Exhibit 10.1

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DEBTOR-IN-POSSESSION CREDIT AGREEMENT
Dated as of April 7, 2016
among
PACIFIC SUNWEAR OF CALIFORNIA, 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
The Other Lenders Party Hereto
WELLS FARGO CAPITAL FINANCE, LLC,
as
Syndication Agent, Documentation Agent, Sole Lead Arranger and Sole Bookrunner

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Table of Contents

Page

Table of Contents Omitted

1

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SCHEDULES

1.01        Borrowers
1.02        Guarantors
1.03        Existing Letters of Credit
2.01        Commitments and Applicable Percentages
5.01        Loan Parties Organizational Information
5.06        Litigation
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; Equity Interests in the
Borrowers
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
7.09        Affiliate Transactions
10.02        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    Credit Card Notification
H    DDA Notification
I    Cash Management Order
J    Interim Financing Order
 

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DEBTOR-IN-POSSESSION CREDIT AGREEMENT

This DEBTOR-IN-POSSESSION CREDIT AGREEMENT (“Agreement”) is entered into as of
April 7, 2016, among
PACIFIC SUNWEAR OF CALIFORNIA, INC., a California corporation, as a debtor and a
debtor-in-possession (the “Lead Borrower”),
the Persons named on Schedule 1.01 hereto, each as a debtor and a
debtor-in-possession (collectively, the “Borrowers”),
the Persons named on Schedule 1.02 hereto, each as a debtor and a
debtor-in-possession (collectively, the “Guarantors”),
each lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”),
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Collateral
Agent, and Swing Line Lender; and
WELLS FARGO CAPITAL FINANCE, LLC, as Syndication Agent and as Documentation
Agent.
On April 7, 2016 (the “Petition Date”), the Lead Borrower and the other Loan
Parties commenced cases under Chapter 11 of the Bankruptcy Code, 11 U.S.C. 101
et seq. (the “Bankruptcy Code”), case numbers 16-10881, 16-10882, and 16-10883
(collectively, the “Chapter 11 Case”) by filing voluntary petitions for relief
under Chapter 11 with the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy Court”). The Lead Borrower and the other Loan Parties
continue to operate their businesses and manage their properties as debtors and
debtors-in-possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy
Code.
The Borrowers have requested, and the Agent and the Lenders have agreed, upon
the terms and conditions set forth in this Agreement, to make available to the
Borrowers a senior secured credit facility in an aggregate principal amount not
to exceed $100,000,000 in order to (a) repay the Pre-Petition Obligations as
provided herein, (b) fund the Chapter 11 Case (including, without limitation,
(x) payment of transaction expenses and fees, expenses and costs incurred in
connection therewith and (y) payment of adequate protection payments approved in
the Financing Orders) in accordance with the Approved Budget and as provided
herein (subject to the Permitted Variance), (c) make certain other payments on
the Closing Date as more fully provided in this Agreement, and (d) provide
working capital for the Borrowers and the other Loan Parties during the pendency
of the Chapter 11 Case in accordance with the Approved Budget and as provided
herein (subject to the Permitted Variance).
The Borrowers and the other Loan Parties desire to secure the Obligations under
the Loan Documents by granting to the Agent, on behalf of itself and the other
Credit Parties, a security interest in and liens upon substantially all of their
assets, whether now existing or hereafter acquired, in each instance as more
fully set forth in the Loan Documents and in the Interim Financing Order (or the
Final Financing Order when applicable).

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All Obligations of the Loan Parties to the Agent and the Lenders hereunder and
under the other Loan Documents shall be full recourse to each of the Loan
Parties, secured by the Agent’s security interest in and liens on all or
substantially all of the assets of the Loan Parties included in the Collateral
and entitled to super-priority administrative claim status under the Bankruptcy
Code as provided herein and in the Financing Orders. In consideration of the
mutual covenants and agreements herein contained, the parties hereto covenant
and agree as follows:
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
1.01    Defined Terms    . As used in this Agreement, the following terms shall
have the meanings set forth below:
“Acceptable Document of Title” means, with respect to any Inventory, a tangible,
negotiable bill of lading or other Document (as defined in the UCC) that (a) is
issued by a common carrier which is not an Affiliate of the Approved Foreign
Vendor or any Loan Party which is in actual possession of such Inventory, (b) is
issued to the order of a Loan Party (as “consignee”) or, if so requested by the
Agent, to the order of the Agent, (c) names the Agent as a notify party and
bears a conspicuous notation on its face of the Agent’s security interest
therein, (d) is not subject to any Lien (other than in favor of the Agent and
Term Agent and Term Lenders), and (e) is on terms otherwise reasonably
acceptable to the Agent.
“Accommodation Payment” as defined in Section 10.21(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.
“ACH” means automated clearing house transfers.
“Acquisition” means, with respect to any Person (a) an investment in, or a
purchase 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 any Store locations other
than the entry into Leases in the ordinary course of business 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:

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(a)    for any Interest Period with respect to any LIBO Borrowing, an interest
rate per annum (rounded upwards, if necessary, to the next 1/16 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.
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the 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, and
(iii) any other Person directly or indirectly holding 10% or more of any class
of the Equity Interests of that Person.
“Agent” means Wells Fargo in its capacity as Administrative Agent and Collateral
Agent under any of the Loan Documents, or any successor thereto.
“Agent Parties” shall have the meaning specified in Section 10.02(c).
“Agent’s Office” means the Agent’s address and, as appropriate, account as set
forth on Schedule 10.02, or such other address or account as the Agent may from
time to time notify the Lead Borrower and the Lenders.
“Aggregate Commitments” means the Commitments of all the Lenders. As of the
Closing Date, the Aggregate Commitments are $100,000,000.
“Agreed Amounts” shall have the meaning specified in Section 6.13(g).
“Agreement” means this Credit Agreement.
“Allocable Amount” has the meaning specified in Section 10.21(d).
“Applicable Lenders” means the Required Lenders, all affected Lenders, or all
Lenders, as the context may require.
“Applicable Margin” means:
Base Rate Margin
Commercial Letter of Credit Fee
Standby Letter of Credit Fee
3.00%
2.00%
3.00%

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“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time. If the commitment of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C 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 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.
“Appraisal Percentage” means 90%.
“Appraised Value” means the appraised orderly liquidation value, net of costs
and expenses to be incurred in connection with any such liquidation, which value
is expressed as a percentage of Cost of Eligible Inventory as set forth in the
inventory stock ledger of the Lead Borrower, which value shall be determined
from time to time by the most recent appraisal undertaken by an independent
appraiser engaged by the Agent.
“Approved Budget” shall mean the debtor-in-possession thirteen (13) week budget
prepared by the Lead Borrower and furnished to the Agent on or before the
Closing Date, as the same may or shall, as applicable, be updated, modified
and/or supplemented thereafter from time to time as provided in Section 6.01(e),
which budget shall include a weekly cash budget, including information on a line
item basis as to (x) projected total cash receipts (which includes sales and
other receipts), (y) projected total disbursements (including ordinary course
operating expenses and capital expenditures, bankruptcy-related expenses
(including professional fees and expenses, including, under the heading,
“Professional Fees and Expenses Accrued” the monthly accrual fees and expenses
budgeted for the Case Professionals), and fees and expenses of the Agent and the
Lenders (including counsel therefor) and any other fees and expenses relating to
the Loan Documents), and (z) a calculation of Availability.
“Approved Budget Variance Report” shall mean a weekly report provided by the
Lead Borrower to the Agent in accordance with Section 6.01(e): (i) showing by
line item actual (a) cash receipts, (b) merchandise vendor payments, (c)
payroll, payroll taxes, and benefits (d) rent and occupancy (d) sales taxes (e)
all other operating disbursements (f) total disbursements (g) cash on hand, (h)
actual invoiced and unpaid professional fees (other than counsel for the Agent
and the Lenders) and (i) Availability (items (a) through (i), collectively, the
“Line Items”) as of Saturday of each week on a cumulative basis from the
Petition Date until the sixth (6th) full week ending on a Saturday after the
Petition Date and then on a rolling six (6) week basis at all times thereafter,
noting therein all variances, on a Line Item basis, from amounts set forth for
such period in the Approved Budget, and shall include or be accompanied by
explanations for all material variances of fifteen percent (15%) or more, and
(ii) certified by a Responsible Officer of the Lead Borrower.
“Approved Foreign Vendor” means a Foreign Vendor which (a) is located in any
country acceptable to the Agent in its reasonable discretion, (b) has not
asserted and has no right to assert any reclamation, repossession, diversion,
stoppage in transit, Lien or title retention rights in respect of such
Inventory, and (c), if so requested by the Agent, has entered into and is in
full compliance with the terms of a Foreign Vendor Agreement.
“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.
“Approved Liquidator” shall mean a professional liquidator, broker or other
advisor acceptable to the Agent.

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“Arranger” means Wells Fargo Capital Finance, LLC, in its capacity as sole lead
arranger and sole book manager.
“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 Agent, in substantially the
form of Exhibit E or any other form approved by the 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.
“Auto-Extension Letter of Credit” shall have the meaning specified in
Section 2.03(b)(iii).
“Availability” means, as of any date of determination thereof by the Agent, the
result, if a positive number, of:
(a)    the Loan Cap
minus
(b)    the Total Outstandings.
In calculating Availability at any time and for any purpose under this
Agreement, the Lead Borrower shall certify to the Agent that all accounts
payable, rent and Taxes required to be paid after the Petition Date are being
paid on a timely basis.
“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 L/C
Issuer to make L/C 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 Agent from time to time determines in
its Permitted Discretion as being appropriate (a) to reflect the impediments to
the Agent’s ability to realize upon the Collateral, (b) to reflect claims and
liabilities that the Agent determines in its Permitted Discretion will need to
be satisfied in connection with the realization upon the Collateral, including
without limitation, amounts entitled to priority under Section 503(b) of the
Bankruptcy Code, as reasonably determined by the Agent, (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 a Default or an
Event of Default then exists. Without limiting the generality of the foregoing,
Availability Reserves may include, in the 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

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and other Taxes which may have priority over the interests of the Agent in the
Collateral; (iv) salaries, wages and benefits due to employees of any Borrower,
(v) Customer Credit Liabilities, (vi) Customer Deposits, (vii) reserves for
reasonably anticipated changes in the Appraised Value of Eligible Inventory
between appraisals, (viii) warehousemen’s or bailee’s charges and other
Permitted Encumbrances which may have priority over the interests of the Agent
in the Collateral, (ix) amounts due to vendors on account of consigned goods,
(x) Cash Management Reserves, (xi) Bank Products Reserves, (xiv) royalties
payable in respect of licensed merchandise, (xv) the Carve-Out Reserve, and
(xvi) reserves with respect to proceeds of Term Loan Priority Collateral that
have been deposited, or otherwise transferred, into a Blocked Account until such
amounts have been credited, or otherwise transferred, to the Term Loan Priority
Account in accordance with Section 6.13(g). For the avoidance of doubt, the
Pre-Petition Reserve shall not be included in “Availability Reserves.”
“Average Daily Availability” shall mean the average daily Availability for the
immediately preceding Fiscal Quarter.
“Bank Products” means any services of facilities provided to any Loan Party by
the 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.
“Bank Product Reserves” means such reserves as the Agent from time to time
determines in its discretion as being appropriate to reflect the liabilities and
obligations of the Loan Parties with respect to Bank Products then provided or
outstanding.
“Bankruptcy Code” has the meaning specified in the Recitals hereto.
“Bankruptcy Court” has the meaning specified in the Recitals hereto.
“Bankruptcy Milestones” has the meaning specified in Section 6.22(e).
“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 plus one percent
(1.00%), or (c) the rate of interest in effect for such day as publicly
announced from time to time by Wells Fargo as its “prime rate.” The “prime rate”
is a rate set by Wells Fargo based upon various factors including Wells Fargo’s
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate. 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. Notwithstanding anything to the contrary contained
herein or in any other Loan Document, the reference to the Adjusted LIBO Rate is
only with reference to determining the Base Rate and any Loan made in reference
to such rate shall not constitute a LIBO Rate Loan under this Agreement.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.
“Bidding Procedures Motion” has the meaning provided in Section 6.22(a).
“Bidding Procedures Order” has the meaning provided in Section 6.22(c).
“Blocked Account” has the meaning provided in Section 6.13(a)(ii).

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“Blocked Account Agreement” means with respect to an account established by a
Loan Party, an agreement, in form and substance satisfactory to the Agent,
establishing control (as defined in the UCC) of such account by the Agent and
whereby the bank maintaining such account agrees to comply only with the
instructions originated by the 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” has the meaning specified in Section 6.02.
“Borrowers” has the meaning specified in the introductory paragraph hereto.
“Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the
context may require.
“Borrowing Base” means, at any time of calculation, an amount equal to:
(a)    the face amount of Eligible Credit Card Receivables multiplied by the
Credit Card Receivables Advance Rate;
plus
(b)    the lesser of (i) the Cost of Eligible Inventory, net of Inventory
Reserves, multiplied by the product of Appraisal Percentage multiplied by the
Appraised Value, or (ii) the Cost of Eligible Inventory, net of Inventory
Reserves, multiplied by the Inventory Advance Rate;
minus
(c)    the then amount of all Availability Reserves.
“Borrowing Base Certificate” means a certificate substantially in the form of
Exhibit F hereto (with such changes therein as may be required by the Agent to
reflect the components of and 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 Agent.
“Business” means the retail sale of clothing, accessories, footwear and other
Inventory reasonably related thereto in the Borrowers’ retail locations.
“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 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 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.

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“Carve-Out” means, collectively, the sum of (a)    allowed administrative
expenses pursuant to 28 U.S.C. § 1930(a)(6) for fees payable to the Office of
the United States Trustee, as determined by agreement of the U.S. Trustee or by
final order of the Bankruptcy Court and 28 U.S.C. § 156(c) for fees required to
be paid to the Clerk of the Bankruptcy Court; (b) all Reported Fee Accruals,
allowed at any time by the Bankruptcy Court and incurred by the Case
Professionals through the date of service by the Agent of a Carve Out Trigger
Notice, up to and as limited by the respective aggregate Approved Budget amounts
for each Case Professional or category of Case Professional through the date of
service of said Carve Out Trigger Notice, less the amount of prepetition
retainers received by such Case Professionals and not previously applied to fees
and expenses; and (c) all accrued and unpaid fees, disbursements, costs and
expenses incurred by the Case Professionals from and after the date of service
of a Carve Out Trigger Notice, to the extent allowed at any time, in an
aggregate amount not to exceed the “Carve Out Cap less the amount of prepetition
retainers received by such Case Professionals and not applied to the fees,
disbursements, costs and expenses set forth in clause (b) above. The Carve Out
Cap shall be reduced on a dollar-for-dollar basis by any payments of fees or
expenses of the Case Professionals made after delivery of the Carve Out Trigger
Notice in respect of fees and expenses incurred after delivery of the Carve Out
Trigger Notice.
“Carve Out Cap” means $250,000.
“Carve-Out Reserve” means a Reserve in the amount of the Carve-Out.
“Carve-Out Trigger Notice” means a written notice by the Agent to lead counsel
for the Loan Parties, the Term Agent, any Statutory Committee and the U.S.
Trustee following the occurrence of an Event of Default, expressly stating that
no additional Committed Loans may be requested to fund the Carve-Out.
“Case Professionals” means the Loan Parties’ and any Statutory Committee’s
professionals, retained by either of them by final order of the Bankruptcy Court
(which order has not been reversed, vacated or stayed unless such stay is no
longer effective) under Sections 327 or 1103(a) of the Bankruptcy Code.
“Cash Collateral Account” means a non-interest bearing account established by
one or more of the Loan Parties with Wells Fargo, and in the name of, the Agent
(or as the Agent shall otherwise direct) and under the sole and exclusive
dominion and control of the Agent, in which deposits are required to be made in
accordance with Section 2.03(g) or 8.02(c).
“Cash Collateralize” has the meaning specified in Section 2.03(g). Derivatives
of such term have corresponding meanings.
“Cash Management Order” means the order of the Bankruptcy Court entered in the
Chapter 11 Case, together with all extensions, modifications and amendments that
are in form and substance acceptable to the Agent in its Permitted Discretion,
which, among other matters, authorizes the Loan Parties to use their cash
management system, substantially in the form of Exhibit I or another form
satisfactory to the Agent.
“Cash Management Reserves ” means such reserves as the Agent, from time to time,
determines in its 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, including, without limitation,
a reserve for all obligations associated with any purchase cards issued, or
deemed to be issued, in connection with this Agreement.
“Cash Management Services” means any cash management services or facilities
provided to any Loan Party by the Agent or any of its Affiliates, including,
without limitation: (a) ACH transactions, (b)

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controlled disbursement services, treasury, depository, overdraft, and
electronic funds transfer services, (c) credit or debit cards, (d) credit card
processing services, and (e) purchase 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, however, for the purposes of this Agreement: (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (y) 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 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 events by which:
(a)    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 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 or
indirectly, of 35% or more of the voting or economic 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; or
(b)    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 who were
neither (i) nominated to that board or equivalent governing body by individuals
constituting at the time of such nomination at least a majority of that board or
equivalent governing body, nor (ii) elected to that board or other equivalent
governing body by individuals constituting at the time of such election at least
a majority of that board or equivalent governing body; or
(c)    the Lead Borrower fails at any time to own, directly or indirectly, 100%
of the Equity Interests of each other Loan Party free and clear of all Liens
(other than the Liens in favor of the Agent or the Term Agent and Term Lenders),
except where such failure is as a result of a transaction permitted by the Loan
Documents.
“Chapter 11 Case” has the meaning specified in the Recitals hereto.

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“Chapter 11 Plan” means a Chapter 11 plan of reorganization proposed by the Loan
Parties in the Chapter 11 Case that is in form and substance acceptable to the
Agent in its Permitted Discretion, together with all modifications and
amendments that are in form and substance acceptable to the Agent in its
Permitted Discretion, and which, among other matters, provides for the payment
in full in cash of the Obligations and the Pre-Petition Obligations, unless
otherwise consented to by each of the Credit Parties in their sole discretion.
“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” or “Mortgaged Property” 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 Agent.
“Collateral Access Agreement” means an agreement reasonably satisfactory in form
and substance to the 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, or (c) the mortgage holder of the Kansas Distribution Facility and the
Corporate Headquarters, or any mortgage holder on any Real Estate owned any Loan
Party, pursuant to which such Person (i) acknowledges the Agent’s Lien on the
Collateral, (ii) releases or subordinates such Person’s Liens in the Collateral
held by such Person or located on such Real Estate or Collateral, (iii) provides
the Agent with access to the Collateral held by such bailee or other Person or
located in or on such Real Estate, (iv) as to any landlord, provides the Agent
with a reasonable time to sell and dispose of the Collateral from such Real
Estate, and (v) makes such other agreements with the Agent as the 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 L/C Issuer.
“Commitment” means, as to each Lender, its obligation to (a) make Committed
Loans to the Borrowers pursuant to Section 2.01, (b) purchase participations in
L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.
“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” has the meaning specified in Section 2.01.

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“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 Section 2.02, which, if in writing, shall be
substantially in the form of Exhibit A.
“Competing Transaction” has the meaning assigned to such term in the
Restructuring Support Agreement.
“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.
“Concentration Account” has 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 Agent of a proposed course of action to be followed by the
Agent without such Lender’s giving the 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.
“Consultants” means FTI Consulting, Inc. and Guggenheim Securities, LLC, in each
case as a financial restructuring consultant to the Loan Parties, or another
party reasonably acceptable to the Agent and Lead Borrower.
“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.
“Corporate Headquarters” means the Borrowers’ corporate headquarters, located at
3450 E. Miraloma Avenue, Anaheim, California.
“Cost” means the lower of cost or market value of Inventory, based upon the
Borrowers’ accounting practices, known to the 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’
stock ledger. “Cost” does not include inventory capitalization costs or other
non purchase price charges (such as freight) used in the Borrowers’ calculation
of cost of goods sold.
“Credit Card Issuer” shall mean any person (other than a Borrower or other 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 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., and Novus Services, Inc. and other issuers approved by the Agent.
“Credit Card Notifications” has the meaning provided in Section 6.13(a)(i).

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“Credit Card Processor” shall mean any servicing or processing agent or any
factor or financial intermediary who facilitates, services, processes or manages
the credit authorization, billing transfer and/or payment procedures with
respect to any Borrower’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 Card Receivables Advance Rate” means 90%.
“Credit Extensions” mean each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.
“Credit Party” or “Credit Parties” means (a) individually, (i) each Lender and
its Affiliates, (ii) the Agent, (iii) each L/C 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.
“Credit Party Expenses” means, without limitation, (a) all reasonable
out-of-pocket expenses incurred by the Agent and its Affiliates, in connection
with this Agreement and the other Loan Documents, including without limitation
(i) the reasonable fees, charges and disbursements of (A) counsel for the Agent,
(B) outside consultants for the Agent, (C) appraisers, (D) commercial finance
examinations, and (E) all such reasonable out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of the Obligations, (ii)
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, and (b) with respect to the L/C Issuer, and its Affiliates, all
reasonable out-of-pocket expenses 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 customary fees and charges (as
adjusted from time to time) of Agent with respect to the disbursement of funds
(or the receipt of funds) to or for the account of Loan Parties (whether by wire
transfer or otherwise), together with any reasonable out-of-pocket costs and
expenses incurred in connection therewith; and (d) all reasonable out-of-pocket
expenses incurred by the Credit Parties who are not the Agent, the L/C Issuer or
any Affiliate of any of them, after the occurrence and during the continuance of
an Event of Default, provided that such Credit Parties shall be entitled to
reimbursement for no more than one counsel representing all such Credit Parties
(absent a conflict of interest in which case the Credit Parties may engage and
be reimbursed for one additional counsel).
“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, and (c)
liabilities in connection with frequent shopping programs of the Borrowers.

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“Customer Deposits” means at any time, the aggregate amount at such time of (a)
deposits made by customers with respect to the purchase of goods or the
performance of services and (b) layaway obligations of the Borrowers.
“Customs Broker/Carrier Agreement” means an agreement in form and substance
satisfactory to the Agent among a Borrower, a customs broker, freight forwarder,
consolidator or carrier, and the Agent, in which the customs broker, freight
forwarder, consolidator or carrier acknowledges that it has control over and
holds the documents evidencing ownership of the subject Inventory for the
benefit of the Agent and agrees, upon notice from the Agent, to hold and dispose
of the subject Inventory solely as directed by the Agent.
“DDA” means each checking, savings or other demand deposit account maintained by
any of the Loan Parties (other than, so long as the Term Loan remains in effect,
the Term Loan Priority Account). All funds in each DDA shall be conclusively
presumed to be Collateral and proceeds of Collateral and the Agent and the
Lenders shall have no duty to inquire as to the source of the amounts on deposit
in any DDA.
“DDA Notification” has the meaning provided therefor in Section 6.13(a)(iii).
“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) 2% per
annum; provided, however, 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 2% per annum, and (b)
when used with respect to Letter of Credit Fees, a rate equal to the Applicable
Margin for Standby Letters of Credit or Commercial Letters of Credit, as
applicable, plus 2% per annum.
“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Committed Loans, participations in L/C 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 Agent or any other Lender any other amount required to be paid
by it hereunder within one Business Day of the date when due, (c) has failed or
refused to abide by any of its obligations under this Agreement, or (d) has been
deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.
“Deteriorating Lender” means any Defaulting Lender or any Lender as to which (a)
the L/C 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.
“Disclosure Statement” means the disclosure statement with respect to the
Chapter 11 Plan filed by the Loan Parties in the Chapter 11 Case, which shall be
in form and substance acceptable to the Agent in its Permitted Discretion,
together with all modifications and amendments that are in form and substance
acceptable to the Agent in its Permitted Discretion.

