Exhibit 10.1

[EXECUTION VERSION]

 

 

 

FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of April 24, 2020

among

FIVE BELOW, INC.,

as the Borrower

The Guarantors Named Herein

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Agent, L/C Issuer and Swing Line Lender,

and

The Other Lenders Party Hereto

TRUIST BANK

as Syndication Agent

and

WELLS FARGO BANK, NATIONAL ASSOCIATION, and

PNC CAPITAL MARKETS LLC

as

Joint Lead Arrangers and Bookrunners

 

 

 

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TABLE OF CONTENTS

 

Section    Page  

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

     1  

1.01

 

Defined Terms

     1  

1.02

 

Other Interpretive Provisions

     57  

1.03

 

Accounting Terms

     58  

1.04

 

Rounding

     58  

1.05

 

Times of Day

     58  

1.06

 

Letter of Credit Amounts

     58  

1.07

 

Divisions

     58  

1.08

 

Effect of Benchmark Transition Event

     59  

ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS

     60  

2.01

 

Committed Loans; Reserves

     60  

2.02

 

Borrowings, Conversions and Continuations of Committed Loans

     60  

2.03

 

Letters of Credit

     62  

2.04

 

Swing Line Loans

     72  

2.05

 

Prepayments

     75  

2.06

 

Termination or Reduction of Commitments

     76  

2.07

 

Repayment of Loans

     77  

2.08

 

Interest

     77  

2.09

 

Fees

     78  

2.10

 

Computation of Interest and Fees

     78  

2.11

 

Evidence of Debt

     79  

2.12

 

Payments Generally; Agent’s Clawback

     79  

2.13

 

Sharing of Payments by Lenders

     81  

2.14

 

Settlement Amongst Lenders

     82  

2.15

 

Increase in Commitments

     82  

ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY

     84  

3.01

 

Taxes

     84  

3.02

 

Illegality

     87  

3.03

 

Inability to Determine Rates

     87  

3.04

 

Increased Costs; Reserves on LIBOR Rate Loans

     87  

3.05

 

Compensation for Losses

     89  

3.06

 

Mitigation Obligations; Replacement of Lenders

     90  

3.07

 

Survival

     90  

 

-i-

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TABLE OF CONTENTS

(continued)

 

Section    Page  

ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     90  

4.01

 

Conditions of Initial Credit Extension

     90  

4.02

 

Conditions to all Credit Extensions

     93  

ARTICLE V REPRESENTATIONS AND WARRANTIES

     94  

5.01

 

Existence, Qualification and Power

     94  

5.02

 

Authorization; No Contravention

     94  

5.03

 

Governmental Authorization; Other Consents

     95  

5.04

 

Binding Effect

     95  

5.05

 

Financial Statements; No Material Adverse Effect

     95  

5.06

 

Litigation

     96  

5.07

 

No Default

     96  

5.08

 

Ownership of Property; Liens

     96  

5.09

 

Environmental Compliance

     97  

5.10

 

Insurance

     97  

5.11

 

Taxes

     98  

5.12

 

ERISA Compliance

     98  

5.13

 

Subsidiaries; Equity Interests

     99  

5.14

 

Margin Regulations; Investment Company Act;

     99  

5.15

 

Disclosure

     99  

5.16

 

Compliance with Laws

     100  

5.17

 

Intellectual Property; Licenses, Etc

     100  

5.18

 

Labor Matters

     100  

5.19

 

Security Documents

     101  

5.20

 

Solvency

     101  

5.21

 

Deposit Accounts; Credit Card Arrangements

     102  

5.22

 

Brokers

     102  

5.23

 

Customer and Trade Relations

     102  

5.24

 

Material Contracts

     102  

5.25

 

Casualty

     102  

 

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TABLE OF CONTENTS

(continued)

 

Section        Page  

5.26

 

OFAC/Sanctions

     102  

5.27

 

PATRIOT Act

     103  

5.28

 

Covered Entities

     103  

ARTICLE VI AFFIRMATIVE COVENANTS

     103  

6.01

 

Financial Statements

     103  

6.02

 

Certificates; Other Information

     104  

6.03

 

Notices

     107  

6.04

 

Payment of Obligations

     108  

6.05

 

Preservation of Existence, Etc

     108  

6.06

 

Maintenance of Properties

     108  

6.07

 

Maintenance of Insurance

     109  

6.08

 

Compliance with Laws

     110  

6.09

 

Books and Records; Accountants

     110  

6.10

 

Inspection Rights

     110  

6.11

 

Use of Proceeds

     111  

6.12

 

Additional Loan Parties

     112  

6.13

 

Cash Management.

     112  

6.14

 

Information Regarding the Collateral

     114  

6.15

 

Physical Inventories.

     114  

6.16

 

Environmental Laws

     114  

6.17

 

Further Assurances

     115  

6.18

 

Compliance with Terms of Leaseholds

     115  

6.19

 

Material Contracts

     115  

6.20

 

OFAC; Sanctions

     116  

6.21

 

Post-Closing Matters

     116  

ARTICLE VII NEGATIVE COVENANTS

     116  

7.01

 

Liens

     116  

7.02

 

Investments

     117  

7.03

 

Indebtedness; Disqualified Stock

     117  

7.04

 

Fundamental Changes

     117  

7.05

 

Dispositions

     117  

 

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TABLE OF CONTENTS

(continued)

 

Section        Page  

7.06

 

Restricted Payments

     117  

7.07

 

Prepayments of Indebtedness

     118  

7.08

 

Change in Nature of Business

     118  

7.09

 

Transactions with Affiliates

     118  

7.10

 

Burdensome Agreements

     119  

7.11

 

Use of Proceeds

     119  

7.12

 

Amendment of Material Documents

     119  

7.13

 

Fiscal Year

     119  

7.14

 

Deposit Accounts; Credit Card Processors

     119  

7.15

 

Financial Covenant

     120  

7.16

 

Sale and Leaseback Transactions

     120  

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES

     120  

8.01

 

Events of Default

     120  

8.02

 

Remedies Upon Event of Default

     123  

8.03

 

Application of Funds

     124  

ARTICLE IX THE AGENT

     126  

9.01

 

Appointment and Authority

     126  

9.02

 

Rights as a Lender

     126  

9.03

 

Exculpatory Provisions

     126  

9.04

 

Reliance by Agent

     127  

9.05

 

Delegation of Duties

     128  

9.06

 

Resignation of Agent

     128  

9.07

 

Non-Reliance on Agent and Other Lenders

     129  

9.08

 

[Reserved]

     129  

9.09

 

Agent May File Proofs of Claim

     129  

9.10

 

Collateral and Guaranty Matters

     130  

9.11

 

Notice of Transfer

     130  

9.12

 

Reports and Financial Statements

     130  

9.13

 

Agency for Perfection

     131  

9.14

 

Indemnification of Agent

     132  

9.15

 

Relation among Lenders

     132  

9.16

 

Defaulting Lenders

     132  

9.17

 

Secured Cash Management Services and Secured Bank Products

     135  

 

-iv-

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TABLE OF CONTENTS

(continued)

 

Section        Page  

ARTICLE X MISCELLANEOUS

     136  

10.01

 

Amendments, Etc

     136  

10.02

 

Notices; Effectiveness; Electronic Communications

     138  

10.03

 

No Waiver; Cumulative Remedies

     140  

10.04

 

Expenses; Indemnity; Damage Waiver

     140  

10.05

 

Payments Set Aside

     142  

10.06

 

Successors and Assigns

     142  

10.07

 

Treatment of Certain Information; Confidentiality

     146  

10.08

 

Right of Setoff

     147  

10.09

 

Interest Rate Limitation

     147  

10.10

 

Counterparts; Integration; Effectiveness

     147  

10.11

 

Survival

     148  

10.12

 

Severability

     148  

10.13

 

Replacement of Lenders

     148  

10.14

 

Governing Law; Jurisdiction; Etc.

     149  

10.15

 

Waiver of Jury Trial

     150  

10.16

 

No Advisory or Fiduciary Responsibility

     150  

10.17

 

USA PATRIOT Act Notice

     151  

10.18

 

Foreign Asset Control Regulations

     151  

10.19

 

Time of the Essence

     152  

10.20

 

Press Releases

     152  

10.21

 

Additional Waivers

     152  

10.22

 

No Strict Construction

     154  

10.23

 

Attachments

     154  

10.24

 

Keepwell

     154  

10.25

 

Acknowledgment and Consent to Bail-In of EEA Financial Institutions

     155  

10.26

 

Acknowledgement Regarding Any Supported QFCs

     155  

 

-v-

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SCHEDULES

 

2.01

  

Commitments and Applicable Percentages

6.02

  

Financial and Collateral Reporting

10.02

  

Agent’s Office; Certain Addresses for Notices

 

EXHIBITS

   

Form of

A

 

LIBOR Rate Loan Notice

B

 

Swing Line Loan Notice

C-1

 

Note

C-2

 

Swing Line Note

D

 

Compliance Certificate

E

 

Assignment and Assumption

F

 

Borrowing Base Certificate

G

 

Credit Card Notification

 

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FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

This FIFTH AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into
as of April 24, 2020, among

FIVE BELOW, INC., a Pennsylvania corporation (the “Borrower”),

1616 HOLDINGS, INC., a Pennsylvania corporation (the “Guarantor”),

each lender from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), and

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

WHEREAS, the Borrower, Wells Fargo Bank, National Association, as lender, and
certain other parties are party to a Fourth Amended and Restated Loan and
Security Agreement, dated as of May 10, 2017 (as amended, restated, amended and
restated, supplemented, extended or otherwise modified from time to time prior
to the date hereof, the “Existing Credit Agreement”), pursuant to which the
lenders party thereto provided the Borrower with certain financial
accommodations;

WHEREAS, the Loan Parties have requested that the Agent and the Lenders enter
into this Agreement, to among other things, extend credit to the Borrower
pursuant to a revolving credit facility in an initial aggregate principal amount
of up to $225,000,000, including the issuance of Letters of Credit, on the terms
and conditions set forth herein; and

WHEREAS, this Agreement and the Security Agreement (as defined below),
collectively, amend and restate the Existing Credit Agreement, as provided
herein and therein;

NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree that the Existing Credit
Agreement shall be amended and restated in its entirety as follows and as set
forth in the Security Agreement (it being agreed that neither this Agreement nor
the Security Agreement shall be deemed to evidence or result in a novation or
repayment and reborrowing of the Obligations under, and as defined in, the
Existing Credit Agreement):

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

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

“Acceptable Document of Title” means, with respect to any Inventory, a tangible,
negotiable bill of lading or other Document (as defined in the UCC) that (a) is
issued by a common carrier which is not an Affiliate of the Approved Foreign
Vendor or any Loan Party which is in actual possession of such Inventory, (b) is
issued to the order of a Loan Party or, if so requested by the Agent, to the
order of the Agent, (c) names the Agent as a notify party and bears a

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conspicuous notation on its face of the Agent’s security interest therein,
(d) is not subject to any Lien (other than in favor of the Agent and Liens and
permitted under clauses (a), (b) and (o) of the definition of Permitted
Encumbrances), and (e) is on terms otherwise reasonably acceptable to the Agent.

“ACH” means automated clearing house transfers.

“Accommodation Payment” as defined in Section 10.21(d).

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

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

“Additional Commitment Lender” shall have the meaning provided in
Section 2.15(iii).

“Adjustment Date” means the first day of each Fiscal Quarter, commencing May 3,
2020.

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

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

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

 

2

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

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

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

“Agreement” means this Credit Agreement.

“Allocable Amount” has the meaning specified in Section 10.21(d).

“Anti-Corruption Laws” means the FCPA, the U.K. Bribery Act of 2010, as amended,
and all other applicable laws and regulations or ordinances concerning or
relating to bribery, money laundering or corruption in any jurisdiction in which
any Loan Party or any of its Subsidiaries or Affiliates is located or is doing
business.

“Anti-Money Laundering Laws” means the applicable laws or regulations in any
jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is
located or is doing business that relates to money laundering, any predicate
crime to money laundering, or any financial record keeping and reporting
requirements related thereto.

“Applicable Margin” means:

(a)    From and after the Closing Date until the first Adjustment Date, the
percentages set forth in Level I of the pricing grid below; and

(b)    From and after the first Adjustment Date and on each Adjustment Date
thereafter, the Applicable Margin shall be determined from the following pricing
grid based upon Average Daily Availability for the Fiscal Quarter ended
immediately preceding such Adjustment Date; provided that if any Borrowing Base
Certificates are at any time restated or otherwise revised (including as a
result of an audit) or if the information set forth in any Borrowing Base
Certificates otherwise proves to be false or incorrect such that the Applicable
Margin would have been higher than was otherwise in effect during any period,
without constituting a waiver of any Default or Event of Default arising as a
result thereof, interest due under this Agreement shall be immediately
recalculated at such higher rate for any applicable periods and shall be due and
payable on demand.

 

Level

  

Average Daily

Availability

   LIBOR
Margin     Base Rate
Margin     Letter of
Credit Fee  

I

   ³50% of the Loan Cap      2.00 %      1.00 %      2.00 % 

II

   <50% of the Loan Cap      2.25 %      1.25 %      2.25 % 

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such

 

3

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Lender’s Commitment at such time. If the commitment of each Lender to make Loans
and the obligation of the L/C Issuer to make L/C Credit Extensions have been
terminated pursuant to Section 8.02 or if the Aggregate Commitments have
expired, then the Applicable Percentage of each Lender shall be determined based
on the Applicable Percentage of such Lender most recently in effect, giving
effect to any subsequent assignments. The initial Applicable Percentage of each
Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable.

“Appraised Value” means with respect to Eligible Inventory, the appraised
orderly liquidation value, net of costs and expenses to be incurred in
connection with any such liquidation, which value is expressed as a percentage
of Cost of Eligible Inventory as set forth in the inventory stock ledger of the
Borrower, which value shall be determined from time to time by the most recent
appraisal undertaken by an independent appraiser engaged by the Agent.

“Approved Foreign Vendor” means a Foreign Vendor which (a) is located in any
country acceptable to the Agent in its Permitted Discretion, (b) has received
timely payment or performance of all obligations owed to it by the Loan Parties,
(c) has not asserted and has no right to assert any reclamation, repossession,
diversion, stoppage in transit, Lien or title retention rights in respect of
such Inventory, and (d), if so requested by the Agent, has entered into and is
in full compliance with the terms of a Foreign Vendor Agreement.

“Approved Fund” means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business
and that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender, (c) an entity or an Affiliate of an entity that administers or manages a
Lender or (d) the same investment advisor or an advisor under common control
with such Lender, Affiliate or advisor, as applicable.

“Arranger” means each of Wells Fargo and PNC Capital Markets LLC, in their
capacities as joint lead arrangers and book managers.

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

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

“Attributable Indebtedness” shall mean, when used with respect to any Sale and
Leaseback Transaction by any Loan Party, as at the time of determination, the
present value (discounted at a rate equivalent to such Loan Party’s then-current
weighted average cost of funds for borrowed money as at the time of
determination, compounded on a semi-annual basis) of the total obligations of
the lessee for rental payments (and substantially similar payments) during the
remaining term of the lease included in any such Sale and Leaseback Transaction.

“Audited Financial Statements” means the audited consolidated balance sheet of
the Borrower and its Subsidiaries for the Fiscal Year ended February 1, 2020,
and the related consolidated statements of income or operations, Shareholders’
Equity and cash flows for such Fiscal Year of the Borrower and its Subsidiaries,
including the notes thereto.

 

4

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“Availability” means, as of any date of determination thereof by the Agent, the
result, if a positive number, of:

(a)    The Loan Cap

Minus

(b)    The Total Outstandings.

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

“Availability Reserves” means, without duplication of any other Reserves or
items to the extent such items are otherwise addressed or excluded through
eligibility criteria, such reserves as the Agent from time to time determines in
its Permitted Discretion as being appropriate (a) to reflect the impediments to
the Agent’s ability to realize upon the Collateral, (b) to reflect claims and
liabilities that the Agent determines will need to be satisfied in connection
with the realization upon the Collateral, (c) to reflect criteria, events,
conditions, contingencies or risks which adversely affect any component of the
Borrowing Base, or the assets, business, financial performance or financial
condition of any Loan Party, or (d) to reflect that a Default an Event of
Default then exists. Without limiting the generality of the foregoing,
Availability Reserves may include, in the Agent’s Permitted Discretion, (but are
not limited to) reserves based on: (i) rent; (ii) customs duties, and other
costs to release Inventory which is being imported into the United States;
(iii) outstanding Taxes and other governmental charges, including, without
limitation, ad valorem, real estate, personal property, sales, claims of the
PBGC and other Taxes which may have priority over the interests of the Agent in
the Collateral; (iv) salaries, wages and benefits due to employees of the
Borrower, (v) customer credit liabilities consisting of the aggregate remaining
value at such time of (a) outstanding gift certificates and gift cards of the
Borrower entitling the holder thereof to use all or a portion of the certificate
or gift card to pay all or a portion of the purchase price for any Inventory,
(b) outstanding merchandise credits of the Borrower, and (c) liabilities in
connection with frequent shopping programs of the Borrower, (vi) deposits made
by customers with respect to the purchase of goods or the performance of
services and layaway obligations of the Borrower, (vii) reserves for reasonably
anticipated changes in the Appraised Value of Eligible Inventory between
appraisals, (viii) warehousemen’s or bailee’s charges and other Permitted
Encumbrances which may have priority over the interests of the Agent in the
Collateral, (ix) amounts due to vendors on account of consigned goods, (x) Cash
Management Reserves, (xi) Bank Products Reserves, (xii) royalties payable in
respect of licensed merchandise, and (xiii) for the period commencing April 1,
2020, monthly rental payments that are due but have not been made for each Store
that is temporarily closed as a result of the COVID-19 pandemic unless (a) the
landlord of such Store has agreed to an abatement of rent payments, deferral of
rent payments, payback period for delayed rent payments, or any other similar
arrangement (which other similar arrangement is satisfactory to the Agent in its
Permitted Discretion), or (b) it has been

 

5

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agreed by the landlord, or determined by a court or other authority of competent
jurisdiction, that such rental payments for a Store are not owing to landlord
for the subject period (due to force majeure, impossibility, frustration of
purpose or any other reason); provided further that all Availability Reserves
(including the amount of such Availability Reserves) shall bear a reasonable
relationship to the events, conditions or circumstances that are the basis for
each such Availability Reserve. So long as no Event of Default has occurred and
is continuing Agent shall provide the Borrower with no less than three
(3) Business Days’ prior notice of any intended imposition of, or increase in,
the Availability Reserves (other than increases resulting solely from
fluctuations in the amount of the items reserved for) and will be available to
consult with the Borrower in connection with the basis for such imposition or
increase of Availability Reserves; provided that (i) no such prior notice shall
be required for changes to any Availability Reserves resulting solely by virtue
of mathematical calculations of the amount of the Availability Reserves in
accordance with the methodology of calculation previously used and (ii) upon
such notice, the Borrower will not be permitted to borrow so as to exceed the
Borrowing Base after giving effect to such new or modified Reserves. For the
avoidance of doubt, it is acknowledged and agreed that any Reserves made
pursuant to more than one clause above shall be made without duplication.

“Average Daily Availability” means, for any Fiscal Quarter, an amount equal to
the sum of Availability for each day of such Fiscal Quarter divided by the
actual number of days in such Fiscal Quarter, as determined by the Agent, which
determination shall be conclusive absent manifest error.

“Average Monthly Unused Percentage” means, for any Fiscal Month, a percentage
equal to (a) the average daily Total Outstandings during such Fiscal Month,
divided by (b) the amount of the Aggregate Commitments.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“Bank Products” means any services of facilities provided to any Loan Party by a
Lender or any of its Affiliates (but excluding Cash Management Services)
including, without limitation, on account of (a) Swap Contracts, (b) merchant
services constituting a line of credit, (c) leasing, (d) Factored Receivables
which the Borrower has agreed in writing are to constitute Bank Products
hereunder, (e) supply chain finance services including, without limitation,
trade payable services and supplier accounts receivable purchases, in each case,
which the Borrower has agreed in writing are to constitute Bank Products
hereunder, and (f) commercial equipment financing and leasing, including vendor
finance and chattel paper purchases and syndication.

“Bank Products Reserves” means such reserves as the Agent from time to time
determines in its Permitted Discretion as being appropriate to reflect the
liabilities and obligations of the Loan Parties with respect to Bank Products
then provided or outstanding.

 

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“Base Rate” means, for any day, a fluctuating rate per annum equal to the
highest of (a) the Federal Funds Rate plus 1⁄2%, (b) the LIBOR Rate (which rate
shall be calculated based upon an Interest Period of one month and shall be
determined on a daily basis), plus one percentage point, and (c) the rate of
interest announced, from time to time, within Wells Fargo at its principal
office in San Francisco as its “prime rate”, with the understanding that the
“prime rate” is one of Wells Fargo’s base rates (not necessarily the lowest of
such rates) and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto and is evidenced by the
recording thereof after its announcement in such internal publications as Wells
Fargo may designate (and, if any such announced rate is below zero, then the
rate determined pursuant to this clause (c) shall be deemed to be zero).

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

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate
(which may include Term SOFR) that has been selected by Agent and Borrower
giving due consideration to (i) any selection or recommendation of a replacement
rate or the mechanism for determining such a rate by the Relevant Governmental
Body or (ii) any evolving or then-prevailing market convention for determining a
rate of interest as a replacement to the LIBOR Rate for United States
dollar-denominated syndicated credit facilities and (b) the Benchmark
Replacement Adjustment; provided that, if the Benchmark Replacement as so
determined would be less than 0.50%, the Benchmark Replacement shall be deemed
to be 0.50% for the purposes of this Agreement.

“Benchmark Replacement Adjustment” means, with respect to any replacement of the
LIBOR Rate with an Unadjusted Benchmark Replacement for each applicable Interest
Period, the spread adjustment, or method for calculating or determining such
spread adjustment, (which may be a positive or negative value or zero) that has
been selected by Agent and Borrower giving due consideration to (i) any
selection or recommendation of a spread adjustment, or method for calculating or
determining such spread adjustment, for the replacement of the LIBOR Rate with
the applicable Unadjusted Benchmark Replacement by the Relevant Governmental
Body or (ii) any evolving or then-prevailing market convention for determining a
spread adjustment, or method for calculating or determining such spread
adjustment, for the replacement of the LIBOR Rate with the applicable Unadjusted
Benchmark Replacement for United States dollar-denominated syndicated credit
facilities at such time.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of “Base Rate”, the definition of “Interest Period”,
timing and frequency of determining rates and making payments of interest and
other administrative matters) that Agent decides may be appropriate to reflect
the adoption and implementation of such Benchmark Replacement and to permit the
administration thereof by Agent in a manner substantially consistent with market
practice (or, if Agent decides that adoption of any portion of such market
practice is not administratively feasible or if Agent determines that no market
practice for the administration of the Benchmark Replacement exists, in such
other manner of administration as Agent decides is reasonably necessary in
connection with the administration of this Agreement).

 

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“Benchmark Replacement Date” means the earlier to occur of the following events
with respect to the LIBOR Rate:

(a)    in the case of clause (a) or (b) of the definition of “Benchmark
Transition Event,” the later of (i) the date of the public statement or
publication of information referenced therein and (ii) the date on which the
administrator of the LIBOR Rate permanently or indefinitely ceases to provide
the LIBOR Rate; or

(b)    in the case of clause (c) of the definition of “Benchmark Transition
Event,” the date of the public statement or publication of information
referenced therein.

“Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to the LIBOR Rate:

(a)    a public statement or publication of information by or on behalf of the
administrator of the LIBOR Rate announcing that such administrator has ceased or
will cease to provide the LIBOR Rate, permanently or indefinitely, provided
that, at the time of such statement or publication, there is no successor
administrator that will continue to provide the LIBOR Rate;

(b)    a public statement or publication of information by the regulatory
supervisor for the administrator of the LIBOR Rate, the Federal Reserve System
of the United States (or any successor), an insolvency official with
jurisdiction over the administrator for the LIBOR Rate, a resolution authority
with jurisdiction over the administrator for the LIBOR Rate or a court or an
entity with similar insolvency or resolution authority over the administrator
for the LIBOR Rate, which states that the administrator of the LIBOR Rate has
ceased or will cease to provide the LIBOR Rate permanently or indefinitely,
provided that, at the time of such statement or publication, there is no
successor administrator that will continue to provide the LIBOR Rate; or

(c)    a public statement or publication of information by the regulatory
supervisor for the administrator of the LIBOR Rate announcing that the LIBOR
Rate is no longer representative.

“Benchmark Transition Start Date” means (a) in the case of a Benchmark
Transition Event, the earlier of (i) the applicable Benchmark Replacement Date
and (ii) if such Benchmark Transition Event is a public statement or publication
of information of a prospective event, the 90th day prior to the expected date
of such event as of such public statement or publication of information (or if
the expected date of such prospective event is fewer than 90 days after such
statement or publication, the date of such statement or publication) and (b) in
the case of an Early Opt-in Election, the date specified by Agent or the
Required Lenders, as applicable, by notice to Borrower, Agent (in the case of
such notice by the Required Lenders) and the Lenders.

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to the LIBOR Rate
and solely to the extent that the LIBOR Rate has not been replaced with a
Benchmark Replacement, the period (x) beginning at the time that such Benchmark
Replacement Date has occurred if, at such time, no Benchmark Replacement has
replaced the LIBOR Rate for all purposes hereunder in accordance with
Section 1.08 and (y) ending at the time that a Benchmark Replacement has
replaced the LIBOR Rate for all purposes hereunder pursuant to Section 1.08.

“Beneficial Ownership Certification” means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

 

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“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Blocked Account” has the meaning provided in Section 6.13(a)(ii).

“Blocked Account Agreement” means with respect to an account established by a
Loan Party, an agreement, in form and substance reasonably satisfactory to the
Agent, establishing control, pursuant to Section 9-104 of the UCC or other
applicable section of the UCC, of such account by the Agent and whereby the bank
maintaining such account agrees, upon the occurrence and during the continuance
of a Cash Dominion Event, to comply only with the instructions originated by the
Agent without the further consent of any Loan Party.

“Blocked Account Bank” means each bank with whom deposit accounts are maintained
in which any funds of any of the Loan Parties from one or more DDAs are
concentrated (which, as of the Closing Date, are identified on Schedule 5.21(a)
to the Disclosure Letter), and with whom a Blocked Account Agreement has been,
or is required to be, executed in accordance with the terms hereof.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

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

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

(a)    the face amount of Eligible Credit Card Receivables multiplied by the
Credit Card Advance Rate;

plus

(b)    the Cost of Eligible Inventory, net of Inventory Reserves, multiplied by
the product of the Inventory Advance Rate multiplied by the Appraised Value of
Eligible Inventory;

minus

(c)    the then amount of all Availability Reserves;

provided that, until the date that the Agent has received a reasonably
satisfactory Inventory appraisal and commercial finance examination with respect
to the Loan Parties, the Borrowing Base shall be equal to the sum of (i) the
face amount of Eligible Credit Card Receivables multiplied by the Credit Card
Advance Rate, plus (ii) 50% of the book value of Eligible Inventory, minus
(iii) the then amount of all Availability Reserves; provided, further, that
except as otherwise agreed by the Agent, if such Inventory appraisal and
commercial finance examination has not commenced within 90 days (which such
period may be extended for an additional 30 days in the Agent’s sole discretion)
of the Closing Date, the Borrowing Base shall thereafter be equal to $0.

 

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

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

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

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

“Cash Collateral Account” means a non-interest bearing account established by
one or more of the Loan Parties with Wells Fargo, and in the name of, the Agent
(or as the Agent shall otherwise direct) and under the sole and exclusive
dominion and control of the Agent, in which deposits are required to be made in
accordance with Section 2.03(k) or 8.02(c).

“Cash Collateralize” has the meaning specified in Section 2.03(k). Derivatives
of such term have corresponding meanings.

“Cash Dominion Event” means either (i) the occurrence and continuance of any
Event of Default, or (ii) the failure of the Borrower to maintain Availability
of at least 15% of the Loan Cap. For purposes of this Agreement, the occurrence
of a Cash Dominion Event shall be deemed continuing at the Agent’s option (i) so
long as such Event of Default has not been waived, and/or (ii) if the Cash
Dominion Event arises as a result of the Borrower’s failure to achieve
Availability as required hereunder, until Availability has exceeded 15% of the
Loan Cap for sixty (60) consecutive calendar days, in which case a Cash Dominion
Event shall no longer be deemed to be continuing for purposes of this Agreement;
provided that after a Cash Dominion Event has occurred and been discontinued on
two (2) occasions after the Closing Date, any subsequent Cash Dominion Event
shall be deemed continuing at the Agent’s option even if an Event of Default is
no longer continuing and/or Availability exceeds the required amount for sixty
(60) consecutive

 

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calendar days. The termination of a Cash Dominion Event as provided herein shall
in no way limit, waive or delay the occurrence of a subsequent Cash Dominion
Event in the event that the conditions set forth in this definition again arise.

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

“Cash Management Services” means any cash management services or facilities
provided to any Loan Party by a Lender or any of its Affiliates, including
without limitation, Wells Fargo Merchant Services, L.L.C., including, without
limitation: (a) ACH transactions, (b) controlled disbursement services,
treasury, depository, overdraft, and electronic funds transfer services,
(c) credit or debit cards, (d) any services related to the acceptance and/or
processing of payment cards or devices, (e) purchase cards, and (f) print
services.

“Casualty Event” has the meaning set forth in Section 5.25.

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

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

“CFC” means a controlled foreign corporation (as that term is defined in the
Code) in which any Loan Party is a “United States shareholder” within the
meaning of Section 951(b) of the Code.

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

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

(a)    any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit
plan of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such

 

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person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time (such right, an “option right”)),
directly or indirectly, of 25% or more of the Equity Interests of the Borrower
entitled to vote for members of the board of directors or equivalent governing
body of the Borrower on a fully-diluted basis (and taking into account all such
Equity Interests that such “person” or “group” has the right to acquire pursuant
to any option right);

(b)     during any period of 12 consecutive months, a majority of the members of
the board of directors or other equivalent governing body of the Borrower cease
to be composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body; or

(c)    any “change in control” or “sale” or “disposition” or similar event as
defined in any Organizational Document of any Loan Party or in any document
governing Material Indebtedness of any Loan Party; or

(d)    the Borrower fails at any time to own, directly or indirectly, 100% of
the Equity Interests of each other Loan Party free and clear of all Liens (other
than the Liens in favor of the Agent), except where such failure is as a result
of a transaction permitted by the Loan Documents.

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

“Code” means the Internal Revenue Code of 1986, as amended.

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

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

 

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

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

“Commitment” means, as to each Lender, its obligation to (a) make Committed
Loans to the Borrower pursuant to Section 2.01, (b) purchase participations in
L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.

“Commitment Increases” has the meaning specified in Section 2.15(i).

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

“Committed Loan” has the meaning specified in Section 2.01.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

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

“Concentration Account” has the meaning provided in Section 6.13(d).

“Consent” means actual consent given by a Lender from whom such consent is
sought.

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

“Consolidated Cash Balance” means at any time, (a) the aggregate amount of cash
and cash equivalents, marketable securities, treasury bonds and bills,
certificates of deposit, investments in money market funds, commercial paper and
cash equivalents, in each case, held or owned by (either directly or
indirectly), credited to the account of or would otherwise be required to be
reflected as an asset on the balance sheet of the Borrower and its Subsidiaries;
provided that this clause (a) shall not include investments expiring on or
before March 31, 2021 and set forth on Schedule 1.01 to the Disclosure Letter,
less (b) the sum of (i) any restricted cash or cash equivalents to pay royalty
obligations, working interest obligations, suspense payments, severance taxes,
payroll, payroll taxes, other taxes, employee wage and benefit payments and
trust and fiduciary obligations or other obligations of the Borrower or any
Subsidiary to third parties and for which the Borrower or such Subsidiary has
issued checks or has initiated wires or ACH transfers (or, in

 

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the Borrower’s discretion, will issue checks or initiate wires or ACH transfers
within five (5) business days) in order to pay, (ii) other amounts for which the
Borrower or such Subsidiary has issued checks or has initiated wires or ACH
transfers but have not yet been subtracted from the balance in the relevant
account of the Borrower or such Subsidiary and (iii) while and to the extent
refundable, any cash or cash equivalents of the Borrower or any Subsidiaries
constituting purchase price deposits held in escrow pursuant to a binding and
enforceable purchase and sale agreement with a third party containing customary
provisions regarding the payment and refunding of such deposit.

