Exhibit 10.68

REVOLVING CREDIT AGREEMENT

        THIS REVOLVING CREDIT AGREEMENT (this “Agreement”) is made and entered
into as of the 20th day of June, 2003, by and between CPI CORP., a Delaware
corporation (“Borrower”), and COMMERCE BANK, NATIONAL ASSOCIATION (“Bank”).

WITNESSETH:

        WHEREAS, Borrower has applied for a revolving credit facility from Bank
consisting of revolving credit loans and letters of credit in an aggregate
amount of up to $15,000,000.00; and

        WHEREAS, Bank is willing to extend said revolving credit facility to
Borrower upon, and subject to, the terms, provisions and conditions hereinafter
set forth;

        NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower and Bank hereby covenant and agree as follows:

SECTION 1. DEFINITIONS.

        1.01 Definitions. In addition to the terms defined elsewhere in this
Agreement or in any Exhibit or Schedule hereto, when used in this Agreement, the
following terms shall have the following meanings (such meanings shall be
equally applicable to the singular and plural forms of the terms used, as the
context requires):

        Acquisition shall mean any transaction or series of related
transactions, consummated on or after the date of this Agreement, by which
Borrower or any Subsidiary directly or indirectly (a)acquires all or
substantially all of the assets comprising one or more business units of any
other Person, whether through purchase of assets, merger or otherwise or (b)
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least (i) a majority (in number of votes) of the stock and/or
other securities of a corporation having ordinary voting power for the election
of directors (other than stock and/or other securities having such power only by
reason of the happening of a contingency), (ii) a majority (by percentage of
voting power) of the outstanding partnership interests of a partnership, (iii) a
majority (by percentage of voting power) of the outstanding membership interests
of a limited liability company or (iv) a majority of the ownership interests in
any organization or entity other than a corporation, partnership or limited
liability company.

        Adjusted Prime Rate shall mean the Prime Rate plus the Applicable Prime
Margin. The Adjusted Prime Rate shall be adjusted automatically on and as of the
effective date of any change in the Prime Rate and/or the Applicable Prime
Margin.

        Affiliate shall mean, at any time, (a) with respect to any Person, any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person and (b) with respect to Borrower, (i) any Person beneficially
owning or holding, directly or indirectly, Ten Percent (10%) or more of any
class of voting or equity interests of Borrower or any Subsidiary, (ii) any
corporation or other entity of which Borrower and its Subsidiaries beneficially
own or hold, in the aggregate, directly or indirectly, Ten Percent (10%) or more
of any class of voting or equity interests and/or (iii) any Person who is a
director or officer of Borrower or any Subsidiary. As used in this definition,
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise. Unless the
context otherwise clearly requires, any reference to an “Affiliate” is a
reference to an Affiliate of Borrower.

        Applicable Commitment Fee Rate, Applicable LIBOR Margin and Applicable
Prime Margin shall mean the per annum rate shown in the applicable column below
based on the applicable Consolidated Adjusted Liabilities to Consolidated EBITDA
Ratio:

If Consolidated Adjusted
Liabilities to Consolidated
EBITDA Ratio is, then   Applicable
Commitment Fee
Rate is   Applicable LIBOR
Margin is   Applicable Prime
Margin is               >2.75 to 1.0   0.375   2.75%   0.75%               >
2.50 to 1.00 but
‹= 2.75 to 1.00   0.300%   2.25%   0.25%               > 2.00 to 1.00 but
‹ = 2.50 to 1.0   0.250%   2.00%   0.00%               => 1.25 to 1.00 but
‹= 2.00 to 1.00   0.225%   1.75%   0.00%               ‹1.25 to 1.00   0.200%  
1.38%   0.00%

The determination of the Applicable Commitment Fee Rate, the Applicable LIBOR
Margin and the Applicable Prime Margin as of any date shall be based on the
Consolidated Adjusted Liabilities to Consolidated EBITDA Ratio as of the end of
the most recently ended fiscal quarter of Borrower for which financial
statements of Borrower and its Subsidiaries have been delivered to Bank pursuant
to Section 5.01(a), and shall be effective for purposes of determining the
Applicable Commitment Fee Rate, the Applicable LIBOR Margin and the Applicable
Prime Margin from and after the first day of the first month immediately
following the date on which such delivery of financial statements is required
until the first day of the first month immediately following the next such date
on which delivery of financial statements of Borrower and its Subsidiaries is so
required. For example, the Consolidated Adjusted Liabilities to Consolidated
EBITDA Ratio as of the end of the fiscal quarter of Borrower ending July 19,
2003, will be determined from the financial statements of Borrower and its
Subsidiaries as of and for the fiscal quarter of Borrower ending July 19, 2003
(which are required to be delivered to Bank on or before September 3, 2003), and
will be used in determining the Applicable Commitment Fee Rate, the Applicable
LIBOR Margin and the Applicable Prime Margin from and after October 1, 2003.
Notwithstanding the foregoing, during the period commencing on the date of this
Agreement and ending September 30, 2003, (a) Applicable Commitment Fee Rate
shall mean 0.30% per annum, (b) Applicable LIBOR Margin shall mean 2.25% per
annum and (c) Applicable Prime Margin shall mean 0.25% per annum.

        Asset Sale shall have the meaning ascribed thereto in Section 5.02(d).

        Attorneys’ Fees shall mean the reasonable value of the services (and
costs, charges and expenses related thereto) of the attorneys (and all
paralegals, accountants and other staff employed by such attorneys) employed by
Bank (including, without limitation, attorneys and paralegals who are employees
of Bank or of any direct or indirect parent corporation, subsidiary or affiliate
of Bank) from time to time (a) in connection with the negotiation, preparation,
execution, delivery, amendment, modification, extension, renewal, restatement,
administration and/or enforcement of this Agreement and/or any other Transaction
Document, (b) in connection with the preparation, negotiation or execution of
any waiver or consent with respect to this Agreement and/or any other
Transaction Document, (c) in connection with any Default or Event of Default
under this Agreement, (d) to represent Bank in any litigation, contest, dispute,
suit or proceeding, or to commence, defend or intervene in any litigation,
contest, dispute, suit or proceeding, or to file any petition, complaint,
answer, motion or other pleading or to take any other action in or with respect
to any litigation, contest, dispute, suit or proceeding (whether instituted by
Bank, Borrower and/or any other Person and whether in bankruptcy or otherwise)
in any way or respect relating to this Agreement and/or any other Transaction
Document, Borrower, any other Obligor, any Subsidiary and/or (e) to enforce any
of the rights and/or remedies of Bank to collect any of the Borrower’s
Obligations and/or any Guarantee thereof.

        Bank’s Commitment shall mean, subject to termination or reduction as set
forth in Section 2.09, $15,000,000.00.

        Borrower’s Obligations shall mean any and all present and future
indebtedness (principal, interest, fees, collection costs and expenses and other
amounts), liabilities and obligations (including, without limitation, guaranty
obligations, letter of credit reimbursement obligations and indemnity
obligations) of Borrower to Bank evidenced by or arising under or in respect of
this Agreement, the Note, any Letter of Credit Application, any other
Transaction Document and/or any other agreement, document or instrument
heretofore, now or hereafter executed and delivered by Borrower to Bank, in each
case whether now existing or hereafter arising, absolute or contingent, joint
and/or several, secured or unsecured, direct or indirect, expressed or implied
in law, contractual or tortious, liquidated or unliquidated, at law or in
equity, or otherwise, and whether created directly or acquired by Bank by
assignment or otherwise, and any and all costs of collection and/or Attorneys’
Fees from time to time incurred in connection therewith.

        Capital Expenditure shall mean any expenditure which, in accordance with
GAAP, should be capitalized on the balance sheet of the Person making the same.

        Capitalized Lease shall mean any lease of Property, whether real and/or
personal, by a Person as lessee which in accordance with GAAP should be
capitalized on the balance sheet of such Person.

        Capitalized Lease Obligations of any Person shall mean, as of the date
of any determination thereof, the amount at which the aggregate rental
obligations due and to become due under all Capitalized Leases under which such
Person is a lessee should be reflected as a liability on a balance sheet of such
Person in accordance with GAAP.

         CERCLA shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. &sect;&sect;9601 et seq., and as the
same may from time to time be further amended, modified, extended or renewed.

        Change of Control Event means the beneficial ownership or acquisition by
any Person or group of Persons who are Affiliates (in any transaction or series
of related transactions) of (a) more than Fifty Percent (50%) of the Voting
Stock of Borrower, (b) the power to elect, appoint or cause the election or
appointment of at least a majority of the members of the Board of Directors of
Borrower or (c) all or substantially all of the assets and Properties of
Borrower.

        Code shall mean the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, together with the regulations thereunder,
in each case as in effect from time to time. References to sections of the Code
shall be construed to also refer to any successor sections.

        Consolidated Adjusted Liabilities shall mean, as of the date of any
determination thereof, the total liabilities of Borrower and its Subsidiaries
(other than unsecured trade accounts payable incurred in the ordinary course of
business) which would be shown as liabilities on a consolidated balance sheet of
Borrower and its Subsidiaries as of such date prepared in accordance with GAAP.

        Consolidated Assets shall mean, as of the date of any determination
thereof, the total assets of Borrower and its Subsidiaries which would be shown
as assets on a consolidated balance sheet of Borrower and its Subsidiaries as of
such date prepared in accordance with GAAP, after eliminating all amounts
properly attributable to minority interests, if any, in the stock and surplus of
Subsidiaries.

         Consolidated Adjusted Liabilities to Consolidated EBITDA Ratio shall
mean, as of the last day of any fiscal quarter of Borrower, the ratio of (a)
Consolidated Adjusted Liabilities as of such day to (b) Consolidated EBITDA for
the four (4) consecutive fiscal quarter period of Borrower ending on such day.

         Consolidated Current Ratio shall mean, as of the date of any
determination thereof, the ratio of (a) the Current Assets of Borrower and its
Subsidiaries as of such date to (b) the Current Liabilities of Borrower and its
Subsidiaries as of such date, all determined on a consolidated basis and in
accordance with GAAP.

         Consolidated EBITDA shall mean, for the period in question, the sum of
(a) Consolidated Net Income during such period plus (b) to the extent deducted
in determining such Consolidated Net Income (but without duplication), the sum
of (i) Consolidated Interest Expense during such period, plus (ii) all
provisions for any Federal, state, local and/or foreign income taxes made by
Borrower and its Subsidiaries during such period (whether paid or deferred),
plus (iii) all depreciation, amortization and other non-cash expenses of
Borrower and its Subsidiaries during such period, plus (iv) any extraordinary
losses during such period, plus (v) any losses from the sale or other
disposition of Property other than in the ordinary course of business during
such period plus (vi) for any period which includes the fiscal quarter of
Borrower ended November 9, 2002, the sum of $4,551,716.00 plus (vii) for any
period which includes the fiscal quarter of Borrower ended February 1, 2003, the
sum of $1,490,462.00 minus (c) to the extent added in determining such
Consolidated Net Income (but without duplication), the sum of (i) any
extraordinary gains during such period, plus (ii) any gains from the sale or
other disposition of Property other than in the ordinary course of business
during such period plus (iii) all non-cash gains of Borrower and its
Subsidiaries during such period, all determined on a consolidated basis and in
accordance with GAAP.

         Consolidated EBITDAR shall mean, for the period in question, the sum of
(a) Consolidated EBITDA during such period plus (b) to the extent deducted in
determining such Consolidated EBITDA, Consolidated Operating Lease Expense
during such period, all determined on a consolidated basis and in accordance
with GAAP.

         Consolidated Fixed Charge Coverage Ratio shall mean, for the period in
question, the ratio of (a) Consolidated EBITDAR during such period to (b)
Consolidated Fixed Charges during such period, all determined on a consolidated
basis and in accordance with GAAP.

         Consolidated Fixed Charges shall mean, for the period in question, the
sum of (a) the aggregate amount of all principal payments required to be made by
Borrower and its Subsidiaries on all Debt during such period (including the
principal portion of payments in respect of Capitalized Leases but excluding
principal payments on the Loans), plus (b) Consolidated Interest Expense during
such period, plus (b) Consolidated Operating Lease Expense during such period,
plus (d) all Capital Expenditures made by Borrower and its Subsidiaries during
such period (net of any Debt incurred by Borrower or such Subsidiary (other than
Loans) to finance such Capital Expenditure), plus (e) all provisions for any
Federal, state, local and/or foreign income taxes made by Borrower and its
Subsidiaries during such period (whether paid or deferred) plus (f) all
dividends paid by Borrower on or with respect to any of its capital stock during
such period, all determined on a consolidated basis and in accordance with GAAP.

         Consolidated Interest Expense shall mean, for the period in question,
without duplication, all gross interest expense of Borrower and its Subsidiaries
(including, without limitation, capitalized interest expense, the interest
portion of Capitalized Lease Obligations, the interest portion of any deferred
payment obligation and amortization of debt discount and expense) during such
period, all determined on a consolidated basis and in accordance with GAAP.

         Consolidated Net Income shall mean the after-tax net income (or loss)
of Borrower and its Subsidiaries for the period in question (determined without
giving effect to any loss directly attributable to Borrower’s investment in TRU
Retail, Inc.), all determined on a consolidated basis and in accordance with
GAAP.

         Consolidated Net Worth shall mean, as of the date of any determination
thereof, the amount of the capital stock accounts (net of treasury stock, at
cost) of Borrower and its Subsidiaries as of such date plus (or minus in the
case of a deficit) the surplus and retained earnings of Borrower and its
Subsidiaries as of such date, all determined on a consolidated basis and in
accordance with GAAP.

         Consolidated Operating Lease Expense shall mean, for the period in
question, the aggregate amount of all Operating Lease Expenses of Borrower and
its Subsidiaries during such period, all determined on a consolidated basis and
in accordance with GAAP.

         Consolidated Tangible Net Worth shall mean, as of the date of any
determination thereof, the sum of (a) Consolidated Net Worth as of such date
plus (b) the aggregate principal amount of all Subordinated Debt of Borrower
outstanding as of such date, minus (c) the book value of all Intangible Assets
of Borrower and its Subsidiaries as of such date minus (d) the aggregate
outstanding amount of all Investments (including, without limitation, loans
and/or advances) made by Borrower and/or any Subsidiary in or to TRU Retail Inc.
as of such date, all determined on a consolidated basis and in accordance with
GAAP.

         Current Assets shall mean, with respect to any Person, all assets of
such Person which, in accordance with GAAP, should be classified as current
assets on a balance sheet of such Person.

         Current Liabilities shall mean, with respect to any Person, all
liabilities of such Person which, in accordance with GAAP, should be classified
as current liabilities on a balance sheet of such Person.

        Debt of any Person shall mean, as of the date of determination thereof,
the sum of (a) all Indebtedness of such Person for borrowed money or which has
been incurred in connection with the purchase or other acquisition of Property
(other than unsecured trade accounts payable incurred in the ordinary course of
business) plus (b) all Capitalized Lease Obligations of such Person plus (c) all
Guarantees by such Person of Debt of others plus (d) the aggregate undrawn face
amount of all letters of credit issued for the account and/or upon the
application of such Person together with all unreimbursed drawings with respect
thereto.

         Default shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.

         Distribution in respect of any corporation or other entity shall mean:
(a) dividends or other distributions (other than stock dividends and stock
splits) on or in respect of any of the capital stock or other equity interests
of such corporation or other entity; and (b) the redemption, repurchase or other
acquisition of any capital stock or other equity interests of such corporation
or other entity or of any warrants, rights or other options to purchase any such
capital stock or other equity interests.

         Domestic Business Day shall mean any day except a Saturday, Sunday or
legal holiday observed by Bank.

        Environmental Claim shall mean any administrative, regulatory or
judicial action, judgment, order, consent decree, suit, demand, demand letter,
claim, Lien, notice of noncompliance or violation, investigation or other
proceeding arising (a) pursuant to any Environmental Law or governmental or
regulatory approval issued under any such Environmental Law, (b) from the
presence, use, generation, storage, treatment, Release, threatened Release,
disposal, remediation or other existence of any Hazardous Substance, (c) from
any removal, remedial, corrective or other response action pursuant to an
Environmental Law or the order of any governmental or regulatory authority or
agency, (d) from any third party seeking damages, contribution, indemnification,
cost recovery, compensation, injunctive or other relief in connection with a
Hazardous Substance or arising from alleged injury or threat of injury to
health, safety, natural resources or the environment or (e) from any Lien
against any Property owned, leased or operated by Borrower or any Subsidiary in
favor of any governmental or regulatory authority or agency in connection with a
Release, threatened Release or disposal of a Hazardous Substance.

         Environmental Law shall mean any Federal, state, local, foreign or
other statute, law, rule, regulation, order, consent decree, judgment, permit,
license, code, covenant, deed restriction, common law, treaty, convention,
ordinance or other requirement relating to public health, safety or the
environment, including, without limitation, those relating to Releases,
discharges or emissions to air, water, land or groundwater, to the withdrawal or
use of groundwater, to the use and handling of polychlorinated biphenyls or
asbestos, to the disposal, treatment, storage or management of hazardous or
solid waste, Hazardous Substances or crude oil, or any fraction thereof, to
exposure to toxic or hazardous materials, to the handling, transportation,
discharge or release of gaseous or liquid Hazardous Substances and any rule,
regulation, order, notice or demand issued pursuant to such law, statute or
ordinance, in each case applicable to any of the Property owned, leased or
operated by Borrower or any Subsidiary or the operation, construction or
modification of any such Property, including, without limitation, the following:
CERCLA, the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984,
the Hazardous Materials Transportation Act, as amended, the Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1976, the Safe
Drinking Water Control Act, the Clean Air Act of 1966, as amended, the Toxic
Substances Control Act of 1976, the Occupational Safety and Health Act of 1970,
as amended, the Emergency Planning and Community Right-to-Know Act of 1986, the
National Environmental Policy Act of 1975, the Oil Pollution Act of 1990 and any
similar or implementing state or local law, and any state or local statute and
any further amendments to these laws providing for financial responsibility for
cleanup or other actions with respect to the Release or threatened Release of
Hazardous Substances or crude oil, or any fraction thereof and all rules,
regulations, guidance documents and publication promulgated thereunder.

         ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor sections.

         ERISA Affiliate shall mean any corporation, trade or business that is,
along with Borrower or any Subsidiary, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
Sections 414(b) and 414(c), respectively, of the Code or Section 4001 of ERISA.

         Eurodollar Business Day shall mean any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.

         Event of Default shall have the meaning ascribed thereto in Section 6.

         Exchange Act shall mean the Securities Exchange Act of 1934, as
amended.

         Existing Revolving Credit Agreement shall mean that certain Revolving
Credit Agreement dated as of June 27, 2000, by and among Borrower, the banks
party thereto and U.S. Bank National Association (which was formerly known as
Firstar Bank, N.A., which is the successor by merger to Firstar Bank Missouri,
National Association), as agent for the banks, as amended by that certain First
Amendment to Revolving Credit Agreement dated as of July 20, 2001, that certain
Second Amendment to Revolving Credit Agreement dated as of November 8, 2001,
that certain Third Amendment to Revolving Credit Agreement dated as of January
16, 2002, that certain Fourth Amendment to Revolving Credit Agreement dated as
of April 4, 2002, and that certain Fifth Amendment to Revolving Credit Agreement
dated as of December 16th , 2002.