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“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (whether in one transaction or in a series of transactions, and
including any sale and leaseback transaction and any sale, transfer, license or
other disposition) 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, however, 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
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.
“Documentation Agent” means Wells Fargo Capital Finance, LLC.
“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 $250,000,000; (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, and
(e) any other Person (other than a natural person) approved by (i) the Agent,
the L/C Issuer and the Swing Line Lender, and (ii) unless a Default or 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.
“Eligible Credit Card Receivables” means at the time of any determination
thereof, each Credit Card Receivable that satisfies the following criteria at
the time of creation and continues to meet the same at the time of such
determination: such Credit Card Receivable (i) has been earned by performance
and represents the bona fide amounts due to a Borrower from a Credit Card Issuer
or Credit Card Processor, and in each case originated in the ordinary course of
business of such Borrower, and (ii) in each case is acceptable to

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the Agent in its Permitted Discretion, and is not ineligible for inclusion in
the calculation of the Borrowing Base pursuant to any of clauses (a) through (j)
below. Without limiting the foregoing, to qualify as 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 Issuer
or Credit Card Processor 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 agreed by the Agent, any Credit
Card Receivable included within any of the following categories shall not
constitute an Eligible Credit Card Receivable:
(a)    Credit Card Receivable which do not constitute an “Account” (as defined
in the UCC);
(b)    Credit Card Receivables that have been outstanding for more than five (5)
Business Days from the date of sale;
(c)    Credit Card Receivables (i) that are not subject to a perfected first
priority security interest in favor of the Agent, or (ii) 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 Agent pursuant to the
Security Documents);
(d)    Credit Card Receivables which are disputed, are with recourse, or with
respect to which a claim, counterclaim, offset or chargeback has been asserted
(to the extent of such claim, counterclaim, offset or chargeback);
(e)    Credit Card Receivables as to which the Credit Card Issuer or Credit Card
Processor has the right under certain circumstances to require a Loan Party to
repurchase the Accounts from such Credit Card Issuer or Credit Card Processor;
(f)    Credit Card Receivables due from Credit Card Issuer or Credit Card
Processor of the applicable credit card which is the subject of any bankruptcy
or insolvency proceedings;
(g)    Credit Card Receivables which are not a valid, legally enforceable
obligation of the applicable Credit Card Issuer or Credit Card Processor with
respect thereto;
(h)    Credit Card Receivables which do not conform to all representations,
warranties or other provisions in the Loan Documents relating to Credit Card
Receivables;
(i)    Credit Card Receivables which are evidenced by “chattel paper” or an
“instrument” of any kind unless such “chattel paper” or “instrument” is in the
possession of the Agent, and to the extent necessary or appropriate, endorsed to
the Agent; or
(j)    Credit Card Receivables which the Agent determines in its Permitted
Discretion to be uncertain of collection.
As of the time when any Credit Card Receivable is included in the Borrowing Base
as an Eligible Credit Card Receivable each Loan Party shall be deemed to have
represented and warranted that such Credit

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Card Receivable and all records, papers and documents relating thereto (a) are
genuine and correct and in all material respects what they purport to be, (b)
represent the legal, valid and binding obligation of the account debtor, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar Laws relating to or limiting creditors’ rights generally
or by equitable principles relating to enforceability, evidencing indebtedness
unpaid and owed by such account debtor, arising out of the performance of labor
or services or the sale, lease, license, assignment or other disposition and
delivery of the goods or other property listed therein or out of an advance or a
loan, and (c) are in all material respects in compliance and conform with all
applicable material federal, state and local Laws and applicable Laws of any
relevant foreign jurisdiction.
“Eligible In-Transit Inventory” means, as of any date of determination thereof,
without duplication of other Eligible Inventory, In-Transit Inventory not
exceeding $20,000,000 in the aggregate:
(a)    Which has been shipped from a foreign location for receipt by a Borrower,
but which has not yet been delivered to such Borrower, which In-Transit
Inventory has been in transit for thirty (30) days or less from the date of
shipment of such Inventory;
(b)    For which the purchase order is in the name of a Borrower and title and
risk of loss has passed to such Borrower;
(c)    For which an Acceptable Document of Title has been issued, and in each
case as to which the Agent has control (as defined in the UCC) over the
documents of title which evidence ownership of the subject Inventory (such as,
if requested by the Agent, by the delivery of a Customs Broker/Carrier
Agreement);
(d)    Which is insured to the reasonable satisfaction of the Agent (including,
without limitation, marine cargo insurance);
(e)    the Foreign Vendor with respect to such In-Transit Inventory is an
Approved Foreign Vendor;
(f)    For which payment of the purchase price has been made by the Borrower or
the purchase price is supported by a Commercial Letter of Credit; and
(g)    Which otherwise would constitute Eligible Inventory;
provided that the Agent may, in its Permitted Discretion, exclude any particular
Inventory from the definition of “Eligible In-Transit Inventory” in the event
the Agent determines that such Inventory is subject to any Person’s right of
reclamation, repudiation, stoppage in transit or any event has occurred or is
reasonably anticipated by the Agent to arise which may otherwise adversely
impact the ability of the Agent to realize upon such Inventory.
“Eligible Inventory” means, as of the date of determination thereof, without
duplication, (i) Eligible In-Transit Inventory, and (ii) 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 and deemed by the 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 Agent,
(A) complies with each of the representations and warranties respecting
Inventory made by the Borrowers in the Loan Documents, and (B) is not excluded
as ineligible by virtue of one or more of the criteria set forth below. Except
as otherwise agreed by the Agent, in its discretion, the following items of
Inventory shall not be included in Eligible Inventory:

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(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 (other than Eligible In-Transit Inventory) that is not located
in the United States of America (excluding territories or possessions of the
United States);
(d)    Inventory that is not located at a location that is owned or leased by a
Loan Party, except (i) Inventory in transit between such owned or leased
locations or locations which meet the criteria set forth in clause (ii) below,
or (ii) to the extent that the Borrowers have furnished the Agent with (A) any
UCC financing statements or other documents that the 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 Agent;
(e)    Inventory that is located: (i) in a distribution center leased by a Loan
Party unless the applicable lessor has delivered to the Agent a Collateral
Access Agreement or the Agent has implemented Reserves for such leased location
in an amount determined by the Agent in its Permitted Discretion, or (ii) at any
leased location in a Landlord Lien State unless the applicable lessor has
delivered to the Agent a Collateral Access Agreement or the Agent has
implemented Reserves for such leased location (provided such reserves shall not
exceed any past due amounts plus two months’ rent for the applicable Store
location);
(f)    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 slow moving, or custom items, work in process, raw
materials, or that constitute samples, spare parts, promotional, marketing,
labels, bags and other 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;
(g)    Inventory that is not subject to a perfected first priority security
interest in favor of the Agent;
(h)    Inventory that is not insured in compliance with the provisions of
Section 5.10 hereof;
(i)    Inventory that has been sold but not yet delivered or as to which a
Borrower has accepted a deposit; or
(j)    Inventory that is subject to any licensing, patent, royalty, trademark,
trade name or copyright agreement with any third party and such third party has
delivered a written notice to a Loan Party that either limits such Loan Party’s
ability to sell such Inventory or that no Loan Party or any of its Subsidiaries
may sell such Inventory.
“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements

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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 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” has the meaning set forth in the UCC.
“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 corporation or 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 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” has the meaning specified 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 10.01 hereof.
“Excluded Subsidiary” means Miraloma Borrower Corporation, a Delaware
corporation.

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“Events and Circumstances” has the meaning assigned to such term in the
definition of “Material Adverse Effect”.
“Excluded Taxes” means, with respect to the Agent, any Lender, the L/C 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, (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 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), (d) any U.S. federal, state or local backup withholding tax,
and (e) any U.S. federal withholding tax imposed under FATCA.
“Executive Order” has the meaning set forth in Section 10.18.
“Existing Letters of Credit” means those letters of credit referenced on
Schedule 1.03 attached hereto.
“Extraordinary Receipt” means any cash received by or paid to or for the account
of any Person not in the ordinary course of business (other than, so long as the
Term Loan remains outstanding, any amounts arising out of Term Loan Priority
Collateral), 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 any Guarantee made by the Guarantors from time to time
in favor of the Agent and the other Credit Parties, in form reasonably
satisfactory to the Agent, as the same now exists or may hereafter be amended,
modified, supplemented, renewed, restated or replaced.
“FATCA” means current Section 1471 through 1474 of the Code or any amended
version or successor provision that is substantively similar to and, in each
case, any regulations promulgated thereunder and any interpretation and other
guidance issued in connection therewith.
“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 Agent.
“Fee Letter” means the letter agreement, dated as of the Closing Date, among the
Borrowers and the Agent.

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“Final Financing Order” means, the order of the Bankruptcy Court entered in the
Chapter 11 Case after a final hearing under Bankruptcy Rule 4001(c)(2) or such
other procedures as approved by the Bankruptcy Court, which order shall be
satisfactory in form and substance to the Agent in its Permitted Discretion and
from which no appeal or motion to reconsider has been filed, together with all
extensions, modifications and amendments thereto, in form and substance
satisfactory to the Agent, which, among other matters but not by way of
limitation, authorizes the Borrowers to obtain credit, incur the Obligations,
and grant Liens under this Agreement and the other Loan Documents, as the case
may be, and provides for the super-priority of the claims of the Agent and
Lenders, subject to the Carve-Out and Permitted Prior Liens.
“Final Order Entry Date” means the date on which the Bankruptcy Court enters the
Final Financing Order.
“Financing Orders” means the Interim Financing Order and Final Financing Order,
as applicable.
“Fiscal Month” means any fiscal month of any Fiscal Year, which month shall
generally end on the last Saturday of each calendar month in accordance with the
fiscal accounting calendar of the Loan Parties.
“Fiscal Quarter” means any fiscal quarter of any Fiscal Year, which quarters
shall generally end on the last Saturday of each April, July, October and
January of such Fiscal Year in accordance with the fiscal accounting calendar of
the Loan Parties.
“Fiscal Year” means any period of twelve (12) consecutive months ending on
Saturday closest to January 31st of any calendar year.
“Foreign Asset Control Regulations” has the meaning set forth in 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.
“Foreign Vendor” means a Person that sells In-Transit Inventory to a Borrower.
“Foreign Vendor Agreement” means an agreement between a Foreign Vendor and the
Agent in form and substance satisfactory to the Agent and pursuant to which,
among other things, the parties shall agree upon their relative rights with
respect to In-Transit Inventory of a Borrower purchased from such Foreign
Vendor.
“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.

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“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).
“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 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” has the meaning specified in the introductory paragraph hereto, and
each other Subsidiary of the Lead Borrower 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” has the meaning specified 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);

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(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
(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, unless such Indebtedness is expressly
made 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” has the meaning specified in Section 10.04(b).
“Information” has the meaning specified in Section 10.07.
“Intellectual Property” means all present and future: proprietary trade secrets,
know-how and other proprietary information; proprietary 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; proprietary copyrights and copyright applications; (including proprietary
copyrights for computer programs) and all tangible and intangible property
embodying the copyrights, unpatented inventions (whether or not patentable);
proprietary patents and patent applications; industrial design applications and
registered industrial designs; license agreements pursuant to which Borrower has
licensed any trademark, patent or copyright and income therefrom; proprietary
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; all other proprietary intellectual property; and all
common law and other rights throughout the world in and to all of the foregoing.
“Intercompany Loan Agreements” means those certain intercompany loan
arrangements by and among the Loan Parties as reflected on Schedule 7.09 and as
in effect on the Closing Date, and those certain documents, promissory notes,
and other agreements executed in connection therewith.
“Intercreditor Agreement” means that certain intercreditor agreement entered
into as of the December 7, 2011 by and between the Agent and the Term Agent, and
acknowledged and agreed to by the Loan Parties, as amended from time to time in
accordance with the terms of thereof.

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“Interest Payment Date” means, (a) as to any LIBO 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 months,
the respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any Base
Rate Loan (including a Swing Line Loan), the first day after the end of each
month and 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:
(i)    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;
(ii)    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; and
(iii)    no Interest Period shall extend beyond the Maturity Date.
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.
“Interim Financing Order” means, the order of the Bankruptcy Court entered in
the Chapter 11 Case after an interim hearing, substantially in the form attached
hereto as Exhibit J and/or otherwise in form and substance satisfactory to the
Agent in its Permitted Discretion, together with all extension, modifications,
and amendments thereto approved by the Agent, which, among other matters but not
by way of limitation, authorizes, on an interim basis, the Loan Parties to
execute and perform under the terms of this Agreement and the other Loan
Documents.
“Internal Control Event” means a material weakness in, or fraud 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.
“In-Transit Inventory” means Inventory of a Borrower which is in the possession
of a common carrier and is in transit from a Foreign Vendor of a Borrower from a
location outside of the continental United States to a location of a Borrower
that is within the continental United States.
“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 Advance Rate” means 80%.
“Inventory Reserves” means such reserves as may be established from time to time
by the Agent in its Permitted Discretion with respect to the determination of
the saleability, at retail, of the Eligible Inventory,

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which reflect such other factors as affect the market value of the Eligible
Inventory or which reflect claims and liabilities that the Agent determines will
need to be satisfied in connection with the realization upon the Inventory.
Without limiting the generality of the foregoing, Inventory Reserves may, in the
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)    Packaways;
(j)    Retail markons and markups inconsistent with prior period practice and
performance, industry standards, current business plans or advertising calendar
and planned advertising events; and
(k)    Out-of-date and/or expired 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.
“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, as applicable, and any other document, agreement and
instrument entered into by the L/C Issuer and the Borrower (or any Subsidiary)
or in favor of the L/C Issuer and relating to any such Letter of Credit.
“Joinder” means an agreement, in form satisfactory to the 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

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Documents in the same capacity and to the same extent as either a Borrower or a
Guarantor, as the Agent may determine.
“Kansas Distribution Facility” has the meaning assigned to such term in the
definition of “Kansas IRB Financing”.
“Kansas IRB Documents” means all agreements and documents which evidence the
Kansas IRB Financing, including (i) the Trust Indenture dated as of July 1, 2007
by and between the City of Olathe, Kansas and U.S. Bank National Association, as
trustee, (ii) the Bond Purchase Agreement dated as of July 4, 2007 by and
between the City of Olathe, Kansas and Pacific Sunwear Stores Corp., (iii) the
Performance Agreement dated as of July 1, 2007 by and between the City of
Olathe, Kansas and Pacific Sunwear Stores Corp. and (iv) the Lease Agreement
dated as of July 1, 2007 by and between the City of Olathe, Kansas and Pacific
Sunwear Stores Corp., each as amended, supplemented or otherwise modified from
time to time in accordance with the terms of this Agreement.
“Kansas IRB Financing” means that certain industrial revenue bond financing,
structured as a sale and leaseback transaction, entered into on July 1, 2007
between the City of Olathe, Kansas and Pacific Sunwear Stores Corp., whereby the
City of Olathe, Kansas issued Industrial Revenue Bonds (PacSun Project), Series
2007, purchased by Pacific Sunwear Stores Corp. for the purpose of financing the
acquisition, construction and installation of certain real property, machinery
and equipment constituting a distribution facility located in the City of
Olathe, Johnson County, Kansas (the “Kansas Distribution Facility”), which
facility was sold and deeded by Pacific Sunwear Stores Corp. to the City of
Olathe, Kansas and leased back by the City of Olathe, Kansas to Pacific Sunwear
Stores Corp.
“Landlord Lien State” means such state(s) in which a landlord’s claim for rent
may have priority over the Lien of the Agent in any of the Collateral.
“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.
“L/C 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.
“L/C Issuer” means 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 Agent in its discretion). The L/C
Issuer may, in its discretion, arrange for one or more Letters of Credit to be
issued by Affiliates of the L/C 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
“L/C Issuer” shall include any such Affiliate with respect to Letters of Credit
issued by such Affiliate.
“L/C 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”

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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” has the meaning assigned to such term in the preamble of this
Agreement.
“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.
“Lease Extension Order” has the meaning assigned to such term in Section
6.23(b).
“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the Swing Line Lender.
“Lender Group Consultant” has the meaning assigned to such term in Section
6.20(c).
“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
Agent.
“Letter of Credit” means each Standby Letter of Credit and each Commercial
Letter of Credit issued hereunder 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 L/C
Issuer.
“Letter of Credit Expiration Date” means the day that is seven 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” has the meaning specified 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 Commitments. A
permanent reduction of the Aggregate Commitments shall not require a
corresponding pro rata reduction in the Letter of Credit Sublimit; provided,
however, that if the Aggregate 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 Committed Borrowing comprised of LIBO Rate Loans.
“LIBO Rate” means for any Interest Period with respect to a LIBO Rate Loan, the
rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Agent from time to time)
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period. If such rate is not available at such time for any reason, then the
“LIBO Rate” for such Interest Period shall be the rate per annum determined by
the Agent to be the rate at which deposits in Dollars for delivery on the first
day of such Interest Period in same day funds in the approximate amount of the
LIBO Rate Loan being made, continued or converted by Wells Fargo and with a term
equivalent to such Interest Period would be offered to Wells Fargo by major
banks in the London interbank eurodollar market

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in which Wells Fargo participates at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of such Interest
Period.
“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.
“Line Item” has the meaning assigned to such term in the definition of “Approved
Budget Variance Report”.
“Liquidation” means the exercise by the Agent of those rights and remedies
accorded to the 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 the continuation of an Event of Default) the
conduct by the Loan Parties acting with the consent of the 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 a Lender to the Borrowers under Article
II in the form of a Committed Loan or a Swing Line Loan.
“Loan Account” has the meaning assigned to such term 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, in each case, minus the Pre-Petition
Reserve.
“Loan Documents” means this Agreement, the Intercreditor Agreement, each Note,
each Issuer Document, the Fee Letter, the Facility Guaranty, all Borrowing Base
Certificates, the Blocked Account Agreements, the DDA Notifications, the Credit
Card Notifications, the Security Documents, the Financing Orders, 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 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 or
condition (financial or otherwise) of the 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 Agent or any Lender 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. 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

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occurred if the cumulative effect of such event and all other then existing
events would result in a Material Adverse Effect. Notwithstanding the foregoing,
(i) the filing of the Chapter 11 Case (and any defaults under pre-petition
agreements, so long as the exercise of remedies as a result of such defaults are
stayed under the Bankruptcy Code or such agreements are voided or invalidated by
the Bankruptcy Court), (ii) the events that led up to the commencement of the
Chapter 11 Case described in the Declaration of Gary H. Schoenfeld in Support of
First Day Motions and the Declaration of Chris Tedford in Support of First Day
Motions, dated on or about the date hereof, and (iii) the incurrence of any
claim or liability that is Pre-Petition, unsecured and junior in priority to the
Obligations (each of the foregoing clauses (i), (ii) and (iii), collectively,
the “Events and Circumstances”), will, individually and collectively, not be
deemed to have a Material Adverse Effect.
“Material Contract” means, with respect to any Person, the Term Loan, the Kansas
IRB Documents, the Mortgage Debt Documents and each contract required to be
filed as an exhibit to the reports of the Borrower filed with the SEC.
“Material Indebtedness” means (i) Indebtedness owed under the Term Loan, the
Kansas IRB Financing, or the Mortgage Debt Documents, and (ii) any other
Indebtedness (other than the Obligations) of the Loan Parties or any of their
Subsidiaries in an aggregate principal amount exceeding $10,000,000. 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, and (c) all amounts owing to all creditors
under any combined or syndicated credit arrangement shall be included.
“Maturity Date” means the earliest of: (a) April 7, 2017; (b) if the Final
Financing Order is not entered within thirty (30) calendar days after the
Petition Date, immediately thereafter, (c) the effective date of a Chapter 11
plan of reorganization, and (d) the closing of a sale of all or substantially
all of the assets of the Loan Parties pursuant to Section 363 of the Bankruptcy
Code.
“Maximum Rate” has the meaning provided therefor in Section 10.09.
“Miraloma Lease” means that certain Lease Agreement dated as of August 20, 2010
and entered into between Miraloma Borrower Corporation, a Guarantor (as
landlord), and the Lead Borrower (as tenant) in connection with the Mortgage
Debt Documents with respect to the Corporate Headquarters.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Mortgage Debt Documents” means those certain promissory notes executed by
Pacific Sunwear Stores Corp. and Miraloma Borrower Corporation on or about
October 1, 2010 in favor of American National Insurance Company in the aggregate
principal amount of $29,800,000, and those certain deeds of trust and/or
mortgages, security agreements, financing statements, and fixture filings
entered into by Pacific Sunwear Stores Corp on the Kansas Distribution Facility
and Miraloma Borrower Corporation on the Corporate Headquarters in connection
therewith, in each case as amended, supplemented or otherwise modified from time
to time in accordance with the terms of this Agreement.
“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,

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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 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, the excess of (i) the
sum of the cash and cash equivalents received in connection with such
transaction over (ii) 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.
“Non-Consenting Lender” has the meaning provided therefor in Section 10.01.
“Non-Extension Notice Date” has the meaning specified in Section 2.03(b)(iii).
“Note” means (a) a promissory note made by the Borrowers in favor of a Lender
evidencing Committed 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.
“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 claims in such proceeding, and
(b) any Other Liabilities. For the avoidance of doubt, as of the Closing Date,
all Existing Letters of Credit and all purchase cards existing under the
Pre-Petition Credit Agreement and the “Loan Documents” (as defined in the
Pre-Petition Credit Agreement) shall be deemed issued and part of the
“Obligations” under this Agreement.
“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.

