

 

Section 13.1 Notices.

 

(a) Method of Communication. Except as otherwise provided in this Agreement, all
notices and communications hereunder shall be in writing, or by telephone
subsequently

 

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confirmed in writing. Any notice shall be effective if delivered by hand
delivery or sent via telecopy, recognized overnight courier service or certified
mail, return receipt requested, and shall be presumed to be received by a party
hereto (i) on the date of delivery if delivered by hand or sent by telecopy,
(ii) on the next Business Day if sent by recognized overnight courier service
and (iii) on the third Business Day following the date sent by certified mail,
return receipt requested. A telephonic notice to the Administrative Agent as
understood by the Administrative Agent will be deemed to be the controlling and
proper notice in the event of a discrepancy with or failure to receive a
confirming written notice.

 

(b) Addresses for Notices. Notices to any party shall be sent to it at the
following addresses, or any other address as to which all the other parties are
notified in writing.

 

If to the Borrowers:   Urban Outfitters, Inc.     1809 Walnut Street    
Philadelphia, PA 19103-4997     Attention: President     Telephone No.: (215)
564-2313     Telecopy No.: (215) 568-1549 With copies to:   Urban Outfitters,
Inc.     1809 Walnut Street     Philadelphia, PA 19103-4997     Attention:
General Counsel     Telephone No.: (215) 564-2313     Telecopy No.: (215)
568-1549 If to Wachovia:   Wachovia Securities, Inc.     123 South Broad Street
    14th Floor (PA1202)     Philadelphia, Pennsylvania 19109     Attention:
Stephen T. Dorosh     Telephone: (267) 670-6577     Telecopy No.: (267) 670-6543
With copies to:   Pepper Hamilton LLP     3000 Two Logan Square     18th and
Arch Streets     Philadelphia, Pennsylvania 19107-2799     Attention: Lisa R.
Jacobs, Esquire     Telephone No.: (215) 981-4701     Telecopy No.: (215)
981-4750 If to any Lender:   To the Address set forth on Schedule 2 hereto

 

(c) Administrative Agent’s Office. The Administrative Agent hereby designates
its office located at the address set forth above, or any subsequent office
which shall have been specified for such purpose by written notice to the
Borrowers, as the Administrative Agent’s Office referred to herein, to which
payments due are to be made and at which Loans will be disbursed and Letters of
Credit issued.

 

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Section 13.2 Expenses; Indemnity. The Borrowers will: (a) pay all reasonable
out-of-pocket expenses of the Administrative Agent in connection with (i) the
preparation, execution and delivery of this Agreement and each other Loan
Document, whenever the same shall be executed and delivered, including without
limitation all out-of-pocket due diligence expenses and reasonable fees and
disbursements of counsel for the Administrative Agent and (ii) the preparation,
execution and delivery of any waiver, amendment or consent by the Administrative
Agent relating to this Agreement or any other Loan Document, including without
limitation reasonable fees and disbursements of counsel for the Administrative
Agent; (b) pay all reasonable out-of-pocket expenses of the Administrative Agent
and each Lender actually incurred in connection with the administration and
enforcement of any rights and remedies of the Administrative Agent and each
Lender under the Aggregate Commitment, including without limitation consulting
with appraisers, accountants, engineers, attorneys and other Persons concerning
the nature, scope or value of any right or remedy of the Administrative Agent or
any Lender hereunder or under any other Loan Document or any factual matters in
connection therewith, which expenses shall include without limitation the
reasonable fees and disbursements of such Persons; and (c) defend, indemnify and
hold harmless the Administrative Agent and any Lender and its parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any losses, penalties, fines, liabilities, settlements, damages, costs
and expenses, suffered by any such Person in connection with any claim,
investigation, litigation or other proceeding (whether or not the Administrative
Agent or any Lender is a party thereto) and the prosecution and defense thereof,
arising out of or in any way connected with the Agreement, any other Loan
Document or the Loans, including without limitation reasonable attorney’s and
consultant’s fees, except to the extent that any of the foregoing directly
result from the gross negligence or willful misconduct of the party seeking
indemnification therefor.

