Exhibit 10.1

[Execution]

SECOND AMENDED AND RESTATED

CREDIT AGREEMENT

Dated as of February 3, 2015

among

STEIN MART, INC.,

as the Lead Borrower

For

The Borrowers Named Herein

The Guarantors Named Herein

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Administrative Agent, Collateral Agent, Swing Line Lender and LC Issuer,

The Other Lenders Party Hereto

and

WELLS FARGO BANK, NATIONAL ASSOCIATION

as

Sole Lead Arranger and Sole Bookrunner

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TABLE OF CONTENTS

 

Section         Page   ARTICLE I DEFINITIONS AND ACCOUNTING TERMS      1   

1.01.

   Defined Terms.      1   

1.02.

   Other Interpretive Provisions.      46   

1.03.

   Accounting Terms      47   

1.04.

   Rounding.      47   

1.05.

   Times of Day.      48   

1.06.

   Letter of Credit Amounts.      48   

1.07.

   Currency Equivalents Generally.      48    ARTICLE II THE COMMITMENTS AND
CREDIT EXTENSIONS      48   

2.01.

   Committed Loans.      48   

2.02.

   Borrowings, Conversions and Continuations of Committed Loans.      49   

2.03.

   Letters of Credit.      51   

2.04.

   Swing Line Loans.      58   

2.05.

   Prepayments.      61   

2.06.

   Termination or Reduction of Commitments.      62   

2.07.

   Repayment of Loans.      63   

2.08.

   Interest.      63   

2.09.

   Fees.      64   

2.10.

   Computation of Interest and Fees.      64   

2.11.

   Evidence of Debt.      64   

2.12.

   Payments Generally; the Administrative Agent’s Clawback.      65   

2.13.

   Sharing of Payments by Lenders.      66   

2.14.

   Settlement Amongst Lenders      67    ARTICLE III TAXES, YIELD PROTECTION AND
ILLEGALITY; APPOINTMENT OF LEAD BORROWER      67   

3.01.

   Taxes.      67   

3.02.

   Illegality.      69   

3.03.

   Inability to Determine Rates.      69   

3.04.

   Increased Costs; Reserves on LIBO Rate Loans.      70   

3.05.

   Compensation for Losses.      71   

3.06.

   Mitigation Obligations; Replacement of Lenders.      72   

3.07.

   Survival.      72   

3.08.

   Designation of Lead Borrower as Borrowers’ Agent.      72    ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS      73   

4.01.

   Conditions to Initial Credit Extension.      73   

4.02.

   Conditions to all Credit Extensions.      76    ARTICLE V REPRESENTATIONS AND
WARRANTIES      77   

 

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5.01.

   Existence, Qualification and Power.      77   

5.02.

   Authorization; No Contravention.      78   

5.03.

   Governmental Authorization; Other Consents.      78   

5.04.

   Binding Effect.      78   

5.05.

   Financial Statements; No Material Adverse Effect.      78   

5.06.

   Litigation.      79   

5.07.

   No Default.      79   

5.08.

   Ownership of Property; Liens.      79   

5.09.

   Environmental Compliance.      80   

5.10.

   Insurance.      81   

5.11.

   Taxes.      81   

5.12.

   ERISA Compliance.      81   

5.13.

   Subsidiaries; Equity Interests.      81   

5.14.

   Margin Regulations; Investment Company Act;      82   

5.15.

   Disclosure.      82   

5.16.

   Compliance with Laws.      82   

5.17.

   Intellectual Property; Licenses, Etc.      82   

5.18.

   Labor Matters      83   

5.19.

   Security Documents      83   

5.20.

   Solvency.      83   

5.21.

   Deposit Accounts; Credit Card Arrangements.      84   

5.22.

   Brokers.      84   

5.23.

   [Reserved]      84   

5.24.

   Material Contracts.      84   

5.25.

   Casualty.      84   

ARTICLE VI AFFIRMATIVE COVENANTS

     84   

6.01.

   Financial Statements.      84   

6.02.

   Certificates; Other Information.      85   

6.03.

   Notices.      87   

6.04.

   Payment of Obligations.      88   

6.05.

   Preservation of Existence, Etc.      89   

6.06.

   Maintenance of Properties.      89   

6.07.

   Maintenance of Insurance.      89   

6.08.

   Compliance with Laws.      91   

6.09.

   Books and Records; Accountants.      91   

6.10.

   Inspection Rights.      91   

6.11.

   Use of Proceeds      92   

6.12.

   Additional Loan Parties.      92   

6.13.

   Cash Management.      93   

6.14.

   Information Regarding the Collateral.      94   

6.15.

   Physical Inventories.      95   

6.16.

   Environmental Laws.      96   

6.17.

   Further Assurances.      96   

6.18.

   Compliance with Terms of Leaseholds.      97   

6.19.

   [Reserved].      97   

6.20.

   Lender Meetings      97   

6.21.

   [Reserved].      97   

6.22.

   ERISA.      97   

 

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ARTICLE VII NEGATIVE COVENANTS

  98   

7.01.

Liens   98   

7.02.

Investments   98   

7.03.

Indebtedness; Disqualified Stock.   98   

7.04.

Fundamental Changes.   98   

7.05.

Dispositions.   99   

7.06.

Restricted Payments.   99   

7.07.

Prepayments of Indebtedness.   99   

7.08.

Change in Nature of Business   99   

7.09.

Transactions with Affiliates.   99   

7.10.

Burdensome Agreements.   100   

7.11.

Use of Proceeds.   100   

7.12.

Amendment of Material Documents.   100   

7.13.

Fiscal Year.   100   

7.14.

Deposit Accounts; Credit Card Processors   100   

7.15.

Financial Covenants   100   

7.16.

Immaterial Subsidiary   100   

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES

  101   

8.01.

Events of Default.   101   

8.02.

Remedies Upon Event of Default.   104   

8.03.

Application of Funds.   104   

ARTICLE IX ADMINISTRATIVE AGENT

  106   

9.01.

Appointment and Authority.   106   

9.02.

Rights as a Lender.   106   

9.03.

Exculpatory Provisions.   107   

9.04.

Reliance by the Administrative Agent.   107   

9.05.

Delegation of Duties.   108   

9.06.

Resignation of the Administrative Agent.   108   

9.07.

Non-Reliance on Administrative Agent and Other Lenders.   109   

9.08.

No Other Duties, Etc.   109   

9.09.

Administrative Agent May File Proofs of Claim.   109   

9.10.

Collateral and Guaranty Matters.   110   

9.11.

Notice of Transfer.   110   

9.12.

Reports and Financial Statements.   110   

9.13.

Agency for Perfection.   111   

9.14.

Indemnification of Administrative Agent.   111   

9.15.

Relation among Lenders.   112   

9.16.

Defaulting or Deteriorating Lender.   112   

9.17.

Co-Syndication, Documentation Agent and Co-Lead Arrangers.   113   

ARTICLE X MISCELLANEOUS

  113   

10.01.

Amendments, Etc.   113   

10.02.

Notices; Effectiveness; Electronic Communications.   114   

10.03.

No Waiver; Cumulative Remedies.   116   

10.04.

Expenses; Indemnity; Damage Waiver.   116   

 

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10.05.

   Payments Set Aside.      118   

10.06.

   Successors and Assigns.      118   

10.07.

   Treatment of Certain Information; Confidentiality.      121   

10.08.

   Right of Setoff.      122   

10.09.

   Interest Rate Limitation.      122   

10.10.

   Counterparts; Integration; Effectiveness.      123   

10.11.

   Survival.      123   

10.12.

   Severability.      123   

10.13.

   Replacement of Lenders.      123   

10.14.

   Governing Law; Jurisdiction; Etc.      124   

10.15.

   Waiver of Jury Trial.      125   

10.16.

   No Advisory or Fiduciary Responsibility.      125   

10.17.

   USA PATRIOT Act Notice.      126   

10.18.

   Foreign Assets Control Regulations.      126   

10.19.

   Time of the Essence.      126   

10.20.

   [Reserved].      126   

10.21.

   Press Releases.      126   

10.22.

   Additional Waivers.      127   

10.23.

   No Strict Construction.      128   

10.24.

   Attachments.      128   

10.25.

   Restatement.      128   

10.26.

   Keepwell      129   

10.27.

   Collateral Release on Termination      129   

SIGNATURES

     S-2   

 

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SCHEDULES

 

1.01(a)

   Existing Letters of Credit

1.01(b)

   Freight Forwarders

2.01

   Commitments and Applicable Percentages

5.01

   Loan Parties Organizational Information

5.05

   Supplement to Interim Financial Statements

5.08(b)(1)

   Owned Real Estate

5.08(b)(2)

   Leased Real Estate

5.09

   Environmental Matters

5.10

   Insurance

5.13

   Subsidiaries; Other Equity Investments

5.17

   Intellectual Property Matters

5.18

   Labor Matters

5.21(a)

   DDAs

5.21(b)

   Credit Card Arrangements

5.24

   Material Contracts

6.02

   Financial and Collateral Reporting

7.01

   Existing Liens

7.02

   Existing Investments

7.03

   Existing Indebtedness

10.02

   Administrative Agent’s Office; Certain Addresses for Notices

EXHIBITS

 

   Form of A    Committed Loan Notice B    Swing Line Loan Notice C -1    Note
C-2    Swing Line Note D    Compliance Certificate E    Assignment and
Assumption F    Borrowing Base Certificate G    DDA Notification H    Credit
Card Notification

 

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SECOND AMENDED AND RESTATED CREDIT AGREEMENT

This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into
as of February 3, 2015, among Stein Mart, Inc., a Florida corporation (“Stein
Mart” or the “Lead Borrower”), and Stein Mart Buying Corp., a Florida
corporation (“Buying Corp.”, and together with Stein Mart, each individually a
“Borrower” and collectively, “Borrowers”), the Guarantors from time to time
party hereto, each lender from time to time party hereto (collectively, the
“Lenders” and individually, a “Lender”), and Wells Fargo Bank, National
Association, as the Administrative Agent, Collateral Agent, Swing Line Lender
and LC Issuer.

The Borrowers have requested that the Lenders provide a revolving credit
facility, and the Lenders have indicated their willingness to lend and the LC
Issuer has indicated its willingness to issue Letters of Credit, in each case on
the terms and conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01. Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“Accelerated Borrowing Base Weekly Delivery Event” means the occurrence of
either of the following events at any time: (a) the occurrence and continuance
of any Event of Default, or (b) Excess Availability is at any time less than
fifteen percent (15%) of the Loan Cap for any four (4) consecutive Business
Days. For purposes of this Agreement, the occurrence of an Accelerated Borrowing
Base Weekly Delivery Event shall be deemed continuing at the Administrative
Agent’s option (i) so long as such Event of Default is continuing and has not
been waived, and/or (ii) if the Accelerated Borrowing Base Weekly Delivery Event
arises as a result of the Borrowers’ failure to achieve Excess Availability as
required in clause (b) of this definition, until either (A) the Excess
Availability has exceeded fifteen percent (15%) of the Loan Cap for thirty
(30) consecutive calendar days, or (B) there shall be no Loans outstanding
hereunder for thirty (30) consecutive calendar days following the payment in
full of the applicable Loans referenced in clause (b), in which case an
Accelerated Borrowing Base Weekly Delivery Event shall no longer be deemed to be
continuing for purposes of this Agreement.

“ACH” means automated clearing house transfers.

“Accommodation Payment” shall have the meaning provided in Section 10.22(d).

“Account” means “accounts” as defined in the UCC, and also means a right to
payment of a monetary obligation, whether or not earned by performance, (a) for
property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed of, (b) for services rendered or to be rendered, (c) for a
policy of insurance issued or to be issued, (d) for a secondary obligation
incurred or to be incurred, (e) for energy provided or to be provided, (f) for
the use or hire of a vessel under a charter or other contract, (g) arising out
of the use of a credit or charge card or information contained on or for use
with the card, or (h) as winnings in a lottery or other game of chance operated
or sponsored by a state, governmental unit of a state, or person licensed or
authorized to operate the game by a state or governmental unit of a state. The
term “Account” includes health-care-insurance receivables.

“Account Debtor” means each Person obligated in any way on or in connection with
an Account.

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“Acquisition” means, with respect to any Person (a) a purchase or other
acquisition of a Controlling interest in the Equity Interests of any other
Person, (b) a purchase or other acquisition of all or substantially all of the
assets or properties of, another Person or of any business unit of another
Person, (c) any merger or consolidation of such Person with any other Person or
other transaction or series of transactions resulting in the acquisition of all
or substantially all of the assets, or a Controlling interest in the Equity
Interests, of any Person, or (d) any acquisition of all or substantially all of
the Store locations of any Person, in each case in any transaction or group of
transactions which are part of a common plan.

“Act” shall have the meaning provided in Section 10.17.

“Adjusted LIBO Rate” means:

(a) for any Interest Period with respect to any LIBO Borrowing, an interest rate
per annum (rounded upwards, if necessary, to the next 1/100 of one percent)
equal to (i) the LIBO Rate for such Interest Period multiplied by (ii) the
Statutory Reserve Rate; and

(b) for any interest rate calculation with respect to any Base Rate Loan, an
interest rate per annum (rounded upwards, if necessary, to the next 1/100 of one
percent) equal to (i) the LIBO Rate for an Interest Period commencing on the
date of such calculation and ending on the date that is thirty (30) days
thereafter multiplied by (ii) the Statutory Reserve Rate.

The Adjusted LIBO Rate will be adjusted automatically as of the effective date
of any change in the Statutory Reserve Rate.

“Adjustment Date” means May 2, 2015 and the first day of each Fiscal Quarter
thereafter, commencing August 1, 2015.

“Administrative Agent” means Wells Fargo, in its capacity as administrative and
collateral agent under any of the Loan Documents, or any successor
administrative and collateral agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify the Lead
Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affiliate” means, with respect to any Person, (i) another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by
or is under common Control with the Person specified, (ii) any director,
officer, managing member, partner, trustee, or beneficiary of that Person,
(iii) any other Person directly or indirectly holding 10% or more of any class
of the Equity Interests of that Person, and (iv) any other Person 10% or more of
any class of whose Equity Interests is held directly or indirectly by that
Person.

“Agent Parties” shall have the meaning provided in Section 10.02(c).

“Agent Payment Account” means account no. 37235547964500212 of the
Administrative Agent at Wells Fargo, or such other account of the Administrative
Agent as the Administrative Agent may from time to time designate to Lead
Borrower as the Agent Payment Account for purposes of this Agreement and the
other Loan Documents.

 

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“Aggregate Commitments” means the Commitments of all the Lenders. As of the
Closing Date, the Aggregate Commitments are $250,000,000.

“Aggregate Tranche A Revolving Loan Commitments” means the Tranche A Loan
Revolving Commitments of all the Tranche A Revolving Loan Lenders. As of the
Closing Date, the Aggregate Tranche A Revolving Loan Commitments are
$225,000,000.

“Aggregate Tranche A-1 Revolving Loan Commitments” means the Tranche A-1
Revolving Loan Commitments of all the Lenders. As of the Closing Date, the
Aggregate Tranche A -1 Revolving Loan Commitments are $25,000,000.

“Agreement” means this Second Amended and Restated Credit Agreement.

“Allocable Amount” shall have the meaning provided in Section 10.22(d).

“Applicable Commitment Fee Percentage” means one quarter of one percent
(1/4%) per annum.

“Applicable LC Fee Rate” means the percentage rate per annum calculated,
(a) with respect to Standby Letters of Credit, at the then applicable Applicable
Margin for LIBO Rate Loans that are Tranche A Revolving Loans, and (b) with
respect to Commercial Letters of Credit, at the then applicable Applicable
Margin for LIBO Rate Loans that are Tranche A Revolving Loans less one-half of
one percent (.50%).

“Applicable Lenders” means the Required Lenders, the Supermajority Lenders, all
affected Lenders, or all Lenders, as the context may require.

“Applicable Margin” means, at any time, as to the interest rate for Base Rate
Loans and the interest rate for LIBO Rate Loans the applicable percentage (on a
per annum basis) set forth below if the Quarterly Average Excess Availability
for the immediately preceding Fiscal Quarter is at or within the amounts
indicated for such percentage:

 

Tier

  

Quarterly Average

Excess Availability

   Applicable
LIBO Rate
Margin for
Tranche A
Revolving
Loans     Applicable
LIBO Rate
Margin for
Tranche A-1
Revolving Loans     Applicable
Base Rate
Margin for
Tranche A
Revolving
Loans     Applicable
Base Rate
Margin for
Tranche A-1
Revolving
Loans   1    Greater than 66 2/3% of the Aggregate Commitments      1.25 %     
1.25 %      .25 %      .25 %  2    Less than or equal to 66 2/3% of the
Aggregate Commitments and greater than 33 1/3% of the Aggregate Commitments     
1.50 %      1.50 %      .50 %      .50 %  3    Less than or equal to 33 1/3% of
the Aggregate Commitments      1.75 %      1.75 %      .75 %      .75 % 

 

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provided, that, (a) the Applicable Margin shall be calculated and established
once each Fiscal Quarter based on the Quarterly Average Excess Availability for
the immediately preceding three month period and shall remain in effect until
adjusted thereafter as of the first day of the next Fiscal Quarter,
(b) notwithstanding the amount of the Quarterly Average Excess Availability, for
each month prior to the month commencing August 2, 2015, the Applicable Margin
shall be the percentages set forth in Tier 2 of the schedule above for the
applicable category of Loans, (c) notwithstanding anything to the contrary set
forth herein, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent may, and at the direction of the Required
Lenders shall, immediately increase the Applicable Margin to that set forth in
Tier 3 (even if the Quarterly Average Excess Availability requirements for a
different Tier have been met) and interest shall accrue at the Default Rate and
(d) if the financial statements or any Borrowing Base Certificates are at any
time restated or otherwise revised (including as a result of an audit) or if the
information set forth in such financial statements or any Borrowing Base
Certificates otherwise proves to be false or incorrect such that the Applicable
Margin would have been higher than was otherwise in effect during any period,
without constituting a waiver of any Default or Event of Default arising as a
result thereof, interest due under this Agreement shall be immediately
recalculated at such higher rate for any applicable periods and shall be due and
payable on demand.

“Applicable Percentage” means with respect to (a) any Lender at any time, the
fraction, expressed as a percentage (carried out to the ninth decimal place),
the numerator of which is such Lender’s Commitment and the denominator of which
is the Aggregate Commitments at such time, (b) any Tranche A Revolving Loan
Lender at any time, the fraction, expressed as a percentage (carried out to the
ninth decimal place), the numerator of which is such Tranche A Revolving Loan
Lender’s Commitment and the denominator of which is the Aggregate Tranche A
Revolving Loan Commitments at such time and (c) any Tranche A-1 Revolving Loan
Lender at any time, the fraction, expressed as a percentage (carried out to the
ninth decimal place), the numerator of which is such Tranche A-1 Revolving Loan
Lender’s Commitment and the denominator of which is the Aggregate Tranche A-1
Revolving Loan Commitments at such time. If the Commitment of each Lender to
make Loans and the obligation of the LC Issuer to make LC Credit Extensions have
been terminated pursuant to Section 8.02 or if the Aggregate Commitments have
expired, then the Applicable Percentage of each Lender shall be determined based
on the Applicable Percentage of such Lender most recently in effect, giving
effect to any subsequent assignments. The initial Applicable Percentage of each
Lender is set forth opposite the name of such Lender on Schedule 2.01 (as
amended from time to time) or in the Assignment and Assumption pursuant to which
such Lender becomes a party hereto, as applicable.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender, (c) an entity or an Affiliate of an entity that
administers or manages a Lender or (d) the same investment advisor or an advisor
under common control with such Lender, Affiliate or advisor, as applicable.

“Arranger” means Wells Fargo Bank, National Association, in its capacity as sole
lead arranger and sole book manager.

 

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“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit E or any other form approved by the
Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any Capital
Lease Obligation of any Person, the capitalized amount thereof that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease or similar payments under the relevant lease or
other applicable agreement or instrument that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease,
agreement or instrument were accounted for as a capital lease.

“Audited Financial Statements” means the audited Consolidated balance sheet of
the Lead Borrower and its Subsidiaries for the Fiscal Year ended February 1,
2014, and the related Consolidated statements of income or operations,
Shareholders’ Equity and cash flows for such Fiscal Year of the Lead Borrower
and its Subsidiaries, including the notes thereto.

“Auto-Extension Letter of Credit” shall have the meaning provided in
Section 2.03(b)(iii).

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.06, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the LC
Issuer to make LC Credit Extensions pursuant to Section 8.02.

“Availability Reserves” means, without duplication of any other reserves or
items to the extent such items are otherwise addressed or excluded through
eligibility criteria, such reserves as the Administrative Agent from time to
time determines in its Permitted Discretion as being appropriate (a) to reflect
the impediments to the Administrative Agent’s ability to realize upon the
Collateral, (b) to reflect claims and liabilities that the Administrative Agent
determines will need to be satisfied in connection with the realization upon the
Collateral, (c) to reflect criteria, events, conditions, contingencies or risks
which adversely affect any component of the Borrowing Base, or the assets,
business, financial performance or financial condition of any Loan Party, or
(d) to reflect that an Event of Default then exists. Without limiting the
generality of the foregoing, Availability Reserves may include, in the
Administrative Agent’s Permitted Discretion, (but are not limited to) reserves
based on: (i) rent; (ii) customs duties, and other costs to release Inventory
which is being imported into the United States; (iii) outstanding Taxes and
other governmental charges, including, without limitation, ad valorem, real
estate, personal property, sales, claims of the PBGC and other Taxes which have
or are anticipated to have priority over the interests of the Administrative
Agent in the Collateral; (iv) Customer Credit Liabilities (which Reserve based
thereon is, as of the date hereof, equal to the aggregate amount of outstanding
Customer Credit Liabilities that, on any date of determination, arose at any
time during the ninety (90) days immediately preceding such date and fifty
(50%) percent of the aggregate amount of outstanding Customer Credit Liabilities
that arose at any time prior to the ninetieth (90th) day immediately preceding
such date, but without limiting the right of the Administrative Agent to adjust
such amount after the date hereof), (v) Customer Deposits, (vi) warehousemen’s
or bailee’s charges and other Permitted Encumbrances which may be pari passu or
have priority over the interests of the Administrative Agent in the Collateral,
(vii) amounts due to vendors on account of consigned goods, (viii) Cash
Management Reserves, (ix) Bank Product Reserves, (x) Inventory Reserves, and
(xi) royalties payable in respect of licensed merchandise.

 

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“Bank Products” means any services or facilities provided to any Loan Party by
the Administrative Agent or any of its Affiliates (but excluding Cash Management
Services) including, without limitation, on account of (a) Swap Contracts,
(b) merchant services constituting a line of credit, (c) leasing, and (d) supply
chain finance services, including, without limitation, trade payable services
and supplier accounts receivable purchases, but excluding any factoring
services.

“Bank Product Obligations” means (a) any obligation on account of (i) any Cash
Management Services furnished to any of the Loan Parties or any of their
Subsidiaries and/or (ii) any transaction with the Administrative Agent or any of
its Affiliates, which arises out of any Bank Product entered into with any Loan
Party and any such Person, as each may be amended from time to time; and (b) any
liability with respect to Factored Receivables.

“Bank Product Reserves” means such reserves as the Administrative Agent from
time to time determine in its Permitted Discretion as being appropriate to
reflect the liabilities and obligations of the Loan Parties with respect to Bank
Products (other than Bank Products consisting of the Equipment Term Loan
Facility) then provided or outstanding.

“Base Rate” means, for any day, a fluctuating rate per annum equal to the
highest of (a) the Federal Funds Rate, as in effect from time to time, plus
one-half of one percent (0.50%), (b) the Adjusted LIBO Rate (which rate shall be
calculated based upon an Interest Period of one (1) month and shall be
determined on a daily basis) plus one percent (1.00%), or (c) the rate of
interest publicly announced, from time to time, at Wells Fargo at its principal
office in San Francisco as its “prime rate”, with the understanding that the
“prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of
such rates) and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto and is evidenced by the
recording thereof after its announcement in such internal publications as Wells
Fargo may designate. Any change in such rate announced by Wells Fargo shall take
effect at the opening of business on the day specified in the public
announcement of such change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Blocked Account” shall have the meaning provided in Section 6.13(a)(iii).

“Blocked Account Agreement” means with respect to an account established by a
Loan Party, an agreement, in form and substance satisfactory to the
Administrative Agent, establishing control (as defined in the UCC) of such
account by the Administrative Agent and whereby the bank maintaining such
account agrees, upon the occurrence and during the continuance of a Cash
Dominion Event, to comply only with the instructions originated by the
Administrative Agent without the further consent of any Loan Party.

“Blocked Account Bank” means each bank with whom deposit accounts are maintained
in which any funds of any of the Loan Parties from one or more DDAs are
concentrated and with whom a Blocked Account Agreement has been, or is required
to be, executed in accordance with the terms hereof.

“Borrower Materials” shall have the meaning provided in Section 6.02.

“Borrowers” shall have the meaning provided in the introductory paragraph
hereto.

“Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the
context may require.

 

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“Borrowing Base” means, at any time of calculation, the sum of the Tranche A
Borrowing Base and the Tranche A-1 Borrowing Base.

“Borrowing Base Certificate” means a certificate substantially in the form of
Exhibit F hereto (with such changes therein as may be required by the
Administrative Agent to reflect the components of and applicable Availability
Reserves against the Borrowing Base as provided for hereunder from time to
time), executed and certified as accurate and complete by a Responsible Officer
of the Lead Borrower which shall include appropriate exhibits, schedules,
supporting documentation, and additional reports as reasonably requested by the
Administrative Agent.

“Business” means Borrowers’ value department store chain retailing apparel,
household consumer goods and other businesses reasonably related thereto.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any LIBO Rate Loan, means any such day on which dealings in
Dollar deposits are conducted by and between banks in the London interbank
market.

“Capital Expenditures” means, with respect to any Person for any period, (a) all
expenditures made (whether made in the form of cash or other property) or costs
incurred for the acquisition or improvement of fixed or capital assets of such
Person (excluding normal replacements and maintenance which are properly charged
to current operations), in each case that are (or should be) set forth as
capital expenditures in a Consolidated statement of cash flows of such Person
for such period, in each case prepared in accordance with GAAP, plus (b) Capital
Lease Obligations incurred by a Person during such period, less (c) any tenant
allowances actually received by the Borrowers from any of its landlords in
connection with the preceding clauses (a) or (b).

“Capital Lease Obligations” means, with respect to any Person for any period,
the obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal property, or
a combination thereof, which obligations are required to be classified and
accounted for as liabilities on a balance sheet of such Person under GAAP and
the amount of which obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

“Cash Collateralize” shall have the meaning provided in Section 2.03(g).
Derivatives of such term have corresponding meanings.

“Cash Dominion Event” means either (a) the occurrence and continuance of any
Event of Default, or (b) the failure of the Borrowers to maintain Excess
Availability of at least fifteen percent (15%) of the Loan Cap at any time for
any four (4) consecutive Business Days. For purposes of this Agreement, the
occurrence of a Cash Dominion Event shall be deemed continuing at the
Administrative Agent’s option (A) so long as such Event of Default and is
continuing and has not been waived, and/or (B) if the Cash Dominion Event arises
as a result of the Borrowers’ failure to achieve Excess Availability as required
hereunder, until Excess Availability has exceeded fifteen percent (15%) of the
Loan Cap for sixty (60) consecutive Business Days, in which case a Cash Dominion
Event shall no longer be deemed to be continuing for purposes of this Agreement;
provided that a Cash Dominion Event shall be deemed continuing (even if an Event
of Default is no longer continuing and/or Excess Availability exceeds the
required amount for sixty (60) consecutive Business Days) at all times after a
Cash Dominion Event has occurred and been discontinued on two (2) occasion(s)
after the Closing Date. The termination of a Cash Dominion Event as provided
herein shall in no way limit, waive or delay the occurrence of a subsequent Cash
Dominion Event in the event that the conditions set forth in this definition
again arise.

 

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“Cash Management Reserves “ means such reserves as the Administrative Agent,
from time to time, determines in its Permitted Discretion as being appropriate
to reflect the reasonably anticipated liabilities and obligations of the Loan
Parties with respect to Cash Management Services then provided or outstanding.

“Cash Management Services” means any one or more of the following types of
services or facilities provided to any Loan Party by the Administrative Agent or
any of its Affiliates: (a) ACH transactions, (b) cash management services,
including, without limitation, controlled disbursement services, treasury,
depository, overdraft, and electronic funds transfer services, (c) foreign
exchange facilities, (d) credit cards (including commercial cards (including
so-called “purchase cards”, “procurement cards” or “p-cards”)), (e) debit cards,
(f) credit card processing services, and (g) stored value cards.

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. § 9601 et seq.

“CERCLIS” means the Comprehensive Environmental Response, Compensation, and
Liability Information System maintained by the United States Environmental
Protection Agency.

“CFC” means a Person that is a controlled foreign corporation under Section 957
of the Code.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority;
provided, that, notwithstanding anything herein to the contrary, (i) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder or issued in connection therewith and
(ii) all requests, rules, guidelines or directives promulgated by the Bank for
International settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law,” regardless of the date enacted, adopted or issued.

“Change of Control” means an event or series of related events by which:

(a) the transfer (in one transaction or a series of transactions) of all or
substantially all of the assets of Lead Borrower to any Person or group (as such
term is used in Section 13(d)(3) of the Exchange Act), other than as permitted
in Section 7.05 hereof; or

(b) the liquidation or dissolution of any Borrower or the adoption of a plan by
the stockholders of any Borrower relating to the dissolution or liquidation of
such Borrower, other than as permitted in Section 7.04 hereof; or

(c) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding (i) any Person who is a
direct or indirect shareholder of the Lead Borrower as of the date hereof and
(ii) any employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have “beneficial ownership” of all securities
that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time (such right, an
“option right”)), directly

 

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or indirectly, a majority of the voting power of the total outstanding Equity
Interests of the Lead Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Lead Borrower on a fully-diluted
basis (and taking into account all such Equity Interests that such “person” or
“group” has the right to acquire pursuant to any option right); or

(d) during any period of two (2) consecutive years, a majority of the members of
the board of directors or other equivalent governing body of the Lead Borrower
cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least sixty-six and two-thirds (66 2/3%) percent of
that board or equivalent governing body or (iii) whose election or nomination to
that board or other equivalent governing body was approved by individuals
referred to in clauses (i) and (ii) above constituting at the time of such
election or nomination at least sixty-six and two-thirds (66 2/3%) percent of
that board or equivalent governing body (excluding, in the case of both clause
(ii) and clause (iii), any individual whose initial nomination for, or
assumption of office as, a member of that board or equivalent governing body
occurs as a result of solicitation of proxies or consents for the election or
removal of one or more directors by any person or group by or on behalf of the
board of directors); or

(e) any Person or two or more Persons acting in concert shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of the Lead Borrower, or control over the Equity
Interests of the Lead Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Borrower on a fully-diluted basis
(and taking into account all such securities that such Person or Persons have
the right to acquire pursuant to any option right) representing a majority of
the combined voting power of such securities; or

(f) the Lead Borrower fails at any time to own, directly or indirectly, 80% of
the Equity Interests having voting power of each other Loan Party free and clear
of all Liens, except where such failure is as a result of a transaction
permitted by the Loan Documents; or

(g) the occurrence of any “Change of Control” (or similar term) as defined in
the Equipment Term Loan Agreement.

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

“Code” means the Internal Revenue Code of 1986, and the regulations promulgated
thereunder, as amended and in effect.

“Collateral” means any and all “Collateral” as defined in any applicable
Security Document and all other property that is or is intended under the terms
of the Security Documents to be subject to Liens in favor of the Administrative
Agent.

“Collateral Access Agreement” means an agreement reasonably satisfactory in form
and substance to the Administrative Agent executed by (a) a bailee or other
Person in possession of Collateral, and (b) any landlord of Real Estate leased
by any Loan Party, pursuant to which such Person (i) acknowledges the
Administrative Agent’s Lien on the Collateral, (ii) releases such Person’s Liens
in the Collateral held by such Person or located on such Real Estate,
(iii) provides the Administrative Agent with access to the Collateral held by
such bailee or other Person or located in or on such Real Estate, (iv)

 

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as to any landlord, provides the Administrative Agent with a reasonable time to
sell and dispose of the Collateral from such Real Estate, and (v) makes such
other agreements with the Administrative Agent as the Administrative Agent may
reasonably require.

“Commercial Letter of Credit” means any Letter of Credit issued for the purpose
of providing the primary payment mechanism in connection with the purchase of
any materials, goods or services by a Loan Party in the ordinary course of
business of such Loan Party.

“Commercial Letter of Credit Agreement” means the Commercial Letter of Credit
Agreement relating to the issuance of a Commercial Letter of Credit in the form
from time to time in use by the LC Issuer.

“Commitment” means, as to each Lender, its Tranche A Revolving Loan Commitment
and its Tranche A-1 Revolving Loan Commitment, as the context requires.

“Committed Borrowing” means a borrowing consisting of simultaneous Committed
Loans of the same Type and, in the case of LIBO Rate Loans, having the same
Interest Period made by each of the Lenders pursuant to Section 2.01.

“Committed Loan” means a Tranche A Revolving Loan or a Tranche A-1 Revolving
Loan, as the case may be.

“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of LIBO Rate Loans, pursuant to 2.01(a), which, if in writing, shall be
substantially in the form of Exhibit A.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.

“Concentration Account” shall have the meaning provided in Section 6.13(c).

“Consent” means actual consent given by a Lender from whom such consent is
sought; or the passage of seven (7) Business Days from receipt of written notice
to a Lender from the Administrative Agent of a proposed course of action to be
followed by the Administrative Agent without such Lender’s giving the
Administrative Agent written notice of that Lender’s objection to such course of
action.

“Consolidated” means, when used to modify a financial term, test, statement, or
report of a Person, the application or preparation of such term, test, statement
or report (as applicable) based upon the consolidation, in accordance with GAAP,
of the financial condition or operating results of such Person and its
Subsidiaries.

“Consolidated EBITDA” means, at any date of determination, an amount equal to
Consolidated Net Income of the Lead Borrower and its Subsidiaries on a
Consolidated basis for the most recently completed Measurement Period, plus
(a) the following to the extent deducted in calculating such Consolidated Net
Income: (i) Consolidated Interest Charges, (ii) the provision for Federal,
state, local and foreign income Taxes, (iii) depreciation and amortization
expense and (iv) other non-recurring expenses reducing such Consolidated Net
Income which do not represent a cash item in such period or any future period
(in each case of or by the Lead Borrower and its Subsidiaries for such
Measurement Period), minus (b) the following to the extent included in
calculating such Consolidated Net Income: (i) Federal, state, local and foreign
income tax credits and (ii) all non-cash items increasing Consolidated Net
Income (in each case of or by the Lead Borrower and its Subsidiaries for such
Measurement Period), all as determined on a Consolidated basis in accordance
with GAAP.

 

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“Consolidated Fixed Charge Coverage Ratio” means, at any date of determination,
the ratio of (a) (i) Consolidated EBITDA for such period, plus (ii) the
pre-opening costs for new and relocated Stores for such period, minus
(iii) Capital Expenditures made during such period, minus (iv) the aggregate
amount of Federal, state, local and foreign income taxes paid in cash during
such period, to (b) the sum of (i) Debt Service Charges (excluding Debt Service
Charges related to the Equipment Term Loan Facility other than interest payments
made in respect thereof), plus (ii) the aggregate amount of all Restricted
Payments (excluding the February 2015 Dividend), in each case, of or by the Lead
Borrower and its Subsidiaries for the most recently completed Measurement
Period, all as determined on a Consolidated basis in accordance with GAAP.

“Consolidated Interest Charges” means, for any Measurement Period, the sum of
(a) all interest, premium payments, debt discount, fees, charges and related
expenses in connection with borrowed money (including capitalized interest) or
in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, including, without
limitation, all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers’ acceptance financing and net costs
under Swap Contracts, but excluding any non-cash or deferred interest financing
costs, (b) all interest paid or payable with respect to discontinued operations
and (c) the portion of rent expense with respect to such period under Capital
Lease Obligations that is treated as interest in accordance with GAAP minus
(d) interest income during such period (excluding any portion of interest income
representing accruals of amounts received in a previous period), in each case of
or by the Lead Borrower and its Subsidiaries for the most recently completed
Measurement Period, all as determined on a Consolidated basis in accordance with
GAAP.

“Consolidated Net Income” means, as of any date of determination, the net income
of the Lead Borrower and its Subsidiaries for the most recently completed
Measurement Period, all as determined on a Consolidated basis in accordance with
GAAP, provided, however, that there shall be excluded (a) unusual and
non-recurring gains and losses not arising from normal business operations
(including but not limited to prior period impact of error corrections, fees and
settlement charges or income from lawsuits or regulatory actions and the like)
for such Measurement Period, (b) the income (or loss) of such Person during such
Measurement Period in which and to the extent any other Person has a joint
interest, except to the extent of the amount of cash dividends or other
distributions actually paid in cash to such Person during such period, (c) the
income (or loss) of such Person during such Measurement Period and accrued prior
to the date it becomes a Subsidiary of a Person or any of such Person’s
Subsidiaries or is merged into or consolidated with a Person or any of its
Subsidiaries or that Person’s assets are acquired by such Person or any of its
Subsidiaries, and (d) the income of any direct or indirect Subsidiary of a
Person to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted by
operation of the terms of its Organization Documents or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, except that the Lead Borrower’s equity in any net
loss of any such Subsidiary for such Measurement Period shall be included in
determining Consolidated Net Income.

“Contractual Obligation” means, as to any Person, any provision of any
agreement, instrument or other undertaking to which such Person is a party or by
which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Cost” means the lower of cost or market value of Inventory, based upon the
Borrowers’ consistently applied accounting practices, known to the
Administrative Agent, which practices are in effect on the Closing Date as such
calculated cost is determined from invoices received by the Borrowers, the
Borrowers’ purchase journals or the Borrowers’ retail stock ledger.

 

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“Covenant Compliance Event” means either (a) that an Event of Default has
occurred and is continuing, or (b) Excess Availability at any time is, for any
four (4) consecutive Business Days, less than the greater of (i) Twenty Million
Dollars ($20,000,000) or (ii) ten (10%) percent of the Loan Cap. For purposes
hereof, the occurrence of a Covenant Compliance Event shall be deemed continuing
at the Administrative Agent’s option (A) so long as such Event of Default is
continuing and has not been waived, and/or (B) if the Covenant Compliance Event
arises as a result of the Borrowers’ failure to achieve Excess Availability as
required hereunder, until Excess Availability has exceeded the greater of
(i) Twenty Million Dollars ($20,000,000) or (ii) ten (10%) percent of the Loan
Cap for sixty (60) consecutive Business Days, in which case a Covenant
Compliance Event shall no longer be deemed to be continuing for purposes of this
Agreement; provided that, a Covenant Compliance Event shall be deemed continuing
(even if an Event of Default is no longer continuing and/or Excess Availability
exceeds the required amount for sixty (60) consecutive Business Days) at all
times after a Covenant Compliance Event has occurred and been discontinued on
two (2) occasions after the Closing Date. The termination of a Covenant
Compliance Event as provided herein shall in no way limit, waive or delay the
occurrence of a subsequent Covenant Compliance Event in the event that the
conditions set forth in this definition again arise.

“Credit Card Agreements” means all agreements now or hereafter entered into by
any Borrower or for the benefit of any Borrower, in each case with any Credit
Card Issuer or any Credit Card Processor with respect to sales transactions
involving credit card or debit card purchases, including, but not limited to,
the agreements set forth on Schedule 5.21(b) hereto.

“Credit Card Issuer” means any person (other than a Loan Party) who issues or
whose members issue credit cards, including, without limitation, MasterCard or
VISA bank credit or debit cards or other bank credit or debit cards issued
through World Financial Network National Bank, MasterCard International, Inc.,
Visa, U.S.A., Inc. or Visa International and American Express, Discover, Diners
Club, Carte Blanche and other non-bank credit or debit cards, including, without
limitation, credit or debit cards issued by or through American Express Travel
Related Services Company, Inc., Novus Services, Inc., PayPal and other issuers
approved by the Administrative Agent.

“Credit Card Notifications” shall have the meaning provided in
Section 6.13(a)(ii).

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

“Credit Card Receivables” means each “Account” (as defined in the UCC) together
with all income, payments and proceeds thereof, owed by a Credit Card Issuer or
Credit Card Processor to a Loan Party resulting from charges by a customer of a
Loan Party on credit or debit cards issued by such issuer in connection with the
sale of goods by a Loan Party, or services performed by a Loan Party, in each
case in the ordinary course of its business.

“Credit Extensions” mean each of the following: (a) a Borrowing and (b) an LC
Credit Extension.

“Credit Party” or “Credit Parties” means (a) individually, (i) each Lender and
its Affiliates, (ii) the Administrative Agent, (iii) each LC Issuer, (iv) the
Arranger, (v) each beneficiary of each indemnification obligation undertaken by
any Loan Party under any Loan Document, (vi) any other Person to whom
Obligations under this Agreement and other Loan Documents are owing, and
(vii) the successors and assigns of each of the foregoing, and (b) collectively,
all of the foregoing.

 

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“Credit Party Expenses” means, without limitation, (a) all reasonable and
documented out-of-pocket expenses actually incurred by the Administrative Agent
and its Affiliates, in connection with this Agreement and the other Loan
Documents, including without limitation, (i) the reasonable and documented fees,
charges and disbursements (A) of counsel for the Administrative Agent (other
than the allocated costs of in-house counsel), (B) of outside consultants for
the Administrative Agent, (C) of appraisers, (D) incurred during any field
examinations, and (E) all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of the Obligations, (ii) such
out-of-pocket expenses incurred in connection with (A) the syndication of the
credit facilities provided for herein, (B) the preparation, negotiation,
administration, management, execution and delivery of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (C) the enforcement or protection of their rights
in connection with this Agreement or the Loan Documents or efforts to preserve,
protect, collect, or enforce the Collateral, or (D) any workout, restructuring
or negotiations in respect of any Obligations, (b) with respect to the LC
Issuer, and its Affiliates, all reasonable and documented out-of-pocket expenses
actually incurred in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder; and
(c) all reasonable and documented out-of-pocket expenses actually incurred by
the Credit Parties who are not the Administrative Agent, the LC Issuer or any
Affiliate of any of them, after the occurrence and during the continuance of an
Event of Default; provided, that, (x) the Credit Parties shall be entitled to
reimbursement for no more than one counsel representing all the Credit Parties
(absent a conflict of interest in which case the Credit Parties may engage and
be reimbursed for additional counsel), and (y) reimbursement for the expenses of
field examinations, inventories, appraisals, evaluations, audits and the like
shall be subject to the limitations set forth in Sections 4.01(e), 6.10 and
6.15.

“Customer Credit Liabilities” means at any time, the aggregate remaining value
at such time of (a) outstanding gift certificates and gift cards of the
Borrowers entitling the holder thereof to use all or a portion of the
certificate or gift card to pay all or a portion of the purchase price for any
Inventory, (b) outstanding merchandise credits of the Borrowers, (c) layaway
obligations of the Borrowers, and (d) liabilities in connection with frequent
shopping programs of the Borrowers; provided, that, each of the above
liabilities shall be reduced by “breakage” estimated consistently with the
Borrowers’ past practices in accordance with GAAP.

“Customer Deposits” means deposits made by customers with respect to the
purchase of goods or the performance of services.

“DDA” means each checking, savings or other demand deposit account maintained by
any of the Loan Parties. All funds in each DDA shall be conclusively presumed to
be Collateral and proceeds of Collateral and the Administrative Agent and the
Lenders shall have no duty to inquire as to the source of the amounts on deposit
in any DDA.

“DDA Notification” shall have the meaning provided in Section 6.13(a)(i).

“Debt Service Charges” means for any Measurement Period, the sum of
(a) Consolidated Interest Charges required to be paid for such Measurement
Period, plus (b) regularly scheduled principal payments required to be made on
account of Indebtedness (excluding the Obligations and any Synthetic Lease
Obligations and Capital Lease Obligations) for such Measurement Period, in each
case determined on a Consolidated basis in accordance with GAAP.

 

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“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Margin, if any, applicable to Base Rate Loans, plus (iii) two percent
(2%) per annum; provided, that, with respect to a LIBO Rate Loan, the Default
Rate shall be an interest rate equal to the interest rate (including any
Applicable Margin) otherwise applicable to such Loan plus two percent (2%) per
annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to
the Applicable LC Fee Rate for Standby Letters of Credit and Commercial Letters
of Credit, as applicable, plus two percent (2%) per annum.

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Committed Loans, participations in LC Obligations or participations in Swing
Line Loans required to be funded by it hereunder within one Business Day of the
date required to be funded by it hereunder, (b) has otherwise failed to pay over
to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one Business Day of the date when due, or (c) has
been deemed insolvent or become the subject of a bankruptcy or insolvency
proceeding.

“Deferred Compensation Plan” means the Stein Mart Executive Deferred
Compensation Plan, as amended, modified, supplemented, restated or replaced from
time to time.

“Deteriorating Lender” means any Defaulting Lender or any Lender as to which
(a) the LC Issuer or the Swing Line Lender has a good faith belief that such
Lender has defaulted in fulfilling its obligations under one or more other
syndicated credit facilities, or (b) a Person that Controls such Lender has been
deemed insolvent or become the subject of a bankruptcy, insolvency or similar
proceeding.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction and any sale,
transfer, license or other disposition of (whether in one transaction or in a
series of transactions) of any property (including, without limitation, any
Equity Interests) by any Person (or the granting of any option or other right to
do any of the foregoing), including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith.

“Disqualified Stock” means any Equity Interest that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is ninety-one
(91) days after the date on which the Loans mature; provided, that, (i) only the
portion of such Equity Interests which so matures or is mandatorily redeemable,
is so convertible or exchangeable or is so redeemable at the option of the
holder thereof prior to such date shall be deemed to be Disqualified Stock and
(ii) with respect to any Equity Interests issued to any employee or to any plan
for the benefit of employees of the Lead Borrower or its Subsidiaries or by any
such plan to such employees, such Equity Interest shall not constitute
Disqualified Stock solely because it may be required to be repurchased by the
Lead Borrower or one of its Subsidiaries in order to satisfy applicable
statutory or regulatory obligations or as a result of such employee’s
termination, resignation, death or disability and if any class of Equity
Interest of such Person that by its terms authorizes such Person to satisfy its

 

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obligations thereunder by delivery of an Equity Interest that is not
Disqualified Stock, such Equity Interests shall not be deemed to be Disqualified
Stock. Notwithstanding the preceding sentence, any Equity Interest that would
constitute Disqualified Stock solely because the holders thereof have the right
to require a Loan Party to repurchase such Equity Interest upon the occurrence
of a change of control or an asset sale shall not constitute Disqualified Stock.
The amount of Disqualified Stock deemed to be outstanding at any time for
purposes of this Agreement will be the maximum amount that the Lead Borrower and
its Subsidiaries may become obligated to pay upon maturity of, or pursuant to
any mandatory redemption provisions of, such Disqualified Stock or portion
thereof, plus accrued dividends.

“Dollars” and “$” mean lawful money of the United States.

“Eligible Assignee” means (a) a Credit Party or any of its Affiliates; (b) a
bank, insurance company, or company engaged in the business of making commercial
loans, which Person, together with its Affiliates, has a combined capital and
surplus in excess of $1,000,000,000; (c) an Approved Fund; (d) any Person to
whom a Credit Party assigns its rights and obligations under this Agreement as
part of an assignment and transfer of such Credit Party’s rights in and to a
material portion of such Credit Party’s portfolio of asset based credit
facilities provided that such transferee has a combined capital and surplus in
excess of $1,000,000,000, and (e) any other Person (other than a natural person)
approved by (i) the Administrative Agent, the LC Issuer and the Swing Line
Lender, and (ii) unless an Event of Default has occurred and is continuing, the
Lead Borrower (each such approval not to be unreasonably withheld or delayed);
provided that notwithstanding the foregoing, “Eligible Assignee” shall not
include a Loan Party or any of the Loan Parties’ Affiliates or Subsidiaries nor
shall it include any Person that is not a financial institution licensed to
conduct a general banking or commercial lending business under the laws of the
United States or any state within the United States.

“Eligible Credit Card Receivables” means at the time of any determination
thereof, each Credit Card Receivable that at all times satisfies the criteria
set forth below as determined by the Administrative Agent in its Permitted
Discretion and which has been earned by performance and represents the bona fide
amounts due to a Borrower from a Credit Card Processor and/or Credit Card
Issuer, and in each case originated in the ordinary course of business of such
Borrower. Without limiting the foregoing, in order to be an Eligible Credit Card
Receivable, an Account shall indicate no Person other than a Borrower as payee
or remittance party. In determining the amount to be so included, the face
amount of an Account shall be reduced by, without duplication, to the extent not
reflected in such face amount, (i) the amount of all accrued and actual
discounts, claims, credits or credits pending, promotional program allowances,
price adjustments, finance charges or other allowances (including any amount
that a Borrower may be obligated to rebate to a customer, a credit card payment
processor, or Credit Card Issuer pursuant to the terms of any agreement or
understanding (written or oral)) and (ii) the aggregate amount of all cash
received in respect of such Account but not yet applied by the Loan Parties to
reduce the amount of such Credit Card Receivable. Except as otherwise determined
by the Administrative Agent in its Permitted Discretion, Eligible Credit Card
Receivables shall not include any Credit Card Receivable:

(a) which is unpaid more than five (5) Business Days (but with respect to Credit
Card Receivables owing by American Express, seven (7) Business Days) after the
date of determination of eligibility thereof;

(b) where such Credit Card Receivable or the underlying contract contravenes any
laws, rules or regulations applicable thereto, including, rules and regulations
relating to truth-in-lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy or any party to
the underlying contract is in violation of any such laws, rules or regulations;

 

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(c) which is not a valid, legally enforceable obligation of the applicable
issuer with respect thereto;

(d) to the extent to which it is subject to any present, or contingent (or any
facts (i) exist to the knowledge of Administrative Agent or any Loan Party, or
(ii) have been disclosed in the course of any field examination or otherwise,
which are the basis for any future) claim, chargeback, offset, deduction or
counterclaim, dispute or other defense on the part of an Account Debtor;

(e) that is not subject to a perfected first priority Lien in favor of the
Administrative Agent, or with respect to which a Borrower does not have good,
valid and marketable title thereto, free and clear of any Lien (other than Liens
granted to the Administrative Agent pursuant to the Security Documents and Liens
permitted under clause (a) of the definition of Permitted Encumbrances, provided
that a Reserve has been established with respect thereto);

(f) which does not conform to all representations, warranties or other
provisions in the Loan Documents relating to Credit Card Receivables;

(g) which does not constitute an “Account” (as defined in the UCC);

(h) where the Credit Card Processor has asserted the right to require a Loan
Party to repurchase the Accounts from such Credit Card Processor;

(i) is due from a Credit Card Issuer or Credit Card Processor of the applicable
credit card which is the subject of any bankruptcy or insolvency proceedings;

(j) which is evidenced by “chattel paper” or an “instrument” of any kind unless
such “chattel paper” or “instrument” is in the possession of the Administrative
Agent, and to the extent necessary or appropriate, endorsed to the
Administrative Agent; or

(k) which the Administrative Agent determines in its Permitted Discretion to be
uncertain of collection or which do not meet such other reasonable eligibility
criteria for Credit Card Receivables as the Administrative Agent may determine
in its Permitted Discretion.