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“Other Liabilities” means any obligation on account of (a) any Cash Management
Services furnished to any of the Loan Parties or any of their Subsidiaries
and/or (b) any transaction with the Agent or any of its Affiliates that 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.
“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 (i) 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; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date.
“Overadvance” means a Credit Extension to the extent that, immediately after its
having been made, Availability is less than zero.
“Participant” has the meaning specified in Section 10.06(d).
“Participation Register” has the meaning provided therefor in Section 10.06(d).
“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 Discretion” means a determination made by the Agent in good faith and
in the exercise of its commercially reasonable (from the perspective of a
secured asset-based lender in the retail industry) business judgment.
“Permitted Disposition” means any of the following:
(a)    Dispositions of inventory in the ordinary course of business;
(b)    Reserved;
(c)    (i) non-exclusive licenses of Intellectual Property of a Loan Party or
any of its Subsidiaries in the ordinary course of business (it being understood
and agreed that any proceeds (including royalty payments) shall be Term Loan
Priority Collateral and shall be paid to the Term Loan Priority Account in
accordance with this Agreement), and (ii) exclusive licenses of Intellectual
Property outside the United States in the ordinary course of business;

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(d)    licenses for the conduct of licensed departments within the Loan Parties’
Stores in the ordinary course of business;
(e)    Dispositions of Equipment 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; provided
that the fair market value of all such Dispositions shall not exceed $1,000,000
in any Fiscal Year;
(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)    sales, transfers and other Dispositions approved pursuant to an order of
the Bankruptcy Court, in all cases, with the consent of the Agent; and
(i)    Dispositions resulting from any casualty or other insured damage to, or
any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of any Loan Party or any Subsidiary.
“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 by more than thirty (30)
days 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 or letter of credit guarantees issued in respect
thereof;
(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 or a Subsidiary 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;

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(g)    Liens existing on the Closing Date and listed on Schedule 7.01 (other
than with respect to the Term Loan), and any Permitted Refinancings thereof;
(h)    after the Petition Date, Liens on fixed or capital assets acquired by any
Loan Party or a Subsidiary 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 or a
Subsidiary;
(i)    Liens in favor of the Agent;
(j)    (i) with respect to Pre-Petition obligations, Statutory Liens of
landlords and lessors in respect of rent; and (ii) with respect to obligations
from the Petition Date forward, Statutory Liens of landlords and lessors in
respect of rent not in default;
(k)    Reserved;
(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 or a Subsidiary (so long as such consignment Liens do not
extend to proceeds of such Inventory or to any other assets of the Loan Parties
or a Subsidiary);
(n)    adequate protection Liens granted under the Financing Orders;
(o)    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 so long as such liens attach only to the imported goods;
(p)    Liens in favor of the Term Agent and Term Lenders under the Term Loan;
and
(q)    Customary rights of setoff and chargebacks of Credit Card Processors
under credit card processing agreements.
“Permitted Indebtedness” means each of the following:
(a)    Indebtedness outstanding on the Closing Date and listed on Schedule 7.03
(other than the Term Loan) and any Permitted Refinancings thereof;
(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 personal property consisting solely of fixed or capital assets, including
Capital 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 Permitted Refinancings thereof;

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provided, however, that the aggregate principal amount of Indebtedness permitted
by this clause (c) shall not exceed $10,000,000 at any time outstanding;
(d)    Reserved;
(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;
(f)    Reserved;
(g)    Reserved;
(h)    the Obligations;
(i)    Indebtedness with respect to the Term Loan; and
(j)    Unsecured Subordinated Indebtedness not otherwise specifically described
herein in an aggregate principal amount not to exceed $1,000,000 at any time
outstanding, provided that (i) the terms of such Indebtedness are reasonably
acceptable to the Agent, (ii) the interest on such Indebtedness shall not be
payable in cash, (iii) the maturity date of such Indebtedness shall be at least
ninety one (91) days after the Maturity Date, and (iv) the amount of any fees
and expenses associated with such Indebtedness shall be reasonably acceptable to
the Agent;
(k)    Any Guarantees of any of the items set forth in clauses (e), (h) and (i)
of this definition;
(l)    Guarantees by the Borrower and any Subsidiary of sublessees of any
subleases entered into by the Borrower or any Subsidiary as sublessors to the
extent in place on the Closing Date;
(m)    the Pre-Petition Obligations; and
(n)    Indebtedness which may be deemed to exist pursuant to any worker’s
compensation claims, self insurance obligations, performance, surety, statutory,
appeal, custom bonds or similar obligations incurred in the ordinary course of
business.
“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)    Reserved;
(b)    Reserved;
(c)    Reserved;
(d)    Reserved;
(e)    Reserved;
(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;

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(g)    (i) Investments by any Loan Party and its Subsidiaries in their
respective Subsidiaries existing on the Closing Date, and (ii) additional
Investments by any Loan Party and its Subsidiaries in Loan Parties;
(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 to the extent reasonably necessary in order to prevent
or limit loss;
(i)    Guarantees constituting Permitted Indebtedness;
(j)    Reserved;
(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
$200,000 to any individual at any time or in an aggregate amount not to exceed
$1,000,000 at any time outstanding, for travel, entertainment, relocation and
analogous ordinary business purposes;
(m)    Reserved;
(n)    capital contributions made by any Loan Party to another Loan Party;
(o)    Reserved; and
(p)    Investments in any industrial revenue bonds or any other instruments
issued in connection with the Kansas IRB Financing.
“Permitted Overadvance” means an Overadvance made by the 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 five percent (5%) of the Borrowing Base at any time plus an
amount equal to two (2) weeks of payroll and expenses, or (ii) unless a
Liquidation is occurring, remain outstanding for more than forty-five (45)
consecutive Business Days.
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 Section 2.04 regarding the Lenders’ obligations with
respect to Swing Line Loans, or (ii) result in any claim or liability against
the Agent (regardless of the amount of any Overadvance) for Unintentional
Overadvances and such Unintentional

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Overadvances shall not reduce the amount of Permitted Overadvances allowed
hereunder; provided further that in no event shall the 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 Prior Liens” means, collectively, Liens permitted by the Pre-Petition
Credit Agreement (to the extent any such permitted Liens are valid, enforceable,
properly perfected, non-avoidable and senior in priority to the Liens securing
the obligations under the Pre-Petition Credit Agreement as of the Petition
Date).
“Permitted Refinancing” means, with respect to any Person, any Indebtedness
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund (collectively, to “Refinance”), the
Indebtedness being Refinanced (or previous refinancings thereof constituting a
Permitted Refinancing); provided, that (a) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness so
Refinanced (plus unpaid accrued interest and premiums thereon and underwriting
discounts, defeasance costs, fees, commissions and expenses), (b) the weighted
average life to maturity of such Permitted Refinancing is greater than or equal
to the weighted average life to maturity of the Indebtedness being Refinanced
(c) such Permitted Refinancing shall not require any scheduled principal
payments due prior to the Maturity Date in excess of, or prior to, the scheduled
principal payments due prior to such Maturity Date for the Indebtedness being
Refinanced, (d) if the Indebtedness being Refinanced is subordinated in right of
payment to the Obligations under this Agreement, such Permitted Refinancing
shall be subordinated in right of payment to such Obligations on terms at least
as favorable to the Credit Parties as those contained in the documentation
governing the Indebtedness being Refinanced (e) no Permitted Refinancing shall
have direct or indirect obligors who were not also obligors of the Indebtedness
being Refinanced, or greater guarantees or security, than the Indebtedness being
Refinanced, (f) such Permitted Refinancing shall not contain any covenants
(financial or otherwise), or any events of default that would be materially less
favorable to the Credit Parties than those contained in the documentation
governing the Indebtedness being Refinanced, (g) the interest rate applicable to
any such Permitted Refinancing shall not exceed the then applicable market
interest rate, and (h) at the time thereof, no Default or Event of Default shall
have occurred and be continuing.
“Permitted Variance” has the meaning provided in Section 6.21.
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, limited partnership,
Governmental Authority or other entity.
“Petition Date” has the meaning specified in the Recitals to this Agreement.
“Plan” means any “employee benefit plan” (as such term is defined in Section
3(3) of ERISA) established, sponsored, maintained, or contributed to 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 or otherwise with respect to
which the Loan Parties have any liability.
“Plan Sponsor” means the “Supporting Parties” (as defined in the Restructuring
Support Agreement as in effect on the Closing Date) party to the Restructuring
Support Agreement as of the Closing date or any other Person acceptable to the
Agent in its sole discretion.
“Platform” has the meaning specified in Section 6.02.

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“Post-Petition Obligations” means Indebtedness of any Loan Party that was
incurred or accrued after the commencement of the Chapter 11 Case.
“Pre-Petition” means the period prior to the commencement of the Chapter 11
Case.
“Pre-Petition Agent” means the “Agent” as defined in the Pre-Petition Credit
Agreement.
“Pre-Petition Credit Agreement” means that certain Credit Agreement dated as of
December 7, 2011, among the Borrowers, certain of the Guarantors, Wells Fargo
Bank, National Association, as administrative agent, collateral agent and swing
line lender, and the lenders from time to time party thereto, as amended or
otherwise modified prior to and in effect on the Petition Date.
“Pre-Petition Indebtedness” means Indebtedness of any Loan Party that was
incurred or accrued prior to the commencement of the Chapter 11 Case.
“Pre-Petition Liens” means Liens in favor of Wells Fargo as collateral agent for
its benefit and the benefit of the lenders) and other credit parties under the
Pre-Petition Credit Agreement.
“Pre-Petition Obligations” means all “Obligations” as such term is defined in
the Pre-Petition Credit Agreement.
“Pre-Petition Reserve” means, at any date of determination, an amount equal to
the outstanding aggregate amount of the “Total Outstandings” (other than
obligations arising in connection with purchase cards and Letters of Credit, all
of which shall be deemed to be issued under this Agreement as of the Closing
Date), as such term is defined in the Pre-Petition Credit Agreement, plus all
unpaid interest on and unpaid fees related thereto.
“Prepayment Event” means:
(a)    Any Disposition (including pursuant to a sale and leaseback transaction)
of any property or asset of a Loan Party (so long as the Term Loan remains in
effect, other than the Disposition of any Term Loan Priority Collateral);
(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 (so long as the Term Loan
remains in effect, other than the Disposition of any Term Loan Priority
Collateral), unless 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 Agent;
(c)    The issuance by a Loan Party of any Equity Interests, other than any such
issuance of Equity Interests to a Loan Party;
(d)    The incurrence by a Loan Party of any Indebtedness for borrowed money; or
(e)    The receipt by any Loan Party of any Extraordinary Receipts.
“Public Lender” has the meaning specified in Section 6.02.

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“Public Market” shall exist if (a) a Public Offering has been consummated and
(b) any Equity Interests of the Lead Borrower have been distributed by means of
an effective registration statement under the Securities Act of 1933.
“Public Offering” means a public offering of the Equity Interests of the Lead
Borrower pursuant to an effective registration statement under the Securities
Act of 1933.
“Real Estate” means all Leases and 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.
“Receipts and Collections” has the meaning specified in Section 6.13(c).
“Register” has the meaning specified in Section 10.06(c).
“Registered Public Accounting Firm” has the meaning specified 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.
“Released Parties” has the meaning provided in Section 2.15.
“Releasing Parties” has the meaning provided in Section 2.15.
“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
“Reported Fee Accruals” means all fees, disbursements, costs and expenses of the
Case Professionals which have been incurred, accrued or invoiced (but remain
unpaid) through the date of service of a Carve Out Trigger Notice. For purposes
of determining the amount of the Carve Out, “Reported Fee Accruals” shall be
equal to the aggregate amounts under the heading “Professional Fees and Expenses
Accrued” in the Approved Budget (reflected on an accrual basis and not on a cash
basis) for the line item for each such Case Professional (or if less, such Case
Professional’s actual fees, disbursements, costs and expenses incurred to such
time) minus any payments received on account thereof. Any Case Professional’s
fees, disbursements, costs and expenses which have been incurred, accrued or
invoiced (and remain unpaid) but are in excess of the aggregate amounts
reflected in the Budget in the line item for each such Case Professional shall
not constitute “Reported Fee Accruals.”
“Reports” has 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 L/C Credit Extension, a Letter of Credit Application and, if required by the
L/C 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, Lenders holding more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, Lenders holding in

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the aggregate more than 50% of the Total Outstandings (with the aggregate amount
of each Lender’s risk participation and funded participation in L/C Obligations
and Swing Line Loans being deemed “held” by such Lender for purposes of this
definition); provided that 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.
“Reserves” means all Inventory Reserves and Availability Reserves.
“Responsible Officer” means the chief executive officer, president, chief
financial officer or general counsel of a Loan Party or any of the other
individuals designated in writing to the 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.
“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.
“Restructuring Support Agreement” means that certain Restructuring Support
Agreement dated on or about the Petition Date among the Loan Parties, PS
Holdings of Delaware, LLC - Series A and PS Holdings of Delaware, LLC - Series
B, and PS Holdings Agency Corp., which is upon terms and conditions acceptable
to the Agent in its Permitted Discretion, together with all modifications and
amendments that are in form and substance acceptable to the Agent in its
Permitted Discretion.
“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 Security Agreement dated as of the Closing Date
among the Loan Parties and the Agent, as the same now exists or may hereafter be
amended, modified, supplemented, renewed, restated or replaced.
“Security Documents” means the Security Agreement, the Blocked Account
Agreements, the DDA Notifications, the Credit Card Notifications, and each other
security agreement or other instrument or

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document executed and delivered to the Agent pursuant to this Agreement or any
other Loan Document granting a Lien to secure any of the Obligations.
“Settlement Date” has 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.
“Spot Rate” has the meaning given to such term in Section 1.07 hereof.
“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 L/C Issuer.
“Stated Amount” means at any time the maximum amount for which a Letter of
Credit may be honored.
“Statutory Committee” means any official committee of unsecured creditors in the
Chapter 11 Case pursuant to Section 1102 of the Bankruptcy Code.
“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 Agent is subject with respect to the 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.
“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 Agent. For the purposes of
clarity, Subordinated Indebtedness shall not include any Indebtedness owed under
the Term Loan.
“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
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

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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.
“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 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 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” has the meaning specified in Section 2.04(a).
“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 the lesser of (a) $15,000,000 and
(b) the Aggregate Commitments. The Swing Line Sublimit is part of, and not in
addition to, the Aggregate 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).

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“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.
“Term Agent” means PS Holdings Agency Corp.
“Term Lenders” means PS Holdings of Delaware, LLC and any other lenders from
time to time party to the Term Loan as provided therein.
“Term Loan” means that certain Term Loan Agreement entered into by and between
the Loan Parties, the Term Lenders, and the Term Agent, dated as of December 7,
2011, as amended from time to time in accordance with the provisions of the
Intercreditor Agreement.
“Term Loan Priority Account” means a non-interest bearing account in the name of
the Term Agent established with a financial institution as the Term Agent may
request, into which solely proceeds of the Term Loan Priority Collateral shall
be deposited.
“Term Loan Priority Collateral” has the meaning set forth in the Intercreditor
Agreement.
“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 VIII, 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
L/C Obligations.
“Trading with the Enemy Act” has the meaning set forth in Section 10.18.
“Type” means, with respect to a Committed Loan, its character as a Base Rate
Loan or a LIBO Rate Loan.
“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 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 (or such later version thereof as may be in effect
at the time of issuance).
“UFCA” has the meaning specified in Section 10.21(d).
“UFTA” has the meaning specified in Section 10.21(d).

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“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 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.
“Wage Order” means the order of the Bankruptcy Court entered in the Chapter 11
Case, together with all extensions, modifications and amendments that are in
form and substance acceptable to the Agent in its Permitted Discretion, which,
among other matters, authorizes and directs the Loan Parties to pay certain
Pre-Petition wages, benefits and other amounts owing to employees.
“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,
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 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.

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(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) and any other contingent Obligations,
providing Cash Collateralization or other collateral as may be requested by the
Agent) 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 or otherwise collateralized as may
be requested by the Agent, 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 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 past practices, 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 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 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 to the nearest number (with a rounding-up if
there is no nearest number).
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 Article II, Article IX and Article 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 Agent at such time on the basis of
the Spot Rate (as defined

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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
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 Agent may obtain such spot rate from another financial
institution designated by the 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; Reserves.     
(e)    Subject to the terms and conditions set forth herein, each Lender
severally agrees to make loans (each such loan, a “Committed 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 Commitment, or (y) such Lender’s Applicable
Percentage of the 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 Committed Borrowing, the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus
such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment;
(iii)    the Outstanding Amount of all L/C Obligations shall not at any time
exceed the Letter of Credit Sublimit.
Within the limits of each Lender’s Commitment, and subject to the other terms
and conditions hereof, the Borrower may borrow under this Section 2.01, prepay
under Section 2.05, and reborrow under this Section 2.01. As set forth in
Section 2.02(a) below, all Committed Loans shall be Base Rate Loans.
(f)    The Inventory Reserves and Availability Reserves as of the Closing Date
are set forth in the Borrowing Base Certificate delivered pursuant to
Section 4.01(d) hereof.
(g)    The Agent shall have the right, at any time and from time to time after
the Closing Date in its Permitted Discretion to establish, modify or eliminate
Reserves.
2.02    Borrowings, Conversions and Continuations of Committed Loans    .
(a)    Notwithstanding anything to the contrary contained herein or in any other
Loan Document, all Loans shall be Base Rate Loans, and the Borrowers shall not
have any option to borrow or convert to LIBO Rate Loans.
(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 Agent, which may be given by
telephone. Each such notice must be received by the Agent not later than 12:00
p.m. (i) three Business Days prior to the requested date of any Borrowing of,
conversion to or

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continuation of LIBO Rate Loans or of any conversion of LIBO Rate Loans to Base
Rate Loans, and (ii) on 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 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 $5,000,000 or a whole multiple of $1,000,000
in excess thereof. Each Committed Loan Notice (whether telephonic or written)
shall specify (i) 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, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Committed Loans to be borrowed, converted or continued, (iv)
the Type of Committed Loans to be borrowed or to which existing Committed Loans
are to be converted, and (v) 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 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 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 Agent in immediately available funds at the
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 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 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 Agent by the Lead Borrower.
(d)    The 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
Agent shall advise the Lead Borrower of any such advance or charge promptly
after the making thereof. Such action on the part of the Agent shall not
constitute a waiver of the 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 or an Event of Default, no Loans may be
requested as, converted to or continued as LIBO Rate Loans without the Consent
of the Required Lenders.

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(f)    The 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 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.
(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 as the same Type, there shall not be more than five (5) Interest Periods
in effect with respect to LIBO Rate Loans.
(h)    The Agent, the Lenders, the Swing Line Lender and the L/C Issuer shall
have no obligation to make any Loan or to provide any Letter of Credit if an
Overadvance would result. The Agent may, in its discretion, make Permitted
Overadvances without the consent of the Borrowers, the Lenders, the Swing Line
Lender and the L/C Issuer and the Borrowers and each Lender and L/C Issuer 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 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
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 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 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 L/C 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 or extend 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
L/C Credit Extension with respect to any Letter of Credit, (x) the Total
Outstandings shall not exceed Loan Cap, (y) the aggregate Outstanding Amount of
the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of
the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed
such Lender’s Commitment, and (z) the Outstanding Amount of the L/C 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 L/C 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. The Borrowers and the Credit Parties hereby

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acknowledge and agree that all Existing Letters of Credit shall constitute
Letters of Credit under this Agreement on and after the Closing Date with the
same effect as if such Existing Letters of Credit were issued by L/C Issuer at
the request of the Borrowers on the Closing Date.
(ii)    No Letter of Credit shall be issued if:
(A)    subject to Section (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 (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 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
Agent if:
(A)    any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing
such Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall prohibit, or request that
the L/C Issuer refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital requirement (for
which the L/C Issuer is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which the L/C
Issuer in good faith deems material to it;
(B)    the issuance of such Letter of Credit would violate one or more policies
of the L/C Issuer applicable to letters of credit generally;
(C)    such Letter of Credit is to be denominated in a currency other than
Dollars; provided that if the L/C 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;
(D)    such Letter of Credit contains any provisions for automatic reinstatement
of the Stated Amount after any drawing thereunder; or
(E)    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 Agent or L/C Issuer has entered into satisfactory
arrangements with the Borrowers or such Lender to eliminate the L/C Issuer’s
risk with respect to such Lender.
(iv)    The L/C Issuer shall not amend any Letter of Credit if (A) the L/C
Issuer would not be permitted at such time to issue such Letter of Credit in its
amended form under the terms hereof

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or (B) the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit.
(v)    The L/C 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
L/C Issuer shall have all of the benefits and immunities (A) provided to the
Agent in Article IX with respect to any acts taken or omissions suffered by the
L/C 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 “Agent” as used in Article IX. included the L/C Issuer with
respect to such acts or omissions, and (B) as additionally provided herein with
respect to the L/C 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 L/C Issuer (with a copy
to the 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 L/C Issuer and the Agent not later
than 11:00 a.m. at least two Business Days (or such other date and time as the
Agent and the L/C 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 Agent and the L/C 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 Agent or L/C 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 Agent and the
L/C 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 Agent or the L/C Issuer
may require. Additionally, the Lead Borrower shall furnish to the L/C Issuer and
the 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 L/C Issuer, a Standby Letter of Credit Agreement or Commercial
Letter of Credit Agreement, as applicable), as the L/C Issuer or the Agent may
require.
(ii)    Promptly after receipt of any Letter of Credit Application, the L/C
Issuer will confirm with the Agent (by telephone or in writing) that the Agent
has received a copy of such Letter of Credit Application from the Lead Borrower
and, if not, the L/C Issuer will provide the Agent with a copy thereof. Unless
the L/C Issuer has received written notice from any Lender, the 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 or unless the L/C
Issuer would not be permitted, or would have no obligation, at such time to
issue such Letter of Credit under the terms hereof (by reason of the provisions
of clause (ii) or (iii) of Section 2.03(a) or otherwise), then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested date, issue
a Letter of Credit for the account of the applicable Borrower or enter into the
applicable amendment, as the case may be, in each case in accordance with the
L/C Issuer's usual and customary business practices. Immediately upon the
issuance or

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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 L/C 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 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 L/C 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 L/C 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 L/C 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 Agent or the L/C Issuer, the Lead Borrower
shall not be required to make a specific request to the Agent or the L/C 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 L/C
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 Agent shall instruct the L/C Issuer not to permit any such
extension if (A) the L/C 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
L/C 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 Agent that the Required Lenders have elected not to permit such
extension or (2) from the 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 L/C 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 L/C Issuer will also deliver to the Lead Borrower and
the Agent a true and complete copy of such Letter of Credit or amendment.
(c)    Drawings and Reimbursements; Funding of Participations.
(iv)    Upon receipt from the beneficiary of any Letter of Credit of any notice
of a drawing under such Letter of Credit, the L/C Issuer shall notify the Lead
Borrower and the 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 L/C Issuer and the Lenders with respect to any such payment. On
the date of any payment by the L/C 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 L/C Issuer or the Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately

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confirmed in writing; provided that the lack of such an immediate confirmation
shall not affect the conclusiveness or binding effect of such notice.
(v)    Each Lender’s obligation to make Committed Loans to reimburse the L/C
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) any setoff, counterclaim, recoupment, defense
or other right which such Lender may have against the L/C Issuer, any Borrower
or any other Person for any reason whatsoever; (B) the occurrence or continuance
of a Default or Event of 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 L/C Issuer
pursuant to Section 2.03(c)(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 L/C Issuer in its discretion), each Lender shall pay to the
Agent for the account of the L/C Issuer its Applicable Percentage thereof on
demand of the 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
L/C 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 L/C 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 L/C 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 L/C 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