 

Section 13.3 Set-off. In addition to any rights now or hereafter granted under
Applicable Law and not by way of limitation of any such rights, upon and after
the occurrence of any Event of Default and during the continuance thereof, the
Lenders and any assignee or participant of a Lender in accordance with Section
13.10 hereof are hereby authorized by the Borrowers at any time or from time to
time, without notice to the Borrowers or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, time or demand, including without
limitation indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by the Lenders,
or any such assignee or participant to or for the credit or the account of any
Borrower against and on account of the Obligations irrespective of whether or
not (a) the Lenders shall have made any demand under this Agreement or any of
the other Loan Documents or (b) the Administrative Agent shall have declared any
or all of the Obligations to be due and payable as permitted by Section 11.2
hereof and although such Obligations shall be contingent or unmatured.

 

Section 13.4 Governing Law. This Agreement, the Notes and the other Loan
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania, without reference to the conflicts or choice of law principles
thereof.

 

Section 13.5 Consent to Jurisdiction; Service of Process.

 

(a) Each Borrower hereby irrevocably consents to the personal jurisdiction of
the state and federal courts located in Philadelphia County, Pennsylvania, in
any action, claim or other proceeding arising out of any dispute in connection
with this Agreement, the Notes and the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such rights and
obligations. Each Borrower hereby irrevocably appoints each and every officer of
Urban as its attorney upon whom may be served any summons, complaint or other
process or pleading in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Agreement, the

 

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Notes or the other Loan Documents, any rights or obligations hereunder or
thereunder, or the performance of such rights and obligations, on behalf of
itself or its property, in the manner specified in Section 13.1 hereof, and
irrevocably consents to the service of a summons and complaint in any action or
proceeding brought by the Administrative Agent or any Lender by mailing copies
thereof by registered or certified mail, posted paid, to the address specified
for delivery of notices herein. Nothing in this Section 13.5 shall affect the
right of the Lender to serve legal process in any other manner permitted by
Applicable Law or affect the right Administrative Agent or any Lender to bring
any action or proceeding against any Borrower or its properties any other
jurisdictions.

 

(b) To the extent that any Borrower has or hereafter may acquire: (i) any
immunity from jurisdiction of the state or federal courts located in
Philadelphia County, Pennsylvania or from any legal process out of any such
court (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, or (ii) any objection to the laying of the venue or of an
inconvenient forum or any suit, action or proceeding brought in a state or
federal court located in Philadelphia County, Pennsylvania under process served
in accordance with this Agreement or any Loan Document, each Borrower hereby
irrevocably waives such immunity or objection in respect of any suit, action or
proceeding arising out of or relating to this Agreement, any other Loan Document
or the rights and obligations of the parties hereunder.

 

Section 13.6 Waiver of Jury Trial; Preservation of Remedies.

 

(a) Jury Trial. THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH BORROWER HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM
OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE, CLAIM OR CONTROVERSY IN
CONNECTION WITH THIS AGREEMENT, THE NOTES, THE LETTERS OF CREDIT OR THE OTHER
LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

 

(b) Preservation of Certain Remedies. The parties hereto and the other Loan
Documents preserve, without diminution, certain remedies that such Persons may
employ or exercise freely, either alone, in conjunction with or during a
dispute, claim or controversy arising out of this Agreement, the Notes, the
Letters of Credit or any other Loan Document. Each such Person shall have and
hereby reserves the right to proceed in any court of proper jurisdiction or by
self help to exercise or prosecute the following remedies: (i) all rights to
foreclose against any real or personal property or other security by exercising
a power of sale granted in the Loan Documents or under applicable law or by
judicial foreclosure and sale; (ii) all rights of self help including without
limitation peaceful occupation of property and collection of rents, set off, and
peaceful possession of property; (iii) obtaining provisional or ancillary
remedies including without limitation injunctive relief, sequestration,
garnishment, attachment, appointment of receiver and in filing an involuntary
bankruptcy proceeding; and (iv) when applicable, a judgment by confession of
judgment.