“Eligible Inventory” means, as of the date of determination thereof, without
duplication, items of Inventory of a Borrower that are finished goods,
merchantable and readily saleable to the public in the ordinary course of the
Borrowers’ business deemed by the Administrative Agent in its Permitted
Discretion to be eligible for inclusion in the calculation of the Borrowing
Base, in each case that, except as otherwise agreed by the Administrative Agent,
(i) complies with each of the representations and warranties respecting
Inventory made by the Borrowers in the Loan Documents, and (i) is not excluded
as ineligible by virtue of one or more of the criteria set forth below. Except
as otherwise agreed by the Administrative Agent, in its Permitted Discretion,
the following items of Inventory shall not be included in Eligible Inventory:

(a) Inventory that is not solely owned by a Borrower or a Borrower does not have
good and valid title thereto;

(b) Inventory that is leased by or is on consignment to a Borrower or which is
consigned by a Borrower to a Person which is not a Loan Party;

(c) Inventory that is not located in the United States of America (excluding
territories or possessions of the United States) at a location that is owned or
leased by a Borrower, except

 

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(i) Inventory in transit between such owned or leased locations, or (ii) to the
extent that the Borrowers have furnished the Administrative Agent with (A) any
UCC financing statements or other documents that the Administrative Agent may
determine to be necessary to perfect its security interest in such Inventory at
such location, and (B) a Collateral Access Agreement executed by the Person
owning any such location on terms reasonably acceptable to the Administrative
Agent;

(d) Inventory that is located in a distribution center leased by a Loan Party or
leased by a distribution center operator under an agreement with a Loan Party)
unless (i) the applicable lessor or and (if applicable) the distribution center
operator has delivered to the Administrative Agent a Collateral Access Agreement
or (ii) a Reserve based on rent with respect to such location has been
established by the Administrative Agent in its Permitted Discretion;

(e) Inventory that is comprised of goods which (i) are damaged, defective,
“seconds,” or otherwise unmerchantable, (ii) are to be returned to the vendor,
(iii) are obsolete, or custom items, work in process, raw materials, or that
constitute spare parts, promotional, marketing, packaging and shipping materials
or supplies used or consumed in a Borrower’s business, (iv) are seasonal in
nature and which have been packed away for sale in the subsequent season,
(v) not in compliance with all standards imposed by any Governmental Authority
having regulatory authority over such Inventory, its use or sale, or (vi) are
bill and hold goods;

(f) Inventory which does not conform to all representations, warranties or other
provisions in the Loan Documents relating to Inventory;

(g) Inventory that is not subject to a perfected first priority security
interest in favor of the Administrative Agent or that is subject to any other
Lien (except Permitted Encumbrances described in clauses (a), (b) and (j);

(h) Inventory that consists of samples, labels, bags, packaging, and other
similar non-merchandise categories;

(i) Inventory that is not insured in compliance with the provisions of
Section 5.10 hereof;

(j) Inventory that has been sold but not yet delivered or as to which a Borrower
has accepted a deposit;

(k) Inventory that is subject to any licensing, patent, royalty, trademark,
trade name or copyright agreement with any third party from which any Borrower
or any of its Subsidiaries has received notice of a dispute in respect of any
such agreement, in any such case, involving an amount in excess of $100,000 in
the aggregate in any Fiscal Year; or

(l) Inventory acquired in a Permitted Acquisition or which is not of the type
usually sold in the ordinary course of the Borrowers’ business, unless and until
the Administrative Agent has completed or received (A) an appraisal of such
Inventory from appraisers reasonably satisfactory to the Administrative Agent
and establishes Inventory advance rate and Inventory Reserves (if applicable)
therefor, and otherwise agrees that such Inventory shall be deemed Eligible
Inventory, and (B) such other due diligence as the Administrative Agent may
reasonably require, all of the results of the foregoing to be reasonably
satisfactory to the Administrative Agent.

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises,

 

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licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the
environment, including those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.

“Environmental Liability” means any liability, obligation, damage, loss, claim,
action, suit, judgment, order, fine, penalty, fee, expense, or cost, contingent
or otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Borrower, any other Loan
Party or any of their respective Subsidiaries directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal or presence of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment in violation
of any Environmental Law or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.

“Equipment” shall have the meaning set forth in the UCC.

“Equipment Term Loan Agreement” means the Master Loan Agreement, dated on or
about the date hereof, by and among Borrowers, Guarantors and Equipment Term
Loan Lender.

“Equipment Term Loan Documents” means, collectively, the following; (a) the
Equipment Term Loan Agreement and (b) all agreements, documents and instruments
at any time executed and/or delivered in connection therewith.

“Equipment Term Loan Facility” means the term loans made pursuant to and
evidenced by the Equipment Term Loan Documents.

“Equipment Term Loan Lender” means Wells Fargo Equipment Finance, Inc., a
Minnesota corporation, and its successors and assign, including any replacement
or successor lender.

“Equipment Term Loan Priority Collateral” has the meaning assigned to the term
“WFEFI Priority Collateral” in the Intercreditor Agreement.

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Lead Borrower within the meaning of Section 414(b)
or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Lead Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a

 

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cessation of operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Lead
Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to
terminate, the treatment of a Plan amendment as a termination under Sections
4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which
constitutes grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Lead
Borrower or any ERISA Affiliate.

“Event of Default” shall have the meaning provided in Section 8.01. An Event of
Default shall be deemed to be continuing unless and until that Event of Default
has been duly waived as provided in Section 10.03 hereof or is cured in
accordance with the terms of the applicable Loan Document or otherwise cured in
a manner reasonably satisfactory to the Administrative Agent in its Permitted
Discretion, if such Event of Default is capable of being cured as determined by
the Administrative Agent.

“Excess Availability” means, as of any date of determination thereof by the
Administrative Agent, the result, if a positive number, of: (a) the Loan Cap,
minus, without duplication, (b) the sum of (i) the aggregate unpaid balance of
Credit Extensions, plus (ii) past due payables that are past due by more than
sixty (60) days (other than payables being contested or disputed by a Borrower
in good faith). For purposes of determining the outstanding trade payables in
the ordinary course, Lead Borrower shall provide to the Administrative Agent the
summary reports of payables with each Borrowing Base Certificate, together with
such other information with respect thereto as Administrative Agent may from
time to time reasonably request.

“Excluded Swap Obligations” means, with respect to any Loan Party, any
obligation (a “Swap Obligation”) to pay or perform under any agreement, contract
or transaction that constitutes a “swap” within the meaning of Section 1a(47) of
the Commodity Exchange Act, if, and to the extent that, all or a portion of the
guarantee of such Loan Party of, or the grant by such Loan Party of a security
interest to secure, such Swap Obligation (or any guarantee thereof) is or
becomes illegal under the Commodity Exchange Act or any rule, regulation or
order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of such Loan Party’s failure
for any reason not to constitute an “eligible contract participant” as defined
in the Commodity Exchange Act. If a Swap Obligation arises under a master
agreement governing more than one swap, such exclusion shall apply only to the
portion of such Swap Obligation that is attributable to swaps for which such
Guaranty or security interest is or becomes illegal or unlawful under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof).

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the LC Issuer or any other recipient of any payment to be made by or on account
of any obligation of the Loan Parties hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which any Loan Party is located or any of its offices and
(c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Lead Borrower under Section 10.13), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new Lending Office) or is
attributable to such Foreign Lender’s failure or inability (other than as a
result of a Change in Law) to comply with Section 3.01(e), except to the extent
that such

 

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Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from the Loan Parties with respect to such withholding tax pursuant to
Section 3.01(a).

“Executive Order” shall have the meaning provided in Section 10.18.

“Existing Credit Agreement” means the Amended and Restated Credit Agreement,
dated as of October 28, 2011, by and among Borrowers, Wells Fargo, as agent, and
the lenders party thereto, as amended.

“Existing Letters of Credit” means, collectively, the letters of credit issued
for the account of a Borrower pursuant to the Existing Credit Agreement listed
on Schedule 1.01(a) hereto, all of which shall be deemed and shall constitute
Letters of Credit issued hereunder for all purposes of this Agreement, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.

“Existing Obligations” shall have the meaning provided in Section 10.25.

“Extraordinary Receipt” means any cash received by or paid to or for the account
of any Person not in the ordinary course of business, including tax refunds,
pension plan reversions, proceeds of insurance (other than proceeds of business
interruption insurance to the extent such proceeds constitute compensation for
lost earnings), condemnation awards (and payments in lieu thereof), indemnity
payments and any purchase price adjustments.

“Facility Guaranty” means the Guaranty made by any Guarantors in favor of the
Administrative Agent and the other Credit Parties, in form reasonably
satisfactory to the Administrative Agent.

“Factored Receivables” means any Accounts of a Loan Party which have been
factored or sold by an account debtor of a Loan Party to Wells Fargo or any of
its Affiliates pursuant to a factoring arrangement or otherwise.

“February 2015 Dividend” means the dividend to be paid by Stein Mart on or
before February 28, 2015 in respect of the common stock of Stein Mart, which
dividend (a) is not to exceed $5.00 per share of common stock of Stein Mart and
(b) is not to exceed the amount of $230,000,000 in the aggregate.

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Wells Fargo
on such day on such transactions as determined by the Administrative Agent.

“Fee Letter” means any letter agreement that is entered into among the Borrowers
and the Administrative Agent, providing for fees then agreed to.

“Fiscal Month” means any fiscal month of any Fiscal Year in accordance with the
fiscal accounting calendar of the Lead Borrower.

 

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“Fiscal Quarter” means any fiscal quarter of any Fiscal Year in accordance with
the fiscal accounting calendar of the Lead Borrower.

“Fiscal Year” means any period of twelve consecutive months ending on the
Saturday closest to the last day in January of any calendar year.

“Foreign Asset Control Regulations” shall have the meaning provided
Section 10.18.

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Lead Borrower is resident for tax
purposes. For purposes of this definition, the United States, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.

“Freight Forwarders” means the persons listed on Schedule 1.01(b) hereto or such
other person or persons as may be selected by a Borrower after the date hereof
and after written notice by a Borrower to the Administrative Agent to handle the
receipt of Inventory within the United States of America and/or to clear
Inventory through the Bureau of Customs and Border Protection (formerly the
Customs Service) or other domestic or foreign export control authorities or
otherwise perform port of entry services to process Inventory imported by such
Borrower from outside the United States of America.

“Fronting Fee” has the meaning assigned to such term in Section 2.03(j).

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Governmental Litigation” shall have the meaning provided in Section 6.03(b).

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the

 

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obligee in respect of such Indebtedness or other obligation of the payment or
performance thereof or to protect such obligee against loss in respect thereof
(in whole or in part), or (b) any Lien on any assets of such Person securing any
Indebtedness or other obligation of any other Person, whether or not such
Indebtedness or other obligation is assumed by such Person (or any right,
contingent or otherwise, of any holder of such Indebtedness to obtain any such
Lien). The amount of any Guarantee shall be deemed to be an amount equal to the
stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term “Guarantee” as a
verb has a corresponding meaning.

“Guarantor” means(a) Stein Mart Holding Corp., a Florida corporation and
(b) each Subsidiary of the Borrowers (other than any CFC and Stein Mart Air,
Inc., so long as the Borrowers are in compliance with the requirements of
Section 7.16) that shall be required to execute and deliver a Facility Guaranty
pursuant to Section 6.12.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

“Honor Date” shall have the meaning provided in Section 2.03(c)(i).

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

(b) the maximum amount of all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and, in each case, not past due for more than ninety (90) days after
the date on which such trade account payable was created);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

(f) all Attributable Indebtedness of such Person;

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person (including, without limitation, Disqualified Stock, or any
warrant, right or option to acquire such Equity Interest, valued, in the case of
a redeemable preferred interest, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends; and

 

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(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer in the nature of a general partner,
unless such Indebtedness is non-recourse to such Person. The amount of any net
obligation under any Swap Contract on any date shall be deemed to be the Swap
Termination Value thereof as of such date.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitees” shall have the meaning provided in Section 10.04(b).

“Information” shall have the meaning provided in Section 10.07.

“Intellectual Property” means all present and future: (a) trade secrets,
know-how and other proprietary information; (b) trademarks, trademark
applications, internet domain names, service marks, trade dress, trade names,
business names, designs, logos, slogans (and all translations, adaptations,
derivations and combinations of the foregoing) indicia and other source and/or
business identifiers, and all registrations or applications for registrations
which have heretofore been or may hereafter be issued thereon throughout the
world; (c) copyrights and copyright applications (including copyrights for
computer programs) and all tangible and intangible property embodying the
copyrights, unpatented inventions (whether or not patentable); (d) patents and
patent applications; (e) industrial design applications and registered
industrial designs; (f) license agreements related to any of the foregoing and
income therefrom; (g) books, records, writings, computer tapes or disks, flow
diagrams, specification sheets, computer software, source codes, object codes,
executable code, data, databases and other physical manifestations, embodiments
or incorporations of any of the foregoing; (h) all other intellectual property;
and all common law and other rights throughout the world in and to all of the
foregoing.

“Intercreditor Agreement” means the Intercreditor Agreement, dated of even date
herewith, by and between Administrative Agent and Equipment Term Loan Lender.

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a LIBO Rate Loan
exceeds three (3) months, the respective dates that fall every three months
after the beginning of such Interest Period shall also be Interest Payment
Dates, (b) as to any Base Rate Loan (including a Swing Line Loan), (i) so long
as no Cash Dominion Event has occurred and is continuing, the first day after
the end of each calendar month, and (ii) upon the occurrence and during the
continuance of a Cash Dominion Event, the first day after the end of each
calendar month, and (c) the Maturity Date.

“Interest Period” means, as to each LIBO Rate Loan, the period commencing on the
date such LIBO Rate Loan is disbursed or converted to or continued as a LIBO
Rate Loan and ending on the date one, two, or three months thereafter, as
selected by the Lead Borrower in its Committed Loan Notice; provided that:

(a) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

(b) any Interest Period 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 calendar month at the end of such Interest Period;

 

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(c) no Interest Period shall extend beyond the Maturity Date; and

(d) notwithstanding the provisions of clause (c) no Interest Period shall have a
duration of less than one (1) month, and if any Interest Period applicable to a
LIBO Borrowing would be for a shorter period, such Interest Period shall not be
available hereunder.

For purposes hereof, the date of a Borrowing initially shall be the date on
which such Borrowing is made and thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.

“Internal Control Event” means an uncorrected material weakness in, or a fraud
which pertains to and that involves management or other employees who have a
significant role in, the Lead Borrower’s and/or its Subsidiaries’ internal
controls over financial reporting, in each case as described in the Securities
Laws; provided, that, a material weakness which has been identified by
Borrowers’ Registered Public Accounting Firm after February 1, 2014 and which
has been remediated in the opinion of such Registered Public Accounting Firm
shall not constitute an Internal Control Event even though such remediation has
not yet been fully tested except if Administrative Agent determines in its
Permitted Discretion that such Internal Control Event has not been corrected
after such testing.

“Inventory” has the meaning given that term in the UCC, and shall also include,
without limitation, all: (a) goods which (i) are leased by a Person as lessor,
(ii) are held by a Person for sale or lease or to be furnished under a contract
of service, (iii) are furnished by a Person under a contract of service, or
(iv) consist of raw materials, work in process, or materials used or consumed in
a business; (b) goods of said description in transit; (c) goods of said
description which are returned, repossessed or rejected; and (d) packaging,
advertising, and shipping materials related to any of the foregoing.

“Inventory Reserves” means such reserves as may be established from time to time
by the Administrative Agent in the Administrative Agent’s Permitted Discretion
with respect to the determination of the saleability, at retail, of the Eligible
Inventory or which reflect such other factors as affect the market value of the
Eligible Inventory. Without limiting the generality of the foregoing, Inventory
Reserves may, in the Administrative Agent’s Permitted Discretion, include (but
are not limited to) reserves based on: (a) obsolescence; (b) seasonality;
(c) Shrink; (d) imbalance; (e) change in Inventory character; (f) change in
Inventory composition; (g) change in Inventory mix; (h) markdowns (both
permanent and point of sale); (i) retail markons and markups inconsistent with
prior period practice and performance, industry standards, current business
plans or advertising calendar and planned advertising events; (j) out-of-date
and/or expired Inventory; and (k) slow moving Inventory.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or interest in, another Person, or (c) any
Acquisition, or (d) any other investment of money or capital in order to obtain
a profitable return. For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment. For avoidance
of doubt, “Investment” does not include capital improvements to existing assets
or the purchase of real or personal property to be used in the ordinary course
of business.

“IP Lien” has the meaning given that term in clause (r) of the definition of
Permitted Encumbrances.

 

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“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter Credit
Application, the Standby Letter of Credit Agreement or Commercial Letter of
Credit Agreement, applicable, and any other document, agreement and instrument
entered into by the LC Issuer and the Borrower (or any Subsidiary) or in favor
of the LC Issuer and relating to any such Letter of Credit.

“Joinder Agreement” means an agreement, in form satisfactory to the
Administrative Agent pursuant to which, among other things, a Person becomes a
party to, and bound by the terms of, this Agreement and/or the other Loan
Documents in the same capacity and to the same extent as either a Borrower or a
Guarantor, as the Administrative Agent may determine.

“Laws” means each international, foreign, Federal, state and local statute,
treaty, rule, guideline, regulation, ordinance, code and administrative or
judicial precedent or authority, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and each applicable administrative
order, directed duty, request, license, authorization and permit of, and
agreement with, any Governmental Authority, in each case whether or not having
the force of law.

“LC Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

“LC Issuer” means (a) Wells Fargo in its capacity as issuer of Letters of Credit
hereunder, or any successor issuer of Letters of Credit hereunder (which
successor may only be a Lender selected by the Administrative Agent in its
discretion), and (b) with respect to the Existing Letters of Credit and until
such Existing Letters of Credit expire or are returned undrawn, Wells Fargo in
its capacity as issuer of the Existing Letters of Credit under the Existing
Credit Agreement. The LC Issuer may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of the LC Issuer and/or for such
Affiliate to act as an advising, transferring, confirming and/or nominated bank
in connection with the issuance or administration of any such Letter of Credit,
in which case the term “LC Issuer” shall include any such Affiliate with respect
to Letters of Credit issued by such Affiliate.

“LC Obligations” means, as at any date of determination, the aggregate undrawn
amount available to be drawn under all outstanding Letters of Credit. For
purposes of computing the amounts available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of any Rule under the ISP
or any article of UCP 600, such Letter of Credit shall be deemed to be
“outstanding” in the amount so remaining available to be drawn.

“Lead Borrower” shall have the meaning provided in the introductory paragraph
hereto.

“Lease” means any agreement, whether written or oral, no matter how styled or
structured, pursuant to which a Loan Party is entitled to the use or occupancy
of any space in a structure, land, improvements or premises for any period of
time.

 

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“Lender” shall have the meaning provided in the introductory paragraph hereto
and, as the context requires, includes the Swing Line Lender.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

“Letter of Credit” means (a) each Standby Letter of Credit, and (b) each
Commercial Letter of Credit and shall include the Existing Letters of Credit.

“Letter of Credit Application” means an application for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the LC
Issuer.

“Letter of Credit Expiration Date” means the day that is seven (7) days prior to
the Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).

“Letter of Credit Fee” shall have the meaning provided in Section 2.03(i).

“Letter of Credit Sublimit” means an amount equal to $25,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Tranche A
Revolving Loan Commitments. A permanent reduction of the Aggregate Tranche A
Revolving Loan Commitments shall not require a corresponding pro rata reduction
in the Letter of Credit Sublimit; provided, however, that if the Aggregate
Tranche A Revolving Loan Commitments are reduced to an amount less than the
Letter of Credit Sublimit, then the Letter of Credit Sublimit shall be reduced
to an amount equal to (or, at Lead Borrower’s option, less than) the Aggregate
Commitments.

“LIBO Borrowing” means a Borrowing comprised of LIBO Rate Loans.

“LIBO Rate” means the rate per annum rate appearing on Reuters Screen LIBOR01
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service) two (2) Business Days prior to the commencement of
the requested Interest Period, for a term, and in an amount, comparable to the
Interest Period and the amount of the LIBO Rate Loan requested (whether as an
initial LIBO Rate Loan or as a continuation of a LIBO Rate Loan or as a
conversion of a Base Rate Loan to a LIBO Rate Loan) by Borrowers in accordance
with the Loan Documents (and, if any such rate is below zero, the LIBO Rate
shall be deemed to be zero), which determination shall be made by Administrative
Agent and shall be conclusive in the absence of manifest error.

“LIBO Rate Loan” means a Committed Loan that bears interest at a rate based on
the Adjusted LIBO Rate.

“Lien” means (a) any mortgage, deed of trust, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement in
the nature of a security interest of any kind or nature whatsoever (including
any conditional sale, Capital Lease Obligation, Synthetic Lease Obligation, or
other title retention agreement, any easement, right of way or other encumbrance
on title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing) and (b) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

“Liquidation” means the exercise by the Administrative Agent of those rights and
remedies accorded to the Administrative Agent under the Loan Documents and
applicable Law as a creditor of the Loan Parties with respect to the realization
on the Collateral, including (after the occurrence and during

 

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the continuation of an Event of Default) the conduct by the Loan Parties acting
with the consent of the Administrative Agent, of any public, private or “going
out of business”, “store closing”, or other similarly themed sale or other
disposition of the Collateral for the purpose of liquidating the Collateral.
Derivations of the word “Liquidation” (such as “Liquidate”) are used with like
meaning in this Agreement.

“Loan” means an extension of credit by or on behalf of a Lender to a Borrower
under Article II in the form of a Committed Loan or a Swing Line Loan.

“Loan Account” shall have the meaning provided in Section 2.11(a).

“Loan Cap” means, at any time of determination, the lesser of (a) the Aggregate
Commitments or (b) the Borrowing Base.

“Loan Documents” means this Agreement, each Note, each Issuer Document, the Fee
Letter, all Borrowing Base Certificates, the Blocked Account Agreements, the DDA
Notifications, the Credit Card Notifications, the Security Documents, the
Facility Guaranty, the Intercreditor Agreement and any other instrument or
agreement now or hereafter executed and delivered in connection herewith, or in
connection with any transaction arising out of any Cash Management Services and
Bank Products provided by the Administrative Agent or any of its Affiliates,
each as amended and in effect from time to time.

“Loan Parties” means, collectively, the Borrowers and each Guarantor.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent), or financial condition of Loan Parties and their Subsidiaries
taken as a whole; (b) a material impairment of the ability of any Loan Party to
perform its obligations under any Loan Document to which it is a party; or (c) a
material impairment of the rights and remedies of the Administrative Agent or
the Lenders under any Loan Document or a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party; or (d) a material adverse change in
the Collateral or its value. In determining whether any individual event would
result in a Material Adverse Effect, notwithstanding that such event in and of
itself does not have such effect, a Material Adverse Effect shall be deemed to
have occurred if the cumulative effect of such event and all other then existing
events would result in a Material Adverse Effect.

“Material Contract” means, with respect to any Person, (a) each contract to
which such Person is a party involving aggregate consideration payable to or by
such Person of $5,000,000 or more (other than inventory purchase orders in the
ordinary course of business) in any Fiscal Year, and (b) any other contract or
other agreement (other than the Loan Documents), whether written or oral, to
which any Borrower is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto would have a Material
Adverse Effect.

“Material Indebtedness” means Indebtedness (other than the Obligations) of the
Loan Parties in an aggregate principal amount exceeding $5,000,000. For purposes
of determining the amount of Material Indebtedness at any time, (a) the amount
of the obligations in respect of any Swap Contract at such time shall be
calculated at the Swap Termination Value thereof, (b) undrawn committed or
available amounts shall be included (except such amounts under the Loan
Documents), and (c) all amounts owing to all creditors under any combined or
syndicated credit arrangement shall be included.

“Maturity Date” means February 3, 2020.

 

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“Maximum Rate” shall have the meaning provided in Section 10.09.

“Measurement Period” means, at any date of determination, the most recently
completed twelve (12) Fiscal Months of the Lead Borrower for which
Administrative Agent has received financial statements pursuant to Section 6.01
hereof.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Lead Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.

“Net Proceeds” means:

(a) with respect to any Disposition by any Loan Party or any of its
Subsidiaries, or any Extraordinary Receipt received or paid to the account of
any Loan Party or any of its Subsidiaries, the excess, if any, of (i) the sum of
cash and cash equivalents received in connection with such transaction
(including any cash or cash equivalents received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) over (ii) the sum of (A) the principal amount of any
Indebtedness that is secured by the applicable asset by a Lien permitted
hereunder which is senior to the Administrative Agent’s Lien on such asset and
that is required to be repaid (or to establish an escrow for the future
repayment thereof) in connection with such transaction (other than Indebtedness
under the Loan Documents), and (B) the reasonable and customary out-of-pocket
expenses incurred by such Loan Party or such Subsidiary in connection with such
transaction (including, without limitation, appraisals, and brokerage, legal,
title and recording or transfer tax expenses and commissions) paid by any Loan
Party to third parties (other than Affiliates); and

(b) with respect to the sale or issuance of any Equity Interest by any Loan
Party or any of its Subsidiaries, or the incurrence or issuance of any
Indebtedness by any Loan Party or any of its Subsidiaries, (i) fifty percent
(50%) of the excess, in the case of any such sale or issuance of any Equity
Interest, and (ii) one hundred percent (100%) of the excess, in the case of any
such incurrence or issuance of any Indebtedness, of (A) the sum of the cash and
cash equivalents received in connection with such transaction over (B) the
underwriting discounts and commissions, and other reasonable and customary
out-of-pocket expenses, incurred by such Loan Party or such Subsidiary in
connection therewith.

“Net Recovery Percentage” means the fraction, expressed as a percentage (a) the
numerator of which is the amount equal to the recovery on the aggregate amount
of the applicable category of Eligible Inventory at such time on a “going out of
business sale” basis as set forth in the most recent acceptable inventory
appraisal received by the Administrative Agent in accordance with the
requirements of this Agreement, net of operating expenses, liquidation expenses
and commissions reasonably anticipated in the disposition of such assets and
(b) the denominator of which is the original cost of the aggregate amount of the
Eligible Inventory subject to such appraisal.

“Non-Consenting Lender” shall have the meaning provided in Section 10.01.

“Non-Extension Notice Date” shall have the meaning provided in
Section 2.03(b)(iii).

“Note” means (a) a promissory note made by the Borrowers in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit C-1,
and (b) the Swing Line Note, as each may be amended, supplemented or modified
from time to time.

 

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“NPL” means the National Priorities List under CERCLA.

“Obligations” means (a) all advances to, and debts (including principal,
interest, fees, costs, and expenses), liabilities, obligations, covenants,
indemnities, and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit (including payments in
respect of reimbursement of disbursements, interest thereon and obligations to
provide cash collateral therefor), whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest, fees, costs, expenses and
indemnities that accrue after the commencement by or against any Loan Party or
any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest
,fees, costs, expenses and indemnities are allowed or allowable claims in such
proceeding, and (b) Bank Product Obligations; provided, that, the Obligations
shall not include any Excluded Swap Obligations.

“Omnibus Share Compensation Plan” means the Stein Mart 2001 Omnibus Plan, as
amended, modified, supplemented, restated or replaced from time to time.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity, and (d) in each case, all shareholder or other
equity holder agreements, voting trusts and similar arrangements to which such
Person is a party or which is applicable to its Equity Interests and all other
arrangements relating to the Control or management of such Person.

“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

“Outstanding Amount” means (a) with respect to Committed Loans and Swing Line
Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any Borrowings and prepayments or repayments of Committed Loans
and Swing Line Loans, as the case may be, occurring on such date; (b) with
respect to Tranche A Revolving Loans and Swing Line Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
Borrowings and prepayments or repayments of Tranche A Revolving Loans and Swing
Line Loans, as the case may be, occurring on such date; (c) with respect to
Tranche A-1 Revolving Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any Borrowings and prepayments or
repayments of Tranche A-1 Revolving Loans occurring on such date; and (d) with
respect to any LC Obligations on any date, the amount of such LC Obligations on
such date after giving effect to any LC Credit Extension occurring on such date
and any other changes in the aggregate amount of the LC Obligations as of such
date.

“Overadvance” means a Credit Extension to the extent that, immediately after its
having been made, Excess Availability is less than zero.

“Participant” shall have the meaning provided in Section 10.06(d).

 

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“Payment Conditions” means, at the time of determination with respect to any
specified transaction or payment, that (a) no Default or Event of Default then
exists or would arise as a result of entering into such transaction or the
making such payment, unless waived by the Administrative Agent, (b) after giving
effect to such transaction or payment, the Pro Forma Availability Condition has
been satisfied and the Consolidated Fixed Charge Coverage Ratio, as projected on
a pro-forma basis for the twelve (12) months following such transaction or
payment, will be equal to or greater than 1.0:1.0. Prior to undertaking any
transaction or payment which is subject to the Payment Conditions, the Loan
Parties shall deliver to the Administrative Agent evidence of satisfaction of
the conditions contained in clause (b) above on a basis (including, without
limitation, giving due consideration to results for prior periods) reasonably
satisfactory to the Administrative Agent.

“PBGC” means the Pension Benefit Guaranty Corporation.

“PCAOB” means the Public Company Accounting Oversight Board.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Lead Borrower
or any ERISA Affiliate or to which the Lead Borrower or any ERISA Affiliate
contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five plan years.

“Permitted Acquisition” means an Acquisition in which all of the following
conditions are satisfied:

(a) as of the date of such Acquisition and after giving effect thereto, no
Default or Event of Default shall exist or have occurred and be continuing;

(b) such Acquisition shall have been approved by the board of directors of the
Person (or similar governing body if such Person is not a corporation) which is
the subject of such Acquisition and such Person shall not have announced that it
will oppose such Acquisition or shall not have commenced any action which
alleges that such Acquisition shall violate applicable Law;

(c) the Lead Borrower shall have furnished the Administrative Agent with fifteen
(15) days’ prior written notice of such intended Acquisition and shall have
furnished the Administrative Agent with a current draft of the Acquisition
Documents (and final copies thereof as and when executed), a summary of any due
diligence undertaken by the Loan Parties in connection with such Acquisition,
appropriate financial statements of the Person which is the subject of such
Acquisition, pro forma projected financial statements for the twelve (12) month
period following such Acquisition after giving effect to such Acquisition
(including balance sheets, cash flows and income statements by month for the
acquired Person, individually, and on a Consolidated basis with all Loan
Parties), and such other information as the Administrative Agent may reasonably
require, all of which shall be reasonably satisfactory to the Administrative
Agent;

(d) either (i) the legal structure of the Acquisition shall be acceptable to the
Administrative Agent in its Permitted Discretion, or (ii) the Loan Parties shall
have provided the Administrative Agent with a favorable solvency opinion from an
unaffiliated third party valuation firm reasonably satisfactory to the
Administrative Agent;

 

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(e) after giving effect to the Acquisition, if the Acquisition is an Acquisition
of the Equity Interests, a Loan Party shall acquire and own, directly or
indirectly, not less than a majority of the Equity Interests having any voting
rights;

(f) any assets acquired shall be utilized in, and if the Acquisition involves a
merger, consolidation or stock acquisition, the Person which is the subject of
such Acquisition shall be engaged in, a business otherwise permitted to be
engaged in by a Borrower under this Agreement;

(g) if the Person which is the subject of such Acquisition will be maintained as
a Subsidiary of a Loan Party, or if the assets acquired in an acquisition will
be transferred to a Subsidiary which is not then a Loan Party, such Subsidiary
shall have been joined as a “Borrower” hereunder or as a Guarantor, as the
Administrative Agent shall determine, and the Administrative Agent shall have
received a first priority security interest in any Equity Interests in such
Subsidiary held by any Loan Party, and in such Subsidiary’s Inventory, Accounts,
and other property of the same nature as then constitutes Collateral under the
Security Documents; and

(h) the Loan Parties shall have satisfied the Payment Conditions.

“Permitted Discretion” means as used in this Agreement and the other Loan
Documents with reference to the Administrative Agent, a determination made in
good faith in the exercise of its reasonable business judgment based on how an
asset-based lender with similar rights providing a credit facility of the type
set forth herein would act in similar circumstances at the time with the
information then available to it.

“Permitted Disposition” means any of the following:

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

(b) bulk sales of other dispositions of the Inventory of a Loan Party not in the
ordinary course of business in connection with Store closings, at arm’s length,
provided, that, except as Administrative Agent may otherwise agree in its sole
discretion, such Store closures and related Inventory dispositions shall not
exceed (Store closings permitted pursuant to this clause (b) are referred to as
“Permitted Store Closings”): (i) during any one (1) year period, including the
one (1) year period immediately preceding the Closing Date, the number of retail
store locations closed or sold by Borrowers (excluding for the purposes hereof
retail store locations that Borrowers are in the process of closing as of the
Closing Date) minus the number of Stores opened by Borrowers during any such one
(1) year period, shall not exceed the amount equal to ten (10%) percent of the
number of store locations of Borrowers as of the day immediately preceding the
commencement of any such one (1) year period, and (ii) in the aggregate during
any three (3) year period from and after the Closing Date, fifteen (15%) percent
of the number of the Loan Parties’ Stores in existence as of the Closing Date
(net of new Store openings), provided, that, (A) all sales of Inventory in
connection with five (5) or more Store closings which occur substantially
simultaneously or pursuant to any Store closing plan adopted by Loan Parties
(regardless of when the Store closings actually occur) shall be conducted with
the assistance of professional liquidators reasonably acceptable to the
Administrative Agent, (B) the Administrative Agent shall have received not less
than ten (10) Business Days prior written notice of such sale or Store closing,
which notice shall set forth in reasonable detail satisfactory to the
Administrative Agent, the parties to such sale or other disposition, the assets
to be sold or otherwise disposed of, the purchase price and the manner of
payment thereof and such other information with respect thereto as the
Administrative Agent may reasonably request, (C) as of the date of such sale or
other disposition and after giving effect thereto, no Event of Default shall
exist or have occurred and be continuing, and (D) all Net Proceeds received in
connection therewith shall be applied to the Obligations if then required in
accordance with Section 2.05 hereof;

 

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(c) licenses of Intellectual Property of a Loan Party or any of its Subsidiaries
in the ordinary course of business;

(d) licenses for the conduct of licensed departments within the Loan Parties’
Stores in the ordinary course of business; provided that, if requested by the
Administrative Agent, the Administrative Agent shall have entered into an
intercreditor agreement with the Person operating such licensed department on
terms and conditions reasonably satisfactory to the Administrative Agent

(e) Dispositions of Equipment (i) in the ordinary course of business that is
substantially worn, damaged, obsolete or, in the judgment of a Loan Party, no
longer useful or necessary in its business or that of any Subsidiary and is not
replaced with similar property having at least equivalent value, and (ii) in
connection with Permitted Store Closings (which Permitted Dispositions described
in this clause (e) shall be in addition to, and not in limitation of, the
Dispositions by any Borrower and its Subsidiaries of other assets and properties
permitted in clause (j) of this definition);

(f) sales, transfers and dispositions among the Loan Parties or by any
Subsidiary to a Loan Party;

(g) sales, transfers and dispositions by any Subsidiary which is not a Loan
Party to another Subsidiary that is not a Loan Party;

(h) the issuance and sale by any Borrower of Equity Interests of such Borrower
after the date hereof; provided, that, (i) other than such Equity Interests at
any time issued to any of Borrowers’ employees, directors, agents and
consultants as additional compensation pursuant to the Omnibus Share
Compensation Plan, the Administrative Agent shall have received not less than
ten (10) Business Days’ prior notice of such issuance and sale by such Borrower,
which notice shall specify the parties to whom such Equity Interests are to be
sold, the terms of such sale, the total amount which it is anticipated will be
realized from the issuance and sale of such Equity Interests and the Net
Proceeds which it is anticipated will be received by such Borrower from such
sale, (ii) such Borrower shall not be required to pay any cash dividends or
repurchase or redeem such Equity Interests or make any other payments in respect
thereof, except as otherwise permitted in Section 7.06 hereof, (iii) the terms
of such Equity Interests, and the terms and conditions of the purchase and sale
thereof, shall not include any terms that include any limitation on the right of
any Borrower to request or receive Loans or Letters of Credit or the right of
any Borrower to amend or modify any of the terms and conditions of this
Agreement or any of the other Loan Documents or otherwise in any way relate to
or affect the arrangements of Borrowers with the Administrative Agent and
Lenders or are more restrictive or burdensome to any Borrower than the terms of
any Equity Interests in effect on the date hereof, and (iv) as of the date of
such issuance and sale and after giving effect thereto, no Default or Event of
Default shall exist or have occurred and be continuing;

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

(j) Dispositions by any Borrower and its Subsidiaries of other assets and
properties not otherwise described in clauses (a) through (i) above that are not
then included in the Borrowing Base, provided that (i) at the time of such
Disposition, no Default shall exist or would result from such Disposition,
(ii) the aggregate book value of all property Disposed of in reliance on this
clause (j) in any Fiscal Year shall not exceed $3,000,000, (iii) the purchase
price for such asset shall be paid to such

 

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Borrower or Subsidiary solely in cash, and (iv) subject to the Intercreditor
Agreement with respect to Net Proceeds of Equipment Term Loan Priority
Collateral, all Net Proceeds received in connection therewith shall be applied
to the Obligations if then required in accordance with Section 2.05 hereof;

(k) the sale of Factored Receivables by a Loan Party to Wells Fargo or any of
its Affiliates, provided that all Net Proceeds received in connection therewith
shall be applied to the Obligations if then required in accordance with
Section 2.05 hereof; and

(l) the granting of Permitted Encumbrances.

“Permitted Encumbrances” means:

(a) Liens imposed by law for Taxes that are not yet due or are being contested
in compliance with Section 6.04;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by applicable Law, arising in the ordinary course of business
and securing obligations that are not overdue or are being contested in
compliance with Section 6.04;

(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations, other than any Lien imposed by ERISA;

(d) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

(e) Liens in respect of judgments that would not constitute an Event of Default
hereunder;

(f) easements, covenants, conditions, restrictions, building code laws, zoning
restrictions, rights-of-way and similar encumbrances on real property imposed by
law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the
affected property or materially interfere with the ordinary conduct of business
of a Loan Party and such other minor title defects or survey matters that are
disclosed by current surveys that, in each case, do not materially interfere
with the current use of the real property;

(g) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased,
(iii) the direct or any contingent obligor with respect thereto is not changed,
and (iv) any renewal or extension of the obligations secured or benefited
thereby is otherwise permitted hereunder);

(h) Liens on fixed or capital assets acquired by any Loan Party which are
permitted under clause (c) of the definition of Permitted Indebtedness so long
as (i) such Liens and the Indebtedness secured thereby are incurred prior to or
within ninety (90) days after such acquisition, (ii) the Indebtedness secured
thereby does not exceed the cost of acquisition of such fixed or capital assets
and (iii) such Liens shall not extend to any other property or assets of the
Loan Parties;

(i) Liens in favor of the Administrative Agent;

 

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(j) landlords’ and lessors’ Liens in respect of rent not in default;

(k) possessory Liens in favor of brokers and dealers arising in connection with
the acquisition or disposition of Investments owned as of the date hereof and
Permitted Investments, provided that such liens (a) attach only to such
Investments and (b) secure only obligations incurred in the ordinary course and
arising in connection with the acquisition or disposition of such Investments
and not any obligation in connection with margin financing;

(l) Liens arising solely by virtue of any statutory or common law provisions
relating to banker’s liens, liens in favor of securities intermediaries, rights
of setoff or similar rights and remedies as to deposit accounts or securities
accounts or other funds maintained with depository institutions or securities
intermediaries;

(m) Liens arising from precautionary UCC filings regarding “true” operating
leases or, to the extent permitted under the Loan Documents, the consignment of
goods to a Loan Party;

(n) voluntary Liens on property (other than property of the type included in the
Borrowing Base) in existence at the time such property is acquired pursuant to a
Permitted Acquisition or on such property of a Subsidiary of a Loan Party in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition; provided, that, such Liens are not incurred in connection with or
in anticipation of such Permitted Acquisition and do not attach to any other
assets of any Loan Party or any Subsidiary;

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

(p) Liens in favor of customs and revenues authorities imposed by applicable Law
arising in the ordinary course of business in connection with the importation of
goods and securing obligations that are being contested in good faith by
appropriate proceedings, provided, that, (i) the applicable Loan Party or
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP and (ii) such contest effectively suspends collection of
the contested obligation and enforcement of any Lien securing such obligation;

(q) Liens of Equipment Term Loan Lender to secure the Indebtedness permitted by
clause (f) of the definition of Permitted Indebtedness; provided, that, such
Liens on any assets other than the Equipment Term Loan Priority Collateral shall
be subject and subordinate to the Liens of Administrative Agent on such assets
pursuant to the Intercreditor Agreement; and

(r) Liens in assets and properties of Borrowers that do not constitute
Collateral to secure Permitted Indebtedness permitted under clause (j) of the
definition of Permitted Indebtedness; provided, that, if any such Permitted
Indebtedness is secured by any of a Loan Party’s Intellectual Property (an “IP
Lien”), then the Person to whom such IP Lien is granted shall have entered into
an agreement with the Administrative Agent, in form and substance reasonably
satisfactory to Administrative Agent, pursuant to which (among other things)
such Person shall acknowledge and confirm that neither the granting of the IP
Lien nor any enforcement thereof by such Person shall in any manner limit,
impair or otherwise affect the Administrative Agent’s exercise of its
non-exclusive license rights granted to Administrative Agent with respect to
such Loan Party’s Intellectual Property pursuant to Section 17(b) of the
Security Agreement.

 

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“Permitted Indebtedness” means each of the following as long as no Default or
Event of Default exists or would arise from the incurrence thereof:

(a) Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and
any refinancings, refundings, renewals or extensions thereof; provided that
(i) the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder, and the direct or contingent
obligor with respect thereto is not changed as a result of or in connection with
such refinancing, refunding, renewal or extension, (ii) the result of such
extension, renewal or replacement shall not be an earlier maturity date or
decreased weighted average life of such Indebtedness, and (iii) the terms
relating to principal amount, amortization, maturity, collateral (if any) and
subordination (if any), and other material terms taken as a whole, of any such
refinancing, refunding, renewing or extending Indebtedness, and of any agreement
entered into and of any instrument issued in connection therewith, are no less
favorable in any material respect to the Loan Parties or the Lenders than the
terms of any agreement or instrument governing the Indebtedness being
refinanced, refunded, renewed or extended and the interest rate applicable to
any such refinancing, refunding, renewing or extending Indebtedness does not
exceed the then applicable market interest rate;

(b) Indebtedness of any Loan Party to any other Loan Party;

(c) purchase money Indebtedness of any Loan Party to finance the acquisition of
any fixed or capital assets, including Capital Lease Obligations and Synthetic
Lease Obligations, and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to
the acquisition thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof or
result in an earlier maturity date or decreased weighted average life thereof,
provided that, (i) the terms relating to principal amount, amortization,
maturity, collateral (if any) and subordination (if any), and other material
terms taken as a whole, of any such refinancing, refunding, renewing or
extending Indebtedness, and of any agreement entered into and of any instrument
issued in connection therewith, are no less favorable in any material respect to
the Loan Parties or the Lenders than the terms of any agreement or instrument
governing the Indebtedness being refinanced, refunded, renewed or extended and
the interest rate applicable to any such refinancing, refunding, renewing or
extending Indebtedness does not exceed the then applicable market interest rate,
and (ii) the aggregate principal amount of Indebtedness permitted by this clause
(c) shall not exceed $10,000,000 at any time outstanding and further provided
that, if requested by the Administrative Agent, the Loan Parties shall cause the
holders of such Indebtedness to enter into a Collateral Access Agreement on
terms reasonably satisfactory to the Administrative Agent;

(d) obligations (contingent or otherwise) of any Loan Party or any Subsidiary
thereof existing or arising under any Swap Contract, provided that such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
fluctuations in interest rates or foreign exchange rates, and not for purposes
of speculation or taking a “market view;” provided that the aggregate Swap
Termination Value thereof shall not exceed $2,500,000 at any time outstanding;

(e) contingent liabilities under surety bonds or similar instruments incurred in
the ordinary course of business in connection with the construction or
improvement of Stores;

 

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(f) the Indebtedness of the Loan Parties to Equipment Term Loan Lender under the
Equipment Term Loan Documents; provided, that, the aggregate original principal
amount of such Indebtedness shall not exceed $25,000,000 less the aggregate
amount of all repayments, repurchases or redemptions, whether optional or
mandatory, in respect thereof;

(g) Indebtedness with respect to the deferred purchase price for any Permitted
Acquisition, provided, that, (i) payment in cash of principal in respect of such
Indebtedness (other than in respect of working capital adjustments) shall only
be permitted if at the time of any such payment and after giving effect thereto,
Loan Parties have satisfied the Payment Conditions, and (ii) such Indebtedness
shall have a maturity which extends beyond the Maturity Date and shall be
subordinated to the Obligations on terms reasonably acceptable to the
Administrative Agent;

(h) Indebtedness of any Person that becomes a Subsidiary of a Loan Party in a
Permitted Acquisition, which Indebtedness is existing at the time such Person
becomes a Subsidiary of a Loan Party (other than Indebtedness incurred solely in
contemplation of such Person’s becoming a Subsidiary of a Loan Party);

(i) the Obligations; and

(j) Indebtedness not specifically described in clauses (a) through (i) above in
an aggregate principal amount not to exceed $15,000,000 at any time outstanding;
provided, that, if any such Permitted Indebtedness is secured by an IP Lien,
then the Person to whom such IP Lien is granted shall have entered into a
written agreement with the Administrative Agent as required by clause (r) of the
definition of Permitted Encumbrances.

“Permitted Investments” means each of the following as long as no Default or
Event of Default exists or would arise from the making of such Investment:

(a) readily marketable obligations issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
having maturities of not more than three hundred sixty (360) days from the date
of acquisition thereof; provided that the full faith and credit of the United
States of America is pledged in support thereof;

(b) commercial paper issued by any Person organized under the laws of any state
of the United States of America and rated at least “Prime-1” (or the then
equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by
S&P, in each case with maturities of not more than one hundred eighty (180) days
from the date of acquisition thereof;

(c) time deposits with, or insured certificates of deposit or bankers’
acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized
under the laws of the United States of America, any state thereof or the
District of Columbia or is the principal banking subsidiary of a bank holding
company organized under the laws of the United States of America, any state
thereof or the District of Columbia, and is a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial paper rated as
described in clause (c) of this definition and (iii) has combined capital and
surplus of at least $1,000,000,000, in each case with maturities of not more
than one hundred eighty (180) days from the date of acquisition thereof;

(d) fully collateralized repurchase agreements with a term of not more than
thirty (30) days for securities described in clause (a) above (without regard to
the limitation on maturity contained in such clause) and entered into with a
financial institution satisfying the criteria described in clause (c) above or
with any primary dealer and having a market value at the time that such
repurchase agreement is entered into of not less than one hundred percent
(100%) of the repurchase obligation of such counterparty entity with whom such
repurchase agreement has been entered into;

 

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(e) Investments, classified in accordance with GAAP as current assets of the
Loan Parties, in any money market fund, mutual fund, or other investment
companies that are registered under the Investment Company Act of 1940, as
amended, which are administered by financial institutions that have the highest
rating obtainable from either Moody’s or S&P, and which invest solely in one or
more of the types of securities described in clauses (a) through (d) above;

(f) Investments existing on the Closing Date, and set forth on Schedule 7.02,
but not any increase in the amount thereof or any other modification of the
terms thereof;

(g)(i) Investments by any Loan Party and its Subsidiaries in their respective
Subsidiaries outstanding on the date hereof, (ii) additional Investments by any
Loan Party and its Subsidiaries in other Loan Parties, and (iii) additional
Investments by Subsidiaries of any Borrower that are not Loan Parties in other
Subsidiaries that are not Loan Parties, provided, that, as to all of such
Investments, (A) within thirty (30) days after the end of each fiscal month,
Borrowers shall provide to Administrative Agent a report in form and substance
satisfactory to Administrative Agent of the outstanding amount of such
Investments as of the last day of the immediately preceding month and, in the
case of any Investments consisting of loans, indicating the amount of any loans
made and payments received during the immediately preceding month, (B) as of the
date of any such loan and after giving effect thereto, the Borrower making such
Investments shall be Solvent, and (C) as of the date of any such Investments and
after giving effect thereto, no Default or Event of Default shall exist or have
occurred and be continuing;

(h) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

(i) guarantees constituting Permitted Indebtedness;

(j) Investments by any Loan Party in Swap Contracts entered into in the ordinary
course of business and for bona fide business (and not speculative purposes) to
protect against fluctuations in interest rates in respect of the Obligations;

(k) Investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in the ordinary course of business;

(l) advances to officers, directors and employees of the Loan Parties and
Subsidiaries in the ordinary course of business in an amount not to exceed
$500,000 to any individual at any time or in an aggregate amount not to exceed
$500,000 at any time outstanding, for (i) reasonably and necessary work-related
travel or other ordinary business expenses to be incurred by such employee in
connection with their work for such Borrower and (ii) reasonable and necessary
relocation expenses of such employees (including home mortgage financing for
relocated employees);

(m) Investments constituting Permitted Acquisitions and Permitted Indebtedness;

(n) Investments with respect to the Split-Dollar Life Insurance Plan and the
Deferred Compensation Plan consisting of (i) the Loan Parties’ purchase of life
insurance policies from time to

 

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time for the purpose of offsetting liabilities which the Loan Parties anticipate
will arise with respect to each such Plan, and (ii) the Loan Parties’ payment of
premiums which become due and payable with respect to such life insurance
policies, so long as at the time of any such Investment and after giving effect
thereto, no Default or Event of Default shall have then occurred and be
continuing; and

(o) other Investments not described in clauses (a) through (n) above not
exceeding $1,000,000 in the aggregate in any Fiscal Year, so long as at the time
thereof and after giving effect thereto, no Default or Event of Default shall
have then occurred and be continuing;

provided, however, that notwithstanding the foregoing, after the occurrence and
during the continuance of a Cash Dominion Event, no such Investments specified
in clauses (a) through (e) shall be permitted unless (i) either (A) no Loans are
then outstanding, or (B) the Investment is a temporary Investment pending
expiration of an Interest Period for a LIBO Rate Loan, the proceeds of which
Investment will be applied to the Obligations after the expiration of such
Interest Period, and (ii) such Investments are pledged to the Administrative
Agent as additional collateral for the Obligations pursuant to such agreements
as may be reasonably required by the Administrative Agent.

“Permitted Overadvance” means an Overadvance made by the Administrative Agent,
in its discretion, which:

(a) is made to maintain, protect or preserve the Collateral and/or the Credit
Parties’ rights under the Loan Documents or which is otherwise for the benefit
of the Credit Parties; or

(b) is made to enhance the likelihood of, or to maximize the amount of,
repayment of any Obligation;

(c) is made to pay any other amount chargeable to any Loan Party hereunder; and

(d) together with all other Permitted Overadvances then outstanding, shall not
(i) exceed ten percent (10%) of the Borrowing Base at any time or (ii) unless a
Liquidation is occurring, remain outstanding for more than forty-five
(45) consecutive Business Days, unless in each case, the Required Lenders
otherwise agree.

provided however, that the foregoing shall not (i) modify or abrogate any of the
provisions of Section 2.03 regarding the Lenders’ obligations with respect to
Letters of Credit, or (ii) result in any claim or liability against the
Administrative Agent (regardless of the amount of any Overadvance) for
Unintentional Overadvances and such Unintentional Overadvances shall not reduce
the amount of Permitted Overadvances allowed hereunder, and further provided
that in no event shall the Administrative Agent make an Overadvance, if after
giving effect thereto, the principal amount of the Credit Extensions would
exceed the Aggregate Commitments (as in effect prior to any termination of the
Commitments pursuant to Section 2.06 hereof).

“Permitted Store Closings” shall have the meaning provided in clause (b) of the
definition of Permitted Dispositions.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, limited partnership,
Governmental Authority or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Lead Borrower or, with respect to any
such plan that is subject to Section 412 of the Code or Title IV of ERISA, any
ERISA Affiliate.

 

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“Platform” shall have the meaning provided in Section 6.02.

“Prepayment Event” means:

(a) any Disposition (including pursuant to a sale and leaseback transaction) of
any property or asset of a Loan Party (other than Dispositions of inventory in
the ordinary course of business) in an aggregate amount in excess of $3,000,000
in any Fiscal Year (such amount, the “Prepayment Minimum Disposition Amount”),
provided, that, if a Cash Dominion Event has occurred and is continuing, there
shall be no Prepayment Minimum Disposition Amount and any and all of the
foregoing Dispositions (other than Dispositions of inventory in the ordinary
course of business) shall be deemed and shall constitute a Prepayment Event;

(b) any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of (and payments in lieu
thereof), any property or asset of a Loan Party in an aggregate amount in excess
of $1,000,000 in any Fiscal Year, unless (i) the proceeds therefrom are required
to be paid to the holder of a Lien on such property or asset having priority
over the Lien of the Administrative Agent or (ii) prior to the occurrence of a
Cash Dominion Event, (A) the proceeds therefrom, in the case of any casualty
damage, are utilized for purposes of replacing or repairing the assets in
respect of which such proceeds, awards or payments were received within one
hundred eighty (180) days of the occurrence of the damage to or loss of the
assets being repaired or replaced, and (B) notwithstanding anything to the
contrary set forth in this clause (b), in the case of any proceeds that become
payable under any business interruption policies of Loan Parties, the Loan
Parties’ receipt of such proceeds to the extent permitted by Section 6.07(c)
shall not be deemed to be or constitute a Prepayment Event, and a Prepayment
Event shall only be deemed to have occurred, and such proceeds shall applied to
the Obligations, only if and to the extent required by Section 6.07(c);

(c) the issuance by a Loan Party of any Equity Interests, other than any such
issuance of Equity Interests (i) to a Loan Party, (ii) as consideration for a
Permitted Acquisition, (iii) to the extent that the Net Proceeds are used within
ninety (90) days thereafter to finance a Permitted Acquisition or Permitted
Investment, or (iv) as a compensatory issuance to any employee, director, agent,
or consultant (including under any option plan);

(d) the incurrence by a Loan Party of any Indebtedness for borrowed money
permitted hereunder other than Permitted Indebtedness; or

(e) the receipt by any Loan Party of any Extraordinary Receipts.