“Consolidated EBITDA” means, at any date of determination, an amount equal to
Consolidated Net Income of the Borrower and its Subsidiaries on a Consolidated
basis for the most recently completed Measurement Period, plus (a) the following
to the extent deducted in calculating such Consolidated Net Income:
(i) Consolidated Interest Charges, (ii) the provision for Federal, state, local
and foreign income Taxes, (iii) depreciation and amortization expense and other
non-cash charges that were deducted in the calculation of Consolidated Net
Income for such period, (iv) stock based compensation expense (which does not
represent a cash item in such period or any future period), mark to market
adjustments in respect of derivatives, and write offs, write downs or other
impairment of long lived assets, (v) one-time extraordinary, non-recurring or
unusual cash items in an amount not to exceed, together with clause (vii) below,
10% of Consolidated EBITDA, and related taxes thereon, (vi) one-time transaction
fees, costs and expenses incurred in connection with any issuances of Equity
Interests, Investments, Acquisitions, Dispositions, mergers and other
reorganizations, or the incurrence, refinancing, or modification of Indebtedness
or similar transactions, in each case to the extent permitted hereunder;
(vii) costs, charges, accruals, reserves or expenses attributable to the
undertaking and/or implementation of reorganizations, cost savings initiatives,
operating expense reductions and similar initiatives in an amount not to exceed,
together with clause (v) above, 10% of Consolidated EBITDA; minus (b) the
following to the extent included in calculating such Consolidated Net Income:
(i) Federal, state, local and foreign income tax credits and (ii) all non-cash
items increasing Consolidated Net Income (in each case of or by Borrower and its
Subsidiaries for such Measurement Period), all as determined on a Consolidated
basis in accordance with GAAP. Notwithstanding the foregoing, Consolidated
EBITDA in any Measurement Period shall include the Consolidated EBITDA on a pro
forma basis for such Measurement Period of each Person (or business unit,
division or group of such Person) that is acquired by a Loan Party during such
Measurement Period; provided that, in respect of an Acquisition, the pro forma
information shall include the historical financial results of the acquired
Person on a pro forma basis for the most recently completed Measurement Period,
and shall assume that the consummation of such Acquisition accrued on the first
day of such Measurement Period.

“Consolidated Fixed Charge Coverage Ratio” means, at any date of determination,
the ratio of (a) (i) Consolidated EBITDA for such period minus (ii) Non-Financed
Capital Expenditures made during such period minus (iii) the aggregate amount of
Federal, state, local and foreign income taxes paid in cash during such period
to (b) the sum of (i) Debt Service Charges plus (ii) the aggregate amount of all
Restricted Payments, in each case, of or by the Borrower and its Subsidiaries
for the most recently completed Measurement Period, all as determined on a
Consolidated basis in accordance with GAAP.

 

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

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

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

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

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

“Credit Card Advance Rate” means 90%.

“Credit Card Agreements” has the meaning set forth in Section 5.21(b).

 

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

“Credit Card Notifications” has the meaning provided in Section 6.13(a)(i).

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

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

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

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

“Credit Party Expenses” means, without limitation, (a) all reasonable and
documented out-of-pocket expenses incurred by the Agent and its Affiliates in
connection with this Agreement and the other Loan Documents, including without
limitation (i) the reasonable and documented out-of-pocket fees, charges and
disbursements of (A) counsel for the Agent, (B) outside consultants for the
Agent, (C) appraisers, (D) commercial finance examinations, and (E) all such
reasonable and documented out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of the Obligations, (ii) in connection
with (A) the syndication of the credit facilities provided for herein, (B) the
preparation, negotiation, administration, management, execution and delivery of
this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (C) the enforcement or protection of
their rights in connection with this Agreement or the Loan Documents or efforts
to preserve, protect, collect, or enforce the Collateral, or (D) any workout,
restructuring or negotiations in respect of any Obligations, and (iii) all
customary fees and charges (as adjusted from time to time) of the Agents with
respect to the disbursement of funds (or the receipt of funds) to or for the
account of Borrower (whether by wire transfer or otherwise), together with any
reasonable and documented out-of-

 

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pocket costs and expenses incurred in connection therewith, and (b) with respect
to the L/C Issuer, and its Affiliates, all reasonable out-of-pocket expenses
incurred in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder; and (c) all reasonable
and documented out-of-pocket expenses incurred by the Credit Parties who are not
the Agent, the L/C Issuer or any Affiliate of any of them, after the occurrence
and during the continuance of an Event of Default, provided that such Credit
Parties shall be entitled to reimbursement for no more than one counsel
representing all such Credit Parties (absent a conflict of interest in which
case the Credit Parties may engage and be reimbursed for additional counsel).

“Customs Broker/Carrier Agreement” means an agreement in form and substance
reasonably satisfactory to the Agent among the Borrower, a customs broker,
freight forwarder, consolidator or carrier, and the Agent, in which the customs
broker, freight forwarder, consolidator or carrier acknowledges that it has
control over and holds the documents evidencing ownership of the subject
Inventory for the benefit of the Agent and agrees, upon notice from the Agent,
to hold and dispose of the subject Inventory solely as directed by the Agent.

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

“Debt Service Charges” means for any Measurement Period, the sum of
(a) Consolidated Interest Charges required to be paid for such Measurement
Period, plus (b) principal payments required to be made on account of
Indebtedness (excluding the Obligations and any Synthetic Lease Obligations but
including, without limitation, Capital Lease Obligations) for such Measurement
Period, in each case determined on a Consolidated basis in accordance with GAAP.

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

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

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

“Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any
portion of its Loans within two Business Days of the date such Loans were
required to be funded hereunder, or (ii) pay to Agent, L/C Issuer, or any other
Lender any other amount required to be paid by it

 

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hereunder (including in respect of its participation in Letters of Credit)
within two Business Days of the date when due, (b) has notified the Borrower,
Agent or L/C Issuer in writing that it does not intend to comply with its
funding obligations hereunder, or has made a public statement to that effect,
(c) has failed, within three Business Days after written request by Agent or
Borrower, to confirm in writing to Agent and Borrower that it will comply with
its prospective funding obligations hereunder (provided, that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such
written confirmation by Agent and Borrower), or (d) has, or has a direct or
indirect parent company that has, (i) become the subject of any proceeding under
any Debtor Relief Laws, (ii) had appointed for it a receiver, custodian,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or
assets, including the Federal Deposit Insurance Corporation or any other state
or federal regulatory authority acting in such a capacity, or (iii) become the
subject of a Bail-in Action; provided, that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by Agent that a Lender is a Defaulting Lender under
any one or more of clauses (a) through (d) above shall be conclusive and binding
absent manifest error, and such Lender shall be deemed to be a Defaulting Lender
upon delivery of written notice of such determination to Borrower, L/C Issuer,
and each Lender.

“Defaulting Lender Rate” means (a) for the first three (3) days from and after
the date the relevant payment is due, the Base Rate, and (b) thereafter, the
interest rate then applicable to Committed Loans that are Base Rate Loans
(inclusive of the Applicable Margin applicable thereto).

“Disclosure Letter” means that certain disclosure letter, dated as of the date
hereof, by the Loan Parties in favor of Agent.

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

“Disqualified Stock” means any Equity Interest that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is ninety-one
(91) days after the date on which the Loans mature; provided, however, that
(i) only the portion of such Equity Interests which so matures or is mandatorily
redeemable, is so convertible or exchangeable or is so redeemable at the option
of the holder thereof prior to such date shall be deemed to be Disqualified
Stock and (ii)

 

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with respect to any Equity Interests issued to any employee or to any plan for
the benefit of employees of the Borrower or its Subsidiaries or by any such plan
to such employees, such Equity Interest shall not constitute Disqualified Stock
solely because it may be required to be repurchased by the Borrower or one of
its Subsidiaries in order to satisfy applicable statutory or regulatory
obligations or as a result of such employee’s termination, resignation, death or
disability and if any class of Equity Interest of such Person that by its terms
authorizes such Person to satisfy its obligations thereunder by delivery of an
Equity Interest that is not Disqualified Stock, such Equity Interests shall not
be deemed to be Disqualified Stock. Notwithstanding the preceding sentence, any
Equity Interest that would constitute Disqualified Stock solely because the
holders thereof have the right to require a Loan Party to repurchase such Equity
Interest upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock. The amount of Disqualified Stock deemed to be
outstanding at any time for purposes of this Agreement will be the maximum
amount that the Borrower and its Subsidiaries may become obligated to pay upon
maturity of, or pursuant to any mandatory redemption provisions of, such
Disqualified Stock or portion thereof, plus accrued dividends.

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

“Drawing Document” means any Letter of Credit or other document presented for
purposes of drawing under any Letter of Credit, including by electronic
transmission such as SWIFT, electronic mail, facsimile or computer generated
communication.

“Early Opt-in Election” means the occurrence of:

(a) (i) a determination by Agent or (ii) a notification by the Required Lenders
to Agent (with a copy to Borrower) that the Required Lenders have determined
that United States dollar-denominated syndicated credit facilities being
executed at such time, or that include language similar to that contained in
Section 1.08 are being executed or amended, as applicable, to incorporate or
adopt a new benchmark interest rate to replace the LIBOR Rate, and

(b) (i) the election by Agent or (ii) the election by the Required Lenders to
declare that an Early Opt-in Election has occurred and the provision, as
applicable, by Agent of written notice of such election to Borrower and the
Lenders or by the Required Lenders of written notice of such election to Agent.

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

 

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“Eligible Assignee” means (a) a Credit Party or any of its Affiliates; (b) a
bank, insurance company, or company engaged in the business of making commercial
loans, which Person, together with its Affiliates, has a combined capital and
surplus in excess of $250,000,000; (c) an Approved Fund; (d) any Person to whom
a Credit Party assigns its rights and obligations under this Agreement as part
of an assignment and transfer of such Credit Party’s rights in and to a material
portion of such Credit Party’s portfolio of asset based credit facilities, and
(e) any other Person (other than a natural person) approved by (i) the Agent,
and (ii) unless an Event of Default has occurred and is continuing, the Borrower
(each such approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include a Loan
Party or any of the Loan Parties’ Affiliates or Subsidiaries.

“Eligible Credit Card Receivables” means at the time of any determination
thereof, each Credit Card Receivable that satisfies the following criteria at
the time of creation and continues to meet the same at the time of such
determination, as determined by the Agent in its Permitted Discretion: such
Credit Card Receivable (i) has been earned by performance and represents the
bona fide amounts due to a Loan Party from a Credit Card Issuer or Credit Card
Processor, and in each case originated in the ordinary course of business of
such Loan Party, and (ii) in each case is acceptable to the Agent in its
Permitted Discretion, and is not ineligible for inclusion in the calculation of
the Borrowing Base pursuant to any of clauses (a) through (i) below. Without
limiting the foregoing, to qualify as an Eligible Credit Card Receivable, such
Credit Card Receivable shall indicate no Person other than a Loan Party as payee
or remittance party. In determining the amount to be so included, the face
amount of a Credit Card Receivable shall be reduced by, without duplication, to
the extent not reflected in such face amount, (i) the amount of all accrued and
actual discounts, claims, credits or credits pending, promotional program
allowances, price adjustments, finance charges or other allowances (including
any amount that a Loan Party may be obligated to rebate to a customer, a Credit
Card Issuer or Credit Card Processor pursuant to the terms of any agreement or
understanding (written or oral)) and (ii) the aggregate amount of all cash
received in respect of such Credit Card Receivable but not yet applied by the
Loan Parties to reduce the amount of such Credit Card Receivable. Except as
otherwise agreed by the Agent in its Permitted Discretion, any Credit Card
Receivable included within any of the following categories shall not constitute
an Eligible Credit Card Receivable:

(a)    Credit Card Receivables which do not constitute a “payment intangible”
(as defined in the UCC);

(b)    Credit Card Receivables that have been outstanding for more than five
(5) Business Days from the date of sale;

(c)    Credit Card Receivables (i) that are not subject to a perfected first
priority security interest in favor of the Agent, or (ii) with respect to which
a Loan Party does not have good, valid and marketable title thereto, free and
clear of any Lien (other than Liens granted to the Agent pursuant to the
Security Documents);

(d)    Credit Card Receivables which are disputed, are with recourse, or with
respect to which a claim, counterclaim, offset or chargeback has been asserted
(to the extent of such claim, counterclaim, offset or chargeback);

 

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(e)    Credit Card Receivables as to which the Credit Card Issuer or Credit Card
Processor has the right under certain circumstances to require a Loan Party to
repurchase the Credit Card Receivables from such Credit Card Issuer or Credit
Card Processor;

(f)    Credit Card Receivables due from a Credit Card Issuer or Credit Card
Processor which is the subject of any bankruptcy or insolvency proceedings;

(g)    Credit Card Receivables which are not a valid, legally enforceable
obligation of the applicable Credit Card Issuer or Credit Card Processor with
respect thereto;

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

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

“Eligible In-Transit Inventory” means, as of any date of determination thereof,
without duplication of other Eligible Inventory, In-Transit Inventory:

(a)    which has been shipped from a foreign location for receipt by a Loan
Party, but which has not yet been delivered to such Loan Party, which In-Transit
Inventory has been in transit for sixty (60) days or less from the date of
shipment of such Inventory;

(b)    for which the purchase order is in the name of a Loan Party and title and
risk of loss has passed to such Loan Party;

(c)    for which an Acceptable Document of Title has been issued, and in each
case as to which the Agent has control (as defined in the UCC) over the
documents of title which evidence ownership of the subject Inventory (such as,
if requested by the Agent, by the delivery of a Customs Broker/Carrier
Agreement);

(d)    which is insured in accordance with the terms of this Agreement to the
reasonable satisfaction of the Agent (including, without limitation, marine
cargo insurance);

(e)    the Foreign Vendor with respect to such In-Transit Inventory is an
Approved Foreign Vendor;

(f)    for which payment of the purchase price has been made by the Borrower or
the purchase price is supported by a Commercial Letter of Credit; and

(g)    which otherwise would constitute Eligible Inventory;

provided that the Agent may, in its Permitted Discretion, exclude any particular
Inventory from the definition of “Eligible In-Transit Inventory” in the event
the Agent

 

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determines that such Inventory is subject to any Person’s right of reclamation,
repudiation, stoppage in transit or any event has occurred or is reasonably
anticipated by the Agent to arise which may otherwise adversely impact the
ability of the Agent to realize upon such Inventory.

“Eligible Inventory” means, as of the date of determination thereof, without
duplication, (i) Eligible In-Transit Inventory in an amount not to exceed 10% of
the amount of all Eligible Inventory and (ii) items of Inventory of a Loan Party
that are finished goods, merchantable and readily saleable to the public in the
ordinary course of the Loan Party’s business and deemed by the Agent in its
Permitted Discretion to be eligible for inclusion in the calculation of the
Borrowing Base, in each case that, except as otherwise agreed by the Agent,
(A) complies with each of the representations and warranties respecting
Inventory made by the Loan Parties in the Loan Documents, and (B) is not
excluded as ineligible by virtue of one or more of the criteria set forth below
as determined by the Agent in its Permitted Discretion. Except as otherwise
agreed by the Agent, in its Permitted Discretion, the following items of
Inventory shall not be included in Eligible Inventory:

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

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

(c)    Inventory (other than Eligible In-Transit Inventory) that is not located
in the United States of America (excluding territories or possessions of the
United States);

(d)    Inventory that is not located at a location that is owned or leased by a
Loan Party, except (i) Inventory in transit between such owned or leased
locations or locations which meet the criteria set forth in clause (ii) below
(it being understood, for purposes of this clause (d), that any Inventory stored
at a hub or terminal utilized by a common carrier, trucking service or other
transportation provider (x) for less than fourteen (14) Business Days or
(y) after the date that is one hundred twenty (120) days following the Closing
Date, for which a Collateral Access Agreement has been delivered to the Agent
shall be deemed in-transit) or (ii) to the extent that the Loan Parties have
furnished the Agent with (A) any UCC financing statements or other documents
that the Agent may determine to be necessary to perfect its security interest in
such Inventory at such location, and (B) a Collateral Access Agreement executed
by the Person owning any such location on terms reasonably acceptable to the
Agent;

(e)     Inventory that is located in a distribution center or warehouse leased
by a Loan Party unless (x) following the date that is sixty days after the
Closing Date, the applicable lessor has delivered to the Agent a Collateral
Access Agreement or (y) for which the Agent has established an Availability
Reserve in respect of rent for such location;

(f)    Inventory that is comprised of goods which (i) are damaged, defective,
“seconds,” or otherwise unmerchantable, (ii) are to be returned to the vendor,
(iii) are obsolete or slow moving, or custom items, work in process, raw
materials, or that constitute

 

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samples, spare parts, promotional, marketing, labels, bags and other packaging
and shipping materials or supplies used or consumed in a Loan Party’s business,
(iv) are seasonal in nature and which have been packed away for sale in the
subsequent season and exceed five percent (5%) of the Loan Parties’ Inventory,
(v) not in compliance with all standards imposed by any Governmental Authority
having regulatory authority over such Inventory, its use or sale, or (vi) are
bill and hold goods;

(g)    Inventory that is not subject to a perfected first priority security
interest (subject to Permitted Encumbrances that have priority by operation of
Law) in favor of the Agent;

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

(i)    Inventory that has been sold but not yet delivered or as to which a Loan
Party has accepted a deposit;

(j)    Inventory that is subject to any licensing, patent, royalty, trademark,
trade name or copyright agreement with any third party from which any Loan Party
or any of its Subsidiaries has received notice of a dispute in respect of any
such agreement; or

(k)    Inventory in excess of $20,000,000 acquired in a Permitted Acquisition or
which is not of the type usually sold in the ordinary course of the Borrower’s
business, unless and until the Agent has completed or received (A) an appraisal
of such Inventory from appraisers reasonably satisfactory to the Agent and
establishes an Inventory Advance Rate and Inventory Reserves (if applicable)
therefor, and otherwise agrees that such Inventory shall be deemed Eligible
Inventory, and (B) such other due diligence as the Agent may reasonably require,
all of the results of the foregoing to be reasonably satisfactory to the Agent;
provided that such Inventory shall be deemed to constitute Eligible Inventory
for a period of 45 days after the date of its acquisition notwithstanding that
the Agent has not completed such due diligence as long as such Inventory is of
the type usually sold in the ordinary course of the Borrower’s business and
would otherwise constitute Eligible Inventory.

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

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

 

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“Equipment” has the meaning set forth in the UCC.

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

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

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with any Loan Party within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 and 4971 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by any Loan Party or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) a complete or partial withdrawal by any Loan Party or any ERISA Affiliate
from a Multiemployer Plan or notification to the Borrower or any ERISA Affiliate
that a Multiemployer Plan is in reorganization; (d) the filing of a notice of
intent to terminate, the treatment of a plan amendment as a termination of a
Pension Plan or a Multiemployer Plan under Sections 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; (f) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate; or (g) the determination that any Pension Plan is considered to be an
“at-risk” plan, or that any Multiemployer Plan is considered to be in
“endangered” or “critical” status within the meaning of Sections 430, 431 and
432 of the Code or Sections 303, 304 or 305 of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

“Event of Default” has the meaning specified in Section 8.01. An Event of
Default shall be deemed to be continuing unless and until that Event of Default
has been duly waived as provided in Section 10.03 hereof.

“Excluded Account(s)” shall have the meaning set forth in the Security
Agreement.

 

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“Excluded Subsidiary” means (a) any Subsidiary that is not directly or
indirectly a wholly owned Subsidiary of the Borrower, (b) Subsidiaries
designated in writing by the Borrower to the Agent from time to time, provided
that (x) the total assets or annual revenue of any such Subsidiary,
individually, are not in excess of two percent (2%) of the consolidated total
assets or consolidated gross revenues of the Borrower and its Subsidiaries and
(y) the total assets or annual revenues of all such Subsidiaries, in the
aggregate, are not in excess of five percent (5%) of the consolidated total
assets or consolidated gross revenues of the Borrower and its Subsidiaries,
(c) any Subsidiary acquired following the Closing Date that is prohibited by
applicable Law or contractual obligations that are in existence at the time of
acquisition and not entered into in contemplation thereof from guaranteeing the
Obligations or if guaranteeing the Obligation would require governmental
(including regulatory) consent, approval, license or authorization (unless such
consent, approval license or authorization has been obtained following Agent’s
request therefor), (d) any CFC, (e) any non-for-profit Subsidiaries, (f) any
special purpose securitization vehicle or a captive insurance subsidiary, and
(g) any other Subsidiary with respect to which, in the reasonable judgment of
the Agent, in consultation with the Borrower, the burden or cost or other
consequences (including any material adverse tax consequences) of providing a
Guarantee shall be excessive in view of the benefits to be obtained by the
Lenders therefrom.

“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap
Obligation if, and to the extent that, all or a portion of the Guarantee of such
Loan Party of, or the grant by such Loan Party of a security interest to secure,
such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Loan Party’s failure for any reason to constitute an
“eligible contract participant” as defined in the Commodity Exchange Act and the
regulations thereunder at the time the Guarantee of such Loan Party or the grant
of such security interest becomes effective with respect to such Swap
Obligation. If a Swap Obligation arises under a master agreement governing more
than one swap, such exclusion shall apply only to the portion of such Swap
Obligation that is attributable to swaps for which such Guarantee or security
interest is or becomes illegal.

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

 

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“Executive Order” has the meaning set forth in Section 10.18.

“Existing Credit Agreement” has the meaning set forth in the introductory
paragraphs hereto.

“Existing Letters of Credit” means the letters of credit pursuant to the
Existing Credit Agreement, as identified on Schedule 2.03.

“Facility Guaranty” means the Facility Guaranty made by the Guarantors in favor
of the Agent and the other Credit Parties, in form reasonably satisfactory to
the Agent, as the same now exists or may hereafter be amended, modified,
supplemented, renewed, restated or replaced.

“Factored Receivables” means any Accounts originally owed or owing by a Loan
Party to another Person which have been purchased by or factored with Wells
Fargo or any of its Affiliates pursuant to a factoring arrangement or otherwise
with the Person that sold the goods or rendered the services to the Loan Party
which gave rise to such Account.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), and (a) any current or future
regulations or official interpretations thereof, (b) any agreements entered into
pursuant to Section 1471(b)(1) of the Code, and (c) any fiscal or regulatory
legislation rules or practices adopted pursuant to any intergovernmental
agreement entered into in connection with the implementation of such Sections of
the Code.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal funds brokers of recognized
standing selected by it (and, if any such rate is below zero, then the rate
determined pursuant to this definition shall be deemed to be zero).

“Federal Reserve Bank of New York’s Website” means the website of the Federal
Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

“Fee Letter” means (i) the letter agreement, dated April 2, 2020, among the
Borrower, the Agent and Wells Fargo, as an Arranger and (ii) the letter
agreement, dated on or around April 23, 2020, among the Borrower and PNC Capital
Markets LLC, as an Arranger.

“Fiscal Month” means each fiscal month in accordance with the fiscal accounting
calendar of the Loan Parties.

 

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“Fiscal Quarter” means each period of thirteen or fourteen weeks ending on or
about April 30, July 31, October 31 and January 31 in accordance with the fiscal
accounting calendar of the Loan Parties.

“Fiscal Year” means the 52/53 week period ending the Saturday closest to
January 31 of the following year.

“Foreign Asset Control Regulations” has the meaning set forth in Section 10.18.

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

“Foreign Vendor” means a Person that sells In-Transit Inventory to a Loan Party.

“Foreign Vendor Agreement” means an agreement between a Foreign Vendor and the
Agent in form and substance reasonably satisfactory to the Agent and pursuant to
which, among other things, the parties shall agree upon their relative rights
with respect to In-Transit Inventory of a Loan Party purchased from such Foreign
Vendor.

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

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

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

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

 

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

“Guarantor” has the meaning specified in the introductory paragraph hereto and
includes each other Subsidiary of the Borrower that shall be required to execute
and deliver a Facility Guaranty pursuant to Section 6.12.

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

“Increase Effective Date” shall have the meaning provided therefor in
Section 2.15(iv).

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

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

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

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

(d)    all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and, in each case, not past due for more than 60 days after the date
on which such trade account payable was created);

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

(f)    All Indebtedness of such Person (i) in respect of any Capital Lease
Obligations of any Person, the capitalized amount thereof that would appear on a
balance

 

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sheet of such Person prepared as of such date in accordance with GAAP, and
(ii) in respect of any Synthetic Lease Obligations, the capitalized amount of
the remaining lease or similar payments under the relevant lease or other
applicable agreement or instrument that would appear on a balance sheet of such
Person prepared as of such date in accordance with GAAP if such lease, agreement
or instrument were accounted for as a finance lease;

(g)    all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person (including, without limitation, Disqualified Stock), or any
warrant, right or option to acquire such Equity Interest, valued, in the case of
a redeemable preferred interest, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends (but excluding any
payments made with respect to the withholding due upon the grant, vesting or
exercise of any Equity Interest granted to a service provider of the Borrower or
any of its Affiliates); and

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

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

“Indemnified Taxes” means, (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by, or on account of any obligation of, any
Loan Party under any Loan Document, and (b) to the extent not otherwise
described in the foregoing clause (a), Other Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

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

 

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“Intellectual Property Security Agreement” means the Intellectual Property
Security Agreement dated as of the Closing Date among the Loan Parties and the
Agent, granting a Lien in the Intellectual Property and certain other assets of
the Loan Parties, as the same now exists or may hereafter be amended, modified,
supplemented, renewed, restated or replaced.

“Intercompany Note” means that certain Amended and Restated Intercompany Note,
dated as of the date hereof, by and among the Borrower and certain of its
Subsidiaries from time to time party thereto.

“Interest Payment Date” means, (a) as to any LIBOR Rate Loan, the last day of
each Interest Period applicable to such Loan and the Maturity Date; provided,
however, that if any Interest Period for a LIBOR Rate Loan exceeds three months,
the respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any Base
Rate Loan (including a Swing Line Loan), the first day after the end of each
month and the Maturity Date.

“Interest Period” means, as to each LIBOR Rate Loan, the period commencing on
the date such LIBOR Rate Loan is disbursed or converted to or continued as a
LIBOR Rate Loan and ending on the date seven days, or one, two, three or six
months thereafter, as selected by the Borrower in its LIBOR Rate Loan Notice or
such other period that is twelve months or less requested by the Borrower and
Consented to by all the Lenders; provided that:

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

(ii)    any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period; and

(iii)    no Interest Period shall extend beyond the Maturity Date.

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

“In-Transit Inventory” means Inventory of a Loan Party which is in the
possession of a common carrier and is in transit from a Foreign Vendor of a Loan
Party from a location outside of the continental United States to a location of
a Loan Party that is within the continental United States.

“Internal Control Event” means a material weakness in, or fraud that involves
management or other employees who have a significant role in, the Borrower’s
and/or its Subsidiaries’ internal controls over financial reporting, in each
case as described in the Securities Laws.

 

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

“Inventory Advance Rate” means 90%.

“Inventory Reserves” means such reserves as may be established from time to time
by the Agent in its Permitted Discretion with respect to the determination of
the salability, at retail, of the Eligible Inventory, which reflect such other
factors as affect the market value of the Eligible Inventory or which reflect
claims and liabilities that the Agent determines will need to be satisfied in
connection with the realization upon the Inventory. Without limiting the
generality of the foregoing, Inventory Reserves may, in the Agent’s Permitted
Discretion, include (but are not limited to) reserves based on:

(a)    Obsolescence;

(b)    Seasonality;

(c)    Shrink;

(d)    Imbalance;

(e)    Change in Inventory character;

(f)    Change in Inventory composition;

(g)    Change in Inventory mix;

(h)    Markdowns (both permanent and point of sale);

(i)    Retail markons and markups inconsistent with prior period practice and
performance, industry standards, current business plans or advertising calendar
and planned advertising events; and

(j)    Out-of-date and/or expired Inventory

provided further that (x) all Inventory Reserves (including the amount of such
Inventory Reserves) shall bear a reasonable relationship to the events,
conditions or circumstances that are the basis for each such Inventory Reserve.
So long as no Event of Default has occurred and is continuing Agent shall
provide the Borrower with no less than three (3) Business Days’ prior notice of
any intended imposition of, or increase in, the Inventory Reserves (other than
increases resulting solely from fluctuations in the amount of the items reserved
for) and will be available to consult with the Borrower in connection with the
basis for such imposition or increase of Inventory Reserves; provided that
(i) no such prior

 

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notice shall be required for changes to any Inventory Reserves resulting solely
by virtue of mathematical calculations of the amount of the Inventory Reserves
in accordance with the methodology of calculation previously used and (ii) upon
such notice, the Borrower will not be permitted to borrow so as to exceed the
Borrowing Base after giving effect to such new or modified Reserves. For the
avoidance of doubt, it is acknowledged and agreed that any Reserves made
pursuant to more than one clause above shall be made without duplication.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of Indebtedness of, or purchase
or other acquisition of any other Indebtedness or Equity Interest in, another
Person, (c) any Acquisition, or (d) the purchase, acquisition or investment of
or in any stocks, bonds, mutual funds, notes, debentures or other securities, or
any deposit account, certificate of deposit or other investment of any kind. For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

“Investment and RP Conditions” means, as of any date of determination, that
(i) the Outstanding Amount of Loans is zero dollars and has been zero dollars
for at least thirty (30) days prior to such date and (ii) the Borrower has
delivered to the Agent on such date pro forma projections in form and substance
satisfactory to the Agent demonstrating that the Outstanding Amount of Loans is
reasonably anticipated to continue to be zero dollars for at least six months
following such date.

“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any Letter of Credit, the International Standby
Practices 1998 (International Chamber of Commerce Publication No. 590) and any
version or revision thereof accepted by the L/C Issuer for use.

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

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

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

 

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

“L/C Issuer” means (a) Wells Fargo in its capacity as issuer of Letters of
Credit hereunder, including with respect to the Existing Letters of Credit. The
L/C Issuer may, in its discretion, arrange for one or more Letters of Credit to
be issued by Affiliates of the L/C Issuer and/or for such Affiliate to act as an
advising, transferring, confirming and/or nominated bank in connection with the
issuance or administration of any such Letter of Credit, in which case the term
“L/C Issuer” shall include any such Affiliate with respect to Letters of Credit
issued by such Affiliate.

“L/C Obligations” means, as at any date of determination, the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit, plus (b) the
aggregate amount of outstanding reimbursement obligations with respect to
Letters of Credit which remain unreimbursed or which have not been paid through
a Loan. For purposes of computing the amounts available to be drawn under any
Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.06. For all purposes of this Agreement, if on any date
of determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of any Rule under the ISP
or any article of the UCP, such Letter of Credit shall be deemed to be
“outstanding” in the amount so remaining available to be drawn.

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

“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the Swing Line Lender.

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

“Letter of Credit” means each Standby Letter of Credit and each Commercial
Letter of Credit issued hereunder and shall include the Existing Letters of
Credit.

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

“Letter of Credit Disbursement” means a payment made by the L/C Issuer pursuant
to a Letter of Credit.

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

“Letter of Credit Fee” has the meaning specified in Section 2.03(l).

 

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“Letter of Credit Indemnified Costs” has the meaning specified in
Section 2.03(f).

“Letter of Credit Related Person” has the meaning specified in Section 2.03(f).

“Letter of Credit Sublimit” means an amount equal to $20,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments. A
permanent reduction of the Aggregate Commitments shall not require a
corresponding pro rata reduction in the Letter of Credit Sublimit; provided,
however, that if the Aggregate Commitments are reduced to an amount less than
the Letter of Credit Sublimit, then the Letter of Credit Sublimit shall be
reduced to an amount equal to (or, at Borrower’s option, less than) the
Aggregate Commitments.

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

“LIBOR Rate” means for any Interest Period with respect to a LIBOR Rate Loan,
the greater of (a) 0.50% per annum and (b) the rate per annum as published by
ICE Benchmark Administration Limited (or any successor page or other
commercially available source as the Agent may designate from time to time) as
of 11:00 a.m., London time, two Business Days prior to the commencement of the
requested Interest Period, for a term, and in an amount, comparable to the
Interest Period and the amount of the LIBOR Rate Loan requested (whether as an
initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a
conversion of a Base Rate Loan to a LIBOR Rate Loan) by Borrower in accordance
with this Agreement (and, if any such published rate is below zero, then the
rate determined pursuant to this clause (b) shall be deemed to be zero). Each
determination of the LIBOR Rate shall be made by the Agent and shall be
conclusive in the absence of manifest error.