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(vi)    the fact that any Default or 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 Agent and the L/C Issuer. The
Borrowers shall be conclusively deemed to have waived any such claim against the
L/C Issuer and its correspondents unless such notice is given as aforesaid.
(f)    Role of L/C Issuer. Each Lender and the Borrowers agree that, in paying
any drawing under a Letter of Credit, the L/C 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 L/C Issuer,
the Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C 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, however,
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 L/C Issuer, the
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C 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,
however, that anything in such clauses to the contrary notwithstanding, the
Borrowers may have a claim against the L/C Issuer, and the L/C 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 L/C Issuer's willful
misconduct or gross negligence or the L/C 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 L/C
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 L/C Issuer to cure such dishonor. In furtherance and not in
limitation of the foregoing, the L/C 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 L/C 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 L/C 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

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any reason. The L/C 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 L/C Issuer may provide to the Borrowers with drafting or recommending text
for any Letter of Credit Application or with the structuring of any transaction
related to any Letter of Credit, and the Borrowers hereby acknowledge and agree
that any such assistance will not constitute legal or other advice by the L/C
Issuer or any representation or warranty by the L/C Issuer that any such wording
or such Letter of Credit will be effective. Without limiting the foregoing, the
L/C 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. Upon the request of the Agent, (i) if the L/C Issuer has
honored any full or partial drawing request under any Letter of Credit and such
drawing has resulted in an L/C Obligation that remains outstanding, or (ii) if,
as of the Letter of Credit Expiration Date, any L/C Obligation for any reason
remains outstanding, the Borrowers shall, in each case, immediately Cash
Collateralize the then Outstanding Amount of all L/C Obligations.
Sections 2.05(c) and 8.02(c) set forth certain additional requirements to
deliver Cash Collateral hereunder. For purposes of this Section 2.03,
Section 2.05(c) and Section 8.02(c), “Cash Collateralize” means to pledge and
deposit with or deliver to the Agent, for the benefit of the L/C Issuer and the
Lenders, as collateral for the L/C Obligations, cash or deposit account balances
in an amount equal to 105% of the Outstanding Amount of all L/C Obligations
(other than L/C Obligations with respect to Letters of Credit denominated in a
currency other than Dollars, which L/C Obligations shall be Cash Collateralized
in an amount equal to 115% of the Outstanding Amount of such L/C Obligations),
pursuant to documentation in form and substance satisfactory to the Agent and
the L/C Issuer (which documents are hereby Consented to by the Lenders). The
Borrowers hereby grant to the 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. If at any time the Agent determines that any funds held
as Cash Collateral are subject to any right or claim of any Person other than
the Agent or that the total amount of such funds is less than the aggregate
Outstanding Amount of all L/C Obligations, the Borrowers will, forthwith upon
demand by the Agent, pay to the 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 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 L/C 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 L/C 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 the 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 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 Letter of Credit equal to the
Applicable Margin 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, and thereafter on demand,
and (ii) computed on a monthly basis in arrears. If there

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is any change in the Applicable Margin during any quarter, the daily amount
available to be drawn under of each Letter of Credit shall be computed and
multiplied by the Applicable Margin separately for each period during such
quarter that such Applicable Margin 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 L/C
Issuer. The Borrowers shall pay directly to the L/C 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 with respect to
each Standby Letter of Credit 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 L/C Issuer, for its own account, the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C 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 and L/C Obligations of the Lender acting as Swing Line Lender,
may exceed the amount of such Lender’s Commitment; provided, however, that after
giving effect to any Swing Line Loan, (i) the Total Outstandings shall not
exceed the Loan Cap, and (ii) 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 L/C 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, further, that the
Borrowers shall not use the proceeds of any Swing Line Loan to refinance any
outstanding Swing Line Loan, and provided further 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(c), and reborrow under this Section 2.04. Each Swing Line
Loan shall bear interest only at the rate applicable to Base Rate Loans.
Immediately upon the making of a Swing Line Loan, each Lender shall be deemed
to, and hereby 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

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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 “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 Agent, which
may be given by telephone. Each such notice must be received by the Swing Line
Lender and the Agent not later than 1:00 p.m. on the requested borrowing date,
and shall specify (i) the amount to be borrowed, 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 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 Agent (by telephone or in writing) that the Agent has also
received such Swing Line Loan Notice and, if not, the Swing Line Lender will
notify the 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
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 Loan Cap
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 Agent. Each Lender shall make an
amount equal to its Applicable Percentage of the amount specified in such
Committed Loan Notice available to the Agent in immediately available funds for
the account of the Swing Line Lender at the 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 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 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 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.

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(iii)    If any Lender fails to make available to the 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 (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 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 Agent) with respect to any amounts owing under this clause (iii)
shall be conclusive absent manifest error.
(iv)    Each Lender’s obligation to make Committed Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this Section (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 an Event of Default, or (C) any other occurrence, event or condition, whether
or not similar to any of the foregoing; provided, however, that each Lender’s
obligation to make Committed Loans pursuant to this Section (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.
(vii)    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.
(viii)    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 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 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.
(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

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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; Pre-Petition Obligations.     
(a)    The Borrowers may, upon irrevocable notice from the Lead Borrower to the
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 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; and (ii) any prepayment of Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 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 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.
(b)    The Borrowers may, upon irrevocable notice from the Lead Borrower to the
Swing Line Lender (with a copy to the 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 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 $100,000. 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, Swing Line
Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal
to such excess; provided, however, that the Borrowers shall not be required to
Cash Collateralize the L/C Obligations pursuant to this subsection (c) unless
after the prepayment in full of the Loans the Total Outstandings exceed the Loan
Cap as then in effect.
(d)    The Borrower shall prepay the Pre-Petition Obligations and Loans and (if
all such obligations have been repaid in full, at the election of the Agent or
if an Event of Default then exists) Cash Collateralize the L/C Obligations with
proceeds and collections received by the Loan Parties to the extent so required
under the provisions of Section 6.13 hereof and in accordance with clause (f)
below.
(e)    The Borrowers shall prepay the Pre-Petition Obligations and Loans and (if
all such obligations have been repaid in full, at the election of the Agent or
if an Event of Default then exists) Cash Collateralize the L/C Obligations in an
amount equal to the Net Cash Proceeds received by a Loan Party on account of a
Prepayment Event in accordance with clause (f) below.
(f)    Prepayments made pursuant to clauses (c), (d) and (e) above, shall be
applied first, to the outstanding Pre-Petition Obligations in accordance with
the Pre-Petition Credit Agreement (other than those

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obligations arising in connection with purchase cards and Letters of Credit, all
of which shall be deemed to be issued under this Agreement as of the Closing
Date), second, to the Permitted Overadvances, third, to the Swing Line Loans,
fourth, shall be applied ratably to the outstanding Committed Loans, fifth, to
the extent required pursuant to the terms of this Agreement, shall be used to
Cash Collateralize the remaining L/C Obligations, and sixth, the amount
remaining, if any, after the prepayment in full of all Pre-Petition Obligations
as required above, Permitted Overadvances, Swing Line Loans, and Committed Loans
outstanding at such time and the Cash Collateralization of the remaining L/C
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 L/C Issuer or the Lenders, as applicable, and any excess
amounts shall be returned to the Borrowers for use in the ordinary course of its
business.
(g)    No later than one (1) Business Day after the Final Order Entry Date, the
Borrowers shall pay in full with the proceeds of Committed Loans hereunder, the
total outstanding amount of the Pre-Petition Obligations, together with
additional amounts due under Section 2.09 of the Pre-Petition Credit Agreement.
2.06    Termination or Reduction of Commitments.     
(a)    The Borrowers may, upon irrevocable notice from the Lead Borrower to the
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 Agent not later than 11:00
a.m. five Business Days prior to the date of termination or reduction, (ii) any
such partial reduction 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 L/C 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.
(c)    The 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 Borrower shall repay the
outstanding balance of the Swing Line Loans on the Termination Date.

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2.08    Interest    .
(a)    Subject to the provisions of Section 2.08(b) below, (i) each Base Rate
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 (ii) 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.
(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.
(i)    If any other Event of Default exists, then the 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.
(ii)    Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.
(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.
2.09    Fees    . In addition to certain fees described in Sections 2.03(i) and
2.03(j):
(a)    Commitment Fee. The Borrowers shall pay to the Agent for the account of
each Lender in accordance with its Applicable Percentage, a commitment fee
calculated on a per annum basis equal to 0.25% times the actual daily amount by
which the Aggregate Commitments exceed the sum of all outstanding Committed
Loans and the L/C Obligations. 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.
(b)    Other Fees. The Borrower shall pay to the Arranger and the 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 Agent of an interest rate or fee hereunder shall
be conclusive and binding for all purposes, absent manifest error.
2.11    Evidence of Debt.     

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(a)    The Credit Extensions made by each Lender shall be evidenced by one or
more accounts or records maintained by the 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 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 Agent in respect of
such matters, the accounts and records of the Agent shall control in the absence
of manifest error. Upon the request of any Lender made through the Agent, the
Borrowers shall execute and deliver to such Lender (through the 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.
(b)    In addition to the accounts and records referred to in Section 2.11(a),
each Lender and the 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 Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Agent shall control in the absence of manifest error.
(c)    Agent shall render monthly statements regarding the Loan Account to the
Lead Borrower including principal, interest, fees, and including an itemization
of all charges and expenses constituting Credit Party Expenses owing, and such
statements, absent manifest error, shall be conclusively presumed to be correct
and accurate and constitute an account stated between Borrowers and the Credit
Parties unless, within 30 days after receipt thereof by the Lead Borrower, the
Lead Borrower shall deliver to Agent written objection thereto describing the
error or errors contained in any such statements.
2.12    Payments Generally; 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 Agent, for the account of the respective Lenders
to which such payment is owed, at the Agent’s Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein. The 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 Agent after 2:00 p.m., at the option of the 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.
(b)    Funding by Lenders; Presumption by Agent. Unless the 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

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not make available to the Agent such Lender’s share of such Borrowing, the 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 Agent, then the applicable Lender and the Borrowers severally agree to
pay to the 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 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 Agent in
accordance with banking industry rules on interbank compensation plus any
administrative processing or similar fees customarily charged by the 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 Agent for the same or an
overlapping period, the 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 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 Agent. A notice of the 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)    Payments by Borrowers; Presumptions by Agent. Unless the Agent shall have
received notice from the Lead Borrower prior to the time at which any payment is
due to the Agent for the account of the Lenders or the L/C Issuer hereunder that
the Borrowers will not make such payment, the 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 L/C 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 L/C Issuer, as the case
may be, severally agrees to repay to the Agent forthwith on demand the amount so
distributed to such Lender or the L/C 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 Agent, at the
greater of the Federal Funds Rate and a rate determined by the Agent in
accordance with banking industry rules on interbank compensation. A notice of
the Agent to any Lender or the Lead Borrower with respect to any amount owing
under this subsection (c) shall be conclusive, absent manifest error.
(d)    Failure to Satisfy Conditions Precedent. If any Lender makes available to
the 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 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 Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(e)    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.

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(f)    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 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
(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 L/C 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 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 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 Agent.
(b)    The 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 Agent shall transfer
to each Lender its Applicable Percentage of repayments, and (ii) each Lender
shall transfer to the Agent (as provided below) or the 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 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 Agent. If and to the extent any Lender shall not have so made
its transfer to the Agent,

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such Lender agrees to pay to the 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 Agent, equal to the greater of the Federal Funds Rate and
a rate determined by the Agent in accordance with banking industry rules on
interbank compensation plus any administrative, processing, or similar fees
customarily charged by the Agent in connection with the foregoing.
2.15    Release. Subject to the terms of the Interim Financing Order or the
Final Financing Order, as applicable, each Loan Party hereby acknowledges, on
behalf of itself and its Subsidiaries, that no Loan Party or any Subsidiary
thereof has any defense, counterclaim, offset, recoupment, cross-complaint,
claim or demand of any kind or nature whatsoever that can be asserted to reduce
or eliminate all of any part of the Loan Parties’ (and any Subsidiaries’, as
applicable) liability to repay the Credit Parties as provided in this Agreement
and the Pre-Petition Credit Agreement or to seek affirmative relief or damages
of any kind or nature from any Credit Party or any “Credit Party” (as defined in
the Pre-Petition Credit Agreement). Subject to the terms of the Interim
Financing Order or the Final Financing Order, as applicable, each Loan Party, on
behalf of itself and its bankruptcy estate, and on behalf of all its successors,
assigns, Subsidiaries and any Affiliates and any Person acting for and on behalf
of, or claiming through them (collectively, the “Releasing Parties”), hereby
fully, finally and forever releases and discharges each Credit Party and its
respective past and present officers, directors, servants, agents, attorneys,
assigns, heirs, parents, subsidiaries, participants, and each Person acting for
or on behalf of any of them (collectively, the “Released Parties”) of and from
any and all past, present and future actions, causes of action, demands, suits,
claims, liabilities, Liens, lawsuits, adverse consequences, amounts paid in
settlement, costs, damages, debts, deficiencies, diminution in value,
disbursements, expenses, losses and other obligations of any kind or nature
whatsoever, whether in law, equity or otherwise (including, without limitation,
those arising under Sections 541 through 550 of the Bankruptcy Code and interest
or other carrying costs, penalties, legal, accounting and other professional
fees and expenses, and incidental, consequential and punitive damages payable to
third parties), whether known or unknown, fixed or contingent, direct, indirect,
or derivative, asserted or unasserted, foreseen or unforeseen, suspected or
unsuspected, now existing, heretofore existing or which may heretofore accrue
against any of the Released Parties, whether held in a personal or
representative capacity, and which are based on any act, fact, event or omission
or other matter, cause or thing occurring at or from any time prior to and
including the date hereof in any way, directly or indirectly arising out of,
connected with or relating to the Pre-Petition Credit Agreement and the
transactions contemplated thereby, and all other agreements, certificates,
instruments and other documents and statements (whether written or oral) related
to any of the foregoing, in each case other than the obligations arising under
this Agreement and the other Loan Documents of any Credit Party hereunder, which
would otherwise have constituted a Released Party.
2.16    Waiver of any Priming Rights. Upon the Closing Date, and on behalf of
itself and its estate, and for so long as any Obligations or Pre-Petition
Obligations shall be outstanding, each Loan Party hereby irrevocably waives any
right, pursuant to Sections 364(c) or 364(d) of the Bankruptcy Code or
otherwise, to grant any Lien of equal or greater priority than the Liens
securing the Obligations or Pre-Petition Obligations, or to approve a claim of
equal or greater priority than the Obligations or Pre-Petition Obligations,
other than as set forth in a Financing Order or as expressly permitted under
this Agreement.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY; APPOINTMENT OF LEAD BORROWER
3.01    Taxes.     
(i)    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

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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 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 Agent, Lender or L/C 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.
(j)    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.
(k)    Indemnification by the Loan Parties. The Loan Parties shall indemnify the
Agent, each Lender and the L/C Issuer, within 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 Agent, such Lender or the L/C 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 L/C Issuer (with a
copy to the Agent), or by the Agent on its own behalf or on behalf of the Agent,
a Lender or the L/C Issuer, shall be conclusive absent manifest error.
(l)    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 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 Agent.
(m)    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 Agent), at
the time or times prescribed by applicable law or reasonably requested by the
Lead Borrower or the 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 Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Lead Borrower or the
Agent as will enable the Lead Borrower or the 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 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 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.
(n)    Treatment of Certain Refunds. If the Agent, any Lender or the L/C 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 Agent, such
Lender or the L/C Issuer, as the case may be, incurred in obtaining such refund
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 Agent, such Lender or the L/C 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 Agent, such Lender or the
L/C Issuer in the event the Agent, such Lender or the L/C Issuer is required to
repay such refund to such Governmental Authority. This subsection shall not be
construed to require the Agent, any Lender or the L/C 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 any Lender 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 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 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 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. Notwithstanding anything
to the contrary contained herein or in any other Loan Document, so long as all
Loans are Base Rate Loans, the provisions of this Section 3.02 shall not apply.

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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 (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 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
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. Notwithstanding
anything to the contrary contained herein or in any other Loan Document, so long
as all Loans are Base Rate Loans, the provisions of this Section 3.03 shall not
apply.
3.04    Increased Costs; Reserves on LIBO Rate Loans.     
(h)    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
L/C Issuer;
(ii)    subject any Lender or the L/C 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 L/C 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
L/C Issuer); or
(iii)    impose on any Lender or the L/C 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
L/C 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 L/C Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the L/C Issuer, the Borrowers will
pay to such Lender or the L/C Issuer, as the case may be, such additional amount
or amounts as will compensate such Lender or the L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered.
(i)    Capital Requirements. If any Lender or the L/C Issuer determines that any
Change in Law affecting such Lender or the L/C Issuer or any Lending Office of
such Lender or such Lender’s or the L/C 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 L/C Issuer’s capital or on the capital of such
Lender’s or the L/C 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

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by the L/C Issuer, to a level below that which such Lender or the L/C Issuer or
such Lender’s or the L/C Issuer’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s or the L/C Issuer’s
policies and the policies of such Lender’s or the L/C Issuer’s holding company
with respect to capital adequacy), then from time to time the Borrowers will pay
to such Lender or the L/C Issuer, as the case may be, such additional amount or
amounts as will compensate such Lender or the L/C Issuer or such Lender’s or the
L/C Issuer’s holding company for any such reduction suffered.
(j)    Certificates for Reimbursement. A certificate of a Lender or the L/C
Issuer setting forth the amount or amounts necessary to compensate such Lender
or the L/C 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
L/C Issuer, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.
(k)    Delay in Requests. Failure or delay on the part of any Lender or the L/C
Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right
to demand such compensation, provided that the Borrowers shall not be required
to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of
this Section for any increased costs incurred or reductions suffered more than
nine months prior to the date that such Lender or the L/C 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 L/C 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-month period
referred to above shall be extended to include the period of retroactive effect
thereof).
(l)    Reserves on LIBO Rate Loans. The Borrowers shall pay to each Lender, as
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 the
Lead Borrower shall have received at least 10 days’ prior notice (with a copy to
the Agent) of such additional interest from such Lender. If a Lender fails to
give notice 10 days prior to the relevant Interest Payment Date, such additional
interest shall be due and payable 10 days from receipt of such notice.
(m)    Notwithstanding anything to the contrary contained herein or in any other
Loan Document, so long as all Loans are Base Rate Loans, the provisions of this
Section 3.04 with respect to the LIBO Rate and/or LIBO Rate Loans shall not
apply.
3.05    Compensation for Losses    . Upon demand of any Lender (with a copy to
the 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:
(d)    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);
(e)    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

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(f)    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;
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.
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.
Notwithstanding anything to the contrary contained herein or in any other Loan
Document, so long as all Loans are Base Rate Loans, the provisions of this
Section 3.05 with respect to the LIBO Rate and/or LIBO Rate Loans shall not
apply.
3.06    Mitigation Obligations; Replacement of Lenders.     
(c)    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.
(d)    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
Obligations hereunder.
3.08    Designation of Lead Borrower as Borrowers’ Agent    .
(c)    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.

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(d)    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.
(e)    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 Agent nor any other Credit Party shall have any
obligation to see to the application of such proceeds therefrom.
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01    Conditions of Initial Credit Extension    . The obligation of the L/C
Issuer and each Lender to make its initial Credit Extension hereunder is subject
to satisfaction of the following conditions precedent:
(l)    The Agent’s receipt of the following, each of which shall be originals,
telecopies 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)
and each in form and substance satisfactory to the Agent:
(v)    executed counterparts of this Agreement sufficient in number for
distribution to the Agent, each Lender and the Lead Borrower;
(vi)    a Note executed by the Borrowers in favor of each Lender requesting a
Note;
(vii)    such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each Loan
Party as the 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;
(viii)    copies of each Loan Party’s Organization Documents and such other
documents and certifications as the 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;
(ix)    Reserved;
(x)    a certificate signed by a Responsible Officer of the Lead Borrower
certifying (A) that the conditions specified in Sections 4.02(a) and 4.02(b)
have been satisfied, (B) that except with respect to the filing of the Chapter
11 Case and those resulting from the Events and Circumstances, there has been no
event or circumstance since February 29, 2016 that has had or could be
reasonably expected to have, either individually or in the aggregate, a Material
Adverse Effect, and (C) 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

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to which it is a party, or (2) subject to the entry by the Bankruptcy Court of
the Interim Financing Order (as the same may be amended, supplemented or
otherwise modified by the Final Financing Order), all such consents, licenses
and approvals have been obtained and are in full force and effect;
(xi)    Reserved;
(xii)    evidence that all insurance required to be maintained pursuant to the
Loan Documents and all endorsements in favor of the Agent required under the
Loan Documents have been obtained and are in effect;
(xiii)    Reserved;
(xiv)    the Security Documents and certificates evidencing any stock being
pledged thereunder, together with undated stock powers executed in blank, each
duly executed by the applicable Loan Parties;
(xv)    all other Loan Documents, each duly executed by the applicable Loan
Parties;
(xvi)    [Reserved];
(xvii)    results of searches or other evidence reasonably satisfactory to the
Agent (in each case dated as of a date reasonably satisfactory to the Agent)
indicating the absence of Liens on the assets of the Loan Parties, except for
Permitted Encumbrances and Liens for which termination statements and releases,
satisfactions and discharges of any mortgages, and releases or subordination
agreements satisfactory to the Agent are being tendered concurrently with such
extension of credit or other arrangements satisfactory to the Agent for the
delivery of such termination statements and releases, satisfactions and
discharges have been made;
(xviii)    all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the Agent to be
filed, registered or recorded to create or perfect the first priority Liens
intended to be created under the Loan Documents and the Financing Orders and all
such documents and instruments shall have been so filed, registered or recorded
to the satisfaction of the Agent;
(xix)    the Intercreditor Agreement shall continue to be in full force and
effect;
(xx)    such other assurances, certificates, documents, consents, approvals
(including credit approval), or opinions as the Agent reasonably may require.
(m)    Reserved.
(n)    After giving effect to (i) the first funding under the Loans, (ii) any
charges to the Loan Account made in connection with the establishment of the
credit facility contemplated hereby and (iii) all Letters of Credit to be issued
at, or immediately subsequent to, such establishment, Availability shall be not
less than $16,500,000.
(o)    The Agent shall have received a Borrowing Base Certificate dated the
Closing Date, relating to the immediately preceding Saturday, and executed by a
Responsible Officer of the Lead Borrower.
(p)    Reserved.