         Financial Covenant shall mean, with respect to any agreement, document
or instrument representing or governing Debt, any covenant (whether expressed as
a covenant, an event of default or a condition to a borrowing) contained therein
expressed in terms of (a) a minimum or maximum amount in or derived from the
financial statements of Borrower and/or its Subsidiaries or (b) a minimum or
maximum ratio between any such amounts described in clause (a) above or (c) any
other financial or finance-related test as the same may relate to the assets,
liabilities, revenues or expenses of Borrower and/or its Subsidiaries; provided
that the above shall not include a negative pledge covenant.

         GAAP shall mean, at any time, generally accepted accounting principles
at such time in the United States of America.

         Guarantee by any Person shall mean any obligation (other than
endorsements of negotiable instruments for deposit or collection in the ordinary
course of business), contingent or otherwise, of such Person guaranteeing, or in
effect guaranteeing, any Indebtedness, liability, dividend or other obligation
of any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such Person: (a) to purchase such
Indebtedness or obligation or any Property constituting security therefor, (b)
to advance or supply funds (i) for the purchase or payment of such Indebtedness
or obligation or (ii) to maintain working capital or other balance sheet
condition or otherwise to advance or make available funds for the purchase or
payment of such Indebtedness or obligation, (c) to lease property or to purchase
securities or other property or services primarily for the purpose of assuring
the owner of such Indebtedness or obligation of the ability of the primary
obligor to make payment of the Indebtedness or obligation or (d) otherwise to
assure the owner of the Indebtedness or obligation of the primary obligor
against loss in respect thereof. For the purposes of all computations made under
this Agreement, a Guarantee in respect of any Indebtedness for borrowed money
shall be deemed to be Indebtedness equal to the then outstanding principal
amount of such Indebtedness for borrowed money which has been guaranteed or such
lesser amount to which the maximum exposure of the guarantor shall have been
specifically limited, and a Guarantee in respect of any other obligation or
liability or any dividend shall be deemed to be Indebtedness equal to the
maximum aggregate amount of such obligation, liability or dividend or such
lesser amount to which the maximum exposure of the guarantor shall have been
specifically limited. Guarantee when used as a verb shall have a correlative
meaning.

        Guarantor(s) shall mean each Subsidiary of Borrower which now or
hereafter executes a Guaranty.

         Guaranty shall mean each Guaranty now or hereafter executed by one or
more Guarantors in favor of Bank with respect to the indebtedness of Borrower to
Bank, as the same may from time to time be amended, modified, extended, renewed
or restated.

         Hazardous Substance shall mean any hazardous or toxic material,
substance or waste, pollutant or contaminant which is regulated under any
Environmental Law or any other statute, law, ordinance, rule or regulation of
any Federal, state, local, foreign or other body, instrumentality, agency,
authority or official having jurisdiction over any of the Property owned, leased
or operated by Borrower or any Subsidiary or its use, including, without
limitation, any material, substance or waste which is: (a) defined as a
hazardous substance under Section 311 of the Federal Water Pollution Control Act
(33 U.S.C. &sect;&sect;1317), as amended; (b) regulated as a hazardous waste
under Section 1004 or Section 3001 of the Federal Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act (42 U.S.C.
&sect;&sect;6901 et seq.), as amended; (c) defined as a hazardous substance
under Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. &sect;&sect;9601 et seq.), as amended; or (d) defined
or regulated as a hazardous substance or hazardous waste under any rules or
regulations promulgated under any of the foregoing statutes.

         Indebtedness shall mean, with respect to any Person, without
duplication, all indebtedness, liabilities and obligations of such Person which
in accordance with GAAP are required to be classified upon a balance sheet of
such Person as liabilities of such Person, and in any event shall include all
(a) obligations of such Person for borrowed money or which have been incurred in
connection with the purchase or other acquisition of Property, (b) obligations
secured by any Lien on, or payable out of the proceeds of or production from,
any Property owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligations, (c) indebtedness, liabilities
and obligations of third parties, including joint ventures and partnerships of
which such Person is a venturer or general partner, recourse to which may be had
against such Person, (d) obligations created or arising under any conditional
sale or other title retention agreement with respect to Property acquired by
such Person, notwithstanding the fact that the rights and remedies of the
seller, lender or lessor under such agreement in the event of default are
limited to repossession or sale of such Property, (e) Capitalized Lease
Obligations of such Person, (f) the aggregate undrawn face amount of all letters
of credit issued for the account of and/or upon the application of such Person
together with all unreimbursed drawings with respect thereto and (g)
indebtedness, liabilities and obligations of such Person under Guarantees.

         Intangible Assets shall mean all patents, trademarks, service marks,
copyrights, trade names, goodwill (including any amounts, however designated,
representing the cost of acquisition of business and investments in excess of
the book value thereof), unamortized debt discount and expense, unamortized
deferred charges, deferred research and development costs, any write-up of asset
value after the date of this Agreement, non-competition covenants, signing
bonuses, prepaid expenses and other forms of prepaid assets, deferred taxes,
loans, advances and/or other amounts due from shareholders, directors, officers,
managers and/or employees, investments in and receivables due from affiliates,
deposits for insurance, utilities and the like and any other assets treated as
intangible assets under GAAP.

         Interest Period shall mean with respect to each LIBOR Loan:

    (a)        initially, the period commencing on the date of such Loan and
ending 1, 2, 3 or 6 months thereafter (or such other period agreed upon in
writing by Borrower and Bank), as the Borrower may elect in the applicable
Notice of Borrowing; and

    (b)        thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Loan and ending 1, 2, 3 or 6 months
thereafter (or such other period agreed upon in writing by Borrower and Bank),
as Borrower may elect pursuant to Section 2.05;

        provided that:

    (c)        subject to clauses (d) and (e) below, any Interest Period which
would otherwise end on a day which is not a Eurodollar Business Day shall be
extended to the next succeeding Eurodollar Business Day unless such Eurodollar
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Eurodollar Business Day;

    (d)        subject to clause (e) below, any Interest Period which begins on
the last Eurodollar 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 Eurodollar Business Day of a
calendar month; and

    (e)        no Interest Period shall extend beyond the last day of the
Revolving Credit Period.

        Investment shall mean any investment (including, without limitation, any
loan or advance) by Borrower or any Subsidiary in or to any Person, whether
payment therefor is made in cash or in capital stock or other equity interests
of Borrower or any Subsidiary, and whether such investment is by acquisition of
capital stock or other equity interests or Indebtedness, or by loan, advance,
transfer of Property out of the ordinary course of business, capital
contribution, equity or profit sharing interest or extension of credit on terms
other than those normal in the ordinary course of business or otherwise.

         Letter of Credit and Letters of Credit shall have the meanings ascribed
thereto in Section 2.02(a).

         Letter of Credit Application shall mean an Application and Agreement
for Standby Letter of Credit in the form of Exhibit C attached hereto and
incorporated herein by reference (or such other form as may then be Bank’s
standard form of application and agreement for standby letter of credit) or an
Application and Agreement for Commercial Letter of Credit in the form of Exhibit
D attached hereto and incorporated herein by reference (or such other form as
may then be Bank’s standard form of application and agreement for commercial
letter of credit), as the case may be, in either case executed by Borrower, as
applicant and account party, and delivered to Bank pursuant to Section 2.02, as
the same may from time to time be amended, modified, extended, renewed or
restated.

         Letter of Credit Commitment Fee shall have the meaning ascribed thereto
in Section 2.02(d).

         Letter of Credit Issuance Fee shall have the meaning ascribed thereto
in Section 2.02(d).

         Letter of Credit Negotiation Fee shall have the meaning ascribed
thereto in Section 2.02(d).

         Letter of Credit Request shall have the meaning ascribed thereto in
Section 2.02(a).

         LIBOR Base Rate shall mean, with respect to the applicable Interest
Period, (a) the LIBOR Index Rate for such Interest Period, if such rate is
available or (b) if the LIBOR Index Rate is not available, the average (rounded
upward, if necessary, to the next higher 1/100 of 1%) of the respective rates
per annum of interest at which deposits in Dollars are offered to Bank in the
London interbank market by two (2) Eurodollar dealers of recognized standing,
selected by Bank in its sole discretion, at or about 11:00 a.m. (St. Louis time)
on the date two (2) Eurodollar Business Days before the first day of such
Interest Period, for delivery on the first day of the applicable Interest Period
for a number of days comparable to the number of days in such Interest Period
and in an amount approximately equal to the principal amount of the LIBOR Loan
to which such Interest Period is to apply.

         LIBOR Index Rate shall mean, with respect to the applicable Interest
Period, a rate per annum (rounded upwards, if necessary, to the next higher
1/100 of 1%) equal to the British Bankers’ Association interest settlement rates
for U.S. Dollar deposits for such Interest Period as of 11:00 a.m. (London time)
on the day two (2) Eurodollar Business Days before the first day of such
Interest Period as published by Bloomberg Financial Services, Dow Jones Market
Service, Telerate, Reuters or any other service from time to time used by Bank.

         LIBOR Loan shall mean any Loan bearing interest based on the LIBOR
Rate.

         LIBOR Rate shall mean (a) the quotient of the (i) LIBOR Base Rate
divided by (ii) one minus the applicable LIBOR Reserve Percentage plus (b) the
Applicable LIBOR Margin. The LIBOR Rate shall be adjusted automatically on and
as of the effective date of any change in the LIBOR Reserve Percentage and/or
the Applicable LIBOR Margin.

         LIBOR Reserve Percentage shall mean for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by The
Board of Governors of the Federal Reserve System (or any successor), for
determining the maximum reserve requirement (including, without limitation, any
basic, supplemental, emergency, special or marginal reserves) with respect to
“Eurocurrency liabilities” as defined in Regulation D or with respect to any
other category of liabilities which includes deposits by reference to which the
interest rate on LIBOR Loans is determined, whether or not Bank has any
Eurocurrency liabilities subject to such reserve requirement at such time. LIBOR
Loans shall be deemed to constitute Eurocurrency liabilities and as such shall
be deemed subject to reserve requirements without the benefit of any credits for
proration, exceptions or offsets which may be available from time to time to
Bank. The LIBOR Rate shall be adjusted automatically on and as of the effective
date of any change in the LIBOR Reserve Percentage.

         Lien shall mean any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on common law, statute or contract, including, without
limitation, any security interest, mortgage, deed of trust, pledge,
hypothecation, judgment lien or other lien or encumbrance of any kind or nature
whatsoever, any conditional sale or trust receipt, any lease, consignment or
bailment for security purposes and any Capitalized Lease. The term “Lien” shall
include reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property.

         Loan and Loans shall have the meanings ascribed thereto in Section
2.01(a).

         Material Adverse Effect shall mean (a) a material adverse effect on the
Properties, assets, liabilities, business, operations, prospects, income or
condition (financial or otherwise) of Borrower and its Subsidiaries taken as a
whole, (b) material impairment of the ability of Borrower and/or Borrower and
its Subsidiaries taken as a whole to perform any of its or their obligations
under this Agreement, the Note, any Letter of Credit Application and/or any
other Transaction Document or (c) material impairment of the enforceability of
the rights of, or benefits available to, Bank under this Agreement, the Note,
any Letter of Credit Application and/or any other Transaction Document.

         Moody’s shall mean Moody’s Investors Service, Inc. or its successor

         Multi-Employer Plan shall mean a “multi-employer plan” as defined in
Section 4001(a)(3) of ERISA which is maintained for employees of Borrower, any
Subsidiary or any ERISA Affiliate or to which Borrower, any Subsidiary or any
ERISA Affiliate has contributed in the past or currently contributes.

         Note shall have the meaning ascribed thereto in Section 2.04(a).

         Note Agreements shall mean those certain Note Agreements dated June 16,
1997, by and between Borrower and each of The Prudential Insurance Company of
America and The Guardian Life Insurance Company of America, as the same may from
time to time be amended, modified, extended, renewed or restated.

         Notice of Borrowing shall have the meaning ascribed thereto in Section
2.03.

         Obligor shall mean Borrower, each Guarantor and each other Person who
is or shall at any time hereafter become primarily or secondarily liable on any
of the Borrower’s Obligations or who grants Bank a Lien upon any of the Property
or assets of such Person as security for any of the Borrower’s Obligations
and/or any Guarantee thereof.

         Occupational Safety and Health Laws shall mean the Occupational Safety
and Health Act of 1970, as amended, and any other Federal, state, local, foreign
or other statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to or imposing liability or standards of conduct concerning
employee health and/or safety, as now or at any time hereafter in effect.

         Other Taxes shall have the meaning ascribed thereto in Section 2.20(a).

         Operating Lease shall mean any lease of real and/or personal property
under which Borrower or a Subsidiary is lessee other than Capitalized Leases.

         Operating Lease Expenses shall mean with respect to any Person, for the
period in question, the aggregate amount of operating lease expense (i.e. all
minimum rental payments plus all additional rentals payable under percentage
Operating Leases) during such period under all Operating Leases, all determined
in accordance with GAAP, but excluding any amounts required to be paid by such
Person (whether or not designated as rent or additional rent) on account of
maintenance, repairs, insurance, taxes, assessments, amortization and/or similar
charges.

         PBGC shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

         Pension Plan shall mean a “pension plan,” as such term is defined in
Section 3(2) of ERISA, which is established or maintained by Borrower, any
Subsidiary or any ERISA Affiliate, other than a Multi-Employer Plan.

         Permitted Acquisition shall mean any Acquisition by Borrower or any
Wholly-Owned Subsidiary of an ongoing business in the same line of business of
Borrower and its Subsidiaries on the date of this Agreement so long as (a)
Borrower has given Bank at least ten (10) Domestic Business Days prior written
notice of such Acquisition (or such lesser notice as Bank may agree to in
writing) and has provided Bank with such financial and other information
concerning such Acquisition as Bank may reasonably request, (b) such Acquisition
has been (i) in the event a corporation or its assets is the subject of such
Acquisition, either (A) approved by the Board of Directors of the corporation
which is the subject of such Acquisition or (B) recommended by such Board of
Directors to the shareholders of such corporation, (ii) in the event a
partnership or its assets is the subject of such Acquisition, approved by a
majority (by percentage of voting power) of the partners of the partnership
which is the subject of such Acquisition, (iii) in the event a limited liability
company or its assets is the subject of such Acquisition, approved by a majority
(by percentage of voting power) of the members of the limited liability company
which is the subject of such Acquisition, (iv) in the event an organization or
entity other than a corporation, partnership or limited liability company or its
assets is the subject of such Acquisition, approved by a majority (by percentage
of voting power) of the governing body, if any, or by a majority (by percentage
of ownership interest) of the owners of the organization or entity which is the
subject of such Acquisition or (v) in the event the corporation, partnership,
limited liability company or other organization or entity which is the subject
of such Acquisition is in bankruptcy, approved by the bankruptcy court or
another court of competent jurisdiction, (c) if such Acquisition involves a
merger or consolidation of Borrower or any Subsidiary and another entity,
Borrower or such Subsidiary, as the case may be, is the surviving entity, (d)
both immediately before and immediately after giving effect to such Acquisition,
Borrower is, and on a pro forma basis projects that it will continue to be, in
compliance with all of the terms, provisions, covenants and conditions contained
in this Agreement and the other Transaction Documents, which pro forma
compliance shall be demonstrated by Borrower to Bank pursuant to such financial
and other information concerning such Acquisition as Bank may reasonably
request, (e) the total purchase price for such Acquisition (whether payable at
closing or at any time or times after closing of such Acquisition, and if
payable after closing and not determinable prior to closing, as reasonably
estimated by Borrower, and in any event including the amount of any Indebtedness
assumed by Borrower or any Subsidiary of Borrower as a part of such Acquisition)
does not exceed $15,000,000.00, (f) the total purchase price for all
Acquisitions consummated by Borrower and/or any Subsidiary on or after the date
of this Agreement (including the Acquisition in question) (whether payable at
closing or at any time or times after closing of the applicable Acquisition, and
if payable after closing and not determinable prior to closing, as reasonably
estimated by Borrower, and in any event including the amount of any Indebtedness
assumed by Borrower or any Subsidiary of Borrower as a part of the applicable
Acquisition) does not exceed the sum of $30,000,000.00 and (g) both immediately
before and immediately after giving effect to such Acquisition, no Default or
Event of Default shall exist.

         Permitted Liens shall mean any of the following:

    (a)        Liens on Property of a Subsidiary to secure obligations of such
Subsidiary to Borrower;

    (b)        Liens for property taxes and assessments or other governmental
charges or levies and statutory Liens securing claims or demands of suppliers,
mechanics and/or materialmen, provided payment thereof is not at the time
required by Sections 5.01(b), 5.01(d) and/or 5.01(e);

    (c)        Liens (other than any Liens imposed by ERISA) incidental to the
conduct of business or the ownership of Properties and assets (including Liens
in connection with worker’s compensation, unemployment insurance and other like
laws, carriers’, warehousemen’s and attorneys’ liens and statutory landlords’
liens) and Liens to secure the performance of bids, tenders or trade contracts,
or to secure statutory obligations, surety or appeal bonds or other Liens of
like general nature incurred in the ordinary course of business and not in
connection with the borrowing of money or the purchase or other acquisition of
Property; provided in each case the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate actions or proceedings
being diligently conducted and for which adequate reserves in accordance with
GAAP have been established;

    (d)        Liens of or resulting from any judgment or award, the time for
the appeal of which shall not have expired, or in respect of which Borrower or
the applicable Subsidiary shall at any time in good faith be diligently
prosecuting an appeal and in respect of which a stay of execution pending such
appeal shall have been secured and for which reserves shall have been set aside
on the books of Borrower or such Subsidiary in accordance with GAAP which
judgment or award is not for an amount exceeding $5,000,000.00;

    (e)        survey exceptions, easements, reservations, rights of others for
rights-of-way, utilities and other similar purposes and/or zoning or other
restrictions as to the use of real properties, which are necessary or desirable
for the conduct of the activities of Borrower and its Subsidiaries or which
customarily exist on properties of Persons engaged in similar activities and
similarly situated and which do not in any event materially impair the use of
such real properties in the operation of the business of the Borrower and its
Subsidiaries;

    (f)        Liens existing as of the date of this Agreement and listed on
Schedule 4.12 attached hereto (without giving effect to any amendment to
Schedule 4.12 made after the date of this Agreement);

    (g)        Capitalized Leases permitted by Section 5.02(a)(vi); and

    (h)        Liens in favor of Bank under the Letter of Credit Applications.

         Person shall mean any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, entity or government (whether national,
Federal, state, county, city, municipal, foreign or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof).

         Prime Loan shall mean any Loan bearing interest based on the Adjusted
Prime Rate.

         Prime Rate shall mean the interest rate announced from time to time by
Bank as its “prime rate” (which rate shall fluctuate as and when said prime rate
shall change). Borrower acknowledges that such “prime rate” is a reference rate
and does not necessarily represent the lowest or best rate offered by Bank to
its customers.

         Property shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible. Properties shall
mean the plural of Property. For purposes of this Agreement, Borrower and each
Subsidiary shall be deemed to be the owner of any Property which it has acquired
or holds subject to a conditional sale agreement, financing lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes.

         RCRA shall mean the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. &sect;&sect;6901 et seq., and any future
amendments.

         Regulation D shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as from time to time amended.

         Regulatory Change shall have the meaning ascribed thereto in Section
2.15.

         Related Party Arrangement shall have the meaning ascribed thereto in
Section 5.02(g).

         Release shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment, including, without limitation, the abandonment or discarding of
barrels, drums, containers, tanks and/or other receptacles containing (or
containing traces of) any Hazardous Substance.

