on items in the course of collection, Liens and rights of set-off of banks, in each casearising in the ordinary course of business and securing obligations that are not overdue bymore than thirty (30) days or are being contested in compliance with Section 5.04, (ii)landlord’s Liens arising by operation of law which are subordinated to the Liens in favor ofthe Administrative Agent, (iii) landlord’s Liens in Landlord Lien States arising byoperation of law and (iv) any Lien in favor of a landlord on the assets of any Loan Partyarising under the terms of the lease relating to any retail store to secure such LoanParty’s obligations under such lease (provided that the Administrative Agent’s Liens aresenior in priority to such landlord’s Lien);”(b) *Amendment to definition of “Reserves”*. The definition of “Reserves” set forth in Section 1.01of the Credit Agreement is hereby amended and restated in its entirety and replaced with thefollowing:“Reserves” means any and all reserves which the Administrative Agent deemsnecessary, in its Permitted Discretion, to maintain (including, without limitation, BankingServices Reserves, reserves for rent at any retail store location leased by any Loan Partyin any Landlord Lien State for which the applicable landlord has not executed and delivereda Collateral Access Agreement (it being agreed that the maximum amount of any Reserve forany retail store in any Landlord Lien State shall not exceed two month’s rent for suchlocation), reserves for rent with respect to any Leased Distribution Center (other than theKansas Distribution Facility) for which the applicable landlord has not executed anddelivered a Collateral Access Agreement (it being agreed that the maximum amount of anyReserve for any Leased Distribution Center shall not exceed two month’s rent for suchlocation) and for consignee’s, warehousemen’s and bailee’s charges, reserves for rent at anyretail store leased by any Loan Party pursuant to a lease which contains provisions grantingin favor of the applicable landlord a Lien on certain assets of such Loan Party and withrespect to which the applicable landlord has not executed and delivered a Collateral AccessAgreement reasonably satisfactory to the Administrative Agent acknowledging that the Liensgranted by the applicable Loan Party to the Administrative Agent under the Loan Documentsare senior in priority to the Liens granted by such Loan Party to such landlord under suchlease (it being understood that (i) the amount of such rent reserve shall be determined fromtime to time by the Administrative Agent in its Permitted Discretion, (ii) the amount ofsuch reserve shall be $5,000,000 as of the effective date of the First Amendment to thisCredit Agreement, which amount may be increased or decreased in the Administrative Agent’sPermitted Discretion (including decreases in the event the Borrower delivers any CollateralAccess Agreements or amendments to leases eliminating the Liens granted to landlords), and(iii) the maximum amount of such reserves for rent for all such leases shall not exceed thegreater of (x) $5,000,000 or (y) two months’ rent under all such leases), reserves for giftcards, reserves for Inventory shrinkage, reserves for customs charges and shipping chargesrelated to any Inventory in transit, reserves for Swap Obligations, reserves for uninsuredlosses of any Loan Party, reserves for uninsured, underinsured, un-indemnified orunder-indemnified liabilities or potential liabilities with respect to any litigation andreserves for taxes, fees, assessments, and other governmental charges) with respect to theCollateral or any Loan Party. The Administrative Agent may, in its Permitted Discretion,implement additional reserves or adjust existing reserves from time to time upon two (2)Business Days’ prior notice to the Borrower.4. No Default; Representations and Warranties, etc. The Borrower represents and warrantsto the Lenders and the Administrative Agent that as of the date hereof, after giving effect to theamendments set forth herein (a) the representations of the Borrower contained in Article III of theCredit Agreement are true and correct in all material respects as of the date hereof as if made onsuch date (except to extent that such representations and warranties expressly relate to an earlierdate, in which case they shall be true and correct in all material respects as of such date); (b)no Default or Event of Default is continuing; and (c) the execution, delivery and performance bythe Borrower of this Amendment (i) have been duly
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authorized by all necessary corporate and, if required, shareholder action on the part of theBorrower, (ii) will not violate any applicable material law or regulation or the organizationaldocuments of the Borrower, and (iii) will not violate or result in a default under any materialindenture, agreement or other instrument binding on the Borrower or any of its assets.5. Conditions Precedent. The effectiveness of this Amendment shall be conditioned upon theAdministrative Agent’s receipt from the Borrower and the Required Lenders of either (a) acounterpart of this Amendment signed on behalf of such party or (b) written evidence reasonablysatisfactory to the Administrative Agent (which may include telecopy transmission of a signedsignature page of this Amendment) that such party has signed a counterpart of this Amendment.6. Miscellaneous.(a) The Borrower, the Lenders and the Administrative Agent hereby ratify and confirm the terms andprovisions of the Credit Agreement and the other Loan Documents and agree that, except to theextent specifically amended hereby, the Credit Agreement, the other Loan Documents and all relateddocuments shall remain in full force and effect. Nothing contained herein shall constitute awaiver of any provision of the Loan Documents, except such waivers or consents as are expressly setforth herein.(b) The Borrower agrees to pay all reasonable out-of-pocket costs and expenses incurred by JPMorganChase Bank, N.A. and its respective Affiliates (including the reasonable fees, charges anddisbursements of counsel for the Administrative Agent), in connection with the preparation andadministration of this Amendment or any amendments, modifications or waivers of the provisionsthereof (whether or not the transactions contemplated hereby or thereby shall be consummated).(c) This Amendment may be executed in any number of counterparts (including by way of facsimiletransmission), each of which, when executed and delivered, shall be an original, but allcounterparts shall together constitute one instrument.(d) This Amendment shall be governed by the laws of the State of New York and shall be binding uponand inure to the benefit of the parties hereto and their respective successors and assigns.[*Signature Pages Follow*]
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     IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Credit Agreementand Waiver to be duly executed by their respective authorized officers as of the day and year firstabove written.      **BORROWER****:**