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(q)    The Agent shall have received and be satisfied with (i) the initial
Approved Budget, and (ii) such other information (financial or otherwise)
reasonably requested by the Agent.
(r)    There shall not be pending any litigation or other proceeding, the result
of which, either individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect and is not stayed by the filing of the Chapter
11 Case.
(s)    There shall not have occurred any default of any Material Contract of any
Loan Party which could constitute an Event of Default under Section 8.01(n),
other than defaults under Material Contracts arising as a result of the filing
of the Chapter 11 Case, the exercise of remedies as a result of which are stayed
under the Bankruptcy Code.
(t)    The consummation of the transactions contemplated hereby shall not
violate any applicable Law or any Organization Document.
(u)    All fees and expenses required to be paid to the Agent or the Arranger on
or before the Closing Date shall have been paid in full, and all fees and
expenses required to be paid to the Lenders on or before the Closing Date shall
have been paid in full.
(v)    The Borrowers shall have paid all reasonable fees, charges and
disbursements of counsel to the Agent to the extent invoiced prior to or on the
Closing Date, plus such additional reasonable 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 Date
(provided that such estimate shall not thereafter preclude a final settling of
accounts between the Borrowers and the Agent).
(w)    The Agent and the Lenders shall have received all documentation and other
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including without
limitation the USA PATRIOT Act.
(x)    No material changes in governmental regulations or policies affecting any
Loan Party or any Credit Party shall have occurred prior to the Closing Date.
(y)    The Agent and the Lenders shall have received (i) duly executed copies of
the engagement letters for the Consultants, which shall be on terms and
conditions reasonably acceptable to the Agent, and (ii) a duly executed copy of
the Restructuring Support Agreement.
(z)    (i) The Bankruptcy Court shall have entered the Interim Financing Order,
the Cash Management Order and the Wage Order, (ii) none of such orders shall
have been stayed, vacated or reversed (in whole or in part), (iii) the Cash
Management Order shall not have been amended or modified other than with the
consent of the Agent in its Permitted Discretion, and (iv) the Interim Financing
Order and the Wage Order shall not have been amended or modified other than with
the consent of the Agent in its Permitted Discretion.
(aa)    The Bidding Procedures Motion shall have been filed.
(bb)    The Agent shall notify the Lead Borrower and the Lenders 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

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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 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 L/C Issuer to issue each Letter of
Credit is subject to the following conditions precedent:
(g)    The representations and warranties of each other Loan Party contained in
Article V or in 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 as of such earlier date, (ii) in the case of any representation and
warranty qualified by materiality, in which case 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;
(h)    No Default or Event of Default shall exist, or would result from such
proposed Credit Extension or from the application of the proceeds thereof;
(i)    The Agent and, if applicable, the L/C Issuer or the Swing Line Lender
shall have received a Request for Credit Extension in accordance with the
requirements hereof;
(j)    No event or circumstance which could reasonably be expected to result in
a Material Adverse Effect shall have occurred;
(k)    No Overadvance shall result from such Credit Extension;
(l)    Neither the Interim Financing Order nor the Final Financing Order, as
applicable, shall have been (i) stayed, vacated or reversed (in whole or in
part), or (iii) amended or modified other than with the consent of the Agent in
its Permitted Discretion; and
(m)    Each Credit Extension shall be for purposes and in amounts consistent
with the Approved Budget (subject to the Permitted Variance).
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 Borrower shall be deemed to be a representation and
warranty by the Borrowers that the conditions specified in Sections 4.02(a),
(b), (d), (f), and (g) 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 Agent to cease making Loans and issuing Letters of Credit,
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, are agreed to by
the Agent, provided, however, 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.

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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 on
behalf of itself and, where applicable, on behalf of each of their respective
Subsidiaries to the 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) subject to any entry of any
required orders of the Bankruptcy Court including, without limitation, the entry
of the Interim Financing Order and the Final Financing Order, as applicable, 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.
5.02    Authorization; No Contravention    . Subject to the entry of the Interim
Financing Order and the Final Financing Order, as applicable, the execution,
delivery and performance by each Loan Party and each Subsidiary thereof 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 Agent under the
Security Documents); or (d) violate any Law.
5.03    Governmental Authorization; Other Consents    . Subject to the entry of
the Interim Financing Order and the Final Financing Order, as applicable, no
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party or any of their respective Subsidiaries of
this Agreement or any other Loan Document, except for (a) filings required with
the SEC, or (b) such as have been obtained or made 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 and each Subsidiary that is party thereto. Subject to the entry of
the Interim Financing Order and the Final Financing Order, as applicable, this
Agreement constitutes, and each other Loan Document when so delivered will
constitute, a legal, valid and binding obligation of such Loan Party and each
Subsidiary, enforceable against each such Person that is party thereto in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization,

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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.     
(d)    Reserved.
(e)    The unaudited Consolidated balance sheet of the Lead Borrower and its
Subsidiaries dated February 29, 2016, 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 in all material respects 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, in the case
of clauses (i) and (ii), to the absence of footnotes and to normal year-end
audit adjustments.
(f)    Reserved.
(g)    Reserved.
(h)    The initial Approved Budget was prepared in good faith on the basis of
the assumptions stated therein, which assumptions the Lead Borrower reasonably
believes in its good faith business judgment were fair in light of the
conditions existing at the time of delivery, of the Lead Borrower’s and its
Subsidiaries’ forecasts of future financial performance.
5.06    Litigation    . Other than the Events and Circumstances, there are no
actions, suits, proceedings, claims or disputes pending or, to the knowledge of
the Loan Parties, threatened in writing, at law, in equity, in arbitration or
before any Governmental Authority, by or against any Loan Party or any of its
Subsidiaries that (a) purport to affect or pertain to this Agreement or any
other Loan Document, or any of the transactions contemplated hereby, or (b)
except as specifically disclosed in Schedule 5.06, either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect and since the Closing Date, there has been no adverse
change in the status, or financial effect on any Loan Party or any Subsidiary
thereof, of the matters described on Schedule 5.06.
5.07    No Default    . Other than the Events and Circumstances, no Loan Party
or any Subsidiary is in default under or with respect to, or party to, any
Material Contract or any Material Indebtedness, the exercise of remedies as a
result of which are not stayed under the Bankruptcy Code. No Default or Event of
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    .
(d)    Each of the Loan Parties and each Subsidiary thereof has good record and
marketable title in fee simple to or, with respect to leashold interests, other
than as a result of the Events and Circumstances, valid leasehold interests in,
all Real Estate necessary or used in the ordinary conduct of its business. Each
of the Loan Parties and each Subsidiary has good and marketable title to, valid
leases in, or valid licenses to use, in all cases, all personal property and
assets material to the ordinary conduct of its business.
(e)    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 and each
of their Subsidiaries, 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

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has good, marketable and insurable fee simple title to the Real Estate 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 of the terms thereof, other than
defaults under such Leases arising as a result of the Events and Circumstances,
the exercise of remedies as a result of which are stayed under the Bankruptcy
Code.
(f)    Schedule 7.01 sets forth a complete and accurate list of all Liens
securing Indebtedness for borrowed money on the property or assets of each Loan
Party and each of its Subsidiaries, showing as of the Closing Date the
lienholder thereof, the principal amount of the obligations secured thereby 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.
(g)    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 Closing Date the amount, obligor or issuer and maturity, if
any, thereof.
(h)    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 Closing Date the amount, obligor or issuer and maturity
thereof.
5.09    Environmental Compliance    .
(g)    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 written 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.
(h)    To the knowledge of the Loan Parties, (i) none of the properties
currently 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; (ii) there are
no 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 in violation of any Environmental Law,
(iii) there is no asbestos or asbestos-containing material on any property
currently owned or operated by any Loan Party or Subsidiary thereof, and (iv)
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 in violation of any Environmental Law.
(i)    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 that would be reasonably expected to result in a Material
Adverse Effect; 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

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of in a manner not reasonably expected to result in a Material Adverse Effect to
any Loan Party or any Subsidiary thereof.
(j)    No Lien in favor of any Governmental Authority securing, in whole or in
part, any Environmental Liability has attached to any property currently owned
by any Obligor or any Subsidiary thereof and, to the knowledge of the Loan
Parties, no facts, circumstances or conditions exist that could reasonably be
expected to result in any such Lien or any Environmental Liability.
(k)    The Loan Parties have provided true and correct copies of all
environmental audits, reports and other documents materially bearing on any
Environmental Liability relating to the current or former operations or
facilities of the Loan Parties or any Subsidiary which are in their possession
or control as of the Closing Date and which were obtained during the twelve (12)
months prior to the Closing Date.
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, 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 and their Subsidiaries 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,
unless the failure to do so is permitted by the Bankruptcy Code and no Lien
could arise as a result of the failure to make such payment, 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, 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 against any ERISA Affiliate 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

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fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c)    To the knowledge of Loan Parties, (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 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 outstanding
Equity Interests in the Loan Parties have been validly issued, are fully paid
and non-assessable and, with respect to any Subsidiary of a Loan Party, are
owned by a Loan Party (or a Subsidiary of a Loan Party) in the amounts specified
on Schedule 5.13 free and clear of all Liens except for those created under the
Security Documents and those in favor of the Term Agent and Term Lenders
pursuant to the Term Loan. 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. 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 or any Subsidiary thereof 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 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 written report, financial statement,
certificate or other information furnished (in writing) by or on behalf of any
Loan Party or any Subsidiary to the 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 in any material respect; provided that, with respect to
projected financial information and the Approved Budget, the Loan Parties
represent

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only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time in accordance with Section 6.01(e).
5.16    Compliance with Laws    . Except to the extent non-performance thereof
is permitted by the Bankruptcy Code, each of the Loan Parties and each
Subsidiary is in compliance (a) 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 (i) such requirement of Law
or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (ii) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, and (b) with Sections 10.17 and
10.18.
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 used in the operation of
their respective businesses, and to the knowledge of the Lead Borrower such
rights do not conflict with the rights of any other Person in any way which
could reasonably be expected to have a Material Adverse Effect. To the knowledge
of the Lead Borrower, no slogan or other advertising device, 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 in any way which 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 and their Subsidiaries comply
with the Fair Labor Standards Act and any other applicable federal, state, local
or foreign Law dealing with such matters in all material aspects. 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. 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.
No Loan Party or any Subsidiary is a party to or bound by any collective
bargaining agreement. There are no representation proceedings pending or, to the
knowledge of any Loan Party, 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 which could reasonably be expected to result in 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.     
(a)    Upon entry of the Interim Financing Order, the Security Agreement
(together with the Interim Financing Order) will create in favor of the Agent,
for the benefit of the Secured Parties referred to therein, a legal, valid,
continuing and enforceable security interest in the Collateral (as defined in
the Security Agreement). Upon entry of the Interim Financing Order (and the
subsequent entry of the Final Financing Order), the Agent will have a perfected
Lien on, and security interest in, to and under all right, title and

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interest of the grantors thereunder in all Collateral that may be perfected by
filing, recording or registering a financing statement or analogous document or
by obtaining control under the UCC (including without limitation the proceeds of
such Collateral subject to the limitations relating to such proceeds in the
UCC), which, in all cases, shall be prior and superior in right to any other
Person, subject to the Carve-Out and Permitted Prior Liens, and the
Intercreditor Agreement. Assuming the entry of the Interim Financing Order,
filings of UCC-1 financing statements and/or the obtaining of “control” (as
defined in the UCC) of Collateral is not required to create or perfect a legal,
valid, continuing and enforceable security interest in the Collateral.
(b)    Subject to the entry of the Interim Financing Order and the Final
Financing Order, as applicable, the Agent shall have a fully perfected Lien on,
and security interest in, all right, title and interest of the applicable Loan
Parties in the Intellectual Property (as defined in the Security Agreement) in
which a security interest may be perfected by filings of UCC-1 financing
statements and/or filing, recording or registering a security agreement,
financing statement or analogous document in the United States Patent and
Trademark Office or the United States Copyright Office, as applicable, in each
case, prior and superior in right to any other Person, subject to the Carve-Out
and Permitted Prior Liens and the Intercreditor Agreement (it being understood
that the Agent may request subsequent recordings in the United States Patent and
Trademark Office and the United States Copyright Office to reflect the Liens on
registered trademarks, trademark applications and copyrights acquired by the
Loan Parties after the Closing Date).
5.20    Reserved.
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    . Other than as disclosed to the Agent, 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, Subsidiary or Affiliate
thereof has any obligation to any Person in respect of any finder’s or brokerage
fees in connection therewith.
5.23    Customer and Trade Relations    . There exists no actual or, to the
knowledge of any Loan Party, threatened, termination or cancellation of, or any
material adverse modification or change in the business relationship of any Loan
Party or any Subsidiary with any supplier material to its operations, except as
a result of the Events and Circumstances.
5.24    Material Contracts    . Schedule 5.24 sets forth all Material Contracts
to which any Loan Party or its Subsidiaries is a party or is bound as of the
Closing Date. The Loan Parties have delivered true, correct and complete copies
of such Material Contracts to the Agent on or before the Closing Date. The Loan
Parties and their Subsidiaries are not in breach or in default in any material
respect of or under any Material Contract and have not received any written
notice of the intention of any other party thereto to terminate any Material
Contract (other than any notice as to a termination that would be voided or
invalidated under the Bankruptcy Code).

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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.
5.26    Bankruptcy Matters.
(a)    The Chapter 11 Case was commenced on the Petition Date in accordance with
applicable Law and notice of (i) the motion seeking approval of the Loan
Documents and the Interim Financing Order and the Final Financing Order, (ii)
the hearing for the entry of the Interim Financing Order, and (iii) the hearing
for the entry of the Final Financing Order has been or will be given. The
Borrowers shall give, on a timely basis as specified in the Interim Financing
Order or the Final Financing Order, as applicable, all notices required to be
given to all parties specified in the Interim Financing Order or Final Financing
Order, as applicable.
(b)    After the entry of the Interim Financing Order, and pursuant to and to
the extent permitted in the Interim Financing Order and the Final Financing
Order, the Obligations will constitute allowed administrative expense claims in
the Chapter 11 Case having priority over all administrative expense claims
(other than (x) the Carve-Out up to, at any date of determination, the amount of
the Carve-Out Reserve, and (y) Permitted Prior Liens) and unsecured claims
against the Loan Parties now existing or hereafter arising, of any kind
whatsoever, including, without limitation, all administrative expense claims of
the kind specified in Sections 105, 326, 328, 330, 331, 503(a), 503(b), 506(c)
(after entry of the Final Financing Order), 507(a), 507(b), 546(c), 546(d), 726,
1114 or any other provision of the Bankruptcy Code or otherwise, as provided
under Section 364(c)(l) of the Bankruptcy Code, subject to the priorities set
forth in the Interim Financing Order or the Final Financing Order, as
applicable.
(c)    After the entry of the Interim Financing Order and pursuant to and to the
extent provided in the Interim Financing Order and the Final Financing Order,
the Obligations will be secured by a valid and perfected first priority Lien on
all of the Collateral subject, as to priority only, to (x) the Carve-Out up to,
at any date of determination, the amount of the Carve-Out Reserve, (y) the
Permitted Prior Liens, and, (z) the rights of the Term Loan Agent in the Term
Loan Priority Collateral, to the extent provided in the Intercreditor Agreement.
(d)    The Interim Financing Order (with respect to the period on and after
entry of the Interim Financing Order and prior to the Final Order Entry Date) or
the Final Financing Order (with respect to the period on and after the Final
Order Entry Date), as the case may be, is in full force and effect and has not
been reversed, stayed (whether by statutory stay or otherwise), modified or
amended.
(e)    Notwithstanding the provisions of Section 362 of the Bankruptcy Code, and
subject to the applicable provisions of the Interim Financing Order or Final
Financing Order, as the case may be, upon the maturity (whether by acceleration
or otherwise) of any of the Obligations, the Credit Parties shall be entitled to
immediate payment of such Obligations and to enforce the remedies provided for
hereunder, under the other Loan Documents or under applicable law, without
further application to or order by the Bankruptcy Court.
ARTICLE VI
AFFIRMATIVE COVENANTS

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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 Agent, in form and detail
reasonably satisfactory to the Agent:
(n)    [Reserved.]
(o)    [Reserved]
(p)    as soon as available, but in any event within 30 days after the end of
each of the Fiscal Months of each Fiscal Year of the Lead Borrower, a
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) the corresponding Fiscal Month of
the previous Fiscal Year and (B) the corresponding portion of the previous
Fiscal Year, all in reasonable detail, such consolidated statements to be
certified by a Responsible Officer of the Lead Borrower as fairly presenting in
all material respects 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;
(q)    Reserved
(r)        (i) The Approved Budget may be updated, modified or supplemented
(with the consent and/or at the reasonable request of the Agent) from time to
time, and each such updated, modified or supplemented budget shall be approved
by, and in form and substance satisfactory to, the Agent in its Permitted
Discretion and no such updated, modified or supplemented budget shall be
effective until so approved and once so approved shall be deemed an Approved
Budget; provided, that during the tenth (10th) week of the initial Approved
Budget, the Debtors shall submit a budget for the next successive thirteen week
period to the Agent, which budget shall be in (A) form substantially similar to
the previous Approved Budget (or otherwise in form reasonably acceptable to
Agent) and (B) substance reasonably acceptable to the Agent; provided, further,
that in the event that the Agent and the Borrowers cannot, while acting
diligently, reasonably, and in good faith, agree as to an updated, modified or
supplemented budget, such disagreement shall give rise to an Event of Default
hereunder once the period covered by the most recent Approved Budget has
terminated. Each Approved Budget delivered to the Agent shall be accompanied by
such supporting documentation as requested by the Agent in its Permitted
Discretion. Each Approved Budget shall be prepared in good faith based upon
assumptions which the Borrowers believe to be reasonable and are satisfactory to
the Agent in its Permitted Discretion.
(ii)    On or before Wednesday of each week, commencing with the second week
following the Closing Date, the Lead Borrower shall deliver to the Agent an
Approved Budget Variance Report.
6.02    Certificates; Other Information    . Deliver to the Agent, in form and
detail satisfactory to the Agent:

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(g)    Reserved;
(h)    concurrently with the delivery of the financial statements referred to in
Section  6.01(c), a duly completed Compliance Certificate signed by a
Responsible Officer of the Lead Borrower, and (i) 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, and (ii) a copy of
management’s discussion and analysis with respect to such financial statements;
(i)    (i) no later than Wednesday of each week (or, if Wednesday is not a
Business Day, on the next succeeding Business Day), a Borrowing Base Certificate
showing the Borrowing Base as of the close of business on the immediately
preceding Saturday (provided that the Appraised Value percentage applied to the
Eligible Inventory set forth in each Borrowing Base Certificate shall be the
percentage set forth in the most recent appraisal obtained by the Agent pursuant
to Section 6.10 hereof for the applicable week in which such Borrowing Base
Certificate is delivered), each Borrowing Base Certificate to be certified as
complete and correct by a Responsible Officer of the Lead Borrower and
accompanied by the most-recent reports of Eligible Credit Card Receivables and
Eligible Inventory prepared by the Borrowers (which reports shall be updated on
a weekly basis);
(j)    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;
(k)    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 Agent pursuant hereto;
(l)    the financial and collateral reports described on Schedule 6.02 hereto,
at the times set forth in such Schedule;
(m)    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;
(n)    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 Agent, or any
Lender through the Agent, may reasonably specify;
(o)    promptly after the Agent’s request therefor, copies of all Material
Contracts and documents evidencing Material Indebtedness;
(p)    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

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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;
(q)    upon the reasonable request of the Agent (but in all events no less
frequently than monthly), the Borrowers shall provide summaries of the Reported
Fee Accruals; and
(r)    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 Agent or any Lender may
from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01(c) or
Section 6.02(d) (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 Agent
have access (whether a commercial, third-party website or whether sponsored by
the Agent); provided that: (i) the Lead Borrower shall deliver paper copies of
such documents to the 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 Agent or such Lender and (ii) the Lead Borrower shall
notify the Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the 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 Agent. The 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 and their Subsidiaries hereby acknowledge that (a) the Agent
and/or the Arranger will make available to the Lenders and the L/C 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 and their
Subsidiaries hereby agree that 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 Agent, the Arranger, the L/C 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 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.”

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6.03    Notices    . Promptly notify the Agent:
(e)    of the occurrence of any Default or Event of Default;
(f)    of any matter that has resulted or could reasonably be expected to result
in a Material Adverse Effect;
(g)    of any 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 (including, but not limited to, notice of any “Default” or
“Event of Default” under the Term Loan), other than breaches or defaults arising
as a result of the filing of the Chapter 11 Case, the exercise of remedies as a
result of which are stayed under the Bankruptcy Code;
(h)    of any dispute, litigation, investigation, proceeding or suspension
between any Loan Party or any Subsidiary thereof and any Governmental Authority
or the commencement of, or any material development in, any material litigation
or proceeding affecting any Loan Party or any Subsidiary thereof, including
pursuant to any applicable Environmental Laws, each of which is reasonably
expected to result in a Material Adverse Effect;
(i)    of the occurrence of any ERISA Event;
(j)    of any material change in accounting policies or financial reporting
practices by any Loan Party or any Subsidiary thereof;
(k)    of any change in Lead Borrower’s “executive officers” (as such term is
defined by the rules and regulations of the SEC);
(l)    of the discharge by Lead Borrower of its present Registered Public
Accounting Firm or any withdrawal or resignation by such Registered Public
Accounting Firm;
(m)    of any collective bargaining agreement or other labor contract to which a
Loan Party or any Subsidiary becomes a party, or the application for the
certification of a collective bargaining agent;
(n)    of the filing of any Lien for unpaid Taxes against any Loan Party or any
Subsidiary;
(o)    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;
(p)    of any transaction of the nature prohibited in Article VII hereof;
(q)    notice of any amendment to the Term Loan or related documentation and
copies thereof, and any material notices received from, or delivered to, the
Term Agent;
(r)    of any failure by any Loan Party to pay rent or any other amounts due at
(A) any distribution centers or warehouses; or (B) any of such Loan Party’s
locations, in each case, when such rent or such other amounts first came due
following the Petition Date, unless such non-payment was permitted under the
Bankruptcy Code or pursuant to an order of the Bankruptcy Court;

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(s)    the termination, discharge, or resignation of any of the Consultants; and
(t)    of any Loan Party obtaining knowledge that proceeds of any Term Loan
Priority Collateral have been deposited into an account other than the Term Loan
Priority Account.
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. Each notice pursuant to Section 6.03(a)
shall describe with particularity any and all provisions of this Agreement and
any other Loan Document that have been breached.
6.04    Payment of Obligations    . (a) Subject to the provisions of the
Bankruptcy Code, pay and discharge as the same shall become due and payable, all
its obligations and liabilities, including (i) all tax liabilities, assessments
and governmental charges or levies upon it or its properties or assets, (ii) all
lawful claims (including, without limitation, claims of landlords, warehousemen,
customs brokers, freight forwarders, consolidators and carriers) which, if
unpaid, would by law become a Lien upon its property; and (iii) 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, (D) no Lien has
been filed with respect thereto and (E) 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 Agent with
respect to determining Reserves pursuant to this Agreement. For the avoidance of
doubt, nothing herein requires payment of any obligation subject to the
automatic stay of the Bankruptcy Code. (b) Within one (1) Business Day after the
Final Order Entry Date, pay in full all of the Pre-Petition Obligations in
accordance with Section 2.05.
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; (b) take all reasonable action to maintain
all rights, privileges, permits, licenses and franchises necessary 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 such Intellectual
Property is no longer used or useful in the conduct of the business of the Loan
Parties or its Subsidiaries.
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 all cases where the failure to do so could not reasonably be expected to have
a Material Adverse Effect.
6.07    Maintenance of Insurance.     
(i)    Maintain with financially sound and reputable insurance companies
reasonably acceptable to the Agent not Affiliates of the Loan Parties or their
Subsidiaries, 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 as are customarily
carried under similar circumstances by such other Persons and as are reasonably
acceptable to the Agent.