         Reportable Event shall have the meaning given to such term in ERISA.

         Responsible Officer shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of
Borrower or any other officer of Borrower involved principally in the financial
administration or controllership function of Borrower.

         Restricted Investment shall mean any Investment, or any expenditure or
any incurrence of any liability to make any expenditure for an Investment, other
than:

    (a)        loans and/or advances by Borrower or a Wholly-Owned Subsidiary to
a Wholly-Owned Subsidiary;

    (b)        loans and/or advances by any Subsidiary to Borrower which are
subordinated to the payment and priority of the Borrower’s Obligations pursuant
to a subordination agreement in form and substance satisfactory to Bank;

    (c)        Investments which constitute “Eligible Investments” as defined in
and within the meaning of the CPI Corp. Cash Investment Policy dated March 25,
1998, a copy of which has been provided to Bank, as the same may from time to
time be amended with the prior written consent of Bank;

    (d)        Investments existing as of the date of this Agreement as
described in Schedule 4.18 attached hereto, and any future retained earnings in
respect thereof (without giving effect to any amendment to Schedule 4.18 made
after the date of this Agreement);

    (e)        loans or advances in the usual and ordinary course of business to
officers and/or employees of Borrower or a Subsidiary for business expenses in
the aggregate principal amount of up to $100,000.00 (or the equivalent thereof
in any foreign currency) at any one time outstanding;

    (f)        Investments received in total or partial satisfaction of any past
due obligation owed to Borrower or any Subsidiary by financially troubled
Persons in the ordinary course of Borrower’s or such Subsidiary’s business to
the extent deemed necessary by Borrower or such Subsidiary to prevent or limit
loss; and

    (g)        acquisitions of stock or assets in connection with a Permitted
Acquisition.

         Restricted Agreement shall have the meaning ascribed thereto in Section
5.02(q).

         Revolving Credit Period shall mean the period commencing on the date of
this Agreement and ending July 31, 2004; provided, however, that the Revolving
Credit Period shall end on the date the Bank’s Commitment is terminated pursuant
to Section 6 or otherwise.

         S&P shall mean Standard and Poor’s Ratings Group or its successor.

         Subordinated Debt shall mean, as of the date of any determination
thereof, the aggregate principal amount of all Debt of Borrower outstanding as
of such date which is subordinated to the payment and priority of all of the
Borrower’s Obligations pursuant to a subordination agreement in form and
substance satisfactory to Bank.

         Subsidiary shall mean any corporation or other entity of which more
than Fifty Percent (50%) of the issued and outstanding capital stock or other
equity interests entitled to vote for the election of directors or persons
performing similar functions (other than by reason of default in the payment of
dividends or other distributions) is at the time owned directly or indirectly by
Borrower and/or any Subsidiary.

         Taxes shall have the meaning ascribed thereto in Section 2.20.

         Total Outstandings shall mean, as of any date, the sum of (a) the
aggregate principal amount of all Loans outstanding as of such date plus (b) the
aggregate undrawn face amount of all Letters of Credit outstanding as of such
date plus all unreimbursed drawings with respect thereto.

         Transaction Documents shall mean this Agreement, the Note, the Letter
of Credit Applications, each Guaranty and any and all other agreements,
documents and instruments heretofore, now or hereafter delivered to Bank with
respect to or in connection with or pursuant to this Agreement, any Loan made
hereunder, any Letter of Credit issued hereunder and/or any of the other
Borrower’s Obligations, and executed by or on behalf of Borrower and/or any
other Obligor, including, without limitation, any agreement, document or
instrument heretofore, now or hereafter executed by Borrower with or in favor of
Bank providing for any interest rate swap, interest rate cap, interest rate
collar or other interest rate hedge, all as the same may from time to time be
amended, modified, extended, renewed or restated.

         Voting Stock shall mean, with respect to any Person, any shares of
stock or other equity interests of any class or classes of such Person whose
holders are entitled under ordinary circumstances (irrespective of whether at
the time stock or other equity interests of any other class or classes shall
have or might have voting power by reason of the happening of any contingency)
to vote for the election of a majority of the directors, managers, trustees or
other governing body of such Person.

         Welfare Plan shall mean a “welfare plan” as such term is defined in
Section 3(1) of ERISA, which is established or maintained by Borrower, any
Subsidiary or any ERISA Affiliate, other than a Multi-Employer Plan.

         Wholly-Owned Subsidiary shall mean any Subsidiary all of the equity
interests (except directors’ qualifying shares) and voting interests of which
are owned by Borrower and/or one or more of its Wholly-Owned Subsidiaries.

        1.02 Accounting Terms and Determinations; Pro Forma Computations. (a)
Except as otherwise specified in this Agreement, all accounting terms used in
this Agreement shall be interpreted, all accounting determinations under this
Agreement shall be made and all financial statements required to be delivered
under this Agreement shall be prepared in accordance with GAAP as in effect from
time to time, applied on a basis consistent (except for changes approved by Bank
and by Borrower’s independent certified public accountants) with the most recent
audited financial statements of Borrower delivered to Bank. Notwithstanding the
foregoing, Borrower may from time to time change its accounting methods, either
at its option or in order to comply with GAAP, provided that (a) any such
change(s) are in accordance with GAAP and are approved by the independent
certified public accountants of Borrower and (b) if Bank, in good faith,
determines that any such accounting change(s), individually or in the aggregate,
have any significant effect on any of the financial covenants contained in this
Agreement (i) with respect to those financial covenant(s) upon which the effect
of such accounting change(s) can be determined with mathematical certainty, such
financial covenant(s) shall be amended to reflect the effect of such accounting
change(s) (and Borrower and Bank shall be obligated to promptly execute an
amendment to such effect) and (ii) with respect to those financial covenant(s)
upon which the effect of such accounting change(s) cannot be determined with
mathematical certainty, Borrower and Bank shall, in good faith, negotiate and
use their best efforts to agree upon new financial covenant(s) reasonably
acceptable to Borrower and Bank to replace the affected financial covenant(s)
(which new financial covenant(s) shall, to the extent reasonably possible,
approximate the effect of such accounting change(s) on the existing financial
covenant(s)), and if Borrower and Bank cannot, in good faith, agree on said new
financial covenant(s), the existing financial covenant(s) shall remain in full
force and effect and shall be computed using the accounting methods in effect
prior to the applicable change in accounting methods. Each such amendment shall
be evidenced by an instrument in writing signed by Borrower and Bank and until
such amendment has been fully executed the existing financial covenant(s) shall
remain in full force and effect and shall be computed using the accounting
methods in effect prior to the applicable change in accounting methods.

    (b)        Any reference in this Agreement to a Subsidiary of Borrower, and
any financial definition, ratio, restriction or other provision of this
Agreement which is stated to be applicable to Borrower and its Subsidiaries or
which is to be determined on a “consolidated” basis, shall apply only to
“Subsidiaries” of Borrower as defined in this Agreement and shall not include
any other entity which is consolidated with Borrower for financial reporting
purposes in accordance with GAAP.

        1.03 Continuance of an Event of Default. For purposes of this Agreement
and the other Transaction Documents, an Event of Default shall deemed to be
continuing until it is waived in writing by Bank as required by Section 7.10 of
this Agreement.

SECTION 2. THE LOANS.

        2.01 Commitment to Make Loans. Subject to the terms and conditions set
forth in this Agreement and so long as no Default or Event of Default has
occurred and is continuing, during the Revolving Credit Period, Bank agrees to
make such loans to Borrower (individually, a “Loan” and collectively, the
“Loans”) as Borrower may from time to time request pursuant to Section 2.03.
Each Loan under this Section 2.01 shall be for an aggregate principal amount of
at least $500,000.00 or any larger multiple of $25,000.00. The aggregate
principal amount of Loans which Bank shall be required to have outstanding under
this Agreement at any one time shall not exceed the sum of (i) the amount of the
Bank’s Commitment minus (ii) the aggregate undrawn face amount of all Letters of
Credit outstanding at such time plus all unreimbursed drawings with respect
thereto. Within the foregoing limits, Borrower may borrow under this Section
2.01, prepay under Section 2.10 and reborrow at any time during the Revolving
Credit Period under this Section 2.01. All Loans not paid prior to the last day
of the Revolving Credit Period, together with all accrued and unpaid interest
thereon and all fees and other amounts owing by Borrower to Bank with respect
thereto, shall be due and payable on the last day of the Revolving Credit
Period.

      2.02 Letter of Credit Commitment.

    (a)        Subject to the terms and conditions of this Agreement and so long
as no Default or Event of Default has occurred and is continuing, during the
Revolving Credit Period, Bank hereby agrees to issue irrevocable commercial
letters of credit payable at sight and/or standby letters of credit for the
account of Borrower (individually, a “Letter of Credit” and collectively, the
“Letters of Credit”) in an amount and for the term specifically requested by
Borrower by notice in writing to Bank in the form of Exhibit B attached hereto
and incorporated herein by reference (a “Letter of Credit Request”) at least
three (3) Domestic Business Days prior to the requested issuance thereof;
provided, however, that:

    (i)        Borrower shall have executed and delivered to Bank a Letter of
Credit Application with respect to such Letter of Credit;

    (ii)        the term of any such Letter of Credit shall not extend beyond
the earlier of (A) the date one (1) year after the date of issuance thereof or
(B) the last day of the Revolving Credit Period;

    (iii)        any Letter of Credit may only be utilized to guaranty the
payment of obligations of Borrower or a Subsidiary to third parties;

    (iv)        after giving effect to the issuance of the requested Letter of
Credit, the Total Outstandings must not exceed the amount of the Bank’s
Commitment at such time;

    (v)        after giving effect to the issuance of the requested Letter of
Credit, the sum of the aggregate undrawn face amount of all outstanding Letters
of Credit plus all unreimbursed drawings with respect thereto must not exceed
the lesser of (A) the amount of the Bank’s Commitment at such time or (B)
$10,000,000.00; and

    (vi)        the text of any such Letter of Credit is provided to Bank no
less than three (3) Domestic Business Days prior to the requested issuance date,
which text must be acceptable to Bank in its sole and absolute discretion.

    (b)        The payment of drafts under each Letter of Credit shall be made
in accordance with the terms thereof and, in that connection, Bank shall be
entitled to honor any drafts and accept any documents presented to it by the
beneficiary of such Letter of Credit in accordance with the terms of such Letter
of Credit and believed in good faith by Bank to be genuine. Bank shall not have
any duty to inquire as to the accuracy or authenticity of any draft or other
drawing document that may be presented to it other than the duties contemplated
by the applicable Letter of Credit Application. If Bank shall have received
documents that in its good faith judgment constitute all of the documents that
are required to be presented before payment or acceptance of a draft under a
Letter of Credit, it shall be entitled to pay or accept such draft provided such
documents substantially conform on their face to the requirements of such Letter
of Credit.

    (c)        In the event of any payment by Bank of a draft presented under a
Letter of Credit in accordance with Section 2.02(b) above and the applicable
Letter of Credit Application, Borrower agrees to pay to Bank in immediately
available funds at the time of such drawing an amount equal to the sum of such
drawing plus Bank’s customary published processing and other fees related
thereto. Borrower hereby authorizes Bank to charge or cause to be charged
Borrower’s bank accounts at Bank to the extent there are balances of immediately
available funds therein, in an amount equal to the sum of such drawing plus
Bank’s customary published processing and other fees related thereto (and Bank
agrees to give Borrower prompt written notice of any amount so charged to any
bank account of Borrower at Bank), and Borrower agrees to pay the amount of any
such drawing (and/or Bank’s customary published processing and other fees
related thereto) not so charged prior to the close of business of Bank on the
day of such drawing. In the event any payment under a Letter of Credit is made
by Bank prior to receipt of payment from Borrower, such payment by Bank shall
constitute a request by Borrower for a Prime Loan under Section 2.01 above and,
if Bank, at its option, elects to make such Loan, the proceeds of such Loan
shall be paid directly to Bank and applied by Bank to the payment of any amounts
owed by Borrower to Bank under this Section 2.02.

    (d)        Borrower hereby further agrees to pay to the order of Bank:

    (i)        with respect to each Letter of Credit which is a standby Letter
of Credit, a nonrefundable issuance fee in the amount of $250.00 and with
respect to each Letter of Credit which is a commercial Letter of Credit, a
nonrefundable issuance fee in the amount of $100.00 (the “Letter of Credit
Issuance Fees”), which Letter of Credit Issuance Fees shall be due and payable
on the date of issuance of each such Letter of Credit;

    (ii)        with respect to each Letter of Credit which is a standby Letter
of Credit, a nonrefundable commitment fee at the rate of (A) so long as no Event
of Default has occurred and is continuing, One and One-Quarter Percent (1-1/4%)
per annum (calculated on an actual day, 360-day year basis) and (B) so long as
any Event of Default has occurred and is continuing, Three and One-Quarter
Percent (3-1/4%) per annum (calculated on an actual day, 360-day year basis), on
the undrawn face amount of each such Letter of Credit (“Letter of Credit
Commitment Fees”), which Letter of Credit Commitment Fees shall be due and
payable quarterly in advance commencing on the date of issuance of each such
Letter of Credit and every three (3) months thereafter during the term of each
such Letter of Credit;

    (iii)        with respect to each Letter of Credit which is a commercial
Letter of Credit, a nonrefundable negotiation fee in an amount equal to (A) so
long as no Event of Default has occurred and is continuing, Three-Eighths of One
Percent (3/8%) and (B) so long as any Event of Default has occurred and is
continuing, Two and Three-Eighths Percent (2-3/8%), of the amount of each draw
on each such Letter of Credit, with a minimum fee of $85.00 per draw (“Letter of
Credit Negotiation Fee”), which Letter of Credit Negotiation Fee shall be due
and payable on the date of each draw on each such Letter of Credit; and

    (iv)        with respect to each Letter of Credit, such other fees (other
than additional issuance fees, additional commitment fees and/or additional
negotiation fees) as may be charged by Bank from time to time in accordance with
Bank’s published schedule of fees in effect from time to time, which fees shall
be due and payable on demand by Bank.

    (e)        Notwithstanding any provision contained in this Agreement to the
contrary, if any Letters of Credit remain outstanding on the last day of the
Revolving Credit Period, Borrower shall, on or before 12:00 noon (St. Louis
time) on the last day of the Revolving Credit Period, (i) surrender the
originals of the applicable Letter(s) of Credit to Bank for cancellation, (ii)
provide Bank with a clean irrevocable standby letter of credit in a face amount
at least equal to One Hundred Ten Percent (110%) of the aggregate undrawn face
amount of all outstanding Letter(s) of Credit plus all unreimbursed drawings
with respect thereto (the “Back-Up Letter of Credit”), which Back-Up Letter of
Credit must be in form and substance satisfactory to Bank and issued by a
domestic commercial bank acceptable to Bank or (iii) provide Bank with cash
collateral (or other collateral acceptable to Bank in its sole and absolute
discretion) in an amount at least equal to the aggregate undrawn face amount of
all outstanding Letter(s) of Credit plus all unreimbursed drawings with respect
thereto and execute and deliver to Bank such agreements as Bank may require to
grant Bank a first priority perfected security interest in such cash or other
collateral. Any such cash collateral received by Bank pursuant to this Section
2.02(e) shall be held by Bank in a separate account at Bank appropriately
designated as a cash collateral account in relation to this Agreement and the
Letters of Credit and retained by Bank as collateral security for the payment of
the Borrower’s Obligations. Cash amounts delivered to Bank pursuant to the
foregoing requirements of this Section 2.02(e) shall be invested, at the request
and for the account of Bank in investments of a type and nature and with a term
acceptable to Bank. Such amounts, including in the case of cash amounts invested
in the manner set forth above, shall not be used by Bank to pay any amounts
drawn or paid under or pursuant to any Letter of Credit, but may be applied to
reimburse Bank for drawings or payments under or pursuant to such Letters of
Credit which Bank has paid, or if no such reimbursement is required to the
payment of such of the other Borrower’s Obligations as Bank shall determine. Any
amounts remaining in any cash collateral account established pursuant to this
Section 2.02(e) after the payment in full of all of the Borrower’s Obligations
and the expiration or cancellation of all of the Letters of Credit shall be
returned to Borrower (after deduction of Bank’s reasonable expenses, if any).

      2.03 Method of Borrowing.

    (a)        Borrower shall give notice (a “Notice of Borrowing”) to Bank by
11:30 a.m. (St. Louis time) on the Domestic Business Day of each Prime Loan, and
by 11:30 a.m. (St. Louis Time) at least three (3) Eurodollar Business Days
before each LIBOR Loan, specifying:

    (i)        the date of such Loan, which shall be a Domestic Business Day
during the Revolving Credit Period in the case of a Prime Loan and a Eurodollar
Business Day during the Revolving Credit Period in the case of a LIBOR Loan,

    (ii)        the aggregate principal amount of such Loan,

    (iii)        whether such Loan is to be a Prime Loan or a LIBOR Loan,

    (iv)        in the case of a LIBOR Loan, the duration of the initial
Interest Period applicable thereto, subject to the provisions of the definition
of Interest Period.

    (b)        Subject to the terms and conditions of this Agreement, provided
that Bank has received the Notice of Borrowing, Bank shall (unless Bank
determines that any applicable condition specified in Section 3 has not been
satisfied) make the applicable Loan to Borrower by crediting the amount of such
Loan to a demand deposit account of Borrower at Bank specified by Borrower (or
such other account mutually agreed upon in writing between Bank and Borrower)
not later than 2:30 p.m. (St. Louis time) on the Domestic Business Day specified
in said Notice of Borrowing.

    (c)        If Bank makes a new Loan under this Agreement on a day on which
Borrower is required to or has elected to repay all or any part of an
outstanding Loan, Bank shall apply the proceeds of its new Loan to make such
repayment and only an amount equal to the difference (if any) between the amount
being borrowed and the amount being repaid shall be made available by Bank to
Borrower as provided in subsection (b) of this Section, or remitted by Borrower
to Bank as provided in Section 2.11, as the case may be.

    (d)        Borrower hereby authorizes Bank to rely on telephonic,
telegraphic, telecopy, telex or written instructions of any person identifying
himself or herself as one of the individuals listed on Schedule 2.03 attached
hereto (or any other individual from time to time authorized to act on behalf of
Borrower pursuant to a resolution adopted by the Board of Directors of Borrower
and certified by the Secretary of Borrower and delivered to Bank) (each, an
“Authorized Person”) with respect to any request to make a Loan or a repayment
under this Agreement, and on any signature which Bank believes to be genuine,
and Borrower shall be bound thereby in the same manner as if such individual
were actually authorized or such signature were genuine. Borrower also hereby
agrees to defend and indemnify Bank and hold Bank harmless from and against any
and all claims, demands, damages, liabilities, losses, costs and expenses
(including, without limitation, attorneys’ fees and expenses) relating to or
arising out of or in connection with the acceptance of any notices or
instructions believed by Bank in good faith to have been sent or delivered by an
Authorized Person, regardless of whether such notice or instruction was in fact
delivered by an Authorized Person.

       2.04  Notes.

    (a)        The Loans of Bank to Borrower shall be evidenced by a Revolving
Credit Note payable to the order of Bank in a principal amount equal to the
maximum amount of the Bank’s Commitment, which Revolving Credit Note shall be in
substantially the form of Exhibit A attached hereto and incorporated herein by
reference (with appropriate insertions) (as the same may from time to time be
amended, modified, extended, renewed or restated, the “Note”).