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

“LIBOR Rate Loan Notice” means a notice for a LIBOR Borrowing or continuation
pursuant to Section 2.02(b), which shall be substantially in the form of Exhibit
A.

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

“Liquidation” means the exercise by the Agent of those rights and remedies
accorded to the Agent under the Loan Documents and applicable Law as a creditor
of the Loan Parties with respect to the realization on the Collateral, including
(after the occurrence and during the continuation of an Event of Default) the
conduct by the Loan Parties acting with the consent of the Agent, of any public,
private or “going out of business”, “store closing”, or other similarly themed
sale or other disposition of the Collateral for the purpose of liquidating the
Collateral. Derivations of the word “Liquidation” (such as “Liquidate”) are used
with like meaning in this Agreement.

 

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

“Loan Account” has the meaning assigned to such term in Section 2.11(a).

“Loan Cap” means, at any time of determination, the lesser of (a) the Aggregate
Commitments or (b) the Borrowing Base as determined based on the most recently
delivered Borrowing Base Certificate, subject to any adjustments by Agent in its
Permitted Discretion in accordance with the terms of this Agreement.

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

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

“London Business Day” means a day on which commercial banks are open for general
business (including dealings in foreign exchange and foreign currency deposits)
in London, England.

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

“Material Contract” means any contract or other arrangement (other than the Loan
Documents), whether written or oral, to which any Loan Party is a party as to
which the breach, nonperformance, cancellation or failure to renew by any party
thereto would reasonably be expected to have a Material Adverse Effect.

“Material Indebtedness” means Indebtedness (other than the Obligations) of the
Loan Parties in an aggregate principal amount exceeding $25,000,000. For
purposes of determining the amount of Material Indebtedness at any time, (a) the
amount of the obligations in respect of any Swap Contract at such time shall be
calculated at the Swap Termination Value thereof, (b) undrawn committed or
available amounts shall be included, and (c) all amounts owing to all creditors
under any combined or syndicated credit arrangement shall be included.

 

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“Maturity Date” means April 24, 2023.

“Maximum Rate” has the meaning provided therefor in Section 10.09.

“Measurement Period” means, at any date of determination, the most recently
completed four Fiscal Quarters of the Borrower.

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

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

“Non-Consenting Lender” has the meaning provided therefor in Section 10.01.

“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

“Non-Financed Capital Expenditures” means, for any period, all Capital
Expenditures made during such period that have not been funded with the proceeds
of purchase money financing (including, without limitations, finance leases)
other than the proceeds of Loans.

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

“NPL” means the National Priorities List under CERCLA.

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

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or

 

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other applicable agreement of formation or organization and any agreement,
instrument, filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in the
jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity, and (d) in
each case, all shareholder or other equity holder agreements, voting trusts and
similar arrangements to which such Person is a party or which is applicable to
its Equity Interests and all other arrangements relating to the Control or
management of such Person.

“Other Liabilities” means (a) any obligation on account of (i) any Cash
Management Services furnished to any of the Loan Parties or any of their
Subsidiaries and/or (ii) any transaction with the Agent, any Lender, or any of
their respective Affiliates, which arises out of any Bank Product entered into
with any Loan Party and any such Person, as each may be amended from time to
time.

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

“Outstanding Amount” means (i) with respect to Committed Loans and Swing Line
Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Committed Loans
and Swing Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date.

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

“Participant” has the meaning specified in Section 10.06(d).

“Payment Conditions” means, at the time of determination with respect to any
specified transaction or payment, that (a) no Default or Event of Default then
exists or would arise as a result of entering into such transaction or the
making of such payment, (b) before and after giving effect to such transaction
or payment, Availability is greater than 15% of the Loan Cap, and (c) after
giving effect to such transaction or payment, the Consolidated Fixed Charge
Coverage Ratio, for the most recent Measurement Period immediately preceding the
date of such transaction or payment for which the Agent has received financial
statements shall be equal to or greater than 1.00:1.00 after giving pro forma
effect to such transaction or payment as if such transaction had been entered
into or such payment had been made as of the first day of such Measurement
Period. Prior to undertaking any transaction or payment which is subject to the
Payment Conditions, the Loan Parties shall deliver to the Agent (i) an updated
Borrowing Base Certificate giving effect to the payment or transaction and
(ii) evidence of satisfaction of the condition contained in clause (c) above on
a basis (including, without limitation, giving due consideration to results for
prior periods) reasonably satisfactory to the Agent.

 

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“PBGC” means the Pension Benefit Guaranty Corporation.

“PCAOB” means the Public Company Accounting Oversight Board.

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

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

(a)    No Event of Default then exists or would arise from the consummation of
such Acquisition;

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

(c)    If the aggregate consideration for such Acquisition exceeds an amount
equal to $25,000,000, the Borrower shall have furnished the Agent with ten
(10) days’ prior written notice of such intended Acquisition and shall have
furnished the Agent with a current draft of the acquisition documents (and final
copies thereof as and when executed), financial statements of the Person which
is the subject of such Acquisition (to the extent available), a summary of any
due diligence undertaken by the Loan Parties in connection with such Acquisition
if requested by the Agent, pro forma projected financial statements for the
twelve (12) month period following such Acquisition after giving effect to such
Acquisition (including balance sheets, cash flows and income statements by month
on a Consolidated basis with all Loan Parties), and such other information as
the Agent may reasonably require, all of which shall be reasonably satisfactory
to the Agent;

(d)    If Loans will be used to fund any part of the Acquisition, if the
aggregate consideration for such Acquisition exceeds $25,000,000, either (i) the
legal structure of the Acquisition shall be acceptable to the Agent in its
reasonable discretion, or (ii) the Loan Parties shall have provided the Agent
with a favorable solvency opinion from an unaffiliated third party valuation
firm reasonably satisfactory to the Agent;

(e)    After giving effect to the Acquisition, if the Acquisition is an
Acquisition of the Equity Interests, a Loan Party shall acquire and own,
directly or indirectly, a majority of the Equity Interests in the Person being
acquired and shall Control a majority of any voting interests or shall otherwise
Control the governance of the Person being acquired;

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

 

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(g)    If the Person which is the subject of such Acquisition will be maintained
as a Subsidiary of a Loan Party (other than an Excluded Subsidiary), or if the
assets acquired in an acquisition will be transferred to a Subsidiary which is
not then a Loan Party, within 60 days of the closing date of such Acquisition
(or such later date as Agent may agree), such Subsidiary shall be joined as a
“Borrower” hereunder or as a Guarantor, as the Agent shall reasonably determine,
and the Agent shall receive a first priority security interest (subject to
Permitted Encumbrances that have priority by operation of Law) in such
Subsidiary’s Equity Interests, Inventory, Accounts and other property of the
same nature as constitutes collateral under the Security Documents; and

(i)    Either the Payment Conditions or the Investment and RP Conditions shall
be satisfied as of the closing date of such Acquisition.

“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.

“Permitted Disposition” means any of the following:

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

(b)    sales or other Dispositions by any Loan Party of assets in connection
with the closing or sale of a Store location of any Loan Party in the ordinary
course of any Loan Party’s business which consist of bulk sales or other
Dispositions of the Inventory, leasehold interests in the premises of such
Store, the Equipment and fixtures located at such premises and the books and
records relating exclusively and directly to the operations of such Store;
provided, that, as to each and all such sales and closings, (A) on the date of,
and after giving effect to, any such closing or sale, the aggregate number of
Store locations closed or sold by Borrower in any Fiscal Year minus the number
of Stores opened by Borrower in such Fiscal Year, shall not exceed an amount
equal to ten percent (10%) of the number of retail store locations of Borrower
as of the end of the immediately preceding Fiscal Year, (B) Agent shall have
received not less than ten (10) Business Days prior written notice of such sale
or closing, which notice shall set forth in reasonable detail satisfactory to
Agent, the parties to such sale or other disposition, the assets to be sold or
otherwise disposed of, the purchase price and the manner of payment thereof and
such other information with respect thereto as Agent may reasonably request,
(C) after giving effect thereto, no Event of Default shall exist or have
occurred and be continuing, and (D) such sale shall be on commercially
reasonable prices and terms in a bona fide arm’s length transaction.

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

(d)    licenses for the conduct of licensed departments within the Loan Parties’
Stores in the ordinary course of business;

 

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(e)    Dispositions of Equipment in the ordinary course of business that is
substantially worn, damaged, obsolete or, in the judgment of a Loan Party, no
longer useful or necessary in its business or that of any Subsidiary;

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

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

(h)    Sale and Leaseback Transactions to the extent otherwise permitted by
Section 7.16;

(i)    the issuance and sale by Borrower of Equity Interests of Borrower after
the date hereof; provided, that, after giving effect thereto, no Change of
Control shall exist or have occurred;

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

(k)    the abandonment, sale or other disposition of Intellectual Property that
is, in the reasonable good faith judgment of the Borrower, no longer
economically practicable to maintain or useful in the conduct of the business of
the Borrower and its Subsidiaries;

(l)    other sales or dispositions; provided that (i) the aggregate
consideration received in respect of all such sales and other dispositions
pursuant to this clause (l) shall not exceed $10,000,000 in any period of twelve
(12) consecutive months, (ii) such sales or other dispositions are made for fair
market value and on an arm’s-length commercial basis, and (iii) at least 75% of
the consideration payable in respect of such sales or other dispositions is in
the form of cash or cash equivalents;

(m)    leases, subleases, licenses or sublicenses of real or personal property
in the ordinary course of business so long as no such lease, sublease, license
or sublicense adversely affects the Agent’s security interest in the asset or
property subject thereto in any material respect;

(n)    any Permitted Investments;

(o)    any Disposition that constitutes a Casualty Event;

(p)    any sale or other Disposition of accounts receivable arising in the
ordinary course of business in connection with the collection or compromise
thereof and not as part of any financing transaction; and

 

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(q)    any sale or other Disposition of a distribution center.

provided if any such Disposition includes the Disposition of Intellectual
Property used or useful in connection with the Collateral, the purchaser,
assignee or other transferee thereof shall agree in writing to be bound by a
non-exclusive royalty-free worldwide license of such Intellectual Property in
favor of the Agent for use in connection with the exercise of the rights and
remedies of the Credit Parties, which license shall be in form and substance
reasonably satisfactory to the Agent, and provided further that in the case of a
Disposition of Intellectual Property by the Loan Parties or any Subsidiary to a
third party, the transferee thereof shall be required to provide such a license
only to the extent to which the applicable license gives it a right to do so.

“Permitted Encumbrances” means:

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

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

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

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

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

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

(g)    Liens existing on the Closing Date and listed on Schedule 7.01 to the
Disclosure Letter and any Permitted Refinancings thereof;

(h)    (i) purchase money security interests in Equipment (including any
embedded software or related assets) and proceeds thereof (including finance
leases to secure Indebtedness permitted under clause (c) of the definition of
“Permitted Indebtedness”) and (ii) purchase money security interests (including
finance leases) in the

 

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distribution center (or any of its constituent parts), as applicable, or
proceeds thereof to secure Indebtedness permitted under clause (c) of the
definition of “Permitted Indebtedness”, in each case so long as such security
interests are limited to the assets acquired with such Indebtedness, or proceeds
thereof and the Indebtedness secured thereby does not exceed the cost of the
assets so acquired;

(i)    Liens in favor of the Agent;

(j)    statutory Liens of landlords and lessors in respect of rent which are not
overdue or are being contested in good faith by appropriate proceedings
diligently pursued and available to Borrower and such Subsidiary and with
respect to which adequate reserves have been set aside on its books to the
extent required by GAAP;

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

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

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

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

(o)    Liens in favor of customs and revenues authorities imposed by applicable
Law arising in the ordinary course of business in connection with the
importation of goods solely to the extent the following conditions are
satisfied: (A) such Liens secure obligations that are being contested in good
faith by appropriate proceedings, (B) the applicable Loan Party or Subsidiary
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (C) such contest effectively suspends collection of the contested
obligation and enforcement of any Lien securing such obligation;

(p)    liens or rights of setoff against credit balances of Borrower or any of
its Subsidiaries with Credit Card Issuers or Credit Card Processors or amounts
owing by such Credit Card Issuers or Credit Card Processors to Borrower or such
Subsidiary in the ordinary course of business, but not liens on or rights of
setoff against any other property

 

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or assets of Borrower or such Subsidiary, pursuant to the Credit Card Agreements
(as in effect on the date hereof) to secure the obligations of Borrower or such
Subsidiary to the Credit Card Issuers or Credit Card Processors as a result of
fees and chargebacks; and

(q)    liens on property rented to, or leased by, the Borrower or any of its
Subsidiaries pursuant to a Sale and Leaseback Transaction and proceeds thereof;
provided that (i) such Sale and Leaseback Transaction is permitted by
Section 7.16, (ii) such liens do not encumber any other property of the Borrower
or any of its Subsidiaries, and (iii) such Liens secure only the Attributable
Indebtedness incurred in connection with such Sale and Leaseback Transaction;

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

(a)    Indebtedness outstanding on the Closing Date and listed on Schedule 7.03
to the Disclosure Letter and any Permitted Refinancing thereof;

(b)    (i) Indebtedness of any Loan Party to any other Loan Party,
(ii) Indebtedness of any Subsidiaries that are not Loan Parties to any other
Subsidiaries that are not Loan Parties, and (iii) so long as no Default or Event
of Default has occurred and is continuing or would result from such Indebtedness
and either the Payment Conditions or the Investment and RP Conditions are
satisfied, Indebtedness of wholly-owned Subsidiaries that are not Loan Parties
to any Loan Parties;

(c)    (i) Indebtedness (including finance leases) incurred after the date
hereof to finance fixed or capital assets (including Equity Interests of any
person owning the applicable fixed or capital assets) in an aggregate amount not
to exceed (i) $25,000,000 at any time outstanding with respect to purchase money
Indebtedness and finance leases related to assets other than one or more of the
Borrower’s distribution centers and (ii) $50,000,000 with respect to purchase
money Indebtedness and finance leases related to one of the Borrower’s
distribution centers; provided, however, that, in the case of purchase money
Indebtedness, (A) such Indebtedness is incurred within ninety (90) days after
such acquisition, installation, construction or improvement of such fixed or
capital assets (including Equity Interests of any person owning the applicable
fixed or capital assets) by such person and (B) the amount of such Indebtedness
does not exceed 100% of the cost of such acquisition, installation, construction
or improvement, as the case may be;

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

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

 

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(f)    Indebtedness with respect to the deferred purchase price for any
Permitted Acquisition, provided that such Indebtedness does not require the
payment in cash of principal (other than in respect of working capital
adjustments) prior to the Maturity Date, has a maturity which extends beyond the
Maturity Date, and is subordinated to the Obligations on terms reasonably
acceptable to the Agent;

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

(h)    the Obligations;

(i)    Indebtedness of any Subsidiary that is a non-Loan Party in an aggregate
outstanding principal amount not to exceed $5,000,000 at any time outstanding
for all such non-Loan Parties; provided that such Indebtedness is not directly
or indirectly recourse to the Borrower or any of its Subsidiaries or of their
respective assets, other than to such non-Loan Party;

(j)    Indebtedness representing deferred compensation to employees of the
Borrower or any of its Subsidiaries incurred in the ordinary course of business;

(k)    Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is extinguished
within five (5) Business Days of incurrence;

(l)    Indebtedness arising in connection with endorsement of instruments for
deposit in the ordinary course of business;

(m)    outstanding and unpaid trade payables incurred in the ordinary course of
business of Borrower or any of its Subsidiaries;

(n)    cash management obligations and other Indebtedness incurred in the
ordinary course of business in respect of netting services and similar
arrangements in each case in connection with cash management and deposit
accounts;

(o)    all premiums (if any), interest (including post-petition interest), fees,
expenses, charges and additional or contingent interest (other than pay-in-kind
interest) on obligations described in clauses (a) through (l) of this
definition;

(p)    Indebtedness arising from Permitted Investments;

(q)    Guarantees by any Loan Party or any Subsidiary thereof of Indebtedness of
any other Loan Party or any Subsidiary thereof, provided that such Indebtedness
is otherwise permitted by this definition;

 

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(r)    Indebtedness in respect of Sale and Leaseback Transactions to the extent
otherwise permitted by Section 7.16; and

(r)    Indebtedness not otherwise specifically described herein in an aggregate
principal amount not to exceed $25,000,000 at any time outstanding.

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

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

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

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

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

(e)    Investments, classified in accordance with GAAP as current assets of the
Loan Parties, in any money market fund that has the highest rating obtainable
from either Moody’s or S&P;

(f)    Investments by Borrower consistent with Borrower’s investment policy as
in effect as of the date hereof, or as approved by the Agent from time to time;

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

 

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(h)    (i) Investments by any Loan Party and its Subsidiaries in their
respective Subsidiaries outstanding on the Closing Date, (ii) additional
Investments by any Loan Party and its Subsidiaries in Loan Parties,
(iii) additional Investments by Subsidiaries of the Loan Parties that are not
Loan Parties in other Subsidiaries that are not Loan Parties and (iv) so long as
no Default or Event of Default has occurred and is continuing or would result
from such Investment and the Payment Conditions are satisfied, additional
Investments by the Loan Parties in wholly-owned Subsidiaries that are not Loan
Parties; provided that to the extent such Investment includes Intellectual
Property material and necessary for the operation of the assets of the Loan
Parties and their Subsidiaries, taken as a whole, which constitute Collateral,
such Intellectual Property shall be subject to a non-exclusive royalty-free
worldwide license in favor of the Agents for the purpose of the Agents’ exercise
of rights and remedies under this Agreement in connection with the Collateral;

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

(j)    Guarantees constituting Permitted Indebtedness;

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

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

(m)    advances to officers, directors and employees of the Loan Parties and
Subsidiaries in the ordinary course of business (i) with respect to advances
incident to hiring or relocation expenses, in the aggregate for all such
directors, employees or officers, not to exceed $500,000 at any time outstanding
and (ii) with respect to all other advances (including, without limitation) for
travel, entertainment, and analogous ordinary business purposes, in the
aggregate for all such directors, employees or officers, not to exceed $250,000
at any time outstanding;

(n)    Investments constituting Permitted Acquisitions;

(o)    Capital contributions made by any Loan Party to another Loan Party;

(p)    Investments in securities of trade creditors or customers in the ordinary
course of business that are received in settlement of bona fide disputes or
pursuant to any plan of reorganization or liquidation or similar arrangement
upon the bankruptcy or insolvency of such trade creditors or customers;

 

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(q)    so long as no Default or Event of Default then exists or would result
therefrom, the Borrower and its Subsidiaries may make Investments that are made
in exchange for the substantially concurrent sale of Equity Interests of the
Borrower permitted to be issued by it hereunder;

(r)    promissory notes or other obligations of directors, officers or other
employees of the Borrower or any of its Subsidiaries in connection with such
directors’, officers’ or employees’ purchase of Equity Interests of the Borrower
or any direct or indirect parent thereof, so long as no cash is advanced by the
Borrower or any of its Subsidiaries in connection with such Investment;

(s)    Investments that may arise as a result of the consummation of Sale and
Leaseback Transactions permitted under Section 7.16;

(t)    so long as no Default or Event of Default then exists or would result
therefrom, the Borrower and its Subsidiaries may make Investments that are made
in exchange for the substantially concurrent sale of Equity Interests of the
Borrower permitted to be issued by it hereunder;

(u)    Investments of any person that becomes a Subsidiary on or after the
Closing Date in an aggregate amount for all such Subsidiaries not to exceed
$15,000,000 on the date such person becomes a Subsidiary; provided that (i) such
Investments exist at the time such person is acquired, (ii) such Investments are
not made in anticipation or contemplation of such person becoming a Subsidiary,
and (iii) such Investments are not directly or indirectly recourse to the
Borrower or any of its Subsidiaries or any of their respective assets, other
than to the person that becomes a Subsidiary;

(v)    Guarantees of obligations of the Borrower or any Subsidiary that do not
constitute Indebtedness;

(w)    Investments in Affiliates of the Borrower as of the Closing Date (x) not
exceeding $10,000,000 made within 60 days of the Closing Date and (y) an
additional amount which, taken together with the amount invested pursuant to
clause (x) of this paragraph shall not exceed $20,000,000 in the aggregate, so
long as on the date of such Investment, the Payment Conditions are met, in each
case, provided that the amount of such Investment shall be the cost thereof when
made, notwithstanding any subsequent change in value;

(x)    Investments not exceeding $100,000,000 in the aggregate so long as on the
date of such Investment, the Payment Conditions are met, provided that the
amount of such Investment shall be the cost thereof when made, notwithstanding
any subsequent change in value;

(y)    other Investments not otherwise specifically described herein and not
exceeding $15,000,000 in the aggregate at any time outstanding; and

(x)    so long as the Investment and RP Conditions are satisfied, any
Investments.

 

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provided, however, that notwithstanding the foregoing, after the occurrence and
during the continuance of a Cash Dominion Event, no such Investments specified
in clauses (a) through (f), and clauses (w) through (y) shall be permitted
unless (i) either (A) no Loans, or Letters of Credit that have not been Cash
Collateralized to the extent required to be Cash Collateralized, are then
outstanding, or (B) the Investment is a temporary Investment pending expiration
of an Interest Period for a LIBOR Rate Loan, the proceeds of which Investment
will be applied to the Obligations after the expiration of such Interest Period,
and (ii) such Investments shall be pledged to the Agent as additional collateral
for the Obligations pursuant to such agreements as may be reasonably required by
the Agent.

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

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

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

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

(d)    Together with all other Permitted Overadvances then outstanding, shall
not (i) exceed 10.0 percent (10%) of the Borrowing Base at any time or
(ii) unless a Liquidation is occurring, remain outstanding for more than
forty-five (45) consecutive Business Days, unless in each case, the Required
Lenders otherwise agree.

provided however, that the foregoing shall not (i) modify or abrogate any of the
provisions of Section 2.03 regarding the Lenders’ obligations with respect to
Letters of Credit or Section 2.04 regarding the Lenders’ obligations with
respect to Swing Line Loans, or (ii) result in any claim or liability against
the Agent (regardless of the amount of any Overadvance) for Unintentional
Overadvances and such Unintentional Overadvances shall not reduce the amount of
Permitted Overadvances allowed hereunder, and further provided that in no event
shall the Agent make an Overadvance, if after giving effect thereto, the
principal amount of the Credit Extensions would exceed the Aggregate Commitments
(as in effect prior to any termination of the Commitments pursuant to
Section 2.06 or Section 8.02 hereof).

“Permitted Refinancing” means, with respect to any Person, any Indebtedness
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund (collectively, to “Refinance”), the
Indebtedness being Refinanced (or previous refinancings thereof constituting a
Permitted Refinancing); provided, that (a) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness so
Refinanced (plus unpaid accrued interest and premiums thereon and underwriting
discounts, defeasance costs, fees, commissions and expenses), (b) the weighted
average life to maturity of such Permitted Refinancing is greater than or equal
to the weighted average life to maturity of the Indebtedness being Refinanced
(c)

 

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such Permitted Refinancing shall not require any scheduled principal payments
due prior to the Maturity Date, (d) if the Indebtedness being Refinanced is
subordinated in right of payment to the Obligations under this Agreement, such
Permitted Refinancing shall be subordinated in right of payment to such
Obligations on terms at least as favorable to the Credit Parties as those
contained in the documentation governing the Indebtedness being Refinanced
(e) no Permitted Refinancing shall have direct or indirect obligors who were not
also obligors of the Indebtedness being Refinanced, or greater guarantees or
security, than the Indebtedness being Refinanced, (f) such Permitted Refinancing
shall be otherwise on terms not materially less favorable to the Credit Parties
than those contained in the documentation governing the Indebtedness being
Refinanced, including, without limitation, with respect to financial and other
covenants and events of default, (g) the interest rate applicable to any such
Permitted Refinancing shall not exceed the then applicable market interest rate,
and (h) at the time thereof, no Event of Default shall have occurred and be
continuing.

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

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

“Platform” has the meaning specified in Section 6.02.

“Portal” has the meaning specified in Section 2.02.

“Public Lender” has the meaning specified in Section 6.02.

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

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

“Register” has the meaning specified in Section 10.06(c).

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

 

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

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal
Reserve Bank of New York, or a committee officially endorsed or convened by the
Federal Reserve Board and/or the Federal Reserve Bank of New York or any
successor thereto.

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

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

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

“Required Lenders” means, as of any date of determination, at least two Lenders
that are not Affiliates (or one (1) Lender to the extent that there is only one
(1) Lender) holding more than 50% of the Aggregate Commitments or, if the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section 8.02,
Lenders holding in the aggregate more than 50% of the Total Outstandings (with
the aggregate amount of each Lender’s risk participation and funded
participation in L/C Obligations and Swing Line Loans being deemed “held” by
such Lender for purposes of this definition); provided that the Commitment of,
and the portion of the Total Outstandings held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders.

“Reserves” means all Inventory Reserves and Availability Reserves.

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer, assistant treasurer or secretary of a Loan Party
or any of the other individuals designated in writing to the Agent by an
existing Responsible Officer of a Loan Party as an authorized signatory of any
certificate or other document to be delivered hereunder, including, with respect
to the Portal, any person authorized and authenticated through the Portal in
accordance with the Agent’s procedures for such authentication. Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party
shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Person or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to such Person’s
stockholders, partners or members (or the

 

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equivalent of any thereof), or any option, warrant or other right to acquire any
such dividend or other distribution or payment. Without limiting the foregoing,
“Restricted Payments” with respect to any Person shall also include all payments
made by such Person with any proceeds of a dissolution or liquidation of such
Person.

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

“Sale and Leaseback Transactions” shall have the meaning set forth in
Section 7.16.

“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, or (d) a Person resident
in or determined to be resident in a country, in each case of clauses
(a) through (d) that is a target of Sanctions, including a target of any country
sanctions program administered and enforced by OFAC.

“Sanctioned Person” means, at any time (a) any Person named on the list of
Specially Designated Nationals and Blocked Persons maintained by OFAC, OFAC’s
consolidated Non-SDN list or any other Sanctions-related list maintained by any
Governmental Authority, (b) a Person or legal entity that is a target of
Sanctions, (c) any Person operating, organized or resident in a Sanctioned
Entity, or (d) any Person directly or indirectly owned or controlled
(individually or in the aggregate) by or acting on behalf of any such Person or
Persons described in clauses (a) through (c) above.

“Sanctions” means individually and collectively, respectively, any and all
economic sanctions, trade sanctions, financial sanctions, sectoral sanctions,
secondary sanctions, trade embargoes anti-terrorism laws and other sanctions
laws, regulations or embargoes, including those imposed, administered or
enforced from time to time by: (a) the United States of America, including those
administered by OFAC, the U.S. Department of State, the U.S. Department of
Commerce, or through any existing or future executive order, (b) the United
Nations Security Council, (c) the European Union or any European Union member
state, (d) Her Majesty’s Treasury of the United Kingdom, or (e) any other
Governmental Authority with jurisdiction over any Lender or any Loan Party or
any of their respective Subsidiaries or Affiliates.

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

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

“Secured Bank Products” means, as of any date of determination by the Agent, any
Bank Product that is the subject of any document, instrument or agreement
entered into by any Loan Party or any Subsidiary and any Lender or Affiliate of
a Lender that such Lender (other than Wells Fargo) or Affiliate of such Lender
has designated as a “Secured Bank Product” in a notice delivered to the Agent
and signed by such Lender or Affiliate of such Lender and the Borrower, together
with such supporting documentation as the Agent may request.

“Secured Cash Management Services” means, as of any date of determination by the
Agent, any Cash Management Service that is the subject of any document,
instrument or agreement

 

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entered into by any Loan Party or any Subsidiary and any Lender or Affiliate of
a Lender that such Lender (other than Wells Fargo) or Affiliate of such Lender
has designated as a “Secured Cash Management Service” in a notice delivered to
the Agent and signed by such Lender or Affiliate of such Lender and the
Borrower, together with such supporting documentation as the Agent may request.

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

“Security Agreement” means the Security Agreement dated as of the Closing Date
among the Loan Parties and the Agent, as the same now exists or may hereafter be
amended, modified, supplemented, renewed, restated or replaced.

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

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

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

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

“SOFR” with respect to any day means the secured overnight financing rate
published for such day by the Federal Reserve Bank of New York, as the
administrator of the benchmark, (or a successor administrator) on the Federal
Reserve Bank of New York’s Website.

“Solvent” and “Solvency” means, with respect to any Person as of any date of
determination, that (a) at fair valuations, the sum of such Person’s debts
(including contingent liabilities) is less than all of such Person’s assets,
(b) such Person is not engaged or about to engage in a business or transaction
for which the remaining assets of such Person are unreasonably small in relation
to the business or transaction or for which the property remaining with such
Person is an unreasonably small capital, and (c) such Person has not incurred
and does not intend to incur, or reasonably believe that it will incur, debts
beyond its ability to pay such debts as they become due (whether at maturity or
otherwise), and (d) such Person is “solvent” or not “insolvent”, as applicable
within the meaning given those terms and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standard
No. 5).

“Standard Letter of Credit Practice” means, for the L/C Issuer, any domestic or
foreign Law or letter of credit practices applicable in the city in which the
L/C Issuer issued the applicable

 

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Letter of Credit or, for its branch or correspondent, such Laws and practices
applicable in the city in which it has advised, confirmed or negotiated such
Letter of Credit, as the case may be, in each case, (a) which letter of credit
practices are of banks that regularly issue letters of credit in the particular
city, and (b) which laws or letter of credit practices are required or permitted
under ISP or UCP, as chosen in the applicable Letter of Credit.

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

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

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

“Stepdown Date” means the first date occurring after both (i) the date that 75%
of the number of Stores as of the Closing Date have reopened (the “Store
Reopening Date”) and (ii) the date that is not less than six (6) months
following the Store Reopening Date that the Consolidated Fixed Charge Coverage
Ratio is equal to at least 1.00 to 1.00, provided that for the purpose of
calculating the Consolidated Fixed Charge Coverage Ratio to determine the
Stepdown Date, (x) if fewer than four consecutive Fiscal Quarters of the
Borrower have been completed since the Store Reopening Date, the Agent shall use
the Fiscal Quarters of the Borrower that have been completed since the Store
Reopening Date as the Measurement Period to calculate the Consolidated Fixed
Charge Coverage Ratio on a pro forma basis and (y) Capital Expenditures (but in
any event in an amount not to exceed 10% of all Capital Expenditures for the
applicable Measurement Period) related to new Stores shall be excluded from such
calculation.

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

“Store Reopening Date” has the meaning specified in the definition of “Stepdown
Date.”

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

“Subordination Provisions” has the meaning specified in Section 8.01(q).

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

 

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“Supermajority Lenders” means, as of any date of determination, at least two
Lenders that are not Affiliates (or one (1) Lender to the extent that there is
only one (1) Lender) holding more than 66-2/3% of the Aggregate Commitments or,
if the commitment of each Lender to make Loans and the obligation of the L/C
Issuer to make L/C Credit Extensions have been terminated pursuant to
Section 8.02, Lenders holding in the aggregate more than 66-2/3% of the Total
Outstandings (with the aggregate amount of each Lender’s risk participation and
funded participation in L/C Obligations and Swing Line Loans being deemed “held”
by such Lender for purposes of this definition); provided that the Commitment
of, and the portion of the Total Outstandings held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Supermajority Lenders.

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

“Swap Obligation” means, with respect to any Loan Party, any obligation to pay
or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

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

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

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

 

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“Swing Line Loan” has the meaning specified in Section 2.04(a).

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

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

“Swing Line Sublimit” means an amount equal to the lesser of (a) $20,000,000 and
(b) the Aggregate Commitments. The Swing Line Sublimit is part of, and not in
addition to, the Aggregate Commitments.

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

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

“Term SOFR” means the forward-looking term rate based on SOFR that has been
selected or recommended by the Relevant Governmental Body.

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

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

“Trading with the Enemy Act” has the meaning set forth in Section 10.18.

“Type” means, with respect to a Committed Loan, its character as a Base Rate
Loan or a LIBOR Rate Loan.

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

 

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“UCP” means, with respect to any Letter of Credit, the Uniform Customs and
Practice for Documentary Credits 2007 Revision, International Chamber of
Commerce Publication No. 600 and any version or revision thereof accepted by the
L/C Issuer for use.

“UFCA” has the meaning specified in Section 10.21(d).