 

Section 13.7 Reversal of Payments. To the extent the Borrowers make a payment or
payments to the Administrative Agent for the ratable benefit of the Lenders or
the Administrative Agent receives any payment or proceeds of the collateral
which payments or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds repaid, the Obligations or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if such
payment or proceeds had not been received by the Administrative Agent.

 

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Section 13.8 Injunctive Relief; Punitive Damages.

 

(a) The Borrowers recognize that, in the event the Borrowers fail to perform,
observe or discharge any of their obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrowers agree that the Lenders, at the Lenders’ option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.

 

(b) The Administrative Agent, Lenders and the Borrowers (on behalf of themselves
and each Subsidiary) hereby agree that no such Person shall have a remedy of
punitive or exemplary damages against any other party to a Loan Document and
each such Person hereby waives any right or claim to punitive or exemplary
damages that they may now have or may arise in the future in connection with any
Dispute, whether such Dispute is resolved through arbitration or judicially.

 

(c) The parties agree that they shall not have a remedy of punitive or exemplary
damages against any other party in any Dispute and hereby waive any right or
claim to punitive or exemplary damages they have now or which may arise in the
future in connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.

 

Section 13.9 Accounting Matters. All financial and accounting calculations,
measurements and computations made for any purpose relating to this Agreement,
including without limitation all computations utilized by any Borrower or any
Subsidiary to determine compliance with any covenant contained herein, shall,
except as otherwise expressly contemplated hereby or unless there is an express
written direction by the Administrative Agent to the contrary agreed to by the
Borrowers, be performed in accordance with GAAP as in effect on the Closing
Date. In the event that changes in GAAP shall be mandated by the Financial
Accounting Standards Board, or any similar accounting body of comparable
standing, or shall be recommended by the Borrowers’ certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrowers and
the Lenders shall have amended this Agreement to the extent necessary to reflect
any such changes in the financial covenants and other terms and conditions of
this Agreement.

 

Section 13.10 Successors and Assigns; Participations.

 

(a) Benefit of Agreement. This Agreement shall be binding upon and inure to the
benefit of the Borrowers, the Administrative Agent and the Lenders, all future
holders of the Notes, and their respective successors and assigns, except that
the Borrowers shall not assign or transfer any of their rights or obligations
under this Agreement or any other Loan Document without the prior written
consent of each Lender.

 

(b) Assignments and Participations by the Lenders.

 

(i) Assignments by the Lenders. The Borrowers hereby acknowledge and agree that
each Lender may at any time with the consent of the Borrowers (so long as no
Default or Event of Default has occurred and is continuing) and the consent of
the Administrative Agent, which consents shall not be unreasonably withheld,
assign to one or more Eligible Assignees all or a portion of its interests,
rights and obligations under this Agreement (including without limitation all or
a portion of the Extensions of Credit at the time owing to it and the Notes held
by it); provided that (A) each such assignment shall be of a constant, and not a
varying percentage, of all such assigning Lender’s rights and obligations under
this Agreement; (B) if less than all of the assigning Lender’s Commitment is to
be assigned, the Commitment so assigned shall not be less than $5,000,000; (C)
the parties to each such

 

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assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording, an assignment agreement (an “Assignment Agreement”) in
the form of Exhibit G hereto, together with any Note or Notes subject to such
assignment; (D) such assignment shall not, without the consent of the Borrowers,
require the Borrowers to file a registration statement with the Securities and
Exchange Commission or apply to or qualify the Loans or any Note under the blue
sky laws of any state; (E) the assigning Lender shall pay to the Administrative
Agent an assignment fee of $3,000 upon the execution by such Lender of the
Assignment Agreement; provided that no such fee shall be payable upon any
assignment by a Lender to an Affiliate thereof; (F) the assignee thereunder
shall be a party to this Agreement and, to the extent provided in such
Assignment Agreement, have the rights and obligations of a Lender hereunder; (G)
the assigning Lender thereunder shall, to the extent provided in such Assignment
Agreement, be released from its obligations under this Agreement; and (H) upon
receipt of an Assignment Agreement from an assigning Lender and an Eligible
Assignee, the Administrative Agent shall promptly deliver a copy of such
Assignment Agreement to the Borrowers. Within five (5) Business Days after
receipt of notice, the Borrowers shall execute and deliver to the Lender, in
exchange for the Note or Notes to be surrendered in the manner set forth below,
a new Note or Notes payable to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it pursuant to such Assignment Agreement and
a new Note payable to the order of the assigning Lender in an amount equal to
the Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Note, shall be dated the effective date of such Assignment Agreement
and shall otherwise be in substantially the form of the surrendered Note. Each
surrendered Note shall be canceled and returned to the Borrowers concurrent with
the Borrowers’ delivery of the new Note or Notes.