    (b)        Bank shall record in its books and records the date, amount, type
and Interest Period (if any) of each Loan made by it and the date and amount of
each payment of principal and/or interest made by Borrower with respect thereto;
provided, however, that the obligation of Borrower to repay each Loan made to
Borrower under this Agreement shall be absolute and unconditional,
notwithstanding any failure of Bank to make any such recordation or any mistake
by Bank in connection with any such recordation. The books and records of Bank
showing the account between Bank and Borrower shall be admissible in evidence in
any action or proceeding and shall constitute prima facie proof of the items
therein set forth in the absence of manifest error.

        2.05   Duration of Interest Periods and Selection of Interest Rates.

    (a)        The duration of the initial Interest Period for each LIBOR Loan
shall be as specified in the applicable Notice of Borrowing. Borrower shall
elect the duration of each subsequent Interest Period applicable to such LIBOR
Loan and the interest rate to be applicable during such subsequent Interest
Period (and Borrower shall have the option (i) in the case of any Prime Loan, to
elect that such Loan become a LIBOR Loan and the Interest Period to be
applicable thereto, and (ii) in the case of any LIBOR Loan, to elect that such
Loan become a Prime Loan), by giving notice of such election to Bank by 11:30
a.m. (St. Louis time) on the Domestic Business Day of, in the case of the
election of the Prime Rate, and by 11:30 a.m. (St. Louis time) at least three
(3) Eurodollar Business Days before, in the case of the election of the LIBOR
Rate, the end of the immediately preceding Interest Period applicable thereto,
if any; provided, however, that notwithstanding the foregoing, in addition to
and without limiting the rights and remedies of Bank under Section 6 of this
Agreement, so long as any Default or Event of Default has occurred and is
continuing, Borrower shall not be permitted to renew any LIBOR Loan as a LIBOR
Loan or to convert any Prime into a LIBOR Loan.

    (b)        If Bank does not receive a notice of election for a Loan pursuant
to Section 2.05(a) above within the applicable time limits specified therein,
Borrower shall be deemed to have elected to pay such Loan in whole pursuant to
Section 2.11 on the last day of the current Interest Period with respect thereto
and to reborrow the principal amount of such Loan on such date as a Prime Loan.

    (c)        Borrower may not have outstanding and Bank shall not be obligated
to make more than six (6) LIBOR Loans at any one time.

      2.06 Interest Rates and Interest Payments.

    (a)        So long as no Event of Default has occurred and is continuing,
each Prime Loan shall bear interest on the outstanding principal amount thereof,
for each day from the date such Loan is made until it becomes due (whether by
reason of maturity, acceleration or otherwise), at a rate per annum equal to the
Adjusted Prime Rate. So long as any Event of Default has occurred and is
continuing, each Prime Loan shall, unless otherwise agreed in writing by Bank,
bear interest on the outstanding principal amount thereof, for each day from the
date such Loan is made until it becomes due (whether by reason of maturity,
acceleration or otherwise), at a rate per annum equal to Two Percent (2%) over
and above the Adjusted Prime Rate. Such interest shall be payable monthly in
arrears on the first (1st) day of each month commencing on the first such date
after such Prime Loan is made, and at the maturity of the Notes (whether by
reason of acceleration or otherwise). From and after the maturity of the Notes,
whether by reason of acceleration or otherwise, each Prime Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to Two Percent (2%) over and above the Adjusted Prime Rate.

    (b)        So long as no Event of Default has occurred and is continuing,
each LIBOR Loan shall bear interest on the outstanding principal amount thereof
for each Interest Period applicable thereto at a rate per annum equal to the
applicable LIBOR Rate. So long as any Event of Default has occurred and is
continuing, each LIBOR Loan shall, unless otherwise agreed in writing by Bank,
bear interest on the outstanding principal amount thereof for each Interest
Period applicable thereto at a rate per annum equal to Two Percent (2%) over and
above the applicable LIBOR Rate. Interest shall be payable for each Interest
Period on the last day thereof, unless the duration of such Interest Period
exceeds three (3) months, in which case such interest shall be payable at the
end of the first three (3) months of such Interest Period and on the last day of
such Interest Period, and at the maturity of the Notes (whether by reason of
acceleration or otherwise). From and after the maturity of the Notes, whether by
reason of acceleration or otherwise, each LIBOR Loan shall bear interest,
payable on demand, for each day until paid, at a rate per annum equal to Two
Percent (2%) over and above the higher of (i) the LIBOR Rate for the immediately
preceding Interest Period applicable to such LIBOR Loan or (ii) the Adjusted
Prime Rate.

    (c)        Bank shall determine each interest rate applicable to the Loans
under this Agreement and its determination thereof shall be conclusive in the
absence of manifest error.

        2.07  Computation of Interest.  Interest on Prime Loans under this
Agreement shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Interest on LIBOR Loans shall be computed on the basis of a year of 360
days and paid for the actual number of days elapsed, calculated as to each
Interest Period from and including the first day thereof to but excluding the
last day thereof.

    2.08  Fees.

    (a)        From the date of this Agreement to but excluding the last day of
the Revolving Credit Period, Borrower shall pay Bank a nonrefundable commitment
fee on the unused portion of the Bank’s Commitment (determined by subtracting
the Total Outstandings (other than any portion of the Total Outstandings
consisting of the undrawn face amount of any Letters of Credit which are
commercial Letters of Credit) from the Bank’s Commitment) at a rate per annum
equal to the Applicable Commitment Fee Rate. Such commitment fee shall be (i)
calculated on a daily basis, (ii) payable quarterly in arrears on the first
(1st) day of each January, April, July and October during the Revolving Credit
Period commencing July 1, 2003, and on the last day of the Revolving Credit
Period and (iii) calculated on an actual day, 360-day year basis.

    (b)        Contemporaneously with the execution of this Agreement, Borrower
agrees to pay Bank a nonrefundable facility fee in the amount of $15,000.00.

    (c)        If Borrower fails to make any payment of any principal of or
interest on any Loan within ten (10) days after the date the same shall become
due and payable, whether by reason of maturity, acceleration or otherwise, in
addition to all of the other rights and remedies of Bank under this Agreement
and at law or in equity, Borrower shall pay Bank on demand with respect to each
such late payment a late fee in an amount equal to the greater of $100.00 or
Five Percent (5%) of the amount of each such late payment.

      2.09 Termination or Reduction of Commitments.

    (a)        Borrower may, upon three (3) Domestic Business Days’ prior
written notice to Bank, terminate entirely at any time, or reduce from time to
time by an aggregate amount of $5,000,000.00 or any larger multiple of
$1,000,000.00, the unused portion of the Bank’s Commitment; provided, however,
that (i) at no time shall the Bank’s Commitment be reduced to a figure less than
the Total Outstandings, (ii) at no time shall the Bank’s Commitment be reduced
to a figure greater than zero but less than $5,000,000.00 and (iii) any such
termination or reduction shall be permanent and Borrower shall have no right to
thereafter reinstate or increase, as the case may be, the Bank’s Commitment.

    (b)        If the amount of the Bank’s Commitment on any date is less than
the Total Outstandings on such date, whether as a result of Borrower’s election
to decrease the amount of the Bank’s Commitment pursuant to Section 2.09(a)
above or otherwise, Borrower shall be automatically required (without demand or
notice of any kind by Bank, all of which are hereby expressly waived by
Borrower) to immediately repay the Loans and/or surrender for cancellation the
outstanding Letters of Credit, in either case in an amount sufficient to reduce
the amount of the Total Outstandings to an amount equal to or less than the
amount of the Bank’s Commitment.

      2.10 Voluntary Prepayments.

    (a)        Borrower may, upon notice to Bank specifying that it is paying
the Prime Loans, pay without penalty or premium the Prime Loans in whole at any
time or in part from time to time in amounts aggregating $500,000.00 or any
larger multiple of $25,000.00, by paying the principal amount to be paid;
provided, however, that in no event may Borrower make a partial payment of Prime
Loans which results in the total outstanding Prime Loans being greater than zero
but less than $500,000.00.

    (b)        Borrower may, upon at least three (3) Eurodollar Business Day’s
notice to Bank specifying that it is paying the LIBOR Loans, pay the LIBOR Loans
to which a given Interest Period applies, in whole, or in part in amounts
aggregating $500,000.00 or any larger multiple of $25,000.00, by paying the
principal amount to be paid together with all accrued and unpaid interest
thereon to and including the date of payment and any funding losses and other
amounts payable under Section 2.12; provided, however, that in no event may
Borrower make a partial payment of LIBOR Loans which results in the total
outstanding LIBOR Loans with respect to which a given Interest Period applies
being greater than $0.00 but less than $500,000.00.

    (c)        A notice of prepayment from Borrower may not be revoked by
Borrower.

        2.11  General Provisions as to Payments.  Borrower shall make each
payment of principal of, and interest on, the Loans and of fees and all other
amounts payable under this Agreement, not later than 12:00 p.m. (St. Louis time)
on the date when due, in Federal or other funds immediately available in St.
Louis, Missouri, to Bank at its address referred to in Section 7.07. All
payments received by Bank after 12:00 p.m. (St. Louis time) on a Domestic
Business Day shall be deemed to be received by Bank on the next succeeding
Domestic Business Day. Bank agrees that irrevocable authorization from Borrower
to Bank to debit an account of Borrower at Bank shall constitute “payment” by
Borrower under this Section at the time the payment(s) covered by such
authorization are due provided there are sufficient collected funds in such
account to cover such payment(s). Whenever any payment of principal of, or
interest on, the Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon, at the then
applicable rate, shall be payable for such extended time.

        2.12  Funding Losses.  Notwithstanding any provision contained in this
Agreement to the contrary, (a) if Borrower makes any payment of principal with
respect to any LIBOR Loan (pursuant to Sections 2 or 6 or otherwise) on any day
other than the last day of the Interest Period applicable thereto, or if
Borrower fails to borrow or pay any LIBOR Loan after notice has been given to by
Borrower to Bank in accordance with Section 2.03, 2.05, 2.10 or otherwise, or if
Borrower fails to pay any principal of or interest on a LIBOR Loan on the date
when due (whether by reason of maturity, acceleration or otherwise), Borrower
shall reimburse Bank on demand for any resulting losses and expenses incurred by
Bank, including, without limitation, any losses incurred in obtaining,
liquidating or employing deposits from third parties and any loss of margin for
the period after any such payment, provided that Bank shall have delivered to
Borrower a certificate setting forth in reasonable detail the calculation of the
amount of such losses and expenses, which calculation shall be conclusive in the
absence of manifest error.

      2.13    Basis for Determining Interest Rate Inadequate or Unfair.  If with
respect to any Interest Period:

    (a)        deposits in Dollars (in the applicable amounts) are not being
offered to Bank in the relevant market for such Interest Period (despite good
faith efforts by Bank to request such offers (whether through brokers or
otherwise)), or

    (b)        Bank determines in good faith that the LIBOR Rate as determined
pursuant to the definition thereof will not adequately and fairly reflect the
cost to Bank of maintaining or funding the LIBOR Loans for such Interest Period,

Bank shall forthwith give notice thereof to Borrower which notice shall set
forth in detail the basis for such notice, whereupon (i) until Bank notifies
Borrower that the circumstances giving rise to such suspension no longer exist,
the LIBOR Rate shall not be available to Borrower as an interest rate option on
any Loans and (ii) all of the then outstanding LIBOR Loans shall automatically
convert to Prime Loans on the last day of the then current Interest Period
applicable to each such LIBOR Loan. Interest accrued on each such Loan prior to
any such conversion shall be due and payable on the date of such conversion
together with any funding losses and other amounts due under Section 2.12.

        2.14  Illegality.  If, after the date of this Agreement, the adoption of
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental or regulatory
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Bank with any request or directive
(whether or not having the force of law) of any such governmental or regulatory
authority, central bank or comparable agency shall make it unlawful or
impossible for Bank to make, maintain or fund its LIBOR Loans to Borrower, Bank
shall forthwith give notice thereof to Borrower. Upon receipt of such notice,
Borrower shall convert all of its then outstanding LIBOR Loans to Prime Loans on
either (a) the last day of the then current Interest Period applicable to such
LIBOR Loan if Bank may lawfully continue to maintain and fund such LIBOR Loan to
such day or (b) immediately if Bank may not lawfully continue to fund and
maintain such LIBOR Loan to such day. Interest accrued on each such Loan prior
to any such conversion shall be due and payable on the date of such conversion
together with any funding losses and other amounts due under Section 2.12.

        2.15  Increased Cost. If (a) Regulation D or (b) after the date hereof,
the adoption of any applicable law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental or regulatory authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by Bank with
any request or directive (whether or not having the force of law) of any such
governmental or regulatory authority, central bank or comparable agency (a
“Regulatory Change”):

    (i)        shall subject Bank to any tax, duty or other charge with respect
to the LIBOR Loans, the Note or its obligation to make LIBOR Loans, or shall
change the basis of taxation of payments to Bank of the principal of or interest
on the LIBOR Loans or any other amounts due under this Agreement in respect of
the LIBOR Loans or its obligation to make LIBOR Loans (except for taxes on or
changes in the rate of tax on the overall net income of Bank imposed by the
jurisdiction under the laws of which Bank is organized or any political
subdivision thereof); or

    (ii)        shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by The Board of Governors of the Federal
Reserve System), special deposit, capital or similar requirement against assets
of, deposits with or for the account of, or credit extended or committed to be
extended by, Bank or shall impose, modify or deem applicable any other condition
affecting the LIBOR Loans, the Note or Bank’s obligation to make LIBOR Loans;

and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D, to impose a cost on or increase the cost to) Bank of
making or maintaining any LIBOR Loan, or to reduce the amount of any sum
received or receivable by Bank under this Agreement or under the Note with
respect thereto, by an amount deemed by Bank to be material, and if Bank is not
otherwise fully compensated for such increase in cost or reduction in amount
received or receivable by virtue of the inclusion of the reference to “LIBOR
Reserve Percentage” in the calculation of the LIBOR Rate, then upon notice by
Bank to Borrower, which notice shall set forth Bank’s supporting calculations in
reasonable detail and the details of the Regulatory Change, Borrower shall pay
Bank, as additional interest, such additional amount or amounts as will
compensate Bank for such increased cost or reduction. The determination by Bank
under this Section of the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount or amounts, Bank may use any reasonable averaging and attribution
methods.

        2.16  Prime Loans Substituted for Affected LIBOR Loans.  If notice has
been given by Bank pursuant to Sections 2.14 or 2.15 then, unless and until Bank
notifies Borrower that the circumstances giving rise to such repayment no longer
apply, all Loans which would otherwise be made to Borrower as LIBOR Loans shall
be made instead as Prime Loans. Bank shall promptly notify Borrower if and when
the circumstances giving rise to such repayment no longer apply.

        2.17  Capital Adequacy.  If, after the date of this Agreement, Bank
shall have determined in good faith that the adoption of any applicable law,
rule, regulation or guideline regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof by any
governmental or regulatory authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by Bank with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
will have the effect of reducing the rate of return on Bank’s capital in respect
of its obligations under this Agreement to a level below that which Bank could
have achieved but for such adoption, change or compliance (taking into
consideration Bank’s policies with respect to capital adequacy), then from time
to time Borrower shall pay to Bank upon demand such additional amount or amounts
as will compensate Bank for such reduction. All determinations made in good
faith by Bank of the additional amount or amounts required to compensate Bank in
respect of the foregoing shall be conclusive in the absence of manifest error.
In determining such amount or amounts, Bank may use any reasonable averaging and
attribution methods.

        2.18  Survival of Indemnities.  All indemnities and all provisions
relating to reimbursement to Bank of amounts sufficient to protect the yield to
the Bank with respect to the Loans, including, without limitation, Sections
2.12, 2.13, 2.14, 2.15 and 2.17 of this Agreement, shall survive the payment of
the Note and the other Borrower’s Obligations and the termination of this
Agreement.

        2.19  Discretion of Bank as to Manner of Funding.  Notwithstanding any
provision contained in this Agreement to the contrary, Bank shall be entitled to
fund and maintain its funding of all or any part of the LIBOR Loans in any
manner it elects, it being understood, however, that for purposes of this
Agreement all determinations hereunder (including, without limitation, the
determination of Bank’s funding losses and expenses under Section 2.12) shall be
made as if Bank had actually funded and maintained each LIBOR Loan through the
purchase of deposits in Dollars having a maturity corresponding to the maturity
of the applicable Interest Period relating to the applicable LIBOR Loan and
bearing an interest rate equal to the applicable LIBOR Base Rate.

    2.20   Taxes.

    (a)        Any and all payments by Borrower to or for the account of Bank
under this Agreement, the Note and/or any other Transaction Document shall be
made free and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on or measured by
Bank’s net income, and franchise taxes imposed on Bank, in each case by the
jurisdiction under the laws of which Bank is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as “Taxes”). If Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable to Bank under this Agreement, the Note and/or any
other Transaction Document, (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 2.20(a)) Bank receives an amount
equal to the sum it would have received had no such deduction of Taxes been
made, (ii) Borrower shall make such deductions, (iii) Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) Borrower shall furnish to Bank, at its
address referred to in Section 7.07, the original or a certified copy of a
receipt evidencing payment thereof.

    (b)        In addition, Borrower agrees to pay any present or future stamp
or documentary taxes and any other excise or property taxes, or charges or
similar levies which arise from any payment made under this Agreement, the Note
and/or any other Transaction Document or from the execution or delivery of, or
otherwise with respect to, this Agreement, the Note and/or any other Transaction
Document (hereinafter referred to as “Other Taxes”).

    (c)        Borrower agrees to indemnify Bank for the full amount of Taxes or
Other Taxes, respectively (including, without limitation, any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section 2.20), paid by Bank and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within fifteen (15) days from the date Bank makes demand therefor,
accompanied by a certificate of Bank setting forth in reasonable detail its
computation of the amount or amounts to be paid to it hereunder.

    (d)        The provisions of this Section 2.20 shall survive any expiration
or termination of this Agreement and the payment of the Note and the other
Borrower’s Obligations.

SECTION 3. PRECONDITIONS TO LOANS AND LETTERS OF CREDIT.

        3.01   Initial Loan or Letter of Credit.  Notwithstanding any provision
contained in this Agreement to the contrary, Bank shall have no obligation to
make the initial Loan under this Agreement or to issue the initial Letter of
Credit under this Agreement unless Bank shall have first received:

    (a)        this Agreement, executed by a duly authorized officer of
Borrower;

    (b)        the Note, executed by a duly authorized officer of Borrower;

    (c)        a copy of resolutions of the Board of Directors of Borrower, duly
adopted, which authorize the execution, delivery and performance of this
Agreement, the Note, the Letter of Credit Applications and the other Transaction
Documents, certified by the Secretary of Borrower;

    (d)        a copy of the Certificate of Incorporation of Borrower, including
any amendments thereto, certified by the Secretary of State of the State of
Delaware;

    (e)        a copy of the By-Laws of Borrower, including any amendments
thereto, certified by the Secretary of Borrower;

    (f)        an incumbency certificate, executed by the Secretary of Borrower,
which shall identify by name and title and bear the signatures of all of the
officers of Borrower executing any of the Transaction Documents;

    (g)        certificates of corporate good standing of Borrower issued by the
Secretaries of State of the States of Delaware and Missouri;

    (h)        an opinion of counsel of Husch & Eppenberger, outside counsel for
Borrower, in the form of Exhibit E attached hereto and incorporated herein by
reference; and an opinion of Jane E. Nelson, Esq., General Counsel of Borrower,
in the form of Exhibit F attached hereto and incorporated herein by reference;

    (i)        the Notice of Borrowing required by Section 2.03 and/or the
Letter of Credit Request and the Letter of Credit Application required by
Section 2.02(a), as the case may be;

    (j)        evidence satisfactory to Bank that the existing Revolving Credit
Agreement has been terminated and all of the “Borrower’s Obligations” (as
defined therein) have been paid in full; and

    (k)        such other agreements, documents, instruments and certificates as
Bank may reasonably request.