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(j)    Cause fire and extended coverage policies maintained with respect to any
Collateral to be endorsed or otherwise amended to include (i) lenders’ loss
payable clause (regarding personal property), in form and substance satisfactory
to the Agent, which endorsements or amendments shall provide that the insurer
shall pay all proceeds otherwise payable to the Loan Parties under the policies
directly to the Agent, (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 Agent may reasonably require from time to time to
protect the interests of the Credit Parties.
(k)    Cause commercial general liability policies to be endorsed to name the
Agent as an additional insured.
(l)    Cause business interruption policies to name the Agent as a loss payee
and to be endorsed or amended to include (i) a provision that, from and after
the Closing Date, the insurer shall pay all proceeds otherwise payable to the
Loan Parties under the policies directly to the Agent, (ii) a provision to the
effect that none of the Loan Parties, their Subsidiaries, the Agent, the Agent
or any other party shall be a co insurer and (iii) such other provisions as the
Agent may reasonably require from time to time to protect the interests of the
Credit Parties.
(m)    Cause each such policy referred to in this Section 6.07 to also provide
that it shall not be canceled, modified 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 Agent (giving the 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 Agent.
(n)    Deliver to the Agent, prior to the cancellation, 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
Agent, including an insurance binder) together with evidence satisfactory to the
Agent of payment of the premium therefor.
(o)    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 Agent furnish the
Agent certificates evidencing renewal of each such policy.
(p)    Permit any representatives that are designated by the 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.
(q)    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

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adequate for the purposes of the business of the Loan Parties and their
Subsidiaries or the protection of their properties.
6.08    Compliance with Laws    . Except to the extent non-compliance is
permitted under the Bankruptcy Code, 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; (b) such contest effectively suspends
enforcement of the contested Laws, and (c) the failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect.
6.09    Books and Records; Accountants    .
(b)    (i) 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.
(c)    At all times retain a Registered Public Accounting Firm which is
reasonably satisfactory to the Agent and shall instruct such Registered Public
Accounting Firm to cooperate with, and be available to, the 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 Agent. The Agent hereby approves Deloitte & Touche as a satisfactory
Registered Public Accounting Firm.
6.10    Inspection Rights.     
(c)    Upon reasonable prior written notice, permit representatives and
independent contractors of the Agent to visit and inspect any of its properties,
provided that the Agent shall use reasonable efforts to minimize any disruption
to the business of the Loan Parties, 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 officers and Registered
Public Accounting Firm, and permit the Agent or professionals (including
investment bankers, consultants, accountants, and lawyers) retained by the Agent
to conduct evaluations of the Loan Parties’ business plan, forecasts and cash
flows, 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, however, that when a
Default or Event of Default exists the 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.
(d)    Upon the request of the Agent after reasonable prior notice, permit the
Agent or professionals (including investment bankers, consultants, accountants,
and lawyers) retained by the Agent to conduct commercial finance examinations
and other evaluations, including, without limitation, of (i) the Lead Borrower’s
practices in the computation of the Borrowing Base and (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. The Loan Parties
acknowledge that the Agent may, in its discretion, undertake such commercial
finance examinations at the expense of the Loan Parties as the Agent deems
necessary or appropriate; provided, however, prior to the occurrence and
continuance of an Event of Default, the Agent shall not conduct more than one
(1) commercial finance examination at the Loan Parties’ expense in any six (6)
month

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period. Any commercial finance exams referred to in this clause (b) as being,
“at the Loan Parties’ expense” shall mean that the Loan Parties shall pay the
fees and expenses of the Agent and such professionals with respect to such
examinations and evaluations. Notwithstanding the foregoing, the Agent may cause
additional commercial finance examinations to be undertaken (i) as it in its
discretion deems necessary or appropriate, at its own expense or, (ii) if
required by Law, at the expense of the Loan Parties.
(e)    Upon the request of the Agent after reasonable prior notice, permit the
Agent or professionals (including appraisers) retained by the Agent to conduct
appraisals of the Collateral, including, without limitation, the assets included
in the Borrowing Base. The Agent may, in its discretion, undertake such
inventory appraisals at the Loan Parties’ expense as the Agent deems necessary
or appropriate. Any appraisals referred to in this clause (c) as being, “at the
Loan Parties’ expense” shall mean that the Loan Parties shall pay the fees and
out-of-pocket expenses of the Agent and such professionals with respect to such
appraisals.
6.11    Use of Proceeds    . Use the proceeds of the Credit Extensions, to the
extent permitted under applicable Law, the Approved Budget (subject to the
Permitted Variance), and the Loan Documents, (a) on the Closing Date, for the
payment of transaction expenses in connection with this Agreement, and (b) after
the Closing Date, (i) to finance the payoff of the Pre-Petition Obligations in
accordance with Section 2.05, (ii) to finance general corporate purposes of the
Loan Parties and the acquisition of working capital assets of the Borrowers,
including capital expenditures and the purchase of inventory and equipment, in
each case in the ordinary course of business or as otherwise approved by the
Lenders, and (iii) to pay fees, expenses, and costs incurred in connection with
the Chapter 11 Case, as well as the payment of any adequate protection payments
approved in the Financing Orders.
6.12    Additional Loan Parties    . Notify the Agent at the time that any
Person (x) 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 Agent a Joinder to this
Agreement or a Joinder to the Facility Guaranty or such other documents as the
Agent shall deem appropriate for such purpose, (ii) grant a Lien to the Agent on
such Person’s assets of the same type that constitute Collateral to secure the
Obligations, and (iii) deliver to the 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 65% of the outstanding voting Equity Interests of such Subsidiary and 100% of
the non-voting Equity Interests of such Subsidiary), in each case in form,
content and scope reasonably satisfactory to the Agent. In no event shall
compliance with this Section 6.12 waive or be 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.
6.13    Cash Management.     
(c)    Upon and to the extent requested by the Agent:
(i)    deliver to the Agent copies of notifications (each, a “Credit Card
Notification”) substantially in the form attached hereto as Exhibit G which have
been executed on behalf of such

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Loan Party and delivered to such Loan Party’s Credit Card Issuers and Credit
Card Processors listed on Schedule 5.21(b); and
(ii)    enter into a Blocked Account Agreement satisfactory in form and
substance to the Agent with each Blocked Account Bank (collectively, the
“Blocked Accounts”); and
(iii)    at the request of the Agent, deliver to the Agent copies of
notifications (each, a “DDA Notification”) substantially in the form attached
hereto as Exhibit H which have been executed on behalf of such Loan Party and
delivered to each depository institution listed on Schedule 5.21(a).
(d)    From and after the Closing Date, the Loan Parties shall ACH or wire
transfer no less frequently than daily (and whether or not there are then any
outstanding Obligations) to a Blocked Account all of the following:
(i)    all amounts on deposit in 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);
(ii)    all payments due from Credit Card Processors and Credit Card Issuers and
proceeds of all credit card charges;
(iii)    all cash receipts from the Disposition of Inventory and other assets
other than Term Loan Priority Collateral (whether or not constituting
Collateral) ;
(iv)    all proceeds of Accounts; and
(v)    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 Disposition or other
transaction or event, including, without limitation, any Prepayment Event.
(e)    Each Blocked Account Agreement shall require the ACH or wire transfer no
less frequently than daily (and whether or not there are then any outstanding
Obligations) to the concentration account maintained by the Agent at Wells Fargo
(the “Concentration Account”), of all cash receipts and collections received by
each Loan Party from all sources (the “Receipts and Collections”), including,
without limitation, the following:
(i)    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);
(ii)    all amounts required to be deposited into the Blocked Accounts pursuant
to clause (b) above; and
(iii)    any other cash amounts received by any Loan Party from any other
source, on account of any type of transaction or event;
provided, however, the Agent may, in its sole discretion, permit the Loan
Parties to have one or more “intermediate” Blocked Account Agreements, whereby
such agreements would provide the ACH or wire transfer no less frequently than
daily (and whether or not there are then any

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outstanding Obligations) all Receipts and Collections to another Blocked
Account, as opposed to the Concentration Account.
(f)    The Concentration Account shall at all times be under the sole dominion
and control of the Agent. The Agent shall cause all funds on deposit in the
Concentration Account to be applied in the order proscribed in either Section
2.05(f) or Section 8.03 of this Agreement, as applicable. The Loan Parties
hereby acknowledge and agree that (i) the Loan Parties have no right of
withdrawal from the Concentration Account, and (ii) the funds on deposit in the
Concentration Account shall at all times be collateral security for all of the
Obligations. 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 cash receipts or collections, such receipts and collections shall be
held in trust by such Loan Party for the 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 Agent.
(g)    Upon the request of the Agent, the Loan Parties shall cause bank
statements and/or other reports to be delivered to the 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.
(h)    If the Agent does not require DDA Notifications to be delivered on the
Closing Date in accordance with Section 6.13(a) above, then the Loan Parties
shall, upon the request of the Agent at any time after the Closing Date, deliver
to the Agent copies of DDA Notifications, which have been executed on behalf of
the applicable Loan Party and delivered to each depository institution listed on
Schedule 5.21(a).
(i)    Notwithstanding anything to the contrary contained herein, to the extent
practicable, the Loan Parties shall, upon receipt of any identifiable proceeds
of Term Loan Priority Collateral, deposit (by ACH or wire transfer) such
proceeds directly into the Term Loan Priority Account. However, the Agent,
Credit Parties, and Loan Parties acknowledge and agree that it may not be
practicable to deposit all proceeds of Term Loan Priority Collateral directly
into the Term Loan Priority Account in all instances. As such, the Agent agrees
that, upon the written request of the Term Agent to the Agent (which shall be
delivered no more frequently than bi-weekly), the Agent shall, from time to
time, conduct a “true-up” analysis with the Term Agent to determine the amount
of identifiable proceeds of Term Loan Priority Collateral that have been
deposited, or otherwise transferred, into a Blocked Account (and not yet
credited or transferred to the Term Agent), which analysis shall be conducted
based on written disclosures and other reports provided to the Agent and Term
Agent by the Loan Parties and/or Consultants. The Agent shall work in good faith
with the Term Agent to come to an agreement as to such amounts (the “Agreed
Amounts”). With respect to all Agreed Amounts, the Agent shall (i) first setoff
against any amounts that would otherwise be reimbursable to the Agent by the
Term Agent pursuant to Section 12(b)(ii) of the Interim Financing Order, or
Final Financing Order, as applicable, and (ii) with respect to any remaining
amounts, so long as the conditions specified in Sections 4.02(b), (c), (e) and
(f) shall have been satisfied, make a Committed Loan to the Borrowers for such
Agreed Amounts, which the Borrowers irrevocably direct the Agent to fund into
the Term Loan Priority Account; provided, that, in furtherance of the foregoing,
the Loan Parties shall, promptly following direction by the Term Agent, deliver
the Request for Credit Extension contemplated by this sentence required pursuant
to Section 4.02(c); provided, further, that the Loan Parties shall be expressly
obligated to (i) assist the Agent and the Term Agent (including, if applicable,
by engaging with Consultants and communicating the findings thereof to the Agent
and Term Agent) and (ii) provide such written disclosures, calculations and
other reports reasonably requested by the Agent and Term Agent that are
necessary to determine the Agreed Amounts.

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(j)    Notwithstanding anything to the contrary herein, during the period
between the Closing Date and payment in full of the Total Outstandings (as such
term is defined in the Pre-Petition Credit Agreement), all funds on deposit in
the Concentration Account shall be applied to the Pre-Petition Obligations.
6.14    Information Regarding the Collateral    .
(a)    Furnish to the Agent at least fifteen (15) 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 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 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 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 to Permitted Prior Liens and
the Carve-Out) for its own benefit and the benefit of the other Credit Parties.
(b)    Should any of the information on any of the Schedules hereto become
inaccurate or misleading in any material respect at any time as a result of
changes occurring after the Closing Date, the Lead Borrower shall promptly, but
in all events with the next scheduled delivery of financial statements under
Section 6.01(c), advise the Agent in writing of any such revisions or updates to
the applicable Schedule or Schedules as may be necessary or appropriate to
update or correct the same. 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 or Event of Default resulting from the matters disclosed therein.
6.15    Physical Inventories    .
(a)    Cause one (1) physical inventory to be undertaken, at the expense of the
Loan Parties, in each Fiscal Year and periodic cycle counts, in each case
consistent with past practices, conducted by such inventory takers as are
satisfactory to the 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 Agent. The Agent, at the reasonable expense of the Loan
Parties, may participate in and/or observe each scheduled physical count of
Inventory which is undertaken on behalf of any Loan Party. The Lead Borrower,
within fifteen (15) days following the completion of such inventory, shall
provide the Agent with a reconciliation of the results of such inventory (as
well as of any other physical inventory or cycle counts undertaken by a Loan
Party) and shall post such results to the Loan Parties’ stock ledgers and
general ledgers, as applicable.
(b)    Permit the Agent, in its discretion, if any Default or Event of Default
exists, to cause additional such inventories to be taken as the 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 environmental permits necessary for its operations and properties;
and (c) implement and complete any and all investigation,

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remediation, removal and response actions that are necessary to comply with
Environmental Laws or to avoid subjecting its Real Estate to any Lien 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 reasonable further documents, financing statements,
agreements and instruments, and take all such further reasonable actions
(including the filing and recording of financing statements and other
documents), that may be required under any applicable Law, or which the 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 Agent, from time to time upon request, evidence
satisfactory to the Agent as to the perfection and priority of the Liens created
or intended to be created by the Security Documents.
(b)    If any material assets are acquired by any Loan Party after the Closing
Date (other than assets constituting Collateral under the Security Documents
that become subject to the perfected first-priority Lien under the Security
Documents upon acquisition thereof), notify the Agent thereof, and the Loan
Parties will cause such assets to be subjected to a Lien securing the
Obligations and will take such actions as shall be necessary or shall be
requested by the Agent to grant and perfect such Liens, including actions
described in paragraph (a) of this Section 6.17, all at the reasonable expense
of the Loan Parties. In no event shall compliance with this Section 6.17 waive
or be deemed a waiver or Consent to any transaction giving rise to the need to
comply with this Section 6.17 if such transaction was not otherwise expressly
permitted by this Agreement or constitute or be deemed to constitute Consent to
the inclusion of any acquired assets in the computation of the Borrowing Base.
(c)    Upon the request of the Agent, use commercially reasonable efforts to
cause each of its customs brokers, freight forwarders, consolidators and/or
carriers to deliver an agreement (including, without limitation, a Customs
Broker/Carrier Agreement) to the Agent covering such matters and in such form as
the Agent may reasonably require.
(d)    Reserved.
(e)    If any Real Estate of any Loan Party or a Subsidiary (other than
mall-based Stores) is acquired (or is no longer subject to a Lien under the
Mortgage Debt Documents), promptly notify the Agent thereof, and the Loan
Parties shall cause such Real Estate to be subjected to a Lien securing the
Obligations and will take such actions as shall be necessary or shall be
requested by the Agent to grant and perfect such Liens on a first priority basis
(subject to Permitted Prior Liens, Liens in favor of the Term Agent and Term
Lenders under the Term Loan Agreement, and the Carve-Out), and subject to
Permitted Encumbrances described in clause (f) of the definition thereof, all at
the expense of the Loan Parties.
(f)    If the Excluded Subsidiary is no longer subject to a Lien under the
Mortgage Debt Documents (or such Mortgage Debt Documents no longer prevent the
Excluded Subsidiary from becoming a Loan Party hereunder), the Loan Parties
shall promptly notify the Lenders thereof, and the Loan Parties shall cause the
Excluded Subsidiary to become a Loan Party hereunder and cause its assets to be
subjected to a Lien securing the Obligations, and will take such actions as
shall be necessary or shall be requested by the Lenders to grant

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and perfect such Liens, including, but not limiting to, amending its
Organization Documents to permit the foregoing.
6.18    Compliance with Terms of Leaseholds    . Except as otherwise expressly
permitted hereunder or to the extent non-performance thereof is permitted by the
Bankruptcy Code and other than the filing of the Chapter 11 Case and the effect
thereof, (a) make all payments of Post-Petition Obligations and otherwise
perform all obligations in respect of all Leases to which any Loan Party or any
of its Subsidiaries is a party, and keep such Leases in full force and effect,
(b) not allow such Leases to be terminated due to a default thereunder by a Loan
Party or any of their Subsidiaries, (c) notify the Agent of any default by any
party with respect to such Leases and cooperate with the Agent in all respects
to cure any such default, and (d) cause each of its Subsidiaries to do the
foregoing.
6.19    Material Contracts    . Except to the extent non-performance thereof is
permitted by the Bankruptcy Code and other than the filing of the Chapter 11
Case and the effect thereof, (a) maintain each such Material Contract in full
force and effect, (b) enforce each such Material Contract in accordance with its
terms, and (c) cause each of its Subsidiaries to do the foregoing.
6.20    Retention of Consultants; Communication with Accountants and Other
Financial Advisors    .
(c)    The Agent shall have received evidence by no later than seven (7) days
after the Petition Date, that the Loan Parties have filed motions seeking to
retain the Consultants. The terms and scope of the engagement of and
responsibilities of the Consultants shall be reasonably acceptable to the Agent,
and, without limiting the foregoing, the Agent shall have the right to
communicate directly with the Consultants and authorize and direct the
Consultants to communicate directly with the Agent and to furnish the Agent with
such information as the Agent may reasonably request, together with copies of
all material final written materials provided to the board of directors of the
Loan Parties by such Consultant. Subject to Bankruptcy Court approval, to be
obtained by no later than forty five (45) days after the Petition Date, the Loan
Parties shall continue to retain the Consultants, the scope and terms of each
such engagement to be reasonably satisfactory to the Agent. There shall be no
material modifications to the terms (excluding any decreases in compensation but
including any other modification in compensation) of the engagement of the
Consultants without the Consent of the Agent. Until such time as all
Pre-Petition Obligations and all Obligations have been repaid in full (or Cash
Collateralized in accordance with the terms hereof) and all Commitments have
been terminated, the Lead Borrower shall continue to retain the Consultants to
assist the Loan Parties with the preparation of the Approved Budget and the
other financial and Collateral reporting required to be delivered to the Agent
pursuant to this Agreement, and approval of all requests for Borrowing and all
disbursements by the Borrowers.
(d)    The Lead Borrower authorizes the Agent to communicate directly with the
Loan Parties’ independent certified public accountants, appraisers, financial
advisors, investment bankers and consultants (including the Consultants), which
have been engaged from time to time by the Loan Parties, and authorizes and
shall instruct those accountants, appraisers, financial advisors, investment
bankers and consultants to communicate to the Agent information relating to each
Loan Party with respect to the business, results of operations, prospects and
financial condition of such Loan Party. The Lead Borrower acknowledges and
agrees that (i) the Loan Parties and their representatives will cooperate with
the Consultants and any Lender Group Consultant (as defined below), if any, (ii)
the Consultants and any Lender Group Consultant shall be granted reasonable
access to the Loan Parties’ books and records during normal business hours,
(iii) the Agent and the Lenders are authorized to communicate directly with the
Consultants and the Consultants are authorized to communicate directly with the
Agent and the Lenders, regarding the bankruptcy milestones,

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all financial reports, the Approved Budget and any variances from same, other
financial information, operational issues, matters related to the Collateral,
and such other matters as the Agent may reasonably request, and (v) the
Consultants are authorized to provide the Agent and the Lenders with all reports
and other information (including, without limitation, all marketing materials
and indications of interest) prepared or reviewed by the Consultants; provided
that no Consultant shall be required to provide copies of any reports (financial
or otherwise) that are in “draft” or “work product” form, but, if so requested
by the Agent, any such Consultant may elect to do so. The Consultants shall,
together with senior management of the Loan Parties, participate in weekly
telephonic calls with the Agent and Lenders (and/or their advisors and counsel)
to discuss the matters described above.
(e)    Each Loan Party acknowledges that the Agent shall be permitted to engage
such outside consultants and advisors (each, a “Lender Group Consultant”), for
the sole benefit of the Agent, L/C Issuer, and the Lenders, as the Agent may
determine to be necessary or appropriate, in its sole discretion. Each Loan
Party covenants and agrees that (i) such Loan Party shall provide its complete
cooperation during normal business hours with any Lender Group Consultant
(including, without limitation, providing reasonable access to such Loan Party’s
business, books and records and senior management); (ii) all reasonable costs
and expenses of any such Lender Group Consultant shall be expenses required to
be paid by the Loan Parties under Section 10.04 hereof; and (iii) all reports,
determinations and other written and verbal information provided by any Lender
Group Consultant shall be confidential and no Loan Party shall be entitled to
have access to same.
6.21    Performance within Budget. At all times following the Closing Date,
strictly perform in accordance with the Approved Budget, including having made
all scheduled payments to the “Lenders” (as defined in the Pre-Petition Credit
Agreement) and Lenders, as applicable, as and when required, subject to the
following (the “Permitted Variance”): (a) the Borrowers’ actual total cash
receipts shall not be less than 90% of the projected total cash receipts set
forth in the Approved Budget, and (b) the Borrowers’ actual total disbursements
(other than fees and expenses paid to the Agent and Lenders, which shall not be
subject to the limitations in this clause (b)) shall not be greater than 110% of
the projected total disbursements set forth in the Approved Budget on an
aggregate basis (other than with respect to professional fees and expenses,
which shall be tested on an aggregate basis solely with respect to such Line
Item); provided, however, to the extent any amounts owed to professionals and
vendors are permitted to be paid in accordance with the foregoing covenant but
are not actually paid during the subject period, such amounts may be paid during
a subsequent period. Each of the foregoing covenants shall be tested for the
applicable period ending as of each Saturday (such testing commencing for the
three (3) full week period after the Petition Date) on a cumulative basis from
the Petition Date until the period ending on the six (6) full week period after
the Petition Date and thereafter on a rolling six (6) week basis, pursuant to
the Approved Budget Variance Report delivered by the Lead Borrower to the Agent
in accordance with Section 6.01(e).
6.22    Bankruptcy Related Affirmative Covenants.
(a)    On the Petition Date, the Loan Parties shall have filed the following
motions in the Chapter 11 Case with the Bankruptcy Court, each in form and
substance reasonably acceptable to the Agent:
(i)    A motion (the “Bidding Procedures Motion”) requesting an order from the
Bankruptcy Court approving bidding procedures relating to the solicitation of a
Competing Transaction and approval of a sale of all or substantially all of the
assets of the Loan Parties pursuant to Section 363 of the Bankruptcy Code or the
Chapter 11 Plan, which motion and bidding procedures (including the bidding
protections set forth therein) shall be on terms and conditions reasonably
acceptable to the Agent and shall contain, without limitation, provisions with
respect to the