 

(ii) Participations by the Lenders. The Borrowers hereby acknowledge and agree
that each Lender may at any time grant participations in all or any portion the
Commitment, the Loans, the Notes, the Extensions of Credit or of its right,
title and interest therein or in or to this Agreement (collectively,
“Participations”) to any other lending office or to any other bank, lending
institution or other entity which has the requisite sophistication to evaluate
the merits and risks of investments in Participations (“Participants”);
provided, however, that: (A) each such participation shall be in an amount not
less than $5,000,000; (B) all amounts payable by the Borrowers hereunder shall
be determined as if Lenders had not granted such Participation; (C) such
Lender’s obligations under this Agreement (including without limitation its
Commitment) shall remain unchanged); (D) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations;
(E) such Lender shall remain the holder of the Notes held by it for purposes of
this Agreement; (F) the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement and
(G) any agreement pursuant to which a Lender may grant a Participation (x) shall
provide that such Lender shall retain the sole right and responsibility to
enforce the obligations of Borrowers hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provisions of
this Agreement, (y) such participation agreement may provide that such Lender
will not agree to any modification, amendment or waiver of this Agreement
without the consent of the Participant if such modification, amendment or waiver
would reduce the principal of or rate of interest on any Loan or postpone the
date fixed for any payment of principal of or interest on any Loan, and (z)
shall not relieve such Lender from its obligations, which shall remain absolute,
to make Loans and to issue Letters of Credit hereunder.

 

(iii) Right to Assign to Federal Reserve Bank. Notwithstanding anything herein
to the contrary, Lenders may pledge or grant a security interest in any Note,
right to payment or other benefit hereunder to any Federal Reserve Bank without
the consent or any party, without notice to any party, and without payment of
any fees in accordance with Applicable Law.

 

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Section 13.11 Disclosure of Information; Confidentiality. Lenders shall hold all
non-public information with respect to the Borrowers obtained pursuant to the
Loan Documents in accordance with their customary procedures for handling
confidential information; provided, that the Administrative Agent and Lenders
may disclose any such information: (a) to the extent such disclosure is required
by law or requested by any regulatory authority, or (b) in any suit, action or
proceeding for the purpose of the Administrative Agent or any Lender defending
itself, reducing its liability, or protecting or exercising any of its claims,
rights, remedies or interests under or in connection with any of the Loan
Documents or any Hedging Agreement. Any Lender may, in connection with any
assignment, proposed assignment, participation or proposed participation
pursuant to Section 13.10 hereof, disclose to the assignee, participant,
proposed assignee or proposed participant, any information relating to any
Borrower, any Subsidiary or any Guarantor furnished to such Lender by or on
behalf of the Borrowers, their Subsidiaries or the Guarantors; provided, that
prior to any such disclosure, each such assignee, proposed assignee, participant
or proposed participant shall agree with the Borrowers or such Lender to
preserve the confidentiality of any confidential information relating to any
Borrower, any Subsidiary or any Guarantor received from such Lender.

 

Section 13.12 Patriot Act Notice. To help fight the funding of terrorism and
money laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person who opens an
account. For purposes of this section, account shall be understood to include
loan accounts.