     3.02  All Loans.   Notwithstanding any provision contained in this
Agreement to the contrary, Bank shall have no obligation to make any Loan under
this Agreement unless:

    (a)        Bank shall have received a Notice of Borrowing for such Loan as
required by Section 2.03;

    (b)        after giving effect to the requested Loan, the Total Outstandings
are less than or equal to the amount of the Bank’s Commitment;

    (c)        both immediately before and immediately after the making of such
Loan, no Default or Event of Default shall have occurred and be continuing;

    (d)        no material adverse change in the Properties, assets,
liabilities, business, operations, prospects, income or condition (financial or
otherwise) of Borrower and its Subsidiaries taken as a whole shall have occurred
since the date of this Agreement and be continuing; and

    (e)        all of the representations and warranties made by Borrower and/or
any other Obligor in this Agreement and/or in any other Transaction Document
shall be true and correct in all material respects on and as of the date of such
Loan as if made on and as of the date of such Loan (and for purposes of this
Section 3.02(d), the representations and warranties made by Borrower in Section
4.04 shall be deemed to refer to the most recent financial statements of
Borrower and its Subsidiaries delivered to Bank pursuant to Section 5.01(a)).

        Each request for a Loan by Borrower under this Agreement shall be deemed
to be a representation and warranty by Borrower on the date of such Loan as to
the facts specified in clauses (b), (c), (d) and (e) of this Section 3.02.

        3.03  All Letters of Credit.  Notwithstanding any provision contained
herein to the contrary, Bank shall have no obligation to issue any Letter of
Credit under this Agreement unless:

    (a)        Bank shall have received a Letter of Credit Request for such
Letter of Credit as required by Section 2.02(a);

    (b)        Bank shall have received a Letter of Credit Application for such
Letter of Credit as required by Section 2.02(a), duly executed by an authorized
officer of Borrower as applicant and account party;

    (c)        Borrower shall have complied with all of the procedures and
requirements set forth in Section 2.02;

    (d)        after giving effect to the issuance of the requested Letter of
Credit, the Total Outstandings are less than or equal to the amount of the
Bank’s Commitment;

    (e)        both immediately before and immediately after the issuance of
such Letter of Credit, no Default or Event of Default shall have occurred and be
continuing;

    (f)        no material adverse change in the Properties, assets,
liabilities, business, operations, prospects, income or condition (financial or
otherwise) of Borrower and its Subsidiaries taken as a whole shall have occurred
since the date of this Agreement and be continuing;

    (g)        all of the representations and warranties made by Borrower and/or
any other Obligor in this Agreement and/or in any other Transaction Document
shall be true and correct in all material respects on and as of the date of the
issuance of such Letter of Credit as if made on and as of the date of the
issuance of such Letter of Credit (and for purposes of this Section 3.03(f), the
representations and warranties made by Borrower in Section 4.04 shall be deemed
to refer to the most recent financial statements of Borrower and its
Subsidiaries delivered to Bank pursuant to Section 5.01(a)); and

    (h)        Bank shall have received such other documents, certificates and
agreements as it may reasonably request.

Each request for the issuance of a Letter of Credit by Borrower under this
Agreement shall be deemed to be a representation and warranty by Borrower on the
date of the issuance of such Letter of Credit as to the facts specified in
clauses (d), (e), (f) and (g) of this Section 3.03.

SECTION 4. REPRESENTATIONS AND WARRANTIES.

        Borrower hereby represents and warrants to Bank that:

        4.01  Corporate Existence and Power.  Borrower and each Subsidiary: (a)
is duly incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation; (b) has all requisite corporate powers
required to carry on its business as now conducted; (c) has all requisite
governmental and regulatory licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except such licenses,
authorizations, consents and approvals the failure to have could not reasonably
be expected to have a Material Adverse Effect; and (d) is qualified to transact
business as a foreign corporation in, and is in good standing under the laws of,
all jurisdictions in which it is required by applicable law to maintain such
qualification and good standing except for those states in which the failure to
qualify or maintain good standing could not reasonably be expected to have a
Material Adverse Effect.

        4.02  Corporate Authorization.  The execution, delivery and performance
by Borrower of this Agreement, the Note, the Letter of Credit Applications and
the other Transaction Documents to which it is a party are within the corporate
powers of Borrower and have been duly authorized by all necessary corporate
action on the part of Borrower.

        4.03  Binding Effect.  This Agreement, the Note, the Letter of Credit
Applications and the other Transaction Documents to which Borrower is a party
and which have been executed contemporaneously with or prior to the execution of
this Agreement have been duly executed and delivered by Borrower and constitute
the legal, valid and binding obligations of Borrower enforceable in accordance
with their respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency or other similar laws affecting creditors’ rights
generally and (b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and the
Letter of Credit Applications and the other Transaction Documents to which
Borrower is a party which were not executed contemporaneously with or prior to
the execution of this Agreement, when executed and delivered in accordance with
this Agreement, will constitute the legal, valid and binding obligations of
Borrower enforceable in accordance with their respective terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency or other similar
laws affecting creditors’ rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

        4.04  Financial Statements.  Borrower has furnished Bank with (a) a
consolidated balance sheet and consolidated statements of income, cash flows and
changes in stockholders’ equity of Borrower and its Subsidiaries as of and for
the fiscal year ended February 1, 2003, all certified by Borrower’s independent
certified public accountants, which financial statements have been prepared in
accordance with GAAP consistently applied and (b) an unaudited consolidated
balance sheet and unaudited consolidated statements of income, cash flows and
changes in stockholders’ equity of Borrower and its Subsidiaries as of and for
the fiscal quarter ended April 26, 2003, certified by the chief financial
officer of Borrower as being true and correct to the best of his or her
knowledge and as being prepared in accordance with GAAP consistently applied.
Borrower further represents and warrants to Bank that (a) said balance sheets
fairly present the condition of Borrower and its Subsidiaries as of the dates
thereof, (b) there has been no material adverse change in the condition or
operation, financial or otherwise, of Borrower and its Subsidiaries taken as a
whole since April 26, 2003, and (c) neither Borrower nor any of its Subsidiaries
had any direct or contingent liabilities which are not disclosed on said balance
sheets (to the extent such disclosure is required by GAAP).

        4.05  Litigation.  Except as disclosed on Schedule 4.05 attached hereto,
there is no action or proceeding pending against or, to the knowledge of any
Responsible Officer of Borrower, threatened against or affecting Borrower or any
Subsidiary before any court, arbitrator or any governmental, regulatory or
administrative body, agency, instrumentality, authority or official which, if
determined adversely against Borrower or any Subsidiary, could reasonably be
expected to have a Material Adverse Effect. Neither Borrower nor any Subsidiary
is in default with respect to any order, writ, injunction, decision or decree of
any court, arbitrator or any governmental, regulatory or administrative body,
agency, instrumentality, authority or official, a default under which could
reasonably be expected to have a Material Adverse Effect. To the best knowledge
of Borrower after due inquiry, there are no outstanding judgments against
Borrower or any Subsidiary.

        4.06  Pension and Welfare Plans.  Each Pension Plan and Welfare Plan
complies in all material respects with ERISA (to the extent ERISA is applicable
to such Pension Plan or Welfare Plan) and all other applicable statutes and
governmental and regulatory rules and regulations; no Reportable Event has
occurred and is continuing with respect to any Pension Plan which is subject to
ERISA; neither Borrower nor any Subsidiary nor any ERISA Affiliate has withdrawn
from any Multi-Employer Plan in a “complete withdrawal” or a “partial
withdrawal” as defined in Sections 4203 or 4205 of ERISA, respectively; neither
Borrower nor any Subsidiary nor any ERISA Affiliate has entered into an
agreement pursuant to Section 4204 of ERISA; neither Borrower nor any Subsidiary
nor any ERISA Affiliate has in the past contributed to or currently contributes
to a Multi-Employer Plan; neither Borrower nor any Subsidiary nor any ERISA
Affiliate has any withdrawal liability with respect to a Multi-Employer Plan; no
steps have been instituted by Borrower or any Subsidiary or any ERISA Affiliate
to terminate any Pension Plan; no condition exists or event or transaction has
occurred in connection with any Pension Plan, Multi-Employer Plan or Welfare
Plan which could result in the incurrence by Borrower or any Subsidiary or any
ERISA Affiliate of any material liability, fine or penalty; and neither Borrower
nor any Subsidiary nor any ERISA Affiliate is a “contributing sponsor” as
defined in Section 4001(a)(13) of ERISA of a “single-employer plan” as defined
in Section 4001(a)(15) of ERISA which has two or more contributing sponsors at
least two of whom are not under common control. Except as disclosed on the
consolidated financial statements of Borrower and its Subsidiaries delivered by
Borrower to Bank, neither Borrower nor any Subsidiary nor any ERISA Affiliate
has any unfunded liability with respect to any Welfare Plan.

        4.07  Tax Returns and Payment.  Except as disclosed on Schedule 4.07
attached hereto, Borrower and its Subsidiaries have filed all United States
Federal and all other tax returns which are required to be filed and have paid
all taxes which have become due pursuant to such returns and all other taxes,
assessments, fees and other governmental charges upon Borrower and its
Subsidiaries and upon their respective Properties, assets, income and franchises
which have become due and payable by Borrower or any of its Subsidiaries, except
for (a) the filing of state and local tax returns which the failure to file (i)
by the Borrower or any Subsidiary was not willful and (ii) could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect, (b) taxes, assessments, fees and other governmental charges
wherein the amount, applicability or validity are being contested by Borrower or
any such Subsidiary by appropriate proceedings being diligently conducted in
good faith and in respect of which adequate reserves in accordance with GAAP
have been established and (c) taxes, assessments, fees and other governmental
charges the nonpayment of which (i) by the Borrower or any Subsidiary was not
willful and (ii) could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. All material tax liabilities of
Borrower and its Subsidiaries were adequately provided for as of April 26, 2003,
and are now so provided for on the books of Borrower and its Subsidiaries.
Except as disclosed on Schedule 4.07 attached hereto, there is no proposed,
asserted or assessed tax deficiency against Borrower or any of its Subsidiaries
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

        4.08  Subsidiaries.  Borrower has no Subsidiaries other than as
identified on Schedule 4.08 attached hereto, as the same may from time to time
be amended, modified or supplemented as provided herein. Schedule 4.08 attached
hereto correctly sets forth, for each Subsidiary, the number of shares of each
class of stock or other equity interests authorized for such Subsidiary, the
number of outstanding and the percentage of the outstanding shares of each such
class owned, directly or indirectly, by Borrower or one or more of its
Subsidiaries. All of the issued and outstanding capital stock and other equity
interests of each Subsidiary is duly authorized, validly issued and fully paid
and nonassessable. Except as disclosed on Schedule 4.08 attached hereto, neither
Borrower nor any Subsidiary, individually or collectively, owns or holds,
directly or indirectly, any capital stock of or equity interest in any other
Person other than Borrower’s Subsidiaries. Borrower may at any time amend,
modify or supplement Schedule 4.08 by notifying Bank in writing of any changes
thereto, including any formation, acquisition, merger or liquidation of any
Subsidiary or any change in the capitalization of any Subsidiary, in each case,
in accordance with the terms of this Agreement, and thereby the representations
and warranties contained in this Section 4.08 shall be amended accordingly so
long as such amendment, modification or supplement is made within thirty (30)
days after the occurrence of any such changes in the facts stated therein and
that such changes reflect transactions that are permitted under this Agreement.

        4.09  Compliance With Other Instruments; None Burdensome.  Neither
Borrower nor any Subsidiary is a party to any contract, agreement, document or
instrument or subject to any charter or other corporate restriction which could
reasonably be expected to have a Material Adverse Effect; none of the execution
and delivery by Borrower of the Transaction Documents to which it is a party,
the consummation of the transactions therein contemplated or the compliance with
the provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on Borrower, or any of the
provisions of the Certificate of Incorporation or By-Laws of Borrower or any of
the provisions of any indenture, agreement, document, instrument or undertaking
to which Borrower is a party or subject, or by which Borrower or any Property of
Borrower is bound, or conflict with or constitute a default thereunder or result
in the creation or imposition of any Lien pursuant to the terms of any such
indenture, agreement, document, instrument or undertaking (other than in favor
of Bank pursuant to the Transaction Documents). No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental, regulatory, administrative or public
body or authority, or any subdivision thereof, or any other Person is required
to authorize, or is required in connection with, the execution, delivery or
performance of, or the legality, validity, binding effect or enforceability of,
any of the Transaction Documents.

        4.10  Other Debt, Guarantees and Capitalized Leases.  Except as
disclosed on Schedule 4.10 attached hereto and except for Debt of any
Wholly-Owned Subsidiary to Borrower or any other Wholly-Owned Subsidiary,
neither Borrower nor any Subsidiary is a borrower, guarantor or obligor with
respect to, or a lessee under, any Debt, Guarantees or Capitalized Leases other
than the Borrower’s Obligations. Borrower may at any time amend, modify or
supplement Schedule 4.10 by notifying Bank in writing of any changes thereto,
and thereby the representations and warranties contained in this Section 4.10
shall be amended accordingly so long as such amendment, modification or
supplement is made within thirty (30) days after the occurrence of any such
changes in the facts stated therein and that such changes reflect transactions
that are permitted under this Agreement.

        4.11  Labor Matters.  Neither Borrower nor any Subsidiary is a party to
any labor dispute which could reasonably be expected to have a Material Adverse
Effect. There are no strikes or walkouts relating to any labor contract to which
Borrower or any Subsidiary is subject which could reasonably be expected to have
a Material Adverse Effect. Hours worked and payments made to the employees of
Borrower and its Subsidiaries have not been in violation of (a) the Fair Labor
Standards Act (if applicable) or (b) any other applicable law dealing with such
matters, the violation of which could reasonably be expected to have a Material
Adverse Effect. All payments due from Borrower or any Subsidiary, or for which
any claim may be made against any of them, in respect of wages, employee health
and welfare insurance and/or other benefits have been paid or accrued as a
liability on their respective books in accordance with GAAP.

        4.12  Title to Property.  Except as disclosed on Schedule 4.12 attached
hereto, Borrower and each Subsidiary is the sole owner of, or has the legal
right to use and occupy, all Property it claims to own or which is necessary for
Borrower or such Subsidiary to conduct its business, and all of such Property is
free and clear of all Liens other than Permitted Liens. Borrower and each
Subsidiary enjoys peaceful and undisturbed possession in all material respects
under all leases under which it is operating as a lessee.

        4.13  Regulation U.  Borrower is not engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
buying or carrying margin stock (within the meaning of Regulation U of The Board
of Governors of the Federal Reserve System, as amended) and no part of the
proceeds of any Loan will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately (a) for the purpose of buying or
carrying margin stock (other than repurchases by Borrower of shares of common
stock of Borrower) or to extend credit to others for the purpose of buying or
carrying margin stock, or to refund or repay indebtedness originally incurred
for such purpose or (b) for any purpose which entails a violation of, or which
is inconsistent with, the provisions of any of the Regulations of The Board of
Governors of the Federal Reserve System, including, without limitation,
Regulations U, T or X thereof, as amended. If requested by Bank, Borrower shall
furnish to Bank a statement in conformity with the requirements of Federal
Reserve Form U-1 referred to in Regulation U.

        4.14  Multi-Employer Pension Plan Amendments Act of 1980.  Borrower and
each Subsidiary is in compliance with the Multi-Employer Pension Plan Amendments
Act of 1980, as amended (“MEPPAA”), except to the extent the noncompliance
therewith could not reasonably be expected to have a Material Adverse Effect.
Neither Borrower nor any Subsidiary has any liability for pension contributions
pursuant to MEPPAA.

        4.15  Investment Company Act of 1940; Public Utility Holding Company Act
of 1935.  Borrower is not an “investment company” within the meaning of, and is
not otherwise subject to regulation under, the Investment Company Act of 1940,
as amended. Borrower is not a “holding company” or a “subsidiary company” of a
“holding company” or an “affiliate” of a “holding company” or of a “subsidiary
company” of a “holding company” within the meaning of, and is not otherwise
subject to regulation under, the Public Utility Holding Company Act of 1935, as
amended.

        4.16  Patents, Trademarks, Copyrights, Licenses, Etc.  Borrower and each
Subsidiary possesses all patents, patent rights, trademarks, trademark rights,
trade names, trade name rights, copyrights, licenses and other intellectual
property necessary to conduct its business without conflict with any patent,
patent right, trademark, trademark right, trade name, copyright, license or
other intellectual property of any other Person, except where such failure to
possess or such conflict could not reasonably be expected to have a Material
Adverse Effect.

        4.17  Environmental and Safety and Health Matters.  Except as disclosed
on Schedule 4.17 attached hereto: (i) the operations of Borrower and each
Subsidiary comply with all applicable Environmental Laws and all applicable
Occupational Safety and Health Laws, the violation or noncompliance with which
could reasonably be expected to have a Material Adverse Effect; (ii) none of the
operations of Borrower or any Subsidiary are subject to any Environmental Claim
or any judicial, governmental, regulatory or administrative proceeding alleging
the violation of any Occupational Safety and Health Law, which, if determined
adversely against Borrower or any Subsidiary, could reasonably be expected to
have a Material Adverse Effect; (iii) none of the operations of Borrower or any
Subsidiary is the subject of any Federal, state or other investigation
evaluating whether any remedial action is needed to respond to any Release of
Hazardous Substances or any unsafe or unhealthful condition at any premises
owned, leased or operated by Borrower or such Subsidiary, which, if determined
adversely to Borrower or any Subsidiary, could reasonably be expected to have a
Material Adverse Effect; (iv) neither Borrower nor any Subsidiary has filed any
notice under any Environmental Law or Occupational Safety and Health Law
indicating or reporting any past or present spillage, leakage or Release into
the environment of, or treatment, storage or disposal of, any Hazardous
Substances which could reasonably be expected to have a Material Adverse Effect;
and (v) neither Borrower nor any Subsidiary has any material contingent
liability in connection with any spillage, disposal or Release into the
environment of, or otherwise with respect to, any Hazardous Substances.

        4.18   Investments.  Neither Borrower nor any Subsidiary has any
Restricted Investments.

        4.19 No Default.  No Default or Event of Default under this Agreement
has occurred and is continuing. There is no existing default or event of default
under or with respect to any indenture, contract, agreement, lease or other
instrument to which Borrower or any Subsidiary is a party or by which any
Property of Borrower or any Subsidiary is bound or affected, a default under
which could reasonably be expected to have a Material Adverse Effect. Borrower
and each Subsidiary has and is in full compliance with and in good standing with
respect to all governmental and/or regulatory permits, licenses, certificates,
consents and franchises necessary to continue to conduct its business as
previously conducted by it and to own or lease and operate its Properties as now
owned or leased by it, the failure to have or noncompliance with which could
reasonably be expected to have a Material Adverse Effect, and, to the best of
Borrower’s knowledge, none of said permits, certificates, consents or franchises
contain any term, provision, condition or limitation more burdensome than such
as are generally applicable to Persons engaged in the same or similar business
as Borrower or such Subsidiary, as the case may be. Neither Borrower nor any
Subsidiary is in violation of any applicable Federal, state, local, foreign or
other statute, law, rule, regulation or ordinance, a violation of which could
reasonably be expected to have a Material Adverse Effect.