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Bankruptcy Milestones (it being acknowledged and agreed that, in order for a
Competing Transaction to qualify for consideration under such bidding
procedures, it must satisfy the Obligations and the Pre-Petition Obligations in
full in cash from the proceeds paid as part of any such Competing Transaction on
the date of consummation); and
(ii)    A motion (the “Disclosure Motion”) requesting an order from the
Bankruptcy Court to approve the Disclosure Statement, which motion shall be in
form and substance reasonably acceptable to the Agent.
(b)    On or before forty-five (45) days after the Petition Date, the Bankruptcy
Court shall have issued an order authorizing the retention by the Loan Parties
of the Consultants.
(c)    On or before thirty-five (35) days after the Petition Date, the
Bankruptcy Court shall have entered an order (the “Bidding Procedures Order”)
approving the bidding procedures set forth in the Bidding Procedures Motion,
which Bidding Procedures Order shall be in form and substance reasonably
acceptable to the Agent;
(d)    Subject to the Financing Orders, if an Event of Default has occurred and
is continuing and the Agent has accelerated the repayment of the Obligations
pursuant to Section 8.02, at the request of the Agent, the Loan Parties shall
promptly engage an Approved Liquidator or Approved Liquidators on terms and
conditions reasonably acceptable to the Agent; and
(e)    The Borrower shall complete, or shall cause to be completed, the
following actions as and when required below (clauses (i) through (v),
collectively, the “Bankruptcy Milestones”):
(i)    no later than thirty-five (35) days after the Petition Date, the Loan
Parties shall forward so-called “bid packages” to any potential bidders to whom
bid packages had not already been delivered prior to the Petition Date, subject
to the terms and conditions contained in the Bidding Procedures Order,
including, without limitation, potential bidders being qualified and executing
an acceptable confidentiality agreement;
(ii)    no later than seventy (70) days after the Petition Date, binding bids
with respect to a Competing Transaction (if any) shall be due and delivered to
the Loan Parties in accordance with the Bidding Procedures Order (and copies of
such bids shall be provided to the Agent);
(iii)    no later than seventy-five (75) days after the Petition Date, an
auction with respect to a Competing Transaction (if any) shall have been
completed in accordance with the Bidding Procedures Order;
(iv)    subject to clause (v) below, if (a) a Competing Transaction (if any) in
the form of a sale under Section 363 of the Bankruptcy Code is the winning bid
at the auction in accordance with the Bidding Procedures Order, entry of an
order by the Bankruptcy Court approving such sale within five (5) business days
after the auction and closing of such sale within fifteen (15) calendar days
after the entry of such order, or (b) a Competing Transaction (if any) in the
form of a modified Chapter 11 Plan is the winning bid at the auction in
accordance with the Bidding Procedures Order, commence solicitation of votes on
the modified Chapter 11 Plan no later than fourteen (14) days after selection of
the winning bidder; and
(v)    if the Plan Sponsor is either the winning bid at the auction or deemed to
be the backup bidder at such auction in accordance with the Bidding Procedures
Order (and the winning

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bidder at such auction fails to close on the terms and conditions set forth in
the applicable purchase agreement and sale order) or if a Competing Transaction
(if any) in the form of a modified Chapter 11 Plan is the winning bid at the
auction in accordance with the Bidding Procedures Order:
(A)    entry of an order by the Bankruptcy Court confirming the Chapter 11 Plan
within one hundred twenty (120) days after the Petition Date; and
(B)    consummation of the Chapter 11 Plan, including irrevocable payment in
full in cash of all obligations under this Agreement and the Pre-Petition Credit
Agreement within one hundred forty (140) days after the Petition Date, or such
later date as agreed by Agent.
(f)    Promptly following entry of the Wage Order and satisfaction of the
conditions under Sections 4.01 and 4.02, the Loan Parties shall have paid, or
cause to be paid, all Pre-Petition amounts authorized by such order.
(g)    On or before seven (7) days after the Petition Date, the Loan Parties
shall have filed a motion seeking to retain the Consultants on terms reasonably
satisfactory to the Agent.
(h)    On or before fifty (50) days after the Petition Date, the Bankruptcy
Court shall have entered an order approving the Disclosure Statement.
(i)    The Loan Parties shall provide the Agent with a status report and such
other updated information relating to the sale process as may be reasonably
requested by the Agent, in form and substance reasonably acceptable to the
Agent.
6.23    Leases.
(a)    The Loan Parties shall pay all Post-Petition Obligations under the leases
of real property and licenses of Intellectual Property, if any, as required by
the Bankruptcy Code or the Bankruptcy Court, except to the extent (i) any Loan
Party is contesting any such obligations in good faith by appropriate
proceedings, (ii) such Loan Party has established proper reserves as required
under GAAP, and (iii) the nonpayment of which does not result in the imposition
of a Lien. No Loan Party may reject any of its leases without the prior written
consent of the Agent (such consent not to be unreasonably withheld or delayed).
The assumption or rejection of any lease shall be conducted in a manner
consistent with a maximization of the value of the assets of the Loan Parties.
(b)    On or before thirty (30) days after the Petition Date, the Loan Parties
shall have filed a motion seeking an order (“Lease Extension Order”) of the
Bankruptcy Court extending the time period of the Loan Parties to assume or
reject leases to not less than 210 days from the Petition Date, and on or before
sixty (60) days after the Petition Date, the Bankruptcy Court shall have entered
the Lease Extension Order.
6.24    Financing Orders. The Loan Parties shall comply with the Financing
Orders, as then in effect, in all respects, and shall not seek any reversal,
vacatur, stay, amendment or modification thereto without the prior written
consent of the Agent.
6.25    Restructuring Support Agreement. The Loan Parties shall comply with the
Restructuring Support Agreement in all material respects.
ARTICLE VII
NEGATIVE COVENANTS

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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 or
sign or file or suffer to exist under the UCC or any similar Law or statute of
any jurisdiction a financing statement that names any Loan Party or any
Subsidiary thereof as debtor; sign or suffer to exist any security agreement
authorizing any Person thereunder to file such financing statement; sell any of
its property or assets subject to an understanding or agreement (contingent or
otherwise) to repurchase such property or assets with recourse to it or any of
its Subsidiaries; or assign or otherwise transfer any accounts or other rights
to receive income, other than, as to all of the above, 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; (b) issue Disqualified Stock,
or (c) issue and sell any other Equity Interests unless (i) such Equity
Interests shall be issued solely by the Lead Borrower and not by a Subsidiary of
a Loan Party: and (ii) such Equity Interests shall not be subject to redemption
other than redemption at the option of the Loan Party issuing such Equity
Interests and in accordance with the limitations contained in this Agreement.
7.04    Fundamental Changes    . Merge, dissolve, liquidate, consolidate with or
into another Person, except upon the consummation of the Chapter 11 Plan or a
Competing Transaction, which in all cases, complies with the Bidding Procedures
Order, and so long as the Pre-Petition Obligations and Obligations are paid in
full in cash upon consummation of such Chapter 11 Plan or Competing Transaction.
7.05    Dispositions    . 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, each Subsidiary of a Loan Party may make Restricted Payments to any
Loan Party, so long as no Default or Event of Default shall have occurred and be
continuing prior to or immediately after giving effect to such Restricted
Payment or would result therefrom.
7.07    Prepayments of Indebtedness    . Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner any
Indebtedness (other (i) than Indebtedness incurred hereunder, (ii) Indebtedness
under the Pre-Petition Credit Agreement in accordance with the terms and
conditions herein, (iii) with respect to the Term Loan, (x) any adequate
protection payments expressly provided for in the Financing Orders, (y) any
other payments required to be paid pursuant to the Term Loan and/or the
Intercreditor Agreement with the identifiable proceeds of Term Loan Priority
Collateral, and (iv) as set forth in the Approved Budget or otherwise expressly
permitted under this Agreement) or make any payment in violation of any
subordination terms of any Subordinated Indebtedness.
7.08    Change in Nature of Business    . Engage in any line of business
substantially different from the Business conducted by the Loan Parties and
their Subsidiaries on the Closing Date or any business substantially related or
incidental thereto.

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7.09    Transactions with Affiliates    . Enter into, renew, extend or be a
party to any transaction of any kind with any Affiliate (including the Excluded
Subsidiary) 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) a transaction between or among the Loan Parties, (b)
transactions described on Schedule 7.09 hereto, (c) advances for commissions,
travel and other similar purposes in the ordinary course of business to
directors, officers and employees, (d) the issuance of Equity Interests in the
Lead Borrower to any officer, director, employee or consultant of the Lead
Borrower or any of its Subsidiaries, (e) the payment of reasonable fees and
out-of-pocket costs to directors, and compensation and employee benefit
arrangements paid to, and indemnities provided for the benefit of, directors,
officers or employees of the Lead Borrower or any of its Subsidiaries, (f) any
issuances of securities of the Lead Borrower (other than Disqualified Stock and
other Equity Interests not permitted hereunder) or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment agreements, stock options and stock ownership plans (in each case in
respect of Equity Interests in the Lead Borrower) of the Lead Borrower or any of
its Subsidiaries, and (g) the transactions pursuant to the Miraloma Lease as in
effect on the Closing Date. Each Loan Party acknowledges and agrees that (i) the
Agent, on behalf of the Lenders, is a third party beneficiary as to the
subordination provisions set forth in the Intercompany Loan Agreements, (ii)
that such subordination provisions shall not be amended or modified without the
Agent’s consent, and (iii) that the Agent shall be entitled to bring suit
against any Loan Party to enforce said provisions.
7.10    Burdensome Agreements    . Enter into or permit to exist any Contractual
Obligation (other than this Agreement, the Term Loan, or any other Loan Document
or the Kansas IRB Documents or loan documents to which Miraloma Borrower
Corporation is a party as of the Closing Date, or the Pre-Petition Credit
Agreement) 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 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
(f) 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 or its Subsidiaries’ 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) other than the Term Loan, 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. The Loan Parties shall not amend, modify or waive any of a Loan
Party’s or its Subsidiaries’ rights under the Term Loan or any documents
executed in connection therewith, except as permitted by the Intercreditor
Agreement. The Loan Parties shall not, without the prior consent of the

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Agent, amend or modify in a manner materially adverse to the Credit Parties (x)
the Miraloma Lease, (y) the Intercompany Loan Agreements, or (z) the
Restructuring Support Agreement.
7.13    Fiscal Year    . Change the Fiscal Year of any Loan Party, or the
accounting policies or reporting practices of the Loan Parties, except as
required by GAAP or with the prior written consent of the Agent, which consent
shall not be unreasonably withheld.
7.14    Deposit Accounts; Credit Card Processors; Term Loan Priority Account.
    
(c)    No Loan Party shall open new DDAs or Blocked Accounts unless the Loan
Parties shall have delivered to the Agent appropriate DDA Notifications (to the
extent requested by Agent pursuant to the provisions of Section 6.13(a)(iii)
hereof) or Blocked Account Agreements consistent with the provisions of
Section 6.13 and otherwise satisfactory to the Agent.
(d)    No Loan Party shall maintain any bank accounts or enter into any
agreements with Credit Card Issuers or Credit Card Processors other than the
ones expressly contemplated herein or in Section 6.13 hereof.
(e)    No Loan Party shall deposit, or cause to be deposited, any funds into the
Term Loan Priority Account other than proceeds of the Term Loan Priority
Collateral.
(f)    The Loan Parties shall comply with the provisions of Sections 2.05(d) and
6.13 hereof and maintain only such amounts, if any, in deposit accounts or
investment accounts as may be expressly permitted thereunder.
7.15    Financial Covenants. Minimum Excess Availability. Permit Availability at
any time to be less than the greater of (a) ten percent (10%) of the Borrowing
Base and (b) $7,500,000.
7.16    Reclamation Claims. Enter into any agreement to return any of its
Inventory to any of its creditors for application against any Pre-Petition
Indebtedness, Pre-Petition trade payables or other Pre-Petition claims under
Section 546(c) of the Bankruptcy Code or agree to allow any creditor to take any
setoff or recoupment against any of its Pre-Petition Indebtedness, Pre-Petition
trade payables or other Pre-Petition claims based upon any such return pursuant
to Section 553(b)(l) of the Bankruptcy Code or otherwise if, after giving effect
to any such agreement, setoff or recoupment, the aggregate amount applied to
Pre-Petition Indebtedness, Pre-Petition trade payables and other Pre-Petition
claims subject to all such agreements, setoffs and recoupments since the
Petition Date would exceed $100,000.
7.17    Bankruptcy Related Negative Covenants. No Loan Party shall seek, consent
to, or permit to exist any of the following:
(c)    Any order which authorizes the rejection or assumption of any Leases of
any Loan Party without the Agent’s prior consent;
(d)    Any modification, stay, vacation or amendment to the Financing Orders to
which the Agent has not consented in writing;
(e)    A priority claim or administrative expense or unsecured claim against any
Loan Party (now existing or hereafter arising or any kind or nature whatsoever,
including, without limitation, any administrative expense of the kind specified
in Sections 105, 326, 328, 330, 331, 503(a), 503(b), 506(c) (after entry of the
Final Financing Order), 507(a), 507(b), 546(c), 546(d), 726, 1114 of the
Bankruptcy Code)

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equal or superior to the priority claim of the Agent and the Lenders in respect
of the Obligations and the Pre-Petition Obligations, subject to the Carve-Out
and Permitted Prior Liens, and except as otherwise set forth in the Financing
Orders;
(f)    Any Lien on any Collateral having a priority equal or superior to the
Lien securing the Obligations or Pre-Petition Liens including any adequate
protection Liens, subject to the Carve-Out and Permitted Prior Liens and except
as otherwise set forth in the Financing Orders;
(g)    Any order which authorizes the return of any of the Loan Parties’
property pursuant to Section 546(h) of the Bankruptcy Code;
(h)    Any order which authorizes the payment of any Indebtedness (other than
the Pre-Petition Obligations and Pre-Petition Indebtedness reflected in the
Approved Budget (subject to the Permitted Variance)) incurred prior to the
Petition Date, except as set forth in the orders entered into in connection with
the first day motions and the Financing Orders and the grant of “adequate
protection” (whether payment in cash or transfer of property) with respect to
any such Indebtedness which is secured by a Lien; or
(i)    Any order seeking authority to take any action that is prohibited by the
terms of this Agreement or the other Loan Documents or refrain from taking any
action that is required to be taken by the terms of this Agreement or any of the
other Loan Documents.
7.18    Excluded Subsidiary    .    Notwithstanding anything to the contrary in
this Agreement or any other Loan Document: (i) permit the Excluded Subsidiary to
open or maintain any DDAs or otherwise possess any cash, cash equivalents, or
other proceeds; (ii) transfer, cause to be transferred, to the Excluded
Subsidiary, any assets constituting Collateral or of the type of asset
constituting Collateral (including, but not limited to, cash, except to the
extent necessary for the Lead Borrower to make regularly scheduled lease
payments to the Excluded Subsidiary pursuant the Miraloma Lease as in effect on
the Closing Date); (iii) except as otherwise required under Section 6.17(f),
permit the Excluded Subsidiary from amending or modifying its Organization
Documents in any way, or conduct any business other than owning the Corporate
Headquarters; (iv) incur any Indebtedness or Liens other than those permitted in
accordance with the Mortgage Debt Documents; or (v) otherwise permit any of the
statements, representations, warranties or covenants made by the Loan Parties
hereunder with respect to the Excluded Subsidiary to become untrue or misleading
in any material respect.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01    Events of Default    . Any of the following shall constitute an Event of
Default:
(u)    Non-Payment. The Borrowers or any other Loan Party fails to pay when and
as required to be paid herein, (i) any amount of principal of any Loan or any
L/C Obligation, or deposit any funds as Cash Collateral in respect of L/C
Obligations, or of any of the Pre-Petition Obligations, or (ii) any interest on
any Loan or on any L/C Obligation, or any fee due hereunder, or on any
Pre-Petition Obligation, or (iii) any other amount payable hereunder or under
any other Loan Document or the Interim Financing Order or Final Financing Order;
or
(v)    Specific Covenants. Any Loan Party fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.07,
6.10, 6.11, 6.12, 6.13, 6.14, 6.20, 6.21, 6.22, 6.23, 6.24, 6.25 or Article VII;
or

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(w)    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 30 days; or
(x)    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, with respect to any
representation, warranty, certification, or statement of fact qualified by
materiality, incorrect or misleading in any respect); or
(y)    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 post-petition or unstayed
Material Indebtedness (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) (including, but not limited to, the Term Loan), or (B) fails to
observe or perform any other agreement or condition relating to any such
post-petition or unstayed 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 post-petition or unstayed 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 $2,000,000; or
(z)    Reserved; or
(aa)    Attachment. 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; or
(bb)    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) exceeding $10,000,000 (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 either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of 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
(cc)    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 $5,000,000

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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 $5,000,000 or which would reasonably likely
result in a Material Adverse Effect; or
(dd)    Invalidity of Loan Documents. (i) Any material 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 and the Pre-Petition Obligations, ceases to be in full force
and effect due to the actions of a Loan Party; 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; or
(ee)    Change of Control. There occurs any Change of Control; or
(ff)    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
(gg)    Loss of Collateral. There occurs any uninsured loss to any material
portion of the Collateral; or
(hh)    Breach of Contractual Obligation. Any Loan Party or any Subsidiary
thereof fails to make any post-petition 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 post-petition 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
(ii)    Indictment. The indictment 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;
(jj)    Guaranty. The termination or attempted termination of any Facility
Guaranty except as expressly permitted hereunder or under any other Loan
Document;
(kk)    Subordination. (i) The subordination provisions contained in any 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

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Indebtedness, or realized from the liquidation of any property of any Loan
Party, shall be subject to any of the Subordination Provisions.
(ll)    Chapter 11 Case. The occurrence of any of the following in the Chapter
11 Case:
(i)    any Loan Party, without the Agent’s prior written consent, files a motion
with the Bankruptcy Court seeking the authority to liquidate all or
substantially all of any Loan Party’s assets or capital stock unless the
transactions that are the subject of the motion will result in payment in full
in cash of the Pre-Petition Obligations and the Obligations on the closing of
such sale;
(ii)    other than in connection with the payment in full or refinancing of the
Pre-Petition Obligations and the Obligations, the bringing or supporting of a
motion, taking of any action or the filing of any plan or disclosure statement
attendant thereto by or on behalf of any Loan Party in the Chapter 11 Case: (A)
to obtain additional financing under Section 364(c) or (d) of the Bankruptcy
Code not otherwise permitted pursuant to this Agreement; (B) to grant any Lien
other than Permitted Encumbrances upon or affecting any Collateral; (C) except
as provided in the Interim Financing Order or Final Financing Order, as the case
may be, to use cash collateral under Section 363(c) of the Bankruptcy Code
without the prior written consent of the Agent; (D) that seeks to prohibit Agent
or Lenders from credit bidding on any or all of the Loan Parties’ assets during
the pendency of the Chapter 11 Case; or (E) any other action or actions adverse
to the interest of the Agent or the Lenders in their capacities as such or their
rights and remedies hereunder or its interest in the Collateral;
(iii)    (A) other than in connection with the payment in full or refinancing of
the Pre-Petition Obligations and the Obligations on the effective date of such
plan, the filing of any plan of reorganization or disclosure statement attendant
thereto, or any direct or indirect amendment to such plan or disclosure
statement, by any Loan Party or any other Person to which the Agent does not
consent or otherwise agree to treatment of the respective claims of the Agent
and the Lenders, (B) the entry of any order terminating the Loan Parties’
exclusive right to file a plan of reorganization without the consent of the
Agent, or (C) the expiration of the Loan Parties’ exclusive right to file a plan
of reorganization without the consent of the Agent;
(iv)    the entry of an order in the Chapter 11 Case confirming a plan that (A)
is not acceptable to the Agent in its Permitted Discretion (it being agreed that
a plan that satisfies the Obligations and the Pre-Petition Obligations (if any)
in full in cash on the effective date thereof is acceptable to the Agent) or (B)
does not contain a provision for termination of the Commitments and repayment in
full in cash of all of the Pre-Petition Obligations and the Obligations under
this Agreement on or before the effective date of such plan or plans;
(v)    the entry of an order reversing, amending, supplementing, staying,
vacating or otherwise modifying the Loan Documents, the Pre-Petition Credit
Agreement or the Interim Financing Order, the Final Financing Order or the Cash
Management Order without the written consent of the Agent or the filing of a
motion for reconsideration with respect to the Interim Financing Order or the
Final Financing Order or the Interim Financing Order, the Final Financing Order
or the Cash Management Order are otherwise not in full force and effect, in each
case, without the consent of the Agent;
(vi)    the Final Financing Order is not entered prior to the expiration of the
Interim Financing Order, and in any event within thirty (30) days after the
Petition Date;

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(vii)    except as set forth in any motions which have been delivered to and are
acceptable to the Agent and as contemplated by the Approved Budget (subject to
the Permitted Variance), the payment of, or application for authority to pay,
any Pre-Petition Indebtedness or Pre-Petition claim without the Agent’s prior
written consent;
(viii)    the allowance of any claim or claims under Section 506(c) of the
Bankruptcy Code or otherwise against the Agent, any other Credit Party or any of
the Collateral;
(ix)    the filing of a motion by a Loan Party or any of their respective
Affiliates for, or the entry of an order directing, the appointment of an
interim or permanent trustee in the Chapter 11 Case or the appointment of a
receiver or an examiner in the Chapter 11 Case with expanded powers to operate
or manage the financial affairs, the business, or reorganization of the Loan
Parties; or, the sale without the Agent’s consent, of all or substantially all
of the Loan Parties’ assets either through a sale under Section 363 of the
Bankruptcy Code, through a confirmed plan of reorganization in the Chapter 11
Case, or otherwise that does not provide for payment in full in cash of the
Pre-Petition Obligations and the Obligations and termination of the Commitments
on the effective date of such plan or the closing of such sale;
(x)    the dismissal of the Chapter 11 Case, or the conversion of the Chapter 11
Case from Chapter 11 to Chapter 7 of the Bankruptcy Code, or any Loan Party
files a motion or other pleading seeking the dismissal of the Chapter 11 Case
under Section 1112 of the Bankruptcy Code or otherwise;
(xi)    the entry of an order by the Bankruptcy Court granting relief from or
modifying the automatic stay of Section 362 of the Bankruptcy Code (1) to allow
any creditor to execute upon or enforce a Lien on any Collateral having a value
of $250,000 (or $500,000 in the aggregate) or more, or (2) with respect to any
Lien or the granting of any Lien on any Collateral to any state or local
environmental or regulatory agency or authority;
(xii)    the commencement of a suit or action against the Agent, any Lender or
any other Credit Party (both under this Agreement and as such terms are defined
in the Pre-Petition Credit Agreement) by or on behalf of any Loan Party, its
bankruptcy estates, any statutory committee, the Term Agent or any Term Lenders;
(xiii)    the entry of an order in the Chapter 11 Case avoiding or permitting
recovery of any portion of the payments made on account of the Indebtedness
owing under this Agreement or the other Loan Documents or the Pre-Petition
Credit Agreement;
(xiv)    the failure of any Loan Party to perform any of its obligations under
the Interim Financing Order, the Final Financing Order or the Cash Management
Order or any of its material obligations under the any other order of the
Bankruptcy Court;
(xv)    the failure of the Bankruptcy Court to, within sixty (60) days after the
Petition Date (or such later date to which the Agent may otherwise agree), grant
an order extending the time period of the Loan Parties to assume or reject
unexpired leases of real property to a date that is 210 days from the Petition
Date;
(xvi)    the entry of an order in the Chapter 11 Case granting any other
super-priority administrative claim or Lien equal or superior to that granted to
the Agent, the Lenders and Pre-Petition Agent except as set forth in the
Financing Orders; or