“UFTA” has the meaning specified in Section 10.21(d).

“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the
Benchmark Replacement Adjustment.

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

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

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

“Weekly Borrowing Base Delivery Event” means either (i) the occurrence and
continuance of any Event of Default, or (ii) the failure of the Borrower to
maintain Availability at least equal to seventeen and one-half percent (17.5%)
of the Loan Cap. For purposes of this Agreement, the occurrence of a Weekly
Borrowing Base Delivery Event shall be deemed continuing at the Agent’s option
(i) so long as such Event of Default has not been waived, and/or (ii) if the
Weekly Borrowing Base Delivery Event arises as a result of the Borrower’s
failure to achieve Availability as required hereunder, until Availability has
exceeded seventeen and one-half percent (17.5%) of the Loan Cap for forty-five
(45) consecutive calendar days, in which case a Weekly Borrowing Base Delivery
Event shall no longer be deemed to be continuing for purposes of this Agreement.
The termination of a Weekly Borrowing Base Delivery Event as provided herein
shall in no way limit, waive or delay the occurrence of a subsequent Weekly
Borrowing Base Delivery Event in the event that the conditions set forth in this
definition again arise.

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

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

 

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

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

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

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

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

 

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by the Agent, and (iii) any Obligations relating to Swap Contracts that, at such
time, are allowed by the applicable provider of such Swap Contracts to remain
outstanding without being required to be repaid.

1.03    Accounting Terms

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

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

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

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

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

1.07    Divisions. For all purposes under the Loan Documents, in connection with
any division or plan of division under Delaware law (or any comparable event
under a different jurisdiction’s laws): (a) if any asset, right, obligation or
liability of any Person becomes the asset, right, obligation or liability of a
different Person, then it shall be deemed to have been transferred from the
original Person to the subsequent Person, and (b) if any new Person comes into
existence, such new Person shall be deemed to have been organized on the first
date of its existence by the holders of its Equity Interests at such time.

 

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1.08    Effect of Benchmark Transition Event.

(a)    Benchmark Replacement. Notwithstanding anything to the contrary herein or
in any other Loan Document, upon the occurrence of a Benchmark Transition Event
or an Early Opt-in Election, as applicable, Agent and Borrower may amend this
Agreement to replace the LIBOR Rate with a Benchmark Replacement. Any such
amendment with respect to a Benchmark Transition Event will become effective at
5:00 p.m. on the fifth (5th) Business Day after Agent has posted such proposed
amendment to all Lenders and Borrower so long as Agent has not received, by such
time, written notice of objection to such amendment from Lenders comprising the
Required Lenders. Any such amendment with respect to an Early Opt-in Election
will become effective on the date that Lenders comprising the Required Lenders
have delivered to Agent written notice that such Required Lenders accept such
amendment. No replacement of the LIBOR Rate with a Benchmark Replacement
pursuant to this Section 1.08 will occur prior to the applicable Benchmark
Transition Start Date.

(b)    Benchmark Replacement Conforming Changes. In connection with the
implementation of a Benchmark Replacement, Agent will have the right to make
Benchmark Replacement Conforming Changes from time to time and, notwithstanding
anything to the contrary herein or in any other Loan Document, any amendments
implementing such Benchmark Replacement Conforming Changes will become effective
without any further action or consent of any other party to this Agreement.

(c)    Notices; Standards for Decisions and Determinations. Agent will promptly
notify Borrower and the Lenders of (1) any occurrence of a Benchmark Transition
Event or an Early Opt-in Election, as applicable, and its related Benchmark
Replacement Date and Benchmark Transition Start Date, (2) the implementation of
any Benchmark Replacement, (3) the effectiveness of any Benchmark Replacement
Conforming Changes and (4) the commencement or conclusion of any Benchmark
Unavailability Period. Any determination, decision or election that may be made
by Agent or Lenders pursuant to this Section 1.08 including any determination
with respect to a tenor, rate or adjustment or of the occurrence or
non-occurrence of an event, circumstance or date and any decision to take or
refrain from taking any action, will be conclusive and binding absent manifest
error and may be made in its or their sole discretion and without consent from
any other party hereto, except, in each case, as expressly required pursuant to
this Section 1.08.

(d)    Benchmark Unavailability Period. Upon Borrower’s receipt of notice of the
commencement of a Benchmark Unavailability Period, Borrower may revoke any
request for a LIBOR Borrowing of, conversion to or continuation of LIBOR Rate
Loans to be made, converted or continued during any Benchmark Unavailability
Period and, failing that, Borrower will be deemed to have converted any such
request into a request for a Borrowing of or conversion to Base Rate Loans.
During any Benchmark Unavailability Period, the component of Base Rate based
upon the LIBOR Rate will not be used in any determination of the Base Rate.

 

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ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

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

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

(ii)    after giving effect to any Committed Borrowing, the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus
such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment,

(iii)    The Outstanding Amount of all L/C Obligations shall not at any time
exceed the Letter of Credit Sublimit

Within the limits of each Lender’s Commitment, and subject to the other terms
and conditions hereof, the Borrower may borrow under this Section 2.01, prepay
under Section 2.05, and reborrow under this Section 2.01. Committed Loans may be
Base Rate Loans or LIBOR Rate Loans, as further provided herein.

(b)    The Inventory Reserves and Availability Reserves as of the Closing Date
are set forth in the Borrowing Base Certificate delivered pursuant to
Section 4.01(c) hereof.

(c)    The Agent shall have the right, at any time and from time to time after
the Closing Date in its Permitted Discretion to establish, modify or eliminate
Reserves.

2.02    Borrowings, Conversions and Continuations of Committed Loans.

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

(b)    Each request for a Committed Borrowing consisting of a Base Rate Loan
shall be made by electronic request of the Borrower through Agent’s Commercial
Electronic Office Portal or through such other electronic portal provided by
Agent (the “Portal”), which must be received by the Agent not later than 2:00
p.m. on the requested date of any Borrowing of Base Rate Loans. The Borrower
hereby acknowledges and agrees that any request made through the Portal shall be
deemed made by a Responsible Officer of the Borrower. Each request for a
Committed Borrowing consisting of a LIBOR Rate

 

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Loan shall be made pursuant to the Borrower’s submission of a LIBOR Rate Loan
Notice, which must be received by the Agent not later than 11:00 a.m. one
(1) Business Day prior to the requested date of any Borrowing or continuation of
LIBOR Rate Loans. Each LIBOR Rate Loan Notice shall specify (i) the requested
date of the Borrowing or continuation, as the case may be (which shall be a
Business Day), (ii) the principal amount of LIBOR Rate Loans to be borrowed or
continued (which shall be in a principal amount of $1,000,000 or a whole
multiple of $250,000 in excess thereof), and (iii) the duration of the Interest
Period with respect thereto. If the Borrower fails to specify an Interest
Period, it will be deemed to have specified an Interest Period of one month. On
the requested date of any LIBOR Rate Loan, (i) in the event that Base Rate Loans
are outstanding in an amount equal to or greater than the requested LIBOR Rate
Loan, all or a portion of such Base Rate Loans shall be automatically converted
to a LIBOR Rate Loan in the amount requested by the Borrower, and (ii) if Base
Rate Loans are not outstanding in an amount at least equal to the requested
LIBOR Rate Loan, the Borrower shall make an electronic request via the Portal
for additional Base Rate Loans in an such amount, when taken with the
outstanding Base Rate Loans (which shall be converted automatically at such
time), as is necessary to satisfy the requested LIBOR Rate Loan. If the Borrower
fails to make such additional request via the Portal as required pursuant to
clause (ii) of the foregoing sentence, then the Borrower shall be responsible
for all amounts due pursuant to Section 3.05 hereof arising on account of such
failure. If the Borrower fails to give a timely notice with respect to any
continuation of a LIBOR Rate Loan, then the applicable Committed Loans shall be
converted to Base Rate Loans, effective as of the last day of the Interest
Period then in effect with respect to the applicable LIBOR Rate Loans.

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

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

 

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

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

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

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

2.03    Letters of Credit.

(a)    Subject to the terms and conditions of this Agreement, upon the request
of the Borrower made in accordance herewith, and prior to the Maturity Date, the
L/C Issuer agrees to issue a requested Letter of Credit for the account of the
Loan Parties. By submitting a request to the L/C Issuer for the issuance of a
Letter of Credit, the Borrower shall be deemed to have requested that the L/C
Issuer issue the requested Letter of Credit. Each request for the issuance of a
Letter of Credit, or the amendment, renewal, or extension of any outstanding
Letter of Credit, shall be (i) irrevocable and be made in writing pursuant

 

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to a Letter of Credit Application by a Responsible Officer, (ii) delivered to
the L/C Issuer and the Agent via telefacsimile or other electronic method of
transmission reasonably acceptable to the L/C Issuer not later than 11:00 a.m.
at least two Business Days (or such other date and time as the Agent and the L/C
Issuer may agree in a particular instance in their sole discretion) prior to the
requested date of issuance, amendment, renewal, or extension, and (iii) subject
to the L/C Issuer’s authentication procedures with results satisfactory to the
L/C Issuer. Each such request shall be in form and substance reasonably
satisfactory to the Agent and the L/C Issuer and (i) shall specify (A) the
amount of such Letter of Credit, (B) the date of issuance, amendment, renewal,
or extension of such Letter of Credit, (C) the proposed expiration date of such
Letter of Credit, (D) the name and address of the beneficiary of the Letter of
Credit, and (E) such other information (including, the conditions to drawing,
and, in the case of an amendment, renewal, or extension, identification of the
Letter of Credit to be so amended, renewed, or extended) as shall be necessary
to prepare, amend, renew, or extend such Letter of Credit, and (ii) shall be
accompanied by such Issuer Documents as the Agent or the L/C Issuer may request
or require, to the extent that such requests or requirements are consistent with
the Issuer Documents that the L/C Issuer generally requests for Letters of
Credit in similar circumstances. The Agent’s records of the content of any such
request will be conclusive.

(b)    The L/C Issuer shall have no obligation to issue a Letter of Credit if,
after giving effect to the requested issuance, (i) the Total Outstandings would
exceed Loan Cap, (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all L/C Obligations, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all Swing Line Loans would exceed such Lender’s
Commitment, or (iii) the Outstanding Amount of the L/C Obligations would exceed
the Letter of Credit Sublimit;

(c)    In the event there is a Defaulting Lender as of the date of any request
for the issuance of a Letter of Credit, the L/C Issuer shall not be required to
issue or arrange for such Letter of Credit to the extent (i) the Defaulting
Lender’s participation with respect to such Letter of Credit may not be
reallocated pursuant to Section 9.16(b), or (ii) the L/C Issuer has not
otherwise entered into arrangements reasonably satisfactory to it and the
Borrower to eliminate the L/C Issuer’s risk with respect to the participation in
such Letter of Credit of the Defaulting Lender, which arrangements may include
the Borrower cash collateralizing such Defaulting Lender’s participation with
respect to such Letter of Credit in accordance with Section 9.16(b).
Additionally, the L/C Issuer shall have no obligation to issue and/or extend a
Letter of Credit if (A) any order, judgment, or decree of any Governmental
Authority or arbitrator shall, by its terms, purport to enjoin or restrain the
L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C
Issuer or any request or directive (whether or not having the force of Law) from
any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit
or request that the L/C Issuer refrain from the issuance of letters of credit
generally or such Letter of Credit in particular, or (B) the issuance of such
Letter of Credit would violate one or more policies of the L/C Issuer applicable
to letters of credit generally, or (C) if the expiry date of such requested
Letter of Credit would occur after the Letter of Credit Expiration Date, unless
either such Letter of Credit is Cash Collateralized on or prior to the date of
issuance of such Letter of Credit (or such later date as to which the Agent may
agree) or all the Lenders have approved such expiry date.

 

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(d)    Any L/C Issuer (other than Wells Fargo or any of its Affiliates) shall
notify the Agent in writing no later than the Business Day prior to the Business
Day on which such L/C Issuer issues any Letter of Credit. In addition, each L/C
Issuer (other than Wells Fargo or any of its Affiliates) shall, on the first
Business Day of each week, submit to Agent a report detailing the daily undrawn
amount of each Letter of Credit issued by such L/C Issuer during the prior
calendar week. The Borrower and the Credit Parties hereby acknowledge and agree
that all Existing Letters of Credit shall constitute Letters of Credit under
this Agreement on and after the Closing Date with the same effect as if such
Existing Letters of Credit were issued by L/C Issuer at the request of the
Borrower on the Closing Date. Each Letter of Credit shall be in form and
substance reasonably acceptable to the L/C Issuer, including the requirement
that the amounts payable thereunder must be payable in Dollars. If the L/C
Issuer makes a payment under a Letter of Credit, the Borrower shall pay to Agent
an amount equal to the applicable Letter of Credit Disbursement on the Business
Day such Letter of Credit Disbursement is made and, in the absence of such
payment, the amount of the Letter of Credit Disbursement immediately and
automatically shall be deemed to be a Committed Loan hereunder (notwithstanding
any failure to satisfy any condition precedent set forth in Section 4.02 hereof)
and, initially, shall bear interest at the rate then applicable to Committed
Loans that are Base Rate Loans. If a Letter of Credit Disbursement is deemed to
be a Committed Loan hereunder, the Borrower’s obligation to pay the amount of
such Letter of Credit Disbursement to the L/C Issuer shall be automatically
converted into an obligation to pay the resulting Committed Loan. Promptly
following receipt by the Agent of any payment from the Borrower pursuant to this
paragraph, the Agent shall distribute such payment to the L/C Issuer or, to the
extent that the Lenders have made payments pursuant to Section 2.03(e) to
reimburse the L/C Issuer, then to such Lenders and the L/C Issuer as their
interests may appear.

(e)    Promptly following receipt of a notice of a Letter of Credit Disbursement
pursuant to Section 2.03(d), each Lender agrees to fund its Applicable
Percentage of any Committed Loan deemed made pursuant to Section 2.03(d) on the
same terms and conditions as if the Borrower had requested the amount thereof as
a Committed Loan and the Agent shall promptly pay to the L/C Issuer the amounts
so received by it from the Lenders. By the issuance of a Letter of Credit (or an
amendment, renewal, or extension of a Letter of Credit) and without any further
action on the part of the L/C Issuer or the Lenders, the L/C Issuer shall be
deemed to have granted to each Lender, and each Lender shall be deemed to have
purchased, a participation in each Letter of Credit issued by the L/C Issuer, in
an amount equal to its Applicable Percentage of such Letter of Credit, and each
such Lender agrees to pay to the Agent, for the account of the L/C Issuer, such
Lender’s Applicable Percentage of any Letter of Credit Disbursement made by the
L/C Issuer under the applicable Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and unconditionally
agrees to pay to the Agent, for the account of the L/C Issuer, such Lender’s
Applicable Percentage of each Letter of Credit Disbursement made by the L/C
Issuer and not reimbursed by Borrower on the date due as provided in
Section 2.03(d), or of any reimbursement payment that is required to be refunded
(or that the Agent or the L/C Issuer elects, based upon the advice of counsel,
to

 

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refund) to the Borrower for any reason. Each Lender acknowledges and agrees that
its obligation to deliver to the Agent, for the account of the L/C Issuer, an
amount equal to its respective Applicable Percentage of each Letter of Credit
Disbursement pursuant to this Section 2.03(e) shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of a Default or Event of Default or the failure to satisfy any
condition set forth in Section 4.02 hereof. If any such Lender fails to make
available to the Agent the amount of such Lender’s Applicable Percentage of a
Letter of Credit Disbursement as provided in this Section, such Lender shall be
deemed to be a Defaulting Lender and the Agent (for the account of the L/C
Issuer) shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate until paid in full.

(f)    Each Borrower agrees to indemnify, defend and hold harmless each Credit
Party (including the L/C Issuer and its branches, Affiliates, and
correspondents) and each such Person’s respective directors, officers,
employees, attorneys and agents (each, including the L/C Issuer, a “Letter of
Credit Related Person”) (to the fullest extent permitted by Law) from and
against any and all claims, demands, suits, actions, investigations,
proceedings, liabilities, fines, costs, penalties, and damages, and all
reasonable fees and disbursements of attorneys, experts, or consultants and all
other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), which may be incurred by
or awarded against any such Letter of Credit Related Person (other than Taxes,
which shall be governed by Section 3.01) (the “Letter of Credit Indemnified
Costs”), and which arise out of or in connection with, or as a result of:

(i)    any Letter of Credit or any pre-advice of its issuance;

(ii)    any transfer, sale, delivery, surrender or endorsement (or lack thereof)
of any Drawing Document at any time(s) held by any such Letter of Credit Related
Person in connection with any Letter of Credit;

(iii)    any action or proceeding arising out of, or in connection with, any
Letter of Credit (whether administrative, judicial or in connection with
arbitration), including any action or proceeding to compel or restrain any
presentation or payment under any Letter of Credit, or for the wrongful dishonor
of, or honoring a presentation under, any Letter of Credit;

(iv)    any independent undertakings issued by the beneficiary of any Letter of
Credit;

(v)    any unauthorized instruction or request made to the L/C Issuer in
connection with any Letter of Credit or requested Letter of Credit, or any
error, omission, interruption or delay in such instruction or request, whether
transmitted by mail, courier, electronic transmission, SWIFT, or any other
telecommunication including communications through a correspondent;

 

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(vi)    an adviser, confirmer or other nominated person seeking to be
reimbursed, indemnified or compensated;

(vii)    any third party seeking to enforce the rights of an applicant,
beneficiary, nominated person, transferee, assignee of Letter of Credit proceeds
or holder of an instrument or document;

(viii)    the fraud, forgery or illegal action of parties other than the Letter
of Credit Related Person;

(ix)    any prohibition on payment or delay in payment of any amount payable by
the L/C Issuer to a beneficiary or transferee beneficiary of a Letter of Credit
arising out of Anti-Corruption Laws, Anti-Money Laundering Laws, or Sanctions;

(x)    the L/C Issuer’s performance of the obligations of a confirming
institution or entity that wrongfully dishonors a confirmation;

(xi)    any foreign language translation provided to the L/C Issuer in
connection with any Letter of Credit;

(xii)    any foreign law or usage as it relates to the L/C Issuer’s issuance of
a Letter of Credit in support of a foreign guaranty including without limitation
the expiration of such guaranty after the related Letter of Credit expiration
date and any resulting drawing paid by the L/C Issuer in connection therewith;
or

(xiii)    the acts or omissions, whether rightful or wrongful, of any present or
future de jure or de facto governmental or regulatory authority or cause or
event beyond the control of the Letter of Credit Related Person;

provided, however, that such indemnity shall not be available to any Letter of
Credit Related Person claiming indemnification under clauses (i) through (x)
above to the extent that such Letter of Credit Indemnified Costs may be finally
determined in a final, non-appealable judgment of a court of competent
jurisdiction to have resulted directly from the gross negligence or willful
misconduct of the Letter of Credit Related Person claiming indemnity. The
Borrower hereby agrees to pay the Letter of Credit Related Person claiming
indemnity on demand from time to time all amounts owing under this
Section 2.03(f). If and to the extent that the obligations of the Borrower under
this Section 2.03(f) are unenforceable for any reason, the Borrower agrees to
make the maximum contribution to the Letter of Credit Indemnified Costs
permissible under applicable Law. This indemnification provision shall survive
termination of this Agreement and all Letters of Credit.

(g)    The liability of the L/C Issuer (or any other Letter of Credit Related
Person) under, in connection with or arising out of any Letter of Credit (or
pre-advice), regardless of the form or legal grounds of the action or
proceeding, shall be limited to direct damages suffered by the Borrower that are
caused directly by the L/C Issuer’s gross negligence or willful misconduct in
(i) honoring a presentation under a Letter of Credit that on its face does not
at least substantially comply with the terms and conditions of such Letter of
Credit,

 

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(ii) failing to honor a presentation under a Letter of Credit that strictly
complies with the terms and conditions of such Letter of Credit or
(iii) retaining Drawing Documents presented under a Letter of Credit. The
Borrower’s aggregate remedies against the L/C Issuer and any Letter of Credit
Related Person for wrongfully honoring a presentation under any Letter of Credit
or wrongfully retaining honored Drawing Documents shall in no event exceed the
aggregate amount paid by the Borrower to the L/C Issuer in respect of the
honored presentation in connection with such Letter of Credit under
Section 2.03(d), plus interest at the rate then applicable to Base Rate Loans
hereunder. The Borrower shall take action to avoid and mitigate the amount of
any damages claimed against the L/C Issuer or any other Letter of Credit Related
Person, including by enforcing its rights against the beneficiaries of the
Letters of Credit. Any claim by the Borrower under or in connection with any
Letter of Credit shall be reduced by an amount equal to the sum of (x) the
amount (if any) saved by the Borrower as a result of the breach or alleged
wrongful conduct complained of; and (y) the amount (if any) of the loss that
would have been avoided had the Borrower taken all reasonable steps to mitigate
any loss, and in case of a claim of wrongful dishonor, by specifically and
timely authorizing the L/C Issuer to effect a cure.

(h)    The Borrower shall be responsible for the final text of the Letter of
Credit as issued by the L/C Issuer, irrespective of any assistance the L/C
Issuer may provide such as drafting or recommending text or by the L/C Issuer’s
use or refusal to use text submitted by the Borrower. The Borrower understand
that the final form of any Letter of Credit may be subject to such revisions and
changes as are deemed necessary or appropriate by the L/C Issuer, and Borrower
hereby consent to such revisions and changes not materially different from the
application executed in connection therewith. The Borrower is solely responsible
for the suitability of the Letter of Credit for the Borrower’s purposes. If the
Borrower requests that the L/C Issuer issue a Letter of Credit for an affiliated
or unaffiliated third party (an “Account Party”), (i) such Account Party shall
have no rights against the L/C Issuer; (ii) the Borrower shall be responsible
for the application and obligations under this Agreement; and
(iii) communications (including notices) related to the respective Letter of
Credit shall be among the L/C Issuer and the Borrower. The Borrower will examine
the copy of the Letter of Credit and any other documents sent by the L/C Issuer
in connection therewith and shall promptly notify the L/C Issuer (not later than
three (3) Business Days following the Borrower’s receipt of documents from the
L/C Issuer) of any non-compliance with the Borrower’s instructions and of any
discrepancy in any document under any presentment or other irregularity. The
Borrower understands and agree that the L/C Issuer is not required to extend the
expiration date of any Letter of Credit for any reason. With respect to any
Letter of Credit containing an “automatic amendment” to extend the expiration
date of such Letter of Credit, the L/C Issuer, in its sole and absolute
discretion, may give notice of nonrenewal of such Letter of Credit and, if the
Borrower does not at any time want the then current expiration date of such
Letter of Credit to be extended, the Borrower will so notify the Agent and the
L/C Issuer at least 30 calendar days before the L/C Issuer is required to notify
the beneficiary of such Letter of Credit or any advising bank of such
non-extension pursuant to the terms of such Letter of Credit.

(i)    The Borrower’s reimbursement and payment obligations under this
Section 2.03 are absolute, unconditional and irrevocable and shall be performed
strictly in

 

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accordance with the terms of this Agreement under any and all circumstances
whatsoever, including:

(i)    any lack of validity, enforceability or legal effect of any Letter of
Credit, any Issuer Document, this Agreement or any Loan Document, or any term or
provision therein or herein;

(ii)    payment against presentation of any draft, demand or claim for payment
under any Drawing Document that does not comply in whole or in part with the
terms of the applicable Letter of Credit or which proves to be fraudulent,
forged or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, or which is signed, issued or presented by a Person
or a transferee of such Person purporting to be a successor or transferee of the
beneficiary of such Letter of Credit;

(iii)    the L/C Issuer or any of its branches or Affiliates being the
beneficiary of any Letter of Credit;

(iv)    the L/C Issuer or any correspondent honoring a drawing against a Drawing
Document up to the amount available under any Letter of Credit even if such
Drawing Document claims an amount in excess of the amount available under the
Letter of Credit;

(v)    the existence of any claim, set-off, defense or other right that the
Borrower or any of its Subsidiaries may have at any time against any beneficiary
or transferee beneficiary, any assignee of proceeds, the L/C Issuer or any other
Person;

(vi)    the L/C Issuer or any correspondent honoring a drawing upon receipt of
an electronic presentation under a Letter of Credit requiring the same,
regardless of whether the original Drawing Documents arrive at the L/C Issuer’s
counters or are different from the electronic presentation;

(vii)    any other event, circumstance or conduct whatsoever, whether or not
similar to any of the foregoing that might, but for this Section 2.03(i),
constitute a legal or equitable defense to or discharge of, or provide a right
of set-off against, the Borrower’s or any of its Subsidiaries’ reimbursement and
other payment obligations and liabilities, arising under, or in connection with,
any Letter of Credit, whether against the L/C Issuer, the beneficiary or any
other Person; or

(viii)    the fact that any Default or Event of Default shall have occurred and
be continuing;

provided, however, that subject to Section 2.03(g) above, the foregoing shall
not release the L/C Issuer from such liability to the Borrower as may be finally
determined in a final, non-appealable judgment of a court of competent
jurisdiction against the L/C Issuer following reimbursement or payment of the
obligations and liabilities, including reimbursement and other payment
obligations, of the Borrower to the L/C Issuer arising under, or in connection
with, this Section 2.03 or any Letter of Credit.

 

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(j)    Without limiting any other provision of this Agreement, the L/C Issuer
and each other Letter of Credit Related Person (if applicable) shall not be
responsible to the Borrower for, and the L/C Issuer’s rights and remedies
against the Borrower and the obligation of the Borrower to reimburse the L/C
Issuer for each drawing under each Letter of Credit shall not be impaired by:

(i)    honor of a presentation under any Letter of Credit that on its face
substantially complies with the terms and conditions of such Letter of Credit,
even if the Letter of Credit requires strict compliance by the beneficiary;

(ii)    honor of a presentation of any Drawing Document that appears on its face
to have been signed, presented or issued (A) by any purported successor or
transferee of any beneficiary or other Person required to sign, present or issue
such Drawing Document or (B) under a new name of the beneficiary;

(iii)    acceptance as a draft of any written or electronic demand or request
for payment under a Letter of Credit, even if nonnegotiable or not in the form
of a draft or notwithstanding any requirement that such draft, demand or request
bear any or adequate reference to the Letter of Credit;

(iv)    the identity or authority of any presenter or signer of any Drawing
Document or the form, accuracy, genuineness or legal effect of any Drawing
Document (other than the L/C Issuer’s determination that such Drawing Document
appears on its face substantially to comply with the terms and conditions of the
Letter of Credit);

(v)    acting upon any instruction or request relative to a Letter of Credit or
requested Letter of Credit that the L/C Issuer in good faith believes to have
been given by a Person authorized to give such instruction or request;

(vi)    any errors, omissions, interruptions or delays in transmission or
delivery of any message, advice or document (regardless of how sent or
transmitted) or for errors in interpretation of technical terms or in
translation or any delay in giving or failing to give notice to the Borrower;

(vii)    any acts, omissions or fraud by, or the insolvency of, any beneficiary,
any nominated person or entity or any other Person or any breach of contract
between any beneficiary and the Borrower or any of the parties to the underlying
transaction to which the Letter of Credit relates;

(viii)    assertion or waiver of any provision of the ISP or UCP that primarily
benefits an issuer of a letter of credit, including any requirement that any
Drawing Document be presented to it at a particular hour or place;

 

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(ix)    payment to any presenting bank (designated or permitted by the terms of
the applicable Letter of Credit) claiming that it rightfully honored or is
entitled to reimbursement or indemnity under Standard Letter of Credit Practice
applicable to it;

(x)    acting or failing to act as required or permitted under Standard Letter
of Credit Practice applicable to where the L/C Issuer has issued, confirmed,
advised or negotiated such Letter of Credit, as the case may be;

(xi)    honor of a presentation after the expiration date of any Letter of
Credit notwithstanding that a presentation was made prior to such expiration
date and dishonored by the L/C Issuer if subsequently the L/C Issuer or any
court or other finder of fact determines such presentation should have been
honored;

(xii)    dishonor of any presentation that does not strictly comply or that is
fraudulent, forged or otherwise not entitled to honor; or

(xiii)    honor of a presentation that is subsequently determined by the L/C
Issuer to have been made in violation of international, federal, state or local
restrictions on the transaction of business with certain prohibited Persons.

(k)    Upon the request of the Agent, (i) if the L/C Issuer has honored any full
or partial drawing request under any Letter of Credit and such drawing has
resulted in an L/C Obligation that remains outstanding, or (ii) if, as of the
Letter of Credit Expiration Date, any L/C Obligation for any reason remains
outstanding, the Borrower shall, in each case, immediately Cash Collateralize
the then Outstanding Amount of all L/C Obligations. Sections 2.05 and 8.02(c)
set forth certain additional requirements to deliver Cash Collateral hereunder.
For purposes of this Section 2.03, Section 2.05 and Section 8.02(c), “Cash
Collateralize” means to pledge and deposit with or deliver to the Agent, for the
benefit of the L/C Issuer and the Lenders, as collateral for the L/C
Obligations, cash or deposit account balances in an amount equal to 105% of the
Outstanding Amount of all L/C Obligations (other than L/C Obligations with
respect to Letters of Credit denominated in a currency other than Dollars, which
L/C Obligations shall be Cash Collateralized in an amount equal to 107.5% of the
Outstanding Amount of such L/C Obligations), pursuant to documentation in form
and substance reasonably satisfactory to the Agent and the L/C Issuer (which
documents are hereby Consented to by the Lenders). The Borrower hereby grants to
the Agent a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing. Cash Collateral shall be
maintained in blocked, non-interest bearing deposit accounts at Wells Fargo. If
at any time the Agent determines that any funds held as Cash Collateral are
subject to any right or claim of any Person other than the Agent or that the
total amount of such funds is less than the aggregate Outstanding Amount of all
L/C Obligations, the Borrower will, forthwith upon demand by the Agent, pay to
the Agent, as additional funds to be deposited as Cash Collateral, an amount
equal to the excess of (x) such aggregate Outstanding Amount over (y) the total
amount of funds, if any, then held as Cash Collateral that the Agent determines
to be free and clear of any such right and claim. Upon the drawing of any Letter
of Credit for which funds are on deposit as Cash Collateral, such funds shall be
applied, to the extent permitted under applicable Laws, to reimburse the L/C
Issuer and, to the extent not so applied, shall thereafter be applied to satisfy
other Obligations.

 

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(l)    The Borrower shall pay to the Agent for the account of each Lender in
accordance with its Applicable Percentage a Letter of Credit fee (the “Letter of
Credit Fee”) for each Letter of Credit equal to the Applicable Margin times the
daily Stated Amount under each such Letter of Credit (whether or not such
maximum amount is then in effect under such Letter of Credit). For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the
amount of the Letter of Credit shall be determined in accordance with
Section 1.06. Letter of Credit Fees shall be (i) due and payable on the first
day after the end of each month commencing with the first such date to occur
after the issuance of such Letter of Credit, and after the Letter of Credit
Expiration Date, on demand, and (ii) computed on a monthly basis in arrears.
Notwithstanding anything to the contrary contained herein, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the Default Rate as
provided in Section 2.08(b) hereof.

(m)    In addition to the Letter of Credit Fees as set forth in Section 2.03(l)
above, the Borrower shall pay immediately upon demand to the Agent for the
account of the L/C Issuer as non-refundable fees, commissions, and charges (it
being acknowledged and agreed that any charging of such fees, commissions, and
charges to the Loan Account pursuant to the provisions of Section 2.02(d) shall
be deemed to constitute a demand for payment thereof for the purposes of this
Section 2.03(m)): (i) a fronting fee which shall be imposed by the L/C Issuer
equal to 0.125% per annum times the average amount of the L/C Obligations during
the immediately preceding month, plus (ii) any and all other customary
commissions, fees and charges then in effect imposed by, and any and all
expenses incurred by, the L/C Issuer, or by any adviser, confirming institution
or entity or other nominated person, relating to Letters of Credit, at the time
of issuance of any Letter of Credit and upon the occurrence of any other
activity with respect to any Letter of Credit (including transfers, assignments
of proceeds, amendments, drawings, renewals or cancellations).

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

(o)    The L/C Issuer shall be deemed to have acted with due diligence and
reasonable care if the L/C Issuer’s conduct is in accordance with Standard
Letter of Credit Practice or in accordance with this Agreement.

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

 

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(q)    In the event of a direct conflict between the provisions of this
Section 2.03 and any provision contained in any Issuer Document, it is the
intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.03 shall control and
govern.