“Pro Forma Availability Condition” means (a) for any date of calculation with
respect to any Restricted Payments, the Pro Forma Excess Availability following,
and after giving effect to, such Restricted Payments, will be equal to or
greater than the greater of (i) Twenty Million Dollars ($20,000,000) or
(ii) twenty percent (20%) of the Loan Cap, and (b) for any date of calculation
with respect to any proposed Permitted Acquisition, the Pro Forma Excess
Availability following, and after giving effect to, such Acquisition, will be
equal to or greater than the greater of (i) Fifteen Million Dollars
($15,000,000) or (ii) fifteen percent (15%) of the Loan Cap.

“Pro Forma Excess Availability” means, for any date of calculation, after giving
pro forma effect to the transaction then to be consummated, the projected
Quarterly Average Excess Availability during the subsequent projected twelve
(12) Fiscal Months.

“Public Lender” shall have the meaning provided in Section 6.02.

 

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“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan
Party that has total assets exceeding $10,000,000 at the time the relevant
Guarantee or grant of the relevant security interest becomes effective with
respect to such Swap Obligation or such other person as constitutes an “eligible
contract participant” under the Commodity Exchange Act or any regulations
promulgated thereunder and can cause another person to qualify as an “eligible
contract participant” at such time by entering into a keepwell under
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Quarterly Average Excess Availability” means, at any time, the average daily
Excess Availability for the immediately preceding Fiscal Quarter.

“Real Estate” means all land, together with the buildings, structures, parking
areas, and other improvements thereon, now or hereafter owned by any Loan Party,
including all easements, rights-of-way, and similar rights relating thereto and
all leases, tenancies, and occupancies thereof.

“Register” shall have the meaning provided in Section 10.06(c).

“Registered Public Accounting Firm” shall have the meaning provided by the
Securities Laws and shall be independent of the Lead Borrower and its
Subsidiaries as prescribed by the Securities Laws.

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the thirty (30) day notice period has been
waived.

“Reports” shall have the meaning provided in Section 9.12(b).

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to
an LC Credit Extension, a Letter of Credit Application and, if required by the
LC Issuer, a Standby Letter of Credit Agreement or Commercial Letter of Credit
Agreement, as applicable, and (c) with respect to a Swing Line Loan, a Swing
Line Loan Notice.

“Required Lenders” means, as of any date of determination, any Lender or Lenders
holding more than fifty percent (50%) of the Aggregate Commitments or, if the
commitment of each Lender to make Loans and the obligation of the LC Issuer to
make LC Credit Extensions have been terminated pursuant to Section 8.02, any
Lender or Lenders holding more than fifty percent (50%) of the Total
Outstandings (with the aggregate amount of each Lender’s risk participation and
funded participation in LC Obligations and Swing Line Loans being deemed “held”
by such Lender for purposes of this definition); provided, that, (a) the
Commitment of, and the portion of the Total Outstandings held or deemed held by,
any Defaulting Lender or Deteriorating Lender shall be excluded for purposes of
making a determination of Required Lenders and (b) at any time there are two
(2) or more Lenders who are not Affiliates of one another, in that case
“Required Lenders” must include at least two (2) Lenders (who are not Affiliates
of one another).

“Responsible Officer” means the chief executive officer, president, chief
operating officer, chief financial officer, treasurer or assistant treasurer of
a Loan Party or any of the other individuals designated in writing to the
Administrative Agent by an existing Responsible Officer of a Loan Party as an
authorized signatory of any certificate or other document to be delivered
hereunder. Any document delivered hereunder that is signed by a Responsible
Officer of a Loan Party shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of such
Loan Party and such Responsible Officer shall be conclusively presumed to have
acted on behalf of such Loan Party.

 

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“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Person or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to such Person’s
stockholders, partners or members (or the equivalent of any thereof), or any
option, warrant or other right to acquire any such dividend or other
distribution or payment. Without limiting the foregoing, “Restricted Payments”
with respect to any Person shall also include all payments made by such Person
with any proceeds of a dissolution or liquidation of such Person.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley, and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the PCAOB.

“Security Agreement” means the Amended and Restated Security Agreement dated as
of the Closing Date among the Loan Parties and the Administrative Agent.

“Security Documents” means, collectively, the following: the Security Agreement,
the Blocked Account Agreements, the DDA Notifications, the Credit Card
Notifications, and each other security agreement or other instrument or document
now or hereafter executed and delivered to the Administrative Agent pursuant to
this Agreement or any other Loan Document granting a Lien to secure any of the
Obligations.

“Settlement Date” shall have the meaning provided in Section 2.14(a).

“Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Lead Borrower and its Subsidiaries as of that date
determined in accordance with GAAP.

“Shrink” means Inventory which has been lost, misplaced, stolen, or is otherwise
unaccounted for.

“Solvent” and “Solvency” means, with respect to any Person on a particular date,
that on such date (a) at fair valuation, all of the properties and assets of
such Person are greater than the sum of the debts, including contingent
liabilities, of such Person, (b) the present fair saleable value of the
properties and assets of such Person is not less than the amount that would be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person is able to realize upon its
properties and assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that it will,
incur debts beyond such Person’s ability to pay as such debts mature, and
(e) such Person is not engaged in a business or a transaction, and is not about
to engage in a business or transaction, for which such Person’s properties and
assets would constitute unreasonably small capital

 

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after giving due consideration to the prevailing practices in the industry in
which such Person is engaged. The amount of all guarantees at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, can reasonably be expected to become an actual or matured
liability.

“Split-Dollar Life Insurance Plan” means each Split Dollar Agreement between an
employee of any Borrower and such Borrower, providing certain benefits to
designated beneficiaries upon the death of such employee, as each such Split
Dollar Agreement is entered into from time to time, as amended, modified,
supplemented, restated or replaced from time to time.

“Spot Rate” shall have the meaning provided in Section 1.07.

“Standby Letter of Credit” means any Letter of Credit that is not a Commercial
Letter of Credit and that (a) is used in lieu or in support of performance
guaranties or performance, surety or similar bonds (excluding appeal bonds)
arising in the ordinary course of business, (b) is used in lieu or in support of
stay or appeal bonds, (c) supports the payment of insurance premiums for
reasonably necessary casualty insurance carried by any of the Loan Parties, or
(d) supports payment or performance for identified purchases or exchanges of
products or services in the ordinary course of business.

“Standby Letter of Credit Agreement” means the Standby Letter of Credit
Agreement relating to the issuance of a Standby Letter of Credit in the form
from time to time in use by the LC Issuer.

“Stated Amount” means at any time the maximum amount for which a Letter of
Credit may be honored.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the FRB to which the Administrative Agent is subject with respect
to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D. LIBO Rate
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

“Stein Mart” shall have the meaning provided in the introductory paragraph
hereto.

“Store” means any retail store (which may include any real property, fixtures,
equipment, inventory and other property related thereto) operated, or to be
operated, by any Loan Party.

“Subordinated Indebtedness” means Indebtedness which is expressly subordinated
in right of payment to the prior payment in full of the Obligations and which is
in form and on terms approved in writing by the Administrative Agent.

“Subordination Provisions” shall have the meaning provided in Section 8.01(r).

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares Equity Interests having ordinary voting power for the election of
directors or other governing body are at the time beneficially owned, or the
management of which is otherwise controlled, directly, or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of a Loan Party.

 

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“Supermajority Lenders” means, as of any date of determination, any Lender or
Lenders holding more than sixty-six and two-thirds percent (66-2/3%) of the
Aggregate Commitments or, if the commitment of each Lender to make Loans and the
obligation of the LC Issuer to make LC Credit Extensions have been terminated
pursuant to Section 8.02, any Lender or Lenders holding more than sixty-six and
two-thirds percent (66-2/3%) of the Total Outstandings (with the aggregate
amount of each Lender’s risk participation and funded participation in LC
Obligations and Swing Line Loans being deemed “held” by such Lender for purposes
of this definition); provided that, (a) the Commitment of, and the portion of
the Total Outstandings held or deemed held by, any Defaulting Lender or
Deteriorating Lender shall be excluded for purposes of making a determination of
Supermajority Lenders and (b) at any time there are two (2) or more Lenders who
are not Affiliates of one another, in that case “Supermajority Lenders” must
include at least two (2) Lenders (who are not Affiliates of one another).

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

“Swap Obligation” shall have the meaning provided in the definition of “Excluded
Swap Obligations.”

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

“Swing Line” means the revolving credit facility made available by the Swing
Line Lender pursuant to Section 2.04.

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

“Swing Line Lender” means Wells Fargo, in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.

“Swing Line Loan” shall have the meaning provided in Section 2.04(a).

 

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“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit B.

“Swing Line Note” means the promissory note of the Borrowers substantially in
the form of Exhibit C-2, payable to the order of the Swing Line Lender,
evidencing the Swing Line Loans made by the Swing Line Lender.

“Swing Line Sublimit” means an amount equal to ten percent (10%) of the
Aggregate Commitments. The Swing Line Sublimit is part of, and not in addition
to, the Aggregate Tranche A Revolving Loan Commitments.

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any Debtor
Relief Laws to such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by and actually due to
any Governmental Authority, including any interest, additions to tax or
penalties applicable thereto.

“Termination Date” means the earliest to occur of (i) the Maturity Date,
(ii) the date on which the maturity of the Obligations is accelerated (or deemed
accelerated) and the Commitments are irrevocably terminated (or deemed
terminated) in accordance with Article VII, or (iii) the termination of the
Commitments in accordance with the provisions of Section 2.06(a) hereof.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
LC Obligations.

“Total Tranche A Outstandings” means the aggregate Outstanding Amount of all
Tranche A Revolving Loans, all Swing Line Loans and all LC Obligations.

“Total Tranche A-1 Outstandings” means the aggregate Outstanding Amount of all
Tranche A-1 Revolving Loans.

“Trading With the Enemy Act” shall have the meaning provided in Section 10.18.

“Tranche A Borrowing Base” means, at any time of calculation, an amount equal
to:

(a) ninety percent (90%) multiplied by the Eligible Credit Card Receivables;

plus

(b) ninety percent (90%) of the Net Recovery Percentage multiplied by the Cost
of Eligible Inventory, net of Inventory Reserves, provided, that, the result of
the foregoing calculation shall not result in an advance rate for Eligible
Inventory for the month of July 2015 of less than ninety percent (90%);

 

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minus

(c) the then amount of all Availability Reserves (without duplication of the
then amount of any Inventory Reserves).

“Tranche A Revolving Loan Commitment” means, at any time, as to any Lender, its
obligation to (a) fund Committed Loans to the Borrowers pursuant to
Section 2.01(a), (b) purchase participations in LC Obligations, and (c) purchase
participations in Swing Line Loans, in an aggregate principal amount at any time
outstanding not to exceed the principal amount set forth opposite such Lender’s
name on Schedule 2.01 designated as such Lender’s Tranche A Revolving Loan
Commitment or on Schedule I of an the Assignment and Assumption Agreement
pursuant to which such Lender became a Lender hereunder, as applicable, as the
same may be adjusted from time to time in accordance with this Agreement;
sometimes being collectively (as to all Tranche A Revolving Loan Lenders)
referred to herein as the “Tranche A Revolving Loan Commitments”.

“Tranche A Revolving Loan Lenders” means, at any time, Lenders having a Tranche
A Revolving Loan Commitment or Tranche A Revolving Loans owing to it at such
time; each sometimes referred to herein individually as a “Tranche A Revolving
Loan Lender”.

“Tranche A Revolving Loan Limit” means the lesser of (a) $225,000,000 (subject
to adjustment as provided in Sections 2.06 of the Agreement) and (b) the Tranche
A Borrowing Base.

“Tranche A Revolving Loans” has the meaning specified in Section 2.01(a).

“Tranche A-1 Borrowing Base” means, at any time of calculation, an amount equal
to:

(a) ten percent (10%) multiplied by the Eligible Credit Card Receivables;

plus

(b) ten percent (10%) of the Net Recovery Percentage multiplied by the Cost of
Eligible Inventory, net of Inventory Reserves.

“Tranche A-1 Revolving Loan Commitment” means, at any time, as to any Lender,
its obligation to fund Committed Loans to Borrowers pursuant to Section 2.01(b)
in an aggregate principal amount at any time oustanding not to exceed the
principal amount set forth opposite such Lender’s name on Schedule 2.01
designated as such Lender’s Tranche A-1 Revolving Loan Commitment or on Schedule
I of an the Assignment and Assumption Agreement pursuant to which such Lender
became a Lender hereunder, as applicable, as the same may be adjusted from time
to time in accordance with this Agreement; sometimes being collectively (as to
all Tranche A-1 Revolving Loan Lenders) referred to herein as the “Tranche A-1
Revolving Loan Commitments”.

“Tranche A-1 Revolving Loan Lenders” means, at any time, Lenders having a
Tranche A-1 Revolving Loan Commitment or Tranche A-1 Revolving Loans owing to it
at such time; each sometimes referred to herein individually as a “Tranche A-1
Revolving Loan Lender”.

“Tranche A-1 Revolving Loan Limit” means the lesser of (a) $25,000,000 (subject
to reduction as provided in Section 2.06 of the Agreement) and (b) the Tranche
A-1 Borrowing Base.

“Tranche A-1 Revolving Loans” has the meaning specified in Section 2.01(b).

“Type” means, with respect to a Committed Loan, its character as a (a) Tranche A
Revolving Loan or Tranche A-1 Revolving Loan or (b) Base Rate Loan or a LIBO
Rate Loan.

 

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“UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in
effect from time to time in the State of New York; provided, however, that if a
term is defined in Article 9 of the Uniform Commercial Code differently than in
another Article thereof, the term shall have the meaning set forth in Article 9;
provided further that, if by reason of mandatory provisions of law, perfection,
or the effect of perfection or non-perfection, of a security interest in any
Collateral or the availability of any remedy hereunder is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than State of New
York, “Uniform Commercial Code” means the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection or effect of perfection or non-perfection or availability of
such remedy, as the case may be.

“UCP 600” means the rules of the Uniform Customs and Practice for Documentary
Credits, as most recently published by the International Chamber of Commerce and
in effect as of July 1, 2007.

“UFCA” shall have the meaning provided in Section 10.22(d).

“UFTA” shall have the meaning provided in Section 10.22(d).

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

“Unintentional Overadvance” means an Overadvance which, to the Administrative
Agent’s knowledge, did not constitute an Overadvance when made but which has
become an Overadvance resulting from changed circumstances beyond the control of
the Credit Parties, including, without limitation, a reduction in the Appraised
Value of property or assets included in the Borrowing Base or misrepresentation
by the Loan Parties.

“United States” and “U.S.” mean the United States of America.

“Wells Fargo” means Wells Fargo Bank, National Association and its successors.

1.02. Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein or in any other
Loan Document), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (iii) the words “herein,” “hereof”
and “hereunder,” and words of similar import when used in any Loan Document,
shall be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending replacing or
interpreting such law and any reference to any law or

 

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regulation shall, unless otherwise specified, refer to such law or regulation as
amended, modified or supplemented from time to time, and (vi) the words “asset”
and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.

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

(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

(d) Any reference herein or in any other Loan Document to the satisfaction,
repayment, or payment in full of the Obligations shall mean the repayment in
Dollars in full in cash or immediately available funds (or, in the case of
contingent reimbursement obligations with respect to Letters of Credit and Bank
Products (other than Swap Contracts), providing Cash Collateralization) of all
of the Obligations (including the payment of any termination amount then
applicable (or which would or could become applicable as a result of the
repayment of the other Obligations) under Swap Contracts) other than
(i) unasserted contingent indemnification Obligations, (ii) any Obligations
relating to Bank Products (other than Swap Contracts) that, at such time, are
allowed by the applicable Bank Product provider to remain outstanding without
being required to be repaid or Cash Collateralized, and (iii) any Obligations
relating to Swap Contracts that, at such time, are allowed by the applicable
provider of such Swap Contracts to remain outstanding without being required to
be repaid.

1.03. Accounting Terms

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Lead Borrower or the Required Lenders shall so request,
the Administrative Agent, the Lenders and the Lead Borrower shall negotiate in
good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(ii) the Lead Borrower shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

1.04. Rounding. Any financial ratios required to be maintained by the Borrowers
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down, as the case may be, to the nearest number (with a rounding-up if
there is no nearest number).

 

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1.05. Times of Day. Unless otherwise specified, all references herein to times
of day shall be references to Eastern time (daylight or standard, as
applicable).

1.06. Letter of Credit Amounts. Unless otherwise specified, all references
herein to the amount of a Letter of Credit at any time shall be deemed to be the
Stated Amount of such Letter of Credit in effect at such time; provided,
however, that with respect to any Letter of Credit that, by its terms of any
Issuer Documents related thereto, provides for one or more automatic increases
in the Stated Amount thereof, the amount of such Letter of Credit shall be
deemed to be the maximum Stated Amount of such Letter of Credit after giving
effect to all such increases, whether or not such maximum Stated Amount is in
effect at such time.

1.07. Currency Equivalents Generally. Any amount specified in this Agreement
(other than in Articles II, IX and X) or any of the other Loan Documents to be
in Dollars shall also include the equivalent of such amount in any currency
other than Dollars, such equivalent amount thereof in the applicable currency to
be determined by the Administrative Agent at such time on the basis of the Spot
Rate (as defined below) for the purchase of such currency with Dollars. For
purposes of this Section 1.07, the “Spot Rate” for a currency means the rate
determined by the Administrative Agent to be the rate quoted by the Person
acting in such capacity as the spot rate for the purchase by such Person of such
currency with another currency through its principal foreign exchange trading
office at approximately 11:00 a.m. on the date two Business Days prior to the
date of such determination; provided that the Administrative Agent may obtain
such spot rate from another financial institution designated by the
Administrative Agent if the Person acting in such capacity does not have as of
the date of determination a spot buying rate for any such currency.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01. Committed Loans. (a) Subject to the terms and conditions set forth herein,
each Lender severally agrees to make loans (each such loan, a “Tranche A
Revolving Loan”) to the Borrowers from time to time, on any Business Day during
the Availability Period, in an aggregate amount not to exceed at any time
outstanding the lesser of (x) the amount of such Lender’s Tranche A Revolving
Loan Commitment, or (y) such Lender’s Applicable Percentage of the Tranche A
Borrowing Base; subject in each case to the following limitations:

(i) after giving effect to any Committed Borrowing, the Total Outstandings shall
not exceed the Loan Cap;

(ii) after giving effect to any Tranche A Revolving Loan, the Total Tranche A
Outstandings shall not exceed the Tranche A Revolving Loan Limit,

(iii) after giving effect to any Committed Borrowing pursuant to which Tranche A
Revolving Loans are requested, the aggregate Outstanding Amount of the Tranche A
Revolving Loans of any Lender, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all LC Obligations, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed
such Lender’s Tranche A Revolving Loan Commitment; and

(iv) the Outstanding Amount of all LC Obligations shall not at any time exceed
the Letter of Credit Sublimit.

Within the limits of each Lender’s Tranche A Revolving Loan Commitment, and
subject to the other terms and conditions hereof, the Borrowers may borrow under
this Section 2.01(a), prepay under Section 2.05, and reborrow under this
Section 2.01(a). Tranche A Revolving Loans may be Base Rate Loans or LIBO Rate
Loans, as further provided herein.

 

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(b) Subject to the terms and conditions set forth herein, each Lender severally
agrees to make loans (each such loan, a “Tranche A-1 Revolving Loan”) to the
Borrowers from time to time, on any Business Day during the Availability Period,
in an aggregate amount not to exceed at any time outstanding the lesser of
(x) the amount of such Lender’s Tranche A-1 Revolving Loan Commitment, or
(y) such Lender’s Applicable Percentage of the Tranche A-1 Borrowing Base;
subject in each case to the following limitations:

(i) after giving effect to any Committed Borrowing, the Total Outstandings shall
not exceed the Loan Cap,

(ii) after giving effect to any Tranche A-1 Revolving Loan, the Total Tranche
A-1 Outstandings shall not exceed the Tranche A-1 Revolving Loan Limit, and

(iii) after giving effect to any Committed Borrowing pursuant to which Tranche
A-1 Revolving Loans are requested, the aggregate Outstanding Amount of the
Tranche A-1 Revolving Loans of any Lender, shall not exceed such Lender’s
Tranche A-1 Revolving Loan Commitment.

Within the limits of each Lender’s Tranche A-1 Revolving Loan Commitment, and
subject to the other terms and conditions hereof, the Borrower may borrow under
this Section 2.01(b), prepay under Section 2.05, and reborrow under this
Section 2.01(b). Tranche A-1 Revolving Loans may be Base Rate Loans or LIBO Rate
Loans, as further provided herein.

2.02. Borrowings, Conversions and Continuations of Committed Loans.

(a) Committed Loans (other than Swing Line Loans) shall be either Base Rate
Loans or LIBO Rate Loans as the Lead Borrower may request subject to and in
accordance with this Section 2.02. All Swing Line Loans shall be only Base Rate
Loans. Subject to the other provisions of this Section 2.02, Committed
Borrowings of more than one Type may be incurred at the same time.

(b) Each Committed Borrowing, each conversion of Committed Loans from one Type
to the other, and each continuation of LIBO Rate Loans shall be made upon the
Lead Borrower’s irrevocable notice to the Administrative Agent, which may be
given by telephone. Each such notice must be received by the Administrative
Agent not later than 11:00 a.m. (i) three (3) Business Days prior to the
requested date of any Borrowing of, conversion to or continuation of LIBO Rate
Loans or of any conversion of LIBO Rate Loans to Base Rate Loans, and (ii) one
(1) Business Day prior to the requested date of any Borrowing of Base Rate
Loans. Each telephonic notice by the Lead Borrower pursuant to this
Section 2.02(b) must be confirmed promptly by delivery to the Administrative
Agent of a written Committed Loan Notice, appropriately completed and signed by
a Responsible Officer of the Lead Borrower. Each Borrowing of, conversion to or
continuation of LIBO Rate Loans shall be in a principal amount of $1,000,000 or
a whole multiple of $500,000 in excess thereof. Each Borrowing of or conversion
to Base Rate Loans shall be in a principal amount of $50,000 or a whole multiple
of $10,000 in excess thereof. Each Committed Loan Notice (whether telephonic or
written) shall specify (A) whether the Lead Borrower is requesting a Committed
Borrowing, a conversion of Committed Loans from one Type to the other, or a
continuation of LIBO Rate Loans, (B) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(C) whether such Committed Loan is a Tranche A Revolving Loan, a Tranche A-1
Revolving Loan or Swing Line Loan, provided, that, any request for a Tranche A
Revolving Loan shall be deemed a request for a Tranche A-1

 

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Revolving Loan until such time as the aggregate outstanding principal amount of
Tranche A-1 Revolving Loans equals the lesser of (x) the Tranche A-1 Borrowing
Base or (y) the Tranche A-1 Revolving Loan Limit, (D) the principal amount of
Committed Loans to be borrowed, converted or continued, (E) the Type of
Committed Loans to be borrowed or to which existing Committed Loans are to be
converted, and (F) if applicable, the duration of the Interest Period with
respect thereto. If the Lead Borrower fails to specify a Type of Committed Loan
in a Committed Loan Notice or if the Lead Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Committed Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable LIBO Rate Loans.
If the Lead Borrower requests a Borrowing of, conversion to, or continuation of
LIBO Rate Loans in any such Committed Loan Notice, but fails to specify an
Interest Period, it will be deemed to have specified an Interest Period of one
month. Notwithstanding anything to the contrary herein, a Swing Line Loan may
not be converted to a LIBO Rate Loan.

(c) Following receipt of a Committed Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage of the
applicable Committed Loans, and if no timely notice of a conversion or
continuation is provided by the Lead Borrower, the Administrative Agent shall
notify each Lender of the details of any automatic conversion to Base Rate Loans
described in Section 2.02(b). In the case of a Committed Borrowing, each Lender
shall make the amount of its Committed Loan available to the Administrative
Agent in immediately available funds at the Administrative Agent’s Office not
later than 1:00 p.m. on the Business Day specified in the applicable Committed
Loan Notice. Upon satisfaction of the applicable conditions set forth in
Section 4.02 (and, if such Borrowing is the initial Credit Extension,
Section 4.01), the Administrative Agent shall use reasonable efforts to make all
funds so received available to the Borrowers in like funds by no later than 4:00
p.m. on the day of receipt by the Administrative Agent either by (i) crediting
the account of the Lead Borrower on the books of Wells Fargo with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Lead Borrower.

(d) The Administrative Agent, without the request of the Lead Borrower, may
advance any interest, fee, service charge (including direct wire fees), Credit
Party Expenses, or other payment to which any Credit Party is entitled from the
Loan Parties pursuant hereto or any other Loan Document and may charge the same
to the Loan Account notwithstanding that an Overadvance may result thereby. The
Administrative Agent shall advise the Lead Borrower of any such advance or
charge promptly after the making thereof. Such action on the part of the
Administrative Agent shall not constitute a waiver of the Administrative Agent’s
rights and the Borrowers’ obligations under Section 2.05(c). Any amount which is
added to the principal balance of the Loan Account as provided in this
Section 2.02(d) shall bear interest at the interest rate then and thereafter
applicable to Base Rate Loans.

(e) Except as otherwise provided herein, a LIBO Rate Loan may be continued or
converted only on the last day of an Interest Period for such LIBO Rate Loan.
During the existence of a Default, no Loans may be requested as, converted to or
continued as LIBO Rate Loans without the Consent of the Required Lenders.

(f) The Administrative Agent shall promptly notify the Lead Borrower and the
Lenders of the interest rate applicable to any Interest Period for LIBO Rate
Loans upon determination of such interest rate. At any time that Base Rate Loans
are outstanding, the Administrative Agent shall notify the Lead Borrower and the
Lenders of any change in Wells Fargo’s prime rate used in determining the Base
Rate promptly following the public announcement of such change.

 

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(g) After giving effect to all Committed Borrowings, all conversions of
Committed Loans from one Type to the other, and all continuations of Committed
Loans of the same Type, there shall not be more than nine (9) Interest Periods
in effect with respect to LIBO Rate Loans.

(h) The Administrative Agent, the Lenders, the Swing Line Lender and the LC
Issuer shall have no obligation to make any Loan or to provide any Letter of
Credit if an Overadvance would result. The Administrative Agent may, in its
discretion, make Permitted Overadvances without the consent of the Borrowers,
the Lenders, the Swing Line Lender and the LC Issuer and the Borrowers and each
Lender shall be bound thereby. Any Permitted Overadvance may constitute a Swing
Line Loan. A Permitted Overadvance is for the account of the Borrowers and shall
constitute a Base Rate Loan and an Obligation and shall be repaid by the
Borrowers in accordance with the provisions of Section 2.05(c). The making of
any such Permitted Overadvance on any one occasion shall not obligate the
Administrative Agent or any Lender to make or permit any Permitted Overadvance
on any other occasion or to permit such Permitted Overadvances to remain
outstanding. The making by the Administrative Agent of a Permitted Overadvance
shall not modify or abrogate any of the provisions of Section 2.03 regarding the
Lenders’ obligations to purchase participations with respect to Letter of
Credits or of Section 2.04 regarding the Lenders’ obligations to purchase
participations with respect to Swing Line Loans. The Administrative Agent shall
have no liability for, and no Loan Party or Credit Party shall have the right
to, or shall, bring any claim of any kind whatsoever against the Administrative
Agent with respect to Unintentional Overadvances regardless of the amount of any
such Overadvance(s).

2.03. Letters of Credit.

(a) The Letter of Credit Commitment.

(i) Subject to the terms and conditions set forth herein, (A) the LC Issuer
agrees, in reliance upon the agreements of the Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the period from
the Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit for the account of the Borrowers, and to amend Letters of Credit
previously issued by it, in accordance with Section 2.03(b) below, and (2) to
honor drawings under the Letters of Credit; and (B) the Lenders severally agree
to participate in Letters of Credit issued for the account of the Borrowers and
any drawings thereunder; provided that after giving effect to any LC Credit
Extension with respect to any Letter of Credit, (1) (aa) theTotal Outstandings
shall not exceed the Loan Cap and (bb) the Total Tranche A Outstandings shall
not exceed the Tranche A Revolving Loan Limit, (2) the aggregate Outstanding
Amount of the Committed Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all LC Obligations, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Commitment, (3) the aggregate Outstanding Amount of the
Tranche A Revolving Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all LC Obligations, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Tranche A Revolving Loan Commitment, and (4) the
Outstanding Amount of the LC Obligations shall not exceed the Letter of Credit
Sublimit. Each request by the Lead Borrower for the issuance or amendment of a
Letter of Credit shall be deemed to be a representation by the Borrowers that
the LC Credit Extension so requested complies with the conditions set forth in
the proviso to the preceding sentence. Within the foregoing limits, and subject
to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrowers may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed. All Existing Letters
of Credit shall be deemed to have been issued pursuant hereto, and from and
after the Closing Date shall be subject to and governed by the terms and
conditions hereof.

 

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(ii) No Letter of Credit shall be issued if:

(A) subject to Section 2.03(b)(iii), the expiry date of such requested Standby
Letter of Credit would occur more than twelve months after the date of issuance
or last extension, unless the Required Lenders have approved such expiry date;
or

(B) subject to Section 2.03(b)(iii), the expiry date of such requested
Commercial Letter of Credit would occur more than 120 days after the date of
issuance or last extension, unless the Required Lenders have approved such
expiry date; or

(C) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless either such Letter of Credit is Cash
Collateralized on or prior to the date of issuance of such Letter of Credit (or
such later date as to which the Administrative Agent may agree) or all the
Lenders have approved such expiry date.

(iii) No Letter of Credit shall be issued without the prior consent of the
Administrative Agent if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the LC Issuer from issuing such
Letter of Credit, or any Law applicable to the LC Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the LC Issuer shall prohibit, or request that
the LC Issuer refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon the LC Issuer with respect
to such Letter of Credit any restriction, reserve or capital requirement (for
which the LC Issuer is not otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon the LC Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and which the LC Issuer in
good faith deems material to it;

(B) the issuance of such Letter of Credit would violate one or more policies of
the LC Issuer applicable to letters of credit generally;

(C) except as otherwise agreed by the Administrative Agent and the LC Issuer,
such Letter of Credit is in an initial Stated Amount less than $100,000, in the
case of a Commercial Letter of Credit, or $500,000, in the case of a Standby
Letter of Credit;

(D) such Letter of Credit is to be denominated in a currency other than Dollars;
provided that if the LC Issuer, in its discretion, issues a Letter of Credit
denominated in a currency other than Dollars, all reimbursements by the
Borrowers of the honoring of any drawing under such Letter of Credit shall be
paid in Dollars based on the Spot Rate;

(E) such Letter of Credit contains any provisions for automatic reinstatement of
the Stated Amount after any drawing thereunder; or

(F) a default of any Lender’s obligations to fund under Section 2.03(c) exists
or any Lender is at such time a Defaulting Lender or Deteriorating Lender
hereunder, unless the Administrative Agent or LC Issuer has entered into
satisfactory arrangements with the Borrowers or such Lender to eliminate the LC
Issuer’s risk with respect to such Lender.

(iv) The LC Issuer shall not amend any Letter of Credit if (A) the LC Issuer
would not be permitted at such time to issue such Letter of Credit in its
amended form under the terms hereof or (B) the beneficiary of such Letter of
Credit does not accept the proposed amendment to such Letter of Credit.

 

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(v) The LC Issuer shall act on behalf of the Lenders with respect to any Letters
of Credit issued by it and the documents associated therewith, and the LC Issuer
shall have all of the benefits and immunities (A) provided to the Administrative
Agent in Article IX with respect to any acts taken or omissions suffered by the
LC Issuer in connection with Letters of Credit issued by it or proposed to be
issued by it and Issuer Documents pertaining to such Letters of Credit as fully
as if the term “Administrative Agent” as used in Article IX included the LC
Issuer with respect to such acts or omissions, and (B) as additionally provided
herein with respect to the LC Issuer.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension
Letters of Credit.

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the Lead Borrower delivered to the LC Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Lead
Borrower. Such Letter of Credit Application must be received by the LC Issuer
and the Administrative Agent not later than 11:00 a.m. at least two Business
Days (or such other date and time as the Administrative Agent and the LC Issuer
may agree in a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be. In the case of
a request for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the Administrative
Agent and the LC Issuer: (A) the proposed issuance date of the requested Letter
of Credit (which shall be a Business Day); (B) the amount thereof; (C) the
expiry date thereof; (D) the name and address of the beneficiary thereof;
(E) the documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (G) such other matters as the
Administrative Agent or LC Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the Administrative Agent and
the LC Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the Administrative Agent or
the LC Issuer may require. Additionally, the Lead Borrower shall furnish to the
LC Issuer and the Administrative Agent such other documents and information
pertaining to such requested Letter of Credit issuance or amendment, and any
Issuer Documents (including, if requested by the LC Issuer, a Standby Letter of
Credit Agreement or Commercial Letter of Credit Agreement, as applicable), as
the LC Issuer or the Administrative Agent may require.

(ii) Promptly after receipt of any Letter of Credit Application, the LC Issuer
will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Lead Borrower and, if not, the LC Issuer will provide the
Administrative Agent with a copy thereof. Unless the LC Issuer has received
written notice from any Lender, the Administrative Agent or any Loan Party, at
least one Business Day prior to the requested date of issuance or amendment of
the applicable Letter of Credit, that one or more applicable conditions
contained in Article IV shall not then be satisfied, then, subject to the terms
and conditions hereof, the LC Issuer shall, on the requested date, issue a
Letter of Credit for the account of the applicable Borrower or enter into the
applicable amendment, in each case in accordance with the LC Issuer’s usual and
customary business practices. Immediately upon the issuance or amendment of each
Letter of Credit, each Lender shall be deemed to (without any further action),
and hereby irrevocably and unconditionally agrees to, purchase from the LC
Issuer, without recourse or warranty, a risk participation in such Letter of
Credit in an amount equal to the product of such Lender’s Applicable Percentage
times

 

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the Stated Amount of such Letter of Credit. Upon any change in the Commitments
under this Agreement, it is hereby agreed that with respect to all LC
Obligations, there shall be an automatic adjustment to the participations hereby
created to reflect the new Applicable Percentages of the assigning and assignee
Lenders.

(iii) If the Lead Borrower so requests in any applicable Letter of Credit
Application, the LC Issuer may, in its sole and absolute discretion, agree to
issue a Standby Letter of Credit that has automatic extension provisions (each,
an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension
Letter of Credit must permit the LC Issuer to prevent any such extension at
least once in each twelve-month period (commencing with the date of issuance of
such Standby Letter of Credit) by giving prior notice to the beneficiary thereof
not later than a day (the “Non-Extension Notice Date”) in each such twelve-month
period to be agreed upon at the time such Standby Letter of Credit is issued.
Unless otherwise directed by the Administrative Agent or the LC Issuer, the Lead
Borrower shall not be required to make a specific request to the Administrative
Agent or the LC Issuer for any such extension. Once an Auto-Extension Letter of
Credit has been issued, the Lenders shall be deemed to have authorized (but may
not require) the LC Issuer to permit the extension of such Standby Letter of
Credit at any time to an expiry date not later than the Letter of Credit
Expiration Date; provided, however, that the Administrative Agent shall instruct
the LC Issuer not to permit any such extension if (A) the LC Issuer has
determined that it would not be permitted, or would have no obligation, at such
time to issue such Standby Letter of Credit in its revised form (as extended)
under the terms hereof (by reason of the provisions of clause (ii) or (iii) of
Section 2.03(a) or otherwise), or (B) the LC Issuer has received notice (which
may be by telephone or in writing) on or before the day that is five Business
Days before the Non-Extension Notice Date (1) from the Administrative Agent that
the Required Lenders have elected not to permit such extension or (2) from the
Administrative Agent, any Lender or the Lead Borrower that one or more of the
applicable conditions specified in Section 4.02 is not then satisfied, and in
each such case directing the LC Issuer not to permit such extension.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the LC Issuer will also deliver to the Lead Borrower and the
Administrative Agent a true and complete copy of such Letter of Credit or
amendment.

(c) Drawings and Reimbursements; Funding of Participations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the LC Issuer shall notify the Lead
Borrower and the Administrative Agent thereof not less than two (2) Business
Days prior to the Honor Date (as defined below); provided, however, that any
failure to give or delay in giving such notice shall not relieve the Borrowers
of their obligation to reimburse the LC Issuer and the Lenders with respect to
any such payment. On the date of any payment by the LC Issuer under a Letter of
Credit (each such date, an “Honor Date”), the Borrowers shall be deemed to have
requested a Committed Borrowing of Base Rate Loans to be disbursed on the Honor
Date in an amount equal to the amount of such payment, without regard to the
minimum and multiples specified in Section 2.02(b) for the principal amount of
Base Rate Loans, and without regard to whether the conditions set forth in
Section 4.02 have been met. Any notice given by the LC Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.

(ii) Each Lender’s obligation to make Committed Loans or LC Advances to
reimburse the LC Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A)

 

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any setoff, counterclaim, recoupment, defense or other right which such Lender
may have against the LC Issuer, any Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing,
and without regard to whether the conditions set forth in Section 4.02 have been
met.

(d) Repayment of Participations. If any payment received by the LC Issuer
pursuant to Section 2.03(c)(i) is required to be returned under any of the
circumstances described in Section 10.05 (including pursuant to any settlement
entered into by the LC Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the LC Issuer its Applicable Percentage
thereof on demand of the Administrative Agent, plus interest thereon from the
date of such demand to the date such amount is returned by such Lender, at a
rate per annum equal to the Federal Funds Rate from time to time in effect. The
obligations of the Lenders under this clause shall survive the payment in full
of the Obligations and the termination of this Agreement.

(e) Obligations Absolute. The obligation of the Borrowers to reimburse the LC
Issuer for each drawing under each Letter of Credit shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that the Borrowers or any Subsidiary may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), the LC Issuer or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

(iv) any payment by the LC Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the LC Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law;

(v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrowers or any of
their Subsidiaries; or

(vi) the fact that any Event of Default shall have occurred and be continuing.

The Lead Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Lead Borrower’s instructions or other irregularity, the
Lead Borrower will immediately notify the Administrative Agent and the LC
Issuer. The Borrowers shall be conclusively deemed to have waived any such claim
against the LC Issuer and its correspondents unless such notice is given as
aforesaid.

 

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(f) Role of LC Issuer. Each Lender and the Borrowers agree that, in paying any
drawing under a Letter of Credit, the LC Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the LC Issuer, the
Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the LC Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Lenders or the Required Lenders, as applicable;
(ii) any action taken or omitted in the absence of gross negligence or willful
misconduct; (iii) any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit or any error in interpretation of technical
terms; or (iv) the due execution, effectiveness, validity or enforceability of
any document or instrument related to any Letter of Credit or Issuer Document.
The Borrowers hereby assume all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
provided, that, this assumption is not intended to, and shall not, preclude the
Borrowers’ pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement. None of the LC
Issuer, the Administrative Agent, any of their respective Related Parties nor
any correspondent, participant or assignee of the LC Issuer shall be liable or
responsible for any of the matters described in clauses (i) through (v) of
Section 2.03(e) or for any action, neglect or omission under or in connection
with any Letter of Credit or Issuer Documents, including, without limitation,
the issuance or any amendment of any Letter of Credit, the failure to issue or
amend any Letter of Credit, or the honoring or dishonoring of any demand under
any Letter of Credit, and such action or neglect or omission will bind the
Borrowers; provided, that, anything in such clauses to the contrary
notwithstanding, the Borrowers may have a claim against the LC Issuer, and the
LC Issuer may be liable to the Borrowers, to the extent, but only to the extent,
of any direct, as opposed to consequential, exemplary or punitive damages
suffered by the Borrowers which the Borrowers prove were caused by the LC
Issuer’s willful misconduct or gross negligence or the LC Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit; provided further, however, that any
claim against the LC Issuer by the Borrowers for any loss suffered or incurred
by the Borrowers shall be reduced by an amount equal to the sum of (i) the
amount (if any) saved by the Borrowers as a result of the breach or other
wrongful conduct that allegedly caused such loss, and (ii) the amount (if any)
of the loss that would have been avoided had the Borrowers taken all reasonable
steps to mitigate such loss, including, without limitation, by enforcing their
rights against any beneficiary and, in case of a claim of wrongful dishonor, by
specifically and timely authorizing the LC Issuer to cure such dishonor. In
furtherance and not in limitation of the foregoing, the LC Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary
(or the LC Issuer may refuse to accept and make payment upon such documents if
such documents are not in strict compliance with the terms of such Letter of
Credit and may disregard any requirement in a Letter of Credit that notice of
dishonor be given in a particular manner and any requirement that presentation
be made at a particular place or by a particular time of day), and the LC Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason. The LC Issuer shall
not be responsible for the wording of any Letter of Credit (including, without
limitation, any drawing conditions or any terms or conditions that are
ineffective, ambiguous, inconsistent, unduly complicated or reasonably
impossible to satisfy), notwithstanding any assistance the LC Issuer may provide
to the Borrowers with drafting or recommending text for any Letter of Credit
Application or with the structuring

 

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of any transaction related to any Letter or Credit, and the Borrowers hereby
acknowledge and agree that any such assistance will not constitute legal or
other advice by the LC Issuer or any representation or warranty by the LC Issuer
that any such wording or such Letter of Credit will be effective. Without
limiting the foregoing, the LC Issuer may, as it deems appropriate, modify or
alter and use in any Letter of Credit the terminology contained on the Letter of
Credit Application for such Letter of Credit.

(g) Cash Collateral.

(i) Upon the request of the Administrative Agent, (A) if the LC Issuer has
honored any full or partial drawing request under any Letter of Credit and such
drawing has resulted in an LC Obligation that remains outstanding, or (B) if, as
of the Letter of Credit Expiration Date, any LC Obligation for any reason
remains outstanding, the Borrowers shall, in each case, immediately Cash
Collateralize the then Outstanding Amount of all LC Obligations. Sections 2.05
and 8.02(c) set forth certain additional requirements to deliver Cash Collateral
hereunder. For purposes of this Section 2.03, Section 2.05 and Section 8.02(c),
“Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the LC Issuer and the Lenders, as
collateral for the LC Obligations, cash or deposit account balances in an amount
equal to one hundred five percent (105%) of the Outstanding Amount of all LC
Obligations (other than LC Obligations with respect to Letters of Credit
denominated in a currency other than Dollars, which LC Obligations shall be Cash
Collateralized in an amount equal to one hundred fifteen percent (115%) of the
Outstanding Amount of such LC Obligations), pursuant to documentation in form
and substance satisfactory to the Administrative Agent and the LC Issuer (which
documents are hereby Consented to by the Lenders). The Borrowers hereby grant to
the Administrative Agent a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing. Cash Collateral
shall be maintained in blocked, non-interest bearing deposit accounts at Wells
Fargo.

(ii) If at any time the Administrative Agent determines that any funds held as
Cash Collateral are subject to any right or claim of any Person other than the
Administrative Agent or that the total amount of such funds is less than the
aggregate Outstanding Amount of all LC Obligations, the Borrowers will,
forthwith upon demand by the Administrative Agent, pay to the Administrative
Agent, as additional funds to be deposited as Cash Collateral, an amount equal
to the excess of (x) such aggregate Outstanding Amount over (y) the total amount
of funds, if any, then held as Cash Collateral that the Administrative Agent
determines to be free and clear of any such right and claim. Upon the drawing of
any Letter of Credit for which funds are on deposit as Cash Collateral, such
funds shall be applied, to the extent permitted under applicable Laws, to
reimburse the LC Issuer and, to the extent not so applied, shall thereafter be
applied to satisfy other Obligations.

(h) Applicability of ISP and UCP 600. Unless otherwise expressly agreed by the
LC Issuer and the Lead Borrower when a Letter of Credit is issued (including any
such agreement applicable to an Existing Letter of Credit), (i) the rules of the
ISP and UCP 600 shall apply to each Standby Letter of Credit, and (ii) the rules
of the UCP 600 shall apply to each Commercial Letter of Credit.

(i) Letter of Credit Fees. The Borrowers shall pay to the Administrative Agent
for the account of each Lender in accordance with its Applicable Percentage a
Letter of Credit fee (the “Letter of Credit Fee”) for each Standby Letter of
Credit and Commercial Letter of Credit equal to the Applicable LC Fee Rate times
the daily Stated Amount under each such Letter of Credit (whether or not such
maximum amount is then in effect under such Letter of Credit). For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the
amount of the Letter of Credit shall be determined in accordance with
Section 1.06. Letter of Credit Fees shall be (i) due and payable on the first
day after the end of each month commencing with the first such date to occur
after the issuance of such Letter of Credit, on the Letter of Credit Expiration
Date and thereafter on demand, and (ii) computed on a

 

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monthly basis in arrears. If there is any change in the Applicable LC Fee Rate
during any quarter, the daily amount available to be drawn under of each Letter
of Credit shall be computed and multiplied by the Applicable LC Fee Rate
separately for each period during such quarter that such Applicable LC Fee Rate
was in effect. Notwithstanding anything to the contrary contained herein, while
any Event of Default exists, all Letter of Credit Fees shall accrue at the
Default Rate as provided in Section 2.08(b) hereof.

(j) Fronting Fee and Documentary and Processing Charges Payable to LC Issuer.
The Borrowers shall pay directly to the LC Issuer, for its own account, a
fronting fee (the “Fronting Fee”) (i) with respect to each Commercial Letter of
Credit, at a rate equal to 0.125% per annum, computed on the amount of such
Letter of Credit, and payable upon the issuance or amendment thereof, and
(ii) with respect to each Standby Letter of Credit, at a rate equal to
0.125% per annum, computed on the daily amount available to be drawn under such
Letter of Credit and on a monthly basis in arrears. Such Fronting Fees shall be
due and payable on the first day after the end of each month, commencing with
the first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand. For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the
amount of the Letter of Credit shall be determined in accordance with
Section 1.06. In addition, the Borrowers shall pay directly to the LC Issuer,
for its own account, the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of the LC Issuer relating
to letters of credit as from time to time in effect. Such customary fees and
standard costs and charges are due and payable on demand and are nonrefundable.

(k) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

2.04. Swing Line Loans.

(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender may, in reliance upon the agreements of the other Lenders set
forth in this Section 2.04, make loans (each such loan, a “Swing Line Loan”) to
the Borrowers from time to time on any Business Day during the Availability
Period in an aggregate amount not to exceed at any time outstanding the amount
of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans,
when aggregated with the Applicable Percentage of the Outstanding Amount of
Committed Loans that are Tranche A Revolving Loans and LC Obligations of the
Lender acting as Swing Line Lender, may exceed the amount of such Lender’s
Tranche A Revolving Loan Commitment; provided, that, after giving effect to any
Swing Line Loan, (i) the Total Outstandings shall not exceed Loan Cap, (ii) the
aggregate Outstanding Amount of the Committed Loans that are Tranche A Revolving
Loans of any Lender at such time, plus such Lender’s Applicable Percentage of
the Outstanding Amount of all LC Obligations at such time, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans at such
time shall not exceed such Lender’s Tranche A Revolving Loan Commitment and
(iii) the aggregate Outstanding Amount of the Committed Loans of any Lender at
such time, plus such Lender’s Applicable Percentage of the Outstanding Amount of
all LC Obligations at such time, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all Swing Line Loans at such time shall not exceed such
Lender’s Commitment, and provided, that, the Borrowers shall not use the
proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan,
and provided that, the Swing Line Lender shall not be obligated to make any
Swing Line Loan at any time when any Lender is at such time a Defaulting Lender
or Deteriorating Lender hereunder, unless the Swing Line Lender has entered into
satisfactory arrangements with the Borrower or such Lender to eliminate the
Swing Line Lender’s risk with respect to such Lender. Within the foregoing
limits, and subject to the other terms and conditions hereof, the Borrowers may
borrow under this Section 2.04, prepay under Section 2.05, and reborrow under
this Section 2.04. Each Swing Line Loan shall bear interest only at a rate based
on the Base Rate. Immediately upon the making of a Swing Line Loan, each Lender
shall be deemed to, and hereby

 

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irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk participation in such Swing Line Loan in an amount equal to the product of
such Lender’s Applicable Percentage times the amount of such Swing Line Loan.
The Swing Line Lender shall have all of the benefits and immunities (A) provided
to the Administrative Agent in Article IX with respect to any acts taken or
omissions suffered by the Swing Line Lender in connection with Swing Line Loans
made by it or proposed to be made by it as if the term “Administrative Agent” as
used in Article IX included the Swing Line Lender with respect to such acts or
omissions, and (B) as additionally provided herein with respect to the Swing
Line Lender.

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Lead
Borrower’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $50,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Lead Borrower. Promptly after receipt by the Swing Line Lender of
any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with
the Administrative Agent (by telephone or in writing) that the Administrative
Agent has also received such Swing Line Loan Notice and, if not, the Swing Line
Lender will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing Line Lender has received notice (by telephone
or in writing) from the Administrative Agent at the request of the Required
Lenders prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing
(A) directing the Swing Line Lender not to make such Swing Line Loan as a result
of the limitations set forth in the proviso to the first sentence of
Section 2.04(a), or (B) that one or more of the applicable conditions specified
in Article IV is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender may, not later than 3:00 p.m. on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to the Borrowers at its office by crediting the account of the
Lead Borrower on the books of the Swing Line Lender in immediately available
funds.

(c) Refinancing of Swing Line Loans.

(i) The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of the Borrowers (which hereby irrevocably authorize the
Swing Line Lender to so request on their behalf), that each Lender make a Base
Rate Loan in an amount equal to such Lender’s Applicable Percentage of the
amount of Swing Line Loans then outstanding. Such request shall be made in
writing (which written request shall be deemed to be a Committed Loan Notice for
purposes hereof) and in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
Aggregate Tranche A Revolving Loan Commitments and the conditions set forth in
Section 4.02. The Swing Line Lender shall furnish the Lead Borrower with a copy
of the applicable Committed Loan Notice promptly after delivering such notice to
the Administrative Agent. Each Lender shall make an amount equal to its
Applicable Percentage of the amount specified in such Committed Loan Notice
available to the Administrative Agent in immediately available funds for the
account of the Swing Line Lender at the Administrative Agent’s Office not later
than 1:00 p.m. on the day specified in such Committed Loan Notice, whereupon,
subject to Section 2.04(c)(ii), each Lender that so makes funds available shall
be deemed to have made a Base Rate Loan to the Borrowers in such amount. The
Administrative Agent shall remit the funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Committed Borrowing in accordance with Section 2.04(c)(i), the request for Base
Rate Loans submitted

 

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by the Swing Line Lender as set forth herein shall be deemed to be a request by
the Swing Line Lender that each of the Lenders fund its risk participation in
the relevant Swing Line Loan and each Lender’s payment to the Administrative
Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i)
shall be deemed payment in respect of such participation.

(iii) If any Lender fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the Swing
Line Lender at a rate per annum equal to the greater of the Federal Funds Rate
and a rate determined by the Swing Line Lender in accordance with banking
industry rules on interbank compensation plus any administrative, processing or
similar fees customarily charged by the Swing Line Lender in connection with the
foregoing. If such Lender pays such amount (with interest and fees as
aforesaid), the amount so paid shall constitute such Lender’s Committed Loan
included in the relevant Committed Borrowing or funded participation in the
relevant Swing Line Loan, as the case may be. A certificate of the Swing Line
Lender submitted to any Lender (through the Administrative Agent) with respect
to any amounts owing under this clause (iii) shall be conclusive absent manifest
error.

(iv) Each Tranche A Revolving Loan Lender’s obligation to make Committed Loans
or to purchase and fund risk participations in Swing Line Loans pursuant to this
Section 2.04(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Borrowers or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, that, each Lender’s
obligation to make Committed Loans pursuant to this Section 2.04(c) is subject
to the conditions set forth in Section 4.02. No such funding of risk
participations shall relieve or otherwise impair the obligation of the Borrowers
to repay Swing Line Loans, together with interest as provided herein.