        4.20  Purchase and Other Commitments and Outstanding Bids.  No material
purchase or other commitment of Borrower or any Subsidiary is in excess of the
normal, ordinary and usual requirements of its business, or was made at any
price in excess of the then current market price, or, to the actual knowledge of
the Responsible Officers of Borrower, contains terms and conditions more onerous
than those usual and customary in the applicable industry. There is no material
outstanding bid, sales proposal, contract or unfilled order of Borrower or any
Subsidiary which (a) will, or could if accepted, require Borrower or any
Subsidiary to supply goods or services at a cost to Borrower or any Subsidiary
in excess of the revenues to be received therefor or (b) quotes prices which do
not include a markup over reasonably estimated costs consistent with past
markups on similar business based on market conditions current at that time.

        4.21  Disclosure.  Neither this Agreement nor any of the Exhibits or
Schedules hereto nor any certificate or other data furnished to Bank in writing
by or on behalf of Borrower or any Subsidiary in connection with the
transactions contemplated by this Agreement contains any untrue or incorrect
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading. To the actual
knowledge of the Responsible Officers of Borrower, there is no fact peculiar to
Borrower or any Subsidiary which presently has a Material Adverse Effect or in
the future (so far as the Responsible Officers of Borrower can now foresee)
could reasonably be expected to have a Material Adverse Effect, which has not
heretofore been disclosed in writing by Borrower to Bank.

SECTION 5. COVENANTS.

        5.01  Affirmative Covenants of Borrower.  Borrower covenants and agrees
that, so long as (i) Bank has any obligation to make any Loan under this
Agreement and/or to issue any Letter of Credit under this Agreement, (ii) any
Letter of Credit remains outstanding or (iii) any of Borrower’s Obligations
remain unpaid:

    (a)        Information.  Borrower will deliver to Bank:

    (i)        as soon as available and in any event within ninety (90) days
after the end of each fiscal year of Borrower: (A) a consolidated balance sheet
of Borrower and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, cash flows and changes in
stockholders’ equity for such fiscal year, setting forth in each case, in
comparative form, the figures for the previous fiscal year, all such financial
statements to be prepared in accordance with GAAP consistently applied and
reported on by and accompanied by the unqualified opinion of independent
certified public accountants of nationally recognized standing selected by
Borrower and reasonably acceptable to Bank together with (1) a certificate from
such accountants to the effect that, in making the examination necessary for the
signing of such annual audit report (including, without limitation, reviewing
the computations of Borrower evidencing Borrower’s compliance with the covenants
contained in Section 5.01(o) of this Agreement), such accountants have not
become aware of any Default or Event of Default that has occurred and is
continuing, or, if such accountants have become aware of any such event,
describing it and the steps, if any, being taken to cure it and (2) industry
segment information prepared in the same amount of detail as set forth in
Borrower’s annual report to shareholders for the fiscal year ended February 1,
2003, certified by the chief financial officer of Borrower as fairly presenting
the information therein; provided, however, that delivery within the time period
specified above of copies of the Annual Report on Form 10-K of Borrower for such
fiscal year as filed with the Securities and Exchange Commission (together with
Borrower’s annual report to shareholders, if any, prepared pursuant to Rule
14a-3 under the Exchange Act) together with the accountant’s certificate
described above shall be deemed to satisfy the requirements of this Section
5.01(a)(i) with respect to delivery of the audited consolidated financial
statements referred to above and, so long as the annual report to shareholders
accompanying such Annual Report on Form 10-K is prepared as to business segment
information in the same amount of detail as set forth in the annual report to
shareholders for the fiscal year ended February 1, 2003, the industry segment
information referred to above;

    (ii)        as soon as available and in any event within forty-five (45)
days after the end of each of the first three (3) fiscal quarters of each fiscal
year of Borrower: (A) a consolidated balance sheet of Borrower and its
Subsidiaries as of the end of such fiscal quarter and the related consolidated
statements of income, cash flows and changes in stockholders’ equity for such
fiscal quarter and for the portion of Borrower’s fiscal year ended at the end of
such fiscal quarter, setting forth in each case in comparative form, the figures
for the corresponding fiscal quarter and the corresponding portion of Borrower’s
previous fiscal year, all such financial statements to be prepared in accordance
with GAAP consistently applied (subject to normal year-end adjustments and
absence of footnotes) and accompanied by a certification of the chief executive
officer of Borrower and the chief financial officer of Borrower in accordance
with the Sarbanes-Oxley Act of 2002; provided, however, that delivery within the
time period specified above of copies of the Quarterly Report on Form 10-Q of
Borrower for such fiscal quarter as filed with the Securities and Exchange
Commission together with the certificate of the chief executive officer of
Borrower and the chief financial officer of Borrower described above shall be
deemed to satisfy the requirements of this Section 5.01(a)(ii);

    (iii)        promptly upon transmission thereof, one copy of (A) each
financial statement, report, notice or proxy statement sent by Borrower or any
Subsidiary generally to its stockholders or to its creditors (other than
Borrower or another Subsidiary) and (B) each regular or periodic report, each
registration statement (without exhibits except as expressly requested by Bank),
and each prospectus and all amendments thereto filed by Borrower or any
Subsidiary with the Securities and Exchange Commission (or any governmental body
or agency succeeding to the functions of the Securities and Exchange Commission)
and of each press release and other statement made available generally by
Borrower or any Subsidiary to the public concerning developments that are
material;

    (iv)        simultaneously with the delivery of each set of financial
statements referred to in Sections 5.01(a)(i) and 5.01(a)(ii) above, a
certificate of the chief financial officer of Borrower in the form attached
hereto as Exhibit G and incorporated herein by reference, accompanied by
supporting financial work sheets where appropriate, (A) evidencing Borrower’s
compliance with the covenants contained in Section 5.01(o) of this Agreement,
(B) stating whether there exists on the date of such certificate any Default or
Event of Default and, if any Default or Event of Default then exists, setting
forth the details thereof and the action which Borrower is taking or proposes to
take with respect thereto, (C) certifying that all of the representations and
warranties made by Borrower and/or any other Obligor in this Agreement and/or in
any other Transaction Document are true and correct in all material respects on
and as of the date of such certificate as if made on and as of the date of such
certificate and (D) containing a detailed description of any Related Party
Arrangement entered into during the period covered by such financial statements;

    (v)        as soon as available and in any event within forty-five (45) days
after the end of each fiscal quarter of each fiscal year of Borrower, a listing
of all stock redemptions consummated by Borrower during such fiscal quarter,
including the total consideration paid by Borrower to consummate such stock
redemptions;

    (vi)        promptly upon receipt thereof, any reports submitted to Borrower
or any Subsidiary (other than reports previously delivered pursuant to Sections
5.01(a)(i) and (ii) above) by independent accountants in connection with any
annual, interim or special audit made by them of the books of Borrower or any
Subsidiary;

    (vii)        as soon as available and in any event within ninety (90) days
after the beginning of each fiscal year of Borrower, consolidated balance sheet,
income statement and cash flow projections for Borrower and its Subsidiaries for
such fiscal year and the succeeding one (1) year period, all in form and detail
reasonably acceptable to Bank; and

    (viii)        with reasonable promptness, such further information regarding
the business, affairs and financial condition of Borrower or any Subsidiary as
Bank may from time to time reasonably request.

        Bank is hereby authorized to deliver a copy of any financial statement
or other information made available by Borrower or any Subsidiary to any
regulatory authority having jurisdiction over Bank pursuant to any request
therefor.

    (b)        Payment of Indebtedness.  Borrower will, and it will cause each
Subsidiary to, (i) pay and discharge any and all Indebtedness payable or
Guaranteed by Borrower or such Subsidiary, as the case may be, and any interest
or premium thereon, when due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) in accordance with the
agreement, document or instrument relating to such Indebtedness or Guarantee
(provided, however, that neither Borrower nor any Subsidiary shall be required
to pay any such Indebtedness which does not constitute Debt the payment of which
is being contested in good faith and by appropriate proceedings being diligently
conducted and for which adequate reserves in accordance with GAAP have been
provided, except that Borrower or such Subsidiary, as the case may be, shall pay
or cause to be paid all such Indebtedness forthwith upon the commencement of
proceedings to foreclose any Lien which is attached as security therefor, unless
such foreclosure is stayed by the filing of an appropriate bond in a manner
reasonably satisfactory to Bank) and (ii) perform, observe and discharge all
covenants, conditions and obligations which are imposed upon Borrower or such
Subsidiary, as the case may be, by any and all agreements, documents,
instruments and indentures evidencing, securing or otherwise relating to such
Indebtedness or Guarantee.

    (c)        Maintenance of Books and Records; Consultations and Inspections. 
Borrower will, and it will cause each Subsidiary to, maintain books and records
sufficient to permit the preparation of financial statements in accordance with
GAAP and in which true, correct and complete entries shall be made of all
dealings and transactions in relation to its business. Borrower will, and it
will cause each Subsidiary to, permit Bank (and any Person appointed by Bank to
whom Borrower does not reasonably object) to discuss the affairs, finances and
accounts of Borrower and each Subsidiary with the officers of Borrower and each
Subsidiary and, upon oral or written notice to Borrower, their independent
public accountants (during which discussions, representatives of Borrower shall
have the right to be present), all at such reasonable times during normal
business hours and as often as Bank may from time to time reasonably request.
Borrower will also permit, and will cause each Subsidiary to permit, inspection
of its Properties, books and records by Bank during normal business hours and at
other reasonable times. Borrower will reimburse Bank upon demand for all
reasonable costs and expenses incurred by Bank in connection with any such
inspection conducted by Bank while any Default or Event of Default under this
Agreement has occurred and is continuing. Borrower irrevocably authorizes Bank
to, upon oral or written notice to Borrower, communicate directly with
Borrower’s independent public accountants and irrevocably authorizes and directs
such accountants to disclose to Bank any and all information with respect to the
business and financial condition of Borrower and its Subsidiaries as Bank may
from time to time reasonably request in writing.

    (d)        Payment of Taxes.  Borrower will, and it will cause each
Subsidiary to, duly file all Federal, state, local, foreign and other income tax
returns and all other tax returns and reports of Borrower or such Subsidiary, as
the case may be, which are required to be filed and duly pay and discharge
promptly all taxes, assessments and other governmental charges imposed upon it
or any of its Property; provided, however, that neither Borrower nor any
Subsidiary shall be required to pay any such tax, assessment or other
governmental charge the payment of which is being contested in good faith and by
appropriate proceedings being diligently conducted and for which adequate
reserves in accordance with GAAP have been provided, except that Borrower or
such Subsidiary, as the case may be, shall pay or cause to be paid all such
taxes, assessments and governmental charges forthwith upon the commencement of
proceedings to foreclose any Lien which is attached as security therefor, unless
such foreclosure is stayed by the filing of an appropriate bond in a manner
reasonably satisfactory to Bank.

    (e)        Payment of Claims.  Borrower will, and it will cause each
Subsidiary to, promptly pay and discharge (i) all trade accounts payable in
accordance with its usual and customary business practices as in effect on the
date of this Agreement (but in no event later than thirty (30) days after the
due date thereof) and (ii) all claims for work, labor, materials or supplies
which if unpaid does or could reasonably be expected to become a Lien upon any
of its Property; provided, however, that neither Borrower nor any Subsidiary
shall be required to pay any such account payable or claim the payment of which
is being contested in good faith and by appropriate proceedings being diligently
conducted and for which adequate reserves in accordance with GAAP have been
provided, except that Borrower or such Subsidiary, as the case may be, shall pay
or cause to be paid all such accounts payable and claims forthwith upon the
commencement of proceedings to foreclose any Lien which is attached as security
therefor, unless such foreclosure is stayed by the filing of an appropriate bond
in a manner reasonably satisfactory to Bank.

    (f)        Corporate or Other Existence.  Borrower will, and it will cause
each Subsidiary to, do all things necessary to (i) preserve and keep in full
force and effect at all times its corporate or other existence and all permits,
licenses, franchises and other rights material to its business and (ii) be duly
qualified to do business and be in good standing in all jurisdictions where the
nature of its business or its ownership of Property requires such qualification
except for those jurisdictions in which the failure to qualify or be in good
standing could not reasonably be expected to have a Material Adverse Effect.

    (g)        Maintenance of Property.  Borrower will, and it will cause each
Subsidiary to, at all times, preserve and maintain all of the Property used or
useful in the conduct of its business in good condition, working order and
repair, ordinary wear and tear excepted.

    (h)        Compliance with Laws, Regulations, Etc.  Borrower will, and it
will cause each Subsidiary to, (i) comply with any and all laws, ordinances and
governmental and regulatory rules and regulations to which Borrower or such
Subsidiary, as the case may be, is subject (including, without limitation, all
Occupational Safety and Health Laws and all Environmental Laws), the violation
of which or failure to comply with which could reasonably be expected to have a
Material Adverse Effect and (ii) obtain any and all licenses, permits,
franchises and other governmental and regulatory authorizations necessary to the
ownership of its Properties or to the conduct of its business, the failure to
obtain which license, permit, franchise and/or other governmental or regulatory
authorization could reasonably be expected to have a Material Adverse Effect.

    (i)        Environmental Matters.  Borrower will give Bank prompt written
notice of (i) any Environmental Claim or any other action or investigation with
respect to the existence or potential existence of any Hazardous Substances
instituted or threatened with respect to Borrower or any Subsidiary or any of
the Properties or facilities owned, leased or operated by Borrower or any
Subsidiary which, if determined adversely to Borrower or any Subsidiary, could
reasonably be expected to have a Material Adverse Effect and (ii) any condition
or occurrence on any of the Properties or facilities owned, leased or operated
by Borrower or any Subsidiary which constitutes a violation of any Environmental
Laws or which gives rise to a reporting obligation or requires removal or
remediation under any Environmental Laws and which could reasonably be expected
to have a Material Adverse Effect. Within thirty (30) days after the giving of
any such notice, Borrower shall deliver to Bank Borrower’s plan with respect to
any removal or remediation required by any Environmental Law or any other
applicable law, rule or regulation and Borrower agrees to complete any such
removal and/or remediation within the time required thereby. Borrower shall
promptly provide Bank with copies of all documentation relating thereto, and
such other information with respect to environmental matters as Bank may
reasonably request from time to time.

    (j)        ERISA Compliance.  If Borrower, any Subsidiary or any ERISA
Affiliate shall have any Pension Plan, Borrower, such Subsidiary or such ERISA
Affiliate, as the case may be, shall comply in all material respects with all
requirements of ERISA relating to such Pension Plan. Without limiting the
generality of the foregoing, Borrower will not, and it will not cause or permit
any Subsidiary or any ERISA Affiliate to:

    (i)        permit any Pension Plan maintained by Borrower, any Subsidiary or
any ERISA Affiliate to engage in any nonexempt “prohibited transaction,” as such
term is defined in Section 4975 of the Code;

    (ii)        permit any Pension Plan maintained by Borrower, any Subsidiary
or any ERISA Affiliate to incur any “accumulated funding deficiency”, as such
term is defined in Section 302 of ERISA, 29 U.S.C. &sect; 1082, whether or not
waived;

    (iii)        terminate any Pension Plan in a manner which could result in
the imposition of a Lien on any Property of Borrower, any Subsidiary or any
ERISA Affiliate pursuant to Section 4068 of ERISA, 29 U.S.C. &sect; 1368; or

    (iv)        take any action which would constitute a complete or partial
withdrawal from a Multi-Employer Plan within the meaning of Sections 4203 or
4205 of Title IV of ERISA.

        Notwithstanding any provision contained in this Section 5.01(j) to the
contrary, an act by Borrower or any Subsidiary shall not be deemed to constitute
a violation of this Section 5.01(j) unless said action, individually or
cumulatively with other acts of Borrower and its Subsidiaries, has or could
reasonably be expected to have a Material Adverse Effect.

    (k)        Notices.  Borrower will notify Bank in writing of any of the
following within three (3) Domestic Business Days after any Responsible Officer
of Borrower has actual knowledge thereof, describing the same and, if
applicable, the steps being taken by the Person(s) affected with respect
thereto:

    (i)        the occurrence of any Default or Event of Default under this
Agreement;

    (ii)        the occurrence of any default or event of default by Borrower,
any other Obligor or any Subsidiary under any note, indenture, loan agreement,
mortgage, deed of trust, security agreement, lease or other similar agreement,
document or instrument to which Borrower, any other Obligor or any Subsidiary,
as the case may be, is a party or by which it is bound or to which it is
subject;

    (iii)        the institution of any litigation, arbitration proceeding or
governmental or regulatory proceeding affecting Borrower, any other Obligor or
any Subsidiary, whether or not considered to be covered by insurance, in which
the prayer or claim for relief seeks recovery of an amount in excess of
$5,000,000.00 (or, if no dollar amount is specified in the prayer or claim for
relief, in which there is a reasonable likelihood of recovery of an amount in
excess of $5,000,000.00) or any form of equitable relief which, if granted,
could reasonably be expected to have a Material Adverse Effect;

    (iv)        the entry of any judgment or decree in an amount in excess of
$100,000.00 against Borrower, any other Obligor or any Subsidiary;

    (v)        the occurrence of a Reportable Event with respect to any Pension
Plan; the filing of a notice of intent to terminate a Pension Plan by Borrower,
any ERISA Affiliate or any Subsidiary; the institution of proceedings to
terminate a Pension Plan by the PBGC or any other Person; the withdrawal in a
“complete withdrawal” or a “partial withdrawal” as defined in Sections 4203 and
4205, respectively, of ERISA by Borrower, any ERISA Affiliate or any Subsidiary
from any Multi-Employer Plan; or the incurrence of any material increase in the
contingent liability of Borrower or any Subsidiary with respect to any “employee
welfare benefit plan” as defined in Section 3(1) of ERISA which covers retired
employees and their beneficiaries;

    (vi)        the occurrence of any event which could reasonably be expected
to have a Material Adverse Effect;

    (vii)        any change in the name of Borrower, any other Obligor or any
Subsidiary;

    (viii)        any material change in Borrower’s or any Subsidiary’s line(s)
of business;

    (ix)        the occurrence of any Change of Control Event; and

    (x)        the occurrence of such other events as Bank may from time to time
reasonably specify.

    (l)        Insurance.  Borrower will, and it will cause each Subsidiary to,
insure all of its Property of the character usually insured by Persons engaged
in the same or similar businesses similarly situated, against loss or damage of
the kind customarily insured against by such Persons, unless higher limits or
coverage are reasonably required in writing by Bank (in which event Borrower
and/or the applicable Subsidiary will have thirty (30) days after written
request by Bank to obtain such additional insurance), and carry liability
insurance and other insurance of a kind and in an amount generally carried by
Persons engaged in the same or similar businesses similarly situated, unless
higher limits or coverage are reasonably required in writing by Bank (in which
event Borrower and/or the applicable Subsidiary will have thirty (30) days after
written request by Bank to obtain such additional insurance). All insurance
required by this Section 5.01(l) shall be with insurers rated A-IX or better by
A.M Best Company (or accorded a similar rating by another nationally or
internationally recognized insurance rating agency of similar standing if A.M.
Best Company is not then in the business of rating insurers or rating foreign
insurers) or such other insurers as may from time to time be reasonably
acceptable to Bank. All such insurance may be subject to reasonable deductible
amounts. Simultaneously with each delivery of financial statements under Section
5.01(a)(i), Borrower shall deliver to Bank a certificate of an officer of
Borrower specifying the details of all insurance then in effect and certifying
that all of the premiums therefor which are then due and payable have been paid
in full.