(r)    The provisions of this Section 2.03 shall survive the termination of this
Agreement and the repayment in full of the Obligations with respect to any
Letters of Credit that remain outstanding.

(s)    At the Borrower’s costs and expense, the Borrower shall execute and
deliver to the L/C Issuer such additional certificates, instruments and/or
documents and take such additional action as may be reasonably requested by the
L/C Issuer to enable the L/C Issuer to issue any Letter of Credit pursuant to
this Agreement and related Issuer Document, to protect, exercise and/or enforce
the L/C Issuer’s rights and interests under this Agreement or to give effect to
the terms and provisions of this Agreement or any Issuer Document. Each Borrower
irrevocably appoints the L/C Issuer as its attorney-in-fact and authorizes the
L/C Issuer, without notice to the Borrower, to execute and deliver ancillary
documents and letters customary in the letter of credit business that may
include but are not limited to advisements, indemnities, checks, bills of
exchange and issuance documents. The power of attorney granted by the Borrower
is limited solely to such actions related to the issuance, confirmation or
amendment of any Letter of Credit and to ancillary documents or letters
customary in the letter of credit business. This appointment is coupled with an
interest.

2.04    Swing Line Loans.

(a)    The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender may, in reliance upon the agreements of the other Lenders set
forth in this Section 2.04, make loans (each such loan, a “Swing Line Loan”) to
the Borrower from time to time on any Business Day during the Availability
Period in an aggregate amount not to exceed at any time outstanding the amount
of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans,
when aggregated with the Applicable Percentage of the Outstanding Amount of
Committed Loans and L/C Obligations of the Lender acting as Swing Line Lender,
may exceed the amount of such Lender’s Commitment; provided, however, that after
giving effect to any Swing Line Loan, (i) the Total Outstandings shall not
exceed Loan Cap, and (ii) the aggregate Outstanding Amount of the Committed
Loans of any Lender at such time, plus such Lender’s Applicable Percentage of
the Outstanding Amount of all L/C Obligations at such time, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans at such
time shall not exceed such Lender’s Commitment, and provided, further, that the
Borrower shall not use the proceeds of any Swing Line Loan to refinance any
outstanding Swing Line Loan. Within the foregoing limits, and subject to the
other terms and

 

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conditions hereof, the Borrower may borrow under this Section 2.04, prepay under
Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall
bear interest only at the rate applicable to Base Rate Loans. Immediately upon
the making of a Swing Line Loan, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk participation in such Swing Line Loan in an amount equal to the product of
such Lender’s Applicable Percentage times the amount of such Swing Line Loan.
The Swing Line Lender shall have all of the benefits and immunities (A) provided
to the Agent in Article IX with respect to any acts taken or omissions suffered
by the Swing Line Lender in connection with Swing Line Loans made by it or
proposed to be made by it as if the term “Agent” as used in Article IX included
the Swing Line Lender with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the Swing Line Lender.

(b)    Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrower’s irrevocable notice to the Swing Line Lender and the Agent, which may
be given by telephone. Each such notice must be received by the Swing Line
Lender and the Agent not later than 1:00 p.m. on the requested borrowing date,
and shall specify (i) the amount to be borrowed, which shall be a minimum of
$100,000, and (ii) the requested borrowing date, which shall be a Business Day.
Each such telephonic notice must be confirmed promptly by delivery to the Swing
Line Lender and the Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Agent (by telephone or in writing) that
the Agent has also received such Swing Line Loan Notice and, if not, the Swing
Line Lender will notify the Agent (by telephone or in writing) of the contents
thereof. Unless the Swing Line Lender has received notice (by telephone or in
writing) from the Agent at the request of the Required Lenders prior to 2:00
p.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing
Line Lender not to make such Swing Line Loan as a result of the limitations set
forth in the proviso to the first sentence of Section 2.04(a), or (B) that one
or more of the applicable conditions specified in Article IV is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line
Lender may, not later than 3:00 p.m. on the borrowing date specified in such
Swing Line Loan Notice, make the amount of its Swing Line Loan available to the
Borrower at its office by crediting the account of the Borrower on the books of
the Swing Line Lender in immediately available funds.

(c)    Refinancing of Swing Line Loans.

(i)    The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of the Borrower (which hereby irrevocably authorize the Swing
Line Lender to so request on their behalf), that each Lender make a Base Rate
Loan in an amount equal to such Lender’s Applicable Percentage of the amount of
Swing Line Loans then outstanding. Such request shall be made in accordance with
the requirements of Section 2.02, without regard to the minimum and multiples
specified therein for the principal amount of Base Rate Loans, but subject to
the unutilized portion of the Loan Cap and the conditions set forth in
Section 4.02. Each Lender shall make an amount equal to its Applicable

 

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Percentage of the amount of such outstanding Swing Line Loan available to the
Agent in immediately available funds for the account of the Swing Line Lender at
the Agent’s Office not later than 1:00 p.m. on the day specified by the Swing
Line Lender, whereupon, subject to Section 2.04(c)(ii), each Lender that so
makes funds available shall be deemed to have made a Base Rate Loan to the
Borrower in such amount. The Agent shall remit the funds so received to the
Swing Line Lender.

(ii)    If for any reason any Swing Line Loan cannot be refinanced by such a
Committed Borrowing in accordance with Section 2.04(c)(i), the request for Base
Rate Loans submitted by the Swing Line Lender as set forth herein shall be
deemed to be a request by the Swing Line Lender that each of the Lenders fund
its risk participation in the relevant Swing Line Loan and each Lender’s payment
to the Agent for the account of the Swing Line Lender pursuant to
Section 2.04(c)(i) shall be deemed payment in respect of such participation.

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

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

 

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(d)    Repayment of Participations.

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

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

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

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

2.05    Prepayments.

(a)    The Borrower may, upon irrevocable notice from the Borrower to the Agent,
at any time or from time to time voluntarily prepay Committed Loans in whole or
in part without premium or penalty; provided that (i) such notice must be
received by the Agent not later than 11:00 a.m. (A) three Business Days prior to
any date of prepayment of LIBOR Rate Loans and (B) on the date of prepayment of
Base Rate Loans; (ii) any prepayment of LIBOR Rate Loans shall be in a principal
amount of $1,000,000 or a whole multiple of $250,000 in excess thereof; and
(iii) unless a Cash Dominion Event has occurred and is continuing, any
prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding. Each such notice shall specify
the date and amount of such prepayment and the Type(s) of Loans to be prepaid
and, if LIBOR Rate Loans, the Interest Period(s) of such Loans. The Agent will
promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender’s Applicable Percentage of such prepayment. If such notice
is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a LIBOR Rate

 

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Loan shall be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section 3.05. Each
such prepayment shall be applied to the Committed Loans of the Lenders in
accordance with their respective Applicable Percentages.

(b)    The Borrower may, upon irrevocable notice from the Borrower to the Swing
Line Lender (with a copy to the Agent), at any time or from time to time,
voluntarily prepay Swing Line Loans in whole or in part without premium or
penalty; provided that (i) such notice must be received by the Swing Line Lender
and the Agent not later than 1:00 p.m. on the date of the prepayment, and
(ii) any such prepayment shall be in a minimum principal amount of $100,000.
Each such notice shall specify the date and amount of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein.

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

(d)    After the occurrence and during the continuance of a Cash Dominion Event,
the Borrower shall prepay the Loans and Cash Collateralize the L/C Obligations
with the proceeds and collections received by the Loan Parties to the extent so
required under the provisions of Section 6.13 hereof.

(e)    Prepayments made pursuant to Section 2.05(c) and (d) above, first, shall
be applied to the Swing Line Loans, second, shall be applied ratably to the
outstanding Committed Loans, third, shall be used to Cash Collateralize the
remaining L/C Obligations; and, fourth, the amount remaining, if any, after the
prepayment in full of all Swing Line Loans and Committed Loans outstanding at
such time and the Cash Collateralization of the remaining L/C Obligations in
full may be retained by the Borrower for use in the ordinary course of its
business. Upon the drawing of any Letter of Credit that has been Cash
Collateralized, the funds held as Cash Collateral shall be applied (without any
further action by or notice to or from the Borrower or any other Loan Party) to
reimburse the L/C Issuer or the Lenders, as applicable.

2.06    Termination or Reduction of Commitments

(a)    The Borrower may, upon irrevocable notice from the Borrower to the Agent,
terminate the Aggregate Commitments, the Letter of Credit Sublimit or the Swing
Line Sublimit or from time to time permanently reduce the Aggregate Commitments,
the Letter of Credit Sublimit or the Swing Line Sublimit; provided that (i) any
such notice shall be received by the Agent not later than 11:00 a.m. five
Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $10,000,000 or any whole
multiple of $250,000 in excess thereof, (iii) the Borrower shall

 

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not terminate or reduce (A) the Aggregate Commitments if, after giving effect
thereto and to any concurrent prepayments hereunder, the Total Outstandings
would exceed the Aggregate Commitments, (B) the Letter of Credit Sublimit if,
after giving effect thereto, the Outstanding Amount of L/C Obligations not fully
Cash Collateralized hereunder would exceed the Letter of Credit Sublimit, and
(C) the Swing Line Sublimit if, after giving effect thereto, and to any
concurrent payments hereunder, the Outstanding Amount of Swing Line Loans
hereunder would exceed the Swing Line Sublimit.

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

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

2.07    Repayment of Loans.

(a)    If, as of the final Business Day of each weekly period starting from the
first complete calendar week after the Closing Date (for the avoidance of doubt,
with the first such final Business Day being May 1, 2020), (A) the Outstanding
Amount of all Loans is greater than $50,000,000 and (B) the Consolidated Cash
Balance exceeds $50,000,000 as of the end of such applicable Business Day, then
the Borrower shall, on the next Business Day thereafter, prepay the Loans in an
aggregate principal amount equal to such excess set forth in this clause (B).

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

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

2.08    Interest.

(a)    Subject to the provisions of Section 2.08(b) below, (i) each LIBOR Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the LIBOR Rate for such Interest
Period plus the Applicable Margin; (ii) each Base Rate Loan shall bear interest
on the outstanding principal amount thereof from the applicable borrowing date
at a rate per annum equal to the Base Rate plus the Applicable Margin; and
(iii) each Swing Line Loan shall bear interest on the outstanding principal
amount thereof from the applicable borrowing date at a rate per annum equal to
the Base Rate plus the Applicable Margin.

 

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

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

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

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

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

(a)    Unused Line Fee. The Borrower shall pay to the Agent for the account of
each Lender in accordance with its Applicable Percentage, on the first day after
the end of each fiscal month, commencing on May 4, 2020, and on the last day of
the Availability Period, an unused line fee on the actual daily amount by which
the Aggregate Commitments exceed the Total Outstandings equal to (a) 0.375% per
annum times the actual daily amount by which the Aggregate Commitments exceed
the Total Outstandings during any month (or portion thereof) when the Average
Monthly Unused Percentage is greater than or equal to fifty percent (50%) and
(b) 0.50% per annum times the actual daily amount by which the Aggregate
Commitments exceed the Total Outstandings during any month (or portion thereof)
when the Average Monthly Unused Percentage is less than fifty percent
(50%).    The unused line fee shall accrue at all times during the Availability
Period, including at any time during which one or more of the conditions in
Article IV is not met.

(b)    Other Fees. The Borrower shall pay to the Arrangers and the Agent, as
applicable, for their own respective accounts fees in the amounts and at the
times specified in the Fee Letters. Such fees shall be fully earned when paid
and shall not be refundable for any reason whatsoever.

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

 

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2.11    Evidence of Debt.

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

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

2.12    Payments Generally; Agent’s Clawback.

(a)    General. All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Agent, for the account of the respective Lenders
to which such payment is owed, at the Agent’s Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein. Subject to Section 2.14 hereof, the Agent will promptly distribute to
each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender’s Lending Office. All payments received by the Agent after 2:00 p.m., at
the option of the Agent, shall be deemed received on the next succeeding
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applicable interest or fee shall continue to accrue. If any payment to be made
by the Borrower shall come due on a day other than a Business Day, payment shall
be made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.

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

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

 

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

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

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

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

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

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

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

 

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

2.14    Settlement Amongst Lenders

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

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

2.15    Increase in Commitments.

(i)    Request for Increase. Provided no Default or Event of Default then exists
or would arise therefrom, upon notice to the Agent (which shall promptly notify
the Lenders), the Borrower may from time to time request an increase in the
Aggregate Commitments by an amount (for all such requests) not exceeding
$150,000,000 (the “Commitment Increases”); provided that (i) any such request
for an increase shall be in a minimum amount of $25,000,000, (ii) the Borrower
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make a maximum of six such requests, and (iii) the amount of the Aggregate
Commitments, as the same may be increased pursuant to this Section 2.15, shall
not exceed $375,000,000 at any time. At the time of sending such notice, the
Borrower (in consultation with the Agent) shall specify the time period within
which each Lender is requested to respond (which shall in no event be less than
ten Business Days from the date of delivery of such notice to the Lenders).

(ii)    Lender Elections to Increase. Each Lender shall notify the Agent within
such time period whether or not it agrees to increase its Commitment and, if so,
whether by an amount equal to, greater than, or less than its Applicable
Percentage of such requested increase. Any Lender not responding within such
time period shall be deemed to have declined to increase its Commitment.

(iii)    Notification by Agent; Additional Lenders. The Agent shall notify the
Borrower and each Lender of the Lenders’ responses to each request made
hereunder. To achieve the full amount of a requested increase and subject to the
approval of the Agent, the L/C Issuer and the Swing Line Lender (which approvals
shall not be unreasonably withheld), to the extent that the existing Lenders
decline to increase their Commitments, or decline to increase their Commitments
to the amount requested by the Borrower, the Agent, in consultation with the
Borrower, will use its reasonable efforts to arrange for other Eligible
Assignees to become a Lender hereunder and to issue commitments in an amount
equal to the amount of the increase in the Aggregate Commitments requested by
the Borrower and not accepted by the existing Lenders (and the Borrower may also
invite additional Eligible Assignees to become Lenders) (each, an “Additional
Commitment Lender”), provided, however, that without the consent of the Agent,
at no time shall the Commitment of any Additional Commitment Lender be less than
$25,000,000.

(iv)    Effective Date and Allocations. If the Aggregate Commitments are
increased in accordance with this Section, the Agent, in consultation with the
Borrower, shall determine the effective date (the “Increase Effective Date”) and
the final allocation of such increase. The Agent shall promptly notify the
Borrower and the Lenders of the final allocation of such increase and the
Increase Effective Date and on the Increase Effective Date (i) the Aggregate
Commitments under, and for all purposes of, this Agreement shall be increased by
the aggregate amount of such Commitment Increases, and (ii) Schedule 2.01 shall
be deemed modified, without further action, to reflect the revised Commitments
and Applicable Percentages of the Lenders.

(b)    Conditions to Effectiveness of Commitment Increase. As a condition
precedent to such Commitment Increase, (i) the Borrower shall deliver to the
Agent a certificate of each Loan Party dated as of the Increase Effective Date
(in sufficient copies for each Lender) signed by a Responsible Officer of such
Loan Party (A) certifying and attaching the resolutions adopted by such Loan
Party approving or consenting to such Commitment Increase, and (B) in the case
of the Borrower, certifying that, before and after giving effect to such
Commitment Increase, (1) the representations and warranties contained in Article
V and the other Loan Documents are true and correct on and as of the

 

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Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Section 2.15, the representations and warranties contained in subsections
(a) and (b) of Section 5.05 shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01, and (2) no Default or Event of Default exists or would arise
therefrom, (ii) the Borrower, the Agent, and any Additional Commitment Lender
shall have executed and delivered a Joinder to the Loan Documents in such form
as the Agent shall reasonably require; (iii) the Borrower shall have paid such
fees and other compensation to the Additional Commitment Lenders as the Borrower
and such Additional Commitment Lenders shall agree; (iv) the Borrower shall have
paid such arrangement fees to the Agent as the Borrower and the Agent may agree;
(v) if requested by the Agent, the Borrower shall deliver to the Agent and the
Lenders an opinion or opinions, in form and substance reasonably satisfactory to
the Agent, from counsel to the Borrower reasonably satisfactory to the Agent and
dated such date; (vi) the Borrower and the Additional Commitment Lender shall
have delivered such other instruments, documents and agreements as the Agent may
reasonably have requested; and (vii) no Default or Event of Default exists. The
Borrower shall prepay any Committed Loans outstanding on the Increase Effective
Date (and pay any additional amounts required pursuant to Section 2.05) to the
extent necessary to keep the outstanding Committed Loans ratable with any
revised Applicable Percentages arising from any nonratable increase in the
Commitments under this Section.

(c)    Conflicting Provisions. This Section shall supersede any provisions in
Sections 2.13 or 10.01 to the contrary.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01    Taxes.

(a)    Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Borrower shall be required by
applicable law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Agent, Lender or L/C Issuer, as
the case may be, receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

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

 

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

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

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

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

(i)    duly completed copies of Internal Revenue Service Form W-8BEN or W8BEN-E,
as applicable, claiming eligibility for benefits of an income tax treaty to
which the United States is a party,

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

 

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(iii)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under section 881(c) of the Code, (x) a certificate to
the effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower
within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly
completed copies of Internal Revenue Service Form W-8BEN or W8BEN-E, as
applicable, or

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

(f)    FATCA. If a payment made to a Lender under any Loan Document would be
subject to U.S. federal income withholding Tax imposed by FATCA if such Lender
were to fail to comply with the applicable reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the IRC, as
applicable), such Lender shall deliver to Agent (or, in the case of a
Participant, to the Lender granting the participation only) at the time or times
prescribed by law and at such time or times reasonably requested by Agent (or,
in the case of a Participant, the Lender granting the participation) such
documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation
reasonably requested by Agent (or, in the case of a Participant, the Lender
granting the participation) as may be necessary for Agent or Borrower to comply
with their obligations under FATCA and to determine that such Lender has
complied with such Lender’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this subsection
(f) “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

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

 

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

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

3.04    Increased Costs; Reserves on LIBOR Rate Loans.

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

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

(ii)    subject any Lender or the L/C Issuer to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any participation in a
Letter of Credit or any LIBOR Rate Loan made by it, or change the basis of

 

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taxation of payments to such Lender or the L/C Issuer in respect thereof (except
for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition
of, or any change in the rate of, any Excluded Tax payable by such Lender or the
L/C Issuer); or

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

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

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

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

(d)    Delay in Requests. Failure or delay on the part of any Lender or the L/C
Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right
to demand such compensation, provided that the Borrower shall not be required to
compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of
this Section for any increased costs

 

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incurred or reductions suffered more than nine months prior to the date that
such Lender or the L/C Issuer, as the case may be, notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the L/C Issuer’s intention to claim compensation therefor (except
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to
include the period of retroactive effect thereof).

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

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

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

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

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

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

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

 

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3.06    Mitigation Obligations; Replacement of Lenders.

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

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

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

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01    Conditions of Initial Credit Extension. The obligation of the L/C Issuer
and each Lender to make any Credit Extension hereunder on the Closing Date is
subject to satisfaction of the following conditions precedent:

(a)    The Agent’s receipt of the following, each of which shall be originals,
telecopies or other electronic image scan transmission (e.g., “pdf” or “tif ”
via e-mail) (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party or the
Lenders, as applicable, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date)
and each in form and substance satisfactory to the Agent:

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

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

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

 

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

(v)    a favorable opinion of Pepper Hamilton LLP, counsel to the Loan Parties,
addressed to the Agent and each Lender, as to such matters concerning the Loan
Parties and the Loan Documents as the Agent may reasonably request;

(vi)    a certificate signed by a Responsible Officer of the Borrower certifying
(A) that the conditions specified in Sections 4.02(a) and (b) have been
satisfied, (B) that there has been no event or circumstance since April 2, 2020
that has had or would be reasonably expected to have, either individually or in
the aggregate, a Material Adverse Effect, (C) to the Solvency of the Loan
Parties as of the Closing Date after giving effect to the transactions
contemplated hereby, and (D) either that (1) no consents, licenses or approvals
are required in connection with the execution, delivery and performance by such
Loan Party and the validity against such Loan Party of the Loan Documents to
which it is a party, or (2) that all such consents, licenses and approvals have
been obtained and are in full force and effect;

(vii)    evidence that all insurance required to be maintained pursuant to the
Loan Documents and, subject to Section 6.21, all endorsements in favor of the
Agent required under the Loan Documents have been obtained and are in effect;

(viii)    the Security Documents and certificates evidencing any stock being
pledged thereunder, together with undated stock powers executed in blank, each
duly executed by the applicable Loan Parties;

(ix)    the Facility Guaranty;

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

(xi)    results of searches or other evidence reasonably satisfactory to the
Agent (in each case dated as of a date reasonably satisfactory to the Agent)
indicating the absence of Liens on the assets of the Loan Parties, except for
Permitted Encumbrances and Liens for which termination statements and releases,
satisfactions and discharges of any mortgages, and releases or subordination
agreements reasonably satisfactory to the Agent are being tendered concurrently
with such extension of credit or other arrangements reasonably satisfactory to
the Agent for the delivery of such termination statements and releases,
satisfactions and discharges have been made;

 

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(xii)    all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the Agent to be
filed, registered or recorded to create or perfect the first priority Liens
(subject to Permitted Encumbrances that have priority by operation of Law)
intended to be created under the Loan Documents and all such documents and
instruments shall have been so filed, registered or recorded to the satisfaction
of the Agent; and

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

(b)    After giving effect to (i) any Loans outstanding or made hereunder on the
Closing Date, (ii) any charges to the Loan Account made on the Closing Date and
(iii) all Letters of Credit issued or outstanding on the Closing Date,
Availability shall be not less than $80,000,000.

(c)    The Agent shall have received a Borrowing Base Certificate dated the
Closing Date, relating to the Fiscal Month ended on April 4, 2020, and executed
by a Responsible Officer of the Borrower.

(d)    The Agent shall be reasonably satisfied that any financial statements
delivered to it fairly present the business and financial condition of the Loan
Parties and that there has been no Material Adverse Effect since April 2, 2020.

(e)    The Agent shall have received and be satisfied with (i) a detailed
forecast for the period commencing on the Closing Date and ending with the end
of the current Fiscal Year, which shall include an Availability model,
Consolidated income statement, balance sheet, and statement of cash flow, by
month, each prepared in conformity with GAAP and consistent with the Loan
Parties’ then current practices and (b) such other information (financial or
otherwise) reasonably requested by the Agent.

(f)    There shall not be pending any litigation or other proceeding, the result
of which, either individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect.

(g)    There shall not have occurred any default of any Material Contract of any
Loan Party.

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

(i)    All fees and expenses required to be paid to the Agent or the Arrangers
on or before the Closing Date shall have been paid in full, all fees and
expenses required to be paid to the Lenders on or before the Closing Date shall
have been paid in full, and all fees and expenses required to be paid to the
lenders under the Existing Credit Agreement shall have been paid in full.

(j)    The Borrower shall have paid all fees, charges and disbursements of
counsel to the Agent to the extent invoiced prior to or on the Closing Date,
plus such additional

 

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amounts of such fees, charges and disbursements as shall constitute its
reasonable estimate of such fees, charges and disbursements incurred or to be
incurred by it through the Closing Date (provided that such estimate shall not
thereafter preclude a final settling of accounts between the Borrower and the
Agent).

(k)    The Agent and the Lenders shall have received all documentation and other
information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including without
limitation the USA PATRIOT Act in each case, the results of which are
satisfactory to the Agent, and with respect to any Loan Party that qualifies as
a “legal entity customer” under the Beneficial Ownership Regulation, a
Beneficial Ownership Certification in relation to such Loan Party, which such
Beneficial Ownership Certification shall be complete and accurate in all
respects.

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

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

4.02    Conditions to all Credit Extensions. The obligation of each Lender to
honor any Request for Credit Extension (other than a LIBOR Rate Loan Notice
requesting only a continuation of LIBOR Rate Loans) and each L/C Issuer to issue
each Letter of Credit is subject to the following conditions precedent:

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

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

(c)    The Agent and, if applicable, the L/C Issuer or the Swing Line Lender
shall have received a Request for Credit Extension or an updated Borrowing Base
Certificate, as applicable, in accordance with the requirements hereof;

(d)    No Overadvance shall result from such Credit Extension; and

 

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(e)    After giving effect to the requested Borrowing, in the event that the
Outstanding Amount of all Loans hereunder would exceed $50,000,000, the
Consolidated Cash Balance of the Borrower shall not exceed $50,000,000.

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

ARTICLE V

REPRESENTATIONS AND WARRANTIES

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

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

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

5.03    Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document, except for
(a) the perfection or maintenance of the Liens created under the Security
Documents (including the first priority nature thereof, subject to Permitted
Encumbrances that have priority by operation of Law) or (b) such as have been
obtained or made and are in full force and effect.

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

5.05    Financial Statements; No Material Adverse Effect.

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

(b)    Since April 2, 2020, there has been no event or circumstance, either
individually or in the aggregate, that has had or would reasonably be expected
to have a Material Adverse Effect.

(c)    To the best knowledge of the Borrower, no Internal Control Event exists
or has occurred since the date of the Audited Financial Statements that has
resulted in or would reasonably be expected to result in a misstatement in any
material respect, (i) in any financial information delivered or to be delivered
to the Agent or the Lenders, (ii) of the Borrowing Base, (iii) of covenant
compliance calculations provided hereunder or (iv) of the assets, liabilities,
financial condition or results of operations of the Borrower and its
Subsidiaries on a Consolidated basis.

 

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

5.06    Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of the Loan Parties, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority, by or
against any Loan Party or any of its Subsidiaries or against any of its
properties or revenues that (a) purport to affect or pertain to this Agreement
or any other Loan Document, or any of the transactions contemplated hereby, or
(b) except as specifically disclosed in Schedule 5.06 to the Disclosure Letter,
either individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect, and since the Closing Date, there has been no adverse
change in the status of the matters described on Schedule 5.06 to the Disclosure
Letter, or financial effect on any Loan Party or any Subsidiary thereof, that
would reasonably be expected to have a Material Adverse Effect.

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

5.08    Ownership of Property; Liens

(a)    Each of the Loan Parties and each Subsidiary thereof has good record and
marketable title in fee simple to or valid leasehold interests in, all Real
Estate necessary or used in the ordinary conduct of its business, except for
such defects in title as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. Each of the Loan Parties and each
Subsidiary has good and marketable title to, valid leasehold interests in, or
valid licenses to use all personal property and assets material to the ordinary
conduct of its business.

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

 

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5.09    Environmental Compliance

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

(b)    Except as otherwise set forth in Schedule 5.09 to the Disclosure Letter,
none of the properties currently or, to the knowledge of any Loan Party or
Subsidiary thereof, formerly owned or operated by any Loan Party or any
Subsidiary thereof is listed or proposed for listing on the NPL or on the
CERCLIS or any analogous foreign, state or local list or is adjacent to any such
property; there are no and never have been any underground or above-ground
storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons
in which Hazardous Materials are being or have been treated, stored or disposed
on any property currently owned or operated by any Loan Party or any Subsidiary
thereof or, to the best of the knowledge of the Loan Parties, on any property
formerly owned or operated by any Loan Party or Subsidiary thereof; there is no
asbestos or asbestos-containing material in violation of Environmental Law or
that would reasonably be expected to be required to be removed or remediated on
any property currently owned or operated by any Loan Party or Subsidiary
thereof; and Hazardous Materials have not been released, discharged or disposed
of on any property currently or, to the knowledge of any Loan Party or
Subsidiary thereof, formerly owned or operated by any Loan Party or any
Subsidiary thereof. For the avoidance of doubt, no Loan Party nor any Subsidiary
thereof, has undertaken any investigation of any kind with respect current
conditions at, or status of any formerly owned property.

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

5.10    Insurance. The properties of the Loan Parties and their Subsidiaries are
insured with financially sound and reputable insurance companies which are not
Affiliates of the Loan Parties, in such amounts, with such deductibles and
covering such risks (including, without limitation, workmen’s compensation,
public liability, business interruption and property damage insurance) as are
customarily carried by companies engaged in similar businesses and owning

 

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similar properties in localities where the Loan Parties or the applicable
Subsidiary operates. Schedule 5.10 to the Disclosure Letter sets forth a
description of all insurance maintained by or on behalf of the Loan Parties and
their Subsidiaries as of the Closing Date. Each insurance policy listed on
Schedule 5.10 to the Disclosure Letter is in full force and effect and all
premiums in respect thereof that are due and payable have been paid.

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

5.12    ERISA Compliance.

(a)    The Borrower, each of its ERISA Affiliates, and each Pension Plan is in
compliance in all material respects with the applicable provisions of ERISA, the
Code and other Federal or state Laws. Each Plan that is intended to qualify
under Section 401(a) of the Code has received a favorable determination letter
or opinion letter from the IRS or an application for such a letter is currently
being processed by the IRS with respect thereto and, to the best knowledge of
the Borrower, nothing has occurred which would prevent, or cause the loss of,
such qualification. The Loan Parties and each ERISA Affiliate have made all
required contributions to each Pension Plan subject to Sections 412 or 430 of
the Code and to each Multiemployer Plan, and no application for a funding waiver
or an extension of any amortization period pursuant to Sections 412 or 430 of
the Code has been made with respect to any such Plan. No Lien imposed under the
Code or ERISA exists or is likely to arise on account of any Pension Plan or
Multiemployer Plan.

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

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

 

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5.13    Subsidiaries; Equity Interests.

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

5.14    Margin Regulations; Investment Company Act;

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

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

5.15    Disclosure. As of the Closing Date, each Loan Party has disclosed to the
Agent and the Lenders all agreements, instruments and corporate or other
restrictions to which it or any of its Subsidiaries is subject, and all other
matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. No report, financial statement,
certificate or other information furnished (whether in writing or orally) by or
on behalf of any Loan Party to the Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished) contains any material

 

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misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Loan Parties represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time. As
of the Closing Date, the information included in the Beneficial Ownership
Certification is true and correct in all respects.

5.16    Compliance with Laws. Each of the Loan Parties and each Subsidiary is in
compliance (A) in all material respects with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (i) such requirement of Law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (ii) the failure to comply
therewith, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect and (B) with Section 10.17 and 10.18.

5.17    Intellectual Property; Licenses, Etc. The Loan Parties and their
Subsidiaries own, or possess the right to use, all of the Intellectual Property
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person. To the best knowledge of the Borrower, no
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any Loan
Party or any Subsidiary infringes upon any rights held by any other Person.
Except as specifically disclosed in Schedule 5.17 to the Disclosure Letter, no
claim or litigation regarding any of the foregoing is pending or, to the best
knowledge of the Borrower, threatened, which, either individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.

5.18    Labor Matters.

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

5.19    Security Documents.

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

(b)    When the Security Agreement (or a short form thereof) is filed in the
United States Patent and Trademark Office and the United States Copyright Office
and when financing statements, releases and other filings in appropriate form
are filed in the offices specified in Schedule II of the Security Agreement, the
Agent shall have a fully perfected Lien on, and security interest in, all right,
title and interest of the applicable Loan Parties in the Intellectual Property
(as defined in the Security Agreement) in which a security interest may be
perfected by filing, recording or registering a security agreement, financing
statement or analogous document in the United States Patent and Trademark Office
or the United States Copyright Office, as applicable, in each case prior and
superior in right to any other Person (it being understood that subsequent
recordings in the United States Patent and Trademark Office and the United
States Copyright Office may be necessary to perfect a Lien on registered
trademarks, trademark applications and copyrights acquired by the Loan Parties
after the Closing Date).

5.20    Solvency

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

 

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5.21    Deposit Accounts; Credit Card Arrangements.

(a)    Schedule 5.21(a) to the Disclosure Letter annexes a list of all DDAs
maintained by the Loan Parties as of the Closing Date, which Schedule includes,
with respect to each DDA (i) the name and address of the depository; (ii) the
account number(s) maintained with such depository; (iii) a contact person at
such depository, (iv) the identification of each Blocked Account Bank and
(v) the identification of all such DDAs that are not required to be subject to a
Blocked Account Agreement.

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

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

5.23    Customer and Trade Relations. There exists no actual or, to the
knowledge of any Loan Party, threatened, termination or cancellation of, or any
material adverse modification or change in the business relationship of any Loan
Party with any supplier material to its operations that would reasonably be
expected to have a Material Adverse Effect.