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(xvii)    the failure of any Loan Party or other Person to perform any of its
obligations under the Bidding Procedures Order.
8.02    Remedies Upon Event of Default    . If any Event of Default occurs and
is continuing, the Agent may, or, at the request of the Required Lenders shall,
take any or all of the following actions:
(i)    declare the Commitments of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
Commitments and obligation shall be terminated;
(j)    declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other Obligations 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;
(k)    require that the Loan Parties Cash Collateralize the L/C Obligations; and
(l)    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, the Pre-Petition 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 the Pre-Petition
Loan Documents or any instrument pursuant to which the Obligations or
Pre-Petition 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.
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 L/C 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 Agent in the
following order:
First, to the payment in full of the Pre-Petition Obligations including the
funding of indemnity accounts;
Second, to payment of that portion of the Obligations (excluding the Other
Liabilities) constituting fees, indemnities, Credit Party Expenses and other
amounts (including fees, charges and disbursements of counsel to the Agent and
amounts payable under Article III) payable to the Agent;
Third, to payment of that portion of the Obligations (excluding the Other
Liabilities) constituting indemnities, Credit Party Expenses, and other amounts
(other than principal, interest and fees) payable to the Lenders and the L/C
Issuer (including fees, charges and disbursements of counsel to the respective
Lenders and the L/C Issuer and amounts payable under Article III), ratably among
them in proportion to the amounts described in this clause Third payable to
them;
Fourth, to the extent not previously reimbursed by the Lenders, to payment to
the Agent of that portion of the Obligations constituting principal and accrued
and unpaid interest on any Permitted Overadvances;

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Fifth, 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;
Sixth, 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 L/C Issuer in
proportion to the respective amounts described in this clause Sixth payable to
them;
Seventh, 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;
Eighth, to payment of that portion of the Obligations constituting unpaid
principal of the Committed Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Eighth held by them;
Ninth, to the Agent for the account of the L/C Issuer, to Cash Collateralize
that portion of L/C Obligations comprised of the aggregate undrawn amount of
Letters of Credit;
Tenth, to payment of all other Obligations (including without limitation the
cash collateralization of unliquidated indemnification obligations for which a
claim has been made, but excluding any Other Liabilities), ratably among the
Credit Parties in proportion to the respective amounts described in this clause
Tenth 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 Eleventh held by them;
Twelfth, to payment of all other Obligations arising from Bank Products to the
extent secured under the Security Documents, ratably among the Credit Parties in
proportion to the respective amounts described in this clause Twelfth 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.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Eighth 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
THE AGENT
9.01    Appointment and Authority    . Each of the Lenders and the Swing Line
Lender hereby irrevocably appoints Wells Fargo to act on its behalf as the Agent
hereunder and under the other Loan Documents and authorizes the Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Agent by the terms hereof or thereof (including, without limitation, acquiring,
holding and enforcing any and all Liens on Collateral granted by any of the Loan
Parties to secure any of the Obligations and appearing in the Chapter 11 Case on
behalf of the Lenders), together with such actions and powers as

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are reasonably incidental thereto. The provisions of this Article are solely for
the benefit of the Agent, the Lenders and the L/C Issuer, and no Loan Party or
any Subsidiary thereof shall have rights as a third party beneficiary of any of
such provisions.
9.02    Rights as a Lender    . The Person serving as the Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though they were not the Agent and the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as the 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
hereunder and without any duty to account therefor to the Lenders.
9.03    Exculpatory Provisions    . The 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 Agent:
(a)    shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default or Event of 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 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 the Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose the 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 its Affiliates
that is communicated to or obtained by the Person serving as the Agent or any of
its Affiliates in any capacity.
The 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 Agent shall believe
in good faith shall be necessary, under the circumstances as provided in
Sections 10.01 and 8.02) 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 Agent shall not be deemed to have knowledge of any Default or Event of
Default unless and until notice describing such Default or Event of Default is
given to the Agent by the Loan Parties, a Lender or the L/C Issuer. Upon the
occurrence of a Default or Event of Default, the 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 Agent shall have received such
direction, the 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 Agent be required to comply with any such directions to
the extent that the Agent believes that its compliance with such directions
would be unlawful.
The 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)

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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 or Event of 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 Agent.
9.04    Reliance by Agent    . The 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, Internet or intranet
website posting or other distribution) believed by it to be genuine and to have
been signed, sent or otherwise authenticated by the proper Person. The Agent
also may rely upon any statement made to it orally or by telephone and 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 L/C Issuer, the Agent
may presume that such condition is satisfactory to such Lender or the L/C Issuer
unless the Agent shall have received written notice to the contrary from such
Lender or the L/C Issuer prior to the making of such Loan or the issuance of
such Letter of Credit. The 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 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 Agent. The
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 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 Agent.
9.06    Resignation of Agent    . The 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, 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 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may on behalf of the Lenders and the L/C Issuer, appoint a
successor Agent meeting the qualifications set forth above; provided that if the
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 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 Agent on behalf
of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Agent shall continue to hold such collateral security until such time as a
successor Agent is appointed) and (2) all payments, communications and
determinations provided to be made by, to or through the Agent shall instead be
made by or to each Lender and the L/C Issuer directly, until such time as the
Required Lenders appoint a successor Agent as provided for above in this
Section. Upon the acceptance of a successor’s appointment as Agent hereunder,
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Agent, and the
retiring Agent shall be discharged from all of its duties and

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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 Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Lead Borrower and such
successor. After the retiring 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 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 Agent was acting as Agent hereunder.
Any resignation by Wells Fargo as Agent pursuant to this Section shall also
constitute its resignation as Swing Line Lender and the resignation of Wells
Fargo as L/C Issuer. Upon the acceptance of a successor’s appointment as Agent
hereunder, (a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line
Lender, (b) the retiring L/C Issuer and 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 L/C 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 L/C
Issuer to effectively assume the obligations of the retiring L/C Issuer with
respect to such Letters of Credit.
9.07    Non-Reliance on Agent and Other Lenders    . Each Lender and the L/C
Issuer acknowledges that it has, independently and without reliance upon the
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 L/C
Issuer also acknowledges that it will, independently and without reliance upon
the 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 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
Agent.
9.08    No Other Duties, Etc    . Anything herein to the contrary
notwithstanding, none of the Bookrunners, Arrangers, Syndication Agent or
Documentation Agent 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 the Agent, a Lender or the L/C Issuer
hereunder.
9.09    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 Agent (irrespective of whether the principal of any Loan
or L/C Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the 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, L/C 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 L/C
Issuer, the Agent and the other Credit Parties (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders,
the L/C Issuer, the Agent, such Credit Parties and their respective agents and
counsel and all other amounts due the Lenders, the L/C Issuer the 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

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(b)    to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
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 L/C Issuer to make such payments to the Agent and, if the
Agent shall consent to the making of such payments directly to the Lenders and
the L/C Issuer, to pay to the Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Agent and its agents
and counsel, and any other amounts due the Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the Agent to authorize or
consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or the L/C Issuer or to authorize the
Agent to vote in respect of the claim of any Lender or the L/C Issuer in any
such proceeding.
9.10    Collateral and Guaranty Matters    . The Credit Parties irrevocably
authorize the Agent, at its option and in its discretion,
(k)    to release any Lien on any property granted to or held by the 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, termination or Cash
Collateralization 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;
(l)    to subordinate any Lien on any property granted to or held by the 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
(m)    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 Agent at any time, the Applicable Lenders will confirm in
writing the Agent’s authority to release or subordinate its interest in
particular types or items of property, or any Guarantor from its obligations
under the Facility Guaranty, in each case pursuant to this Section 9.10. In each
case as specified in this Section 9.10, the 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 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
Acceptance shall have become effective as set forth in Section 10.06.
9.12    Reports and Financial Statements    . By signing this Agreement, each
Lender:
(g)    agrees to furnish the Agent (at such frequency as the Agent may
reasonably request) with a summary of all Other Liabilities due or to become due
to such Lender. In connection with any distributions

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to be made hereunder, the Agent shall be entitled to assume that no amounts are
due to any Lender on account of Other Liabilities unless the Agent has received
written notice thereof from such Lender;
(h)    is deemed to have requested that the Agent furnish such Lender, promptly
after they become available, copies of all Borrowing Base Certificates and
financial statements required to be delivered by the Lead Borrower hereunder and
all commercial finance examinations and appraisals of the Collateral received by
the Agent (collectively, the “Reports”);
(i)    expressly agrees and acknowledges that the 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;
(j)    expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that the 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;
(k)    agrees to keep all Reports confidential in accordance with the provisions
of Section 10.07 hereof; and
(l)    without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold the 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 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
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 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 Agent) obtain possession of any such
Collateral, such Lender shall notify the Agent thereof, and, promptly upon the
Agent's request therefor shall deliver such Collateral to the Agent or otherwise
deal with such Collateral in accordance with the Agent's instructions.
9.14    Indemnification of Agent    . Without limiting the obligations of the
Loan Parties hereunder, the Lenders hereby agree to indemnify the Agent, the L/C
Issuer and any Related Party, as the case may be, 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 the Agent, the L/C Issuer and their Related Parties 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 the Agent, the L/C Issuer and
their Related Parties 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 Agent’s, the L/C Issuer’s and their Related Parties’ gross negligence
or willful misconduct as determined by a final and nonappealable 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 Agent) authorized to act
for, any other Lender.
9.16    Defaulting Lenders.     
(a)    If for any reason any Lender shall become a Defaulting Lender and such
failure is not cured within one (1) Business Day after receipt from the 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) any such 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, (ii) any such
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, and
(iii) at the option of the Agent, any amount payable to such Defaulting Lender
hereunder (whether on account of principal, interest, fees or otherwise) shall,
in lieu of being distributed to such Defaulting Lender, be retained by the Agent
as cash collateral for future funding obligations of the Defaulting Lender in
respect of any Loan or existing or future participating interest in any Swing
Line Loan or Letter of Credit. Such Defaulting Lender’s decision-making and
participation rights and rights to payments as set forth in clauses (i), (ii),
and (iii) 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 2.08(b) hereof from the date when
originally due until the date upon which any such amounts are actually paid, or
otherwise cure such default or other cause of such Lender becoming a Defaulting
Lender.
(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 Defaulting Lender
for no cash consideration (pro rata, based on the respective Commitments of
those Lenders electing to exercise such right), of the Defaulting Lender’s
Commitment to fund future Loans. Upon any such purchase of the Applicable
Percentage of any Defaulting Lender, the 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 or Defaulting Lender shall
promptly execute all documents reasonably requested to surrender and transfer
such interest, including, if so requested, an Assignment and Acceptance.
(c)    Each Defaulting Lender shall indemnify the 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 Agent or by any
non-Defaulting Lender, on account of a Defaulting Lender’s failure to timely
fund its Applicable Percentage of a Loan or to otherwise perform its obligations
under the Loan Documents.
9.17    Syndication Agents; Documentation Agents and Lead Arrangers    .
Notwithstanding the provisions of this Agreement or any of the other Loan
Documents, no Person who is or becomes a Syndication Agent or a Documentation
Agent nor a Lead Arranger shall have any powers, rights, duties,
responsibilities or liabilities with respect to this Agreement and the other
Loan Documents.
ARTICLE X
MISCELLANEOUS

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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 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 Agent, and
each such waiver or Consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall:
(f)    increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written Consent of such Lender;
(g)    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 or
termination of the Aggregate Commitments hereunder or under any other Loan
Document without the written Consent of such Lender;
(h)    as to any Lender, reduce the principal of, or the rate of interest
specified herein on, any Loan held by such Lender, 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 to or for the account of such Lender,
without the written Consent of each Lender entitled to such amount; provided,
however, that only the Consent of the Required Lenders shall be necessary 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;
(i)    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;
(j)    change any provision of this Section or the definition of “Required
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;
(k)    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;
(l)    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;
(m)    increase the Aggregate Commitments without the written Consent of each
Lender;
(n)    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 each Lender,
provided that the foregoing shall not limit the discretion of the Agent to
change, establish or eliminate any Reserves;
(o)    modify the definition of Permitted Overadvance so as to increase the
amount thereof or, except as provided in such definition, the time period for
which a Permitted Overadvance may remain outstanding without the written Consent
of each Lender; and

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(p)    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 further, that (i) no amendment, waiver or Consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C 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 Agent in addition to the
Lenders required above, affect the rights or duties of the Agent under this
Agreement or any other Loan Document; and (iv) the Fee Letter may 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.     
(d)    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:
(iii)    if to the Loan Parties, the Agent, the L/C 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
(iv)    if to any other Lender, to the address, telecopier number, electronic
mail address or telephone number specified in its Administrative Questionnaire.
(v)    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

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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).
(e)    Electronic Communications. Notices and other communications to the Loan
Parties, the Lenders and the L/C Issuer hereunder may be delivered or furnished
by electronic communication (including e mail and Internet or intranet websites)
pursuant to procedures approved by the Agent, provided that the foregoing shall
not apply to notices to any Lender or the L/C Issuer pursuant to Article II if
such Lender or the L/C Issuer, as applicable, has notified the Agent that it is
incapable of receiving notices under such Article by electronic communication.
The Agent 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 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.
(f)    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 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 Agent or any of its Related Parties (collectively, the “Agent
Parties”) have any liability to any Loan Party, any Lender, the L/C 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 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 court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided, however, that in no event shall any Agent Party have
any liability to any Loan Party, any Lender, the L/C Issuer or any other Person
for indirect, special, incidental, consequential or punitive damages (as opposed
to direct or actual damages).
(g)    Change of Address, Etc. Each of the Loan Parties, the Agent, the L/C
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 Agent, the L/C Issuer and the Swing Line Lender. In addition,
each Lender agrees to notify the Agent from time to time to ensure that the
Agent has on record (i) an effective address, contact name, telephone number,

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telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender.
(h)    Reliance by Agent, L/C Issuer and Lenders. The Agent, the L/C 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 Agent, the L/C 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 Agent may be recorded by the 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 or Event of Default, regardless of whether any Credit Party may have
had notice or knowledge of such Default or Event of Default at the time.
10.04    Expenses; Indemnity; Damage Waiver.     
(l)    Costs and Expenses. The Borrowers shall pay all Credit Party Expenses in
the case of appraisals and audits subject to the limits in Section 6.10.
(m)    Indemnification by the Loan Parties. The Loan Parties shall indemnify the
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, costs, and related expenses (including the 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 obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, or, in the case
of the 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 L/C 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 a 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,

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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 nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or (y) result
from a claim brought by a Borrower or any other Loan Party against an Indemnitee
for breach in bad faith of such Indemnitee's obligations hereunder or under any
other Loan Document, if the Borrowers or such Loan Party has obtained a final
and nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction.
(n)    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 Agent (or any such
sub-agent), the L/C 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 Agent (or any such sub-agent) or the L/C Issuer in its capacity as
such, or against any Related Party of any of the foregoing acting for the Agent
(or any such sub-agent) or L/C Issuer in connection with such capacity. The
obligations of the Lenders under this subsection (c) are subject to the
provisions of Section 2.12(e).
(o)    Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Loan Parties shall not assert, and hereby waive, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, 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 transmission systems in
connection with this 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 nonappealable judgment of a court of competent jurisdiction.
(p)    Payments. All amounts due under this Section shall be payable on demand
therefor.
(q)    Survival. The agreements in this Section shall survive the resignation of
any Agent and the L/C 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

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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 L/C Issuer severally agrees to pay to
the Agent upon demand its Applicable Percentage (without duplication) of any
amount so recovered from or repaid by the 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 L/C 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    .
(f)    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 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 (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.
(g)    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 (b), participations in L/C Obligations
and in Swing Line Loans) at the time owing to it); provided that any such
assignment shall be subject to the following conditions:
(vi)    Minimum Amounts
(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 Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date, shall not be
less than $5,000,000 unless each of the Agent and, so long as no Default or
Event of Default has occurred and is continuing, the Lead Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed);
provided, however, 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

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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;
(vii)    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;
(viii)    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 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 L/C 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.
(ix)    Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500, provided, however, that the 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 Agent an Administrative Questionnaire.
Subject to acceptance and recording thereof by the 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).
(h)    Register. The Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at the Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for

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the recordation of the names and addresses of the Lenders, and the Commitments
of, and principal amounts of the Loans and L/C 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 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.
(i)    Participations. Any Lender may at any time, without the consent of, or
notice to, the Loan Parties or the 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 L/C 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
Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement, and (iv) such Lender shall continue to have the sole right to
enforce its rights 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 (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. Each Lender, acting for this purpose as an agent of the
Loan Parties, shall maintain at its offices a record of each agreement or
instrument effecting any participation and a register for the recordation of the
names and addresses of its Participants and their rights with respect to
principal amounts and other Obligations from time to time (each a “Participation
Register”).  The entries in each Participation Register shall be conclusive
absent manifest error and the Loan Parties, the Administrative Agent, the L/C
Issuer and the Lenders may treat each Person whose name is recorded in a
Participant Register as a Participant for all purposes of this Agreement
(including, for the avoidance of doubt, for purposes of entitlement to benefits
under Section 3.01, Section 3.04, Section 3.05 and Section 10.08”).  The
Participation Register shall be available for inspection by the Lead Borrower,
the L/C Issuer and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(j)    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
sold to such Participant, unless the sale of the participation to such
Participant is made with the Lead Borrower's prior written consent, and a
Participant shall have no right to enforce any rights of Lender under this
Agreement without the Borrower’s prior written consent. A Participant that would
be a Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 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.

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(k)    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.
(l)    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.
(m)    Resignation as L/C 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 30 days’ notice to the Lead Borrower and the Lenders,
resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Lead Borrower,
Wells Fargo may resign as Swing Line Lender. In the event of any such
resignation as L/C Issuer or Swing Line Lender, the Lead Borrower shall be
entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line
Lender hereunder; provided, however, that no failure by the Lead Borrower to
appoint any such successor shall affect the resignation of Wells Fargo as L/C
Issuer or Swing Line Lender, as the case may be. If Wells Fargo resigns as L/C
Issuer, it shall retain all the rights, powers, privileges and duties of the L/C
Issuer hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as L/C Issuer and all L/C 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 L/C 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 L/C Issuer
or Swing Line Lender, as the case may be, and (b) the successor L/C 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 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

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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 Closing Date, 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.
For the avoidance of doubt, the Parties agree that nothing herein shall prohibit
Borrower from disclosing the terms of this Agreement and filing any Loan
Documents, other than the Fee Letter (unless required by the SEC), pursuant to
the rules and regulations of the SEC.
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 L/C
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 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 L/C
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 L/C Issuer, regardless of the adequacy of the Collateral, and
irrespective of whether or not such Lender or the L/C 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 L/C Issuer different
from the branch or office holding such deposit or obligated on such
indebtedness. The rights of each Lender, the L/C 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 L/C Issuer or their
respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify
the Lead Borrower and the 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 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 exceeds such
unpaid principal, refunded to the Borrowers. In determining whether the interest
contracted for, charged, or received by the Agent or a Lender exceeds

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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 Agent and when the 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, pdf., or other electronic transmission 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 or Event of 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 Agent may require such indemnities and
collateral security as they shall reasonably deem necessary or appropriate to
protect the Credit Parties against (x) loss on account of credits previously
applied to the Obligations that may subsequently be reversed or revoked, (y) any
obligations that may thereafter arise with respect to the Other Liabilities and
(z) any Obligations that may thereafter arise under Section 10.04 (other than
contingent indemnification obligations for which no claim has been asserted).
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 or a Non-Consenting
Lender, then the Borrowers may, at their sole expense and effort, upon notice to
such Lender and the 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

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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:
(g)    the Borrowers shall have paid to the Agent the assignment fee specified
in Section 10.06(b);
(h)    such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, 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);
(i)    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
(j)    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.     
(j)    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF, BUT INCLUDING SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW, AND TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.
(k)    SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE BANKRUPTCY COURT AND OF THE UNITED STATES DISTRICT COURT OF
THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO 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
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURTS. 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 AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.
(l)    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

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ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.
EACH OF THE 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.
(m)    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.
(n)    ACTIONS COMMENCED BY LOAN PARTIES. EACH LOAN PARTY AGREES THAT ANY ACTION
COMMENCED BY ANY LOAN PARTY ASSERTING ANY CLAIM OR COUNTERCLAIM ARISING UNDER OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT
SOLELY IN THE BANKRUPTCY COURT OR THE UNITED STATES DISTRICT COURT OF THE
SOUTHERN DISTRICT OF NEW YORK AS THE 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, the 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;

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(iv) the Credit Parties and their 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 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 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 Patriot 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.
10.18    Foreign Asset Control Regulations    . Neither of the advance of the
Loans nor the use of the proceeds of any thereof will violate the Trading With
the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the "Trading With the Enemy
Act") or any of the foreign assets control regulations of the United States
Treasury Department (31 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    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 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 Agent and without the prior written consent of the 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 Agent before issuing such press release or other
public disclosure.
(b)    Each Loan Party consents to the publication by the Agent or any Lender of
advertising material, including any “tombstone” or comparable advertising, on
its website or in other marketing materials

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of Agent, relating to the financing transactions contemplated by this Agreement
using any Loan Party’s name, product photographs, logo, trademark or other
insignia. The 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 Agent reserves the right to provide to industry
trade organizations and loan syndication and pricing reporting services
information necessary and customary for inclusion in league table measurements.
10.21    Additional Waivers    .
(f)    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
Agent or any other Credit Party.
(g)    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 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).
(h)    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 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, 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 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.
(i)    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

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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 the Obligations and, if an
Event of Default has then occurred and is continuing, no Loan Party will demand,
sue for or otherwise attempt to collect any such indebtedness. 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 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 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.
(j)    Without limiting the generality of the foregoing, or of any other waiver
or other provision set forth in this Agreement, each Loan Party hereby
absolutely, knowingly, unconditionally, and expressly waives any and all claim,
defense or benefit arising directly or indirectly under any one or more of
Sections 2787 to 2855 inclusive of the California Civil Code or any similar law
of California.
10.22    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.
10.23    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.
10.24    Intercreditor Agreement    .     The Loan Parties, the Agent and the
Lenders acknowledge that the exercise of certain of the Agent’s rights and
remedies hereunder may be subject to, and restricted by, the provisions of the
Intercreditor Agreement. Except as specified herein, nothing contained in the
Intercreditor Agreement shall be deemed to modify any requirement or shall be
deemed to modify any of the provisions of this Agreement and the other Loan
Documents, which, among the Loan Parties, the Agent and the Lenders shall remain
in full force and effect. In the event of any conflict between the terms of this
Agreement and the Intercreditor Agreement, the terms of the Intercreditor
Agreement shall govern and control.

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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.

PACIFIC SUNWEAR OF CALIFORNIA, INC., as the Lead Borrower and as a Borrower

By:                         
Name:
Title:

PACIFIC SUNWEAR STORES CORP.,
as a Borrower

By:                         
Name:
Title:

 

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

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent

By:                         
Name:
Its Authorized Signatory
 

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

 
WELLS FARGO BANK, NATIONAL ASSOCIATION, as L/C Issuer, as a Lender and Swing
Line Lender

By:                         
Name:
Its Authorized Signatory