(d) Repayment of Participations.

(i) At any time after any Lender has purchased and funded a risk participation
in a Swing Line Loan, if the Swing Line Lender receives any payment on account
of such Swing Line Loan, the Swing Line Lender will distribute to such Lender
its Applicable Percentage of such payment (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
risk participation was funded) in the same funds as those received by the Swing
Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line Lender its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the Federal Funds Rate. The Administrative Agent will make such
demand upon the request of the Swing Line Lender. The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

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(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrowers for interest on the Swing Line Loans.
Until each Lender funds its Base Rate Loan or risk participation pursuant to
this Section 2.04 to refinance such Lender’s Applicable Percentage of any Swing
Line Loan, interest in respect of such Applicable Percentage shall be solely for
the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. The Borrowers shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.

2.05. Prepayments.

(a) The Borrowers may, upon irrevocable notice from the Lead Borrower to the
Administrative Agent, at any time or from time to time voluntarily prepay
Committed Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Administrative Agent not later than
11:00 a.m. (A) three Business Days prior to any date of prepayment of LIBO Rate
Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any prepayment
of LIBO Rate Loans shall be in a principal amount of$1,000,000 or a whole
multiple of $500,000 in excess thereof; and (iii) any prepayment of Base Rate
Loans shall be in a principal amount of $50,000 or a whole multiple of $10,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Loans to be prepaid and, if LIBO Rate Loans, the
Interest Period(s) of such Loans. The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender’s Applicable Percentage of such prepayment. If such notice is given by
the Lead Borrower, the Borrowers shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein. Any prepayment of a LIBO Rate Loan shall be accompanied by all accrued
interest on the amount prepaid, together with any additional amounts required
pursuant to Section 3.05. Each such prepayment shall be applied to the Committed
Loans of the Lenders in accordance with their respective Applicable Percentages.
If the Borrowers shall fail to specify a voluntary prepayment as to the Loans
then such prepayment shall be applied first to Base Rate Loans and second to
LIBO Rate Loans in direct order of Interest Payment Dates. All such prepayments
shall first be applied to Tranche A Revolving Loans until payment in full (and
to Cash Collateralize any outstanding LC Obligations) and then to Tranche A-1
Revolving Loans.

(b) The Borrowers may, upon irrevocable notice from the Lead Borrower to the
Swing Line Lender (with a copy to the Administrative Agent), at any time or from
time to time, voluntarily prepay Swing Line Loans in whole or in part without
premium or penalty; provided that, (i) such notice must be received by the Swing
Line Lender and the Administrative Agent not later than 1:00 p.m. on the date of
the prepayment, and (ii) any such prepayment shall be in a minimum principal
amount of $50,000. Each such notice shall specify the date and amount of such
prepayment. If such notice is given by the Lead Borrower, the Borrowers shall
make such prepayment and the payment amount specified in such notice shall be
due and payable on the date specified therein.

(c) If for any reason the Total Outstandings at any time exceed the Loan Cap as
then in effect, the Borrowers shall immediately prepay Loans and/or Cash
Collateralize the LC Obligations in an aggregate amount equal to such excess;
provided, however, that the Borrowers shall not be required to Cash
Collateralize the LC Obligations pursuant to this Section 2.05(c) unless after
the prepayment in full of the Loans the Total Outstandings exceed the Loan Cap
as then in effect.

(d) If for any reason the Total Tranche A Outstandings at any time exceed the
Tranche A Revolving Loan Limit as then in effect, the Borrowers shall
immediately prepay Tranche A Revolving Loans, Swing Line Loans and/or Cash
Collateralize the LC Obligations in an aggregate

 

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amount equal to such excess; provided, that, the Borrowers shall not be required
to Cash Collateralize the LC Obligations pursuant to this Section 2.05(d) unless
after the prepayment in full of the Tranche A Revolving Loans and Swing Line
Loans the Total Tranche A Outstandings exceed the Tranche A Revolving Loan Limit
as then in effect.

(e) If for any reason the Total Tranche A-1 Outstandings at any time exceed the
Tranche A-1 Revolving Loan Limit as then in effect, the Borrowers shall
immediately prepay Tranche A-1 Revolving Loans in an aggregate amount equal to
such excess.

(f) The Borrowers shall prepay the Loans and Cash Collateralize the LC
Obligations to the extent required by the provisions of Section 6.13 hereof.

(g) Subject to the Intercreditor Agreement with respect to Net Proceeds of
Equipment Term Loan Priority Collateral, the Borrowers shall prepay the Loans
and Cash Collateralize the LC Obligations in an amount equal to the Net Proceeds
received by a Loan Party on account of a Prepayment Event at any time a Cash
Dominion Event then exists and is continuing.

(h) Prepayments made pursuant to Section 2.05(c), (f) and (g) above, first,
shall be applied to the Swing Line Loans, second, shall be applied ratably to
the outstanding Committed Loans (first to the Tranche A Revolving Loans and then
to the Tranche A-1 Revolving Loans and any accrued and unpaid interest), third,
shall be used to Cash Collateralize the remaining LC Obligations; and, fourth,
the amount remaining, if any, after the prepayment in full of all Swing Line
Loans and Committed Loans outstanding at such time and the Cash
Collateralization of the remaining LC Obligations in full may be retained by the
Borrowers for use in the ordinary course of its business. Upon the drawing of
any Letter of Credit that has been Cash Collateralized, the funds held as Cash
Collateral shall be applied (without any further action by or notice to or from
the Borrowers or any other Loan Party) to reimburse the LC Issuer or the
Lenders, as applicable. Any payment in respect of Committed Loans, shall first
be made to Tranche A Revolving Loans until payment in full (and to Cash
Collateralize any outstanding LC Obligations) and then to Tranche A-1 Revolving
Loans.

2.06. Termination or Reduction of Commitments. (a) The Borrowers may, upon
irrevocable notice from the Lead Borrower to the Administrative Agent, terminate
the Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line
Sublimit or from time to time permanently reduce the Aggregate Commitments, the
Letter of Credit Sublimit or the Swing Line Sublimit; provided that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction of the Aggregate Commitments, the Letter of Credit Sublimit or
the Swing Line Sublimit shall be in an aggregate amount of $10,000,000 or any
whole multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall not
terminate or reduce (A) the Aggregate Commitments if, after giving effect
thereto and to any concurrent prepayments hereunder, the Total Outstandings
would exceed the Aggregate Commitments, (B) the Letter of Credit Sublimit if,
after giving effect thereto, the Outstanding Amount of LC Obligations not fully
Cash Collateralized hereunder would exceed the Letter of Credit Sublimit, and
(C) the Swing Line Sublimit if, after giving effect thereto, and to any
concurrent payments hereunder, the Outstanding Amount of Swing Line Loans
hereunder would exceed the Swing Line Sublimit.

(b) If, after giving effect to any reduction of the Aggregate Commitments, the
Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the
Aggregate Commitments, such Letter of Credit Sublimit or Swing Line Sublimit
shall be automatically reduced by the amount of such excess.

 

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(c) The Administrative Agent will promptly notify the Lenders of any termination
or reduction of the Letter of Credit Sublimit, Swing Line Sublimit or the
Aggregate Commitments under this Section 2.06. Upon any reduction of the
Aggregate Commitments, the Commitment of each Lender shall be reduced by such
Lender’s Applicable Percentage of such reduction amount. All fees (including,
without limitation, commitment fees, and Letter of Credit Fees) and interest in
respect of the Aggregate Commitments accrued until the effective date of any
termination of the Aggregate Commitments shall be paid on the effective date of
such termination.

2.07. Repayment of Loans.

(a) The Borrowers shall repay to the Lenders on the Termination Date the
aggregate principal amount of Committed Loans outstanding on such date.

(b) To the extent not previously paid, the Borrowers shall repay the outstanding
balance of the Swing Line Loans on the Termination Date.

2.08. Interest.

(a) Subject to the provisions of Section 2.08(b) below,

(i) each LIBO Rate Loan that is a (A) Tranche A Revolving Loan, shall bear
interest on the outstanding principal amount thereof for each Interest Period at
a rate per annum equal to the Adjusted LIBO Rate for such Interest Period plus
the Applicable Margin and (B) Tranche A-1 Revolving Loan shall bear interest on
the outstanding principal amount thereof for each Interest Period at a rate per
annum equal to the Adjusted LIBO Rate for such Interest Period plus the
Applicable Margin;

(ii) each Base Rate Loan that is a (A) Tranche A Revolving Loan shall bear
interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Margin and (B) Tranche A-1 Revolving Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum
equal to the Base Rate plus the Applicable Margin; and

(iii) each Swing Line Loan shall bear interest on the outstanding principal
amount thereof from the applicable borrowing date at a rate per annum equal to
the Base Rate plus the Applicable Margin for Tranche A Revolving Loans.

(b)(i) If any amount payable under any Loan Document is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

(ii) If any other Event of Default exists, then the Administrative Agent may,
and upon the request of the Required Lenders shall, notify the Lead Borrower
that all outstanding Obligations shall thereafter bear interest at a fluctuating
interest rate per annum at all times equal to the Default Rate and thereafter
such Obligations shall bear interest at the Default Rate to the fullest extent
permitted by applicable Laws.

(iii) Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.

 

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(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

2.09. Fees. In addition to certain fees described in subsections (i) and (j) of
Section 2.03:

(a) Commitment Fee. The Borrowers shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a
commitment fee equal to the Applicable Commitment Fee Percentage times the
actual daily amount by which the Aggregate Commitments exceed the Total
Outstandings. The commitment fee shall accrue at all times during the
Availability Period, including at any time during which one or more of the
conditions in Article IV is not met, and shall be due and payable monthly in
arrears on the first day after the end of each month, commencing with the first
such date to occur after the Closing Date, and on the last day of the
Availability Period. The commitment fee shall be calculated monthly in arrears.
Swing Line Loans will not be considered in the calculation of the commitment
fee.

(b) Other Fees. The Borrowers shall pay to the Arranger and the Administrative
Agent for their own respective accounts fees in the amounts and at the times
specified in the Fee Letter. Such fees shall be fully earned when paid and shall
not be refundable for any reason whatsoever.

2.10. Computation of Interest and Fees. All computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed. Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid, provided that any Loan that is repaid on the same day on which
it is made shall, subject to Section 2.12(a), bear interest for one day. Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

2.11. Evidence of Debt.

(a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by the Administrative Agent (the “Loan Account”)
in the ordinary course of business. In addition, each Lender may record in such
Lender’s internal records, an appropriate notation evidencing the date and
amount of each Loan from such Lender, each payment and prepayment of principal
of any such Loan, and each payment of interest, fees and other amounts due in
connection with the Obligations due to such Lender. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Credit Extensions made by the Lenders
to the Borrowers and the interest and payments thereon. Any failure to so record
or any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrowers hereunder to pay any amount owing with respect to
the Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrowers shall execute and
deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender’s Loans in addition to such accounts or records. Each
Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.
Upon receipt of an affidavit of a Lender as to the loss, theft, destruction or
mutilation of such Lender’s Note and upon cancellation of such Note, the
Borrowers will issue, in lieu thereof, a replacement Note in favor of such
Lender, in the same principal amount thereof and otherwise of like tenor.

 

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(b) In addition to the accounts and records referred to in Section 2.11(a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit and Swing Line Loans. In the event of any
conflict between the accounts and records maintained by the Administrative Agent
and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.

2.12. Payments Generally; the Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrowers
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent’s
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender’s Lending Office. All payments received by the Administrative Agent after
2:00 p.m., at the option of the Administrative Agent, shall be deemed received
on the next succeeding Business Day and any applicable interest or fee shall
continue to accrue. If any payment to be made by the Borrowers shall come due on
a day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest or fees, as the case may be. Any such payments shall be applied first,
to the Tranche A Revolving Loans and second, to the Tranche A-1 Revolving Loans.

(b)(i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of LIBO Rate Loans (or in the case of any
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing)
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with
Section 2.02 (or in the case of a Borrowing of Base Rate Loans, that such Lender
has made such share available in accordance with and at the time required by
Section 2.02) and may, in reliance upon such assumption, make available to the
Borrowers a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Committed Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrowers severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each day from
and including the date such amount is made available to the Borrowers to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation plus any administrative processing or similar
fees customarily charged by the Administrative Agent in connection with the
foregoing, and (B) in the case of a payment to be made by the Borrowers, the
interest rate applicable to Base Rate Loans. If the Borrowers and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrowers the amount of such interest paid by the Borrowers for such period. If
such Lender pays its share of the applicable Committed Borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender’s
Committed Loan included in such Committed Borrowing. Any payment by the
Borrowers shall be without prejudice to any claim the Borrowers may have against
a Lender that shall have failed to make such payment to the Administrative
Agent.

 

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(ii) Payments by Borrowers; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Lead Borrower prior to
the time at which any payment is due to the Administrative Agent for the account
of the Lenders or the LC Issuer hereunder that the Borrowers will not make such
payment, the Administrative Agent may assume that the Borrowers have made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the LC Issuer, as the case may be, the
amount due. In such event, if the Borrowers have not in fact made such payment,
then each of the Lenders or the LC Issuer, as the case may be, severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or the LC Issuer, in immediately available funds with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.

A notice of the Administrative Agent to any Lender or the Lead Borrower with
respect to any amount owing under this subsection (b) shall be conclusive,
absent manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrowers by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article IV are not
satisfied or waived in accordance with the terms hereof (subject to the
provisions of the last paragraph of Section 4.02 hereof), the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Committed Loans, to fund participations in Letters of Credit and Swing Line
Loans and to make payments hereunder are several and not joint. The failure of
any Lender to make any Committed Loan, to fund any such participation or to make
any payment hereunder on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its
Committed Loan, to purchase its participation or to make its payment hereunder.

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

2.13. Sharing of Payments by Lenders. If any Credit Party shall, by exercising
any right of setoff or counterclaim or otherwise, obtain payment in respect of
any principal of, interest on, or other amounts with respect to, any of the
Obligations resulting in such Lender’s receiving payment of a proportion of the
aggregate amount of such Obligations greater than its pro rata share thereof as
provided herein (including as in contravention of the priorities of payment set
forth in Section 8.03), then the Credit Party receiving such greater proportion
shall (a) notify the Administrative Agent of such fact, and (b) purchase (for
cash at face value) participations in the Obligations of the other Credit
Parties, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Credit Parties ratably and
in the priorities set forth in Section 8.03, provided that:

(i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

 

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(ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by the Loan Parties pursuant to and in accordance with the express
terms of this Agreement or (y) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Committed Loans
or subparticipations in LC Obligations or Swing Line Loans to any assignee or
participant, other than to the Borrowers or any Subsidiary thereof (as to which
the provisions of this Section shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.

2.14. Settlement Amongst Lenders

(a) The amount of each Lender’s Applicable Percentage of outstanding Loans
(including outstanding Swing Line Loans) shall be computed weekly (or more
frequently in the Administrative Agent’s discretion) and shall be adjusted
upward or downward based on all Loans (including Swing Line Loans) and
repayments of Loans (including Swing Line Loans) received by the Administrative
Agent as of 3:00 p.m. on the first Business Day (such date, the “Settlement
Date”) following the end of the period specified by the Administrative Agent.

(b) The Administrative Agent shall deliver to each of the Lenders promptly after
a Settlement Date a summary statement of the amount of outstanding Committed
Loans and Swing Line Loans for the period and the amount of repayments received
for the period. As reflected on the summary statement, (i) the Administrative
Agent shall transfer to each Lender its Applicable Percentage of repayments, and
(ii) each Lender shall transfer to the Administrative Agent (as provided below)
or the Administrative Agent shall transfer to each Lender, such amounts as are
necessary to insure that, after giving effect to all such transfers, the amount
of Committed Loans made by each Lender shall be equal to such Lender’s
Applicable Percentage of all Committed Loans outstanding as of such Settlement
Date. If the summary statement requires transfers to be made to the
Administrative Agent by the Lenders and is received prior to 1:00 p.m. on a
Business Day, such transfers shall be made in immediately available funds no
later than 3:00 p.m. that day; and, if received after 1:00 p.m., then no later
than 3:00 p.m. on the next Business Day. The obligation of each Lender to
transfer such funds is irrevocable, unconditional and without recourse to or
warranty by the Administrative Agent. If and to the extent any Lender shall not
have so made its transfer to the Administrative Agent, such Lender agrees to pay
to the Administrative Agent, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Administrative Agent, equal to the greater of the Federal Funds Rate and
a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation plus any administrative, processing, or
similar fees customarily charged by the Administrative Agent in connection with
the foregoing.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY;

APPOINTMENT OF LEAD BORROWER

3.01. Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrowers hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Borrowers shall be required by
applicable law to deduct any Indemnified Taxes (including any Other

 

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Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or LC Issuer, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrowers
shall make such deductions and (iii) the Borrowers shall timely pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.

(b) Payment of Other Taxes by the Borrowers. Without limiting the provisions of
subsection (a) above, the Borrowers shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

(c) Indemnification by the Loan Parties. The Loan Parties shall indemnify the
Administrative Agent, each Lender and the LC Issuer, within ten (10) days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or the LC Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Lead Borrower by a
Lender or the LC Issuer (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender or the LC
Issuer, shall be conclusive absent manifest error.

(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrowers to a Governmental Authority,
the Lead Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which any
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Loan Document
shall deliver to the Lead Borrower (with a copy to the Administrative Agent), at
the time or times prescribed by applicable law or reasonably requested by the
Lead Borrower or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding. Such delivery
shall be provided on the Closing Date and on or before such documentation
expires or becomes obsolete or after the occurrence of an event requiring a
change in the documentation most recently delivered. In addition, any Lender, if
requested by the Lead Borrower or the Administrative Agent, shall deliver such
other documentation prescribed by applicable law or reasonably requested by the
Lead Borrower or the Administrative Agent as will enable the Lead Borrower or
the Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.

Without limiting the generality of the foregoing, in the event that any Borrower
is resident for tax purposes in the United States, any Foreign Lender shall
deliver to the Lead Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Lead Borrower or the Administrative Agent,
but only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:

 

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(i) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party,

(ii) duly completed copies of Internal Revenue Service Form W-8ECI,

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the
Borrowers within the meaning of section 881(c)(3)(B) of the Code, or (C) a
“controlled foreign corporation” described in section 881(c)(3)(C) of the Code
and (y) duly completed copies of Internal Revenue Service Form W-8BEN, or

(iv) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in
United States Federal withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable law to permit the
Lead Borrower to determine the withholding or deduction required to be made.

(f) Treatment of Certain Refunds. If the Administrative Agent, any Lender or the
LC Issuer determines, in its sole discretion, that it has received a refund of
any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or
with respect to which the Borrowers have paid additional amounts pursuant to
this Section, it shall pay to the Borrowers an amount equal to such refund (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrowers under this Section with respect to the Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent, such Lender or the LC Issuer, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund), provided, that, the Borrowers, upon the request of the
Administrative Agent, such Lender or the LC Issuer, agree to repay the amount
paid over to the Borrowers (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent,
such Lender or the LC Issuer in the event the Administrative Agent, such Lender
or the LC Issuer is required to repay such refund to such Governmental
Authority. This subsection shall not be construed to require the Administrative
Agent, any Lender or the LC Issuer to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to the
Borrowers or any other Person.

3.02. Illegality. If the Administrative Agent determines that any Law has made
it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund LIBO Rate Loans, or to determine or charge interest rates based upon the
LIBO Rate, or any Governmental Authority has imposed material restrictions on
the authority of such Lender to purchase or sell, or to take deposits of,
Dollars in the London interbank market, then, on notice thereof by such Lender
to the Lead Borrower through the Administrative Agent, any obligation of such
Lender to make or continue LIBO Rate Loans or to convert Base Rate Loans to LIBO
Rate Loans shall be suspended until such Lender notifies the Administrative
Agent and the Lead Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, the Borrowers shall,
upon demand from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable, convert all LIBO Rate Loans of such Lender to Base Rate
Loans, either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such LIBO Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such LIBO Rate
Loans. Upon any such prepayment or conversion, the Borrowers shall also pay
accrued interest on the amount so prepaid or converted.

3.03. Inability to Determine Rates. If the Required Lenders determine that for
any reason in connection with any request for a LIBO Rate Loan or a conversion
to or continuation thereof that

 

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(a) Dollar deposits are not being offered to banks in the London interbank
market for the applicable amount and Interest Period of such LIBO Rate Loan,
(b) adequate and reasonable means do not exist for determining the LIBO Rate for
any requested Interest Period with respect to a proposed LIBO Rate Loan , or
(c) the LIBO Rate for any requested Interest Period with respect to a proposed
LIBO Rate Loan does not adequately and fairly reflect the cost to such Lenders
of funding such Loan, the Administrative Agent will promptly so notify the Lead
Borrower and each Lender. Thereafter, the obligation of the Lenders to make or
maintain LIBO Rate Loans shall be suspended until the Administrative Agent (upon
the instruction of the Required Lenders) revokes such notice. Upon receipt of
such notice, the Lead Borrower may revoke any pending request for a Borrowing
of, conversion to or continuation of LIBO Rate Loans or, failing that, will be
deemed to have converted such request into a request for a Committed Borrowing
of Base Rate Loans in the amount specified therein.

3.04. Increased Costs; Reserves on LIBO Rate Loans.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement reflected in the LIBO Rate) or the LC Issuer;

(ii) subject any Lender or the LC Issuer to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any participation in a Letter
of Credit or any LIBO Rate Loan made by it, or change the basis of taxation of
payments to such Lender or the LC Issuer in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of,
or any change in the rate of, any Excluded Tax payable by such Lender or the LC
Issuer); or

(iii) impose on any Lender or the LC Issuer or the London interbank market any
other condition, cost or expense affecting this Agreement or LIBO Rate Loans
made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBO Rate Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or the
LC Issuer of participating in, issuing or maintaining any Letter of Credit (or
of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the LC Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the LC Issuer, the Borrowers will
pay to such Lender or the LC Issuer, as the case may be, such additional amount
or amounts as will compensate such Lender or the LC Issuer, as the case may be,
for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender or the LC Issuer determines that any
Change in Law affecting such Lender or the LC Issuer or any Lending Office of
such Lender or such Lender’s or the LC Issuer’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or the LC Issuer’s capital or on the capital of such
Lender’s or the LC Issuer’s holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the LC Issuer, to a level below that which such Lender or the
LC Issuer or such Lender’s or the LC Issuer’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s or
the LC Issuer’s policies and the policies of such Lender’s or the LC Issuer’s
holding company with respect to capital adequacy), then from time to time the
Borrowers will pay to such Lender or the LC Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the LC Issuer or
such Lender’s or the LC Issuer’s holding company for any such reduction
suffered.

 

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(c) Certificates for Reimbursement. A certificate of a Lender or the LC Issuer
setting forth in reasonable detail the amount or amounts necessary to compensate
such Lender or the LC Issuer or its holding company, as the case may be, as
specified in subsection (a) or (b) of this Section and delivered to the Lead
Borrower shall be conclusive absent manifest error. The Borrowers shall pay such
Lender or the LC Issuer, as the case may be, the amount shown as due on any such
certificate within ten (10) days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender or the LC
Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender’s or the LC Issuer’s right
to demand such compensation, provided that the Borrowers shall not be required
to compensate a Lender or the LC Issuer pursuant to the foregoing provisions of
this Section for any increased costs incurred or reductions suffered more than
nine (9) months prior to the date that such Lender or the LC Issuer, as the case
may be, notifies the Lead Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the LC Issuer’s intention
to claim compensation therefor (except that, if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the nine (9)-month
period referred to above shall be extended to include the period of retroactive
effect thereof).

(e) Reserves on LIBO Rate Loans. The Borrowers shall pay to each Lender, so long
as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each LIBO Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive), which shall be due and
payable on each date on which interest is payable on such Loan; provided, that,
the Lead Borrower shall have received at least ten (10) days’ prior notice (with
a copy to the Administrative Agent) of such additional interest from such
Lender. If a Lender fails to give notice ten (10) days prior to the relevant
Interest Payment Date, such additional interest shall be due and payable ten
(10) days from receipt of such notice.

3.05. Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrowers shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

(b) any failure by the Borrowers (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Lead
Borrower; or

(c) any assignment of a LIBO Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Lead Borrower pursuant
to Section 10.13;

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrowers shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

 

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For purposes of calculating amounts payable by the Borrowers to the Lenders
under this Section 3.05, each Lender shall be deemed to have funded each LIBO
Rate Loan made by it at the LIBO Rate for such Loan by a matching deposit or
other borrowing in the London interbank market for a comparable amount and for a
comparable period, whether or not such LIBO Rate Loan was in fact so funded.

3.06. Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrowers are required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice pursuant
to Section 3.02, as applicable, and (ii) in each case, would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, the Borrowers may replace such Lender in accordance with
Section 10.13.

3.07. Survival. All of the Borrowers’ obligations under this Article III shall
survive termination of the Aggregate Commitments and repayment of all other
Obligations hereunder.

3.08. Designation of Lead Borrower as Borrowers’ Agent.

(a) Each Borrower hereby irrevocably designates and appoints the Lead Borrower
as such Borrower’s agent to obtain Credit Extensions, the proceeds of which
shall be available to each Borrower for such uses as are permitted under this
Agreement. As the disclosed principal for its agent, each Borrower shall be
obligated to each Credit Party on account of Credit Extensions so made as if
made directly by the applicable Credit Party to such Borrower, notwithstanding
the manner by which such Credit Extensions are recorded on the books and records
of the Lead Borrower and of any other Borrower. In addition, each Loan Party
other than the Borrowers hereby irrevocably designates and appoints the Lead
Borrower as such Loan Party’s agent to represent such Loan Party in all respects
under this Agreement and the other Loan Documents.

(b) Each Borrower recognizes that credit available to it hereunder is in excess
of and on better terms than it otherwise could obtain on and for its own account
and that one of the reasons therefor is its joining in the credit facility
contemplated herein with all other Borrowers. Consequently, each Borrower hereby
assumes and agrees to discharge all Obligations of each of the other Borrowers.

(c) The Lead Borrower shall act as a conduit for each Borrower (including
itself, as a “Borrower”) on whose behalf the Lead Borrower has requested a
Credit Extension. Neither the Administrative Agent nor any other Credit Party
shall have any obligation to see to the application of such proceeds therefrom.

 

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ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01. Conditions to Initial Credit Extension. The obligation of the LC Issuer
and each Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:

(a) the Administrative Agent’s receipt of the following, each of which shall be
originals, facsimile or other electronic image scan transmission (e.g., “pdf” or
“tif “ via e-mail), followed promptly by originals unless otherwise specified,
each properly executed by a Responsible Officer of the signing Loan Party or the
Lenders, as applicable, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date,
or if a Loan Document previously delivered in connection with the Existing
Credit Agreement and not being restated in connection with this Agreement, a
date before the Closing Date) and each in form and substance reasonably
satisfactory to the Administrative Agent:

(i) executed counterparts of this Agreement sufficient in number for
distribution to the Administrative Agent, each Lender and the Lead Borrower;

(ii) a Note executed by the Borrowers in favor of each Lender requesting a Note;

(iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may reasonably require evidencing (A) the authority of each
Loan Party to enter into this Agreement and the other Loan Documents to which
such Loan Party is a party or is to become a party and (B) the identity,
authority and capacity of each Responsible Officer thereof authorized to act as
a Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party or is to become a party;

(iv) copies of each Loan Party’s Organization Documents and such other documents
and certifications as the Administrative Agent may reasonably require to
evidence that each Loan Party is duly organized or formed, and that each Loan
Party is validly existing, in good standing and qualified to engage in business
in each jurisdiction where its ownership, lease or operation of properties or
the conduct of its business requires such qualification, except to the extent
that failure to so qualify in such jurisdiction could not reasonably be expected
to have a Material Adverse Effect;

(v) a favorable written opinion of Bradley Arant Boult and Cummings LLP, counsel
to the Loan Parties, dated the Closing Date and addressed to the Administrative
Agent, LC Issuer and the Lenders, in form and substance reasonably satisfactory
to the Administrative Agent, as to such matters concerning the Loan Parties and
the Loan Documents as the Administrative Agent may reasonably request;

(vi) a certificate signed by a Responsible Officer of the Lead Borrower
certifying (A) that the conditions specified in Sections 4.02(a) and (b) have
been satisfied, (B) that there has been no event or circumstance since
November 29, 2014 that has had or could be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect, (C) to the Solvency
of the Loan Parties as of the Closing Date after giving effect to the
transactions contemplated hereby, and (D) either that (1) no consents, licenses
or approvals are required in connection with the execution, delivery and
performance by such Loan Party and the validity against such Loan Party of the
Loan Documents to which it is a party, or (2) that all such consents, licenses
and approvals have been obtained and are in full force and effect;

 

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(vii) a duly completed Compliance Certificate as of the last day of the Fiscal
Quarter of the Lead Borrower and its Subsidiaries most recently ended prior to
the Closing Date, signed by a Responsible Officer of the Lead Borrower;

(viii) evidence that all insurance required to be maintained pursuant to the
Loan Documents and all endorsements in favor of the Administrative Agent
required under the Loan Documents have been obtained and are in effect;

(ix) the Security Documents, each duly executed by the applicable Loan Parties;

(x) the Intercreditor Agreement, duly executed by the Equipment Term Loan Lender
and the Loan Parties;

(xi) the Representations and Warranties of Officers, duly executed by the Loan
Parties;

(xii) all other Loan Documents, each duly executed by the applicable Loan
Parties;

(xiii) results of searches or other evidence reasonably satisfactory to the
Administrative Agent (in each case dated as of a date reasonably satisfactory to
the Administrative Agent) indicating the absence of Liens on the assets of the
Loan Parties, except for Permitted Encumbrances;

(xiv)(A) all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the
Administrative Agent to be filed, registered or recorded to create or perfect
the first priority Liens (subject as to priority only to Permitted Encumbrances
which are non-consensual Permitted Encumbrances, permitted purchase money Liens,
the interests of lessors under Capital Leases or Liens on Equipment Term Loan
Priority Collateral securing obligations under the Equipment Term Loan Documents
to the extent set forth in the Intercreditor Agreement) intended to be created
under the Loan Documents and all such documents and instruments shall have been
so filed, registered or recorded to the satisfaction of the Administrative
Agent, (B) the DDA Notifications, Credit Card Notifications, and Blocked Account
Agreements required pursuant to Section 6.13 hereof, (C) control agreements with
respect to the Loan Parties’ securities and investment accounts, and
(D) Collateral Access Agreements as required by the Administrative Agent; and

(xv) such other assurances, certificates, documents, or consents as the
Administrative Agent reasonably may require.

(b) the Administrative Agent shall have received a Borrowing Base Certificate
dated the Closing Date, relating to the fiscal month ended on January 3, 2015,
and executed by a Responsible Officer of the Lead Borrower;

(c) Borrowers shall have minimum opening Excess Availability of not less than
$40,000,000 after the application of proceeds of the initial Loan and/or the
issuance of the initial Letters of Credit and after provision for payment of all
fees and expenses of the transaction required to be paid by Borrowers on the
Closing Date under the Agreement or the other Loan Documents,

 

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(d) the Administrative Agent shall be reasonably satisfied that any financial
statements delivered to it fairly present the business and financial condition
of the Loan Parties and that there has been no Material Adverse Effect since
November 29, 2014;

(e) the Administrative Agent shall have received (i) updated projected monthly
Consolidated balance sheets, income statements, statements of cash flows and
availability of Borrowers and Guarantors for the period through the end of the
2015 Fiscal Year, (ii) updated projected annual Consolidated balance sheets,
income statements, statements of cash flows and availability of Borrowers and
Guarantors through the end of the 2019 Fiscal Year, in each case as to the
projections described in clauses (i) and (ii) with the assumptions set forth in
all of such projections in form and substance reasonably satisfactory to
Administrative Agent, and an opening pro forma balance sheet for Borrowers and
Guarantors, (iii) third party appraisals of the inventory, in form and
containing assumptions and appraisal methods satisfactory to Administrative
Agent and the Lead Borrower by an appraiser acceptable to Administrative Agent
on which Administrative Agent and Lenders are permitted to rely, with results
reasonably satisfactory to Administrative Agent (it being understood that the
Borrowers shall not be obligated to reimburse Administrative Agent for the cost
of any such inventory appraisal conducted prior to the Closing Date in
connection with this facility), and (iv) field examinations of the business and
collateral of Borrowers and Guarantors in accordance with Administrative Agent’s
customary procedures and practices, with results reasonably satisfactory to
Administrative Agent (it being understood that the Borrowers shall not be
obligated to reimburse Administrative Agent for the cost of any such field
examinations conducted prior to the Closing Date in connection with this
facility), and (v) updates of customary legal due diligence, with results
reasonably satisfactory to Administrative Agent;

(f) there shall be no material pending or, to Borrowers’ actual knowledge,
threatened, litigation, proceeding, bankruptcy or insolvency, injunction, order
or claims with respect to any Loan Party, the credit facility evidenced by this
Agreement or the Equipment Term Loan Facility;

(g) there shall not have occurred any (i) default of any Material Contract or of
any agreements evidencing any debt of any Loan Party, (ii) default under any of
the Equipment Term Loan Documents or (iii) any Default or Event of Default under
any of the Loan Documents;

(h) there shall be no material misstatements in or omissions from the materials
previously furnished to Administrative Agent by Borrowers and Guarantors and
Administrative Agent have not become aware of any material information or other
matter that is inconsistent in a material and adverse manner with any previous
due diligence, information or matter (including any financial information).

(i) the consummation of the transactions contemplated hereby shall not violate
any applicable Law or any Organization Document.

(j) the Administrative Agent shall have received reasonably satisfactory
confirmation that all fees, charges and disbursements of counsel to the
Administrative Agent to the extent invoiced prior to or on the Closing Date,
plus such additional amounts of such fees, charges and disbursements as shall
constitute its reasonable estimate of such fees, charges and disbursements
incurred or to be incurred by it through the closing proceedings (provided that
such estimate shall not thereafter preclude a final settling of accounts between
the Borrowers and the Administrative Agent) will be paid by the Borrowers
concurrently with the initial Credit Extension.

(k) the Administrative Agent shall have received all documentation and other
information requested by the Administrative Agent as required by regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including without limitation the Act.

 

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(l) no material changes in governmental regulations or policies affecting any
Loan Party or any Credit Party shall have occurred prior to the Closing Date.

(m) the Equipment Term Loan Facility shall have been consummated (or consummated
substantially concurrently with the consummation of the facility evidenced by
this Agreement) on terms and conditions and pursuant to documentation reasonably
satisfactory to Administrative Agent.

(n) the Closing Date shall have occurred on or before February 28, 2015 or such
other date as to which the Lead Borrower and the Administrative Agent may agree.
The Administrative Agent shall notify the Lead Borrower of the Closing Date, and
such notice shall be conclusive and binding on the Loan Parties.

Without limiting the generality of the provisions of Section 9.04, for purposes
of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have Consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be Consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

4.02. Conditions to all Credit Extensions. The obligation of each Lender to
honor any Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type, or a
continuation of LIBO Rate Loans) and each LC Issuer to issue each Letter of
Credit is subject to the following conditions precedent:

(a) the representations and warranties of each other Loan Party contained in
Article V or any other Loan Document, or which are contained in any document
furnished at any time under or in connection herewith or therewith, shall be
true and correct in all material respects on and as of the date of such Credit
Extension, except (i) to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct in all material respects as of such earlier date, (ii) in the case of
any representation and warranty qualified by materiality, they shall be true and
correct in all respects, and (iii) for purposes of this Section 4.02, the
representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01;

(b) no Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof;

(c) after giving effect to the proposed Credit Extension pursuant to which
Tranche A Revolving Loans or Letters of Credit are requested, the Total Tranche
A Outstandings shall not exceed the Tranche A Revolving Loan Limit;

(d) after giving effect to the proposed Credit Extension pursuant to which
Tranche A-1 Revolving Loans are requested, the Total Tranche A-1 Outstandings
shall not exceed the Tranche A-1 Revolving Loan Limit;

 

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(e) in the case of a request for a Credit Extension pursuant to which Tranche A
Revolving Loans or Letters of Credit are requested, the Total Tranche A-1
Outstandings are equal to the Tranche A-1 Revolving Loan Limit,

(f) the Administrative Agent and, if applicable, the LC Issuer or the Swing Line
Lender shall have received a Request for Credit Extension in accordance with the
requirements hereof;

(g) no event or circumstance which could reasonably be expected to result in a
Material Adverse Effect shall have occurred;

(h) no Overadvance shall result from such Credit Extension (other than a
Permitted Overadvance); and

(i) the Administrative Agent shall have received a Borrowing Base Certificate,
certified as complete and correct by a Responsible Officer of the Lead Borrower
as of the close of business on the immediately preceding Fiscal Month.

Each Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Committed Loans to the other Type or a continuation of LIBO
Rate Loans) submitted by the Borrowers shall be deemed to be a representation
and warranty by the Borrowers that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of the applicable Credit
Extension. The conditions set forth in this Section 4.02 are for the sole
benefit of the Credit Parties, but until the Required Lenders otherwise direct
the Administrative Agent to cease making Committed Loans, the Lenders will fund
their Applicable Percentage of all Loans and participate in all Swing Line Loans
and Letters of Credit whenever made or issued, which are requested by the Lead
Borrower and which, notwithstanding the failure of the Loan Parties to comply
with the provisions of this Article IV, agreed to by the Administrative Agent,
provided, that, the making of any such Loans or the issuance of any Letters of
Credit shall not be deemed a modification or waiver by any Credit Party of the
provisions of this Article IV on any future occasion or a waiver of any rights
or the Credit Parties as a result of any such failure to comply.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

To induce the Credit Parties to enter into this Agreement and to make Loans and
to issue Letters of Credit hereunder, each Loan Party represents and warrants to
the Administrative Agent and the other Credit Parties that:

5.01. Existence, Qualification and Power. Each Loan Party and each Subsidiary
thereof (a) is a corporation, limited liability company, partnership or limited
partnership, duly incorporated, organized or formed, validly existing and, where
applicable, in good standing under the Laws of the jurisdiction of its
incorporation, organization, or formation (b) has all requisite power and
authority and all requisite governmental licenses, permits, authorizations,
consents and approvals to (i) own or lease its assets and carry on its business
and (ii) execute, deliver and perform its obligations under the Loan Documents
to which it is a party, and (c) is duly qualified and is licensed and, where
applicable, in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification or license; except in each case referred to in
clause (b)(i) or (c), to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect. Schedule 5.01 annexed hereto sets
forth, as of the Closing Date, each Loan Party’s name as it appears in official
filings in its state of incorporation or organization, its state of
incorporation or organization, organization type, organization number, if any,
issued by its state of incorporation or organization, and its federal employer
identification number.

 

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5.02. Authorization; No Contravention. The execution, delivery and performance
by each Loan Party of each Loan Document to which such Person is or is to be a
party, has been duly authorized by all necessary corporate or other
organizational action, and does not and will not (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in any
breach, termination, or contravention of, or constitute a default under, or
require any payment to be made under (i) any Material Contract or any Material
Indebtedness to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; (c) result in or require the
creation of any Lien upon any asset of any Loan Party (other than Liens in favor
of the Administrative Agent under the Security Documents); or (d) violate any
Law.

5.03. Governmental Authorization; Other Consents. No approval, consent
(including, the consent of Equity Interests holders or creditors of any Loan
Party), exemption, authorization, license or other action by, or notice to, or
filing with, any Governmental Authority or regulatory body or any other Person
is necessary or required for the grant of the Liens by such Loan Party in the
Collateral pursuant to the Security Documents or for the execution, delivery or
performance by, or enforcement against, any Loan Party of this Agreement or any
other Loan Document, except for (a) the perfection or maintenance of the Liens
created under the Security Documents (including the first priority nature
thereof, subject as to priority only to Permitted Encumbrances which are
non-consensual Permitted Encumbrances, permitted purchase money Liens, the
interests of lessors under Capital Leases or Liens on Equipment Term Loan
Priority Collateral securing obligations under the Equipment Term Loan Documents
to the extent set forth in the Intercreditor Agreement) and (b) such consents
which have been obtained or made prior to the date hereof and are in full force
and effect.

5.04. Binding Effect. This Agreement has been, and each other Loan Document,
when delivered, will have been, duly executed and delivered by each Loan Party
that is party thereto. This Agreement constitutes, and each other Loan Document
when so delivered will constitute, a legal, valid and binding obligation of such
Loan Party, enforceable against each Loan Party that is party thereto in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

5.05. Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of the Lead
Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all Material Indebtedness and other liabilities,
direct or contingent, of the Lead Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.

(b) The unaudited Consolidated balance sheet of the Lead Borrower and its
Subsidiaries dated November 1, 2014, and the related Consolidated statements of
income or operations, Shareholders’ Equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the financial condition of the Lead
Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby, subject,

 

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in the case of clauses (i) and (ii), to the absence of footnotes and to normal
year-end audit adjustments. Schedule 5.05 sets forth all Material Indebtedness
and other liabilities, direct or contingent, of the Loan Parties and their
Consolidated Subsidiaries as of the date of such financial statements, including
liabilities for taxes, material commitments and Material Indebtedness.

(c) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

(d) To the knowledge of the Lead Borrower, except as has been disclosed to the
Administrative Agent in writing before the Closing Date, no Internal Control
Event exists or has occurred since the date of the Audited Financial Statements
that has resulted in or could reasonably be expected to result in a misstatement
in any material respect, in any financial information delivered or to be
delivered to the Administrative Agent or the Lenders, of (i) covenant compliance
calculations provided hereunder or (ii) the assets, liabilities, financial
condition or results of operations of the Lead Borrower and its Subsidiaries on
a Consolidated basis.

(e) The Consolidated forecasted balance sheet and statements of income and cash
flows of the Lead Borrower and its Subsidiaries delivered pursuant to
Section 6.01(d) were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were fair in light of the conditions existing
at the time of delivery of such forecasts, and represented, at the time of
delivery, the Loan Parties’ good faith estimate of its future financial
performance.

5.06. Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of the Loan Parties, threatened, at law, in equity,
in arbitration or before any Governmental Authority, by or against any Loan
Party or any of its Subsidiaries or against any of its properties or revenues
that (a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby, or (b) either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect.

5.07. No Default. No Loan Party or any Subsidiary is in default in any material
respect under or with respect to any Material Contract or any Material
Indebtedness. No Default has occurred and is continuing or would result from the
consummation of the transactions contemplated by this Agreement or any other
Loan Document.

5.08. Ownership of Property; Liens.

(a) Each of the Loan Parties and each Subsidiary thereof has good record and
marketable title in fee simple to, valid leasehold interests in or other valid
right to use, all real property material to the ordinary conduct of its
business. Each of the Loan Parties and each Subsidiary has good and marketable
title to, valid leasehold interests in, valid license or other contractual right
to use all personal property and assets material to the ordinary conduct of its
business.

(b) Schedule 5.08(b)(1) sets forth the address (including street address, county
and state) of all Real Estate that is owned by the Loan Parties, together with a
list of the holders of any mortgage or other Lien thereon as of the Closing
Date. Each Loan Party and each of its Subsidiaries has good, marketable and
insurable fee simple title to the real property owned by such Loan Party or such
Subsidiary, free and clear of all Liens, other than Permitted Encumbrances.
Schedule 5.08(b)(2) sets forth the address (including street address, county and
state) of all Leases of the Loan Parties, together with a list of the lessor and
its contact information with respect to each such Lease as of the Closing Date.
Each of such Leases is in full force and effect and the Loan Parties are not in
default in any material respect of the terms thereof.

 

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(c) Schedule 7.01 sets forth a complete and accurate list of all Liens (other
than Liens in favor of Administrative Agent) on the property or assets of each
Loan Party and each of its Subsidiaries, showing as of the Closing Date the
lienholder thereof, and the property or assets of such Loan Party or such
Subsidiary subject thereto. The property of each Loan Party and each of its
Subsidiaries is subject to no Liens, other than Permitted Encumbrances.

(d) Schedule 7.02 sets forth a complete and accurate list of all Investments
held by any Loan Party or any Subsidiary of a Loan Party on the Closing Date,
showing as of the date hereof the amount, obligor or issuer and maturity, if
any, thereof.

(e) Schedule 7.03 sets forth a complete and accurate list of all Indebtedness of
each Loan Party or any Subsidiary of a Loan Party on the Closing Date, showing
as of the date hereof the amount, obligor or issuer and maturity thereof.

5.09. Environmental Compliance.

(a) Except as specifically disclosed in Schedule 5.09, no Loan Party or any
Subsidiary thereof (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability, except, in each case, as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

(b) To the knowledge of the Loan Parties, except as otherwise set forth in
Schedule 5.09, none of the properties currently or formerly owned or operated by
any Loan Party or any Subsidiary thereof is listed or proposed for listing on
the NPL or on the CERCLIS or any analogous foreign, state or local list or is
adjacent to any such property; there are no and never have been any underground
or above-ground storage tanks or any surface impoundments, septic tanks, pits,
sumps or lagoons in which Hazardous Materials are being or have been treated,
stored or disposed on any property currently owned or operated by any Loan Party
or any Subsidiary thereof or on any property formerly owned or operated by any
Loan Party or Subsidiary thereof; there is no asbestos or asbestos-containing
material on any property currently owned or operated by any Loan Party or
Subsidiary thereof; and Hazardous Materials have not been released, discharged
or disposed of on any property currently or formerly owned or operated by any
Loan Party or any Subsidiary thereof.

(c) Except as otherwise set forth on Schedule 5.09, no Loan Party or any
Subsidiary thereof is undertaking, and no Loan Party or any Subsidiary thereof
has completed, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation, either voluntarily or
pursuant to the order of any Governmental Authority or the requirements of any
Environmental Law which investigation, assessment or other action has disclosed
any material concern as existing or potential violations of Environmental Laws;
and all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or operated by
any Loan Party or any Subsidiary thereof have been disposed of, are stored or
used in a manner not reasonably expected to result in material liability to any
Loan Party or any Subsidiary thereof.

 

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5.10. Insurance. The properties of the Loan Parties and their Subsidiaries are
insured with financially sound and reputable insurance companies which are not
Affiliates of the Loan Parties, in such amounts (after giving effect to any
self-insurance), with such deductibles and covering such risks (including,
without limitation, workmen’s compensation, public liability, business
interruption and property damage insurance) as are customarily carried by
companies engaged in similar businesses and owning similar properties in
localities where the Loan Parties or the applicable Subsidiary operates.
Schedule 5.10 sets forth a description of all insurance maintained by or on
behalf of the Loan Parties as of the Closing Date. Each insurance policy listed
on Schedule 5.10 is in full force and effect and all premiums in respect thereof
that are due and payable have been paid.

5.11. Taxes. The Loan Parties and their Subsidiaries have filed all Federal,
state and other material tax returns and reports required to be filed, and have
paid all Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings being diligently conducted, for which adequate
reserves have been provided in accordance with GAAP, as to which Taxes no Lien
has been filed and which contest effectively suspends the collection of the
contested obligation and the enforcement of any Lien securing such obligation.
There is no proposed tax assessment against any Loan Party or any Subsidiary
that would, if made, have a Material Adverse Effect. No Loan Party or any
Subsidiary thereof is a party to any tax sharing agreement.

5.12. ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the knowledge
of the Lead Borrower, nothing has occurred which would prevent, or cause the
loss of, such qualification. The Loan Parties and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan. No
Lien imposed under the Code or ERISA exists or is likely to arise on account of
any Plan.

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

(c)(i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither any Loan Party
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv) neither any
Loan Party nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither any Loan
Party nor any ERISA Affiliate has engaged in a transaction that could be subject
to Sections 4069 or 4212(c) of ERISA.

5.13. Subsidiaries; Equity Interests. The Loan Parties have no Subsidiaries
other than those specifically disclosed in Part (a) of Schedule 5.13, which
Schedule sets forth the legal name, jurisdiction of incorporation or formation
and authorized Equity Interests of each such Subsidiary. All of the

 

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outstanding Equity Interests in such Subsidiaries have been validly issued, are
fully paid and non-assessable and are owned by a Loan Party (or a Subsidiary of
a Loan Party) in the amounts specified on Part (a) of Schedule 5.13 free and
clear of all Liens except for those created under the Security Documents. Except
as set forth in Schedule 5.13, there are no outstanding rights to purchase any
Equity Interests in any Subsidiary. The Loan Parties have no equity investments
in any other corporation or entity other than those specifically disclosed in
Part (b) of Schedule 5.13. All of the outstanding Equity Interests in the Loan
Parties have been validly issued, and are fully paid and non-assessable and are
owned in the amounts specified on Part (c) of Schedule 5.13 free and clear of
all Liens except for those created under the Security Documents. The copies of
the Organization Documents of each Loan Party and each amendment thereto
provided pursuant to Section 4.01 are true and correct copies of each such
document, each of which is valid and in full force and effect.

5.14. Margin Regulations; Investment Company Act;

(a) No Loan Party is engaged or will be engaged, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock. None of the proceeds of the
Credit Extensions shall be used directly or indirectly for the purpose of
purchasing or carrying any margin stock, for the purpose of reducing or retiring
any Indebtedness that was originally incurred to purchase or carry any margin
stock or for any other purpose that might cause any of the Credit Extensions to
be considered a “purpose credit” within the meaning of Regulations T, U, or X
issued by the FRB.

(b) None of the Loan Parties, any Person Controlling any Loan Party, or any
Subsidiary is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.

5.15. Disclosure. Each Loan Party has disclosed to the Administrative Agent and
the Lenders all agreements, instruments and corporate or other restrictions to
which it or any of its Subsidiaries is subject, and all other matters known to
it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf of
any Loan Party to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Loan Parties represent only that such information was prepared
in good faith based upon assumptions believed by the Loan Parties to be
reasonable at the time.

5.16. Compliance with Laws. Each of the Loan Parties and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

5.17. Intellectual Property; Licenses, Etc. The Loan Parties and their
Subsidiaries own, or possess the right to use, all of the Intellectual Property,
licenses, permits and other authorizations that are reasonably necessary for the
operation of their respective businesses, without conflict with the rights of
any other Person. To the knowledge of the Lead Borrower, no material slogan or
other advertising device,

 

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product, process, method, substance, part or other material now employed, or now
contemplated to be employed, by any Loan Party or any Subsidiary infringes upon
any rights held by any other Person except as could not reasonably be expected
to have a Material Adverse Effect. Except as specifically disclosed in Schedule
5.17, no claim or litigation regarding any of the foregoing is pending or, to
the knowledge of the Lead Borrower, threatened, which, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.18. Labor Matters. There are no strikes, lockouts, slowdowns or other material
labor disputes against any Loan Party or any Subsidiary thereof pending or, to
the knowledge of any Loan Party, threatened. The hours worked by and payments
made to employees of the Loan Parties comply in all material respects with the
Fair Labor Standards Act and any other applicable federal, state, local or
foreign Law dealing with such matters. No Loan Party or any of its Subsidiaries
has incurred any liability or obligation under the Worker Adjustment and
Retraining Act or similar state Law in excess of $50,000. All payments due from
any Loan Party and its Subsidiaries, or for which any claim may be made against
any Loan Party or any of its Subsidiaries, on account of wages and employee
health and welfare insurance and other benefits, have been paid or properly
accrued in accordance with GAAP as a liability on the books of such Loan Party.
Except as set forth on Schedule 5.18, no Loan Party or any Subsidiary is a party
to or bound by any collective bargaining agreement, management agreement,
employment agreement, bonus, restricted stock, stock option, or stock
appreciation plan or agreement or any similar plan, agreement or arrangement.
There are no representation proceedings pending or, to any Loan Party’s
knowledge, threatened to be filed with the National Labor Relations Board, and
no labor organization or group of employees of any Loan Party or any Subsidiary
has made a pending demand for recognition. There are no complaints, unfair labor
practice charges, grievances, arbitrations, unfair employment practices charges
or any other claims or complaints against any Loan Party or any Subsidiary
pending or, to the knowledge of any Loan Party, threatened to be filed with any
Governmental Authority or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment of
any employee of any Loan Party or any of its Subsidiaries, an adverse
determination of which could reasonably be expected to have a Material Adverse
Effect. The consummation of the transactions contemplated by the Loan Documents
will not give rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to which any Loan
Party or any of its Subsidiaries is bound.