    (m)        Further Assurances.  Borrower will, promptly upon request,
execute and deliver to Bank, at any time and from time to time, any and all
further agreements, documents and instruments, and take any and all further
actions which may be required under applicable law, or which Bank may from time
to time reasonably request, in order to effectuate the transactions contemplated
by this Agreement and the other Transaction Documents.

    (n)        Accountant.  Borrower will give Bank prompt notice of any change
of Borrower’s independent certified public accountants and a statement of the
reasons for such change. Borrower shall at all times utilize independent
certified public accountants reasonably acceptable to Bank.

    (o)        Financial Covenants.

    (i)        Minimum Consolidated Fixed Charge Coverage Ratio.  Borrower will
have a Consolidated Fixed Charge Coverage Ratio of at least 1.10 to 1.00 for
each four (4) consecutive fiscal quarter period of Borrower commencing with the
four (4) consecutive fiscal quarter period ending July 19, 2003.

    (ii)        Maximum Consolidated Adjusted Liabilities to Consolidated EBITDA
Ratio.  Borrower will have a Consolidated Adjusted Liabilities to Consolidated
EBITDA Ratio of not more than 3.25 to 1.0 as of the last day of each fiscal
quarter of Borrower commencing with the fiscal quarter of Borrower ending July
19, 2003.

    (iii)        Minimum Consolidated Tangible Net Worth.  Borrower will have a
Consolidated Tangible Net Worth of at least $26,000,000.00 as of the last day of
each fiscal quarter of Borrower commencing with the fiscal quarter of Borrower
ending July 19, 2003.

    (iv)        Minimum Consolidated Current Ratio.  Borrower will at all times
have and maintain a Consolidated Current Ratio of at least .85 to 1.00.

    (p)        Covenant to Secure Borrower’s Obligations Equally.  Borrower
will, if it or any Subsidiary shall create or assume any Lien upon any of its
Property or assets, whether now owned or hereinafter acquired, other than
Permitted Liens (unless prior written consent to the creation or assumption
thereof shall have been obtained pursuant to Section 7.10 of this Agreement),
make or cause to be made effective provision whereby all of the Borrower’s
Obligations will be secured by such Lien equally and ratably with any and all
other Indebtedness thereby secured so long as any such other Indebtedness shall
be so secured as evidenced by documentation which is acceptable to Bank.
Borrower acknowledges and agrees that compliance with this covenant will not
cure a violation of Section 5.02(b) of this Agreement or any other covenant
contained in this Agreement.

    (q)        Amendment of Note Agreements.  Borrower shall provide Bank with a
written copy of any proposed amendment to any of the Note Agreements at least
fifteen (15) Domestic Business Days prior to the effective date of such
amendment and shall promptly furnish Bank with a copy of each effective
amendment to any of the Note Agreements.

    (r)        Subsidiaries.  If the Note Agreements expire or are otherwise
terminated, (i) Borrower shall, within five (5) Domestic Business Days after
such expiration or termination, cause each existing Subsidiary to guaranty the
payment and performance of all of the Borrower’s Obligations pursuant to a
Guaranty in substantially the form of Exhibit H attached hereto (and
contemporaneously with the execution of such guaranty, Borrower shall execute
and/or obtain and deliver to Bank such other documentation, including, without
limitation, certified corporate documents, resolutions and legal opinions, as
Bank may require in connection therewith, all of which must be in form and
substance reasonably satisfactory to Bank) and (ii) if Borrower or any
Subsidiary creates, forms or acquires any Subsidiary on or after the date of
such expiration or termination, Borrower shall cause such Subsidiary to guaranty
the payment and performance of all of the Borrower’s Obligations pursuant to a
Guaranty in substantially the form of Exhibit H attached hereto (and
contemporaneously with the execution of each such guaranty, Borrower shall
execute and/or obtain and deliver to Bank such other documentation, including,
without limitation, certified corporate documents, resolutions and legal
opinions, as Bank may require in connection therewith, all of which must be in
form and substance reasonably satisfactory to the Bank).

    (s)        Deposit Accounts. Borrower will, and it will cause each
Subsidiary to, maintain its primary operating accounts with Bank throughout the
term of this Agreement; provided, however, that, subject to the provisions of
Section 5.02(m) of this Agreement, Borrower and each Subsidiary may maintain
interest bearing time deposits with any financial institution.

        5.02 Negative Covenants of Borrower.  Borrower covenants and agrees
that, so long as (i) Bank has any obligation to make any Loan under this
Agreement and/or to issue any Letter of Credit under this Agreement, (ii) any
Letter of Credit remains outstanding or (iii) any of Borrower’s Obligations
remain unpaid, unless the prior written consent of Bank is obtained:

    (a)        Limitation on Indebtedness.  Borrower will not, and it will not
cause or permit any Subsidiary to, incur or be obligated on any Indebtedness,
either directly or indirectly, by way of Guarantee, suretyship or otherwise,
other than:

         (i) the Borrower’s Obligations;

    (ii)        Indebtedness of a Wholly-Owned Subsidiary to Borrower or to
another Wholly-Owned Subsidiary;

    (iii)        unsecured trade accounts payable and other normal accruals
incurred in the ordinary course of business which are not more than (A) in the
case of unsecured trade accounts payable and/or other normal accruals owed to
any one or more of the ten (10) largest creditors of Borrower or the applicable
Subsidiary, as the case may be (measured by the aggregate amount of unsecured
trade accounts payable and/or other normal accruals then owed by Borrower or the
applicable Subsidiary, as the case may be, to such creditor) thirty (30) days
past due and (B) in the case of unsecured trade accounts payable and/or other
normal accruals owed to all other creditors of the Borrower and/or any
Subsidiary, sixty (60) past due (provided, however, that neither Borrower nor
any Subsidiary shall be required to pay any such account payable or other
accrual the payment of which is being contested in good faith and by appropriate
proceedings being diligently conducted and for which adequate reserves in
accordance with GAAP have been provided, except that Borrower or such
Subsidiary, as the case may be, shall pay or cause to be paid all such accounts
payable and accruals forthwith upon the commencement of proceedings to foreclose
any Lien which is attached as security therefor, unless such foreclosure is
stayed by the filing of an appropriate bond in a manner reasonably satisfactory
to Bank);

    (iv)        Indebtedness existing as of the date of this Agreement and
listed on Schedule 4.10 attached hereto (and without giving effect to any
amendment to Schedule 4.10 made by Borrower after the date of this Agreement);

    (v)        Subordinated Debt;

    (vi)        Capitalized Lease Obligations incurred on or after the date of
this Agreement in an aggregate amount of up to $5,000,000.00 at any one time
outstanding for Borrower and all of its Subsidiaries on a combined basis; and

    (vii)        other Indebtedness of Borrower not otherwise permitted by this
Section 5.02(a) in an aggregate principal amount at any one time outstanding not
to exceed the sum of (A) $5,000,000.00 minus (B) the then aggregate outstanding
amount of all Capitalized Lease Obligations incurred by Borrower and/or any
Subsidiary on or after the date of this Agreement.

    (b)        Limitation on Liens.  Borrower will not, and will not cause or
permit any Subsidiary to, create, incur or assume, or suffer to be incurred or
to exist, any Lien on any of its Property (other than treasury stock of
Borrower), whether now owned or hereafter acquired, or upon any income or
profits therefrom (whether or not provision is made for the equal and ratable
securing of the Borrower’s Obligations in accordance with the provisions of
Section 5.01(p)), except for Permitted Liens.

    (c)        Merger, Consolidation, etc..  Borrower will not, and it will not
cause or permit any Subsidiary to, merge or consolidate with or into any other
Person, permit any other Person to merge into or with or consolidate with it or
convey, transfer or lease all or substantially all of its assets in a single
transaction or series of transactions to any Person, except:

    (i)        any Wholly-Owned Subsidiary may merge or consolidate with or into
Borrower (provided that Borrower shall be the continuing or surviving
corporation) or with or into any other Wholly-Owned Subsidiary and any
Subsidiary may convey, transfer or lease all or substantially all of its assets
in a single transaction or series of transactions to Borrower or any
Wholly-Owned Subsidiary; and

    (ii)        any Wholly-Owned Subsidiary may merge or consolidate with or
into any other Person in order to consummate a Permitted Acquisition so long as
the surviving entity is a Wholly-Owned Subsidiary; and

    (iii)        Asset Sales permitted by Section 5.2(d) below.

    (d)        Asset Sales.  Borrower will not, and it will not cause or permit
any Subsidiary to, directly or indirectly, make any sale, transfer, lease (as
lessor), loan or other disposition (each, an “Asset Sale”) of any Property or
assets (other than treasury stock of Borrower), other than:

    (i)        Asset Sales in the ordinary course of business; and

    (ii)        Asset Sales of Property or assets by a Subsidiary to Borrower or
a Wholly-Owned Subsidiary.

    (e)        Sale and Leaseback Transactions.  Borrower will not, and it will
not cause or permit any Subsidiary to, enter into any arrangement, directly or
indirectly, whereby Borrower or such Subsidiary shall in one or more related
transactions sell, transfer or otherwise dispose of any Property owned by
Borrower or such Subsidiary to any Person and then rent or lease, as lessee,
such Property or any part thereof for a period or periods which in the aggregate
would exceed twelve (12) months from the date of commencement of the lease term.

    (f)        Sale or Discount of Accounts.  Borrower will not, and it will not
cause or permit any Subsidiary to, sell or discount (other than prompt payment
discounts granted in the ordinary course of business) any of its notes or
accounts receivable or chattel paper.

    (g)        Transactions with Affiliates.  Except for the transactions and
arrangements described on Schedule 5.02(g) attached hereto as in effect on the
date of this Agreement, Borrower will not, and it will not cause or permit any
Subsidiary to, enter into or be a party to any transaction or arrangement with
any Affiliate (other than Borrower or a Wholly-Owned Subsidiary) (including,
without limitation, the purchase from, sale to or exchange of Property with, or
the rendering of any service by or for, any Affiliate), except in the ordinary
course of business and pursuant to the reasonable requirements of Borrower’s or
such Subsidiary’s business and upon fair and reasonable terms no less favorable
to Borrower or such Subsidiary than would be obtained in a comparable
arm’s-length transaction with a Person not an Affiliate. The provisions of this
Section 5.02(g) shall not apply to any arrangements between Borrower or any of
its Subsidiaries and any entity subsequently created to continue development and
licensing of certain of Borrower’s software and related intellectual property;
provided that the terms of such arrangements are determined to be fair and
reasonable from Borrower’s point of view by Borrower’s Board of Directors (any
such arrangement being herein referred to as a “Related Party Arrangement”).

    (h)        Changes in Nature of Business.  Borrower will not, and it will
not cause or permit any Subsidiary to, engage in any business if, as a result,
the general nature of the business which would then be engaged in by Borrower
and its Subsidiaries, considered as a whole, would be substantially changed from
the general nature of the business engaged in by Borrower and its Subsidiaries,
considered as a whole, as of the date of this Agreement.

    (i)        Fiscal Year.  Borrower will not, and it will not cause or permit
any Subsidiary to, change its fiscal year.

    (j)        Stock Redemptions and Distributions.  Borrower will not declare
or incur any liability to make any Distribution in respect of the capital stock
of Borrower; provided, however, that so long as no Default or Event of Default
has occurred and is continuing or would be created by or result from the payment
of such dividends and/or from the consummation of such stock redemptions,
Borrower shall be permitted to declare and pay cash dividends on its capital
stock and to redeem shares of its capital stock for cash.

    (k)        Pension Plans.  Borrower will not, and it will not cause or
permit any Subsidiary to, (i) permit any condition to exist in connection with
any Pension Plan which might constitute grounds for the PBGC to institute
proceedings to have such Pension Plan terminated or a trustee appointed to
administer such Pension Plan or (ii) engage in, or permit to exist or occur, any
other condition, event or transaction with respect to any Pension Plan which
could result in the incurrence by Borrower, any Subsidiary or any ERISA
Affiliate of any material liability, fine or penalty.

    (l)        Subordinated Debt.  Borrower will not make any payments of
principal, interest or other amounts on or with respect to any of its
Subordinated Debt to the extent prohibited by the subordination provisions
governing the same.

    (m)        Restricted Investments.  Borrower will not, and it will not cause
or permit any Subsidiary to, directly or indirectly, make any Restricted
Investments.

    (n)        Acquisitions.  Borrower will not, and it will not cause or permit
any Subsidiary to, directly or indirectly, make any Acquisitions other than
Permitted Acquisitions.

    (o)        Subsidiaries.  Borrower will not, and it will not cause or permit
any Subsidiary to, create, form or acquire any Subsidiaries other than
Wholly-Owned Subsidiaries.

    (p)        Limitations on Restrictive Agreements.  Borrower will not, and it
will not cause or permit any Subsidiary to, enter into, or permit to exist, any
agreement with any Person which prohibits or limits the ability of Borrower or
such Subsidiary, as the case may be, to (a) pay dividends or make other
distributions or prepay any Indebtedness owed to Borrower and/or any Subsidiary,
(b) make loans or advances to Borrower and/or any Subsidiary, (c) transfer any
of its properties or assets to Borrower and/or any Subsidiary (other than with
respect to assets subject to Liens permitted by clause (g) of the definition of
Permitted Liens) or (d) create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter acquired
(other than with respect to assets subject to Liens permitted by clause (g) of
the definition of Permitted Liens); provided that the foregoing shall not apply
to restrictions in effect on the date of this Agreement contained in agreements
governing Debt outstanding on the date of this Agreement and listed on Schedule
5.02(p) attached hereto and, if such Debt is renewed, extended or refinanced,
restrictions in the agreements governing the renewed, extended or refinanced
Debt (and successive renewals, extensions and refinancings thereof) if such
restrictions are no more restrictive in any material respect than those
contained in the agreements governing the Debt being renewed, extended or
refinanced.

    (q)        Financial Covenants and Collateral Provisions of Note Purchase
Agreements and other Restricted Agreements.  Borrower will not, and it will not
cause or permit any Subsidiary to: (i) enter into any indenture, agreement or
other instrument under which any Debt of Borrower or any Subsidiary may be
issued (a “Restricted Agreement”) or (ii) agree to any amendment, waiver,
consent, modification, refunding, refinancing or replacement of any of the Note
Purchase Agreements or any other Restricted Agreement, in either case, with
terms the effect of which is to (A) include a Financial Covenant which is not
contained in this Agreement, (B) revise or alter any Financial Covenant
contained therein the effect of which is to increase or expand the restriction
on Borrower or any Subsidiary or (C) except for Permitted Liens, grant
collateral for the obligations of Borrower or any Subsidiary thereunder, unless
Borrower or such Subsidiary, as the case may be, concurrently incorporates
herein such additional, altered or revised Financial Covenant or grant of
collateral (as the case may be). The incorporation of each such additional
Financial Covenant is hereby deemed to occur automatically and concurrently by
reason of the execution of this Agreement without any further action or the
execution of any additional document by any of the parties to this Agreement
(and Borrower hereby agrees to give Bank prompt written notice of each such
Financial Covenant so incorporated into this Agreement). Without limiting the
foregoing, neither Borrower nor any Subsidiary, directly or indirectly, will
offer any economic inducement (including, without limitation, any collateral) to
any holder of notes under the Note Purchase Agreements or to any other Person
who is a party to any other Restricted Agreement for the purpose of inducing
such holder or such other Person to enter into any waiver of any event of
default under the Note Purchase Agreements or such other Restricted Agreement or
event which with the lapse of time or the giving of notice, or both, would
constitute such an event of default, unless the same such economic inducement
has been concurrently offered and paid on a pro-rata basis (determined with
respect to the amount of Bank’s Commitment under this Agreement, whether used or
unused) to Bank (it being understood and agreed that the offering of such
economic inducement to Bank shall not be deemed or construed to obligate Bank to
enter into any waiver of any Default or Event of Default under this Agreement).
Borrower acknowledges and agrees that compliance with this covenant will not
cure a violation of Section 5.02(b) of this Agreement or any other covenant
contained in this Agreement.

        5.03 Use of Proceeds.  Borrower hereby represents and warrants to Bank
and covenants and agrees with Bank that: (a) the proceeds of the Loans will be
used solely (i) for the working capital and general corporate purposes of
Borrower and (ii) to enable Borrower to make loans to one or more of its
Wholly-Owned Subsidiaries for their respective working capital and general
corporate purposes; (b) none of such proceeds will be used in violation of any
applicable law or regulation; (c) Borrower will not directly or indirectly use
the proceeds of any Loan for the purpose of buying or carrying margin stock
within the meaning of Regulation U of The Board of Governors of the Federal
Reserve System, as amended, other than for the purpose of financing Borrower’s
repurchase of shares of common stock of Borrower; and (d) not more than
Twenty-Five Percent (25%) of the value of the consolidated assets of Borrower
and its Subsidiaries (other than any treasury stock of Borrower) is now, or will
at any time be, represented by margin stock. As used in this Section, the terms
“margin stock” and “purpose of buying or carrying” shall have the respective
meanings ascribed to them in Regulation U of The Board of Governors of the
Federal Reserve System, as amended.

SECTION 6. EVENTS OF DEFAULT.