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

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

5.26    OFAC/Sanctions.

No Loan Party nor any of its Subsidiaries is in violation of any Sanctions. No
Loan Party nor any of its Subsidiaries nor, to the knowledge of such Loan Party,
any director, officer, employee, agent or Affiliate of such Loan Party or such
Subsidiary (a) is a Sanctioned Person or a Sanctioned Entity, (b) has any assets
located in Sanctioned Entities, or (c) derives revenues from investments in, or
transactions with Sanctioned Persons or Sanctioned Entities. Each of the Loan
Parties and its Subsidiaries has implemented and maintains in effect policies
and procedures designed to ensure compliance by the Loan Parties and their
Subsidiaries and their respective directors, officers, employees, agents and
Affiliates with all Sanctions, Anti-Corruption Laws and Anti-Money Laundering
Laws. Each of the Loan Parties and its Subsidiaries, and to the knowledge of
each such Loan Party, each director, officer, employee, agent and Affiliate of
each such Loan

 

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Party and each such Subsidiary, is in compliance with all Sanctions,
Anti-Corruption Laws and Anti-Money Laundering Laws in all material respects. No
proceeds of any loan made or Letter of Credit issued hereunder will be used to
fund any operations in, finance any investments or activities in, or make any
payments to, a Sanctioned Person or a Sanctioned Entity, or otherwise used in
any manner that would result in a violation of any applicable Sanctions,
Anti-Corruption Laws or Anti-Money Laundering Laws by any Person (including any
Credit Party or other individual or entity participating in any transaction).

5.27    PATRIOT Act.

To the extent applicable, each Loan Party is in compliance, in all material
respects, with the (a) Trading with the Enemy Act, as amended, and each of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, and (b) Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
Patriot Act of 2001, as amended) (the “Patriot Act”).

5.28    Covered Entities. The Borrower is not a Covered Entity.

ARTICLE VI

AFFIRMATIVE COVENANTS

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

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

(a)    as soon as available, but in any event within 90 days after the end of
each Fiscal Year of the Borrower, commencing with the Fiscal Year ending
February 1, 2020 (or, so long as the Borrower shall be subject to periodic
reporting obligations under the Securities Exchange Act of 1934, by the date
that the Annual Report on Form 10-K of the Borrower for such fiscal year would
be required to be filed under the rules and regulations of the SEC, giving
effect to any automatic extension available thereunder for the filing of such
form), a Consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such Fiscal Year, and the related consolidated statements of income
or operations, Shareholders’ Equity and cash flows for such Fiscal Year, setting
forth in each case in comparative form the figures for the previous Fiscal Year,
all in reasonable detail and prepared in accordance with GAAP, such consolidated
statements to be audited and accompanied by (i) a report and unqualified opinion
of a Registered Public Accounting Firm of nationally recognized standing
reasonably acceptable to the Agent, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and shall not be
subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit and (ii) an opinion of
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Registered Public Accounting Firm independently assessing Loan Parties’ internal
controls over financial reporting in accordance with Item 308 of SEC Regulation
S-K, PCAOB Auditing Standard No. 2, and Section 404 of Sarbanes-Oxley expressing
a conclusion that contains no statement that there is a material weakness in
such internal controls, except for such material weaknesses as to which the
Required Lenders do not object;

(b)    as soon as available, but in any event within 45 days after the end of
each Fiscal Quarter of each Fiscal Year of the Borrower (commencing with the
Fiscal Quarter ended April 30, 2020) (or, so long as the Borrower shall be
subject to periodic reporting obligations under the Securities Exchange Act of
1934, by the date that the Quarterly Report on Form 10-Q of the Borrower for
such fiscal quarter would be required to be filed under the rules and
regulations of the SEC, giving effect to any automatic extension available
thereunder for the filing of such form), a Consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such Fiscal Quarter, and the
related consolidated statements of income or operations, Shareholders’ Equity
and cash flows for such Fiscal Quarter and for the portion of the Borrower’s
Fiscal Year then ended, setting forth in each case in comparative form the
figures for (A) such period set forth in the projections delivered pursuant to
Section 6.01(d) hereof, (B) the corresponding Fiscal Quarter of the previous
Fiscal Year and (C) the corresponding portion of the previous Fiscal Year, all
in reasonable detail, such Consolidated statements to be certified by a
Responsible Officer of the Borrower as fairly presenting the financial
condition, results of operations, Shareholders’ Equity and cash flows of the
Borrower and its Subsidiaries as of the end of such Fiscal Quarter in accordance
with GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes;

(c)    [reserved];

(d)    as soon as available, but in any event no more than 60 days after the end
of each Fiscal Year of the Borrower, forecasts prepared by management of the
Borrower, in form reasonably satisfactory to the Agent, of consolidated balance
sheets and statements of income or operations and cash flows of the Borrower and
its Subsidiaries on a monthly basis for the immediately following Fiscal Year
(including the Fiscal Year in which the Maturity Date occurs), and as soon as
available, any significant revisions to such forecast with respect to such
Fiscal Year.

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

(a)    concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrower, and in the event of any change in generally
accepted accounting principles used in the preparation of such financial
statements, the Borrower shall also provide: (i) a statement of reconciliation
conforming such financial statements to GAAP and (ii) a copy of management’s
discussion and analysis with respect to such financial statements;

 

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(b)    on the 15th day of each Fiscal Month (or, if such day is not a Business
Day, on the next succeeding Business Day), a Borrowing Base Certificate showing
the Borrowing Base as of the close of business as of the last day of the
immediately preceding Fiscal Month (provided that the Appraised Value applied to
the Eligible Inventory set forth in each Borrowing Base Certificate shall be the
Appraised Value set forth in the most recent appraisal obtained by the Agent
pursuant to Section 6.10 hereof for the applicable month to which such Borrowing
Base Certificate relates), each Borrowing Base Certificate to be certified as
complete and correct by a Responsible Officer of the Borrower; provided that at
any time that a Weekly Borrowing Base Delivery Event has occurred and is
continuing, at the election of the Agent, such Borrowing Base Certificate shall
be delivered on Wednesday of each week (or, if such Wednesday is not a Business
Day, on the next succeeding Business Day), as of the close of business on the
Saturday of the immediately preceding week.

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

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

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

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

(g)    as soon as available, but in any event within 60 days after the end of
each Fiscal Year of the Loan Parties, a report summarizing the insurance
coverage (specifying type, amount and carrier) in effect for each Loan Party and
its Subsidiaries and containing such additional information as the Agent, or any
Lender through the Agent, may reasonably specify;

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

 

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

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

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 10.02; (ii) on
which such documents are posted on the Borrower’s behalf on an Internet or
intranet website, if any, to which each Lender and the Agent have access
(whether a commercial, third-party website or whether sponsored by the Agent) or
shall be available on the website of the SEC at http://www.sec.gov.
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.02(a) to the Agent. The Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Loan Parties
with any such request for delivery, and each Lender shall be solely responsible
for maintaining its copies of such documents.

Each Loan Party agrees that Agent may make materials or information provided by
or on behalf of Borrower hereunder (the “Borrower Materials”) available to the
Lenders by posting the Communications on IntraLinks, SyndTrak or a substantially
similar secure electronic transmission system (the “Platform”). The Platform is
provided “as is” and “as available.” Agent does not warrant the accuracy or
completeness of the Borrower Materials, or the adequacy of the Platform and
expressly disclaim liability for errors or omissions in the communications. No
warranty of any kind, express, implied or statutory, including, without
limitation, any warranty of merchantability, fitness for a particular purpose,
non-infringement of third party rights or freedom from viruses or other code
defects, is made by Agent in connection with the Borrower Materials or the
Platform. In no event shall Agent or any of the Agent Parties have any liability
to the Loan Parties, any Lender or any other person for damages of any kind,
including direct or indirect, special, incidental or consequential damages,
losses or expenses (whether in tort, contract or otherwise) arising out of any
Loan Party’s or Agent’s transmission of communications through the Internet,
except to the extent the liability of such person is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such person’s gross negligence or willful misconduct. Each Loan Party
further agrees that certain of the Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with respect
to the Loan Parties or their securities) (each, a “Public Lender”). The Loan
Parties shall

 

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be deemed to have authorized Agent and its Affiliates and the Lenders to treat
Borrower Materials marked “PUBLIC” or otherwise at any time filed with the SEC
as not containing any material non-public information with respect to the Loan
Parties or their securities for purposes of United States federal and state
securities laws. All Borrower Materials marked “PUBLIC” are permitted to be made
available through a portion of the Platform designated as “Public Investor” (or
another similar term). Agent and its Affiliates and the Lenders shall be
entitled to treat the Borrower Materials that are not marked “PUBLIC” or that
are not at any time filed with the SEC as being suitable only for posting on a
portion of the Platform not marked as “Public Investor” (or such other similar
term).

6.03    Notices. Promptly notify the Agent:

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

(b)    of any matter that has resulted or would reasonably be expected to result
in a Material Adverse Effect;

(c)    of any breach or non-performance of, or any default under, a Material
Contract or with respect to Material Indebtedness of any Loan Party or any
Subsidiary thereof;

(d)    of any dispute, litigation, investigation, proceeding or suspension
between any Loan Party or any Subsidiary thereof and any Governmental Authority
or the commencement of, or any material development in, any litigation or
proceeding affecting any Loan Party or any Subsidiary thereof, including
pursuant to any applicable Environmental Laws, in each case, which would
reasonably be expected to have a Material Adverse Effect;

(e)    of the occurrence of any ERISA Event;

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

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

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

(i)    of any collective bargaining agreement or other labor contract to which a
Loan Party becomes a party, or the application for the certification of a
collective bargaining agent;

(j)    of the filing of any Lien for unpaid Taxes against any Loan Party;

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

 

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(l)    of any transaction of the nature contained in ARTICLE VII hereof; and

(m)    of any failure by any Loan Party to pay rent or such other amounts due at
(i) any distribution centers or warehouses or any of a Loan Party’s locations if
such failure continues for more than fifteen (15) days following the day on
which such rent first came due and such failure would be reasonably likely to
result in a Material Adverse Effect.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.

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

6.05    Preservation of Existence, Etc.

(a)    Preserve, renew and maintain in full force and effect its legal existence
and good standing under the Laws of the jurisdiction of its organization or
formation except in a transaction permitted by Section 7.04 or 7.05; (b) take
all reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so would not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its Intellectual
Property, except to the extent such Intellectual Property is no longer used or
useful in the conduct of the business of the Loan Parties.

6.06    Maintenance of Properties

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

 

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6.07    Maintenance of Insurance.

(a)    Maintain with financially sound and reputable insurance companies not
Affiliates of the Loan Parties, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business and operating in the same or
similar locations or as is required by applicable Law, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons and as are reasonably acceptable to the Agent.

(b)    Cause fire and extended coverage policies maintained with respect to any
Collateral to be endorsed or otherwise amended to include (i) a lenders’ loss
payable clause regarding personal property, in form and substance reasonably
satisfactory to the Agent, which endorsements or amendments shall provide that
the insurer shall pay all proceeds otherwise payable to the Loan Parties under
the policies directly to the Agent, (ii) a provision to the effect that none of
the Loan Parties, Credit Parties or any other Person shall be a co-insurer and
(iii) such other provisions as the Agent may reasonably require from time to
time to protect the interests of the Credit Parties.

(c)    Cause commercial general liability policies to be endorsed to name the
Agent as an additional insured.

(d)    Cause business interruption policies to name the Agent as a lenders’ loss
payee and to be endorsed or amended to include (i) a provision that, from and
after the Closing Date, the insurer shall pay all proceeds otherwise payable to
the Loan Parties under the policies directly to the Agent, (ii) a provision to
the effect that none of the Loan Parties, the Agent, the Agent or any other
party shall be a co insurer and (iii) such other provisions as the Agent may
reasonably require from time to time to protect the interests of the Credit
Parties.

(e)    Cause each such policy referred to in this Section 6.07 to also provide
that it shall not be canceled (i) by reason of nonpayment of premium except upon
not less than ten (10) days’ prior written notice thereof by the insurer to the
Agent or (ii) for any other reason except upon not less than thirty (30) days’
prior written notice thereof by the insurer to the Agent.

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

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

 

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

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

6.08    Compliance with Laws. Comply (a) in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which the failure to comply therewith would not reasonably be expected to have a
Material Adverse Effect, and (b) with Sections 10.17 and 10.18.

6.09    Books and Records; Accountants

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

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

6.10    Inspection Rights

(a)    Permit representatives and independent contractors of the Agent to visit
and inspect any of its properties, to examine its corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts

 

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with its directors, officers, and Registered Public Accounting Firm, and permit
the Agent or professionals (including investment bankers, consultants,
accountants, and lawyers) retained by the Agent to conduct evaluations of the
Loan Parties’ business plan, forecasts and cash flows during normal business
hours, upon reasonable advance notice to the Borrower, all at the expense of the
Loan Parties; provided, however, that, unless an Event of Default shall have
occurred or be continuing, such visits and inspections shall be limited to one
such visit and inspection per calendar year conducted by the Agent (or any of
its representatives or independent contractors) on behalf of the Lenders.

(b)    Upon the request of the Agent after reasonable prior notice, permit the
Agent or professionals (including investment bankers, consultants, accountants,
and lawyers) retained by the Agent to conduct commercial finance examinations
and other evaluations, including, without limitation, of (i) the Borrower’s
practices in the computation of the Borrowing Base and (ii) the assets included
in the Borrowing Base and related financial information such as, but not limited
to, sales, gross margins, payables, accruals and reserves, provided, that, so
long as no Default or Event of Default exists, the Agent may, in its discretion,
undertake (i) no more than one (1) such commercial finance examination within
ninety (90) days (which period may be extended by the Agent in its sole
discretion) following the Closing Date, and (ii) thereafter, no more than one
(1) commercial finance examination in any consecutive twelve (12) month period
following the Closing Date, in each case at the Loan Parties’ expense.
Notwithstanding the foregoing, the Agent may cause additional commercial finance
examinations to be undertaken (i) as it in its discretion deems necessary or
appropriate, at its own expense or, (ii) if required by Law or if a Default or
Event of Default shall have occurred and be continuing, at the expense of the
Loan Parties and without advance notice.

(c)    Upon the request of the Agent after reasonable prior notice, permit the
Agent or professionals (including appraisers) retained by the Agent to conduct
appraisals of the Collateral, including, without limitation, the assets included
in the Borrowing Base, provided that, so long as no Default or Event of Default
exists, the Agent may, in its discretion, undertake (i) no more than one
(1) inventory appraisal within ninety (90) days (which period may be extended by
the Agent in its sole discretion) following the Closing Date at the Loan
Parties’ expense, and (ii) thereafter, no more than one (1) inventory appraisal
in any consecutive twelve (12) month period following the Closing Date at the
Loan Parties’ expense and no more than two (2) inventory appraisals in any
consecutive twelve (12) month period following the Closing Date at the Loan
Parties’ expense when Availability is less than 20% of the Loan Cap.
Notwithstanding the foregoing, the Agent may cause additional appraisals to be
undertaken (i) as it in its discretion deems necessary or appropriate, at its
own expense or, (ii) if required by Law or if a Default or Event of Default
shall have occurred and be continuing, at the expense of the Loan Parties and
without advance notice.

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

 

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

6.13    Cash Management.

(a)    (i) On or prior to the Closing Date, deliver to the Agent copies of
notifications (each, a “Credit Card Notification”) substantially in the form
attached hereto as Exhibit G which have been executed on behalf of such Loan
Party and delivered to such Loan Party’s Credit Card Issuers and Credit Card
Processors listed on Schedule 5.21(b) to the Disclosure Letter, and (ii) unless
previously delivered on or prior to the Closing Date, by the date set forth in
Section 6.21, use commercially reasonable efforts to enter into a Blocked
Account Agreement reasonably satisfactory in form and substance to the Agent
with each Blocked Account Bank (collectively, the “Blocked Accounts”).

(b)    [Reserved].

(c)    The Loan Parties shall ACH or wire transfer no less frequently than
(x) twice per week during the calendar months of November and December and
(y) weekly during all other calendar months (and whether or not there are then
any outstanding Obligations) to a Blocked Account all amounts on deposit in each
DDA (net of any minimum balance, not to exceed $2,500.00, as may be required to
be kept in the subject DDA by the depository institution at which such DDA is
maintained) and all payments due from all Credit Card Issuers and Credit Card
Processors.

 

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(d)    Each Blocked Account Agreement shall require, upon notice from Agent
which notice shall be delivered only after the occurrence and during the
continuance of a Cash Dominion Event, the ACH or wire transfer no less
frequently than daily (and whether or not there are then any outstanding
Obligations) (net of any minimum balance, not to exceed $2,500.00, as may be
required to be kept in the subject DDA by the depository institution at which
such DDA is maintained) to the concentration account maintained by the Agent at
Wells Fargo (the “Concentration Account”), of all cash receipts and collections
received by each Loan Party from all sources, including, without limitation, the
following:

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

(ii)    all proceeds of collections of Accounts;

(iii)    all cash payments received by a Loan Party from any Person or from any
source or on account of any Disposition or other transaction or event;

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

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

(vi)    the proceeds of all credit card charges.

(e)    The Concentration Account shall at all times be under the sole dominion
and control of the Agent. The Loan Parties hereby acknowledge and agree that
(i) the Loan Parties have no right of withdrawal from the Concentration Account,
(ii) the funds on deposit in the Concentration Account shall at all times be
collateral security for all of the Obligations and (iii) the funds on deposit in
the Concentration Account shall be applied to the Obligations as provided in
this Agreement. In the event that, notwithstanding the provisions of this
Section 6.13, any Loan Party receives or otherwise has dominion and control of
any such cash receipts or collections, such receipts and collections shall be
held in trust by such Loan Party for the Agent, shall not be commingled with any
of such Loan Party’s other funds or deposited in any account of such Loan Party
and shall, not later than the Business Day after receipt thereof, be deposited
into the Concentration Account or dealt with in such other fashion as such Loan
Party may be instructed by the Agent.

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

 

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6.14    Information Regarding the Collateral.

Furnish to the Agent at least thirty (30) days prior written notice of any
change in: (i) any Loan Party’s name or in any trade name used to identify it in
the conduct of its business or in the ownership of its properties; (ii) the
location of any Loan Party’s chief executive office, its principal place of
business, any office in which it maintains books or records (to the extent such
books and records are not duplicates) relating to Collateral owned by it or any
office or facility at which Collateral owned by it is located (including the
establishment of any such new office or facility); (iii) any Loan Party’s
organizational structure or jurisdiction of incorporation or formation; or
(iv) any Loan Party’s Federal Taxpayer Identification Number or organizational
identification number assigned to it by its state of organization. The Loan
Parties agree not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the UCC or otherwise that are
required in order for the Agent to continue at all times following such change
to have a valid, legal and perfected first priority security interest (subject
to Permitted Encumbrances that have priority by operation of Law) in all the
Collateral for its own benefit and the benefit of the other Credit Parties.

6.15    Physical Inventories.

(a)    Cause not less than one (1) physical inventory to be undertaken, at the
expense of the Loan Parties, in each twelve (12) month period, consistent with
past practices, conducted by such inventory takers as are reasonably
satisfactory to the Agent and following such methodology as is consistent with
the methodology used in the immediately preceding inventory or as otherwise may
be reasonably satisfactory to the Agent (it being agreed that use of cycle
counts shall be permitted). The Agent, at the expense of the Loan Parties, may
participate in and/or observe each scheduled physical count of Inventory which
is undertaken on behalf of any Loan Party, it being understood that the Agent
shall provide at least thirty (30) days’ prior notice to such Loan Party if
Agent wishes to so participate or observe. The Borrower, within ninety (90) days
following the completion of such inventory, shall provide the Agent with a
reconciliation of the results of such inventory (as well as of any other
physical inventory or cycle counts undertaken by a Loan Party) and shall post
such results to the Loan Parties’ stock ledgers and general ledgers, as
applicable.

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

6.16    Environmental Laws.

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

 

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6.17    Further Assurances.

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

(b)    If any material assets are acquired by any Loan Party after the Closing
Date (other than assets constituting Collateral under the Security Documents
that become subject to the perfected first-priority Lien under the Security
Documents upon acquisition thereof), notify the Agent thereof, and the Loan
Parties will cause such assets to be subjected to a Lien securing the
Obligations and will take such actions as shall be necessary or shall be
reasonably requested by the Agent to grant and perfect such Liens, including
actions described in paragraph (a) of this Section 6.17, all at the expense of
the Loan Parties. In no event shall compliance with this Section 6.17(b) waive
or be deemed a waiver or Consent to any transaction giving rise to the need to
comply with this Section 6.17(b) if such transaction was not otherwise expressly
permitted by this Agreement or constitute or be deemed to constitute Consent to
the inclusion of any acquired assets in the computation of the Borrowing Base.

6.18    Compliance with Terms of Leaseholds.

Except as would not reasonably be expected to have a Material Adverse Effect,
(a) make all payments and otherwise perform all obligations in respect of all
Leases to which any Loan Party or any of its Subsidiaries is a party, keep such
Leases in full force and effect, (b) not allow such Leases to lapse or be
terminated or any rights to renew such Leases to be forfeited or cancelled,
(c) notify the Agent of any default by any party with respect to such Leases and
cooperate with the Agent in all respects to cure any such default, and (d) cause
each of its Subsidiaries to do the foregoing.

6.19    Material Contracts. (a) Perform and observe in all material respects the
terms and provisions of each Material Contract to be performed or observed by
it, (b) maintain each such Material Contract in full force and effect unless the
Borrower determines in its prudent business judgment that such maintenance is no
longer desirable, (c) take commercially reasonable efforts, in its prudent
business judgment, to enforce each such Material Contract in accordance with its
terms, (d) upon reasonable request of the Agent, during the existence of an
Event of Default, make to each other party to each such Material Contract such
demands and requests for information and reports or for action as any Loan Party
or any of its Subsidiaries is entitled to make under such Material Contract, and
(e) cause each of its Subsidiaries to do the foregoing.

 

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6.20    OFAC; Sanctions.

Each Loan Party will, and will cause each of its Subsidiaries to comply in all
material respects with all applicable Sanctions, Anti-Corruption Laws and
Anti-Money Laundering Laws. Each of the Loan Parties and its Subsidiaries shall
implement and maintain in effect policies and procedures designed to ensure
compliance by the Loan Parties and their Subsidiaries and their respective
directors, officers, employees, agents and Affiliates with all Sanctions,
Anti-Corruption Laws and Anti-Money Laundering Laws. Each of the Loan Parties
shall and shall cause their respective Subsidiaries to comply with all
Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws.

6.21    Post-Closing Matters. Each Loan Party will take the following actions
within the time periods set forth below (or such longer period as the Agent may
agree in its sole discretion):

(a)    on or before the date that is 120 days following the Closing Date,
deliver to the Agent the Blocked Account Agreements required under
Section 6.13(a);

(b)    on or before the date that is 60 days following the Closing Date, deliver
to the Agent all certificates, agreements or instruments required to be
delivered under Section 3.1 of the Security Agreement and the original
Intercompany Note and allonge thereto;

(c)    on or before the date that is 30 days following the Closing Date, deliver
to the Agent all endorsements and insurance certificates required to be obtained
by the Loan Parties pursuant to Section 6.07; and

(d)    on or before the date that is 120 days following the Closing Date,
deliver to the Agent all Securities Account Control Agreements (as defined in
the Security Agreement) required to be delivered under Section 3.4(b) of the
Security Agreement.

ARTICLE VII

NEGATIVE COVENANTS

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

7.01    Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired or sign or
file or suffer to exist under the UCC or any similar Law or statute of any
jurisdiction a financing statement that names any Loan Party or any Subsidiary
thereof as debtor; sign or suffer to exist any security agreement authorizing
any Person thereunder to file such financing statement; sell any of its property
or assets subject to an understanding or agreement (contingent or otherwise) to
repurchase such property or assets with recourse to it or any of its
Subsidiaries; or assign or otherwise transfer any accounts or other rights to
receive income, other than, as to all of the above, Permitted Encumbrances.

 

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7.02    Investments. Make any Investments, except Permitted Investments.

7.03    Indebtedness; Disqualified Stock.

(a)    Create, incur, assume, guarantee, suffer to exist or otherwise become or
remain liable with respect to, any Indebtedness, except Permitted Indebtedness
or (b) issue Disqualified Stock.

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

(a)    any Subsidiary which is not a Loan Party may merge with (i) a Loan Party,
provided that the Loan Party shall be the continuing or surviving Person or the
surviving Person shall join as a Loan Party in accordance with Section 6.12, or
(ii) any one or more other Subsidiaries which are not Loan Parties, provided
that when any wholly-owned Subsidiary is merging with another Subsidiary that is
not wholly-owned, the wholly-owned Subsidiary shall be the continuing or
surviving Person;

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

(c)    in connection with a Permitted Acquisition, any Subsidiary of a Loan
Party may merge with or into or consolidate with any other Person or permit any
other Person to merge with or into or consolidate with it; provided that the
Person surviving such merger shall be a wholly-owned Subsidiary of a Loan Party
and such Person shall become a Loan Party in accordance with the provisions of
Section 6.12 hereof;

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

(e)    any Subsidiary (other than Borrower) may liquidate or dissolve if the
Borrower determines in good faith that such liquidation is in the best interests
of the Borrower and would not have a Material Adverse Effect; provided that,
prior to such liquidation or dissolution, such Subsidiary shall transfer all of
its assets of the type included in the Borrowing Base to a Loan Party.

7.05    Dispositions. Make any Disposition, except Permitted Dispositions.

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

(a)    The Loan Parties and each Subsidiary may make Restricted Payments to any
other Loan Party or Subsidiary;

 

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

(c)    if either the Payment Conditions or Investment and RP Conditions are
satisfied, the Loan Parties and each Subsidiary may purchase, redeem or
otherwise acquire Equity Interests issued by it;

(d)    if either the Payment Conditions or Investment and RP Conditions are
satisfied, the Borrower may declare or pay cash dividends to its stockholders;
and

(e)    any non-wholly owned Subsidiaries of Borrower that are not Loan Parties
may declare and make dividend payments or other distributions to their
respective stockholders.

7.07    Prepayments of Indebtedness. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner any
Indebtedness, or make any payment in violation of any subordination terms of any
Subordinated Indebtedness, except (a) as long as no Default or Event of Default
then exists, regularly scheduled or mandatory repayments, repurchases,
redemptions or defeasances of (i) Permitted Indebtedness (other than
Subordinated Indebtedness), and (ii) Subordinated Indebtedness in accordance
with the subordination terms thereof or the applicable subordination agreement
relating thereto, (b) voluntary prepayments, repurchases, redemptions or
defeasances of (i) Permitted Indebtedness (but excluding on account of any
Subordinated Indebtedness) as long as the either Payment Conditions or
Investment and RP Conditions are satisfied, and (ii) Subordinated Indebtedness
in accordance with the subordination terms thereof or the applicable
subordination agreement relating thereto, and as long as the either Payment
Conditions or Investment and RP Conditions are satisfied, (c) Permitted
Refinancings of any such Indebtedness, or (d) as long as no Default or Event of
Default or Cash Dominion Event then exists and is continuing, such prepayments,
redemptions, repurchases or defeasements of Indebtedness made substantially
simultaneously with proceeds of Equity Interests issued by Borrower.

7.08    Change in Nature of Business. Engage in any line of business
substantially different from the business conducted by the Loan Parties and
their Subsidiaries on the Closing Date or any business related, incidental or
ancillary thereto.

7.09    Transactions with Affiliates. Enter into, renew, extend or be a party to
any transaction of any kind with any Affiliate of any Loan Party, whether or not
in the ordinary course of business, other than on fair and reasonable terms
substantially as favorable to the Loan Parties or such Subsidiary as would be
obtainable by the Loan Parties or such Subsidiary at the time in a comparable
arm’s length transaction with a Person other than an Affiliate, provided that
the foregoing restriction shall not apply to (a) a transaction between or among
the Loan Parties, (b) transactions described on Schedule 7.09 to the Disclosure
Letter, (c) advances for commissions, travel and other similar purposes in the
ordinary course of business to directors, officers and employees, (d) the
issuance of Equity Interests in the Borrower to any officer, director, employee
or consultant of the Borrower or any of its Subsidiaries, (e) the payment of
reasonable fees and out-of-pocket costs to directors, and compensation and
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and indemnities provided for the benefit of, directors, officers or employees of
the Borrower or any of its Subsidiaries, and (f) any issuances of securities of
the Borrower (other than Disqualified Stock and other Equity Interests not
permitted hereunder) or other payments, awards or grants in cash, securities or
otherwise pursuant to, or the funding of, employment agreements, stock options
and stock ownership plans (in each case in respect of Equity Interests in the
Borrower) of the Borrower or any of its Subsidiaries.

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

7.11    Use of Proceeds. Use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately,
(a) to purchase or carry margin stock (within the meaning of Regulation U of the
FRB) or to extend credit to others for the purpose of purchasing or carrying
margin stock or to refund Indebtedness originally incurred for such purpose;
(b) to make any payments to a Sanctioned Entity or a Sanctioned Person, to
finance any investments in a Sanctioned Entity or a Sanctioned Person, to fund
any operations of a Sanctioned Entity or a Sanctioned Person, or in any other
manner that would result in a violation of Sanctions by any Person; or (c) for
purposes other than those permitted under this Agreement.

7.12    Amendment of Material Documents.

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

7.13    Fiscal Year.

Change the Fiscal Year of any Loan Party, or the accounting policies or
reporting practices of the Loan Parties, except as required by GAAP.

7.14    Deposit Accounts; Credit Card Processors.

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

 

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7.15    Financial Covenant. Permit Availability to be (x) at any time prior to
the Stepdown Date, less than 15% of the Loan Cap, and (y) at any time after the
Stepdown Date, less than 10% of the Loan Cap.