5.19. Security Documents. The Security Agreement creates in favor of the
Administrative Agent, for the benefit of the Secured Parties referred to
therein, a legal, valid, continuing and enforceable Lien in the Collateral (as
defined in the Security Agreement), the enforceability of which is subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
The financing statements, releases and other filings are in appropriate form and
have been or will be filed in the offices specified in Schedule 11 of the
Security Agreement. Upon such filings and/or the obtaining of “control,” (as
defined in the UCC) the Administrative Agent will have a perfected Lien on, and
security interest in, to and under all right, title and interest of the Loan
Parties in all Collateral that may be perfected by filing, recording or
registering a financing statement or analogous document (including without
limitation the proceeds of such Collateral subject to the limitations relating
to such proceeds in the UCC) or by obtaining control, under the UCC (in effect
on the date this representation is made) in each case prior and superior in
right to any other Person.

5.20. Solvency.

After giving effect to the transactions contemplated by this Agreement, and
before and after giving effect to each Credit Extension, each of the Loan
Parties is Solvent. No transfer of property has been or will be made by any Loan
Party and no obligation has been or will be incurred by any Loan Party in
connection with the transactions contemplated by this Agreement or the other
Loan Documents with the intent to hinder, delay, or defraud either present or
future creditors of any Loan Party.

 

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5.21. Deposit Accounts; Credit Card Arrangements.

(a) Annexed hereto as Schedule 5.21(a) is a list of all DDAs maintained by the
Loan Parties as of the Closing Date, which Schedule includes, with respect to
each DDA (i) the name and address of the depository; (ii) the account number(s)
maintained with such depository; (iii) a contact person at such depository, and
(iv) the identification of each Blocked Account Bank.

(b) Annexed hereto as Schedule 5.21(b) is a list describing all arrangements as
of the Closing Date to which any Loan Party is a party with respect to the
processing and/or payment to such Loan Party of the proceeds of any credit card
charges and debit card charges for sales made by such Loan Party.

5.22. Brokers. No broker or finder brought about the obtaining, making or
closing of the Loans or transactions contemplated by the Loan Documents, and no
Loan Party or Affiliate thereof has any obligation to any Person in respect of
any finder’s or brokerage fees in connection therewith.

5.23. [Reserved]

5.24. Material Contracts. Schedule 5.24 sets forth all Material Contracts to
which any Loan Party is a party or is bound as of the Closing Date. The Loan
Parties have delivered, or will upon request of the Administrative Agent
deliver, true, correct and complete copies of such Material Contracts to the
Administrative Agent on or before the date hereof. The Loan Parties are not in
breach or in default in any material respect of or under any Material Contract
and have not received any notice of the intention of any other party thereto to
terminate any Material Contract.

5.25. Casualty. Neither the businesses nor the properties of any Loan Party or
any of its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or of the public enemy or other casualty (whether or not covered by
insurance) that, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied (other than contingent
indemnification obligations for which a claim has not been asserted), or any
Letter of Credit shall remain outstanding, the Loan Parties shall, and shall
(except in the case of the covenants set forth in Sections 6.01, 6.02, and 6.03)
cause each Subsidiary to:

6.01. Financial Statements. Deliver to the Administrative Agent, in form and
detail satisfactory to the Administrative Agent:

(a) as soon as available, but in any event within ninety (90) days after the end
of each Fiscal Year of the Lead Borrower (commencing with the Fiscal Year ended
January 31, 2015), a Consolidated balance sheet of the Lead Borrower and its
Subsidiaries as at the end of such Fiscal Year, and the related Consolidated
statements of income or operations, Shareholders’ Equity and cash flows for such
Fiscal Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year,

 

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all in reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and unqualified opinion of a Registered Public
Accounting Firm of nationally recognized standing reasonably acceptable to the
Administrative Agent, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and shall not be subject to any
“going concern” or like qualification or exception or any qualification or
exception as to the scope of such audit;

(b) [Reserved];

(c) as soon as available, but in any event within (x) thirty (30) days after the
end of each of the Fiscal Months of each fiscal year of the Lead Borrower (other
than a Fiscal Month that coincides with a Fiscal Quarter end) and (y) forty-five
(45) days after the end of each of the Fiscal Months of each fiscal year of the
Lead Borrower that coincides with a Fiscal Quarter end (commencing with the
Fiscal Month ended May 2, 2015), an unaudited Consolidated balance sheet of the
Lead Borrower and its Subsidiaries as at the end of such Fiscal Month, and the
related Consolidated statements of income or operations, Shareholders’ Equity
and cash flows for such Fiscal Month, and for the portion of the Lead Borrower’s
Fiscal Year then ended, setting forth in each case in comparative form the
figures for (A) such period set forth in the projections delivered pursuant to
Section 6.01(d) hereof, (B) the corresponding Fiscal Month of the previous
Fiscal Year and (C) the corresponding portion of the previous fiscal year, all
in reasonable detail, certified by a Responsible Officer of the Lead Borrower as
fairly presenting the financial condition, results of operations, Shareholders’
Equity and cash flows of the Lead Borrower and its Subsidiaries as of the end of
such Fiscal Month in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes, certified by a Responsible Officer of
the Lead Borrower to the effect that such statements are fairly stated in all
material respects when considered in relation to the Consolidated financial
statements of the Lead Borrower and its Subsidiaries;

(d) (i) as soon as available, but in any event no later than ten (10) days after
the end of each Fiscal Year of the Lead Borrower, a draft of forecasts prepared
by management of the Lead Borrower which have not been approved by the board of
directors of Lead Borrower (with such forecasts in final form as approved by the
board of directors of Lead Borrower being delivered no later than ninety
(90) days after the end of each Fiscal Year of the Lead Borrower), in form
satisfactory to the Administrative Agent, consisting of (A) Consolidated balance
sheets and statements of income or operations and cash flows of the Lead
Borrower and its Subsidiaries on a monthly basis for the immediately following
Fiscal Year (including the Fiscal Year in which the Maturity Date occurs),
provided, that, so long as there are any Loans outstanding, such Consolidated
balance sheets shall be delivered to the Administrative Agent on a quarterly
basis, and if there are no Loans outstanding, then such Consolidated balance
sheets shall be delivered to the Administrative Agent solely on an annual basis,
as provided above in this clause (i), and (B) an Excess Availability model on a
quarterly basis for the immediately following Fiscal Year (including the Fiscal
Year in which the Maturity Date occurs), in form satisfactory to the
Administrative Agent, and (ii) as soon as available, any significant revisions
to such forecasts delivered pursuant to this Section 6.01(d).

6.02. Certificates; Other Information. Deliver to the Administrative Agent, in
form and detail satisfactory to the Administrative Agent:

(a) [Reserved];

(b) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (c) (commencing with the delivery of the financial
statements for the Fiscal Month ended January 31, 2015), a duly completed
Compliance Certificate signed by a Responsible Officer of the Lead Borrower ,
and in the event of any change in generally accepted accounting principles used
in the preparation of such financial statements, the Lead Borrower shall also
provide a statement of reconciliation conforming such financial statements to
GAAP;

 

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(c) on the fifteenth (15th) day of each Fiscal Month (or, if such day is not a
Business Day, on the next succeeding Business Day), a certificate in the form of
Exhibit F (a “Borrowing Base Certificate”) showing the Borrowing Base as of the
close of business as of the last day of the immediately preceding Fiscal Month
(as applicable), each Borrowing Base Certificate to be certified as complete and
correct by a Responsible Officer of the Lead Borrower; provided that, at any
time that an Accelerated Borrowing Base Weekly Delivery Event has occurred and
is continuing, at the election of the Administrative Agent, such Borrowing Base
Certificate shall be delivered on Wednesday of each week (and such weekly
delivery shall continue for a minimum of six consecutive weeks), commencing with
the first week following the week during which such Accelerated Borrowing Base
Weekly Delivery Event first occurred (or, if Wednesday of any week is not a
Business Day, on the next succeeding Business Day), as of the close of business
on Friday of the immediately preceding week;

(d) promptly upon receipt, copies of any detailed audit reports, management
letters or recommendations submitted to the board of directors (or the audit
committee of the board of directors) of any Loan Party by its Registered Public
Accounting Firm in connection with the accounts or books of the Loan Parties or
any Subsidiary, or any audit of any of them, including, without limitation,
specifying any Internal Control Event;

(e) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of the Loan Parties, and copies of all annual, regular, periodic and special
reports and registration statements which any Loan Party may file or be required
to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of
1934 or with any national securities exchange, and in any case not otherwise
required to be delivered to the Administrative Agent pursuant hereto;

(f) the financial and collateral reports described on Schedule 6.02 hereto, at
the times set forth in such Schedule;

(g) promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities of any Loan Party or any Subsidiary
thereof pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Lenders pursuant to
Section 6.01 or any other clause of this Section 6.02;

(h) as soon as available, but in any event within 30 days after the end of each
fiscal year of the Loan Parties, a report summarizing the insurance coverage
(specifying type, amount and carrier) in effect for each Loan Party and its
Subsidiaries and containing such additional information as the Administrative
Agent, or any Lender through the Administrative Agent, may reasonably specify;

(i) promptly after the Administrative Agent’s request therefor, copies of all
Material Contracts and documents evidencing Material Indebtedness;

(j) promptly, and in any event within five Business Days after receipt thereof
by any Loan Party or any Subsidiary thereof, copies of each notice or other
correspondence received from any Governmental Authority (including, without
limitation, the SEC (or comparable agency in any applicable non-U.S.
jurisdiction)) concerning any proceeding with, or investigation or possible
investigation or other inquiry by such Governmental Authority regarding
financial or other operational results of any Loan Party or any Subsidiary
thereof or any other matter which, if adversely determined, could reasonably
expected to have a Material Adverse Effect; and

 

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(k) promptly, such additional information regarding the business affairs,
financial condition or operations of any Loan Party or any Subsidiary, or
compliance with the terms of the Loan Documents, as the Administrative Agent or
any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a), (b), or (c) or
Section 6.02(d) or (e) (to the extent any such documents are included in
materials otherwise filed with the SEC) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date (i) on which
the Lead Borrower posts such documents, or provides a link thereto on the Lead
Borrower’s website on the Internet at the website address listed on Schedule
10.02; or (ii) on which such documents are posted on the Lead Borrower’s behalf
on an Internet or intranet website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that: (i) the Lead
Borrower shall deliver paper copies of such documents to the Administrative
Agent or any Lender that requests the Lead Borrower to deliver such paper copies
until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (ii) the Lead Borrower shall notify the
Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Lead Borrower
shall be required to provide paper copies of the Compliance Certificates
required by Section 6.02(b) to the Administrative Agent. The Administrative
Agent shall have no obligation to request the delivery or to maintain copies of
the documents referred to above, and in any event shall have no responsibility
to monitor compliance by the Loan Parties with any such request for delivery,
and each Lender shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.

The Loan Parties hereby acknowledge that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders and the LC Issuer materials and/or
information provided by or on behalf of the Loan Parties hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials on
IntraLinks or another similar electronic system (the “Platform”) and (b) certain
of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to
receive material non-public information with respect to the Loan Parties or
their securities) (each, a “Public Lender”). The Loan Parties hereby agree that
so long as any Loan Party is the issuer of any outstanding debt or equity
securities that are registered or issued pursuant to a private offering or is
actively contemplating issuing any such securities, they will use commercially
reasonable efforts to identify that portion of the Borrower Materials that may
be distributed to the Public Lenders and that (w) all such Borrower Materials
shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall
mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC,” the Loan Parties shall be deemed to
have authorized the Administrative Agent, the Arranger, the LC Issuer and the
Lenders to treat such Borrower Materials as not containing any material
non-public information (although it may be sensitive and proprietary) with
respect to the Loan Parties or their securities for purposes of United States
Federal and state securities laws (provided, however, that to the extent such
Borrower Materials constitute Information, they shall be treated as set forth in
Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Investor”;
and (z) the Administrative Agent and the Arranger shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor.”

6.03. Notices. Promptly notify the Administrative Agent:

(a) of the occurrence of any Default or Event of Default;

 

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(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Material Contract or with respect to Material Indebtedness of
any Loan Party or any Subsidiary thereof; (ii) any dispute, litigation,
investigation, proceeding or suspension between any Loan Party or any Subsidiary
thereof and any Governmental Authority (any of the foregoing described in this
clause (ii) being referred to herein as “Governmental Litigation”); or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting any Loan Party or any Subsidiary thereof, including pursuant to any
applicable Environmental Laws; provided, that, solely in the case of any
Governmental Litigation with respect to which the potential liability of Loan
Parties in connection therewith does not exceed $100,000 and all litigation or
proceedings which are not Governmental Litigation, the delivery by Loan Parties
to Administrative Agent, no less frequently than once each Fiscal Quarter, of
Loan Parties’ litigation status report prepared by Loan Parties’ general counsel
shall satisfy Loan Parties’ obligations under this clause (b);

(c) of the occurrence of any ERISA Event;

(d) of any material change in accounting policies or financial reporting
practices by any Loan Party or any Subsidiary thereof;

(e) of any change in any Loan Party’s senior executive officers;

(f) of the discharge by any Loan Party of its present Registered Public
Accounting Firm or any withdrawal or resignation by such Registered Public
Accounting Firm;

(g) [Reserved];

(h) of the filing of any Lien for unpaid Taxes against any Loan Party in excess
of $500,000;

(i) of any casualty or other insured damage to any material portion of the
Collateral or the commencement of any action or proceeding for the taking of any
interest in a material portion of the Collateral under power of eminent domain
or by condemnation or similar proceeding or if any material portion of the
Collateral is damaged or destroyed;

(j) of (i) the entry by a Loan Party into a Material Contract, (ii) the
incurrence by a Loan Party of Material Indebtedness, (iii) the voluntary or
involuntary grant of any Lien upon any property of a Loan Party, (iv) the making
of any Investments by a Loan Party in excess of $1,000,000, or (v) the
occurrence of any Prepayment Event, other than a Prepayment Event arising from
the receipt of Extraordinary Receipts in an amount of less than $1,000,000; and

(k) of any failure by any Loan Party to pay rent at (i) five (5%) or more of
such Loan Party’s locations or (ii) any of such Loan Party’s locations if such
failure continues for more than ten (10) days following the day on which such
rent first came due and such failure would be reasonably likely to result in a
Material Adverse Effect.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Lead Borrower setting forth details of the occurrence
referred to therein and stating what action the Lead Borrower has taken and
proposes to take with respect thereto.

6.04. Payment of Obligations. Pay and discharge as the same shall become due and
payable, all its obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or

 

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levies upon it or its properties or assets, (b) all lawful claims (including,
without limitation, claims of landlords, warehousemen, freight forwarders, and
carriers) which, if unpaid, would by law become a Lien upon its property; and
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness, except, in each case, where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) such
Loan Party has set aside on its books adequate reserves with respect thereto in
accordance with GAAP, (c) such contest effectively suspends collection of the
contested obligation and enforcement of any Lien securing such obligation,
(c) no Lien has been filed with respect thereto and (d) the failure to make
payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect. Nothing contained herein shall be deemed to limit the
rights of the Administrative Agent with respect to determining Availability
Reserves pursuant to this Agreement.

6.05. Preservation of Existence, Etc. (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization or formation except in a transaction permitted
by Section 7.04 or 7.05 (except, in the case of failure to maintain good
standing, to the extent promptly cured or as otherwise could not reasonably be
expected to have a Material Adverse Effect); (b) take all reasonable action to
maintain all rights, privileges, permits, licenses and franchises necessary or
desirable in the normal conduct of its business, except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) preserve or renew all of its Intellectual Property, except to
the extent failure to do so could not reasonably be expected to have a Material
Adverse Effect.

6.06. Maintenance of Properties. (a) Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted; and (b) make
all necessary repairs thereto and renewals and replacements thereof, except, in
each case, where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

6.07. Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies reasonably acceptable to the Administrative Agent which are
not Affiliates of the Loan Parties, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business and operating in the same or
similar locations or as is required by applicable Law, of such types and in such
amounts (after giving effect to any self-insurance compatible with the following
standards) as are customarily carried under similar circumstances by such other
Persons and as are reasonably acceptable to the Administrative Agent.

(a) Cause fire and extended coverage policies maintained with respect to any
Collateral to be endorsed or otherwise amended to include (i) a mortgage clause
and lenders’ loss payable clause, with respect to real property and personal
property, in form and substance reasonably satisfactory to the Administrative
Agent, which endorsements or amendments shall provide that the insurer shall
make all payments of proceeds payable under the policies to both the Loan
Parties and the Administrative Agent, provided, that, the Loan Parties shall
promptly remit to the Administrative Agent any such proceeds that may be
delivered directly to the Loan Parties, for application to the Obligations in
accordance with and subject to the terms of this Agreement, (ii) a provision to
the effect that none of the Loan Parties, Credit Parties or any other Person
shall be a co-insurer and (iii) such other provisions as the Administrative
Agent may reasonably require from time to time to protect the interests of the
Credit Parties.

(b) Cause commercial general liability policies to include the Administrative
Agent as an additional insured.

 

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(c) Cause business interruption policies to name the Administrative Agent as a
loss payee and to be endorsed or amended to include (i) a provision to the
effect that none of the Loan Parties, the Administrative Agent, or any other
party shall be a co insurer and (ii) such other provisions as the Administrative
Agent may reasonably require from time to time to protect the interests of the
Credit Parties. Notwithstanding the foregoing, so long as no Cash Dominion Event
shall have occurred and be continuing at any time that proceeds become payable
under any business interruption policies of Loan Parties, Administrative Agent
shall (x) permit the Loan Parties to use all such business interruption
insurance proceeds for any purpose permitted under this Agreement and (y) remit
to the Loan Parties any amounts received by Administrative Agent as a loss payee
under such business interruption insurance maintained by the Loan Parties. If a
Cash Dominion Event has occurred and is continuing, the Loan Parties shall remit
to the Administrative Agent an amount equal to such proceeds (if the
Administrative Agent has not received same) and the Administrative Agent is
hereby authorized to collect all business interruption insurance directly and to
apply such proceeds to the payment of the then outstanding Obligations.

(d) Cause each such policy referred to in this Section 6.07 to also provide that
it shall not be canceled, materially limited or not renewed (i) by reason of
nonpayment of premium except upon not less than ten (10) days’ prior written
notice thereof by the insurer to the Administrative Agent (giving the
Administrative Agent the right to cure defaults in the payment of premiums) or
(ii) for any other reason except upon not less than thirty (30) days’ prior
written notice thereof by the insurer to the Administrative Agent.

(e) Deliver to the Administrative Agent, prior to the cancellation, material
modification or non-renewal of any such policy of insurance, a copy of a renewal
or replacement policy (or other evidence of renewal of a policy previously
delivered to the Administrative Agent, including an insurance binder) together
with evidence satisfactory to the Administrative Agent of payment of the premium
therefor.

(f) [Reserved].

(g) Maintain for themselves and their Subsidiaries, a Directors and Officers
insurance policy, and a “Blanket Crime” policy including employee dishonesty,
forgery or alteration, theft, disappearance and destruction, robbery and safe
burglary, property, and computer fraud coverage with responsible companies in
such amounts as are customarily carried by business entities engaged in similar
businesses similarly situated, and will upon request by the Administrative Agent
furnish the Administrative Agent certificates evidencing renewal of each such
policy.

(h) Permit any representatives that are designated by the Administrative Agent
to inspect the insurance policies maintained by or on behalf of the Loan Parties
and to inspect books and records related thereto and any properties covered
thereby.

None of the Credit Parties, or their agents or employees shall be liable for any
loss or damage insured by the insurance policies required to be maintained under
this Section 6.07. Each Loan Party shall look solely to its insurance companies
or any other parties other than the Credit Parties for the recovery of such loss
or damage and such insurance companies shall have no rights of subrogation
against any Credit Party or its agents or employees. If, however, the insurance
policies do not provide waiver of subrogation rights against such parties, as
required above, then the Loan Parties hereby agree, to the extent permitted by
law, to waive their right of recovery, if any, against the Credit Parties and
their agents and employees. The designation of any form, type or amount of
insurance coverage by any Credit Party under this Section 6.07 shall in no event
be deemed a representation, warranty or advice by such Credit Party that such
insurance is adequate for the purposes of the business of the Loan Parties or
the protection of their properties.

 

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6.08. Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves have been set aside and maintained by the
Loan Parties in accordance with GAAP, or (b) the failure to comply therewith
could not reasonably be expected to have a Material Adverse Effect.

6.09. Books and Records; Accountants.

(a) Maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the Loan
Parties or such Subsidiary, as the case may be; and (ii) maintain such books of
record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over the Loan Parties
or such Subsidiary, as the case may be.

(b) At all times retain a Registered Public Accounting Firm which is reasonably
satisfactory to the Administrative Agent and instruct such Registered Public
Accounting Firm to cooperate with, and be available to, as reasonably requested
by the Administrative Agent or its representatives to discuss the Loan Parties’
financial performance, financial condition, operating results, controls, and
such other matters, within the scope of the retention of such Registered Public
Accounting Firm, as may be raised by the Administrative Agent.

6.10. Inspection Rights.

(a) Permit representatives and independent contractors of the Administrative
Agent to visit and inspect any of its properties, to examine its corporate,
financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss its affairs, finances and accounts with its directors, officers,
and Registered Public Accounting Firm, all at the expense of the Loan Parties
and at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Lead Borrower;
provided, that, when an Event of Default exists the Administrative Agent (or any
of its representatives or independent contractors) may do any of the foregoing
at the expense of the Loan Parties at any time during normal business hours and
without advance notice.

(b) Upon the request of the Administrative Agent after reasonable prior notice,
permit the Administrative Agent or professionals (including investment bankers,
consultants, accountants, and lawyers) retained by the Administrative Agent to
conduct field examinations and other evaluations, including, without limitation,
of (i) the Lead Borrower’s practices in the computation of the Borrowing Base,
(ii) the assets included in the Borrowing Base and related financial information
such as, but not limited to, sales, gross margins, payables, accruals and
reserves, and (iii) the Loan Parties’ business plan and cash flows. So long as
there are no Credit Extensions outstanding hereunder at any time during any
Fiscal Year, Loan Parties shall not be obligated to pay the fees and expenses of
the Administrative Agent and such professionals with respect to such
examinations and evaluations during such Fiscal Year. If, however, there are any
Loans outstanding hereunder at any time during any Fiscal Year and Excess
Availability is not, while such Loans are outstanding, less than the amount
equal to fifteen percent (15%) of the Loan Cap for any four (4) consecutive
Business Days, then the Loan Parties acknowledge that the Administrative Agent
may, in its discretion, undertake one (1) field examination during such Fiscal
Year

 

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at the Loan Parties’ expense; provided, that, if Excess Availability is less
than the amount equal to fifteen percent (15%) of the Loan Cap for any four
(4) consecutive Business Days at any time while such Loans are outstanding, then
the Loan Parties acknowledge that the Administrative Agent may, in its
discretion, undertake up to two (2) field examination during such Fiscal Year at
the Loan Parties’ expense. Notwithstanding the foregoing, the Administrative
Agent may cause additional field examinations to be undertaken (i) as it in its
discretion deems necessary or appropriate, at its own expense or, (ii) if
required by Law or if a Default or Event of Default shall have occurred and be
continuing, at the expense of the Loan Parties.

(c) Upon the request of the Administrative Agent after reasonable prior notice,
permit the Administrative Agent or professionals (including appraisers) retained
by the Administrative Agent to conduct appraisals of the Collateral, including,
without limitation, the assets included in the Borrowing Base. So long as there
are no Credit Extensions outstanding hereunder at any time during any Fiscal
Year, Loan Parties shall not be obligated to pay the fees and expenses of the
Administrative Agent and such professionals with respect to such appraisals
during such Fiscal Year. If, however, there are any Loans outstanding hereunder
at any time during any Fiscal Year and Excess Availability is not, while such
Loans are outstanding, less than the amount equal to fifteen percent (15%) of
the Loan Cap for any four (4) consecutive Business Days, then the Loan Parties
acknowledge that the Administrative Agent may, in its discretion, undertake one
(1) appraisal during such Fiscal Year at the Loan Parties’ expense; provided,
that, if Excess Availability is less than the amount equal to fifteen percent
(15%) of the Loan Cap for any four (4) consecutive Business Days at any time
while such Loans are outstanding, then the Loan Parties acknowledge that the
Administrative Agent may, in its discretion, undertake up to two (2) appraisals
during such Fiscal Year at the Loan Parties’ expense. Notwithstanding the
foregoing, the Administrative Agent may cause additional appraisals to be
undertaken (1) as it in its discretion deems necessary or appropriate, at its
own expense or, (2) if required by Law or if a Default or Event of Default shall
have occurred and be continuing, at the expense of the Loan Parties.

6.11. Use of Proceeds. Use the proceeds of the Credit Extensions (a) to pay the
February 2015 Dividend, (b) to pay costs, fees and expenses in connection with
this Agreement and the other Loan Documents, (c) to finance the acquisition of
working capital assets of the Borrowers, including the purchase of inventory and
equipment, in each case in the ordinary course of business, (d) to finance
Capital Expenditures of the Borrowers, and (e) for general corporate purposes of
the Loan Parties, in each case to the extent expressly permitted under
applicable Law and the Loan Documents.

6.12. Additional Loan Parties. Notify the Administrative Agent at the time that
any Person becomes a Subsidiary, and promptly thereafter (and in any event
within fifteen (15) days), cause any such Person (a) which is not a CFC, to
(i) become a Loan Party by executing and delivering to the Administrative Agent
a Joinder Agreement or a counterpart of the Facility Guaranty or such other
document as the Administrative Agent shall deem appropriate for such purpose,
(ii) grant a Lien to the Administrative Agent on such Person’s assets of the
type included in the Collateral to secure the Obligations, and (iii) deliver to
the Administrative Agent documents of the types referred to in clauses (iii) and
(iv) of Section 4.01(a) and favorable opinions of counsel to such Person (which
shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to in clause (a)), and (b) if any
Equity Interests or Indebtedness of such Person are owned by or on behalf of any
Loan Party, to pledge such Equity Interests and promissory notes evidencing such
Indebtedness (except that, if such Subsidiary is a CFC, the Equity Interests of
such Subsidiary to be pledged may be limited to sixty-five percent (65%) of the
outstanding voting Equity Interests of such Subsidiary and one hundred percent
(100%) of the non-voting Equity Interests of such Subsidiary and such time
period may be extended based on local law or practice), in each case in form,
content and scope reasonably satisfactory to the Administrative Agent. In no
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deemed a waiver or Consent to any transaction giving rise to the need to comply
with this Section 6.12 if such transaction was not otherwise expressly permitted
by this Agreement or constitute or be deemed to constitute, with respect to any
Subsidiary, an approval of such Person as a Borrower or permit the inclusion of
any acquired assets in the computation of the Borrowing Base. Notwithstanding
the foregoing provisions of this Section 6.12, the parties hereto acknowledge
and agree that Stein Mart Air, Inc. shall not be required to become a Loan Party
as long as Borrowers are in compliance with the requirements of Section 7.16.

6.13. Cash Management.

(a) On or prior to the Closing Date:

(i) deliver to the Administrative Agent copies of notifications (each, a “DDA
Notification”) substantially in the form attached hereto as Exhibit G which have
been executed on behalf of such Loan Party and delivered to each depository
institution listed on Schedule 5.21(a);

(ii) deliver to the Administrative Agent copies of notifications (each, a
“Credit Card Notification”) substantially in the form attached hereto as Exhibit
H which have been executed on behalf of such Loan Party and delivered to such
Loan Party’s credit card clearinghouses and processors listed on Schedule
5.21(b); provided, that, Lead Borrower may amend Schedule 5.21(b) to add
additional Credit Card Issuers and Credit Card Processors, so long as such
amendment occurs by written notice delivered to Administrative Agent promptly
after the date on which the applicable Loan Party enters into a new Credit Card
Agreement after the Closing Date, accompanied by a copy of the Credit Card
Notification delivered to each new Credit Card Issuer and/or Credit Card
Processor which is identified in such amendment; and

(iii) enter into a Blocked Account Agreement satisfactory in form and substance
to the Administrative Agent with each Blocked Account Bank (collectively, the
“Blocked Accounts”).

(b) The Loan Parties shall ACH or wire transfer no less frequently than weekly
(or, upon the occurrence and during the continuance of a Cash Dominion Event,
daily), and whether or not there are then any outstanding Obligations, to a
Blocked Account all amounts on deposit in each such DDA and all payments due
from Credit Card Processors and Credit Card Issuers; provided, however, that the
Loan Parties may leave up to $5,000 on deposit in each DDA.

(c) Each Blocked Account Agreement shall require, after the occurrence and
during the continuance of a Cash Dominion Event, that such bank transfer no less
frequently than daily (and whether or not there are then any outstanding
Obligations) to the concentration account maintained by the Administrative Agent
at Wells Fargo (the “Concentration Account”), all cash receipts and collections,
including, without limitation, the following:

(i) all available cash receipts from the sale of Inventory and other assets
(whether or not constituting Collateral);

(ii) all proceeds of collections of Accounts;

(iii) all Net Proceeds, and all other cash payments received by a Loan Party
from any Person or from any source or on account of any sale or other
transaction or event, including, without limitation, any Prepayment Event;

 

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(iv) the then contents of each DDA (net of any minimum balance, not to exceed
$2,500.00, as may be required to be kept in the subject DDA by the depository
institution at which such DDA is maintained);

(v) the then entire ledger balance of each Blocked Account (net of any minimum
balance, not to exceed $2,500.00, as may be required to be kept in the subject
Blocked Account by the Blocked Account Bank); and

(vi) the proceeds of all credit card charges.

(d) The Concentration Account shall at all times be under the sole dominion and
control of the Administrative Agent. The Loan Parties hereby acknowledge and
agree that (i) the Loan Parties have no right of withdrawal from the
Concentration Account, (ii) the funds on deposit in the Concentration Account
shall at all times be collateral security for all of the Obligations and
(iii) the funds on deposit in the Concentration Account shall be applied as
provided in this Agreement.

(e) All funds received in the Agent Payment Account shall be applied to the
Obligations as provided in accordance with Section 8.03 of this Agreement and
without regard to whether the Administrative Agent is exercising remedies
provided for in Section 8.02 following the occurrence and during the continuance
of an Event of Default. In the event that, notwithstanding the provisions of
this Section 6.13, any Loan Party receives or otherwise has dominion and control
of any such proceeds or collections, such proceeds and collections shall be held
in trust by such Loan Party for the Administrative Agent, shall not be
commingled with any of such Loan Party’s other funds or deposited in any account
of such Loan Party and shall, not later than the Business Day after receipt
thereof, be deposited into the Concentration Account or dealt with in such other
fashion as such Loan Party may be instructed by the Administrative Agent.

(f) Upon the request of the Administrative Agent, the Loan Parties shall cause
bank statements and/or other reports to be delivered to the Administrative Agent
not less often than monthly, accurately setting forth all amounts deposited in
each Blocked Account to ensure the proper transfer of funds as set forth above.

(g) Without limiting the generality of Sections 6.13(a) through 6.13(f) above,
upon the occurrence and during the continuance of a Cash Dominion Event (and not
prior thereto), Administrative Agent shall have the right to direct (i) each
depository institution listed on Schedule 5.21(a), (ii) each bank that is party
to a Blocked Account Agreement (subject to the terms of such Blocked Account
Agreement), and (iii) each Credit Card Processor and Credit Card Issuer which
then acts as a credit card clearinghouse and/or processor for any Loan Party to,
in each case, remit to the Concentration Account (or such other account as
Administrative Agent may direct), all monies on deposit in the applicable bank
accounts, no less frequently than daily, and all payments payable to a Loan
Party by such Credit Card Processor or Credit Card Issuer, as and when payable
to such Loan Party.

6.14. Information Regarding the Collateral.

(a) Furnish to the Administrative Agent at least thirty (30) days prior written
notice of any change in: (i) any Loan Party’s name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties; (ii) the location of any Loan Party’s chief executive office, its
principal place of business, any office in which it maintains books or records
relating to Collateral owned by it or any office or facility at which Collateral
in excess of $500,000 in the aggregate owned by it is located (including the
establishment of any such new office or facility); (iii) any Loan Party’s
organizational structure or jurisdiction of incorporation or formation; or
(iv) any Loan Party’s Federal

 

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Taxpayer Identification Number or organizational identification number assigned
to it by its state of organization. The Loan Parties agree not to effect or
permit any change referred to in the preceding sentence unless all filings have
been made under the UCC or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have a
valid, legal and perfected first priority security interest in all the
Collateral (subject as to priority only to Permitted Encumbrances which are
non-consensual Permitted Encumbrances, permitted purchase money Liens, the
interests of lessors under Capital Leases or Liens on Equipment Term Loan
Priority Collateral securing obligations under the Equipment Term Loan Documents
to the extent set forth in the Intercreditor Agreement) for its own benefit and
the benefit of the other Credit Parties. Notwithstanding anything to the
contrary contained in Section 6.14(a)(ii) above, (x) the delivery to the
Administrative Agent of the Inventory summary by Store location and the
Statement of Store Activity report under Schedule 6.02, Sections (b)(ii) and
(c)(iii) thereof shall satisfy the Loan Parties’ obligation set forth in
Section 6.14(a)(ii) above to provide written notice of any Inventory that is at
any time delivered to any new Store locations, and (y) the delivery to the
Administrative Agent of a Borrowing Base Certificate, together with supporting
source documents for the Borrowing Base Certificate under Schedule 6.02, Section
(a)(i) thereof, evidencing that Inventory located at a new Store, a new
warehouse or any other new facility that was previously reported to the
Administrative Agent as Eligible Inventory has been, as a result of its location
at any such new facility, expressly removed from Eligible Inventory and is not
included within the Borrowing Base, shall satisfy the Loan Parties’ obligation
set forth in Section 6.14(a)(ii) above to provide written notice of any
Inventory that is at any time delivered to a new facility. In addition to, and
not in limitation of, the criteria for Eligible Inventory set forth in the
definition thereof, no Inventory that becomes located at a new Store, a new
warehouse or any other new facility shall constitute Eligible Inventory if Loan
Parties have not satisfied their obligations under Section 6.14(a)(ii) above
with respect to such new Inventory location.

(b) Should any of the information on any of the Schedules hereto become
inaccurate or misleading in any material respect as a result of changes after
the Closing Date, the Lead Borrower shall advise the Administrative Agent in
writing of such revisions or updates as may be necessary or appropriate to
update or correct the same. From time to time as may be reasonably requested by
the Administrative Agent, the Lead Borrower shall supplement each Schedule
hereto, or any representation herein or in any other Loan Document, with respect
to any matter arising after the Closing Date that, if existing or occurring on
the Closing Date, would have been required to be set forth or described in such
Schedule or as an exception to such representation or that is necessary to
correct any information in such Schedule or representation which has been
rendered inaccurate thereby (and, in the case of any supplements to any
Schedule, such Schedule shall be appropriately marked to show the changes made
therein). Notwithstanding the foregoing, no supplement or revision to any
Schedule or representation shall be deemed the Credit Parties’ consent to the
matters reflected in such updated Schedules or revised representations nor
permit the Loan Parties to undertake any actions otherwise prohibited hereunder
or fail to undertake any action required hereunder from the restrictions and
requirements in existence prior to the delivery of such updated Schedules or
such revision of a representation; nor shall any such supplement or revision to
any Schedule or representation be deemed the Credit Parties’ waiver of any
Default resulting from the matters disclosed therein.

6.15. Physical Inventories.

(a) Cause not less than one (1) physical inventory to be undertaken, at the
expense of the Loan Parties, annually, in each case consistent with past
practices, conducted by such inventory takers as are satisfactory to the
Administrative Agent and following such methodology as is consistent with the
methodology used in the immediately preceding inventory or as otherwise may be
satisfactory to the Administrative Agent. The Administrative Agent, at the
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and/or observe each scheduled physical count of Inventory which is undertaken on
behalf of any Loan Party. The Lead Borrower, within forty-five (45) days
following the completion of such inventory, shall provide the Administrative
Agent with a reconciliation of the results of such inventory (as well as of any
other physical inventory undertaken by a Loan Party) and shall post such results
to the Loan Parties’ stock ledgers and general ledgers, as applicable.

(b) Permit the Administrative Agent, in its discretion, if any Default or Event
of Default exists, to cause additional such inventories to be taken as the
Administrative Agent determines (each, at the expense of the Loan Parties).

6.16. Environmental Laws.

(a) Conduct its operations and keep and maintain its Real Estate in material
compliance with all Environmental Laws; (b) obtain and renew all material
environmental permits necessary for its operations and properties; and
(c) implement any and all investigation, remediation, removal and response
actions that are appropriate or necessary to comply in all material respects
with applicable Environmental Laws pertaining to the presence, generation,
treatment, storage, use, disposal, transportation or release of any Hazardous
Materials on, at, in, under, above, to, from or about any of its Real Estate,
provided, however, that neither a Loan Party nor any of its Subsidiaries shall
be required to undertake any such cleanup, removal, remedial or other action to
the extent that its obligation to do so is being contested in good faith and by
proper proceedings and adequate reserves have been set aside and are being
maintained by the Loan Parties with respect to such circumstances in accordance
with GAAP.

6.17. Further Assurances.

(a) Execute any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements and other documents), that may be required
under any applicable Law, or which the Administrative Agent may reasonably
request, to effectuate the transactions contemplated by the Loan Documents or to
grant, preserve, protect or perfect the Liens created or intended to be created
by the Security Documents or the validity or priority of any such Lien, all at
the expense of the Loan Parties. The Loan Parties also agree to provide to the
Administrative Agent, from time to time upon request, evidence satisfactory to
the Administrative Agent as to the perfection and priority of the Liens created
or intended to be created by the Security Documents.

(b) [Reserved]

(c) [Reserved]

(d) Upon the request of the Administrative Agent, use commercially reasonable
efforts to cause each of its Freight Forwarders to deliver an agreement
(including, without limitation, a Collateral Access Agreement) to the
Administrative Agent covering such matters and in such form as the
Administrative Agent may reasonably require.

(e) Upon the request of the Administrative Agent, cause any of its landlords to
deliver a Collateral Access Agreement to the Administrative Agent in such form
as the Administrative Agent may reasonably require.

(f) Upon the request of the Administrative Agent, deliver to the Administrative
Agent copies of each DDA Notification which have been executed on behalf of such
Loan Party and delivered to each depository institution at which a DDA is
maintained.

 

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6.18. Compliance with Terms of Leaseholds. Except as otherwise expressly
permitted hereunder, make all payments and otherwise perform all obligations in
respect of all Leases of real property to which any Loan Party or any of its
Subsidiaries is a party, keep such Leases in full force and effect and not allow
such Leases to lapse or be terminated or any rights to renew such leases to be
forfeited or cancelled, notify the Administrative Agent of any default by any
party with respect to such Leases and cooperate with the Administrative Agent in
all respects to cure any such default, and cause each of its Subsidiaries to do
so, except in any case where the failure to do so, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

6.19. [Reserved].

6.20. Lender Meetings.

Within ninety (90) days after the close of each Fiscal Year of the Lead
Borrower, if there are two (2) or more Lenders party to this Agreement at such
time, at the request of the Administrative Agent or of the Required Lenders and
upon reasonable prior notice, hold a meeting (at a mutually agreeable location
and time or, at the option of the Administrative Agent, by conference call) with
all Lenders who choose to attend such meeting at which meeting shall be reviewed
the financial results of the previous Fiscal Year and the financial condition of
Lead Borrower and its Subsidiaries and the projections presented for the current
Fiscal Year of Lead Borrower.

6.21. [Reserved].

6.22. ERISA.

(a) Each Loan Party shall, and shall cause each of its ERISA Affiliates to:
(i) maintain each Plan in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal and applicable State
law; (ii) cause each Plan which is qualified under Section 401(a) of the Code to
maintain such qualification; (iii) not terminate any Pension Plan so as to incur
any material liability to the PBGC; (iv) not allow or suffer to exist any
prohibited transaction involving any Plan or any trust created thereunder which
would subject such Borrower, Guarantor or such ERISA Affiliate to a material tax
or other liability on prohibited transactions imposed under Section 4975 of the
Code or ERISA; (v) make all required contributions to any Plan which it is
obligated to pay under Section 302 of ERISA, Section 412 of the Code or the
terms of such Plan; (vi) not allow or suffer to exist any accumulated funding
deficiency, whether or not waived, with respect to any such Pension Plan;
(vii) not engage in a transaction that could be subject to Section 4069 or
4212(c) of ERISA; or (viii) not allow or suffer to exist any occurrence of a
reportable event or any other event or condition which presents a material risk
of termination by the PBGC of any Plan that is a single employer plan, which
termination could result in any material liability to the PBGC.

(b) Promptly upon each determination of the amount of the contributions or other
payments required to be made for any calendar year by any Loan Party in respect
of any underfunded Pension Plan in order to eliminate or reduce the funding
deficiency and prior to any Borrower or Guarantor making any contribution of
other payment in respect of such calendar year, the Lead Borrower shall notify
the Administrative Agent of such determination and provide such information with
respect thereto as the Administrative Agent may reasonably request. The
Administrative Agent may, at its option, establish a Reserve equal to the
aggregate amount of the payments required to be made in such year in order to
reduce or eliminate any funding deficiency. On any date that the amount required
to be so contributed or paid is less than the amount of such Reserve, the amount
of the Reserve shall be reduced to the amount required to be so contributed or
paid, provided, that, no Default or Event of Default shall exist or have
occurred and be continuing and on any date that the amount required to be so
contributed or paid is greater than the amount of such Reserve, the amount of
such Reserve may be increased to such amount.

 

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ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding (other than contingent indemnification obligations for
which a claim has not been asserted), no Loan Party shall, nor shall it permit
any Subsidiary to, directly or indirectly:

7.01. Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, except
Permitted Encumbrances.

7.02. Investments. Make any Investments, except Permitted Investments.

7.03. Indebtedness; Disqualified Stock.

(a) Create, incur, assume, guarantee, suffer to exist or otherwise become or
remain liable with respect to, any Indebtedness, except Permitted Indebtedness;
or

(b) issue Disqualified Stock.

7.04. Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, (or agree to do any of the foregoing), except that, so long as
no Default or Event of Default shall have occurred and be continuing prior to or
immediately after giving effect to any action described below or would result
therefrom:

(a) any Subsidiary which is not a Loan Party may merge with (i) a Loan Party,
provided that the Loan Party shall be the continuing or surviving Person, or
(ii) any one or more other Subsidiaries which are not Loan Parties, provided
that when any wholly-owned Subsidiary is merging with another Subsidiary, the
wholly-owned Subsidiary shall be the continuing or surviving Person;

(b) any Subsidiary which is a Loan Party may merge into any Subsidiary which is
a Loan Party or into a Borrower, provided, that, in any merger involving a
Borrower, such Borrower shall be the continuing or surviving Person;

(c) in connection with a Permitted Acquisition, any Subsidiary of a Loan Party
may merge with or into or consolidate with any other Person or permit any other
Person to merge with or into or consolidate with it; provided that (i) the
Person surviving such merger shall be a wholly-owned Subsidiary of a Loan Party
and (ii) in the case of any such merger to which any Loan Party is a party, such
Loan Party is the surviving Person;

(d) any CFC that is not a Loan Party may merge into any CFC that is not a Loan
Party; and

(e)(i) a Subsidiary of any Borrower that is not a Loan Party (other than any
such Subsidiary the Equity Interests of which (or any portion thereof) is
subject to a Lien in favor of Administrative Agent) may liquidate, wind up, or
dissolve itself, so long as all of the assets of such liquidating or dissolving
Subsidiary are transferred to a Subsidiary of a Borrower that is not liquidating
or dissolving, (ii) a Loan Party (other than any Borrower) or any of its
wholly-owned Subsidiaries may liquidate, wind up, or dissolve itself, so long as
all of the assets (including any interest in any Equity Interests) of such
liquidating or dissolving Loan Party or Subsidiary are transferred to a Loan
Party that is not liquidating or dissolving, or (iii) a Borrower (other than
Stein Mart) may liquidate, wind up, or dissolve itself, so long as (A) all of
the assets of such liquidating or dissolving Borrower are transferred to another
Borrower that is not liquidating or dissolving and (B) Administrative Agent
shall have received not less than fifteen (15) Business Days prior written
notice of such liquidation, dissolution or winding-up.

 

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7.05. Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except Permitted Dispositions.

7.06. Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, so long as no Default or Event of Default shall have occurred and
be continuing prior to or immediately after giving effect to any action
described below or would result therefrom:

(a) the Company may make the February 2015 Dividend from legally available funds
so long as such dividend is not in violation of applicable law;

(b) each Subsidiary of a Loan Party may make Restricted Payments to any Loan
Party;

(c) the Loan Parties and each Subsidiary may declare and make dividend payments
or other distributions payable solely in the common stock or other common Equity
Interests of such Person; and

(d) if the Pro Forma Availability Condition is satisfied:

(i) the Loan Parties and each Subsidiary may purchase, redeem or otherwise
acquire Equity Interests issued by it; and

(ii) the Lead Borrower may declare or pay cash dividends to its stockholders.

7.07. Prepayments of Indebtedness. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner any
Indebtedness, or make any payment in violation of any subordination terms of any
Subordinated Indebtedness, except (a) regularly scheduled or mandatory
repayments, repurchases, redemptions or defeasances of Permitted Indebtedness
(other than Subordinated Indebtedness), so long as on the date of any such
payment and after giving effect thereto, no Default or no Event of Default then
exists, (b) repayments and prepayments of Subordinated Indebtedness in
accordance with the subordination terms thereof, so long as on the date of any
such payment and after giving effect thereto, no Default or no Event of Default
then exists, (c) voluntary prepayments, repurchases, redemptions or defeasances
of Permitted Indebtedness (but excluding on account of any Subordinated
Indebtedness) as long as the Payment Conditions satisfied, and (d) refinancings
and refundings of such Indebtedness in compliance with this Agreement.

7.08. Change in Nature of Business

In the case of each of the Loan Parties, engage in any line of business
substantially different from the Business conducted by the Loan Parties and
their Subsidiaries on the date hereof or any business substantially related or
incidental thereto.

7.09. Transactions with Affiliates. Enter into, renew, extend or be a party to
any transaction of any kind with any Affiliate of any Loan Party, whether or not
in the ordinary course of business, other than on fair and reasonable terms
substantially as favorable to the Loan Parties or such Subsidiary as would be
obtainable by the Loan Parties or such Subsidiary at the time in a comparable
arm’s length transaction with a Person other than an Affiliate, provided that
the foregoing restriction shall not apply to a transaction between or among the
Loan Parties.

 

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7.10. Burdensome Agreements. Enter into or permit to exist any Contractual
Obligation (other than this Agreement, any other Loan Document or the Equipment
Term Loan Documents) that (a) limits the ability (i) of any Subsidiary to make
Restricted Payments or other distributions to any Loan Party or to otherwise
transfer property to or invest in a Loan Party, (ii) of any Subsidiary to
Guarantee the Obligations, (iii) of any Subsidiary to make or repay loans to a
Loan Party, or (iv) of the Loan Parties or any Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person in favor of the
Administrative Agent; provided, however, that this clause (iv) shall not
prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under clauses (c) or (j) of the definition of Permitted
Indebtedness solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness; or (b) requires the
grant of a Lien to secure an obligation of such Person if a Lien is granted to
secure another obligation of such Person.

7.11. Use of Proceeds. Use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately,
(a) to purchase or carry margin stock (within the meaning of Regulation U of the
FRB) or to extend credit to others for the purpose of purchasing or carrying
margin stock or to refund Indebtedness originally incurred for such purpose; or
(b) for purposes other than those permitted under this Agreement.

7.12. Amendment of Material Documents. Amend, modify or waive any of a Loan
Party’s rights under (a) its Organization Documents in a manner materially
adverse to the Credit Parties, or (b) any Material Contract or Material
Indebtedness (other than on account of any refinancing thereof otherwise
permitted hereunder), in each case to the extent that such amendment,
modification or waiver would result in a Default or Event of Default under any
of the Loan Documents, would be materially adverse to the Credit Parties or
otherwise would be reasonably likely to have a Material Adverse Effect.

7.13. Fiscal Year. Change the Fiscal Year of any Loan Party, or the accounting
policies or reporting practices of the Loan Parties, except in compliance with
GAAP.

7.14. Deposit Accounts; Credit Card Processors. Open new DDAs or Blocked
Accounts unless the Loan Parties shall have delivered to the Administrative
Agent appropriate DDA Notifications or Blocked Account Agreements consistent
with the provisions of Section 6.13 and otherwise satisfactory to the
Administrative Agent. No Loan Party shall maintain any bank accounts or enter
into any agreements with Credit Card Processors other than the ones expressly
contemplated herein or in Section 6.13 hereof.

7.15. Financial Covenants. Consolidated Fixed Charge Coverage Ratio. Following
the occurrence and during the continuance of a Covenant Compliance Event, permit
the Consolidated Fixed Charge Coverage Ratio, calculated as of the last day of
each month for the Measurement Period then ended, to be less than 1.0:1.0.

7.16. Immaterial Subsidiary. Borrowers will not permit Stein Mart Air, Inc. and
its successors and assigns to (a) own any assets (other than assets of a de
minimis nature), (b) have any liabilities (other than liabilities of a de
minimis nature), or (c) engage in any business activity other than in its
capacity as owner of a fractional interest in an aircraft pursuant to a program
agreement with NetJets or similar aircraft provider.