        If any of the following (each of the following herein sometimes called
an “Event of Default”) shall occur and be continuing:

        6.01   Borrower shall fail to pay any of Borrower’s Obligations
constituting interest within five (5) days after the date the same shall first
become due and payable, whether by reason of demand, maturity, acceleration or
otherwise; or

        6.02   Borrower shall fail to pay any of Borrower’s Obligations (other
than interest) as and when the same shall become due and payable, whether by
reason of demand, maturity, acceleration or otherwise; or

        6.03   Any representation or warranty made Borrower and/or any other
Obligor in this Agreement, in any other Transaction Document or in any
certificate, agreement, instrument or statement furnished or made or delivered
pursuant hereto or thereto or in connection herewith or therewith, shall prove
to have been untrue or incorrect in any material respect when made or effected;
or

        6.04   Borrower shall fail to perform or observe any term, covenant or
provision contained in Section 2.01, Section 2.02(f), Section 5.01(c), 5.01(f),
Section 5.01(k), Section 5.01(l), Section 5.01(m), Section 5.01(o), Section
5.01(p), Section 5.01(q), Section 5.01(r), Section 5.01(r), Section 5.02 or
Section 5.03; or

        6.05   Borrower shall fail to perform or observe any term, covenant or
provision contained in Section 5.01(a) and any such failure shall remain
unremedied for ten (10) days after the earlier of (a) written notice of default
is given to Borrower by Bank or (b) any Responsible Officer of Borrower
obtaining knowledge of such default; or

        6.06   Borrower shall fail to perform or observe any other term,
covenant or provision contained in this Agreement (other than those specified in
Sections 6.01, 6.02, 6.03, 6.04 or 6.05 above) and any such failure shall remain
unremedied for thirty (30) days after the earlier of (a) written notice of
default is given to Borrower by Bank or (b) any Responsible Officer of Borrower
obtaining knowledge of such default; or

        6.07   This Agreement or any other Transaction Document shall at any
time for any reason cease to be in full force and effect or shall be declared to
be null and void by a court of competent jurisdiction, or if the validity or
enforceability thereof shall be contested or denied by Borrower and/or any other
Obligor, or if the transactions completed hereunder or thereunder shall be
contested by Borrower and/or any other Obligor or if Borrower and/or any other
Obligor shall deny that it has any or further liability or obligation hereunder
or thereunder; or

        6.08   Borrower, any other Obligor or any Subsidiary shall (a)
voluntarily commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code or any other Federal, state or foreign
bankruptcy, insolvency, receivership, liquidation or similar law, (b) consent to
the institution of, or fail to contravene in a timely and appropriate manner,
any such proceeding or the filing of any such petition, (c) apply for or consent
to the appointment of a receiver, trustee, custodian, sequestrator or similar
official of itself or of a substantial part of its Property or assets, (d) file
an answer admitting the material allegations of a petition filed against itself
in any such proceeding, (e) make a general assignment for the benefit of
creditors, (f) become unable, admit in writing its inability or fail generally
to pay its debts as they become due or (g) take any corporate or other action
for the purpose of effecting any of the foregoing; or

        6.09   An involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (a) relief
in respect of Borrower, any other Obligor or any Subsidiary, or of a substantial
part of the Property or assets of Borrower, any other Obligor or any Subsidiary,
under Title 11 of the United States Code or any other Federal, state or foreign
bankruptcy, insolvency, receivership, liquidation or similar law, (b) the
appointment of a receiver, trustee, custodian, sequestrator or similar official
of Borrower, any other Obligor or any Subsidiary or of a substantial part of the
Property or assets of Borrower, any other Obligor or any Subsidiary or (c) the
winding-up or liquidation of Borrower, any other Obligor or any Subsidiary; and
such proceeding or petition shall continue undismissed for thirty (30)
consecutive days or an order or decree approving or ordering any of the
foregoing shall continue unstayed and in effect for thirty (30) consecutive
days; or

        6.10   Any Letter of Credit Application shall at any time for any reason
cease to be in full force and effect or shall be declared to be null and void by
a court of competent jurisdiction, or if the validity or enforceability of any
Letter of Credit Application shall be contested or denied by Borrower, or if
Borrower shall deny that it has any further liability or obligation under any
Letter of Credit Application or if Borrower shall fail to comply with or observe
any of the terms, provisions or conditions contained in any Letter of Credit
Application; or

        6.11   Any Guaranty shall at any time for any reason cease to be in full
force and effect or shall be declared to be null and void by a court of
competent jurisdiction, or if the validity or enforceability of any Guaranty
shall be contested or denied by any Guarantor, or if any Guarantor shall deny
that it has any further liability or obligation under any Guaranty or if any
Guarantor shall fail to comply with or observe any of the terms, provisions or
conditions contained in any Guaranty;

        6.12   Borrower, any other Obligor or any Subsidiary shall be declared
by Bank to be in default on, or pursuant to the terms of, (a) any other present
or future obligation to Bank, including, without limitation, any other loan,
line of credit, revolving credit, guaranty or letter of credit reimbursement
obligation or (b) any other present or future agreement purporting to convey to
Bank a Lien upon any Property or assets of Borrower, such other Obligor or such
Subsidiary, as the case may be; or

        6.13   (a) Borrower, any other Obligor or any Subsidiary shall default
(as principal or as guarantor or other surety) in the payment of any principal
of or premium or make-whole amount or interest on any Debt (other than the
Borrower’s Obligations) that is outstanding in an aggregate principal amount of
at least $5,000,000.00 beyond any period of grace provided with respect thereto;
(b) Borrower, any other Obligor or any Subsidiary shall be in default in the
performance of or compliance with any term, provision, condition or covenant
contained in any agreement, document or instrument evidencing, securing,
guaranteeing the payment of or otherwise relating to any Debt having an
aggregate outstanding principal balance equal to or in excess of $5,000,000.00
or any other condition exists, and as a consequence of such default or condition
described in this clause (b) such Debt has become, or has been declared (or one
or more Persons are entitled to declare such Debt to be), due and payable before
its stated maturity or before its regularly scheduled dates of payment; or (c)
as a consequence of the occurrence or continuation of any event or condition
(other than the passage of time or the right of the holder of Debt to convert
such Debt into equity interests or a sale of assets or other transaction that is
permitted if made in connection with a repayment of Debt), Borrower or any
Subsidiary has become obligated to purchase or repay (or one or more Persons are
entitled to cause Borrower or any Subsidiary to purchase or repay) Debt in an
aggregate principal amount of at least $5,000,000.00 before its regular maturity
or before its regularly scheduled dates of payment; or

        6.14   Borrower, any other Obligor or any Subsidiary shall have a
judgment in excess of $1,000,000.00 entered against it by a court having
jurisdiction in the premises and such judgment shall not be appealed in good
faith (and execution of such judgment stayed during such appeal) or satisfied by
Borrower, such other Obligor or such Subsidiary, as the case may be, within the
time period permitted by applicable law for an appeal of such judgment; or

        6.15   The occurrence of a Reportable Event with respect to any Pension
Plan; the filing of a notice of intent to terminate a Pension Plan by Borrower,
any ERISA Affiliate or any Subsidiary; the institution of proceedings to
terminate a Pension Plan by the PBGC or any other Person; the withdrawal in a
“complete withdrawal” or a “partial withdrawal” as defined in Sections 4203 and
4205, respectively, of ERISA by Borrower, any ERISA Affiliate or any Subsidiary
from any Multi-Employer Plan; or the incurrence of any material increase in the
contingent liability of Borrower or any Subsidiary with respect to any “employee
welfare benefit plan” as defined in Section 3(1) of ERISA which covers retired
employees and their beneficiaries; or

        6.16   The institution by Borrower, any ERISA Affiliate or any
Subsidiary of steps to terminate any Pension Plan if, in order to effectuate
such termination, Borrower, such ERISA Affiliate or such Subsidiary, as the case
may be, would be required to make a contribution to such Pension Plan, or would
incur a liability or obligation to such Pension Plan, in excess of
$1,000,000.00; or the institution by the PBGC of steps to terminate any Pension
Plan; or

        6.17   Any "Event of Default" (as defined therein) shall occur under or
within the meaning of any of the Note Agreements; or

        6.18   The occurrence of any Change of Control Event;

        THEN, and in each such event (other than an event described in Sections
6.08 or 6.09), Bank may declare that its obligation to make Loans under this
Agreement and/or its obligation to issue Letters of Credit under this Agreement
have terminated, whereupon such obligations of Bank shall be immediately and
forthwith terminated, and Bank may declare the entire outstanding principal
balance of and all accrued and unpaid interest on the Note and all of the other
Borrower’s Obligations to be forthwith due and payable, whereupon all of the
unpaid principal balance of and all accrued and unpaid interest on the Note and
all such other Borrower’s Obligations shall become and be immediately due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by Borrower, and Bank may exercise any and
all other rights and remedies which it may have under any of the other
Transaction Documents or under applicable law; provided, however, that upon the
occurrence of any event described in Sections 6.08 or 6.09, the obligation of
Bank to make Loans under this Agreement and/or to issue Letters of Credit under
this Agreement shall automatically terminate and the entire outstanding
principal balance of and all accrued and unpaid interest on the Note and all of
the other Borrower’s Obligations shall automatically become immediately due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by Borrower, and Bank may exercise any and
all other rights and remedies which it may have under any of the other
Transaction Documents or under applicable law.

SECTION 7. GENERAL.

        7.01   No Waiver.  No failure or delay by Bank in exercising any right,
remedy, power or privilege under this Agreement or under any other Transaction
Document shall operate as a waiver thereof; nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights and remedies provided
in this Agreement and in the other Transaction Documents are cumulative and not
exclusive of any rights and/or remedies provided by law. Nothing contained in
this Agreement or any other Transaction Document shall in any way affect the
right of Bank to exercise any statutory or common law right of banker’s lien or
set-off.

        7.02   Right of Set-Off.  Upon the occurrence and during the continuance
of any Event of Default, Bank is hereby authorized at any time and from time to
time, without notice to Borrower (any such notice being expressly waived by
Borrower) and to the fullest extent permitted by law, to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by Bank and any and all other indebtedness at any time owing by
Bank to or for the credit or account of Borrower against any and all of
Borrower’s Obligations irrespective of whether or not Bank shall have made any
demand under this Agreement or under any of the other Transaction Documents and
although such obligations may be contingent or unmatured. Bank agrees to
promptly notify Borrower after any such set-off and application made by Bank,
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of Bank under this Section
7.02 are in addition to any other rights and remedies (including, without
limitation, other rights of set-off) which Bank may have. Nothing contained in
this Agreement or any other Transaction Document shall impair the right of Bank
to exercise any right of set-off or counterclaim it may have against Borrower
and to apply the amount subject to such exercise to the payment of indebtedness
of Borrower unrelated to this Agreement or the other Transaction Documents.

        7.03   Cost and Expenses.  Borrower agrees, whether or not any Loan is
made under this Agreement or any Letter of Credit is issued under this
Agreement, to pay or reimburse Bank upon demand (a) all reasonable out-of-pocket
costs and expenses and all Attorneys’ Fees of Bank in connection with the
preparation, documentation, negotiation and execution of this Agreement, the
Note, the Letter of Credit Applications and the other Transaction Documents, (b)
all recording, filing and search fees and expenses incurred in connection with
this Agreement and the other Transaction Documents, (c) all out-of-pocket costs
and expenses and all Attorneys’ Fees of Bank in connection with the (i) the
preparation, documentation, negotiation and execution of any amendment,
modification, extension, renewal or restatement of this Agreement, the Note, the
Letter of Credit Applications and/or any of the other Transaction Documents,
(ii) the preparation of any waiver or consent under this Agreement or under any
of the other Transaction Documents or (iii) any Default or Event of Default or
alleged Default or Event of Default under this Agreement, (d) if an Event of
Default occurs, all out-of-pocket costs and expenses and all Attorneys’ Fees
incurred by Bank in connection with such Event of Default and collection and
other enforcement proceedings resulting therefrom and (e) all other Attorneys’
Fees incurred by Bank relating to or arising out of or in connection with this
Agreement or any of the other Transaction Documents. Borrower further agrees to
pay or reimburse Bank for any stamp or other taxes which may be payable with
respect to the execution, delivery, recording and/or filing of this Agreement,
the Note, the Letter of Credit Applications or any of the other Transaction
Documents. All of the obligations of Borrower under this Section 7.03 shall
survive the satisfaction and payment of Borrower’s Obligations and the
termination of this Agreement.

        7.04   Environmental Indemnity.  Borrower hereby agrees to defend and
indemnify Bank and hold Bank harmless from and against any and all losses,
liabilities, damages, injuries, claims, costs and expenses of any and every kind
whatsoever (including, without limitation, court costs and reasonable attorneys’
fees and expenses) which at any time or from time to time may be paid, incurred
or suffered by, or asserted against, Bank for, with respect to or as a direct or
indirect result of the violation by Borrower or any Subsidiary of any
Environmental Laws; or with respect to, or as a direct or indirect result of the
presence on or under, or the Release from, properties owned, leased or operated
by Borrower and/or any Subsidiary in the conduct of their respective businesses
into or upon any land, the atmosphere or any watercourse, body of water or
wetland, of any Hazardous Substances or any other hazardous or toxic waste,
substance or constituent or other substance (including, without limitation, any
losses, liabilities, damages, injuries, claims, costs or expenses asserted or
arising under the Environmental Laws); and the provisions of and undertakings
and indemnification set out in this Section 7.04 shall survive the satisfaction
and payment of the Borrower’s Obligations and the termination of this Agreement.

        7.05   General Indemnity.  In addition to the payment of expenses
pursuant to Section 7.03, whether or not the transactions contemplated hereby
shall be consummated, Borrower hereby agrees to defend, indemnify, pay and hold
Bank and any holder(s) of the Note, and the officers, directors, employees,
agents and affiliates of Bank and such holder(s) (collectively, the
“Indemnitees”) harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
disbursements, costs and expenses of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitees shall be
designated a party thereto), that may be imposed on, incurred by or asserted
against the Indemnitees, in any manner relating to or arising out of this
Agreement, any of the other Transaction Documents, any other agreement, document
or instrument executed and delivered by Borrower or any other Obligor in
connection herewith or therewith or any commitment letter delivered by Bank to
Borrower, the agreement of Bank to make the Loans under this Agreement and/or to
issue Letters of Credit under this Agreement or the use or intended use of the
proceeds of any Loan or Letter of Credit under this Agreement (collectively, the
“indemnified liabilities”); provided that Borrower shall have no obligation to
an Indemnitee hereunder with respect to indemnified liabilities directly and
solely caused by the gross negligence or willful misconduct of that Indemnitee
as determined by a court of competent jurisdiction in a final, nonappealable
order. To the extent that the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, Borrower shall contribute the maximum portion that
it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by the Indemnitees or any
of them. The provisions of the undertakings and indemnification set out in this
Section 7.05 shall survive satisfaction and payment of the Borrower’s
Obligations and the termination of this Agreement.

        7.06   Authority to Act.  Bank shall be entitled to act on any notices
and instructions (telephonic or written) believed by Bank in good faith to have
been sent or delivered by an Authorized Person, regardless of whether such
notice or instruction was in fact delivered by an Authorized Person, and
Borrower hereby agrees to defend and indemnify Bank and hold Bank harmless from
and against any and all losses and expenses, if any, ensuing from any such
action.

        7.07   Notices.  Each notice, request, demand, consent, confirmation or
other communication under this Agreement shall be in writing and delivered in
person or sent by telecopy, recognized overnight courier or registered or
certified mail, return receipt requested and postage prepaid, to the applicable
party at its address or telecopy number set forth on the signature pages of this
Agreement, or at such other address or telecopy number as any party hereto may
designate as its address for communications under this Agreement by notice so
given. Such notices shall be deemed effective on the day on which delivered or
sent if delivered in person or sent by telecopy (with answerback confirmation
received), on the first (1st) Domestic Business Day after the day on which sent,
if sent by recognized overnight courier or on the third (3rd) Domestic Business
Day after the day on which mailed, if sent by registered or certified mail.

        7.08   Consent to Jurisdiction; Waiver of Jury Trial.  BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY MISSOURI STATE
COURT SITTING IN THE COUNTY OF ST. LOUIS, MISSOURI AND/OR ANY UNITED STATES OF
AMERICA COURT SITTING IN THE EASTERN DISTRICT OF MISSOURI, EASTERN DIVISION, AS
BANK MAY ELECT, IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT. BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT TO SUCH SUIT, ACTION OR PROCEEDING MAY BE HELD
AND DETERMINED IN ANY OF SUCH COURTS. BORROWER IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH BORROWER MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT, AND BORROWER FURTHER IRREVOCABLY WAIVES ANY CLAIM
THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. BORROWER AUTHORIZES THE SERVICE OF PROCESS UPON
BORROWER BY REGISTERED MAIL SENT TO BORROWER AT ITS ADDRESS DETERMINED PURSUANT
TO SECTION 7.07. BORROWER AND BANK HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY ACTION IN WHICH BORROWER AND BANK ARE PARTIES
RELATING TO OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND/OR ANY
OTHER TRANSACTION DOCUMENT.

        7.09   Governing Law.  This Agreement shall be governed by and construed
in accordance with the substantive laws of the State of Missouri (without
reference to conflict of law principles).

        7.10   Amendments and Waivers.  Any provision of this Agreement, the
Note and/or any other Transaction Document to which Borrower is a party may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by Borrower and Bank.

        7.11   References; Headings for Convenience.  Unless otherwise specified
herein, all references herein to Section numbers refer to Section numbers of
this Agreement, all references herein to Exhibits “A”, “B”, “C”, “D”, “E”, “F”,
“G” and “H” refer to annexed Exhibits “A”, “B”, “C”, “D”, “E”, “F”, “G” and “H”
which are hereby incorporated herein by reference and all references herein to
Schedules 2.02, 2.03, 4.05, 4.07, 4.08, 4.10, 4.12, 4.17, 4.18, 5.02(f) and,
5.02(p) refer to annexed Schedules 2.02, 2.03, 4.05, 4.07, 4.08, 4.10, 4.12,
4.17, 4.18, 5.02(f) and, 5.02(p) which are hereby incorporated herein by
reference. The Section headings are furnished for the convenience of the parties
and are not to be considered in the construction or interpretation of this
Agreement.

        7.12   Successors and Assigns.  The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that Borrower may not assign or
otherwise transfer any of its rights or delegate any of its obligations or
duties under this Agreement without the prior written consent of Bank.

        7.13   NO ORAL AGREEMENTS; ENTIRE AGREEMENT.  ORAL AGREEMENTS OR
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT
OF A DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE.
TO PROTECT BORROWER AND BANK FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS REACHED BY BORROWER AND BANK COVERING SUCH MATTERS ARE CONTAINED IN
THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, WHICH AGREEMENT AND OTHER
TRANSACTION DOCUMENTS ARE A COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENTS
BETWEEN BORROWER AND BANK, EXCEPT AS BORROWER AND THE BANK MAY LATER AGREE IN
WRITING TO MODIFY THEM. This Agreement embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings (oral or written) relating to the subject matter hereof.

        7.14   Severability.  In the event any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.

        7.15   Counterparts.  This Agreement may be executed in any number of
counterparts (including telecopy counterparts), each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

        7.16   Resurrection of the Borrower’s Obligations.  To the extent that
Bank receives any payment on account of any of the Borrower’s Obligations, and
any such payment(s) or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside, subordinated and/or required to be
repaid to a trustee, receiver or any other Person under any bankruptcy act,
state or Federal law, common law or equitable cause, then, to the extent of such
payment(s) received, the Borrower’s Obligations or part thereof intended to be
satisfied and any and all Liens upon or pertaining to any Property of Borrower
and/or any other Obligor and theretofore created and/or existing in favor of
Bank as security for the payment of such Borrower’s Obligations shall be revived
and continue in full force and effect, as if such payment(s) had not been
received by Bank and applied on account of the Borrower’s Obligations.

        7.17   Independence of Covenants.  All of the covenants contained in
this Agreement and the other Transaction Documents shall be given independent
effect so that if a particular action, event or condition is prohibited by any
one of such covenants, the fact that it would be permitted by an exception to,
or otherwise be in compliance within the provisions of, another covenant shall
not avoid the occurrence of a Default or Event of Default if such action is
taken, such event occurs or such condition exists.

        7.18   Collateral.  Bank represents that it in good faith is not relying
upon any “margin stock” (as defined in Regulation U of the Board of Governors of
the Federal Reserve System, as amended) as collateral in the extension or
maintenance of the credit provided for in this Agreement.

        IN WITNESS WHEREOF, Borrower and Bank have executed this Revolving
Credit Agreement as of the 20th day of June, 2003.

  CPI CORP.       By       /s/ Gary W. Douglass

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                    Gary W. Douglass   Title:         Executive Vice President,
Finance/Chief Financial Officer       Address:  
1706 Washington Avenue
St. Louis, Missouri 63103
Attention: Chief Financial Officer
Telecopy No.: (314) 878-4537

  COMMERCE BANK, NATIONAL ASSOCIATION       By       /s/ T. William White

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

                    T. William White   Title:         Senior Vice President,
Commerical Banking       Address:  
8000 Forsyth Boulevard
Clayton, Missouri 63105
Attention: Metro II
Telecopy No.: (314)