 

Section 13.13 Amendments, Waivers and Consents. Except as set forth below, any
term, covenant, agreement or condition of this Agreement or any of the other
Loan Documents (other than any Hedging Agreement, the terms and conditions of
which may be amended, modified or waived by the parties thereto) may be amended
or waived by the Lenders, and any consent given by the Lenders, if, but only if,
such amendment, waiver or consent is in writing signed by the Required Lenders
(or by the Administrative Agent with the consent of the Required Lenders) and
delivered to the Administrative Agent and, in the case of an amendment, signed
by the Borrowers; provided, that no amendment, waiver or consent shall: (a)
increase the amount or extend the time of the obligation of the Lenders to make
Loans or issue or participate in Letters of Credit (including without limitation
pursuant to Section 3.7 hereof), (b) extend the originally scheduled time or
times of payment of the principal of any Loan or Reimbursement Obligation or the
time or times of payment of interest on any Loan or Reimbursement Obligation,
(c) reduce the rate of interest or fees payable on any Loan or Reimbursement
Obligation, (d) reduce the principal amount of any Loan or Reimbursement
Obligation, (e) permit any subordination of the principal or interest on any
Loan or Reimbursement Obligation, (f) permit any assignment (other than as
specifically permitted or contemplated in this Agreement) of any of the
Borrowers’ rights and obligations hereunder, (g) release any Guarantor, (h)
consent to a replacement bank or agree to reduce the Aggregate Commitment in
connection with the replacement of a Defaulting Lender under Section 4.6(d)
hereof or (i) amend the provisions of this Section 13.13 or the definition of
Required Lenders, without the prior written consent of each Lender. In addition,
no amendment, waiver or consent to the provisions of (a) Article XIII hereof
shall be made without the written consent of the Administrative Agent and (b)
Article III hereof without the written consent of the Issuing Lender.

 

Section 13.14 Agreement Controls. In the event there is a conflict or
inconsistency between this Agreement and any other Loan Document, the terms of
this Agreement shall control; provided, that any provision of the Guaranty
Agreement which imposes additional burdens on any Borrower or any Subsidiary or
further restricts the rights of any Borrower or any Subsidiary or gives the
Administrative Agent or the Lenders additional rights shall not be deemed to be
in conflict or inconsistent with this Agreement and shall be given full force
and effect.

 

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Section 13.15 Covenants Independent. The Borrowers expressly acknowledge and
agree that each covenant contained in Article VIII, Article IX or Article X
hereof shall be given independent effect. Accordingly, the Borrowers shall not
engage in any transaction or other act otherwise permitted under any covenant
contained in Article VIII, Article IX or Article X hereof if, before or after
giving effect to such transaction or act, the Borrowers shall or would be in
breach of any other covenant contained in Article VIII, Article IX or Article X
hereof.

 

Section 13.16 Survival. Notwithstanding any termination of this Agreement, the
indemnities to which the Administrative Agent and the Lenders are entitled under
the provisions of this Article XIII and any other provision of this Agreement
and the Loan Documents shall continue in full force and effect and shall protect
the Administrative Agent and the Lenders against events arising after such
termination as well as before.

 

Section 13.17 Counterparts. This Agreement may be executed in any number of
counterparts, by facsimile and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and shall be binding upon all parties, their successors and assigns, and all of
which taken together shall constitute one and the same agreement.

 

Section 13.18 Headings. Titles and captions of Articles, Sections and
subsections in this Agreement are for convenience only, and neither limit nor
amplify the provisions of this Agreement.

 

Section 13.19 Severability. Any provision of this Agreement or any other Loan
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

Section 13.20 Entirety. This Agreement together with the other Loan Documents
represents the entire agreement of the parties hereto and thereto, and
supersedes all prior agreements and understandings, oral and written, if any,
including any commitment letters or correspondence relating to the Loan
Documents or the transactions contemplated herein or therein, except those
obligations which survive under the commitment letter between the Borrowers and
the Administrative Agent dated March 30, 2001.

 

Section 13.21 Termination. This Agreement shall remain in effect from the
Closing Date through and including the date upon which all Obligations shall
have been indefeasibly and irrevocably paid and satisfied in full. No
termination of this Agreement shall affect the rights and obligations of the
parties hereto arising prior to such termination.