 

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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01. Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. The Borrowers or any other Loan Party fails to pay within one
(1) Business Day after when and as required to be paid herein, (i) any amount of
principal of any Loan or any LC Obligation, or deposit any funds as Cash
Collateral in respect of LC Obligations, or (ii) any interest on any Loan or on
any LC Obligation, or any fee due hereunder, or (iii) any other amount payable
hereunder or under any other Loan Document; or

(b) Specific Covenants. (i) Any Loan Party fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01 or Section 6.02 (other
than Section 6.02(c)) and such failure continues for three (3) Business Days
after the Lead Borrower receives either written or oral notice thereof from the
Administrative Agent; or (ii) any Loan Party fails to perform or observe any
term, covenant or agreement contained in any of Section 6.02(c), 6.03, 6.05,
6.07, 6.10, 6.11, 6.12, 6.13 or 6.14 or Article VII (other than Section 7.08,
7.10 or 7.13); or (iii) any Guarantor fails to perform or observe any term,
covenant or agreement contained in the Facility Guaranty; or (iv) any of the
Loan Parties fails to perform or observe any term, covenant or agreement
contained in any of the Security Documents to which it is a party, and in the
case of clauses (ii), (iii) and (iv) in this Section 8.01(b), such failure
continues beyond any applicable grace or cure period; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for fifteen (15) days after the earlier of (i) receipt by such Loan
Party of written notice from the Administrative Agent of such failure and
(ii) the time at which such Loan Party or any Responsible Officer thereof knew
or became aware of, or should reasonably have known or been aware of, such
failure; or

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of any Borrower or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith (including, without limitation,
any Borrowing Base Certificate) shall be incorrect or misleading in any material
respect when made or deemed made; or

(e) Cross-Default. (i) Any Loan Party or any Subsidiary thereof (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Material Indebtedness
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement), or (B) fails
to observe or perform any other agreement or condition relating to any such
Material Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event occurs, the effect of which
default or other event is to cause, or to permit the holder or holders of such
Material Indebtedness or the beneficiary or beneficiaries of any Guarantee
thereof (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which a Loan Party or any Subsidiary
thereof is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which a Loan
Party or any Subsidiary thereof is an Affected Party (as so defined) and, in
either event, the Swap Termination Value owed by the Loan Party or such
Subsidiary as a result thereof is greater than $2,500,000; or

 

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(f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or a proceeding shall be commenced or a petition filed,
without the application or consent of such Person, seeking or requesting the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed and the appointment continues
undischarged, undismissed or unstayed for thirty (30) calendar days or an order
or decree approving or ordering any of the foregoing shall be entered; or any
proceeding under any Debtor Relief Law relating to any such Person or to all or
any material part of its property is instituted without the consent of such
Person and continues undismissed or unstayed for thirty (30) calendar days, or
an order for relief is entered in any such proceeding; or

(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary
thereof becomes unable or admits in writing its inability or fails generally to
pay its debts as they become due in the ordinary course of business, or (ii) any
writ or warrant of attachment or execution or similar process is issued or
levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within ten (10) days after its issuance
or levy; or

(h) Judgments. There is entered against any Loan Party or any Subsidiary thereof
(i) one or more judgments or orders for the payment of money in an aggregate
amount (as to all such judgments and orders outstanding at any time ) exceeding
$5,000,000 (to the extent not covered by independent third-party insurance as to
which the insurer is rated at least “A” by A.M. Best Company, has been notified
of the potential claim and does not dispute coverage), or (ii) any one or more
non-monetary judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in the case of
either clause (i) or (ii) of this provision, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of thirty (30) consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, is not in effect;
or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of any Loan Party under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $1,000,000 or
which would reasonably likely result in a Material Adverse Effect, or (ii) a
Loan Party or any ERISA Affiliate fails to pay when due, after the expiration of
any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of $1,000,000 or which would reasonably likely
result in a Material Adverse Effect; or

(j) Invalidity of Loan Documents. (i) Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party or any
other Person contests in any manner the validity or enforceability of any
provision of any Loan Document; or any Loan Party denies that it has any or
further liability or obligation under any provision of any Loan Document, or
purports to revoke, terminate or rescind any provision of any Loan Document or
seeks to avoid, limit or otherwise adversely affect any Lien purported to be
created under any Security Document; or (ii) any Lien purported to be created
under any Security Document shall cease to be, or shall be asserted by any Loan
Party or any other Person not to be, a valid and perfected Lien on any
Collateral, with the priority required by the applicable Security Document, with
respect to Collateral the aggregate value of which, for all such Collateral,
does not exceed $250,000 at any time; or

 

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(k) Change of Control. There occurs any Change of Control; or

(l) Cessation of Business. Except as otherwise expressly permitted hereunder,
any Loan Party shall take any action to suspend the operation of its business in
the ordinary course, liquidate all or a material portion of its assets or Store
locations, or employ an agent or other third party to conduct a program of
closings, liquidations or “going-out-of-business” sales of any material portion
of its business; or

(m) Loss of Collateral. There occurs any uninsured loss to any portion of the
Collateral having a value in excess of $1,000,000; or

(n) Breach of Contractual Obligation. Any Loan Party or any Subsidiary thereof
fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any Material
Contract or fails to observe or perform any other agreement or condition
relating to any such Material Contract or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the
counterparty to such Material Contract to terminate such Material Contract; or

(o) Indictment. The indictment or institution of any legal process or proceeding
against, any Loan Party or any Subsidiary thereof, under any federal, state,
municipal, and other criminal statute, rule, regulation, order, or other
requirement having the force of law for a felony; or

(p) Guaranty. The termination or attempted termination of any Facility Guaranty
except as expressly permitted hereunder or under any other Loan Document; or

(q) Credit Card Agreements. (i) any Credit Card Issuer or Credit Card Processor
shall send notice to any Borrower that it is ceasing to make or suspending all,
or substantially all, payments to such Borrower of amounts due or to become due
to such Borrower or shall cease or suspend all, or substantially all, such
payments, or shall send notice to such Borrower that it is terminating its
arrangements with Borrower (except upon the normal expiration of such
arrangements) or such arrangements shall terminate as a result of any event of
default under such arrangements by a Loan Party, which continues for more than
the applicable cure period, if any, with respect thereto, unless such Borrower
shall have entered into arrangements with another Credit Card Issuer or Credit
Card Processor, as the case may be, prior to the effective date of such
termination or (ii) any Credit Card Issuer or Credit Card Processor withholds
payment of amounts otherwise payable to a Borrower to fund a reserve account or
otherwise hold as collateral, or shall require a Borrower to pay funds into a
reserve account or for such Credit Card Issuer or Credit Card Processor to
otherwise hold as collateral, or any Borrower shall provide a letter of credit,
guarantee, indemnity or similar instrument to or in favor of such Credit Card
Issuer or Credit Card Processors such that in the aggregate all of such funds in
the reserve account, other than amounts held as collateral and the amount of
such letters of credit, guarantees, indemnities or similar instruments shall
exceed an amount equal to ten percent (10%) of the Credit Card Receivables
processed by such Credit Card Issuer or Credit Card Processor in the immediately
preceding Fiscal Year; or

(r) Subordination. (i) The subordination provisions of the documents evidencing
or governing any Subordinated Indebtedness (the “Subordination Provisions”)
shall, in whole or in part, terminate, cease to be effective or cease to be
legally valid, binding and enforceable against any holder of the applicable
Subordinated Indebtedness; or (ii) any Borrower or any other Loan Party shall,
directly or indirectly, disavow or contest in any manner (A) the effectiveness,
validity or enforceability of any of the Subordination Provisions, (B) that the
Subordination Provisions exist for the benefit of the Credit Parties, or
(C) that all payments of principal of or premium and interest on the applicable
Subordinated Indebtedness, or realized from the liquidation of any property of
any Loan Party, shall be subject to any of the Subordination Provisions.

 

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8.02. Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent may, or, at the request of the Required
Lenders shall, take any or all of the following actions:

(a) declare the Commitments of each Lender to make Loans and any obligation of
the LC Issuer to make LC Credit Extensions to be terminated, whereupon such
Commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Loan Parties;

(c) require that the Loan Parties Cash Collateralize the LC Obligations; and

(d) whether or not the maturity of the Obligations shall have been accelerated
pursuant hereto, proceed to protect, enforce and exercise all rights and
remedies of the Credit Parties under this Agreement, any of the other Loan
Documents or applicable Law, including, but not limited to, by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations are
evidenced, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of the Credit Parties;

provided, that, upon the entry of an order for relief (or similar order) with
respect to any Loan Party or any Subsidiary thereof under any Debtor Relief
Laws, the obligation of each Lender to make Loans and any obligation of the LC
Issuer to make LC Credit Extensions shall automatically terminate, the unpaid
principal amount of all outstanding Loans and all interest and other amounts as
aforesaid shall automatically become due and payable, and the obligation of the
Loan Parties to Cash Collateralize the LC Obligations as aforesaid shall
automatically become effective, in each case without further act of the
Administrative Agent or any Lender.

No remedy herein is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of Law.

8.03. Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the LC Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:

first, to payment of that portion of the Obligations (excluding the Bank Product
Obligations) constituting fees, indemnities, Credit Party Expenses and other
amounts (including fees, charges and disbursements of counsel to the
Administrative Agent and amounts payable under Article III) payable to the
Administrative Agent, in its capacity as such;

 

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second, to payment of that portion of the Obligations (excluding the Bank
Product Obligations) constituting indemnities, Credit Party Expenses, and other
amounts (other than principal, interest and fees) payable to the Lenders and the
LC Issuer (including fees, charges and disbursements of counsel to the
respective Lenders and the LC Issuer and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause second
payable to them;

third, to the extent not previously reimbursed by the Lenders, to payment to the
Administrative Agent of that portion of the Obligations constituting principal
and accrued and unpaid interest on any Permitted Overadvances;

fourth, to the extent that Swing Line Loans have not been refinanced by a
Committed Loan, payment to the Swing Line Lender of that portion of the
Obligations constituting accrued and unpaid interest on the Swing Line Loans;

fifth, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Committed Loans and other Obligations, and fees
(including Letter of Credit Fees), ratably among the Lenders and the LC Issuer
in proportion to the respective amounts described in this clause fifth payable
to them;

sixth, to the extent that Swing Line Loans have not been refinanced by a
Committed Loan, to payment to the Swing Line Lender of that portion of the
Obligations constituting unpaid principal of the Swing Line Loans;

seventh, to payment of that portion of the Obligations constituting unpaid
principal of the Trance A Revolving Loans, ratably among the Tranche A Lenders
and the LC Issuer in proportion to the respective amounts described in this
clause seventh held by them;

eighth, to the Administrative Agent for the account of the LC Issuer, to Cash
Collateralize that portion of LC Obligations comprised of the aggregate undrawn
amount of Letters of Credit;

ninth, to payment of that portion of the Obligations constituting unpaid
principal of the Trance A-1 Revolving Loans, ratably among the Tranche A-1
Lenders in proportion to the respective amounts described in this clause ninth
held by them;

tenth, to payment of all other Obligations (including, without limitation, the
cash collateralization of Obligations (other than contingent indemnification
obligations for which no claim has been asserted) that may thereafter arise
under Section 10.04, as provided in Section 10.11(c), but excluding any Bank
Product Obligations), ratably among the Credit Parties in proportion to the
respective amounts described in this clause ninth held by them;

eleventh, to payment of that portion of the Obligations arising from Cash
Management Services to the extent secured under the Security Documents, ratably
among the Credit Parties in proportion to the respective amounts described in
this clause tenth held by them;

twelfth, to payment of all other Obligations arising from Bank Products and
Factored Receivables to the extent secured under the Security Documents, ratably
among the Credit Parties in proportion to the respective amounts described in
this clause eleventh held by them; and

last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Loan Parties or as otherwise required by Law.

 

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Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Seventh above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01. Appointment and Authority.

(a) Each of the Lenders and the LC Issuer hereby irrevocably appoints Wells
Fargo to act on its behalf as the Administrative Agent hereunder and under the
other Loan Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Article
are solely for the benefit of the Administrative Agent, the Lenders and the LC
Issuer, and no Loan Party or any Subsidiary thereof shall have rights as a third
party beneficiary of any of such provisions.

(b) Each of the Lenders (in its capacities as a Lender) and the LC Issuer hereby
irrevocably appoints Wells Fargo as the Administrative Agent and authorizes the
Administrative Agent to act as the agent of such Lender for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any
of the Loan Parties to secure any of the Obligations, together with such powers
and discretion as are reasonably incidental thereto. In this connection, the
Administrative Agent, as “collateral agent” and any co-agents, sub-agents and
attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05
for purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Security Documents, or for exercising any rights and
remedies thereunder at the direction of the Administrative Agent), shall be
entitled to the benefits of all provisions of this Article IX and Article X
(including Section 10.04(c)), as though such co-agents, sub-agents and
attorneys-in-fact were the “collateral agent” under the Loan Documents, as if
set forth in full herein with respect thereto.

(c) Each Lender authorizes and directs the Administrative Agent to enter into
this Agreement and the other Loan Documents. Each Lender agrees that any action
taken by the Administrative Agent or Required Lenders in accordance with the
terms of this Agreement or the other Loan Documents and the exercise by the
Administrative Agent or Required Lenders of their respective powers set forth
herein or therein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.

9.02. Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in their capacity as a Lender as
any other Lender and may exercise the same as though they were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Loan Parties or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

 

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9.03. Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that Administrative Agent shall
not be required to take any action that, in its respective opinion or the
opinion of its counsel, may expose the Administrative Agent to liability or that
is contrary to any Loan Document or applicable law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Loan Parties or any of their
Affiliates that is communicated to or obtained by the Person serving as the
Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the Consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in and Sections 8.02 and 10.01) or (ii) in the absence
of its own gross negligence or willful misconduct as determined by a final and
non-appealable judgment of a court of competent jurisdiction.

The Administrative Agent shall not be deemed to have knowledge of any Default
unless and until notice describing such Default is given to the Administrative
Agent by the Loan Parties, a Lender or the LC Issuer. Upon the occurrence of an
Event of Default, the Administrative Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by the
Applicable Lenders. Unless and until the Administrative Agent shall have
received such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to any such Default or Event of Default as it shall deem advisable in the best
interest of the Credit Parties. In no event shall the Administrative Agent be
required to comply with any such directions to the extent that the
Administrative Agent believes that its compliance with such directions would be
unlawful.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or the creation,
perfection or priority of any Lien purported to be created by the Security
Documents, (v) the value or the sufficiency of any Collateral, or (vi) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

9.04. Reliance by the Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including, but not limited to, any electronic message,

 

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Internet or intranet website posting or other distribution) reasonably believed
by it to be genuine and to have been signed, sent or otherwise authenticated by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and reasonably believed by it to have been
made by the proper Person, and shall not incur any liability for relying
thereon. In determining compliance with any condition hereunder to the making of
a Loan, or the issuance of a Letter of Credit, that by its terms must be
fulfilled to the satisfaction of a Lender or the LC Issuer, the Administrative
Agent may presume that such condition is satisfactory to such Lender or the LC
Issuer unless the Administrative Agent shall have received written notice to the
contrary from such Lender or the LC Issuer prior to the making of such Loan or
the issuance of such Letter of Credit. The Administrative Agent may consult with
legal counsel (who may be counsel for any Loan Party), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.

9.05. Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub agents appointed by the
Administrative Agent. The Administrative Agent and any such sub agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub agent and to the Related Parties of the
Administrative Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as the Administrative Agent.

9.06. Resignation of the Administrative Agent. The Administrative Agent may at
any time give written notice of its resignation to the Lenders and the Lead
Borrower. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with the Lead Borrower (so long as no
Default or Event of Default shall have then occurred and be continuing), to
appoint a successor, which shall be a bank with an office in the United States,
or an Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the LC Issuer, appoint a
successor to the Administrative Agent meeting the qualifications set forth
above; provided that, if the Administrative Agent shall notify the Lead Borrower
and the Lenders that no qualifying Person has accepted such appointment, then
such resignation shall nonetheless become effective in accordance with such
notice and (1) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents (except that
in the case of any Collateral held by the Administrative Agent on behalf of the
Lenders or the LC Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the LC
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor’s appointment as the Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section). The fees payable by the
Borrowers to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Lead Borrower and such
successor. After the retiring Administrative Agent’s resignation hereunder and
under the other Loan Documents, the provisions of this Article and Section 10.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent hereunder.

 

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Any resignation by Wells Fargo as the Administrative Agent pursuant to this
Section shall also constitute its resignation as Swing Line Lender and the
resignation of Wells Fargo as LC Issuer. Upon the acceptance of a successor’s
appointment as the Administrative Agent hereunder, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring LC Issuer and the Swing Line Lender, (b) the retiring LC
Issuer and the Swing Line Lender shall be discharged from all of their
respective duties and obligations hereunder or under the other Loan Documents,
and (c) the successor LC Issuer shall issue letters of credit in substitution
for the Letters of Credit, if any, outstanding at the time of such succession or
make other arrangements satisfactory to the retiring LC Issuer to effectively
assume the obligations of the retiring LC Issuer with respect to such Letters of
Credit.

9.07. Non-Reliance on Administrative Agent and Other Lenders. Each Lender and
the LC Issuer acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
the LC Issuer also acknowledges that it will, independently and without reliance
upon the Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder. Except as
provided in Section 9.12, the Administrative Agent shall not have any duty or
responsibility to provide any Credit Party with any other credit or other
information concerning the affairs, financial condition or business of any Loan
Party that may come into the possession of the Administrative Agent.

9.08. No Other Duties, Etc. Anything herein to the contrary notwithstanding,
neither the Bookrunner nor Arranger listed on the cover page hereof shall have
any powers, duties or responsibilities under this Agreement or any of the other
Loan Documents, except in its capacity, as applicable, as the Administrative
Agent, a Lender or the LC Issuer hereunder.

9.09. Administrative Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Loan Party, the Administrative Agent (irrespective of whether
the principal of any Loan or LC Obligation shall then be due and payable as
herein expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Loan Parties) shall be
entitled and empowered, by intervention in such proceeding or otherwise

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, LC Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the LC
Issuer, the Administrative Agent and the other Credit Parties (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Lenders, the LC Issuer, the Administrative Agent, such Credit Parties and
their respective agents and counsel and all other amounts due the Lenders, the
LC Issuer the Administrative Agent and such Credit Parties under Sections
2.03(i), 2.03(j) and 2.03(k) as applicable, 2.09 and 10.04) allowed in such
judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

 

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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the LC Issuer to make such payments to the Administrative Agent
and, if the Administrative Agent shall consent to the making of such payments
directly to the Lenders and the LC Issuer, to pay to the Administrative Agent
any amount due for the reasonable compensation, expenses, disbursements and
advances of the Administrative Agent and its agents and counsel, and any other
amounts due the Administrative Agent under Sections 2.09 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender or the LC
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or the LC Issuer or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
or the LC Issuer in any such proceeding.

9.10. Collateral and Guaranty Matters. The Credit Parties irrevocably authorize
the Administrative Agent, at its option and in its discretion,

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full of all Obligations (other than contingent indemnification
obligations for which no claim has been asserted) and the expiration or
termination of all Letters of Credit, (ii) that is sold or to be sold as part of
or in connection with any sale permitted hereunder or under any other Loan
Document, or (iii) if approved, authorized or ratified in writing by the
Applicable Lenders in accordance with Section 10.01;

(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by clause (h) of the definition of Permitted
Encumbrances; and

(c) to release any Guarantor from its obligations under the Facility Guaranty if
such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder.

Upon request by the Administrative Agent at any time, the Applicable Lenders
will confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Facility Guaranty pursuant to this
Section 9.10. In each case as specified in this Section 9.10, the Administrative
Agent will, at the Loan Parties’ expense, execute and deliver to the applicable
Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such item of Collateral from the assignment and security interest
granted under the Security Documents or to subordinate its interest in such
item, or to release such Guarantor from its obligations under the Facility
Guaranty, in each case in accordance with the terms of the Loan Documents and
this Section 9.10.

9.11. Notice of Transfer. The Administrative Agent may deem and treat a Lender
party to this Agreement as the owner of such Lender’s portion of the Obligations
for all purposes, unless and until, and except to the extent, an Assignment and
Assumption shall have become effective as set forth in Section 10.06.

9.12. Reports and Financial Statements. By signing this Agreement, each Lender:

(a) agrees to furnish the Administrative Agent, at such frequency as the
Administrative Agent may reasonably request, with a summary of all Bank Product
Obligations due or to become due to such Lender. In connection with any
distributions to be made hereunder, the Administrative Agent shall be entitled
to assume that no amounts are due to any Lender on account of Bank Product
Obligations unless the Administrative Agent has received written notice thereof
from such Lender;

 

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(b) is deemed to have requested that the Administrative Agent furnish such
Lender, promptly after they become available, copies of all financial statements
required to be delivered by the Lead Borrower hereunder and all field
examinations and appraisals of the Collateral received by the Administrative
Agent (collectively, the “Reports”);

(c) expressly agrees and acknowledges that the Administrative Agent makes no
representation or warranty as to the accuracy of the Reports, and shall not be
liable for any information contained in any Report;

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

(e) agrees to keep all Reports confidential in accordance with the provisions of
Section 10.07 hereof; and

(f) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold the Administrative Agent and
any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any Credit Extensions that the
indemnifying Lender has made or may make to the Borrowers, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a Loan or
Loans; and (ii) to pay and protect, and indemnify, defend, and hold the
Administrative Agent and any such other Lender preparing a Report harmless from
and against, the claims, actions, proceedings, damages, costs, expenses, and
other amounts (including attorney costs) incurred by the Administrative Agent
and any such other Lender preparing a Report as the direct or indirect result of
any third parties who might obtain all or part of any Report through the
indemnifying Lender.

9.13. Agency for Perfection. Each Lender hereby appoints each other Lender as
agent for the purpose of perfecting Liens for the benefit of the Administrative
Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC
or any other applicable Law of the United States can be perfected only by
possession. Should any Lender (other than the Administrative Agent) obtain
possession of any such Collateral, such Lender shall notify the Administrative
Agent thereof, and, promptly upon the Administrative Agent’s request therefor
shall deliver such Collateral to the Administrative Agent or otherwise deal with
such Collateral in accordance with the Administrative Agent’s instructions.

9.14. Indemnification of Administrative Agent. The Lenders hereby agree to
indemnify the Administrative Agent, the LC Issuer and any Related Party, as the
case may be (to the extent not reimbursed by the Loan Parties and without
limiting the obligations of Loan Parties hereunder), ratably according to their
Applicable Percentages, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against any of the Administrative Agent, the LC Issuer or any
Related Party in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted to be taken by any of the
Administrative Agent, the LC Issuer or any Related Party in connection
therewith; provided, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent, the LC Issuer or any Related Party as
determined by a final and non-appealable judgment of a court of competent
jurisdiction.

 

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9.15. Relation among Lenders. The Lenders are not partners or co-venturers, and
no Lender shall be liable for the acts or omissions of, or (except as otherwise
set forth herein in case of the Administrative Agent) authorized to act for, any
other Lender.

9.16. Defaulting or Deteriorating Lender.

(a) If for any reason any Lender shall become a Deteriorating Lender or shall
fail or refuse to abide by its obligations under this Agreement, including
without limitation its obligation to make available to the Administrative Agent
its Applicable Percentage of any Loans, expenses or setoff or purchase its
Applicable Percentage of a participation interest in the Swing Line Loans or
Letters of Credit and such failure is not cured within one (1) Business Day
after receipt from the Administrative Agent of written notice thereof, then, in
addition to the rights and remedies that may be available to the other Credit
Parties, the Loan Parties or any other party at law or in equity, and not at
limitation thereof, (i) such Deteriorating Lender’s or Defaulting Lender’s right
to participate in the administration of, or decision-making rights related to,
the Obligations, this Agreement or the other Loan Documents shall be suspended
during the pendency of such failure or refusal, and (ii) a Deteriorating Lender
or Defaulting Lender shall be deemed to have assigned any and all payments due
to it from the Loan Parties, whether on account of outstanding Loans, interest,
fees or otherwise, to the remaining non-Defaulting Lenders for application to,
and reduction of, their proportionate shares of all outstanding Obligations
until, as a result of application of such assigned payments the Lenders’
respective Applicable Percentages of all outstanding Obligations shall have
returned to those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency, and (iii) at the
option of the Administrative Agent, any amount payable to such Deteriorating
Lender or Defaulting Lender hereunder (whether on account of principal,
interest, fees or otherwise) shall, in lieu of being distributed to such
Deteriorating Lender or Defaulting Lender, be retained by the Administrative
Agent as cash collateral for future funding obligations of the Deteriorating
Lender or Defaulting Lender in respect of any Loan or existing or future
participating interest in any Swing Line Loan or Letter of Credit. The
Defaulting Lender’s decision-making and participation rights and rights to
payments as set forth in clauses (i) and (ii) hereinabove shall be restored only
upon the payment by the Defaulting Lender of its Applicable Percentage of any
Obligations, any participation obligation, or expenses as to which it is
delinquent, together with interest thereon at the rate set forth in
Section 2.14(b) hereof from the date when originally due until the date upon
which any such amounts are actually paid.

(b) The non-Defaulting Lenders shall also have the right, but not the
obligation, in their respective, sole and absolute discretion, to cause the
termination and assignment, without any further action by the Deteriorating
Lender or Defaulting Lender for no cash consideration (pro rata, based on the
respective Commitments of those Lenders electing to exercise such right), of the
Deteriorating Lender’s or Defaulting Lender’s Commitment to fund future Loans.
Upon any such purchase of the Applicable Percentage of any Deteriorating Lender
or Defaulting Lender, the Deteriorating Lender’s or Defaulting Lender’s share in
future Credit Extensions and its rights under the Loan Documents with respect
thereto shall terminate on the date of purchase, and the Deteriorating Lender or
Defaulting Lender shall promptly execute all documents reasonably requested to
surrender and transfer such interest, including, if so requested, an Assignment
and Assumption.

(c) Each Deteriorating Lender and Defaulting Lender shall indemnify the
Administrative Agent and each non-Defaulting Lender from and against any and all
loss, damage or expenses, including but not limited to reasonable attorneys’
fees and funds advanced by the Administrative Agent or by any non-Defaulting
Lender, on account of a Deteriorating Lender’s or Defaulting Lender’s failure to
timely fund its Applicable Percentage of a Loan or to otherwise perform its
obligations under the Loan Documents.

 

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9.17. Documentation Agent and Co-Lead Arrangers. Notwithstanding the provisions
of this Agreement or any of the other Loan Documents, no Person who is or
becomes a Documentation Agent, nor any Arrangers, shall have any powers, rights,
duties, responsibilities or liabilities with respect to this Agreement and the
other Loan Documents.

ARTICLE X

MISCELLANEOUS

10.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no Consent to any departure by any
Loan Party therefrom, shall be effective unless in writing signed by the
Administrative Agent, with the Consent of the Required Lenders, and the Lead
Borrower or the applicable Loan Party, as the case may be, and acknowledged by
the Administrative Agent, and each such waiver or Consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, that, no such amendment, waiver or consent shall:

(a) extend or, increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written Consent of
such Lender;

(b) as to any Lender, postpone any date fixed by this Agreement or any other
Loan Document for (i) any scheduled payment (including the Maturity Date) or
mandatory prepayment of principal, interest, fees or other amounts due hereunder
or under any of the other Loan Documents without the written Consent of such
Lender entitled to such payment, or (ii) any scheduled or mandatory reduction of
the Aggregate Commitments hereunder or under any other Loan Document without the
written Consent of such Lender;

(c) as to any Lender, reduce the principal of, or the rate of interest specified
herein on, any Loan, or (subject to clause (iv) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document, without the written Consent of each Lender entitled to such
amount; provided, however, that only the Consent of the Required Lenders shall
be necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of the Borrowers to pay interest or Letter of Credit Fees at the
Default Rate or (ii) to amend any financial covenant hereunder (or any defined
term used therein) even if the effect of such amendment would be to reduce the
rate of interest on any Loan or to reduce any fee payable hereunder;

(d) as to any Lender, change Section 2.13 or Section 8.03 in a manner that would
alter the pro rata sharing of payments required thereby without the written
Consent of such Lender;

(e) change any provision of this Section or the definition of “Required
Lenders”, “Supermajority Lenders”, or any other provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written Consent of each Lender;

(f) except as expressly permitted hereunder or under any other Loan Document,
release, or limit the liability of, any Loan Party without the written Consent
of each Lender;

(g) except for Permitted Dispositions, release all or substantially all of the
Collateral from the Liens of the Security Documents without the written Consent
of each Lender;

 

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(h) increase the Aggregate Commitments without the written Consent of each
Lender;

(i) change the definition of the term “Borrowing Base” or any component
definition thereof if as a result thereof the amounts available to be borrowed
by the Borrowers would be increased without the written Consent of the
Supermajority Lenders, provided that the foregoing shall not limit the
discretion of the Administrative Agent to change, establish or eliminate any
Availability Reserves;

(j) modify the definition of Permitted Overadvance so as to increase the amount
thereof or, except as provided in such definition, the time period for a
Permitted Overadvance without the written Consent of each Lender; and

(k) except as expressly permitted herein or in any other Loan Document,
subordinate the Obligations hereunder or the Liens granted hereunder or under
the other Loan Documents, to any other Indebtedness or Lien, as the case may be
without the written Consent of each Lender;

and, provided, that, (i) no amendment, waiver or Consent shall, unless in
writing and signed by the LC Issuer in addition to the Lenders required above,
affect the rights or duties of the LC Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or Consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or Consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; (iv) the
Fee Letter may each be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto. Notwithstanding anything to the
contrary herein, no Deteriorating Lender or Defaulting Lender shall have any
right to approve or disapprove any amendment, waiver or Consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.

Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, no provider or holder of any Bank Products or Cash Management Services
shall have any voting or approval rights hereunder (or be deemed a Lender)
solely by virtue of its status as the provider or holder of such agreements or
products or the Obligations owing thereunder, nor shall the consent of any such
provider or holder be required (other than in their capacities as Lenders, to
the extent applicable) for any matter hereunder or under any of the other Loan
Documents, including as to any matter relating to the Collateral or the release
of Collateral or any Loan Party.

If any Lender does not Consent (a “Non-Consenting Lender”) to a proposed
amendment, waiver, consent or release with respect to any Loan Document that
requires the Consent of each Lender and that has been approved by the Required
Lenders, the Lead Borrower may replace such Non-Consenting Lender in accordance
with Section 10.13; provided that such amendment, waiver, consent or release can
be effected as a result of the assignment contemplated by such Section (together
with all other such assignments required by the Lead Borrower to be made
pursuant to this paragraph).

10.02. Notices; Effectiveness; Electronic Communications.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

(i) if to the Loan Parties, the Administrative Agent, the LC Issuer or the Swing
Line Lender, to the address, telecopier number, electronic mail address or
telephone number specified for such Person on Schedule 10.02; and

 

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(ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
and the LC Issuer hereunder may be delivered or furnished by electronic
communication (including e mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or the LC Issuer pursuant to Article II
if such Lender or the LC Issuer, as applicable, has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Lead Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND SUBJECT TO THIS SECTION,
EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER
MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT
OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY
ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no
event shall the Administrative Agent or any of their Related Parties
(collectively, the “Agent Parties”) have any liability to any Loan Party, any
Lender, the LC Issuer or any other Person for losses, claims, damages,
liabilities or expenses of any kind (whether in tort, contract or otherwise)
arising out of the Loan Parties’ or the Administrative Agent’s transmission of
Borrower Materials through the Internet, except to the extent that such losses,
claims, damages, liabilities or expenses are determined by a

 

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court of competent jurisdiction by a final and non-appealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent Party;
provided, that, in no event shall any Agent Party have any liability to any Loan
Party, any Lender, the LC Issuer or any other Person for indirect, special,
incidental, consequential or punitive damages (as opposed to direct or actual
damages).

(d) Change of Address, Etc. Each of the Loan Parties, the Administrative Agent,
the LC Issuer and the Swing Line Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
other parties hereto. Each other Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
Lead Borrower, the Administrative Agent, the LC Issuer and the Swing Line
Lender. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.

(e) Reliance by Administrative Agent, LC Issuer and Lenders. The Administrative
Agent, the LC Issuer and the Lenders shall be entitled to rely and act upon any
notices (including telephonic Committed Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of the Loan Parties even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. The Loan Parties shall indemnify the Administrative Agent, the LC
Issuer, each Lender and the Related Parties of each of them from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of the Loan Parties. All
telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

10.03. No Waiver; Cumulative Remedies. No failure by any Credit Party to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder or
under any other Loan Document preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges provided herein and in the other Loan Documents
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law. Without limiting the generality of the foregoing, the making of
a Loan or issuance of a Letter of Credit shall not be construed as a waiver of
any Default, regardless of whether any Credit Party may have had notice or
knowledge of such Default at the time.

10.04. Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrowers shall pay all Credit Party Expenses.

(b) Indemnification by the Loan Parties. The Loan Parties shall indemnify the
Administrative Agent (and any sub-agent thereof), each other Credit Party, and
each Related Party of any of the foregoing Persons (each such Person being
called an “Indemnitee”) against, and hold each Indemnitee harmless (on an after
tax basis) from, any and all losses, claims, causes of action, damages,
liabilities, settlement payments, and reasonable and documented out-of-pocket
costs and expenses related thereto (including the reasonable and documented
out-of-pocket fees, charges and disbursements of any counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by any Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
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hereunder or thereunder or the consummation of the transactions contemplated
hereby or thereby, or, in the case of the Administrative Agent (and any
sub-agents thereof) and their Related Parties only, the administration of this
Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the
use or proposed use of the proceeds therefrom (including any refusal by the LC
Issuer to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), any bank advising or confirming a Letter of Credit or
any other nominated person with respect to a Letter of Credit seeking to be
reimbursed or indemnified or compensated, and any third party seeking to enforce
the rights of an Borrower, beneficiary, nominated person, transferee, assignee
of Letter of Credit proceeds, or holder of an instrument or document related to
any Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any Loan Party
or any of its Subsidiaries, or any Environmental Liability related in any way to
any Loan Party or any of its Subsidiaries, (iv) any claims of, or amounts paid
by any Credit Party to, a Blocked Account Bank or other Person which has entered
into a control agreement with any Credit Party hereunder, or (v) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by any Borrower or any other Loan Party or any of
the Loan Parties’ directors, shareholders or creditors, and regardless of
whether any Indemnitee is a party thereto, in all cases, whether or not caused
by or arising, in whole or in part, out of the comparative, contributory or sole
negligence of the Indemnitee; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and non-appealable judgment to have resulted from the
gross negligence, bad faith or willful misconduct of such Indemnitee, (y) result
from a claim brought by a Borrower or any other Loan Party against an Indemnitee
for a material breach of such Indemnitee’s material obligations hereunder or
under any other Loan Document, if the Borrowers or such Loan Party has obtained
a final and non-appealable judgment in its favor on such claim as determined by
a court of competent jurisdiction or (z) result from a dispute that does not
involve an act or omission of any Loan Party or its Affiliates and that is
solely by an Indemnitee against another Indemnitee and does not involve any
Indemnitee in its capacity as, or in fulfilling its role as, an agent or
arranger under this Agreement.

(c) Reimbursement by Lenders. Without limiting their obligations under
Section 9.14 hereof, to the extent that the Loan Parties for any reason fail to
indefeasibly pay any amount required under subsection (a) or (b) of this Section
to be paid by it, each Lender severally agrees to pay to the Administrative
Agent (or any such sub-agent), the LC Issuer or such Related Party, as the case
may be, such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent (or any such sub-agent) or the LC
Issuer in its capacity as such, or against any Related Party of any of the
foregoing acting for the Administrative Agent (or any such sub-agent) or LC
Issuer in connection with such capacity. The obligations of the Lenders under
this subsection (c) are subject to the provisions of Section 2.12(d).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the parties hereto shall not assert, and hereby waive, any claim
against any other party hereto or any Related Party thereof, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or Letter of Credit or the use of the proceeds thereof. No Indemnitee shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed to such unintended recipients by such
Indemnitee through telecommunications, electronic or other information
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Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby other than for direct or actual damages resulting from the gross
negligence or willful misconduct of such Indemnitee as determined by a final and
non-appealable judgment of a court of competent jurisdiction.

(e) Payments. All amounts due under this Section shall be payable on demand
therefor.

(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent and the LC Issuer, the assignment of any Commitment or
Loan by any Lender, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

10.05. Payments Set Aside. To the extent that any payment by or on behalf of the
Loan Parties is made to any Credit Party, or any Credit Party exercises its
right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by such
Credit Party in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and the LC Issuer severally agrees to pay to
the Administrative Agent upon demand its Applicable Percentage (without
duplication) of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect. The obligations of the Lenders and the LC Issuer under clause
(b) of the preceding sentence shall survive the payment in full of the
Obligations and the termination of this Agreement.

10.06. Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder or under any other
Loan Document without the prior written Consent of the Administrative Agent and
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of Section 10.06(b), (ii) by way of participation in accordance with
the provisions of subsection Section 10.06(d), or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of
Section 10.06(f) (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Credit Parties) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment(s) and the Loans
(including for purposes of this Section 10.06(b), participations in LC
Obligations and in Swing Line Loans) at the time owing to it); provided that any
such assignment shall be subject to the following conditions:

(i) Minimum Amounts

 

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(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, no minimum amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $10,000,000 unless each of the Administrative Agent
and, so long as no Default has occurred and is continuing, the Lead Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, that, concurrent assignments to members of an Assignee Group
and concurrent assignments from members of an Assignee Group to a single
Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group)
will be treated as a single assignment for purposes of determining whether such
minimum amount has been met;

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to the Swing Line
Lender’s rights and obligations in respect of Swing Line Loans;

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Lead Borrower (such consent not to be unreasonably
withheld or delayed) shall be required unless (1) a Default or Event of Default
has occurred and is continuing at the time of such assignment or (2) such
assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; and

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of any
Commitment if such assignment is to a Person that is not a Lender, an Affiliate
of such Lender or an Approved Fund with respect to such Lender; and

(C) the consent of the LC Issuer (such consent not to be unreasonably withheld
or delayed) shall be required for any assignment that increases the obligation
of the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding); and

(D) the consent of the Swing Line Lender (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment in respect of the
assignment of any Commitment.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500, provided, that, the Administrative
Agent may, in its sole discretion, elect to waive such processing and
recordation fee in the case of any assignment. The assignee, if it shall not be
a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

 

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Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrowers (at their expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 10.06(d).

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrowers, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and LC Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, absent manifest error, and the Loan Parties,
the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Lead Borrower and any Lender
at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Loan Parties or the Administrative Agent, sell participations to
any Person (other than a natural person or the Loan Parties or any of the Loan
Parties’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion
of such Lender’s rights and/or obligations under this Agreement (including all
or a portion of its Commitment and/or the Loans (including such Lender’s
participations in LC Obligations and/or Swing Line Loans) owing to it); provided
that (i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) the Loan Parties, the
Administrative Agent, the Lenders and the LC Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any Participant shall agree in writing to
comply with all confidentiality obligations set forth in Section 10.07 as if
such Participant was a Lender hereunder.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, the Loan Parties agree that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 10.06(b).
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.13 as though it were a Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
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such Participant is made with the Lead Borrower’s prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Lead Borrower is notified of
the participation sold to such Participant and such Participant agrees, for the
benefit of the Loan Parties, to comply with Section 3.01(e) as though it were a
Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

(h) Resignation as LC Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Wells
Fargo assigns all of its Commitment and Loans pursuant to subsection (b) above,
Wells Fargo may, (i) upon thirty (30) days’ notice to the Lead Borrower and the
Lenders, resign as LC Issuer and/or (ii) upon thirty (30) days’ notice to the
Lead Borrower, Wells Fargo may resign as Swing Line Lender. In the event of any
such resignation as LC Issuer or Swing Line Lender, the Lead Borrower shall be
entitled to appoint from among the Lenders a successor LC Issuer or Swing Line
Lender hereunder; provided, that, no failure by the Lead Borrower to appoint any
such successor shall affect the resignation of Wells Fargo as LC Issuer or Swing
Line Lender, as the case may be. If Wells Fargo resigns as LC Issuer, it shall
retain all the rights, powers, privileges and duties of the LC Issuer hereunder
with respect to all Letters of Credit outstanding as of the effective date of
its resignation as LC Issuer and all LC Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans pursuant to
Section 2.03(c)). If Wells Fargo resigns as Swing Line Lender, it shall retain
all the rights of the Swing Line Lender provided for hereunder with respect to
Swing Line Loans made by it and outstanding as of the effective date of such
resignation, including the right to require the Lenders to make Base Rate Loans
or fund risk participations in outstanding Swing Line Loans pursuant to
Section 2.04(c). Upon the appointment of a successor LC Issuer and/or Swing Line
Lender, (a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring LC Issuer or Swing Line
Lender, as the case may be, and (b) the successor LC Issuer shall issue letters
of credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession or make other arrangements satisfactory to Wells Fargo
to effectively assume the obligations of Wells Fargo with respect to such
Letters of Credit.

10.07. Treatment of Certain Information; Confidentiality. Each of the Credit
Parties agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates’ respective partners, directors, officers, employees,
agents, funding sources, attorneys, advisors and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable Laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection

 

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with the exercise of any remedies hereunder or under any other Loan Document or
any action or proceeding relating to this Agreement or any other Loan Document
or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section,
to (i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to any Loan Party and its obligations, (g) with
the consent of the Lead Borrower or (h) to the extent such Information
(x) becomes publicly available other than as a result of a breach of this
Section or (y) becomes available to any Credit Party or any of their respective
Affiliates on a non-confidential basis from a source other than the Loan
Parties.

For purposes of this Section, “Information” means all information received from
the Loan Parties or any Subsidiary thereof relating to the Loan Parties or any
Subsidiary thereof or their respective businesses, other than any such
information that is available to any Credit Party on a non-confidential basis
prior to disclosure by the Loan Parties or any Subsidiary thereof, provided
that, in the case of information received from any Loan Party or any Subsidiary
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.

Each of the Credit Parties acknowledges that (a) the Information may include
material non-public information concerning the Loan Parties or a Subsidiary, as
the case may be, (b) it has developed compliance procedures regarding the use of
material non-public information and (c) it will handle such material non-public
information in accordance with applicable Law, including Federal and state
securities Laws.

10.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing or if any Lender shall have been served with a trustee process or
similar attachment relating to property of a Loan Party, each Lender, the LC
Issuer and each of their respective Affiliates is hereby authorized at any time
and from time to time, after obtaining the prior written consent of the
Administrative Agent or the Required Lenders, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender, the
LC Issuer or any such Affiliate to or for the credit or the account of the
Borrowers or any other Loan Party against any and all of the Obligations now or
hereafter existing under this Agreement or any other Loan Document to such
Lender or the LC Issuer, regardless of the adequacy of the Collateral, and
irrespective of whether or not such Lender or the LC Issuer shall have made any
demand under this Agreement or any other Loan Document and although such
obligations of the Borrowers or such Loan Party may be contingent or unmatured
or are owed to a branch or office of such Lender or the LC Issuer different from
the branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender, the LC Issuer and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender, the LC Issuer or their respective Affiliates may have.
Each Lender and the LC Issuer agrees to notify the Lead Borrower and the
Administrative Agent promptly after any such setoff and application, provided
that the failure to give such notice shall not affect the validity of such
setoff and application.

10.09. Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
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refunded to the Borrowers. In determining whether the interest contracted for,
charged, or received by the Administrative Agent or a Lender exceeds the Maximum
Rate, such Person may, to the extent permitted by applicable Law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.

10.10. Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be as effective as delivery
of a manually executed counterpart of this Agreement.

10.11. Survival. All representations and warranties made hereunder and in any
other Loan Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery hereof
and thereof. Such representations and warranties have been or will be relied
upon by the Credit Parties, regardless of any investigation made by any Credit
Party or on their behalf and notwithstanding that any Credit Party may have had
notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding. Further, the provisions of Sections 3.01, 3.04, 3.05
and 10.04 and Article IX shall survive and remain in full force and effect
regardless of the repayment of the Obligations, the expiration or termination of
the Letters of Credit and the Commitments or the termination of this Agreement
or any provision hereof. In connection with the termination of this Agreement
and the release and termination of the security interests in the Collateral, the
Administrative Agent may require such indemnities and collateral security as it
shall reasonably deem necessary or appropriate to protect the Credit Parties
against (a) loss on account of credits previously applied to the Obligations
that may subsequently be reversed or revoked, (b) any obligations that may
thereafter arise with respect to the Bank Product Obligations and (c) any
Obligations (other than contingent indemnification obligations for which no
claim has been asserted) that may thereafter arise under Section 10.04.

10.12. Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

10.13. Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, or if any Lender is a Defaulting Lender, a Deteriorating Lender
or a Non-Consenting Lender, then the Borrowers may, at their sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 10.06), all
of its interests, rights and obligations under this Agreement and the related
Loan Documents to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment), provided that:

 

 

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(a) the Borrowers shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, together with accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter; and

(d) such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation
cease to apply.

10.14. Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
LOAN PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE LOAN PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT ANY CREDIT PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

(c) WAIVER OF VENUE. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
TO IN

 

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PARAGRAPH (B) OF THIS SECTION. EACH OF THE LOAN PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

(e) ACTIONS COMMENCED BY LOAN PARTIES. EACH LOAN PARTY AND, EXCEPT AS PROVIDED
IN THE LAST SENTENCE OF SECTION 10.14(b), EACH CREDIT PARTY AGREES THAT ANY
ACTION COMMENCED BY ANY PARTY ASSERTING ANY CLAIM OR COUNTERCLAIM ARISING UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT
SOLELY IN A COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY OR THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AS THE
ADMINISTRATIVE AGENT MAY ELECT IN ITS SOLE DISCRETION, AND CONSENTS TO THE
EXCLUSIVE JURISDICTION OF SUCH COURTS WITH RESPECT TO ANY SUCH ACTION.

10.15. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16. No Advisory or Fiduciary Responsibility. In connection with all aspects
of each transaction contemplated hereby, the Loan Parties each acknowledge and
agree that: (i) the credit facility provided for hereunder and any related
arranging or other services in connection therewith (including in connection
with any amendment, waiver or other modification hereof or of any other Loan
Document) are an arm’s-length commercial transaction between the Loan Parties,
on the one hand, and the Credit Parties, on the other hand, and each of the Loan
Parties is capable of evaluating and understanding and understands and accepts
the terms, risks and conditions of the transactions contemplated hereby and by
the other Loan Documents (including any amendment, waiver or other modification
hereof or thereof); (ii) in connection with the process leading to such
transaction, each Credit Party is and has been acting solely as a principal and
is not the financial advisor, agent or fiduciary, for the Loan Parties or any of
their

respective Affiliates, stockholders, creditors or employees or any other Person;
(iii) none of the Credit Parties has assumed or will assume an advisory, agency
or fiduciary responsibility in favor of the Loan Parties with respect to any of
the transactions contemplated hereby or the process leading thereto, including
with respect to any amendment, waiver or other modification hereof or of any
other Loan Document (irrespective of whether any of the Credit Parties has
advised or is currently advising any Loan Party or any of its Affiliates on
other matters) and none of the Credit Parties has any obligation to any Loan
Party or any of its Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other Loan
Documents; (iv) the Credit Parties and their

 

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respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Loan Parties and their
respective Affiliates, and none of the Credit Parties has any obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Credit Parties have not provided and will not provide
any legal, accounting, regulatory or tax advice with respect to any of the
transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Loan Document) and each of the Loan Parties
has consulted its own legal, accounting, regulatory and tax advisors to the
extent it has deemed appropriate. Each of the Loan Parties hereby waives and
releases, to the fullest extent permitted by law, any claims that it may have
against each of the Credit Parties with respect to any breach or alleged breach
of agency or fiduciary duty.

10.17. USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Loan Parties that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies each Loan Party, which information includes the name
and address of each Loan Party and other information that will allow such Lender
or the Administrative Agent, as applicable, to identify each Loan Party in
accordance with the Act. Each Loan Party is in compliance, in all material
respects, with the Act. No part of the proceeds of the Loans will be used by the
Loan Parties, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended. In
addition, if Administrative Agent is required by law or regulation or internal
policies to do so, it shall have the right to periodically conduct (a) Patriot
Act searches, OFAC/PEP searches, and customary individual background checks for
the Loan Parties and (b) OFAC/PEP searches and customary individual background
checks for the Loan Parties’ senior management and key principals, and each Loan
Party agrees to cooperate in respect of the conduct of such searches and further
agrees that the reasonable costs and charges for such searches shall constitute
Credit Party Expenses hereunder and be for the account of Borrowers.

10.18. Foreign Assets Control Regulations. Neither of the advance of the Loans
nor the use of the proceeds of any thereof will violate (and no Loan Party nor
any of its Subsidiaries is in violation of) 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
CFR, Subtitle B, Chapter V, as amended) (the “Foreign Assets 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, Threaten to 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 or their 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” or in any manner violative of any such order.

10.19. Time of the Essence. Time is of the essence of the Loan Documents.

10.20. [Reserved].

10.21. Press Releases.

(a) Each Credit Party executing this Agreement agrees that neither it nor its
Affiliates will in the future issue any press releases or other public
disclosure using the name of the

 

126

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Administrative Agent or its Affiliates or referring to this Agreement or the
other Loan Documents without at least two (2) Business Days’ prior notice to the
Administrative Agent and without the prior written consent of the Administrative
Agent unless (and only to the extent that) such Credit Party or Affiliate is
required to do so under applicable Law and then, in any event, such Credit Party
or Affiliate will consult with the Administrative Agent before issuing such
press release or other public disclosure.

(b) Each Loan Party consents to the publication by the Administrative Agent or
any Lender of advertising material relating to the financing transactions
contemplated by this Agreement using any Loan Party’s name, product photographs,
logo or trademark, provided, however, that the Lead Borrower shall receive
reasonable advance notice thereof. The Administrative Agent or such Lender shall
provide a draft reasonably in advance of any advertising material to the Lead
Borrower for review and comment prior to the publication thereof. The
Administrative Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.

10.22. Additional Waivers.

(a) The Obligations are the joint and several obligation of each Loan Party. To
the fullest extent permitted by Applicable Law, the obligations of each Loan
Party shall not be affected by (i) the failure of any Credit Party to assert any
claim or demand or to enforce or exercise any right or remedy against any other
Loan Party under the provisions of this Agreement, any other Loan Document or
otherwise, (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, this Agreement or any other Loan
Document, or (iii) the failure to perfect any security interest in, or the
release of, any of the Collateral or other security held by or on behalf of the
Administrative Agent or any other Credit Party.

(b) The obligations of each Loan Party shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations after the termination of
the Commitments), including any claim of waiver, release, surrender, alteration
or compromise of any of the Obligations, and shall not be subject to any defense
or setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of any of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Loan Party hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Administrative Agent or any other Credit Party to
assert any claim or demand or to enforce any remedy under this Agreement, any
other Loan Document or any other agreement, by any waiver or modification of any
provision of any thereof, any default, failure or delay, willful or otherwise,
in the performance of any of the Obligations, or by any other act or omission
that may or might in any manner or to any extent vary the risk of any Loan Party
or that would otherwise operate as a discharge of any Loan Party as a matter of
law or equity (other than the indefeasible payment in full in cash of all the
Obligations after the termination of the Commitments).

(c) To the fullest extent permitted by applicable Law, each Loan Party waives
any defense based on or arising out of any defense of any other Loan Party or
the unenforceability of the Obligations or any part thereof from any cause, or
the cessation from any cause of the liability of any other Loan Party, other
than the indefeasible payment in full in cash of all the Obligations and the
termination of the Commitments. The Administrative Agent and the other Credit
Parties may, at their election, foreclose on any security held by one or more of
them by one or more judicial or non-judicial sales permitted under Part 6 of
Article 9 of the UCC, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with any other Loan Party, or exercise any other right or remedy
available to them against any other Loan Party, without affecting or impairing
in any way the liability of any Loan Party hereunder except to the extent

 

127

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that all the Obligations have been indefeasibly paid in full in cash and the
Commitments have been terminated. Each Loan Party waives any defense arising out
of any such election even though such election operates, pursuant to applicable
Law, to impair or to extinguish any right of reimbursement or subrogation or
other right or remedy of such Loan Party against any other Loan Party, as the
case may be, or any security.

(d) Each Borrower is obligated to repay the Obligations as joint and several
obligors under this Agreement. Upon payment by any Loan Party of any
Obligations, all rights of such Loan Party against any other Loan Party arising
as a result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and junior in right
of payment to the prior indefeasible payment in full in cash of all the
Obligations and the termination of the Commitments. In addition, any
indebtedness of any Loan Party now or hereafter held by any other Loan Party is
hereby subordinated in right of payment to the prior indefeasible payment in
full of all the Obligations and no Loan Party will demand, sue for or otherwise
attempt to collect any such indebtedness until the payment in full of the
Obligations and the termination of the Commitments. If any amount shall
erroneously be paid to any Loan Party on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or (ii) any such
indebtedness of any Loan Party, such amount shall be held in trust for the
benefit of the Credit Parties and shall forthwith be paid to the Administrative
Agent to be credited against the payment of the Obligations, whether matured or
unmatured, in accordance with the terms of this Agreement and the other Loan
Documents. Subject to the foregoing, to the extent that any Borrower shall,
under this Agreement as a joint and several obligor, repay any of the
Obligations constituting Revolving Loans made to another Borrower hereunder or
other Obligations incurred directly and primarily by any other Borrower (an
“Accommodation Payment”), then the Borrower making such Accommodation Payment
shall be entitled to contribution and indemnification from, and be reimbursed
by, each of the other Borrowers in an amount, for each of such other Borrowers,
equal to a fraction of such Accommodation Payment, the numerator of which
fraction is such other Borrower’s Allocable Amount and the denominator of which
is the sum of the Allocable Amounts of all of the Borrowers. As of any date of
determination, the “Allocable Amount” of each Borrower shall be equal to the
maximum amount of liability for Accommodation Payments which could be asserted
against such Borrower hereunder without (a) rendering such Borrower “insolvent”
within the meaning of Section 101 (31) of the Bankruptcy Code, Section 2 of the
Uniform Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform Fraudulent
Conveyance Act (“UFCA”), (b) leaving such Borrower with unreasonably small
capital or assets, within the meaning of Section 548 of the Bankruptcy Code,
Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving such Borrower
unable to pay its debts as they become due within the meaning of Section 548 of
the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the UFCA.

10.23. No Strict Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.

10.24. Attachments. The exhibits, schedules and annexes attached to this
Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail.

10.25. Restatement. The terms, conditions, agreements, covenants,
representations and warranties set forth in the Existing Credit Agreement are
simultaneously amended and restated in their entirety, and as so amended and
restated, are hereby replaced and superseded, by the terms, conditions
agreements, covenants, representations and warranties set forth in this
Agreement and in the Security

 

128

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Agreement, and as of the Closing Date neither the Borrowers nor the
Administrative Agent and Lenders shall be subject to or bound by any of the
terms of the Existing Credit Agreement and shall only be subject to or bound by
the terms and provisions of this Agreement, except that nothing herein or in the
other Loan Documents shall, in any manner, be construed to constitute payment
of, or impair, limit, cancel or extinguish, or constitute a novation in respect
of any of the “Obligations” existing under (and as defined in) the Existing
Credit Agreement (the “Existing Obligations”) or any other obligations,
liabilities and indebtedness of the Borrowers evidenced by or arising under the
Existing Credit Agreement or impair or adversely affect the continuation of the
Liens and other interests in the Collateral heretofore granted, pledged and/or
assigned by the Borrowers and Guarantors to Administrative Agent, except as
otherwise expressly set forth in the Security Agreement. All Existing
Obligations and all other loans, advances and other financial accommodations
under the Existing Credit Agreement of Borrowers to Administrative Agent and
Lenders that are outstanding and unpaid as of the date hereof pursuant to the
Existing Credit Agreement or otherwise shall be deemed Obligations of Borrowers
which are secured by Liens in the Collateral pursuant to the terms of this
Agreement and the Security Agreement. Upon the effective date of this Agreement,
the Administrative Agent shall cause to be released and satisfied the security
interests under the Existing Credit Agreement in all collateral thereunder which
is not Collateral under this Agreement and shall execute and file, or consent to
the filing by the Loan Parties of all releases and other documents reasonably
requested by the Loan Parties to effect and evidence that release.