7.16    Sale and Leaseback Transactions. Borrower and its Subsidiaries shall not
enter into any arrangement, directly or indirectly, with any person whereby it
shall sell or transfer any property used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such property or other
property which it intends to use for substantially the same purpose or purposes
as the property being sold or transferred (a “Sale and Leaseback Transaction”)
unless (a) the sale of such property is entered into in the ordinary course of
business and is made for cash consideration in an amount not less than the fair
market value of such property, (b) the Sale and Leaseback Transaction is
permitted by Section 7.05 and is consummated within sixty (60) days after the
date on which such property is sold or transferred, (c) any Liens arising in
connection with its use of the property are permitted by clause (q) of the
definition of Permitted Encumbrances, (d) the Sale and Leaseback Transaction
would be permitted under Section 7.03, assuming the Attributable Indebtedness
with respect to the Sale and Leaseback Transaction constituted Indebtedness
under Section 7.03 and (e) the Attributable Indebtedness incurred with respect
to such Sale and Leaseback Transactions shall not exceed (i) for any property
other than one of the Borrower’s distribution centers, $25,000,000 for such Sale
and Leaseback Transactions in the aggregate in any period of twelve
(12) consecutive months and (ii) for one of the Borrower’s distribution centers,
$200,000,000.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

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

(a)    Non-Payment. The Borrower or any other Loan Party fails to pay when and
as required to be paid herein, (i) any amount of principal of any Loan or any
L/C Obligation, or deposit any funds as Cash Collateral in respect of L/C
Obligations, or (ii) any interest on any Loan or on any L/C Obligation, or any
fee due hereunder, or (iii) any other amount payable hereunder or under any
other Loan Document; or

(b)    Specific Covenants. (i) Any Loan Party fails to perform or observe any
term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05
(solely with respect to the existence of the Borrower), 6.07, 6.10, 6.11, 6.12,
6.13, 6.14, 6.21 or Article VII; or

(c)    Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or

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

(e)    Cross-Default. (i) Any Loan Party or any Subsidiary thereof (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Material Indebtedness
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement), or (B) fails
to observe or perform any other agreement or condition relating to any such
Material Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event occurs, the effect of which
default or other event is to cause, or to permit the holder or holders of such
Material Indebtedness or the beneficiary or beneficiaries of any Guarantee
thereof (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which a Loan Party or any Subsidiary
thereof is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which a Loan
Party or any Subsidiary thereof is an Affected Party (as so defined) and, in
either event, the Swap Termination Value owed by the Loan Party or such
Subsidiary as a result thereof is greater than $25,000,000; or

(f)    Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes, consents to the institution of or declares its intention to
institute any proceeding under any Debtor Relief Law, or makes an assignment for
the benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer for it or for all or any material part of its property; or a proceeding
shall be commenced or a petition filed, without the application or consent of
such Person, seeking or requesting the appointment of any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is
appointed and the appointment continues undischarged, undismissed or unstayed
for 30 calendar days or an order or decree approving or ordering any of the
foregoing shall be entered; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or

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

 

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(h)    Judgments. There is entered against any Loan Party or any Subsidiary
thereof (i) one or more judgments or orders for the payment of money in an
aggregate amount (as to all such judgments and orders) exceeding $25,000,000 (to
the extent not covered by independent third-party insurance as to which the
insurer is rated at least “A” by A.M. Best Company, has been notified of the
potential claim and does not dispute coverage), or (ii) any one or more
non-monetary judgments that have, or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, is not in effect; or

(i)    ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or would reasonably be expected to result
in liability of any Loan Party under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $25,000,000
or which would reasonably likely result in a Material Adverse Effect, or (ii) a
Loan Party or any ERISA Affiliate fails to pay when due, after the expiration of
any applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of $25,000,000 or which would reasonably likely
result in a Material Adverse Effect; or

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

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

(l)    Cessation of Business. Except as otherwise expressly permitted hereunder,
any Loan Party shall take any action, or shall make a determination, whether or
not yet formally approved by any Loan Party’s management or board of directors,
to (i) suspend the operation of all or a material portion of its business in the
ordinary course, (ii) suspend the payment of any material obligations in the
ordinary course or suspend the performance under material contracts in the
ordinary course, (iii) solicit proposals for the liquidation of,

 

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or undertake to liquidate, all or a material portion of its assets or Store
locations, or (iv) solicit proposals for the employment of, or employ, an agent
or other third party to conduct a program of closings, liquidations, or
“Going-Out-Of-Business” sales of any material portion of its business; or

(m)    Loss of Collateral. There occurs any uninsured loss to any material
portion of the Collateral; or

(n)    Breach of Contractual Obligation. Any Loan Party or any Subsidiary
thereof fails to make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) in respect of any
Material Contract or fails to observe or perform any other agreement or
condition relating to any such Material Contract or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
occurs, the effect of which default or other event is to cause, or to permit the
counterparty to such Material Contract to terminate such Material Contract; or

(o)    Indictment. The indictment or institution of any legal process or
proceeding against, any Loan Party or any Subsidiary thereof, under any federal,
state, municipal, and other criminal statute, rule, regulation, order, or other
requirement having the force of law for a felony; or

(p)    Guaranty. The termination or attempted termination of any Facility
Guaranty except as expressly permitted hereunder or under any other Loan
Document; or

(q)    Subordination. (i) The subordination provisions of the documents
evidencing or governing any Subordinated Indebtedness (any such provisions being
referred to as the “Subordination Provisions”) shall, in whole or in part,
terminate, cease to be effective or cease to be legally valid, binding and
enforceable against any holder of the applicable Indebtedness; or (ii) the
Borrower or any other Loan Party shall, directly or indirectly, disavow or
contest in any manner (A) the effectiveness, validity or enforceability of any
of the Subordination Provisions, (B) that the Subordination Provisions exist for
the benefit of the Credit Parties, or (C) that all payments of principal of or
premium and interest on the applicable Subordinated Indebtedness, or realized
from the liquidation of any property of any Loan Party, shall be subject to any
of the Subordination Provisions.

8.02    Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Agent may, or, at the request of the Required Lenders shall,
take any or all of the following actions:

(a)    declare the Commitments of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
Commitments and obligation shall be terminated;

(b)    declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other Obligations (other than
Obligations under any Swap Contract) to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Loan Parties;

 

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(c)    require that the Loan Parties Cash Collateralize the L/C Obligations; and

(d)    whether or not the maturity of the Obligations shall have been
accelerated pursuant hereto, proceed to protect, enforce and exercise all rights
and remedies of the Credit Parties under this Agreement, any of the other Loan
Documents or applicable Law, including, but not limited to, by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations are
evidenced, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of the Credit Parties;

provided, however, that upon the occurrence of any Event of Default with respect
to any Loan Party or any Subsidiary thereof under Section 8.01(f), the
obligation of each Lender to make Loans and any obligation of the L/C Issuer to
make L/C Credit Extensions shall automatically terminate, the unpaid principal
amount of all outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable, and the obligation of the Loan
Parties to Cash Collateralize the L/C Obligations as aforesaid shall
automatically become effective, in each case without further act of the Agent or
any Lender.

No remedy herein is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of Law.

Each of the Lenders agrees that it shall not, unless specifically requested to
do so in writing by Agent, take or cause to be taken any action, including, the
commencement of any legal or equitable proceedings to enforce any Loan Document
against any Loan Party or to foreclose any Lien on, or otherwise enforce any
security interest in, or other rights to, any of the Collateral.

8.03    Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Agent in the
following order:

First, to payment of that portion of the Obligations (excluding the Other
Liabilities) constituting fees, indemnities, Credit Party Expenses and other
amounts (including fees, charges and disbursements of counsel to the Agent and
amounts payable under Article III) payable to the Agent;

Second, to payment of that portion of the Obligations (excluding the Other
Liabilities) constituting indemnities, Credit Party Expenses, and other amounts
(other than principal, interest and fees) payable to the Lenders and the L/C
Issuer (including fees, charges and disbursements of counsel to the respective
Lenders and the L/C Issuer and amounts payable under Article III), ratably among
them in proportion to the amounts described in this clause Second payable to
them;

 

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Third, to the extent not previously reimbursed by the Lenders, to payment to the
Agent of that portion of the Obligations constituting principal and accrued and
unpaid interest on any Permitted Overadvances;

Fourth, to the extent that Swing Line Loans have not been refinanced by a
Committed Loan, payment to the Swing Line Lender of that portion of the
Obligations constituting accrued and unpaid interest on the Swing Line Loans;

Fifth, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Committed Loans and other Obligations, and fees
(including Letter of Credit Fees), ratably among the Lenders and the L/C Issuer
in proportion to the respective amounts described in this clause Fifth payable
to them;

Sixth, to the extent that Swing Line Loans have not been refinanced by a
Committed Loan, to payment to the Swing Line Lender of that portion of the
Obligations constituting unpaid principal of the Swing Line Loans;

Seventh, to payment of that portion of the Obligations constituting unpaid
principal of the Committed Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Seventh held by them;

Eighth, to the Agent for the account of the L/C Issuer, to Cash Collateralize
that portion of L/C Obligations comprised of the aggregate undrawn amount of
Letters of Credit;

Ninth, to payment of all other Obligations (including without limitation the
cash collateralization of unliquidated indemnification obligations, but
excluding any Other Liabilities), ratably among the Credit Parties in proportion
to the respective amounts described in this clause Ninth held by them;

Tenth, to payment of that portion of the Obligations arising from Secured Cash
Management Services for which a Cash Management Reserve has been implemented and
is in effect, ratably among the Credit Parties in proportion to the respective
amounts described in this clause Tenth held by them;

Eleventh, to payment of all other Obligations arising from Secured Bank Products
for which a Bank Product Reserve has been implemented and is in effect, ratably
among the Credit Parties in proportion to the respective amounts described in
this clause Eleventh held by them;

Twelfth, to payment of all other Obligations arising from Cash Management
Services not paid pursuant to clause Tenth above;

Thirteenth, to payment of all other Obligations arising from Secured Bank
Products not paid pursuant to clause Eleventh above; and

 

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Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Loan Parties or as otherwise required by Law.

Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Eighth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

ARTICLE IX

THE AGENT

9.01    Appointment and Authority. Each of the Lenders (including in its
capacities as a potential provider of Cash Management Services and/or Bank
Products) and the Swing Line Lender hereby irrevocably appoints Wells Fargo to
act on its behalf as the Agent hereunder and under the other Loan Documents
(other than the Swap Contracts) and authorizes the Agent to take such actions on
its behalf and to exercise such powers as are delegated to the Agent by the
terms hereof or thereof (including, without limitation, acquiring, holding and
enforcing any and all Liens on Collateral granted by any of the Loan Parties to
secure any of the Obligations), together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely for the
benefit of the Agent, the Lenders and the L/C Issuer, and no Loan Party or any
Subsidiary thereof shall have rights as a third party beneficiary of any of such
provisions.

9.02    Rights as a Lender. The Person serving as the Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though they were not the Agent and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated or unless the context
otherwise requires, include the Person serving as the Agent hereunder in its
individual capacity. Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with the Loan Parties or any
Subsidiary or other Affiliate thereof as if such Person were not the hereunder
and without any duty to account therefor to the Lenders.

9.03    Exculpatory Provisions. The Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Agent:

(a)    shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default or an Event of Default has occurred and is continuing;

(b)    shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Agent is required to
exercise as directed in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents), provided that the Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose the Agent
to liability or that is contrary to any Loan Document or applicable law; and

 

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(c)    shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Loan Parties or any of its Affiliates
that is communicated to or obtained by the Person serving as the Agent or any of
its Affiliates in any capacity.

The Agent shall not be liable for any action taken or not taken by it (i) with
the Consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Agent shall believe
in good faith shall be necessary, under the circumstances as provided in
Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or
willful misconduct as determined by a final and non-appealable judgment of a
court of competent jurisdiction.

The Agent shall not be deemed to have knowledge of any Default or Event of
Default unless and until notice describing such Default or Event of Default is
given to the Agent by the Loan Parties, a Lender or the L/C Issuer. Upon the
occurrence of a Default or Event of Default, the Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders. Unless and until the Agent shall have received such
direction, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to any such Default or Event of
Default as it shall deem advisable in the best interest of the Credit Parties.
In no event shall the Agent be required to comply with any such directions to
the extent that the Agent believes that its compliance with such directions
would be unlawful.

The Agent shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
this Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or the creation,
perfection or priority of any Lien purported to be created by the Security
Documents, (v) the value or the sufficiency of any Collateral, or (vi) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Agent.

9.04    Reliance by Agent.

The Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including, but not limited to, any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Agent also may rely upon any statement made to it orally or
by telephone and believed by it to have been made by the proper Person, and
shall not incur any liability for relying thereon. In determining compliance
with any condition hereunder to the making of a Loan, or the issuance of a
Letter of Credit, that by its terms must be fulfilled to the satisfaction of a
Lender or the L/C Issuer, the Agent may presume that such condition is
satisfactory to such Lender or the L/C Issuer unless the Agent shall have
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to the contrary from such Lender or the L/C Issuer prior to the making of such
Loan or the issuance of such Letter of Credit. The Agent may consult with legal
counsel (who may be counsel for any Loan Party), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.

9.05    Delegation of Duties. The Agent may perform any and all of its duties
and exercise its rights and powers hereunder or under any other Loan Document by
or through any one or more sub agents appointed by the Agent. The Agent and any
such sub agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory
provisions of this Article shall apply to any such sub agent and to the Related
Parties of the Agent and any such sub agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as the Agent.

9.06    Resignation of Agent. The Agent may at any time give written notice of
its resignation to the Lenders and the Borrower. Upon receipt of any such notice
of resignation, the Required Lenders shall have the right, in consultation with
the Borrower, to appoint a successor, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may on
behalf of the Lenders and the L/C Issuer, appoint a successor Agent meeting the
qualifications set forth above; provided that if the Agent shall notify the
Borrower and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents (except
that in the case of any Collateral held by the Agent on behalf of the Lenders or
the L/C Issuer under any of the Loan Documents, the retiring Agent shall
continue to hold such collateral security until such time as a successor Agent
is appointed) and (2) all payments, communications and determinations provided
to be made by, to or through the Agent shall instead be made by or to each
Lender and the L/C Issuer directly, until such time as the Required Lenders
appoint a successor Agent as provided for above in this Section. Upon the
acceptance of a successor’s appointment as Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or retired) Agent, and the retiring Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents (if not already discharged therefrom as provided above in this
Section). The fees payable by the Borrower to a successor Agent shall be the
same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the retiring Agent’s resignation hereunder
and under the other Loan Documents, the provisions of this Article and
Section 10.04 shall continue in effect for the benefit of such retiring Agent,
its sub agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Agent was acting
as Agent hereunder.

Any resignation by Wells Fargo as Agent pursuant to this Section shall also
constitute its resignation as Swing Line Lender and the resignation of Wells
Fargo as L/C Issuer. Upon the acceptance of a successor’s appointment as Agent
hereunder, (a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring L/C Issuer and Swing Line
Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged

 

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from all of their respective duties and obligations hereunder or under the other
Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit
in substitution for the Letters of Credit, if any, outstanding at the time of
such succession or make other arrangements satisfactory to the retiring L/C
Issuer to effectively assume the obligations of the retiring L/C Issuer with
respect to such Letters of Credit.

9.07    Non-Reliance on Agent and Other Lenders. Each Lender and the L/C Issuer
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender and the L/C Issuer also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder. Except as provided in Section 9.12, the Agent shall not
have any duty or responsibility to provide any Credit Party with any other
credit or other information concerning the affairs, financial condition or
business of any Loan Party that may come into the possession of the Agent.

9.08    [Reserved].

9.09    Agent May File Proofs of Claim. In case of the pendency of any
proceeding under any Debtor Relief Law or any other judicial proceeding relative
to any Loan Party, the Agent (irrespective of whether the principal of any Loan
or L/C Obligation shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Agent shall have made
any demand on the Loan Parties) shall be entitled and empowered, by intervention
in such proceeding or otherwise.

(a)    to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuer, the Agent and the other Credit Parties (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders,
the L/C Issuer, the Agent, such Credit Parties and their respective agents and
counsel and all other amounts due the Lenders, the L/C Issuer the Agent and such
Credit Parties under Sections 2.03(i), 2.03(j), 2.03(k), 2.03(l) and 2.03(m), as
applicable, 2.09 and 10.04) allowed in such judicial proceeding; and

(b)    to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Agent and, if the
Agent shall consent to the making of such payments directly to the Lenders and
the L/C Issuer, to pay to the Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Agent and its agents
and counsel, and any other amounts due the Agent under Sections 2.09 and 10.04.

 

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Nothing contained herein shall be deemed to authorize the Agent to authorize or
consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or the L/C Issuer or to authorize the
Agent to vote in respect of the claim of any Lender or the L/C Issuer in any
such proceeding.

9.10    Collateral and Guaranty Matters. The Credit Parties (including, as
applicable, in their capacities as potential providers of Bank Products and/or
Cash Management Services) irrevocably authorize the Agent, at its option and in
its discretion,

(a)    to release any Lien on any property granted to or held by the Agent under
any Loan Document (i) upon termination of the Aggregate Commitments and payment
in full of all Obligations (other than contingent indemnification obligations
for which no claim has been asserted) and the expiration, termination or Cash
Collateralization of all Letters of Credit, (ii) that is sold or to be sold as
part of or in connection with any sale permitted hereunder or under any other
Loan Document, or (iii) if approved, authorized or ratified in writing by the
Applicable Lenders in accordance with Section 10.01;

(b)    to subordinate any Lien on Collateral other than Inventory, Accounts,
Credit Card Receivables, DDAs and securities accounts to the holder of any Lien
permitted by clause (h) of the definition of Permitted Encumbrances to secure
Indebtedness permitted pursuant to clause (c) of the definition of Permitted
Indebtedness; and

(c)    to release any Guarantor from its obligations under the Facility Guaranty
if such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder.

Upon request by the Agent at any time, the Applicable Lenders will confirm in
writing the Agent’s authority to release or subordinate its interest in
particular types or items of property, or to release any Guarantor from its
obligations under the Facility Guaranty pursuant to this Section 9.10. In each
case as specified in this Section 9.10, the Agent will, at the Loan Parties’
expense, execute and deliver to the applicable Loan Party such documents as such
Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the Security
Documents or to subordinate its interest in such item, or to release such
Guarantor from its obligations under the Facility Guaranty, in each case in
accordance with the terms of the Loan Documents and this Section 9.10.

9.11    Notice of Transfer.

The Agent may deem and treat a Lender party to this Agreement as the owner of
such Lender’s portion of the Obligations for all purposes, unless and until, and
except to the extent, an Assignment and Acceptance shall have become effective
as set forth in Section 10.06.

9.12    Reports and Financial Statements.

By signing this Agreement, each Lender:

(a)    agrees to furnish the Agent (x) after the incurrence thereof (and
thereafter at such frequency as the Agent may reasonably request), with a
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Bank Products and Secured Cash Management Services due or to become due to such
Lender or its Affiliates and (y) after the occurrence and during the continuance
of a Cash Dominion Event (and thereafter at such frequency as the Agent may
reasonably request) with a summary of all Other Liabilities due or to become due
to such Lender. In connection with any distributions to be made hereunder, the
Agent shall be entitled to assume that no amounts are due to any Lender on
account of any Secured Bank Products, Secured Cash Management Services, and
Other Liabilities unless the Agent has received written notice thereof from such
Lender;

(b)    is deemed to have requested that the Agent furnish such Lender, promptly
after they become available, copies of all Borrowing Base Certificates and
financial statements required to be delivered by the Borrower hereunder and all
commercial finance examinations and appraisals of the Collateral received by the
Agent (collectively, the “Reports”);

(c)    expressly agrees and acknowledges that the Agent makes no representation
or warranty as to the accuracy of the Reports, and shall not be liable for any
information contained in any Report;

(d)    expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that the Agent or any other party performing any audit
or examination will inspect only specific information regarding the Loan Parties
and will rely significantly upon the Loan Parties’ books and records, as well as
on representations of the Loan Parties’ personnel;

(e)    agrees to keep all Reports confidential in accordance with the provisions
of Section 10.07 hereof; and

(f)    without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold the Agent and any such other
Lender preparing a Report harmless from any action the indemnifying Lender may
take or conclusion the indemnifying Lender may reach or draw from any Report in
connection with any Credit Extensions that the indemnifying Lender has made or
may make to the Borrower, or the indemnifying Lender’s participation in, or the
indemnifying Lender’s purchase of, a Loan or Loans; and (ii) to pay and protect,
and indemnify, defend, and hold the Agent and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including attorney costs) incurred by the
Agent and any such other Lender preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.

9.13    Agency for Perfection.

Each Lender hereby appoints each other Lender as agent for the purpose of
perfecting Liens for the benefit of the Agent and the Lenders, in assets which,
in accordance with Article 9 of the UCC or any other applicable Law of the
United States can be perfected only by possession. Should any Lender (other than
the Agent) obtain possession of any such Collateral, such Lender shall notify
the Agent thereof, and, promptly upon the Agent’s request therefor shall deliver
such Collateral to the Agent or otherwise deal with such Collateral in
accordance with the Agent’s instructions.

 

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9.14    Indemnification of Agent. Without limiting the obligations of the Loan
Parties hereunder, the Lenders hereby agree to indemnify the Agent, the L/C
Issuer and any Related Party, as the case may be, ratably according to their
Applicable Percentages, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Agent, the L/C Issuer and their Related Parties in
any way relating to or arising out of this Agreement or any other Loan Document
or any action taken or omitted to be taken by the Agent, the L/C Issuer and
their Related Parties in connection therewith; provided, that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent’s, the L/C Issuer’s and their Related Parties’ gross negligence
or willful misconduct as determined by a final and nonappealable judgment of a
court of competent jurisdiction.

9.15    Relation among Lenders. The Lenders are not partners or co-venturers,
and no Lender shall be liable for the acts or omissions of, or (except as
otherwise set forth herein in case of the Agent) authorized to act for, any
other Lender.

9.16    Defaulting Lenders.

(a)    Notwithstanding the provisions of Section 2.14 hereof, the Agent shall
not be obligated to transfer to a Defaulting Lender any payments made by the
Borrower to the Agent for the Defaulting Lender’s benefit or any proceeds of
Collateral that would otherwise be remitted hereunder to the Defaulting Lender,
and, in the absence of such transfer to the Defaulting Lender, the Agent shall
transfer any such payments (i) first, to the Swing Line Lender to the extent of
any Swing Line Loans that were made by the Swing Line Lender and that were
required to be, but were not, paid by the Defaulting Lender, (ii) second, to the
L/C Issuer, to the extent of the portion of a Letter of Credit Disbursement that
was required to be, but was not, paid by the Defaulting Lender, (iii) third, to
each Non-Defaulting Lender ratably in accordance with their Commitments (but, in
each case, only to the extent that such Defaulting Lender’s portion of a Loan
(or other funding obligation) was funded by such other Non-Defaulting Lender),
(iv) to the Cash Collateral Account, the proceeds of which shall be retained by
the Agent and may be made available to be re-advanced to or for the benefit of
the Borrower (upon the request of the Borrower and subject to the conditions set
forth in Section 4.02) as if such Defaulting Lender had made its portion of the
Loans (or other funding obligations) hereunder, and (v) from and after the date
on which all other Obligations have been paid in full, to such Defaulting
Lender. Subject to the foregoing, the Agent may hold and, in its discretion,
re-lend to the Borrower for the account of such Defaulting Lender the amount of
all such payments received and retained by the Agent for the account of such
Defaulting Lender. Solely for the purposes of voting or consenting to matters
with respect to the Loan Documents (including the calculation of Applicable
Percentages in connection therewith) and for the purpose of calculating the fee
payable under Section 2.09(a), such Defaulting Lender shall be deemed not to be
a “Lender” and such Lender’s Commitment shall be deemed to be zero; provided,

 

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that the foregoing shall not apply to any of the matters governed by
Section 10.01(a) through (c). The provisions of this Section 9.16 shall remain
effective with respect to such Defaulting Lender until the earlier of (y) the
date on which all of the Non-Defaulting Lenders, the Agent, the L/C Issuer, and
the Borrower shall have waived, in writing, the application of this Section 9.16
to such Defaulting Lender, or (z) the date on which such Defaulting Lender pays
to the Agent all amounts owing by such Defaulting Lender in respect of the
amounts that it was obligated to fund hereunder, and, if requested by the Agent,
provides adequate assurance of its ability to perform its future obligations
hereunder (on which earlier date, so long as no Event of Default has occurred
and is continuing, any remaining cash collateral held by the Agent pursuant to
Section 9.16(b) shall be released to the Borrower). The operation of this
Section 9.16 shall not be construed to increase or otherwise affect the
Commitment of any Lender, to relieve or excuse the performance by such
Defaulting Lender or any other Lender of its duties and obligations hereunder,
or to relieve or excuse the performance by the Borrower of its duties and
obligations hereunder to the Agent, the L/C Issuer, the Swing Line Lender, or to
the Lenders other than such Defaulting Lender. Any failure by a Defaulting
Lender to fund amounts that it was obligated to fund hereunder shall constitute
a material breach by such Defaulting Lender of this Agreement and shall entitle
the Borrower, at its option, upon written notice to the Agent, to arrange for a
substitute Lender to assume the Commitment of such Defaulting Lender, such
substitute Lender to be reasonably acceptable to the Agent. In connection with
the arrangement of such a substitute Lender, the Defaulting Lender shall have no
right to refuse to be replaced hereunder, and agrees to execute and deliver a
completed form of Assignment and Assumption in favor of the substitute Lender
(and agrees that it shall be deemed to have executed and delivered such document
if it fails to do so) subject only to being paid its share of the outstanding
Obligations (other than any Other Liabilities, but including (1) all interest,
fees (except any unused line fees or Letter of Credit Fees not due to such
Defaulting Lender in accordance with the terms of this Agreement), and other
amounts that may be due and payable in respect thereof, and (2) an assumption of
its Applicable Percentage of its participation in the Letters of Credit);
provided, that any such assumption of the Commitment of such Defaulting Lender
shall not be deemed to constitute a waiver of any of the Credit Parties’ or the
Loan Parties’ rights or remedies against any such Defaulting Lender arising out
of or in relation to such failure to fund. In the event of a direct conflict
between the priority provisions of this Section 9.16 and any other provision
contained in this Agreement or any other Loan Document, it is the intention of
the parties hereto that such provisions be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 9.16 shall control and govern.

(b)    If any Swing Line Loan or Letter of Credit is outstanding at the time
that a Lender becomes a Defaulting Lender then:

(i)    such Defaulting Lender’s participation interest in any Swing Line Loan or
Letter of Credit shall be reallocated among the Non-Defaulting Lenders in
accordance with their respective Applicable Percentages but only to the extent
(x) the Outstanding Amount sum of all Non-Defaulting Lenders’ Credit Extensions
after giving effect to such reallocation does not exceed the total of all
Non-Defaulting Lenders’ Commitments and (y) the conditions set forth in
Section 4.02 are satisfied at such time;

 

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(ii)    if the reallocation described in clause (b)(i) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Agent (x) first, prepay such Defaulting Lender’s participation in
any outstanding Swing Line Loans (after giving effect to any partial
reallocation pursuant to clause (b)(i) above) and (y) second, cash collateralize
such Defaulting Lender’s participation in Letters of Credit (after giving effect
to any partial reallocation pursuant to clause (b)(i) above), pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Agent, for so long as such L/C Obligations are outstanding;
provided, that the Borrower shall not be obligated to cash collateralize any
Defaulting Lender’s participations in Letters of Credit if such Defaulting
Lender is also the L/C Issuer;

(iii)    if the Borrower cash collateralizes any portion of such Defaulting
Lender’s participation in L/C Obligations pursuant to this Section 9.16(b), the
Borrower shall not be required to pay any Letter of Credit Fees to the Agent for
the account of such Defaulting Lender pursuant to Section 2.03 with respect to
such cash collateralized portion of such Defaulting Lender’s participation in
Letters of Credit during the period such participation is cash collateralized;

(iv)    to the extent the participation by any Non-Defaulting Lender in the
Letters of Credit is reallocated pursuant to this Section 9.16(b), then the
Letter of Credit Fees payable to the Non-Defaulting Lenders pursuant to
Section 2.03 shall be adjusted in accordance with such reallocation;

(v)    to the extent any Defaulting Lender’s participation in Letters of Credit
is neither cash collateralized nor reallocated pursuant to this Section 9.16(b),
then, without prejudice to any rights or remedies of the L/C Issuer or any
Lender hereunder, all Letter of Credit Fees that would have otherwise been
payable to such Defaulting Lender under Section 2.03 with respect to such
portion of such participation shall instead be payable to the L/C Issuer until
such portion of such Defaulting Lender’s participation is cash collateralized or
reallocated;

(vi)    so long as any Lender is a Defaulting Lender, the Swing Line Lender
shall not be required to make any Swing Line Loan and the L/C Issuer shall not
be required to issue, amend, or increase any Letter of Credit, in each case, to
the extent (x) the Defaulting Lender’s Applicable Percentage of such Swing Line
Loans or Letter of Credit cannot be reallocated pursuant to this Section 9.16(b)
or (y) the Swing Line Lender or the L/C Issuer, as applicable, has not otherwise
entered into arrangements reasonably satisfactory to the Swing Line Lender or
the L/C Issuer, as applicable, and the Borrower to eliminate the Swing Line
Lender’s or L/C Issuer’s risk with respect to the Defaulting Lender’s
participation in Swing Line Loans or Letters of Credit; and

 

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(vii)    The Agent may release any cash collateral provided by the Borrower
pursuant to this Section 9.16(b) to the L/C Issuer and the L/C Issuer may apply
any such cash collateral to the payment of such Defaulting Lender’s Applicable
Percentage of any Letter of Credit Disbursement that is not reimbursed by the
Borrower pursuant to Section 2.03. Subject to Section 10.25, no reallocation
hereunder shall constitute a waiver or release of any claim of any party
hereunder against a Defaulting Lender arising from that Lender having become a
Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of
such Non-Defaulting Lender’s increased exposure following such reallocation.

9.17    Secured Cash Management Services and Secured Bank Products.

(a)    Except as otherwise expressly set forth herein or in any Facility
Guaranty or any Security Document, no provider of Cash Management Services or
Bank Products that obtains the benefits of Section 8.03, any Guaranty or any
Collateral by virtue of the provisions hereof or of any Guaranty or any Security
Document shall have any right to notice of any action or to consent to, direct
or object to any action hereunder or under any other Loan Document or otherwise
in respect of the Collateral (including the release or impairment of any
Collateral) other than in its capacity as a Lender and, in such case, only to
the extent expressly provided in the Loan Documents.

(b)    Each Credit Party hereby agrees that the benefit of the provisions of the
Loan Documents directly relating to the Collateral or any Lien granted
thereunder shall extend to and be available to any Credit Party that is not the
Agent, a Lender or an L/C Issuer party hereto as long as, by accepting such
benefits, such Credit Party agrees, as among the Agent and all other Credit
Parties, that such Credit Party is bound by (and, if requested by the Agent,
shall confirm such agreement in a writing in form and substance reasonably
acceptable to the Agent) this Article IX and Sections 3.01, 9.14, 10.08, 10.07,
10.09 and 10.16, and the decisions and actions of the Agent and the Required
Lenders (or, where expressly required by the terms of this Agreement, a greater
proportion of the Lenders or other parties hereto as required herein) to the
same extent a Lender is bound; provided, however, that, notwithstanding the
foregoing clause (ii), (x) such Credit Party shall be bound by the provisions of
Section 10.04 only to the extent of liabilities, reimbursement obligations,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements with respect to or otherwise relating to the Liens
and Collateral held for the benefit of such Credit Party, in which case the
obligations of such Credit Party thereunder shall not be limited by any concept
of pro rata share or similar concept, (y) each of the Agent, the Lenders and the
L/C Issuer party hereto shall be entitled to act at its sole discretion, without
regard to the interest of such Credit Party, regardless of whether any
Obligation to such Credit Party thereafter remains outstanding, is deprived of
the benefit of the Collateral, becomes unsecured or is otherwise affected or put
in jeopardy thereby, and without any duty or liability to such Credit Party or
any such Obligation and (z) such Credit Party shall not have any right to be
notified of, consent to, direct, require or be heard with respect to, any action
taken or omitted in respect of the Collateral or under any Loan Document.

 

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ARTICLE X

MISCELLANEOUS

10.01    Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document (other than Swap Contracts), and no Consent
to any departure by any Loan Party therefrom, shall be effective unless in
writing signed by the Agent, with the Consent of the Required Lenders, and the
Borrower or the applicable Loan Party, as the case may be, and acknowledged by
the Agent, and each such waiver or Consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall:

(a)    increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written Consent of such Lender;

(b)    as to any Lender, postpone any date fixed by this Agreement or any other
Loan Document for (i) any scheduled payment (including the Maturity Date) or
mandatory prepayment of principal, interest, fees or other amounts due hereunder
or under any of the other Loan Documents without the written Consent of such
Lender entitled to such payment, or (ii) any scheduled or mandatory reduction or
termination of the Aggregate Commitments hereunder or under any other Loan
Document without the written Consent of such Lender;

(c)    as to any Lender, reduce the principal of, or the rate of interest
specified herein on, any Loan held by such Lender, or (subject to clause (iv) of
the second proviso to this Section 10.01) any fees or other amounts payable
hereunder or under any other Loan Document to or for the account of such Lender
without the written Consent of each Lender entitled to such amount; provided,
however, that only the Consent of the Required Lenders shall be necessary (i) to
amend the definition of “Default Rate” or to waive any obligation of the
Borrower to pay interest or Letter of Credit Fees at the Default Rate or (ii) to
amend any financial covenant hereunder (or any defined term used therein) even
if the effect of such amendment would be to reduce the rate of interest on any
Loan or to reduce any fee payable hereunder;

(d)    as to any Lender, change Section 2.13 or Section 8.03 in a manner that
would alter the pro rata sharing of payments required thereby without the
written Consent of such Lender;

(e)    change any provision of this Section or the definition of “Required
Lenders” or “Supermajority Lenders” or any other provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written Consent of each Lender;

(f)    except as expressly permitted hereunder or under any other Loan Document,
release, or limit the liability of, any Loan Party without the written Consent
of each Lender;

 

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(g)    except for Permitted Dispositions, release all or substantially all of
the Collateral from the Liens of the Security Documents without the written
Consent of each Lender;

(h)    change the definition of the term “Borrowing Base” or any component
definition thereof (other than “Credit Card Advance Rate” or “Inventory Advance
Rate”) if as a result thereof the amounts available to be borrowed by the
Borrower would be increased without the written Consent of the Supermajority
Lenders, provided that the foregoing shall not limit the Permitted Discretion of
the Agent to change, establish or eliminate any Reserves;

(i)    change the definition of the term “Credit Card Advance Rate” or
“Inventory Advance Rate” if as a result thereof the amounts available to be
borrowed by the Borrower would be increased without the written Consent of each
Lender;

(j)    modify the definition of Permitted Overadvance so as to increase the
amount thereof or, except as provided in such definition, the time period for
which a Permitted Overadvance may remain outstanding without the written Consent
of each Lender; and

(k)    except as expressly permitted herein or in any other Loan Document,
subordinate the Obligations hereunder or the Liens granted hereunder or under
the other Loan Documents, to any other Indebtedness or Lien, as the case may be
without the written Consent of each Lender;

and, provided further, that (i) no amendment, waiver or Consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or Consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or Consent shall, unless in writing and signed by the Agent in addition to the
Lenders required above, affect the rights or duties of the Agent under this
Agreement or any other Loan Document; and (iv) each Fee Letter may be amended,
or rights or privileges thereunder waived, in a writing executed only by the
parties thereto.