 

Section 13.22 Payment of Borrowers’ Obligations. The Borrowers’ Obligations
under this Agreement and each of the Loan Documents shall be performed by the
Borrowers at their sole cost and expense.

 

Section 13.23 Powers of Attorney and Authorizations Irrevocable. All powers of
attorney and other authorizations granted to the Administrative Agent, the
Lenders and any Persons designated by the Administrative Agent or any Lender
pursuant to any provisions of this Agreement or any of the other Loan Documents
shall be deemed coupled with an interest and shall be irrevocable so long as any
of the Obligations remain unpaid or unsatisfied or the Aggregate Commitment has
not been terminated.

 

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Section 13.24 Register. The Administrative Agent shall maintain 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 amount of the Extensions of
Credit with respect to each Lender from time to time (the “Register”). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Administrative Agent and the Lenders may treat each
person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers or Lenders at any reasonable time and from time to time upon
reasonable prior notice.

 

Section 13.25 Judgment Currency.

 

(a) The Borrowers’ obligations under this Agreement to make payments in Dollars
(the “Obligation Currency”) shall not be discharged or satisfied by any tender
or recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the Lenders of the full amount of
the Obligation Currency expressed to be payable to the Lenders under this
Agreement. If for the purpose of obtaining or enforcing judgment against any
Borrowers in any court or in any jurisdiction, it becomes necessary to convert
into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the “Judgment Currency”) an amount due
in the Obligation Currency, the conversion shall be made at the rate of exchange
(as quoted by the Administrative Agent or if the Administrative Agent does not
quote a rate of exchange on such currency, by a known dealer in such currency
designated by the Administrative Agent) determined, in each case, as of the day
immediately preceding the day on which the judgment is given (such business day
being hereinafter referred to as the “Judgment Currency Conversion Date”).

 

(b) If there is a change in the rate of exchange prevailing between the Judgment
Currency Conversion Date and the date of actual payment of the amount due, the
Borrowers covenant and agree to pay, or cause to be paid, such additional
amounts, if any (but in any event not a lesser amount), as may be necessary to
ensure that the amount paid in the Judgment Currency, when converted at the rate
of exchange prevailing on the date of payment, will produce the amount of the
Obligation Currency which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial award at the rate of exchange
prevailing on the Judgment Currency Conversion Date.

 

(c) For purposes of determining any rate of exchange for this Section 13.25,
such amounts shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.

 

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-66-

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

 

        Borrowers:

[CORPORATE SEAL]

     

URBAN OUTFITTERS, INC.,

as a Borrower

            By:   /s/    Richard A. Hayne                

Name: Richard A. Hayne

               

Title:   President

 

[CORPORATE SEAL]

     

UO FENWICK, INC.,

as a Borrower

            By:   /s/    David A. Hill                

Name: David A. Hill

               

Title:   Vice President

 

[CORPORATE SEAL]

     

INTER-URBAN, INC.,

as a Borrower

            By:   /s/    David A. Hill                

Name: David A. Hill

               

Title:   Vice President

 

[CORPORATE SEAL]

     

URBAN OUTFITTERS (DELAWARE), INC.,

as a Borrower

            By:   /s/    Glen A. Bodzy                

Name: Glen A. Bodzy

               

Title:   Secretary

 

[CORPORATE SEAL]

     

ANTHROPOLOGIE (DELAWARE), INC.,

as a Borrower

            By:   /s/    Glen A. Bodzy                

Name: Glen A. Bodzy

               

Title:   Secretary

 

[Signatures Continued]

 

-67-

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

[CORPORATE SEAL]

     

URBAN OUTFITTERS UK LIMITED,

as a Borrower

            By:   /s/    Richard A. Hayne                

Name: Richard A. Hayne

               

Title:   Director

 

            By:   /s/    Glen A. Bodzy                

Name: Glen A. Bodzy

               

Title:   Director

 

[CORPORATE SEAL]

     