10.26. Keepwell. Each Qualified ECP Guarantor hereby jointly and severally
absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by any other Loan Party
hereunder and under the Facility Guaranty to honor all of its obligations
hereunder and under the Facility Guaranty in respect of Swap Obligations
(provided, that, each Qualified ECP Guarantor shall only be liable under this
Section 10.26 for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 10.26, or
otherwise hereunder and under the Facility Guaranty, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). The obligations of each Qualified ECP Guarantor under this
Section 10.26 shall remain in full force and effect until the Obligations shall
have been paid in full (subject to the guarantee reinstatement provisions set
forth in the Facility Guaranty). Each Qualified ECP Guarantor intends that this
Section 10.26 constitute, and this Section 10.26 shall be deemed to constitute,
a “keepwell, support, or other agreement” for the benefit of each other Loan
Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange
Act.

10.27. Collateral Release on Termination. Upon the termination of this Agreement
and the payment in full of all the Obligations, the Administrative Agent shall
terminate and release all Liens in all Collateral granted to the Administrative
Agent pursuant to the Security Documents and shall execute and file, or consent
to the filing by the Loan Parties, of all releases and other documents
reasonably requested by the Loan Parties to effect and evidence that release.

 

129

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

 

BORROWERS: STEIN MART, INC. By:

/s/ Gregory W. Kleffner

Name: Gregory W. Kleffner Title: Executive Vice President, Chief Financial and
Secretary STEIN MART BUYING CORP. By:

/s/ Gregory W. Kleffner

Name: Gregory W. Kleffner Title: Vice President and Secretary GUARANTORS: STEIN
MART HOLDING CORP. By:

/s/ Gregory W. Kleffner

Name: Gregory W. Kleffner Title: Vice President and Secretary

 

[Signature Page to Second Amended and Restated Credit Agreement]

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

WELLS FARGO BANK, NATIONAL

ASSOCIATION, as the Administrative Agent

By:

/s/ Brent E. Shay

Name: Brent E. Shay

Its Authorized Signatory

 

[Signature Page to Second Amended and Restated Credit Agreement]

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

WELLS FARGO BANK, NATIONAL

ASSOCIATION as a Lender, LC Issuer and Swing Line Lender

By:

/s/ Brent E. Shay

Name: Brent E. Shay Its Authorized Signatory

 

[Signature Page to Second Amended and Restated Credit Agreement]

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

SCHEDULES

to

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

These Schedules are the Schedules to the Second Amended and Restated Credit
Agreement, dated as of February 3, 2015 (the “Agreement”), by and among Stein
Mart, Inc., a Florida corporation, Stein Mart Buying Corp., Inc., a Florida
corporation, Stein Mart Holding Corp., a Florida corporation, and Wells Fargo
Bank, National Association, as Administrative Agent, Collateral Agent, LC
Issuer, Swing Line Lender and a Lender. All capitalized terms used, but not
expressly defined, in these Schedules shall have the meanings set forth in the
Agreement. The headings, subheadings and other descriptive information in these
Schedules are for reference purposes only, and such shall not restrict, expand
or otherwise affect the disclosure or restrict, expand or otherwise affect the
representations and warranties in the Agreement. Any information disclosed
herein corresponding to any section or subsection of the Agreement shall be
deemed to be disclosed and incorporated in any other section of the Schedules
where the appropriateness of such disclosure in such other section is reasonably
apparent. Disclosure in these Schedules of a matter that is not required to be
disclosed does not require disclosure of any similar matters not required to be
disclosed and shall not be deemed to set or establish a different standard of
materiality than the one set forth in the representation and warranty to which
such disclosure applies.

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

Schedule 1.01(a)

EXISTING LETTERS OF CREDIT

 

LC #.

  Type    ISSUE DATE    EXPIRATION/
RENEWAL
DATE*   RENEWAL
NOTICE    BENEFICIARY    DESCRIPTION    CURRENT
AMOUNT  

SM226448W

  SB    6/27/2007    6/30 each yr*   60    American Casualty Co    Workers’ Comp
   $ 42,000   

SM205600W

  SB    11/3/2003    10/31 each yr*   90    Travelers Indemnity    Workers’ Comp
   $ 6,260,000   

SM204035W

  SB    7/10/2003    8/12 each yr*   30    Royal Indemnity    Workers’ Comp    $
315,000      Doc    Total               $ 0      SB    Total               $
6,617,000      Grand    Total               $ 6,617,000   

 

* Automatic renewal annually unless notice is given within the # days listed in
“renew” column.

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

Schedule 1.01(b)

FREIGHT FORWARDERS

 

•   Yusen Logistics Americas –Corporate

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

Schedule 2.01

COMMITMENTS AND APPLICABLE PERCENTAGES

Tranche A Revolving Loan Commitments

 

     Total Tranche A Revolving      Applicable  

Lender

   Loan Commitment      Percentage  

Wells Fargo Bank, National Association

   $ 225,000,000         100 % 

Tranche A-1 Revolving Loan Commitments

 

     Total Tranche A-1 Revolving      Applicable  

Lender

   Loan Commitment      Percentage  

Wells Fargo Bank, National Association

   $ 25,000,000         100 % 

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

Schedule 5.01

LOAN PARTIES ORGANIZATIONAL INFORMATION

 

Loan Party’s

   State of    Organization    Document    Federal Employer

Name

   Incorporation    Type    Number    Identification Number Stein Mart, Inc.   
Florida    Corporation    V16025    64-0466198 Stein Mart Buying Corp.   
Florida    Corporation    P97000107148    59-3481114 Stein Mart Holding Corp.   
Florida    Corporation    P08000012345    38-3790492

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

Schedule 5.05

SUPPLEMENT TO INTERIM FINANCIAL STATEMENTS

[Attached]

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

Schedule 5.08(b)(1)

OWNED REAL ESTATE

None.

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

Schedule 5.08(b)(2)

LEASED REAL ESTATE

 

Store

 

City

 

ST

 

County

 

Address

 

ZIP
Code

 

Lessor

 

Mgmt Company

 

Contact #

1   Greenville   MS   Washington   1656 Highway 1 South   38701   One South,
Inc.   One South, Inc.   (662) 378-3633 4   Louisville   KY   Jefferson   5055
Shelbyville Road   40207   Dixie Associates   Dixie Associates   (502) 893-3695
5   Little Rock   AR   Pulaski   6823 Cantrell Road   72207  
Weingarten/Arkansas, Inc.   Weingarten Realty Mgmt. Co.   (800) 688-8865 6  
Jackson   MS   Hinds   5250 I-55 North   39211   DEVILLE PLAZA LLC   Madison
Properties   (212) 596-8200 10   Knoxville   TN   Knox   276 Morrell Road  
37919   Centre at Deane Hill, LLC   Isakson-Barnhart Properties   (770) 709-6600
11   Altamonte Springs   FL   Seminole  

995 State Road 434 N.,

Suite 100

  32714   MSKP Oak Grove, LLC   Kitson & Partners (Realty), LLC   (407) 219-3239
12   Lexington   KY   Fayette   1555 E. New Circle Road, Suite 130   40509  
Equity Alliance of Lexington, LLC   Grand Sakwa   (248) 855-5500 13   Baton
Rouge   LA   East Baton Rouge Parish   9618 Airline Highway   70815   Kimco
Baton Rouge 666, L.L.C.   Kimco Realty Corp. (SM13)   (516) 869-9000 14   Tulsa
  OK   Tulsa   5112 S. Harvard Avenue   74135   John W. Allyn Jr., as Trustee of
the TRUST u/w Arthur C. Allyn   Urban Retail Properties, LLC   (781) 890-6006 16
  Jacksonville   FL   Duval   4399 Roosevelt Boulevard   32210   Roosevelt
Square, LLLP   Dewberry Capital Corporation   (404) 888-7990 18   Vestavia Hills
  AL   Jefferson   652 Montgomery Highway   35216   Excel Trust, LP   AIG Baker
Shopping Center Properties, LLC   (205) 969-1000 19   Richmond   VA   Henrico  
7801 West Broad Street   23294   Olde Towne Retail Investments, LLC   Harrison &
Bates, Inc.   (804) 788-1000 22   New Orleans   LA   Orleans Parish   5300
Tchoupitoulas Street   70115   Shadrall Riverside Market, LLC   Auburndale
Properties, LLC   (201) 930-8800 23   San Antonio   TX   Bexar   4522
Fredericksburg Road   78201   MRO Properties, Inc.   Weiss Realty Management,
LLC   (210) 735-9137 24   San Antonio   TX   Bexar   999 East Basse Road   78209
  Alecta Real Estate USA, LLC   Reata Property Management   (210) 841-3214 25  
Tallahassee   FL   Leon   1400-31 Village Square Boulevard   32312   Kimco
Tallahassee 715, Inc.   Kimco Realty Corporation   (516) 869-9000 26   Raleigh  
NC   Wake  

4500 Falls of the Neuse,

Suite 110

  27609   Sterling (The Falls) Limited Partnership   Sterling Centrecorp Realty
and Management Services   (704) 847-0225 27   Austin   TX   Travis   2900 West
Anderson Lane   78757   Northwood Properties, Ltd.   Pyramid Properties, Inc.  
(512) 472-1585 28   Greenville   SC   Greenville   101 Verdae Boulevard   29607
  SCI Verdae Fund, LLC   The Shopping Center Group   (770) 955-2434 31   Tampa  
FL   Hillsborough   3916 Britton Plaza   33611   Charles J. Bickimer, Trustee  
Bruce Strumpf, Inc.   (727) 449-2020 32   Memphis   TN   Shelby   827 South
White Station Road   38117   Eastgate Center, LLC   Belz Enterprises   (901)
260-7346 33   Pensacola   FL   Escambia   1660 Airport Boulevard   32504   BRE
DDR BR Cordova FL, LLC   DDR   (216) 755-5500 36   Greensboro   NC   Guilford  
3729 Battleground Avenue   27410   SS Brassfield, LLC   CBL & Associates
Management, Inc.   (336) 299-2800 37   Jacksonville   FL   Duval   11111-80 San
Jose Boulevard   32223   Riverplace Shopping Center, LLC   Kimco Realty
Corporation   —   38   Richmond   VA   Chesterfield   9746 Midlothian Turnpike  
23235   Sauer Properties, Inc.   Commonwealth Commercial Partners, Inc.   (804)
346-4966 40   Metairie   LA   Jefferson Parish   2840 Veterans Memorial
Boulevard   70002   2840 Veteran’s, LLC   Select Properties, Ltd Realty   (504)
833-0044

41

  Huntsville   AL   Madison   975 Airport Road   35802   Huntsville Store
Company, Inc.   Aronov Realty Company   (334) 277-1000

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

42       Cary   NC   Wake   240 Crossroads Boulevard   27518   Crossroads Plaza
1743, LP   Kimco Realty Corporation   (704) 362-6102 43   Charleston   SC  
Charleston   975 Savannah Highway   29407   St. Andrews Center 254, LLC   Kimco
Realty Corp.   (704) 367-0313 44   Oklahoma City   OK   Oklahoma   4916 North
May Avenue   73112   B.R. Mayfair Center, LLC   Price Edwards & Company   (405)
843-7474 45   Jacksonville Beach   FL   Duval   3818 South 3rd Street   32250  
IRT Property Company   Equity One Realty & Management, Inc.   (305) 672-1234 46
  Shreveport   LA   Caddo Parish   4801 Line Avenue   71106   Stoneridge Auto,
LLC   Avant Properties, LLC   (318) 227-7622 47   Winston-Salem   NC   Forsyth  
400 South Stratford Road   27103   Thruway Shopping Center LLC   Windham
Management Co.   (301) 986-6000 48   Pineville   NC   Mecklenburg   10416
Centrum Parkway   28134   ARC CTCHRNC001   Lincoln Harris, LLC   (843) 952-2068
49   Virginia Beach   VA   Princess Ann   4554 Virginia Beach Boulevard, Suite
680   23462   Pembroke Square Associates, GP   Jones Lang LaSalle Americas, Inc
  (757) 490-3141 50   Lubbock   TX   Lubbock   7020 Quaker Avenue   79424  
Hartford-Lubbock Limited Partnership   0   (860) 646-6555 51   Boca Raton   FL  
Palm Beach   9831 Glades Road   33434   Shadowwood Square Ltd.   Terranova
Corporation   (561) 314-2780 52   Palm Harbor   FL   Pinellas   33591 U.S. 19
North   34684   Highland Lakes Shopping Plaza, Ltd.   Colliers Arnold   (727)
442-7184 53   Augusta   GA   Richmond   2834 Washington Road   30909   Forum
W.S., LLC   Forum Management   (404) 873-6900 56   Houston   TX   Harris   2640
Fondren Road   77063   Piney Point Shopping Center   RPI Management Company  
(713) 662-7745 57   Fort Myers   FL   Lee   13300 South Cleveland Avenue   33907
  DDRTC Cypress Trace LLC   Developers Diversified Realty Corporation   (941)
371-5301 58   Tampa   FL   Hillsborough   13210 North Dale Mabry Highway   33618
  Regency Realty Corporation #58   Regency Realty Corp   (904) 598-7000 60  
Kettering   OH   Montgomery   100 East Stroop Road   45429   Dayton Town &
County, G.P.   Don Casto Organization   (614) 228-5331 62   Cincinnati   OH  
Hamilton   2692 Madison Road   45208   CLP-SPF Rookwood Pavillion, LLC   Jeffrey
R. Anderson Real Estate   (513) 241-5800 63   Nashville   TN   Davidson   92
White Bridge Road   37205   Lion’s Head Village Investors   Boyle Investment
Company   —   65   Fort Worth   TX   Tarrant   6385 Camp Bowie Boulevard   76116
  Brixmor Holdings 12 SPE, LLC   CA New Plan Management, Inc.   (713) 660-4300
66   Webster   TX   Harris   19801 Gulf Freeway   77598   Price/Baybrook Ltd.  
Kimco Realty Corp   (516) 869-9000 68   Amarillo   TX   Randall   3315 Bell
Street   79106   Barbara and Ford Madison dba The Village on Bell   Madison
Family LP   (817) 583-3226 70   Houston   TX   Harris   5319 A F.M. 1960 West  
77069   HR Venture Properties I LLC   Weingarten Realty Investors, Inc.   (800)
688-8865 71   Indianapolis   IN   Marion   1488 West 86th Street   46260   North
Willow Commons Associates   The Broadbent Company   (317) 237-2900 72  
Arlington   TX   Tarrant   452 Lincoln Square   76011   Lincoln Square Dunhill
LP   Riocan   (855) 746-2260 73   Marietta   GA   Cobb   1309 Johnson Ferry Road
  30068   Merchants Walk (E & A), LLC.   Edens & Avant Properties   (770)
569-5509 74   Cincinnati   OH   Hamilton   11315 Montgomery Road   45249   BRE
Retail Residual Owner 2, LLC   New Plan Excel Realty Trust, Inc.   (713)
660-4300 75   Raleigh   NC   Wake   7444 Creedmoor Road   27613   WRI/Raleigh LP
  Weingarten Realty Management Company   (713) 866-6000 76   Sarasota   FL  
Sarasota   6535 South Tamiami Trail   34231   Inland American Sarasota Tamiami,
LLC   Inland American Retail Management, LLC   (770) 980-8178 78   Dallas   TX  
Dallas   14902 Preston Road   75254   New Pepper Square S/C Ltd.   Henry S.
Miller Devmt Group   (972) 448-5812 79   Austin   TX   Travis  

3201 Bee Caves Road,

Suite 140

  78746   Velocis West Woods, L.P. (Assigned from Randall’s Food and Drugs,
Inc.)   Lincoln Property Company   (512) 322-3225 80   Scottsdale   AZ  
Maricopa   8662 East Shea Boulevard   85260   Regency Centers, L.P.   Regency
Centers, L.P.   (904) 598-7000 81   Columbus   GA   Muscogee   1625 Bradley Park
Drive, Suite 1   31904   Real Sub, LLC   Aronov Realty Mgmt, Inc.   (334)
277-1000

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

82       Tyler   TX   Smith   2125 South Broadway   75701   Weingarten Realty
Investors   Weingarten Realty Investors   (800) 688-8865 84   Houston   TX  
Harris   290 Meyerland Plaza   77096   Myerland Retail Associates, LLC   Fidelis
Realty Partners, Ltd.   (713) 693-1400 85   Tucson   AZ   Pima   4881 North
Stone Avenue   85704   Centro NP Holdings 1 SPE, LLC   New Plan Excel Realty
Trust   (212) 869-3000 87   Terre Haute   IN   Vigo   #43 Meadows Shopping
Center   47803   Terre Haute Realty Corporation   Ragle & Company   (812)
234-8899 90   Lafayette   LA   Lafayette Parish   5700 Johnston Street   70503  
Kimco Acadiana 670, L.L.C.   Kimco Realty Corporation   (516) 869-7277 91  
Plano   TX   Collin   1701 Preston, Suite A   75093   Preston Shepard Retail LP
  Weingarten Realty Investors   —   92   Dunwoody   GA   Fulton   1155 Mount
Vernon Highway   30338   DDR Perimeter Pointe LLC   Developers Diversified
Realty Corporation   (216) 755-5500 93   Gilbert   AZ   Maricopa   891 North Val
Vista Drive, Suite 102   85234   Patterson Farms, Inc.   Patterson Properties,
Inc.   (480) 838-8777 94       Roanoke   VA   Roanoke   4230 Electric Road  
24018   Roanoke Tanglewood, LLC   Urban Retail Properties, Co.   (540) 989-4685
96   Asheville   NC   Buncombe   848 Merrimon Avenue   28804   Sky King, Inc.  
Sky King, Inc.   (828) 669-2941 97   Matthews   NC   Mecklenburg   1813 Matthews
Township Pkwy.   28105   Matthews Festival Shopping Center, Inc.   CB Richard
Ellis   (704) 553-7567 98   Kingwood   TX   Harris   1153 Kingwood Drive   77339
  Chestnut Ridge Associates, LLC   Henry S. Miller Multi Management, Inc.  
(713) 626-2828 100   Savannah   GA   Chatham   7804 Abercorn Street #55   31406
  Oglethorpe Mall, L.L.C.   General Growth Properties, Inc.   (912) 354-7038
102       Peachtree City   GA   Fayette   180 Peachtree East Shopping Ctr.  
30269   Peachtree East Shopping Center   Retail Planning Corporation   (770)
956-8383 103   Fayetteville   NC   Cumberland   2800 Raeford Road   28303  
Highland Centre   Highland Centre   (910) 484-3011 104   Centennial   CO  
Arapahoe   8181 South Quebec Street   80112   Quebec Village JG, Limited   J.G.
Management Co., Inc.   (818) 707-9494 105   Fort Wayne   IN   Allen   6325 West
Jefferson Boulevard   46804   Village at Time Corners, LP   The Broadbent
Company   (317) 237-2900 108   Lakeland   FL   Polk   3615 South Florida Avenue
  33803   Kimco Lakeland 123, Inc.   Kimco Realty Corporation   (516) 869-9000
112   Irving   TX   Dallas   7640 North MacArthur Boulevard   75063   Inland
Western Irving Limited Partnership   RPAI Southwest Management LLC   (972)
801-6017 116   Allentown   PA   Lehigh   3300 Lehigh Street   18103   Nicholas
Park Mall LLC   Metro Commercial Management Services   (856) 866-1900 117  
Stafford   TX   Fort Bend   12656 Fountain Lake Circle   77477   Fountains
Dunhill, LLC   Dunhill Property Management   (214) 373-7500 118   North Little
Rock   AR   Pulaski   2727 Lakewood Village Drive   72116   Conservative
Development Co.   Ashley Company   (501) 758-7745 119   Orlando   FL   Orange  
2530 East Colonial Drive   32803   Weingarten Nostat, Inc.   Weingarten Realty
Management Company   (800) 688-8865 120   Chesapeake   VA   Chesapeake   1228
Greenbrier Parkway   23320   CP Venture Two LLC   Lennar Commercial Investors  
(770) 885-4555 121   Glendale   AZ   Maricopa   5960 West Bell Road   85308  
TPP Gateway, LLC   Cassidy Turley   (602) 682-8255 122   Beaumont   TX  
Jefferson   4436 North Dowlen Road   77706   Wu Family Trust   Wu Property
Management, Inc.   (626) 836-6925 123   Dallas   TX   Dallas   6465 East
Mockingbird Lane, Suite 322   75214   TRP Hillside, LLC   Twinrose Investments  
(214) 989-4152 124   Katy   TX   Harris   1747 Fry Road   77449   Brixmor GA
Apollo 1 TX Holdings, LLC   Brixmor Property Group   —   125   Naples   FL  
Collier   8811 North Tamiami Trail   34108   Musca Properties, LLC   Musca
Properties, LLC   (216) 642-9500 126   Midland   TX   Midland   4706 North
Midkiff Road, #1   79705   Pilchers North Park Limited Partnership   The
Pilchers Group   (214) 520-2800 127   Johnson City   TN   Washington   3211
People Street, Bldg. H   37604   RAF Johnson City, LLC   Chase Properties LTD.  
(212) 464-6626 130   Columbus   OH   Franklin   3628 West Dublin-Granville Road
  43235   Sun Center, Ltd.   DDR Continental LP   (216) 755-5500

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

132       San Antonio   TX   Bexar   18134 San Pedro   78232   Northwoods
Center, Inc.   Barshop & Oles Company   (512) 477-1212 134   Toledo   OH   Lucas
 

3315 W.Central Avenue,

Suite A3-10

  43606   Westgate Village Retail, LLC   Westgage Village Shopping Ctr.   (312)
341-9000 135   Evansville   IN   Vanderburgh   880 South Green River Road  
47715   North 52, LLC   Walter Wagner, Jr Co.   (502) 562-9200 136   Brookfield
  WI   Waukesha   16950 West Bluemound Road   53005   Metropolitan Life
Insurance Company   Urban Retail Properties Co.   (262) 938-0911 137   Athens  
GA   Clarke   196 Alps Road, Suite 34   30606   KRG Beechwood LLC   Kite Realty
Group   (317) 524-1793 140   Rockwall   TX   Rockwall   2855 Ridge Road   75032
  Steger Towne Crossing, L.P.   Trinity Interests   (972) 503-9444 141  
Marietta   GA   Cobb   50 Barrett Parkway, Suite 100   30066   DDR Prado LLC  
Developers Diversified Realty Corporation   (216) 755-5500 143   Henderson   NV
  Clark   500 North Stephanie Street   89014   Galileo Galleria, LLC   ERT
Australian Management, L.P. (subsidiary of New Plan)   (212) 869-3000 148   Reno
  NV   Washoe   5069 South McCarran Boulevard   89502   Meyer Properties, L.P.  
Meyer Properties   (800) 675-8181 149   Cordova   TN   Shelby   1635 Germantown
Parkway   38016   WNI/Tennessee LP   Weingarten Realty Management Company  
(713) 868-6562 154   Poway   CA   San Diego   13644 Poway Road   92064   Poway
City S.C., L.P.   Kimco Realty Corporation   (516) 869-9000 155   Williamsville
  NY   Erie   7992 Transit Road   14221   Premier Place Improvements LLC   DLC
Management Corporation   (216) 755-5500 158   Seminole   FL   Pinellas   11201
Park Boulevard, #73   33772   Seminole Mall LP   Primerica Group One, Inc.  
(813) 933-0629 160   Pompano Beach   FL   Broward   1115 South Federal Highway  
33062   Pompano Marketplace Owner, LLC   Woolbright Development, Inc.   (954)
235-5435 161   Laredo   TX   Webb   4601 San Dario Street   78041   H.E. Butt
Property Co. No. One   H.E. Butt Grocery Company   (210) 938-8290 167  
Cornelius   NC   Mecklenburg   20601 Torrence Chapel Road   28031   DDR
Southeast Southlake LP   DDR Mid- Atlantic Management LLC   (216) 755-6455 173  
Mission Viejo   CA   Orange   25282 Marguerite Parkway   92692   The Lueck
Family Partnership   Robert B. Lueck  

510.834.4350

ext 106

174   Snellville   GA   Gwinnett   1670 Scenic Highway North   30078   DDR
Southeast Snellville, L.L.C.   DDR Southern Management Corp.   (216) 755-6455
175   Columbia   SC   Richland   4840 Forest Drive   29206   Trenholm Plaza
(E&A), LLC   Edens & Avant Comm Real Estate   (803) 779-4420 180   Orlando   FL
  Orange   7506 Dr. Phillips Boulevard   32819   WRI-TC Marketplace at Dr.
Phillips, LLC   Weingarten Realty Investors   —   181   Edmond   OK   Oklahoma  
308 South Bryant Avenue   73034   IA Edmund Bryant LLC   Inland American Retail
Management, LLC   (630) 954-5662 182   Wheaton   IL   DuPage   191 Rice Lake
Square   60187   Danada Centers LLC   Mid-America Asset Management, Inc.   (630)
954-7300 183   Farragut   TN   Knox   11437 Kingston Pike   37922   White Realty
& Service Corp.   White Realty & Service Corp.   (865) 588-2244 184   Virginia
Beach   VA   Virginia Beach   748 Hilltop North   23451   SuSu Developers   S.L.
Nusbaum Realty Co.   (800) 208-8611 185   Venice   FL   Sarasota   1560 U.S. 41
Bypass   34293   Selig Enterprises, Inc.   Selig Enterprises, Inc.   (404)
876-5511 186   Westlake   OH   Cuyahoga   25001 Center Ridge Road   44145  
Westlake Home Improvement Associates, Ltd   Westlake Home Improv. Assoc.   (800)
473-7253 188   Myrtle Beach   SC   Horry   7621 North Kings Highway   29572  
Northwood Plaza, LLC   Rivercrest Realty Associates   (919) 846-4046 190  
Florence   SC   Florence  

1945 West Palmetto Street,

Suite 390

  29501   Florence (Florence Mall) FMH, LLC   Rivercrest Realty Associates  
(919) 926-3131 192   Mandeville   LA   St. Tammany Parish   3450 Highway 190,
Suite 2   70470   Premier Centre, LLC   Stirling Properties   (504) 898-2022 193
  Houston   TX   Harris   6148 Highway 6 North   77084   BRE Retail Residual
Owner 1, LLC   New Plan Excel Realty Trust   (212) 869-3000 194   St. Petersburg
  FL   Pinellas   218 37th Avenue North   33704   Publix Super Markets, Inc.  
Publix   (863) 688-1188 198   Rancho Cucamonga   CA   San Bernardino   10930
Foothill Boulevard   91730   Town Center I Family Partnership LP   Glacier Peak
Management Services, Inc.   (858) 578-3220

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

199       Stevenson Ranch   CA   Los Angeles   24955 Pico Canyon Road   91381  
H.E. Danielli II, LLC   DSB Properties, Inc.   (805) 374-1700 201   Chattanooga
  TN   Hamilton   2020 Gunbarrel Road, Suite 174   37421   Hamilton Village
Station LLC   Phillips Edison & Company   (513) 554-1110 202   High Point   NC  
Guilford   1589 Skeet Club Road, Suite 105   27265   Fairway - Oak Hollow, LLC  
Fairway Management Group, LLC   (205) 402-9990 203   Spartanburg   SC  
Spartanburg   1925 East Main Street   29307   ERP Hillcrest, LLC   New Plan
Excel Realty Trust, Inc.   —   204   Plantation   FL   Broward   8319 West
Sunrise Boulevard   33322   Jacaranda Plaza Partners, LLC   Ram Realty Services
  (561) 282-4630 205   Macon   GA   Bibb   4357 Forsyth Road, Suite 120   31210
  Coro Rivoli Ventures, LLC   Coro Realty Advisors, LLC   (404) 846-4019 206  
Arlington   TX   Tarrant   5906 South Cooper Street   76017   Rip Griffin Truck
Service Center, L.P.   Henry S. Miller Multi Management, Inc.   (972) 448-5808
207   Tuscaloosa   AL   Tuscaloosa   2600 McFarland Boulevard E., Suite S  
35405   DDRTC McFarland Plaza LLC   Developers Diversified Realty Corporation  
(256) 859-6122 208   Tulsa   OK   Tulsa   7827 East 91st Street   74133   Tulsa
County, LLC   Goldberg Family Partnership, LP   (913) 385-9996 210   Fullerton  
CA   Orange   1936 North Placentia Avenue   92831   Albertson’s, LLC   SUPERVALU
  —   212   Hilton Head Island   SC   Beaufort   430 William Hilton Prkwy.,
Suite 101   29926   Pineland Associates, LLC   Perrine & Wheeler Real Estate
Company   (843) 410-0510 213   Hickory   NC   Catawba   2990 North Center Street
  28601   Triangle Properties Assoc. LLC   Southern Real Estate   (704) 375-1000
214   Fresno   CA   Fresno   3070 West Shaw Avenue   93711   AMI Winepress, Ltd.
  AMI Winepress, Ltd.   (559) 224-8100 215   Destin   FL   Okaloosa   4437
Commons Drive East   32541   WR Paradise key, LLC   Pacifica Retail Management,
LLC   (850) 650-5005 217   College Station   TX   Brazos   2408 B Texas Avenue
South   77840   FSC Parkway, LLC   Cencor Realty Services   (713) 781-7111 219  
Orland Park   IL   Cook   204 Orland Park Place   60462   Inland Orland Park
Place, L.L.C.   Inland Commercial Property Management, Inc.  

877.206.5656

(toll free)

220   Temecula   CA   Riverside   31781 U.S. Highway 79 South   92592   Galileo
Vail Ranch, LP   ERT Australian Management, L.P. (subsidiary of New Plan)  
(713) 660-4300 221   Lexington   SC   Lexington   934 North Lake Drive   29072  
Lexington Towne Center, LP   Ziff Properties, Inc.   (843) 724-3500 222  
Shenandoah   TX   Montgomery   19075 Interstate Highway 45 South   77385   KRG
Portofino, LLC   Kite Realty Group   (317) 577-5600 223   Daytona Beach   FL  
Volusia   2500 W. Int’l Speedway Boulevard, #700   32114   International
Speedway Square, LTD   Kite Realty Group   (317) 577-5600 224   St. Charles   IL
  Kane   3619 East Main Street   60174   Slate Main Street Holdings, LLC  
Mid-America Asset Management, Inc.   (630) 954-7360 226   Greenville   NC   Pitt
  115 Red Banks Road   27858   Sterling Rental Company, LLC   Jon Day &
Associates, Inc.   (252) 756-1119 229   Palm Springs   CA   Riverside  

1555 South Palm Canyon Dr.,

Suite F

  92264   John Wessman d/b/a Wessman Development Company   Spinello Property
Management, Inc.   —   230   Stuart   FL   Martin   2508 S.E. Federal Highway  
34994   SPC Regency, LLC   0   (772) 288-0700 232   Kenner   LA   Jefferson
Parish   393 West Esplanade Avenue   70065   Folmar Kenner, LLC   Folmar &
Associates, LLP   (334) 343-3777 233   Frisco   TX   Collin   3333 Preston Road,
Suite 1500   75034   BRE Retail Residual Owner 1, LLC   Brixmor   (713) 660-4300
234   Salt Lake City   UT   Salt Lake   1400 Foothill Drive, #130   84108   JTJG
Foothill Village, L.C.   Johansen-Thackeray Commercial Real Estate Services  
(801) 487-6670 237   El Paso   TX   El Paso   7401 Mesa Street   79912   Sierra
Court Partners LP   Colonial Commercial Real Estate   (817) 632-6200 238  
Collierville   TN   Shelby   3655 Houston Levee Road   38017   Spirit MT
Collierville TN, LLC   The Shopping Center Group   (770) 955-2434 239   Murrells
Inlet   SC   Horry   10125 Highway 17 Bypass, Box #16A   29576   Murrells Retail
Associates, LLC   Urban Retail P   (843) 651-6990 240   Melbourne   FL   Brevard
  4100 North Wickham Road, Suite #132   32935   Post and Wickham Corporation  
Commercial Real Estate   (954) 761-8330 243   Cooper City   FL   Broward   5800
S. Flamingo Road   33330   IRT Property Company   Equity One Realty &
Management, Inc.   (305) 672-1234

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

245       Chino Hills   CA   San Bernardino   13031 Peyton Drive   91709   
CRCH, LLC   Greenland Property Management, LLC   (714) 521-8580 246   Huntington
Beach   CA   Orange   19041 Beach Boulevard   92648    SunBrewer Partners, L.P.
  West Coast Management   (858) 538-7500 247   Wilmington   NC   New Hanover  

3501 Oleander Drive,

Building 1

  28403    The Oleander Company, Inc.   The Oleander Company, Inc.   (910)
392-3300 249   Huntsville   AL   Madison   6275 University Dr., NW, Suite 17  
35806    DDRTC Westside Centre LLC   Developers Diversified Realty Corporation  
(256) 859-6122 250   Portage   MI   Kalamazoo   581 Romence Road   49024    19
Props, LLC   PlazaCorp Realty Advisors, Inc.   (269) 383-5775 252   Ballwin   MO
  Saint Louis   14820 Manchester Road   63011    Olde Towne Plaza, LLC   The
Bedrin Organization   (201) 612-8800 255   Midlothian   VA   Chesterfield   4740
Commonwealth Center Pkwy.   23112    DDR Commonwealth II, LLC   Developers
Diversified Realty Corporation   (410) 535-5490 261   San Antonio   TX   Bexar  
12651 Vance Jackson Road, #125   78230    WRI Fiesta Trails, LP   Weingarten
Realty Management   (800) 688-8865 262   Bonita Springs   FL   Lee   25191
Chamber of Commerce Drive   34135    PMAT PRADO, LLC   Isram Realty &
Management, Inc.   (954) 455-2822 265   Leesburg   VA   Loudoun   1021 Edwards
Ferry Road NE   20176    CH Realty III/Battlefield, LLC   Kimco Realty
Corporation   (410) 684-2000 266   Mount Pleasant   SC   Charleston   600 Long
Point Road   29464    Belle-Hall Shopping Center II, LLC   AAC Real Estate
Services, Inc.   (704) 295-4000 267   Tampa Palms   FL   Hillsborough   16061
Tampa Palms Boulevard, W.   33647    PERA City Plaza Tampa, Inc.   Colliers
International   (727) 442-7184 268   Ocala   FL   Marion   2800 SW 24th Avenue,
Suite 200   34474    Boyd Market Center, Inc.   Ocala Properties, Inc   (352)
861-2248 269   Orchard Park   NY   Erie   3207 Southwestern Boulevard   14127   
Orchard Park TK Owner LLC   LLD Enterprises   (585) 244-3582 270   Riverside  
CA   Riverside   335 East Alessandro Boulevard   92508    Mission Grove Plaza,
LP   Mission Grove Plaza   (310) 553-1776 271   Columbus   OH   Franklin   4870
Morse Road   43230    Highland Properties, Inc.   Don M. Casto Organization  
(614) 228-5331 272   Jackson   TN   Madison   175 Stonebrook Place   38305   
Broadmoor Investment Corp.   Lurie & Associates, LLC   (901) 794-6022 273  
Granada Hills   CA   Los Angeles   10801 Zelzah Avenue   91344    FW CA-Granada
Village, LLC   Regency Realty Group, Inc.   (213) 553-2229 275   Greenwood   IN
  Johnson   1011 North State Road 135   46142    R.P. Wurster, LP   Maquina
Realty Corporation   (317) 579-9700 276   Fort Worth   TX   Tarrant   5026 South
Hulen Street   76132    Rancho Hulen LLC   Pacific Commercial Management, Inc.  
(858) 450-6886 277   Hoover   AL   Jefferson   2792 John Hawkins Parkway   35244
   Highway 150 LLC   Colonial Properties Trust   (205) 871-0406 279   Richmond  
VA   Henrico   3544 Pump Road   23233    Sauer Properties, Inc.   Commonwealth
Commercial Partners, Inc.   (804) 346-4966 281   Valrico   FL   Hillsborough  
3456 Lithia-Pinecrest Road   33596    KRG Lithia, LLC   Kite Realty Group  
(317) 577-5600 283   Charlotte   NC   Mecklenburg   5341 Ballantyne Commons
Pkwy., #200   28277    Promenade Shopping Center, LLC   Childress Klein
Properties   (704) 342-9000 284   Clearwater   FL   Pinellas   2522 North
McMullen Booth Road   33761    NWP Clearwater Holdings LLC   The Sembler Company
  (727) 384-6000 286   Palm Beach Gardens   FL   Palm Beach   11700 U.S. Highway
1   33408    Oakbrook Square Shopping Center Corporation   Equity One Realty &
Management, Inc.   (561) 625-4655 288   Jacksonville   FL   Duval   10915
Baymeadows Road, #26   32256    KSP1 Point Meadows, LLC   KSP1 Point Meadows,
LLC   (954) 354-8282 289   Vero Beach   FL   Indian River   1225 U.S. Highway 1,
Suite 2   32960    KRG Vero, LLC   Kite Realty Group   (317) 577-5600 290  
Chapel Hill   NC   Orange   1800 E. Franklin Street, Suite 13   27514    Federal
Realty Investment Trust   Federal Realty Investment Trust   (301) 998-8100 291  
Cherry Hill   NJ   Camden   1600 Kings Highway North, Suite 20   08034   
Federal Realty Investment Trust   Federal Realty Investment Trust   (301)
998-8100 293   Downingtown   PA   Chester   60 Quarry Road   19335    Brandywine
Square, LLC   0   (610) 873-5585 294   La Quinta   CA   Riverside   78-945
Highway 111   92253    JBM-Stein, LLC   JBM Properties, inc.   (858) 456-5655

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

295       Flowood   MS   Rankin   150 Promenade Boulevard   39232   ARC Dogwood
Promenade, LLC   Aronov Realty Management, Inc.   (334) 277-1000 296  
Jenkintown   PA   Montgomery   913 Old York Road   19046   DDR Noble TC Trust  
DDR   (216) 755-5500 297   Carmel   IN   Hamilton   2520 East 146th Street  
46033   Westfield One, LLC   Kite Realty Group   —   298   Casselberry   FL  
Seminole   1455 Semoran Boulevard, Suite 251   32707   Inland Southeast
Casselberry, L.L.C.   Developers Diversified Realty Corporation   (407) 971-1820
299   Ocean   NJ   Monmouth   1100 Highway 35   07712   Sunset Arcadia Center,
Inc.   Stavola Realty Company   (732) 542-2328 301   Boynton Beach   FL   Palm
Beach   334 North Congress Avenue   33426   Oakwood Square (E&A), LLC   Edens &
Avant   (954) 622-4204 302   Kildeer   IL   Lake   20771 North Rand Road   60047
  Centro/IA Quentin Collection, LLC   Centro Prop   (630) 736-7200 303  
Montgomery   AL   Montgomery   7860 Vaughn Road   36116   PSM Cornerstone,
L.L.C.   Aronov Realty Management, Inc.   (334) 277-1000 304   Chandler   AZ  
Maricopa   2835 South Alma School Road   85286   Vestar California XXII, L.L.C.
  Vestar Property Management   (602) 993-1626 309   Jacksonville   FL   Duval  
13475 Atlantic Blvd   32225   Harbour Village Holdings, L.L.C.   Global Realty &
Management FL, Inc   (904) 716-9300 310   Royal Palm Beach   FL   Palm Beach  
11061 Southern Boulevard   33411   The Centre On Southern LLLP   Merin Hunter
Codman, Inc.   (561) 791-1637 312   Southern Pines   NC   Moore   10564 U.S.
Highway 15-501   28387   SAM Southern Pines LLC   Developers Diversified Realty
Corporation   (919) 383-8000 313   Bluffton   SC   Beaufort   71 Towne Drive  
29910   BRE Mariner Bellfair II LLC   Brixmor Southeast Retail Manager, LLC  
(407) 903-2913 314   McKinney   TX   Collin   3150 South Hardin Boulevard  
75070   Fairway Capital Partners, Ltd.   Crestview Real Estate, LLC   (214)
343-4477 315   Round Rock   TX   Travis   3021 South IH 35, Suite 240   78664  
Round Rock Crossings Texas LP   Cencor Realty Services   (512) 482-8383 316  
Pittsburgh   PA   Allegheny   8050 McKnight Road, Suite 1-B   15237   First City
North Associates   The First City Company   (412) 391-6060 318   La Mirada   CA
  Los Angeles   15745 E. Imperial Highway   90638   Soraya LLC   0   —   320  
Morrisville   NC   Wake   9525 Chapel Hill Road   27560   Cary Park Place LLC  
Kimco Realty Corporation   (704) 362-6120 321   Concord   NC   Cabarrus   6130
Bayfield Parkway   28027   Gateway Afton Ridge Inc.   Edens   (954) 622-4221 322
  Beachwood   OH   Cuyahoga   23949 Chagrin Boulevard   44122   DFG-Pavilion,
LLC   Devonshire, et al   (419) 877-1010 323   Saint Louis   MO   St. Louis  
9610 Manchester Road   63119   Market at McKnight I, LLC   Novus Companies  
(314) 968-0842 324   Murfreesboro   TN   Rutherford   552 North Thompson Lane  
37129   Redus TN-All, LLC   Resource Realty, LLC   (615) 595-2450 325  
Chantilly   VA   Fairfax   13621 Lee Jackson Memorial Highway   20151-3502  
Chantilly Plaza LLC   Combined Properties, Inc.   (202) 293-4500 326   Franklin
Park   NJ   Franklin   3391 State Route 27   08823   The Stop & Shop Supermarket
Company   Fameco Management Services   (781) 440-8356 327   Keller   TX  
Tarrant   1610 Keller Parkway   76248   Assigned to - T Keller Crossing TX, LLC
  Tabani Group   (972) 417-5835 328   Las Vegas   NV   Clark   6435 North
Decatur Boulevard   89131   Shadow Mountain Marketplace, LLC   The Equity Group
  (702) 796-5500 330   Rochester   NY   Monroe   3349 Monroe Avenue Space 42  
14618   Pittsford Plaza SPE, LLC   Wilmorite Management Group, LLC   (585)
424-6220 333   Holmdel   NJ   Monmouth   Route 35 & Unions Avenue   07733  
Holmdel GT LP & GBR Holmdel Plaza LLC   National Realty & Development Corp.  
(914) 694-4444 334   Noblesville   IN   Hamilton   13920 Hoard Drive   46060  
Hamilton Town Center, LLC   Simon Property Group   (317) 849-9994 335  
Westborough   MA   Wooster   1500 Union Street   01581   Westborough CC, LLC   0
  —   336   Queen Creek   AZ   Maricopa   21198 South Ellsworth Loop Road  
85242   VPQCM, LLC   Vestar Property Management   —   337   Port St. Lucie   FL
  St. Lucie   NEC of St. Lucie West Blvd & Peacock Blvd   34986   Benderson
Properties, Inc. & Donald Robinson   0   (941) 360-7283

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

338       Hendersonville   TN   Sumner   1018 Andrews Run   37075   Glenbrook
West General Partnership   0   (615) 349-0553 339   Houston   TX   Harris  
21115 Tomball Parkway   77070   ACF Lakewood 11, LLC   ACF Property Management,
Inc   (303) 291-0111 340   Scottsdale   AZ   Maricopa   16227 North Scottsdale
Road   85254   Excel Promenade, LLC   Pacifica Retail Management, LLC   (480)
385-2820 341   Alpharetta   GA   Fulton   6290 North Point Parkway   30022   CP
Venture Two LLC   Cousins Properties, Inc.   (404) 407-1000 342   Corpus Christi
  TX   Nueces   5425 South Padre Island Drive, Suite 136   78411   Weingarten
Realty Investors   0   —   343   Hurst   TX   Tarrant   500 Grapevine Highway  
76054   Mayfair Station LLC   0   —   344   Lenexa   KS   Johnson   9656 Quivira
Road   66215   Orchard Center Company, LLC   Block & Company   (816) 753-6000
345   Madison   MS   Madison   125 South Congress Street, suite 1800   39201  
Madison Grandview Forum, LLC   Mattiace Properties, Inc.   (601) 352-1818 346  
Sarasota   FL   Sarasota   119 North Cattlemen Road   34243   SIPOC Associates
TIC   Benderson Development Company   (941) 359-8303 347   Tempe   AZ   Maricopa
  1800 E Rio Salado Parkway, Suite 140   85281   Vestar Tm-OPCO, LLC   Tempe
Marketplace   (480) 966-9338 348   Jacksonville   FL   Duval   1648 University
Blvd West   32217   KRG Lakewood, LLC   Kite Realty Group   (239) 596-6945 349  
Monroe   LA   Ouachita Parish   4700 Millhaven Road, Ste. 1252   71203  
Pecanland Mall, LLC   General Growth Properties, Inc.   (318) 322-4635 350  
Folsom   CA   Sacramento   2725 East Bidwell Street   95630   Folsom Broadstone,
Inc.   CB Richard Ellis   (916) 781-4808 351   Flower Mound   TX   Denton  

6101 Long Prairie Road,

Suite 500

  75028   SFERS Real Estate Corp. MM   UCR Realty   (469) 232-3481 352  
Columbia   SC   Lexington   1120 Bower Parkway   29212   DDRTC Columbiana
Station II LLC   DDR   (843) 767-6765 353   Hattiesburg   MS   Lamar   1000
Turtle Creek Drive   39402   Turtle Creek Limited Partnership   CBL & Associates
Management, Inc.   (601) 261-3032 354   Denver   CO   Denver   2490 South
Colorado Blvd   80222   University Hills Plaza, LLC   Judd & Company   (303)
744-1733 355   Irvine   CA   Orange   13742 Jamboree Road   92602   The Irvine
Company, LLC   0   —   356   Suwanee   GA   Forsyth   3630 Peachtree Pkwy  
30024   Hendon/Atlantic RIM Johns Creek, LLC   DDR   (216) 755-3284 357   Sunset
Hills   MO   St. Louis   10990 Sunset Plaza   63128   DDR Sunset Hills LLC   DDR
  (216) 755-3284 358   Surprise   AZ   Maricopa   13712 West Bell Road   85374  
Surprise Towne Center Holdings LLC   CBRE   (602) 735-5212 359   McAllen   TX  
Hidalgo   800 E. Expressway 83, Suite 200   78503   Weingarten Las Tiendas, JV  
Weingarten Realty   (210) 757-3918 360   Biloxi   MS   Harrison   2650 Beach
Boulevard, Suite 36   39531   Edgewater Retail Partners I, L.P.   PCI Houston  
(713) 977-9696 361   Katy   TX   Fort Bend   6565 S. Fry Road   77494   Cinco
Grand & Fry Retail, L.P.   Fidelis Realty Partners, Ltd.   (713) 623-6800 362  
Tucson   AZ   Pima  

5555 East Broadway Blvd.

Suite 101

  85711   East Broadway Tucson Co. LLC   Benenson Capital Partners, LLC   (212)
867-0990 364   San Dimas   CA   Los Angeles   826 W Arrow Highway   91773   PK
III San Dimas Marketplace, L.P.   Kimco Realty   —   366   Charlottesville   VA
  Albemarle   100 Twentyninth Place Court   22901   FR Shoppers World, LLC   0  
—   367   Williamsburg   VA   James City   5225 Settlers Market Blvd. Suite 180
  23188   FCP - Settlers Market, LLC   Faison & Associates, LLC   —   368  
Austin   TX   Williamson   14028 north US Highway 183 Building B   78717   TR
LAKELINE MAERKET RETAIL CORP   Barshop & Oles   (512) 477-1212 369   Anaheim  
CA   Orange   8140 E. Santa Ana Canyon Road   92808   OTR, an Ohio General
Partnership   Donahue Schriber   (714) 283-3535 370   Colorado Springs   CO   El
Paso   5326 N Nevada Avenue   80918   North Nevada Retail Ventures LLC  
Diamante Property Services   (719) 575-0075 371   Buford   GA   Gwinnett   1600
Mall of Georgia Blvd, Suite 900   30519   DDRTC Marketplace at Mill Creek LLC  
0   —  

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

372       El Paso   TX   El Paso   8889 Gateway West   79907   The Fountains at
Farah, LP   0   —   373   Elk Grove   CA   Sacramento  

7707 Laguna Blvd,

suite 100

  95758   Donahue Schriber Realty Group, L.P.   DSRG   (916) 286-5208 374  
Watchung   NJ   Somerset   1511 Route 22 West   07069   Watchung Square
Associates, LLC   Fidelity Management Company   (973) 966-2880 375   Birmingham
  AL   Shelby /Jefferson   5275 Hihgway 280 South, Suite 119   35242   GS II
Brook Highland, LLC   Developers Diversified Realty Corporation   (216) 755-5500
376   Overland Park   KS   Johnson   6403 West 135th Street, Suite E4   66223  
Aspen Square, Inc.   0   (913) 499-1926 377   Hendersonville   NC   Henderson  
223 Greenville Highway   28792   Capitol Funds, Inc.   CNL Commercial Real
Estate, Inc.   (704) 972-2500 378   Las Vegas   NV   Clark   2060 North Rainbow
Boulevard   89108   Weingarten Realty Investors   Weingarten Realty   (702)
259-7900 379   Mobile   AL   Mobile   3960 Airport Boulevard   36608   Pinebrook
Investment, LLC   Burton Brothers Management   (251) 341-5777 380   Las Vegas  
NV   Clark   10000 West Sahara Ave., Suite 160   89117   Sahara Center LLC   0  
—   381   Rocklin   CA   Placer   5116 Commons Drive   95677   Rocklin
Pavilions, LLC & Rocklin Pavilions Sales, LLC   0   -—   382   Franklin   TN  
Williamson  

545 Cool Spring Blvd,

suite 100

  37064   Thoroboughbred Village, LLC & Lightman Cool Springs, LLC   0   —   383
  Citrus Heights   CA   Sacramento   6130 Birdcage Center Drive   95610   MP
Birdcage Marketplace, LLC   0   -—   385   Carlsbad   CA   San Diego   3415 Via
Montebello   92009   La Costa Town Center, LLC   Shelter Bay Retail Group  
(818) 524-2255 386   Clovis   CA   Fresno   1085 Herndon Avenue   93612  
Clovis-Herndon Center, LLC   0   —   387   Albuquerque   NM   0   9500
Montgomery Blvd. NE, Suite A   87111   CPP Sierra Vista LLC   0   -—   389  
Gainesville   VA   Prince William   5095 Wellington Road   20155   Gateway
Center IV L.C.   The Peterson Companies   (703) 227-0883 390   Aventura   FL  
Dade   19915 Biscayne Blvd   33180   Deer Capital, LLC   0   —   391   Falls
Church   VA   Fairfax   7271 Arlington Blvd   22042   Federal Realty Investment
Trust (per Comm.Agt. 5.17.2007)   0   -—   990   Jacksonville   FL   Duval  
1200 Riverplace Boulevard   32207   Parkway Properties LP   Hallmark Partners  
(407) 843-6215 972   Atlanta   GA   0   767 Douglas Hill Road   30122   PAC
OPERATING LIMITED PARTNERSHIP   0   —   973   Grand Prairie   TX   0   2951 N.
Greater Southwest Parkway   75050   AMB-SGP TX/IL, L.P.   0   —   972A   Lithia
Springs   GA     777 Douglas Hill Road   30122   Prologis   Prologis   (678)
441-1400 972B   Lithia Springs   GA     6100 Perdue Drive   30122   Americold
Logistics, LLC     972C   Lithia Springs   GA   0   7095 Tradewater Parkway  
30122   Americold Logistics, LLC   0   (678) 441-1400 974   Ontario   CA   San
Bernardino   4750 E. Zinfandel Court, Unit A   91761   Vogel Family Properties,
LLC   0   —   990   Jacksonville   FL   Duval   suite 917   32207   Parkway
Properties LP   Hallmark Partners   (407) 843-6215 Jax Overflow   Jacksonville  
FL   Duval  

8930 Western Way,

Suite 5

  32256   EastGroup Properties   EastGroup Properties   (904) 363-9996 990B  
Jacksonville   FL   Duval  

8936 Western Way,

Suite 9

  32256   East Group Properties, LP   EastGroup Properties   (904) 363-9996

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

Schedule 5.09

ENVIRONMENTAL MATTERS

None.