Notwithstanding the foregoing, the Agent and the Loan Parties may amend, modify
or supplement this Agreement or any other Loan Document to cure any ambiguity,
error, omission, defect or inconsistency or any necessary or desirable
administrative or technical change without any further action or consent of any
other party to any Loan Document, so long as such amendment, modification or
supplement does not materially and adversely affect the rights of any Lender.

Notwithstanding anything to the contrary in this Agreement or any other Loan
Document, no provider or holder of any Bank Products or Cash Management Services
shall have any voting or approval rights hereunder (or be deemed a Lender)
solely by virtue of its status as the provider or holder of such agreements or
products or the Obligations owing thereunder, nor shall the consent of any such
provider or holder be required (other than in their capacities as Lenders, to
the extent applicable) for any matter hereunder or under any of the other Loan
Documents, including as to any matter relating to the Collateral or the release
of Collateral or any Loan Party.

 

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If any Lender does not Consent (a “Non-Consenting Lender”) to a proposed
amendment, waiver, consent or release with respect to any Loan Document that
requires the Consent of each Lender and that has been approved by the Required
Lenders, the Borrower may replace such Non-Consenting Lender in accordance with
Section 10.13; provided that such amendment, waiver, consent or release can be
effected as a result of the assignment contemplated by such Section (together
with all other such assignments required by the Borrower to be made pursuant to
this paragraph).

10.02    Notices; Effectiveness; Electronic Communications.

(a)    Notices Generally. Except as provided in subsection (b) below, all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by electronic transmission as follows: (i) if to the
Loan Parties, the Agent, the L/C Issuer or the Swing Line Lender, to the
address, telecopier number, and/or electronic mail address specified for such
Person on Schedule 10.02; and (ii) if to any other Lender, to the address,
telecopier number, or electronic mail address specified in its Administrative
Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b)    Electronic Communications. Notices and other communications to the Loan
Parties, the Lenders and the L/C Issuer hereunder may be delivered or furnished
by electronic communication (including e mail and Internet or intranet websites)
pursuant to procedures approved by the Agent, provided that the foregoing shall
not apply to notices to any Lender or the L/C Issuer pursuant to Article II if
such Lender or the L/C Issuer, as applicable, has notified the Agent that it is
incapable of receiving notices under such Article by electronic communication.
The Agent may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

Unless the Agent otherwise prescribes, (i) notices and other communications sent
to an e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
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intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(i) of notification that such notice or communication is available and
identifying the website address therefor.

(c)    The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Agent or any of its Related Parties (collectively, the “Agent
Parties”) have any liability to any Loan Party, any Lender, the L/C Issuer or
any other Person for losses, claims, damages, liabilities or expenses of any
kind (whether in tort, contract or otherwise) arising out of the Loan Parties’
or the Agent’s transmission of Borrower Materials through the Internet, except
to the extent that such losses, claims, damages, liabilities or expenses are
determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided, however, that in no event shall any Agent Party have
any liability to any Loan Party, any Lender, the L/C Issuer or any other Person
for indirect, special, incidental, consequential or punitive damages (as opposed
to direct or actual damages).

(d)    Change of Address, Etc. Each of the Loan Parties, the Agent, the L/C
Issuer and the Swing Line Lender may change its address or telecopier for
notices and other communications hereunder, or, solely with respect to
communications, may change its telephone number, by notice to the other parties
hereto. Each other Lender may change its address or telecopier number for
notices and other communications hereunder by notice to the Borrower, the Agent,
the L/C Issuer and the Swing Line Lender. In addition, each Lender agrees to
notify the Agent from time to time to ensure that the Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.

(e)    Reliance by Agent, L/C Issuer and Lenders. The Agent, the L/C Issuer and
the Lenders shall be entitled to rely and act upon any notices (including,
without limitation, all Requests for Credit Extensions) purportedly given by or
on behalf of the Loan Parties even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Loan Parties shall
indemnify the Agent, the L/C Issuer, each Lender and the Related Parties of each
of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the
Loan Parties (including, without limitation, pursuant to any Requests for Credit
Extensions). All telephonic communications with the Agent may be recorded by the
Agent, and each of the parties hereto hereby consents to such recording.

 

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10.03    No Waiver; Cumulative Remedies. No failure by any Credit Party to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder or
under any other Loan Document preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges provided herein and in the other Loan Documents
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law. Without limiting the generality of the foregoing, the making of
a Loan or issuance of a Letter of Credit shall not be construed as a waiver of
any Default or Event of Default, regardless of whether any Credit Party may have
had notice or knowledge of such Default or Event of Default at the time.

10.04    Expenses; Indemnity; Damage Waiver.

(a)    Costs and Expenses. The Borrower shall pay all Credit Party Expenses.

(b)    Indemnification by the Loan Parties. The Loan Parties shall indemnify the
Agent (and any sub-agent thereof), each other Credit Party, and each Related
Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless (on an after tax basis)
from, any and all losses, claims, causes of action, damages, liabilities,
settlement payments, costs, and related expenses (including the reasonable and
documented out-of-pocket fees, charges and disbursements of any counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Agent (and any sub-agents
thereof) and their Related Parties only, the administration of this Agreement
and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the L/C Issuer
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit, any bank advising or confirming a Letter of Credit or
any other nominated person with respect to a Letter of Credit seeking to be
reimbursed or indemnified or compensated, and any third party seeking to enforce
the rights of a Borrower, beneficiary, nominated person, transferee, assignee of
Letter of Credit proceeds, or holder of an instrument or document related to any
Letter of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by any Loan Party or any of
its Subsidiaries, or any Environmental Liability related in any way to any Loan
Party or any of its Subsidiaries, (iv) any claims of, or amounts paid by any
Credit Party to, a Blocked Account Bank or other Person which has entered into a
control agreement with any Credit Party hereunder, or (v) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower or any other Loan Party or any of
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Parties’ directors, shareholders or creditors, and regardless of whether any
Indemnitee is a party thereto, in all cases, whether or not caused by or
arising, in whole or in part, out of the comparative, contributory or sole
negligence of the Indemnitee; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by a Borrower or any other Loan Party against an Indemnitee for breach
in bad faith of such Indemnitee’s obligations hereunder or under any other Loan
Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.

(c)    Reimbursement by Lenders. Without limiting their obligations under
Section 9.14 hereof, to the extent that the Loan Parties for any reason fail to
indefeasibly pay any amount required under subsection (a) or (b) of this Section
to be paid by it, each Lender severally agrees to pay to the Agent (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Agent (or any such sub-agent) or the L/C Issuer in its capacity as
such, or against any Related Party of any of the foregoing acting for the Agent
(or any such sub-agent) or L/C Issuer in connection with such capacity. The
obligations of the Lenders under this subsection (c) are subject to the
provisions of Section 2.12(d).

(d)    Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Loan Parties shall not assert, and hereby waive, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed to such unintended recipients by such Indemnitee through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby other than for direct or actual damages resulting
from the gross negligence or willful misconduct of such Indemnitee as determined
by a final and nonappealable judgment of a court of competent jurisdiction.

(e)    Payments. All amounts due under this Section shall be payable on demand
therefor.

(f)    Survival. The agreements in this Section shall survive the resignation of
the Agent and the L/C Issuer, the assignment of any Commitment or Loan by any
Lender, the replacement of any Lender, the termination of the Aggregate
Commitments and the repayment, satisfaction or discharge of all the other
Obligations.

 

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10.05    Payments Set Aside. To the extent that any payment by or on behalf of
the Loan Parties is made to any Credit Party, or any Credit Party exercises its
right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by such
Credit Party in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to
the Agent upon demand its Applicable Percentage (without duplication) of any
amount so recovered from or repaid by the Agent, plus interest thereon from the
date of such demand to the date such payment is made at a rate per annum equal
to the Federal Funds Rate from time to time in effect. The obligations of the
Lenders and the L/C Issuer under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this
Agreement.

10.06    Successors and Assigns.

(a)    Successors and Assigns Generally. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Loan Party
may assign or otherwise transfer any of its rights or obligations hereunder or
under any other Loan Document without the prior written Consent of the Agent and
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of Section 10.06(b), (ii) by way of participation in accordance with
the provisions of Section 10.06(d), or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of Section 10.06(f) (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in subsection
(d) of this Section and, to the extent expressly contemplated hereby, the
Related Parties of each of the Credit Parties) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

(b)    Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment(s) and the Loans
(including for purposes of this Section 10.06(b), participations in L/C
Obligations and in Swing Line Loans) at the time owing to it); provided that any
such assignment shall be subject to the following conditions:

(i)    Minimum Amounts

(A)    in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, no minimum amount need be assigned; and

 

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(B)    in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date, shall not be
less than $10,000,000 unless each of the Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed and shall be deemed
given if the Borrower has not responded to a request for such consent within
seven (7) Business Days); provided, however, that concurrent assignments to
members of an Assignee Group and concurrent assignments from members of an
Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and
members of its Assignee Group) will be treated as a single assignment for
purposes of determining whether such minimum amount has been met;

(ii)    Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to the Swing Line
Lender’s rights and obligations in respect of Swing Line Loans;

(iii)    Required Consents. No consent shall be required for any assignment
except to the extent required by subsection (b)(i)(B) of this Section and, in
addition:

(A)    the consent of the Borrower (such consent not to be unreasonably withheld
or delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; and

(B)    the consent of the Agent (such consent not to be unreasonably withheld or
delayed) shall be required for assignments in respect of any Commitment if such
assignment is to a Person that is not a Lender, an Affiliate of such Lender or
an Approved Fund with respect to such Lender; and

(C)    the consent of the L/C Issuer (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding); and

 

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(D)    the consent of the Swing Line Lender (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment in respect of the
assignment of any Commitment.

(iv)    Assignment and Assumption. The parties to each assignment shall execute
and deliver to the Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500, provided, however, that the Agent may,
in its sole discretion, elect to waive such processing and recordation fee in
the case of any assignment. The assignee, if it shall not be a Lender, shall
deliver to the Agent an Administrative Questionnaire.

Subject to acceptance and recording thereof by the Agent pursuant to subsection
(c) of this Section, from and after the effective date specified in each
Assignment and Assumption, the Eligible Assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 10.06(d).

(c)    Register. The Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Agent’s Office a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive, absent manifest error, and the Loan Parties, the Agent and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender at any reasonable time and from time
to time upon reasonable prior notice.

(d)    Participations. Any Lender may at any time, without the consent of, or
notice to, the Loan Parties or the Agent, sell participations to any Person
(other than a natural person or the Loan Parties or any of the Loan Parties’
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender’s
participations in L/C Obligations and/or Swing Line Loans) owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Loan Parties, the
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L/C Issuer shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
Participant shall agree in writing to comply with all confidentiality
obligations set forth in Section 10.07 as if such Participant was a Lender
hereunder.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant. Subject to subsection (e) of this
Section, the Loan Parties agree that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 10.06(b).
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.13 as though it were a Lender.

(e)    Limitations upon Participant Rights. A Participant shall not be entitled
to receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.01 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Loan Parties, to comply with Section 3.01(e) as though it were a Lender.

(f)    Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g)    Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

(h)    Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Wells
Fargo assigns all of its Commitment and Loans pursuant to subsection (b) above,
Wells Fargo may, (i) upon 30 days’ notice to the Borrower and the Lenders,
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(ii) upon 30 days’ notice to the Borrower, Wells Fargo may resign as Swing Line
Lender. In the event of any such resignation as L/C Issuer or Swing Line Lender,
the Borrower shall be entitled to appoint from among the Lenders a successor L/C
Issuer or Swing Line Lender hereunder; provided, however, that no failure by the
Borrower to appoint any such successor shall affect the resignation of Wells
Fargo as L/C Issuer or Swing Line Lender, as the case may be. If Wells Fargo
resigns as L/C Issuer, it shall retain all the rights, powers, privileges and
duties of the L/C Issuer hereunder with respect to all Letters of Credit
outstanding as of the effective date of its resignation as L/C Issuer and all
L/C Obligations with respect thereto (including the right to require the Lenders
to make Base Rate Loans pursuant to Section 2.03(c)). If Wells Fargo resigns as
Swing Line Lender, it shall retain all the rights of the Swing Line Lender
provided for hereunder with respect to Swing Line Loans made by it and
outstanding as of the effective date of such resignation, including the right to
require the Lenders to make Base Rate Loans or fund risk participations in
outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment
of a successor L/C Issuer and/or Swing Line Lender, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and
(b) the successor L/C Issuer shall issue letters of credit in substitution for
the Letters of Credit, if any, outstanding at the time of such succession or
make other arrangements satisfactory to Wells Fargo to effectively assume the
obligations of Wells Fargo with respect to such Letters of Credit.

10.07    Treatment of Certain Information; Confidentiality. Each of the Credit
Parties agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates’ respective partners, directors, officers, employees,
agents, funding sources, attorneys, advisors and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable Laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to any Loan Party and its obligations, (g) with
the consent of the Borrower or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or
(y) becomes available to any Credit Party or any of their respective Affiliates
on a non-confidential basis from a source other than the Loan Parties.

For purposes of this Section, “Information” means all information received from
the Loan Parties or any Subsidiary thereof relating to the Loan Parties or any
Subsidiary thereof or their respective businesses, other than any such
information that is available to any Credit Party on a non-confidential basis
prior to disclosure by the Loan Parties or any Subsidiary thereof, provided
that, in the case of information received from any Loan Party or any Subsidiary
after the Closing Date, such information is clearly identified at the time of
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required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

Each of the Credit Parties acknowledges that (a) the Information may include
material non-public information concerning the Loan Parties or a Subsidiary, as
the case may be, (b) it has developed compliance procedures regarding the use of
material non-public information and (c) it will handle such material non-public
information in accordance with applicable Law, including Federal and state
securities Laws.

10.08    Right of Setoff. If an Event of Default shall have occurred and be
continuing or if any Lender shall have been served with a trustee process or
similar attachment relating to property of a Loan Party, each Lender, the L/C
Issuer and each of their respective Affiliates is hereby authorized at any time
and from time to time, after obtaining the prior written consent of the Agent or
the Required Lenders, to the fullest extent permitted by applicable law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, the L/C
Issuer or any such Affiliate to or for the credit or the account of the Borrower
or any other Loan Party against any and all of the Obligations now or hereafter
existing under this Agreement or any other Loan Document to such Lender or the
L/C Issuer, regardless of the adequacy of the Collateral, and irrespective of
whether or not such Lender or the L/C Issuer shall have made any demand under
this Agreement or any other Loan Document and although such obligations of the
Borrower or such Loan Party may be contingent or unmatured or are owed to a
branch or office of such Lender or the L/C Issuer different from the branch or
office holding such deposit or obligated on such indebtedness. The rights of
each Lender, the L/C Issuer and their respective Affiliates under this Section
are in addition to other rights and remedies (including other rights of setoff)
that such Lender, the L/C Issuer or their respective Affiliates may have. Each
Lender and the L/C Issuer agrees to notify the Borrower and the Agent promptly
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application.

10.09    Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it exceeds such
unpaid principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by the Agent or a Lender exceeds the
Maximum Rate, such Person may, to the extent permitted by applicable Law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.

10.10    Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
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Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Agent and when the Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy, pdf or other electronic
transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement. Each party agrees that the electronic signatures,
whether digital or encrypted, of the parties included in this Agreement are
intended to authenticate this writing and to have the same force and effect as
manual signatures. Electronic signature means any electronic sound, symbol, or
process attached to or logically associated with a record and executed and
adopted by a party with the intent to sign such record pursuant to the New York
Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309) as amended
from time to time or as provided under the Uniform Commercial Code as adopted by
the State of New York.

10.11    Survival. All representations and warranties made hereunder and in any
other Loan Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery hereof
and thereof. Such representations and warranties have been or will be relied
upon by the Credit Parties, regardless of any investigation made by any Credit
Party or on their behalf and notwithstanding that any Credit Party may have had
notice or knowledge of any Default or Event of Default at the time of any Credit
Extension, and shall continue in full force and effect as long as any Loan or
any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter
of Credit shall remain outstanding. Further, the provisions of Sections 3.01,
3.04, 3.05 and 10.04 and Article IX shall survive and remain in full force and
effect regardless of the repayment of the Obligations, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof. In connection with the termination of
this Agreement and the release and termination of the security interests in the
Collateral, the Agent may require such indemnities and collateral security as
they shall reasonably deem necessary or appropriate to protect the Credit
Parties against (x) loss on account of credits previously applied to the
Obligations that may subsequently be reversed or revoked, (y) any obligations
that may thereafter arise with respect to the Other Liabilities and (z) any
Obligations that may thereafter arise under Section 10.04.

10.12    Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

10.13    Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender is a Defaulting Lender or a Non-Consenting
Lender, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Agent, require such Lender to assign and delegate,

 

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without recourse (in accordance with and subject to the restrictions contained
in, and consents required by, Section 10.06), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment), provided that:

(a)    the Borrower shall have paid to the Agent the assignment fee specified in
Section 10.06(b);

(b)    such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 3.05) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts);

(c)    in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and

(d)    such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

10.14    Governing Law; Jurisdiction; Etc.

(a)    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(b)    SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK,
AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE LOAN PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE LOAN PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT ANY CREDIT
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OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS
OF ANY JURISDICTION.

(c)    WAIVER OF VENUE. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT
REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE LOAN PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

(d)    SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

(e)    ACTIONS COMMENCED BY LOAN PARTIES. EACH LOAN PARTY AGREES THAT ANY ACTION
COMMENCED BY ANY LOAN PARTY ASSERTING ANY CLAIM OR COUNTERCLAIM ARISING UNDER OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT
SOLELY IN A COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY OR ANY
FEDERAL COURT SITTING THEREIN AS THE AGENT MAY ELECT IN ITS DISCRETION AND
CONSENTS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS WITH RESPECT TO ANY SUCH
ACTION.

10.15    Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16    No Advisory or Fiduciary Responsibility. In connection with all aspects
of each transaction contemplated hereby, the Loan Parties each acknowledge and
agree that: (i) the credit facility provided for hereunder and any related
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(including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document) are an arm’s-length commercial transaction
between the Loan Parties, on the one hand, and the Credit Parties, on the other
hand, and each of the Loan Parties is capable of evaluating and understanding
and understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with the
process leading to such transaction, the each Credit Party is and has been
acting solely as a principal and is not the financial advisor, agent or
fiduciary, for the Loan Parties or any of their respective Affiliates,
stockholders, creditors or employees or any other Person; (iii) none of the
Credit Parties has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of the Loan Parties with respect to any of the
transactions contemplated hereby or the process leading thereto, including with
respect to any amendment, waiver or other modification hereof or of any other
Loan Document (irrespective of whether any of the Credit Parties has advised or
is currently advising any Loan Party or any of its Affiliates on other matters)
and none of the Credit Parties has any obligation to any Loan Party or any of
its Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Loan Documents; (iv) the
Credit Parties and their respective Affiliates may be engaged in a broad range
of transactions that involve interests that differ from those of the Loan
Parties and their respective Affiliates, and none of the Credit Parties has any
obligation to disclose any of such interests by virtue of any advisory, agency
or fiduciary relationship; and (v) the Credit Parties have not provided and will
not provide any legal, accounting, regulatory or tax advice with respect to any
of the transactions contemplated hereby (including any amendment, waiver or
other modification hereof or of any other Loan Document) and each of the Loan
Parties has consulted its own legal, accounting, regulatory and tax advisors to
the extent it has deemed appropriate. Each of the Loan Parties hereby waives and
releases, to the fullest extent permitted by law, any claims that it may have
against each of the Credit Parties with respect to any breach or alleged breach
of agency or fiduciary duty.

10.17    USA PATRIOT Act Notice. Each Lender that is subject to the requirements
of the Patriot Act hereby notifies the Loan Parties that pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies each Loan Party, which information includes the name
and address of each Loan Party and other information that will allow such Lender
to identify each Loan Party in accordance with the Patriot Act. In addition,
Agent and each Lender shall have the right to periodically conduct due diligence
on all Loan Parties, their senior management and key principals and legal and
beneficial owners. Each Loan Party agrees to cooperate in respect of the conduct
of such due diligence and further agrees that the reasonable costs and charges
for any such due diligence by Agent shall constitute Credit Party Expenses
hereunder and be for the account of Borrower.

10.18    Foreign Asset Control Regulations. Neither of the advance of the Loans
nor the use of the proceeds of any thereof will violate the Trading With the
Enemy Act (50 U.S.C. § 1 et seq., as amended) (the “Trading With the Enemy Act”)
or any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) (the “Foreign Assets
Control Regulations”) or any enabling legislation or executive order relating
thereto (which for the avoidance of doubt shall include, but shall not be
limited to (a) Executive Order 13224 of September 21, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the
Uniting and Strengthening America by Providing Appropriate

 

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Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law
107-56)). Furthermore, none of the Borrower or its Affiliates (a) is or will
become a “blocked person” as described in the Executive Order, the Trading With
the Enemy Act or the Foreign Assets Control Regulations or (b) engages or will
engage in any dealings or transactions, or be otherwise associated, with any
such “blocked person” or in any manner violative of any such order.

10.19    Time of the Essence. Time is of the essence of the Loan Documents.

10.20    Press Releases.

(a)    Each Credit Party executing this Agreement agrees that neither it nor its
Affiliates will in the future issue any press releases or other public
disclosure using the name of the Agent or its Affiliates or referring to this
Agreement or the other Loan Documents without at least two (2) Business Days’
prior notice to the Agent and without the prior written consent of the Agent
unless (and only to the extent that) such Credit Party or Affiliate is required
to do so under applicable Law and then, in any event, such Credit Party or
Affiliate will consult with the Agent before issuing such press release or other
public disclosure.

(b)    Each Loan Party consents to the publication by the Agent, any Lender or
their respective representatives of advertising material, including any
“tombstone,” press release or comparable advertising, on its website or in other
marketing materials of Agent, relating to the financing transactions
contemplated by this Agreement using any Loan Party’s name, product photographs,
logo, trademark or other insignia. The Agent or such Lender shall provide a
draft reasonably in advance of any advertising material, “tomb stone” or press
release to the Borrower for review and comment prior to the publication thereof.
The Agent reserves the right to provide to industry trade organizations and loan
syndication and pricing reporting services information necessary and customary
for inclusion in league table measurements.

10.21    Additional Waivers.

(a)    The Obligations are the joint and several obligation of each Loan Party.
To the fullest extent permitted by applicable law, the obligations of each Loan
Party shall not be affected by (i) the failure of any Credit Party to assert any
claim or demand or to enforce or exercise any right or remedy against any other
Loan Party under the provisions of this Agreement, any other Loan Document or
otherwise, (ii) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, this Agreement or any other Loan
Document, or (iii) the failure to perfect any security interest in, or the
release of, any of the Collateral or other security held by or on behalf of the
Agent or any other Credit Party.

(b)    The obligations of each Loan Party shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations after the termination of
the Commitments), including any claim of waiver, release, surrender, alteration
or compromise of any of the Obligations, and shall not be subject to any defense
or setoff, counterclaim, recoupment or termination

 

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whatsoever by reason of the invalidity, illegality or unenforceability of any of
the Obligations or otherwise. Without limiting the generality of the foregoing,
the obligations of each Loan Party hereunder shall not be discharged or impaired
or otherwise affected by the failure of the Agent or any other Credit Party to
assert any claim or demand or to enforce any remedy under this Agreement, any
other Loan Document or any other agreement, by any waiver or modification of any
provision of any thereof, any default, failure or delay, willful or otherwise,
in the performance of any of the Obligations, or by any other act or omission
that may or might in any manner or to any extent vary the risk of any Loan Party
or that would otherwise operate as a discharge of any Loan Party as a matter of
law or equity (other than the indefeasible payment in full in cash of all the
Obligations after the termination of the Commitments).

(c)    To the fullest extent permitted by applicable Law, each Loan Party waives
any defense based on or arising out of any defense of any other Loan Party or
the unenforceability of the Obligations or any part thereof from any cause, or
the cessation from any cause of the liability of any other Loan Party, other
than the indefeasible payment in full in cash of all the Obligations and the
termination of the Commitments. The Agent and the other Credit Parties may, at
their election, foreclose on any security held by one or more of them by one or
more judicial or non-judicial sales, accept an assignment of any such security
in lieu of foreclosure, compromise or adjust any part of the Obligations, make
any other accommodation with any other Loan Party, or exercise any other right
or remedy available to them against any other Loan Party, without affecting or
impairing in any way the liability of any Loan Party hereunder except to the
extent that all the Obligations have been indefeasibly paid in full in cash and
the Commitments have been terminated. Each Loan Party waives any defense arising
out of any such election even though such election operates, pursuant to
applicable Law, to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of such Loan Party against any other Loan
Party, as the case may be, or any security.

(d)    Each Borrower is obligated to repay the Obligations as joint and several
obligors under this Agreement. Upon payment by any Loan Party of any
Obligations, all rights of such Loan Party against any other Loan Party arising
as a result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and junior in right
of payment to the prior indefeasible payment in full in cash of all the
Obligations and the termination of the Commitments. In addition, any
indebtedness of any Loan Party now or hereafter held by any other Loan Party is
hereby subordinated in right of payment to the prior indefeasible payment in
full of the Obligations and no Loan Party will demand, sue for or otherwise
attempt to collect any such indebtedness. If any amount shall erroneously be
paid to any Loan Party on account of (i) such subrogation, contribution,
reimbursement, indemnity or similar right or (ii) any such indebtedness of any
Loan Party, such amount shall be held in trust for the benefit of the Credit
Parties and shall forthwith be paid to the Agent to be credited against the
payment of the Obligations, whether matured or unmatured, in accordance with the
terms of this Agreement and the other Loan Documents. Subject to the foregoing,
to the extent that any Borrower shall, under this Agreement as a joint and
several obligor, repay any of the Obligations constituting Loans made to another
Borrower hereunder or other Obligations incurred directly and primarily by any
other Borrower (an “Accommodation Payment”),

 

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then the Borrower making such Accommodation Payment shall be entitled to
contribution and indemnification from, and be reimbursed by, each of the other
Borrowers in an amount, for each of such other Borrower, equal to a fraction of
such Accommodation Payment, the numerator of which fraction is such other
Borrower’s Allocable Amount and the denominator of which is the sum of the
Allocable Amounts of all of the Borrowers. As of any date of determination, the
“Allocable Amount” of each Borrower shall be equal to the maximum amount of
liability for Accommodation Payments which could be asserted against such
Borrower hereunder without (a) rendering such Borrower “insolvent” within the
meaning of Section 101 (32) of the Bankruptcy Code, Section 2 of the Uniform
Fraudulent Transfer Act (“UFTA”) or Section 2 of the Uniform Fraudulent
Conveyance Act (“UFCA”), (b) leaving such Borrower with unreasonably small
capital or assets, within the meaning of Section 548 of the Bankruptcy Code,
Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving such Borrower
unable to pay its debts as they become due within the meaning of Section 548 of
the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the UFCA.

10.22    No Strict Construction.

The parties hereto have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

10.23    Attachments.

The exhibits, schedules and annexes attached to this Agreement are incorporated
herein and shall be considered a part of this Agreement for the purposes stated
herein, except that in the event of any conflict between any of the provisions
of such exhibits and the provisions of this Agreement, the provisions of this
Agreement shall prevail.

10.24    Keepwell.

Each Qualified ECP Guarantor hereby jointly and severally absolutely,
unconditionally and irrevocably undertakes to provide such funds or other
support as may be needed from time to time by each other Loan Party to honor all
of its obligations under the Facility Guaranty in respect of Swap Obligations
(provided, however, that each Qualified ECP Guarantor shall only be liable under
this Section 10.24 for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 10.24, or
otherwise under the Facility Guaranty, voidable under applicable Law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount).
The obligations of each Qualified ECP Guarantor under this Section shall remain
in full force and effect until payment in full of the Obligations. Each
Qualified ECP Guarantor intends that this Section 10.24 constitute, and this
Section 10.24 shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Loan Party for all purposes of
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

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10.25    Acknowledgment and Consent to Bail-In of EEA Financial Institutions.

Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document, to the extent such liability is unsecured, may be
subject to the write-down and conversion powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and

(b)    the effects of any Bail-In Action on any such liability, including, if
applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii)    the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

10.26    Acknowledgement Regarding Any Supported QFCs. To the extent that the
Loan Documents provide support, through a guarantee or otherwise, for Swap
Contracts or any other agreement or instrument that is a QFC (such support, “QFC
Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge
and agree as follows with respect to the resolution power of the Federal Deposit
Insurance Corporation under the Federal Deposit Insurance Act and Title II of
the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the
regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in
respect of such Supported QFC and QFC Credit Support (with the provisions below
applicable notwithstanding that the Loan Documents and any Supported QFC may in
fact be stated to be governed by the laws of the State of New York and/or of the
United States or any other state of the United States):

(a)    In the event a Covered Entity that is party to a Supported QFC (each, a
“Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution
Regime, the transfer of such Supported QFC and the benefit of such QFC Credit
Support (and any interest and obligation in or under such Supported QFC and such
QFC Credit Support, and any rights in property securing such Supported QFC or
such QFC Credit Support) from such Covered Party will be effective to the same
extent as the transfer would be effective under the U.S. Special Resolution
Regime if the Supported QFC and such QFC Credit Support (and any such interest,
obligation and rights in property) were governed by

 

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the laws of the United States or a state of the United States. In the event a
Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a
proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan
Documents that might otherwise apply to such Supported QFC or any QFC Credit
Support that may be exercised against such Covered Party are permitted to be
exercised to no greater extent than such Default Rights could be exercised under
the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents
were governed by the laws of the United States or a state of the United States.
Without limitation of the foregoing, it is understood and agreed that rights and
remedies of the parties with respect to a Defaulting Lender shall in no event
affect the rights of any Covered Party with respect to a Supported QFC or any
QFC Credit Support.

(b)    As used in this Section 10.26, the following terms have the following
meanings:

(c)    “BHC Act Affiliate” of a party means an “affiliate” (as such term is
defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such
party.

(d)    “Covered Entity” means any of the following:

(i)    a “covered entity” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 252.82(b);

(ii)    a “covered bank” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 47.3(b); or

(iii)    a “covered FSI” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 382.2(b).

(e)    “Default Right” has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.

(f)    “QFC” has the meaning assigned to the term “qualified financial contract”
in, and shall be interpreted in accordance with, 12 U.S.C. § 5390(c)(8)(D).

[Signature pages follow]

 

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

 

BORROWER:

 

FIVE BELOW, INC.

 

By:  

/s/ Ronald J. Masciantonio

  Name:   Ronald J. Masciantonio   Title:   Senior Vice President, General
Counsel and Secretary

 

GUARANTOR:

 

1616 HOLDINGS, INC.

 

By:  

/s/ Ronald J. Masciantonio

  Name:   Ronald J. Masciantonio   Title:   Secretary

 

[Signature Page – Fifth A&R Credit Agreement (Five Below)]

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AGENT:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent

 

By:  

/s/ Peter Foley

  Name:   Peter Foley   Title:   Director

 

[Signature Page – Fifth A&R Credit Agreement (Five Below)]

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LENDERS:

 

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

 

By:  

/s/ Peter Foley

  Name:   Peter Foley   Title:   Director

 

[Signature Page – Fifth A&R Credit Agreement (Five Below)]

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PNC BANK, NATIONAL ASSOCIATION,
as a Lender

 

By:  

/s/ Robert Orzechowski

  Name:   Robert Orzechowski   Title:   Senior Vice President

 

TRUIST BANK, as a Lender

 

By:  

/s/ Mark Bohntinsky

  Name:   Mark Bohntinsky   Title:   Managing Director

 

TD BANK, N.A., as a Lender

 

By:  

/s/ Virginia J. Pulverenti

  Name:   Virginia J. Pulverenti   Title:   Vice President

 

[Signature Page – Fifth A&R Credit Agreement (Five Below)]