URBAN OUTFITTERS IRELAND LIMITED,

as a Borrower

            By:   /s/    Richard A. Hayne                

Name: Richard A. Hayne

               

Title:   Director

 

            By:   /s/    Glen A. Bodzy                

Name: Glen A. Bodzy

               

Title:   Director

 

            Lenders:        

WACHOVIA BANK, NATIONAL ASSOCIATION
(f/k/a FIRST UNION NATIONAL BANK,)

as a Lender, Issuing and as Administrative Agent

            By:   /s/    Stephen T. Dorosh                

Name: Stephen T. Dorosh

               

Title:   Vice President

 

-68-

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Schedule 1

Subsidiaries that are Borrowers

 

UO Fenwick, Inc., a Delaware corporation

 

Inter-Urban, Inc., a Delaware corporation

 

Urban Outfitters (Delaware), Inc., a Delaware corporation

 

Anthropologie (Delaware), Inc., a Delaware corporation

 

Urban Outfitters UK Limited, a corporation formed under the laws of England and
Wales

 

Urban Outfitters Ireland Limited, a corporation formed under the laws of the
Republic of Ireland

 

S1-1

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Schedule 2

Lenders and Commitments

 

Lender

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

   Commitment

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

Wachovia Bank, National Association

123 South Broad Street, 14th Floor (PA1202)

Philadelphia, PA 19109

Attention: Stephen T. Dorosh, Vice President

   $ 35,000,000

 

Telephone No.: (215) 670-6577

Telecopy No.: (215) 670-6543

 

S2-1

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Schedule 3

Guarantors

 

Anthropologie, Inc., a Pennsylvania corporation

 

Urban Outfitters Wholesale, Inc., a Pennsylvania corporation

 

Urban Outfitters Direct, LLC, a Pennsylvania limited liability company

 

Anthropologie Direct, LLC, a Pennsylvania limited liability company

 

U.O.D., Inc., a Delaware corporation

 

U.O.D. Secondary, Inc., a Delaware corporation

 

UOGC, Inc., a Florida corporation

 

Urban Outfitters West LLC, a California limited liability company

 

Free People LLC, a Delaware limited liability company

 

Freepeople.com LLC, a                      limited liability company

 

Urban Outfitters Holdings LLC, a                      limited liability company

 

Anthropologie Holdings LLC, a                      limited liability company

 

Urbanoutfitters.com LP, a                      limited partnership

 

Anthropologie.com LP, a                      limited partnership

 

S3-2

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

 

Schedule 4

Existing Letters of Credit

 

LC#

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

 

Amount

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

 

Beneficiary

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

  

Expiry
Date

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

 

S3-3

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Schedule 5

Import Letter of Credit Pricing

 

A) Letter of Credit Fees for Urban Outfitters Inc. and affiliates:

 

No fees for Letter of Credit processing *

 

* Assumes all Letter of Credit processing is out of Wachovia Bank Hong Kong.

 

B) Letter of Credit Fees for Urban Outfitters Inc. Beneficiaries:

 

For Hong Kong Beneficiaries:

 

LC Advising Fee:

   $35**         

Commission in lieu of exchange:

   ¼ % on first $50,000, 1/8% on balance         

Transit Commission:

   Prime +1% for 10 days         

Discrepancy fee:

   $65         

Paying Bank Charge:

   $42.50         

Courier fee:

   $35         

Swift/Telex:

   $15 per page         

 

** All dollar quoted charges are U.S. dollars

 

For non-Hong Kong Beneficiaries:

 

Discrepancy fee:

   $65          

Paying Bank Charge:

   $42.50          

Swift/Telex:

   $15 –per page          

Handling Commission:

   $30          

 

Wachovia Bank maintains the right to raise Beneficiary pricing by an amount of
up to 5% in the aggregate during the term of this Agreement; provided, however,
that in the event that the aggregate face amount of all import Letters of Credit
issued under this Agreement during any fiscal year represents an increase of at
least 20% over the aggregate face amount of all import Letters of Credit issued
under this Agreement during the previous fiscal year, no such increase will be
implemented for the next succeeding fiscal year.

 

S3-4