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

Schedule 5.10

INSURANCE

 

Coverage

 

Carrier

 

Policy #

Property (includes business interruption, windstorm, flood and earthquake)  
American Guarantee and Liability Ins. Co.   ERP9140227 08 Ocean Cargo   Federal
Insurance Company   0006-57-50STL Directors & Officers - $10mm   Travelers
Casualty & Surety Co. of America   PCDO-3001

- $10mm excess of $10mm

  Axis Insurance Company   MCN740723012013

- $10mm excess of $20mm

  Continental Casualty Company   425166485

- $10mm excess of $30mm (Broad Form Side A)

  Federal Insurance Company   68030141 Fiduciary Liability & Crime   Travelers
Casualty & Surety Co. of America   105639689 Special Crime   National Union Fire
Insurance Company of Pittsburgh, PA (Chartis)   21135122 Workers’ Compensation  
Travelers Property Casualty/Travelers Indemnity Company (Retro) and Charter Oak
Fire Insurance Company (Ded)  

TRKUB9517B069-13 (Travelers)

TC2OUB9518B712-13 (Charter Oak)

General Liability   Travelers Property Casualty Company of America  
TJEXGL9517BO82-TIL-13 Automobile   Travelers Property Casualty Company of
America   TJCAP9517B070-TIL-13 Foreign Liability   Vigilant Insurance Co.
(Chubb)   7351-28-51-STL Umbrella - $25mm   Continental Casualty Company  
L4018173751

- $25mm excess of $25mm

  St. Paul Fire & Marine   ZUP-14S0321A-13-NF

- $25mm excess of $50mm

  National Surety Corporation   SHX-000-2424-9706

- $25mm excess of $75mm

  Great American Ins. Co.   TUE019147002 Employment Practices Liability  
Continental Casualty Company   425168706 Internet Liability and Network Security
  Lloyds of London   B0713MEDTE1401367

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

Schedule 5.13

SUBSIDIARIES; OTHER EQUITY INVESTMENTS

 

(a)

 

       

Jurisdiction of

Incorporation

 

Authorized

Equity Interests

 

Ownership

Percentage

Loan Party

 

Subsidiary

      Stein Mart, Inc.     Stein Mart Buying Corp.   Florida   1,000 shares  
Stein Mart, Inc. - 100%   Stein Mart Holding Corp.   Florida   1,000 shares  
Stein Mart, Inc. - 100%   Stein Mart Air, Inc.   Florida   10,000 shares   Stein
Mart, Inc. – 100%

 

(b)

See part (a) above.

 

(c)

 

Loan Party

  

Ownership

Stein Mart, Inc.*

  

Jay Stein –33.8%

Others – 66.2%

Stein Mart Buying Corp.

   Stein Mart, Inc. – 100%

Stein Mart Holding Corp.

   Stein Mart, Inc. – 100%

 

* - as of 1/3/15

As of 1/3/15, Jay Stein shares totaled 15,203,716 which consisted of 11,878,260
shares held by Stein Ventures Limited Partnership, the general partner of which
is Cary Ventures, Inc., 21,894 shares held by Jay and Deanie Stein Foundation
over which Mr. Stein has sole voting and dispositive power as trustee of the
Foundation, 40,275 shares held by Cary Ventures, Inc., a corporation wholly
owned by Mr. Stein, 984,299 shares held by Jay Stein, 731,600 shares owned by a
trust for the benefit of Deanie Stein and over which Mr. Stein has sole voting
and dispositive power as trustee, 773,694 shares owned by the Berry Hattie Stein
2013 Trust over which Mr. Stein has sole voting and dispositive power as trustee
and 773,694 shares owned by the Jay Meredith Stein 2013 Trust over which
Mr. Stein as sole voting and dispositive power as trustee.

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

Schedule 5.17

INTELLECTUAL PROPERTY MATTERS

None

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

Schedule 5.18

LABOR MATTERS

 

Employment Agreements relating to four executive officers plus one senior
General Merchandise Manager

Stein Mart, Inc. 2001 Omnibus Plan as amended and restated effective June 14,
2011

 

Short-Term Incentive Plan

Long-Term Incentive Plan Deferred Compensation Plan Split-Dollar Life Insurance
Plan Employee Stock Purchase Plan 401K Plan

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

Schedule 5.21(a)

DDAs

 

Bank

  

Acct #

  

Address

  

Contact Person

  

Contact Number

Huntington National Bank    01472123792   

PO Box 1558

EA1W37 Columbus,

OH 43216

   Jason Travis    216-515-6141 BMO Harris Bank    02173006   

PO Box 755 Chicago,

IL 60690

   Steph Able    262-641-6488 First Citizens Bank    80026721301   

1230 Main Street/PO

Box 29 Columbia,

SC 29202

   Sarah Mack    888-612-4444 TrustMark National Bank    7000072470   

PO Box 291 Jackson,

MS 39205

   Darrius Marshall    601-208-5193 Compass Bank    72031148   

PO Box 10566

Birmingham,

AL 35296

   Sherry Driggers    205-297-3060 Regions Bank    3840250431   

51 W Bay Street

Jacksonville,

FL 32202

   Georgette Smith    904-998-4978 Bank of America N.A.    1290920306   

PO Box 15284

Wilmington,

DE 19850

   Christine Dunn    888-715-1000 ext 87325 Capital One Bank    812122258   

10800 Nuckols Road

Glen Allen,

VA 23060

   Tammy Pratts    504-533-2905 First Niagara Bank    867311711   

349 Orchid Park Rd.

Orchid Park,

NY 14127

   John Rachuna    716-674-9515 TrustMark National Bank    833143101   

PO Box 291 Jackson,

MS 39205

   Darrius Marshall    601-208-5193 Fifth Third Bank    99940261   

PO Box 630900

Cincinnati,

OH 45263-0900

   Louis Hlebiczki    513-534-7455 TrustMark National Bank    1002228237   

PO Box 291 Jackson,

MS 39205

   Darrius Marshall    601-208-5193 PNC Bank    4622938085   

2410 E 146th Street

Carmel, IN 46033

   Derrick Nihart    317-846-4043 Wells Fargo Bank    2000035891884   

One Independent DR,

Jacksonville,

FL 32202

   Gayle Hope    904-351-7323 Wells Fargo Bank    2000025402254   

One Independent DR,

Jacksonville,

FL 32202

   Gayle Hope    904-351-7323

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

Schedule 5.21(b)

CREDIT CARD ARRANGEMENTS

All payment processing/settlement services are provided by the following
entities:

Vantiv Holding, LLC

8500 Governors Hill Drive

Symmes Township, Ohio 45249

American Express

World Financial Center

200 Vesey St.

New York, NY 10285

Discover Financial Services

2500 Lake Cook Road

Riverwoods, Illinois 60015

Synchrony Bank

170 West Election Drive, Suite 125

Draper, Utah 84020

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

Schedule 5.24

MATERIAL CONTRACTS

Agreement for American Express Card Acceptance, effective as of July 1, 2003,
between Stein Mart, Inc. and American Express Travel Related Services Company,
Inc.

Amended and Restated Co-Brand and Private Label Credit Card Consumer Program
Agreement, dated as of October 3, 2011, between Stein Mart, Inc. and GE Capital
Retail Bank (now Synchrony Bank).

Bank Merchant Agreement, dated as of June 15, 2000 (as amended from time to
time), between Vantiv Holding, LLC (as successor in interest to Fifth Third
Bank) and Stein Mart, Inc.

Merchant Services Agreement, effective May 1, 2008, between Stein Mart, Inc. and
DFS Services LLC (f/k/a Discover Financial Services LLC).

Ecommerce Agreement, effective April 30, 2012, between Stein Mart, Inc. and GSI
Commerce, Inc. (now eBay Enterprise, Inc.)

Integrated Marketing, effective April 10, 2013, between Stein Mart, Inc. and GA
Communications Inc. [DBA “PureRED”]

Advertising Agency, effective June 1, 2014, between Stein Mart, Inc. and Fry
Hammond Barr, Inc

Newspaper Planning and Buying, effective July 1, 2014 between Stein Mart, Inc.
and NSA Media, Inc. d/b/a Strategic Print Marketing

CRM Database Management, effective July 10, 2010 between Stein Mart, Inc., and
Lift 361

Printing Services, effective May 31, 2014 between Stein Mart, Inc. and Quad
Graphics, Inc.

Email Service Provider, effective January 1, 2015 between Stein Mart, Inc. and
Experian Marketing Solutions, Inc.

Corporate Office Space, effective March 1, 2014 between Stein Mart, Inc. and
Parkway Properties LP

Distribution Center, effective August, 2012 between Stein Mart, Inc. and PAC
Operating Limited Partnership

Distribution Center, effective March 1, 2013 between Stein Mart, Inc. and
AMB-SGP TX/IL, L.P.

Distribution Center, effective November 1, 2013 between Stein Mart, Inc. and
Vogel Family Properties, LLC

Transportation, effective November 11, 2011 between Stein Mart, Inc. and
Schneider National Carriers

Transportation, effective December 16, 2011 between Stein Mart, Inc. and J.B.
Hunt Transport, Inc.

Warehouse Management System, effective May 4, 2012 between Stein Mart, Inc. and
Highjump Software, Inc.

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

Schedule 6.02

FINANCIAL AND COLLATERAL REPORTING

COLLATERAL REPORTING

In addition to the other materials and information required to be provided
pursuant to the terms of the Credit Agreement, the Loan Parties shall provide
Administrative Agent, on the applicable day specified below, the following
documents (each in such form and detail as the Administrative Agent from time to
time may specify):

Monthly Reports. Monthly, the Loan Parties shall provide to Administrative Agent
original counterparts of (each in such form as Administrative Agent from time to
time may specify):

 

  a. On the fifteenth (15th) day of each Fiscal Month for the immediately
preceding Fiscal Month (or, if such day is not a Business Day, on the next
succeeding Business Day), provided, however, upon the occurrence and during the
continuation of an Accelerated Weekly Borrowing Base Delivery Event, at the
election of the Administrative Agent, on Wednesday of each week for the
immediately preceding week (or, if Wednesday is not a Business Day, on the next
succeeding Business Day):

 

  i. On such day, supporting source documents for the Borrowing Base Certificate
delivered in accordance with the Credit Agreement.

 

  ii. Purchases and accounts payable analysis report, (together with account
payable aging) for each Loan Party, in Administrative Agent’s format;

 

  iii. Inventory summary by Store location;

 

  iv. Inventory summary by department; and

 

  v. Inventory certificate in Administrative Agent’s format.

 

  b. By the thirtieth (30th) day of each Fiscal Month for the immediately
preceding Fiscal Month (or, if such day is not a Business Day, on the next
succeeding Business Day):

 

  i. Reconciliation of the stock ledger to the general ledger;

 

  ii. Gross margin reconciliation, consistent with the Loan Parties’ past
reporting practices;

 

  iii. Statement of Store Activity in Administrative Agent’s format; and

 

  iv. Such other information as the Administrative Agent may from time to time
reasonably request.

For purposes of Sections (a) and (b) above, the first “Fiscal Month” in respect
of which the items required by such Section shall be provided shall be the
Fiscal Month ending on or about January 31, 2015.

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

Schedule 7.01

EXISTING LIENS

 

Debtor

 

Secured Party

  Jurisdiction   UCC Financing
Statement #’s  

Collateral Description

Stein Mart, Inc.         GE Money Bank         Florida       200603783447      
201105166293   Accounts (which is the legal relationship established by and
between a Cardholder and Secured Party pursuant to a Cardholder Agreement and
all Indebtedness thereunder and supporting obligations therefor), Account
Documentation and Indebtedness, all deposits, credit balances and reserves
relating to such Accounts and all proceeds.

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

In addition to the UCC Financing Statements that have been filed by secured
parties of the Loan Parties (described above), the following UCC Financing
Statements have been filed (i) as a precautionary filing or otherwise for
information purposes or (ii) for the purpose of protecting the interests of
consignors of Stein Mart, Inc.

 

Debtor

  

Secured Party

   Jurisdiction    UCC Financing
Statement #’s   

Collateral Description

Stein Mart, Inc.    AT&T Capital Services, Inc.    Florida    200602248394
201104181167    Leased Telecommunications and Data Equipment [Precautionary
Filing] Stein Mart, Inc.    AT&T Capital Services, Inc.    Florida   
200603021784
201104181248    Leased Telecommunications and Data Equipment [Precautionary
Filing] Stein Mart, Inc.    AT&T Capital Services, Inc.    Florida   
200603100250
201104390467    Leased Telecommunications and Data Equipment [Precautionary
Filing] Stein Mart, Inc.    AT&T Capital Services, Inc.    Florida   
200603100269
201104390459    Leased Telecommunications and Data Equipment [Precautionary
Filing] Stein Mart, Inc.    DSW Inc.    Florida    200900396618

201400967463

   Consigned Merchandise (Shoes and Related Items) sold in the Shoe Department
of all Covered Stores [Consignment Filing] Stein Mart, Inc.    Cisco Systems
Capital Corporation    Florida    200901245192

201402097946

   Leased Equipment and all Books and Proceeds therefrom [Precautionary Filing]
Stein Mart, Inc.    ePlus Group, inc.    Florida    200901006880

201401878774

   Certain Assets under and as defined in Lease Agreement No. FLC122 dated June
9, 2009 between Debtor and Secured Party [Precautionary Filing] Stein Mart, Inc.
   Tygris Vendor Finance, Inc. (as assignee of ePlus Group, inc.)    Florida   
201001965696

201002046465

201002301937

201002829591

   Certain Leased Assets described in Schedule No. 102 to Lease Agreement No.
FLC122 dated June 9, 2009 [Precautionary Filing] Stein Mart, Inc.    CSI
Leasing, Inc.    Florida    201003162442    Leased Equipment, Software and
Personal Property located at 1200 Riverplace Blvd., Jacksonville, FL and 400
Scenic View Dr., Cumberland, RI [Precautionary Filing] Stein Mart, Inc.   
Scents of Worth, Inc.    Florida    201003210234    Consigned Inventory of
Designed Perfume and Fragrance Products [Consignment Filing] Stein Mart, Inc.   
ePlus Group, inc.    Florida    201003460125    Certain Leased Assets described
in Schedule No. 2 to Lease Agreement No. FLC122 dated June 9, 2009
[Precautionary Filing]

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

Stein Mart, Inc.    Prime Alliance Bank (as assignee of ePlus Group, inc.)   
Florida    201003787701

201206801253

   Certain Leased Assets described in Schedule No. 105 to Lease Agreement No.
FLC122 dated June 9, 2009 [Precautionary Filing] Stein Mart, Inc.    Prime
Alliance Bank (as assignee of ePlus Group, inc.)    Florida    201104351402

201206801261

   Certain Leased Assets described in Schedule No. 106 to Lease Agreement No.
FLC122 dated June 9, 2009 [Precautionary Filing] Stein Mart, Inc.    Prime
Alliance Bank (as assignee of ePlus Group, inc.)    Florida    201104887760

20120680127X

   Certain Leased Assets described in Schedule No. 107 to Lease Agreement No.
FLC122 dated June 9, 2009 [Precautionary Filing] Stein Mart, Inc.    CIT Finance
LLC (as assignee of ePlus Group, inc.)    Florida    201105418411

20130867496X

   Certain Leased Assets described in Schedule No. 108 to Lease Agreement No.
FLC122 dated June 9, 2009 [Precautionary Filing] Stein Mart, Inc.    Prime
Alliance Bank (as assignee of ePlus Group, inc.)    Florida    201105644462

201206801245

   Certain Leased Assets described in Schedule No. 3 to Lease Agreement No.
FLC122 dated June 9, 2009 [Precautionary Filing] Stein Mart, Inc.    TMH
Acquisition, LLC    Florida    201308223623    Leased Toyota Electric Order
Picker plus 2 batteries and 1 Charger [Precautionary Filing] Stein Mart, Inc.   
Wells Fargo Bank, N.A.    Florida    201309310201    Leased Crown Forklift and
all equipment parts, accessories, substitutions, additional, accessions and
replacements thereto and Proceeds thereof [Precautionary Filing] Stein Mart,
Inc.    Wells Fargo Bank, N.A.    Florida    201300287347    2 Leased Crown
Forklifts and all equipment parts, accessories, substitutions, additional,
accessions and replacements thereto and Proceeds thereof [Precautionary Filing]
Stein Mart, Inc.    Wells Fargo Bank, N.A.    Florida    201300287355    2
Leased Crown Forklifts and all equipment parts, accessories, substitutions,
additional, accessions and replacements thereto and Proceeds thereof
[Precautionary Filing]

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

Stein Mart, Inc.    Wells Fargo Bank, N.A.    Florida    201400510412    Leased
Crown Order Picker and all equipment parts, accessories, substitutions,
additional, accessions and replacements thereto and Proceeds thereof
[Precautionary Filing] Stein Mart, Inc.    Wells Fargo Bank, N.A.    Florida   
201400793473    Leased Crown Forklift and all equipment parts, accessories,
substitutions, additional, accessions and replacements thereto and Proceeds
thereof

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

Schedule 7.02

EXISTING INVESTMENTS

As of end of day on January 3, 2015, Stein Mart had $25.217mm invested in daily
money market funds.

Investments are held in a Rabbi Trust for the Deferred Compensation Plan and
investments are made relating to the Split-Dollar Life Insurance Plan.

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

Schedule 7.03

EXISTING INDEBTEDNESS

As of January 3, 2015, there were standby letters of credit outstanding (see
Schedule 1.01(a)) with a total face amount of $6,617,000 relating primarily to
workers’ compensation and general liability requirements for various insurance
carriers.

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

Schedule 10.02

ADMINISTRATIVE AGENT’S OFFICE; CERTAIN ADDRESSES FOR NOTICES

 

If to any Borrower or Guarantor:    Stein Mart, Inc.    1200 Riverplace
Boulevard    Jacksonville, Florida 32207    Attention: Chief Financial Officer
   Telecopy No.: 904-346-1280    Email: GKleffner@steinmart.com    Telephone
Number: 904-346-1500 If to Administrative Agent, the LC    Issuer or the Swing
Line Lender:    Wells Fargo Bank, National Association    One Boston Place -
18th Floor    Boston, Massachusetts 02108    Attention: Brent E. Shay   
Telecopy No.: 877-488-1721    Email: Brent.E.Shay@wellsfargo.com    Telephone
Number: 617-624-4463

Lead Borrower’s website address for purposes of Section 6.02(k) of the
Agreement:

http://ir.steinmart.com/sec.cfm?view=all

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

EXHIBIT A

FORM OF COMMITTED LOAN NOTICE

Date:             ,         

 

To: Wells Fargo Bank, National Association, as Agent

One Boston Place

Boston, MA 02108

Ladies and Gentlemen:

Reference is made to the Second Amended and Restated Credit Agreement dated as
of February 3, 2015 (as amended, modified, supplemented or restated hereafter,
the “Credit Agreement”) by and among (i) Stein Mart, Inc., a Florida
corporation, for itself and as Lead Borrower (in such capacity, the “Lead
Borrower”) for the other Borrowers party thereto from time to time
(individually, a “Borrower” and, collectively, the “Borrowers”), (ii) the
Borrowers party thereto from time to time, (iii) Wells Fargo Bank, National
Association, as administrative and collateral agent (in such capacities, the
“Agent”) for its own benefit and the benefit of the other Credit Parties
referred to therein, (iv) Wells Fargo Bank, National Association, as LC Issuer,
and (v) the lenders from time to time party thereto (individually, a “Lender”
and, collectively, the “Lenders”). All capitalized terms used herein and not
otherwise defined shall have the same meaning herein as in the Credit Agreement.

 

1. The Lead Borrower hereby requests [a Borrowing][a conversion of Committed
Loans from one Type to the other][a continuation of LIBO Rate Loans]1:

 

  a. On                     (a Business Day)2

 

  b. In the amount of $        3

 

  c. Comprised of [Base Rate][LIBO Rate] Loans (Type of Committed Loan)4

 

  d. Comprised of Tranche A Revolving Loans or Tranche A-1 Revolving Loans5

 

 

1  A Borrowing must be a borrowing consisting of simultaneous Loans of the same
Type and, in the case of LIBO Rate Loans, must have the same Interest Period.

2  Each notice of a Borrowing must be received by the Agent not later than 11:00
a.m. (i) three (3) Business Days prior to the requested date of any Borrowing of
LIBO Rate Loans, and (ii) on the Business Day that is the requested date of any
Borrowing of Base Rate Loans.

3  Each Borrowing, conversion to, or continuation of LIBO Rate Loans must be in
a principal amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof. Each Borrowing, conversion to, or continuation of Base Rate Loans must
be in a principal amount of $50,000 or a whole multiple of $10,000 in excess
thereof.

4  Committed Loans may be Base Rate Loans or LIBO Rate Loans. If the Type of
Committed Loan is not specified, then the applicable Committed Loans will be
made as Base Rate Loans.

5  Any request for a Tranche A Revolving Loan shall be deemed a request for a
Tranche A-1 Revolving Loan until such time as the aggregate outstanding
principal amount of Tranche A-1 Revolving Loans equals the lesser of (A) the
Tranche A-1 Borrowing Base or (B) the Tranche A-1 Revolving Loan Limit.

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

  e. For LIBO Rate Loans: with an Interest Period of             months6

The Lead Borrower hereby represents and warrants (for itself and on behalf of
the other Borrowers) that (a) the Borrowing requested herein complies with
Section 2.02 and the other provisions of the Credit Agreement and (b) the
conditions specified in Sections 4.01 and 4.02 of the Credit Agreement have been
satisfied on and as of the date specified in Item 1(a) above.

[Signature Page Follows]

 

 

6  The Lead Borrower may request a Borrowing of LIBO Rate Loans with an Interest
Period of one, two or three months. If no election of Interest Period is
specified, then the Lead Borrower will be deemed to have specified an Interest
Period of one month.

 

2

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

Dated as of the date above first written.

 

STEIN MART, INC., as Lead Borrower By:  

 

Name: Title:

 

3

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EXHIBIT B

FORM OF SWING LINE LOAN NOTICE

Date:             ,         

 

To: Wells Fargo Bank, National Association, as Swing Line Lender

Wells Fargo Bank, National Association, as Agent

One Boston Place

Boston, MA 02108

Ladies and Gentlemen:

Reference is made to the Second Amended and Restated Credit Agreement dated as
of February 3, 2015 (as amended, modified, supplemented or restated hereafter,
the “Credit Agreement”) by and among (i) Stein Mart, Inc., a Florida
corporation, for itself and as Lead Borrower (in such capacity, the “Lead
Borrower”) for the other Borrowers party thereto from time to time
(individually, a “Borrower” and, collectively, the “Borrowers”), (ii) the
Borrowers party thereto from time to time, (iii) Wells Fargo Bank, National
Association, as administrative and collateral agent (in such capacities, the
“Agent”) for its own benefit and the benefit of the other Credit Parties
referred to therein, (iv) Wells Fargo Bank, National Association, as LC Issuer,
and (v) the lenders from time to time party thereto (individually, a “Lender”
and, collectively, the “Lenders”). All capitalized terms used herein and not
otherwise defined shall have the same meaning herein as in the Credit Agreement.

The Lead Borrower hereby requests a Swing Line Borrowing:

 

  1. On                     (a Business Day)7

 

  2. In the amount of $        8

The Swing Line Borrowing requested herein complies with the provisions of
Section 2.04 of the Credit Agreement.

 

STEIN MART, INC., as Lead Borrower By:  

 

Name: Title:

 

 

7  Each notice of a Swing Line Borrowing must be received by the Swing Line
Lender and the Agent not later than 1:00 p.m. on the requested date of any Swing
Line Borrowing.

8  Each Swing Line Borrowing must be in a minimum amount of $50,000.

 

4

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

EXHIBIT C-1

FORM OF NOTE

 

 

NOTE

 

$                        ,        

FOR VALUE RECEIVED, the undersigned (individually, a “Borrower” and,
collectively, the “Borrowers”), jointly and severally promise to pay to the
order of                     (hereinafter, with any subsequent holders, the
“Lender”), c/o Wells Fargo Bank, National Association, One Boston Place, Boston,
Massachusetts 02108, the principal sum of             ($        ), or, if less,
the aggregate unpaid principal balance of Committed Loans made by the Lender to
or for the account of any Borrower pursuant to the Second Amended and Restated
Credit Agreement dated as of February 3, 2015 (as amended, modified,
supplemented or restated and in effect from time to time, the “Credit
Agreement”) by and among (i) the Borrowers, (ii) Wells Fargo Bank, National
Association, as administrative and collateral agent (in such capacities, the
“Agent”) for its own benefit and the benefit of the other Credit Parties
referred to therein, (iii) Wells Fargo Bank, National Association, as LC Issuer,
and (iv) the lenders from time to time party thereto (individually, a “Lender”
and, collectively, the “Lenders”), with interest at the rate and payable in the
manner stated therein.

This is a “Note” to which reference is made in the Credit Agreement and is
subject to all terms and provisions thereof. The principal of, and interest on,
this Note shall be payable at the times, in the manner, and in the amounts as
provided in the Credit Agreement and shall be subject to prepayment and
acceleration as provided therein. Capitalized terms used herein and not defined
herein shall have the meanings assigned to such terms in the Credit Agreement.

The Agent’s books and records concerning the Committed Loans, the accrual of
interest thereon, and the repayment of such Committed Loans, shall be prima
facie evidence of the indebtedness to the Lender hereunder.

No delay or omission by Agent or the Lender in exercising or enforcing any of
Agent’s or the Lender’s powers, rights, privileges, remedies, or discretions
hereunder shall operate as a waiver thereof on that occasion nor on any other
occasion. No waiver of any Event of Default shall operate as a waiver of any
other Event of Default, nor as a continuing waiver of any such Event of Default.

Each Borrower, and each endorser and guarantor of this Note, waives presentment,
demand, notice, and protest, and also waives any delay on the part of the holder
hereof. Each Borrower assents to any extension or other indulgence (including,
without limitation, the release or substitution of Collateral) permitted by
Agent and/or the Lender with respect to this Note and/or any Collateral or any
extension or other indulgence with respect to any other liability or any
collateral given to secure any other liability of any Borrower or any other
Person obligated on account of this Note.

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

This Note shall be binding upon each Borrower, and each endorser and guarantor
hereof, and upon their respective successors, assigns, and representatives, and
shall inure to the benefit of the Lender and its successors, endorsees, and
assigns.

The liabilities of each Borrower, and of any endorser or guarantor of this Note,
are joint and several, provided, that, the release by Agent or the Lender of any
one or more such Persons shall not release any other Person obligated on account
of this Note. Each reference in this Note to any Borrower, any endorser, and any
guarantor, is to such Person individually and also to all such Persons jointly.
No Person obligated on account of this Note may seek contribution from any other
Person also obligated unless and until all of the Obligations have been paid in
full in cash.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

EACH OF THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK SITTING IN NEW YORK COUNTY AND ANY FEDERAL COURT SITTING THEREIN, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS NOTE OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE BORROWERS IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
BORROWERS AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS NOTE OR IN ANY OTHER LOAN
DOCUMENT SHALL AFFECT ANY RIGHT THAT THE AGENT OR THE LENDER MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS NOTE OR ANY OTHER LOAN
DOCUMENT AGAINST ANY OF THE BORROWERS OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

EACH OF THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS NOTE OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO ABOVE.
EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

Each Borrower makes the following waiver knowingly, voluntarily, and
intentionally, and understands that the Agent and the Lender, in the
establishment and maintenance of their respective relationship with the
Borrowers contemplated by this Note, are each relying thereon. EACH BORROWER,
EACH GUARANTOR, ENDORSER AND SURETY, AND THE LENDER, BY ITS ACCEPTANCE HEREOF,
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS NOTE OR ANY OTHER LOAN DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED

 

2

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

HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT THE AGENT AND THE LENDER HAVE BEEN INDUCED TO ENTER INTO
THE CREDIT AGREEMENT AND THIS NOTE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS HEREIN.

[SIGNATURE PAGE FOLLOWS]

 

3

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

IN WITNESS WHEREOF, the Borrowers have caused this Note to be duly executed as
of the date set forth above.

 

BORROWERS: STEIN MART, INC. By:  

 

Name: Title: STEIN MART BUYING CORP. By:  

 

Name: Title:

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

EXHIBIT C-2

FORM OF SWING LINE NOTE

SWING LINE NOTE

 

$        

               ,        

FOR VALUE RECEIVED, the undersigned (individually, a “Borrower” and,
collectively, the “Borrowers”), jointly and severally promise to pay to the
order of WELLS FARGO BANK, NATIONAL ASSOCIATION (hereinafter, with any
subsequent holders, the “Swing Line Lender”), One Boston Place, Boston,
Massachusetts 02108, the principal sum of             DOLLARS ($        ), or,
if less, the aggregate unpaid principal balance of Swing Line Loans made by the
Swing Line Lender to or for the account of any Borrower pursuant to the Second
Amended and Restated Credit Agreement dated as of February 3, 2015 (as amended,
modified, supplemented or restated and in effect from time to time, the “Credit
Agreement”) by and among (i) the Borrowers, (ii) Wells Fargo Bank, National
Association, as administrative and collateral agent (in such capacities, the
“Agent”) for its own benefit and the benefit of the other Credit Parties
referred to therein, (iii) Wells Fargo Bank, National Association, as LC Issuer,
and (iv) the lenders from time to time party thereto (individually, a “Lender”
and, collectively, the “Lenders”), with interest at the rate and payable in the
manner stated therein.

This is a “Swing Line Note” to which reference is made in the Credit Agreement
and is subject to all terms and provisions thereof. The principal of, and
interest on, this Swing Line Note shall be payable at the times, in the manner,
and in the amounts as provided in the Credit Agreement and shall be subject to
prepayment and acceleration as provided therein. Capitalized terms used herein
and not defined herein shall have the meanings assigned to such terms in the
Credit Agreement.

The Agent’s books and records concerning the Swing Line Loans, the accrual of
interest thereon, and the repayment of such Swing Line Loans, shall be prima
facie evidence of the indebtedness to the Lender hereunder.

No delay or omission by Agent or the Swing Line Lender in exercising or
enforcing any of Agent’s or the Swing Line Lender’s powers, rights, privileges,
remedies, or discretions hereunder shall operate as a waiver thereof on that
occasion nor on any other occasion. No waiver of any Event of Default shall
operate as a waiver of any other Event of Default, nor as a continuing waiver of
any such Event of Default.

Each Borrower, and each endorser and guarantor of this Swing Line Note, waives
presentment, demand, notice, and protest, and also waives any delay on the part
of the holder hereof. Each Borrower assents to any extension or other indulgence
(including, without limitation, the release or substitution of Collateral)
permitted by Agent and/or the Lender with respect to this Swing Line Note and/or
any Collateral or any extension or other indulgence with respect to any other
liability or any collateral given to secure any other liability of any Borrower
or any other Person obligated on account of this Swing Line Note.

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

This Swing Line Note shall be binding upon each Borrower, and each endorser and
guarantor hereof, and upon their respective successors, assigns, and
representatives, and shall inure to the benefit of the Lender and its
successors, endorsees, and assigns.

The liabilities of each Borrower, and of any endorser or guarantor of this Swing
Line Note, are joint and several, provided, that, the release by Agent or the
Lender of any one or more such Persons shall not release any other Person
obligated on account of this Swing Line Note. Each reference in this Swing Line
Note to any Borrower, any endorser, and any guarantor, is to such Person
individually and also to all such Persons jointly. No Person obligated on
account of this Swing Line Note may seek contribution from any other Person also
obligated unless and until all of the Obligations have been paid in full in
cash.

THIS SWING LINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES
THEREOF.

EACH OF THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK SITTING IN NEW YORK COUNTY AND ANY FEDERAL COURT SITTING THEREIN, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS SWING LINE NOTE OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION
OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE BORROWERS IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
BORROWERS AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS SWING LINE NOTE OR IN ANY
OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE AGENT OR THE SWING LINE
LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
SWING LINE NOTE OR ANY OTHER LOAN DOCUMENT AGAINST ANY OF THE BORROWERS OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

EACH OF THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS SWING LINE NOTE OR ANY OTHER LOAN DOCUMENT IN ANY COURT
REFERRED TO ABOVE. EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

Each Borrower makes the following waiver knowingly, voluntarily, and
intentionally, and understands that the Agent and the Lender, in the
establishment and maintenance of their respective relationship with the
Borrowers contemplated by this Swing Line Note, are each relying thereon. EACH
BORROWER, EACH GUARANTOR, ENDORSER AND SURETY, AND THE SWING LINE LENDER, BY ITS
ACCEPTANCE HEREOF, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF

 

2

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

OR RELATING TO THIS SWING LINE NOTE OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THE AGENT AND THE SWING LINE LENDER
HAVE BEEN INDUCED TO ENTER INTO THE CREDIT AGREEMENT AND THIS NOTE BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.

[SIGNATURE PAGE FOLLOWS]

 

3

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

IN WITNESS WHEREOF, the Borrowers have caused this Swing Line Note to be duly
executed as of the date set forth above.

 

BORROWERS:

STEIN MART, INC.

By:

 

 

Name:

Title:

STEIN MART BUYING CORP.

By:

 

 

Name:

Title:

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

EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

 

To:      Wells Fargo Bank, National Association    Date:                    
     One Boston Place, 18th Floor         Boston, MA 02108         Attention:
Portfolio Manager   

Re: Second Amended and Restated Credit Agreement dated as of February 3, 2015
(as amended, modified, supplemented or restated hereafter, the “Credit
Agreement”) by and among (i) Stein Mart, Inc., a Florida corporation, for itself
and as Lead Borrower (in such capacity, the “Lead Borrower”) for the other
Borrowers party thereto from time to time (individually, a “Borrower” and,
collectively, the “Borrowers”), (ii) the Borrowers party thereto from time to
time, (iii) Wells Fargo Bank, National Association, as administrative and
collateral agent (in such capacities, the “Agent”) for its own benefit and the
benefit of the other Credit Parties referred to therein, (iv) Wells Fargo Bank,
National Association, as LC Issuer, and (v) the lenders from time to time party
thereto (individually, a “Lender” and, collectively, the “Lenders”). All
capitalized terms used herein and not otherwise defined shall have the same
meaning herein as in the Credit Agreement.

The undersigned, a duly authorized and acting Responsible Officer of the Lead
Borrower, hereby certifies to you as follows:

 

1. No Default.

 

  a. To the knowledge of the undersigned Responsible Officer, except as set
forth in Appendix I, no Default or Event of Default has occurred and is
continuing.

 

  b. If a Default or Event of Default has occurred and is continuing, the
Borrowers propose to take action as set forth in Appendix I with respect to such
Default or Event of Default.

 

2. No Material Accounting Changes, Etc. The financial statements furnished to
the Agent for the month/year ending [            ] were prepared in accordance
with GAAP consistently applied and present fairly in all material respects the
financial condition of Lead Borrower and its Subsidiaries on a Consolidated
basis at the close of, and the results of the Borrowers’ operations and cash
flows for, the period(s) covered, subject to, with respect to the monthly
financial statements, normal year end audit adjustments and the absence of
footnotes. There has been no change in GAAP and the application thereof since
the date of the financial statements furnished to the Agent for the year ending
[            ], other than the material accounting changes as disclosed on
Appendix II hereto.

 

3. Payables. Except as described in Appendix III attached hereto and except for
items being properly contested, all rent, utility, lease, trade liabilities and
other obligations, inclusive of all taxes and insurance, are current and being
paid as agreed and there are no held or post-dated checks outstanding with
respect to any such obligations. If any such obligations are not current or if
there are any held or post-dated checks outstanding, the Loan Parties have taken
or propose to take those actions with respect to such obligations and/or held or
post-dated checks as described on said Appendix III.

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

4. Representations and Warranties. The representations and warranties of each
Loan Party contained in the Credit Agreement and the other Loan Documents are
true, correct, and complete in all material respects on and as of the date
hereof, as though made on and as of the date hereof (except (i) to the extent
that such representations and warranties relate solely to an earlier date, in
which case such representations and warranties are true, correct, and complete
in all material respects as of such earlier date, (ii) in the case of any
representation and warranty qualified by materiality, they shall be true and
correct in all respects, and (iii) for purposes of Section 4.02 of the Credit
Agreement, the representations and warranties contained in subsections (a) and
(b) of Section 5.05 shall be deemed to refer to the most recent statements
furnished pursuant to Section 6.01(a) of the Credit Agreement).

 

2

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IN WITNESS WHEREOF, I have executed this certificate as of the date first
written above.

 

STEIN MART, INC., as Lead Borrower

By:

 

 

Name:

 

Title:

 

 

3

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APPENDIX I

Except as set forth below, no Default or Event of Default presently exists. [If
a Default or Event of Default exists, the following describes the nature of the
Default in reasonable detail and the steps being taken or contemplated by the
Borrowers to be taken on account thereof.]

 

4

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APPENDIX II

Except as set forth below, no material changes in GAAP or the application
thereof have occurred since [the date of the most recently delivered financial
statements to the Agent prior to the date of this Certificate]. [If material
changes in GAAP or in application thereof have occurred, the following describes
the nature of the changes in reasonable detail and the effect, if any, of each
such material change in GAAP or in application thereof in the determination of
the calculation of the financial statements described in the Credit Agreement].

 

5

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APPENDIX III

PAST DUE OBLIGATIONS; CHECKS HELD

 

6

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EXHIBIT E

FORM OF ASSIGNMENT AND ASSUMPTION

Reference is made to the Second Amended and Restated Credit Agreement dated as
of February 3, 2015 (as amended, modified, supplemented or restated hereafter,
the “Credit Agreement”) by and among (i) Stein Mart, Inc., a Florida
corporation, for itself and as Lead Borrower (in such capacity, the “Lead
Borrower”) for the other Borrowers party thereto from time to time
(individually, a “Borrower” and, collectively, the “Borrowers”), (ii) the
Borrowers party thereto from time to time, (iii) Wells Fargo Bank, National
Association, as administrative ad collateral agent (in such capacities, the
“Agent”) for its own benefit and the benefit of the other Credit Parties
referred to therein, (iv) Wells Fargo Bank, National Association, as LC Issuer,
and (v) the lenders from time to time party thereto (individually, a “Lender”
and, collectively, the “Lenders”). All capitalized terms used herein and not
otherwise defined shall have the same meaning herein as in the Credit Agreement.

                    (the “Assignor”) and                     (the “Assignee”)
agree as follows:

 

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, that interest in and to the
Assignor’s rights and obligations as a Lender under the Credit Agreement as of
the date hereof (including, without limitation, such interest in each of the
Assignor’s outstanding Commitments, if any, and the Loans (and related
Obligations) owing to it) specified in Section 1 of Schedule I hereto. After
giving effect to such sale and assignment, the Assignor’s and the Assignee’s
Commitments and the amount of the Loans owing to the Assignor and the Assignee
and the amount of Letters of Credit participated in by the Assignor and the
Assignee will be as set forth in Section 2 of Schedule I hereto.

 

2. The Assignor: (a) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any Liens and that it is legally authorized to enter into this
Assignment and Assumption; (b) makes no representation or warranty and assumes
no responsibility with respect to (i) any statements, warranties or
representations made in, or in connection with, the Credit Agreement or any
other Loan Document or any other instrument or document furnished pursuant
thereto, or (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other Loan Document or any
other instrument or document furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of any of their respective obligations under the Credit Agreement or
any other Loan Document or any other instrument or document furnished pursuant
thereto; and (d) confirms, in the case of an Assignee who is not a Lender, an
Affiliate of a Lender, or an Approved Fund, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder) or, if
the Commitment is not then in effect, the principal outstanding balance of the
Loans of the Assignor subject to this Assignment and Assumption, is not less
than $        , or, if less, the entire remaining amount of the Assignor’s
Commitment and the Loans at any time owing to it, unless each of the Agent, the
LC Issuer and the Swing Line Lender and, so long as no Default or Event of
Default has occurred and is continuing, the Lead Borrower otherwise consent
(each such consent not to be unreasonably withheld or delayed).

 

3.

The Assignee: (a) confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements referred to in Section 6.01
thereof and such other documents

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

  and information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Assumption; (b) agrees that it
will, independently and without reliance upon the Agent, the Assignor or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (c) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under the Credit Agreement as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (d) agrees that
it will perform in accordance with their terms all of the obligations which, by
the terms of the Credit Agreement, are required to be performed by it as a
Lender; (e) specifies as its lending office (and address for notices) the office
set forth beneath its name on the signature pages hereof; (f) agrees that, if
the Assignee is a Foreign Lender entitled to an exemption from, or reduction of,
withholding tax under the law of the jurisdiction in which the applicable Loan
Party is resident for tax purposes, it shall deliver to the Loan Parties and the
Agent (in such number of copies as shall be requested by the recipient)
whichever of the following is applicable: (i) duly completed copies of Internal
Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax
treaty to which the United States is a party, (ii) duly completed copies of
Internal Revenue Service Form W-8ECI, (iii) in the case of a Foreign Lender
claiming the benefits of the exemption for portfolio interest under section
881(c) of the Code, (A) a certificate to the effect that such Foreign Lender is
not (1) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (2) a
“10 percent shareholder” of the Loan Parties within the meaning of section
881(c)(3)(B) of the Code, or (3) a “controlled foreign corporation” described in
section 881(c)(3)(C) of the Code and (B) duly completed copies of Internal
Revenue Service Form W-8BEN, or (iv) any other form prescribed by applicable law
as a basis for claiming exemption from, or a reduction in, United States Federal
withholding tax, duly completed, together with such supplementary documentation
as may be prescribed by applicable law to permit the Borrowers to determine the
withholding or deduction required to be made; and (g) represents and warrants
that it is an Eligible Assignee.

 

4. Following the execution of this Assignment and Assumption by the Assignor and
the Assignee, it will be delivered, together with a processing and recordation
fee in the amount required as set forth in Section 10.06 to the Credit
Agreement, to the Agent for acceptance and recording by the Agent. The effective
date of this Assignment and Assumption shall be the date of acceptance thereof
by the Agent, unless otherwise specified on Schedule I hereto (the “Effective
Date”).

 

5. Upon such acceptance and recording by the Agent and, to the extent required
by Section 10.06(b)(iii) of the Credit Agreement, consent by the Agent, the LC
Issuer, the Swing Line Lender and the Lead Borrower, as applicable (such consent
not to be unreasonably withheld or delayed), from and after the Effective Date,
(a) the Assignee shall be a party to the Credit Agreement and, to the extent of
the interest assigned by this Assignment and Assumption, shall have the rights
and obligations of a Lender under the Credit Agreement, and (b) the Assignor
shall, to the extent of the interest assigned by this Assignment and Assumption,
be released from its obligations under the Credit Agreement.

 

6. Upon such acceptance and recording by the Agent, from and after the Effective
Date, the Agent shall make all payments under the Credit Agreement in respect of
the interest assigned hereby (including, without limitation, all payments of
principal, interest and fees with respect thereto) to the Assignee. The Assignor
and Assignee shall make all appropriate adjustments in payments under the Credit
Agreement for periods prior to the Effective Date directly between themselves.

 

2

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7. This Assignment and Assumption shall be governed by, and be construed in
accordance with, the laws of the State of New York, without regard to conflicts
of laws principles thereof.

[SIGNATURE PAGE FOLLOWS]

 

3

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IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption to be executed by their respective officers thereunto duly
authorized, as of the date first above written.

 

[ASSIGNOR] By:  

 

Name:   Title:   [ASSIGNEE] By:  

 

Name:   Title:   Lending Office (and address for notices): [Address]

Accepted this      day

of             ,         :

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Agent

 

By:  

 

Name:   Title:  

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

Acknowledged and, to the extent required by Section 10.06(b)(iii) of the Credit
Agreement, consented to, this      day of             ,         :

AGENT:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

 

Name:   Title:  

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

Acknowledged and, to the extent required by Section 10.06(b)(iii) of the Credit
Agreement, consented to, this      day of             ,         :

LC ISSUER:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

 

Name:   Title:  

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

Acknowledged and, to the extent required by Section 10.06(b)(iii) of the Credit
Agreement, consented to, this      day of             ,         :

SWING LINE LENDER:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION By:  

 

Name:   Title:  

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

Acknowledged and, to the extent required by Section 10.06(b)(iii) of the Credit
Agreement, consented to, this      day of             ,             :

LEAD BORROWER:

STEIN MART, INC.

 

By:  

 

Name:   Title:  

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

Schedule I

 

Section 1.

   Percentage/Amount of Commitments/Loans/Letters of Credit Assigned by Assignor
to Assignee.

 

Applicable Percentage assigned by Assignor:           %  Commitment assigned by
Assignor:    $            

Aggregate Outstanding Principal Amount of

   Tranche A Revolving Loans assigned by Assignor:    $            

Aggregate Outstanding Principal Amount of

   Tranche A-1 Revolving Loans assigned by Assignor:    $            

Aggregate Outstanding Principal Amount of

   Loans assigned by Assignor:    $                 Aggregate Participations
assigned by Assignor in LC Obligations:    $            

 

Section 2.    Percentage 9 / Amount of Commitments/Loans/Letters of Credit Held
by Assignor and Assignee after giving effect to
Assignment and Assumption.

 

Assignor’s Applicable Percentage (Tranche A Revolving Loan Commitments):     
     %  Assignee’s Applicable Percentage (Tranche A Revolving Loan Commitments):
          %  Assignor’s Applicable Percentage (Tranche A-1 Revolving Loan
Commitments):           %  Assignee’s Applicable Percentage (Tranche A-1
Revolving Loan Commitments):           %  Assignor’s Applicable Percentage
(Aggregate Commitments):           %  Assignee’s Applicable Percentage
(Aggregate Commitments):           %  Assignor’s Tranche A Revolving Loan
Commitment:    $                 Assignee’s Tranche A Revolving Loan Commitment:
   $                 Assignor’s Tranche A-1 Revolving Loan Commitment:    $
                Assignee’s Tranche A-1 Revolving Loan Commitment:    $
               

 

9 Percentages to be carried out to the ninth decimal place.

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Assignor’s Commitment:

   $                

Assignee’s Commitment:

   $                

Aggregate Outstanding Principal Amount of

  

Tranche A Revolving Loans Owing to Assignor:

   $                

Aggregate Outstanding Principal Amount of

  

Tranche A Loans Owing to Assignee:

   $                

Aggregate Outstanding Principal Amount of

  

Tranche A-1 Revolving Loans Owing to Assignor:

   $                

Aggregate Outstanding Principal Amount of

  

Tranche A-1 Revolving Loans Owing to Assignee:

   $                

Aggregate Outstanding Principal Amount of

  

Loans Owing to Assignor:

   $                

Aggregate Outstanding Principal Amount of

  

Loans Owing to Assignee:

   $                

Aggregate Participations by Assignor in LC Obligations:

   $                

Aggregate Participations by Assignee in LC Obligations:

   $                

 

Section 3. Effective Date

  

 

Effective Date:

                ,            

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EXHIBIT F

FORM OF BORROWING BASE CERTIFICATE

[See attached.]

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EXHIBIT G

FORM OF DDA NOTIFICATION

PREPARE ON BORROWER LETTERHEAD - ONE FOR EACH DEPOSITORY

[DATE]

 

To: [Name and Address of Bank]

 

  Re: [                    ]

The Account Numbers referenced on Exhibit A annexed hereto

Dear Sir/Madam:

This letter relates to the Account Numbers referenced on Exhibit A annexed
hereto and any other depository account(s) (collectively the “Account”) which
[                    ], a [                    ] with an address at
[                    ] (the “Borrower”), now or hereafter maintains with you.
The term “Account” shall also mean any certificates of deposit, investments, or
other evidence of indebtedness heretofore or hereafter issued by you to or for
the account of the Borrower.

Under various agreements between, among others, the Borrower and Wells Fargo
Bank, National Association, a national banking association with an office at One
Boston Place, 18th Floor, Boston, MA 02108, as administrative and collateral
agent (in such capacities, herein the “Agent”) for its own benefit and the
benefit of a syndicate of revolving lenders and certain other credit parties
(the “Credit Parties”), the Borrower has granted to the Agent (for its own
benefit and the benefit of the Credit Parties) security interests in and to,
among other things, the Borrower’s accounts, accounts receivable, inventory, and
proceeds therefrom, including, without limitation, the proceeds now or hereafter
deposited in the Account or evidenced thereby. Consequently, the present and all
future contents of the Account constitute the Agent’s collateral.

From the date hereof, until you receive written notification from the Agent that
the interest of the Agent and the other Credit Parties in the Accounts has been
terminated, you may be instructed from time to time in writing by an officer of
the Agent to transfer all or any portion of the funds on deposit in each of the
Accounts to an account designated in such written instruction.

Upon request of the Agent, a copy of each statement issued with respect to the
Account should be provided to the Agent at the following addresses (which
address may be changed upon seven (7) days’ written notice given to you by the
Agent):

 

1

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Wells Fargo Bank, National Association

One Boston Place

Boston, MA 02108

Attention:                     

Re: Stein Mart, Inc.

You shall be fully protected in acting on any order or direction by the Agent
respecting the Accounts without making any inquiry whatsoever as to the Agent’s
right or authority to give such order or direction or as to the application of
any payment made pursuant thereto. Nothing contained herein is intended to, nor
shall it be deemed to, modify the rights and obligations of the Borrower and the
Agent under the terms of the loan arrangement and the loan documents executed in
connection therewith between, among others, the Borrower and the Agent.

This letter may be amended only by notice in writing signed by the Borrower and
an officer of the Agent and may be terminated solely by written notice signed by
an officer of the Agent.

[signature page follows]

 

2

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Very truly yours, [                    ], as Borrower By:  

 

Name:   Title:  

 

cc: Wells Fargo Bank, National Association

 

Signature Page to DDA Notification

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

Exhibit A

Accounts

[See attached.]

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EXHIBIT H

FORM OF CREDIT CARD NOTIFICATION

PREPARE ON BORROWER LETTERHEAD - ONE FOR EACH PROCESSOR

            ,         

 

To: [Name and Address of Credit Card Processor] (The “Processor”)

 

  Re: [                    ] (the “Company”)

Merchant Account Number:             

Dear Sir/Madam:

Under various agreements between and among the Company, certain affiliates of
the Company, Wells Fargo Bank, National Association, a national banking
association with offices at One Boston Place, Boston, MA 02108, as
administrative and collateral agent (the “Agent”) for a syndicate of lenders and
other credit parties (the “Credit Parties”) party to an Second Amended and
Restated Credit Agreement dated as of February 3, 2015 (as amended, modified or
supplemented from time to time, the “Credit Agreement”), the Company has granted
to the Agent, for its own benefit and the benefit of the other Credit Parties, a
security interest in and to the Company’s inventory, accounts, general
intangibles, equipment, and other assets, including, without limitation, all
amounts due or to become due from the Processor to the Company.

Under such agreements, the Company is obligated to deliver (or cause to be
delivered) all proceeds of the Company’s accounts, accounts receivable, and
inventory to the Agent. Such proceeds include all payments with respect to
credit card charges (the “Charges”) submitted by the Company to the Processor
for processing and the amounts which the Processor owes to the Company on
account thereof (the “Credit Card Proceeds”).

 

1. Until the Processor receives written notification from an officer of the
Agent to the contrary, all amounts as may become due from time to time from the
Processor to the Company shall continue to be transferred only as follows:

 

  a. By ACH, Depository Transfer Check, or Electronic Depository Transfer to:

Wells Fargo Bank, N.A.

RNT #121000248

Acct #                    

Reference: Stein Mart

or

 

  b. As the Processor may be instructed from time to time in writing by an
officer of the Agent.

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2. Upon request of the Agent, a copy of each periodic statement provided by the
Processor to the Company should be provided to the Agent at the following
address (which address may be changed upon seven (7) days’ written notice given
to the Processor by the Agent):

Wells Fargo Bank, National Association

One Boston Place

Boston, MA 02108

Attention:     Portfolio Manager

Re:               Stein Mart

 

3. The Processor shall be fully protected in acting on any order or direction by
the Agents respecting the Charges and the Credit Card Proceeds without making
any inquiry whatsoever as to the Agent’s right or authority to give such order
or direction or as to the application of any payment made pursuant thereto.

 

2

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This letter may be amended only by the written agreement of the Processor, the
Company, and an officer of the Agent and may be terminated solely by written
notice signed by an officer of the Agent.

 

Very truly yours, [                    ], as the Company By:  

 

Name:   Title:  

 

cc: Wells Fargo Bank, National Association