Exhibit 10.1  







CREDIT AGREEMENT


Dated as of March 20, 2009


among


FOOT LOCKER, INC.,

as the Borrower,


The Guarantors Named Herein,


BANK OF AMERICA, N.A.
as Administrative Agent, Collateral Agent, Swing Line
Lender

and

L/C Issuer,


and


The Other Lenders Party Hereto


JPMORGAN CHASE BANK, N.A. and WELLS FARGO
RETAIL FINANCE, LLC,

as Co-Syndication Agents


U.S. BANK NATIONAL ASSOCIATION,

as Documentation Agent


BANC OF AMERICA SECURITIES LLC and J.P.
MORGAN SECURITIES INC.,

as Joint Lead Arrangers and Joint Bookrunners









TABLE OF CONTENTS


	
 

	
 

	
 

	
 

	
 


	
Section

	
 

	
 

	
 

	
Page


	
 

	
 

	
 

	
 

	
 


	
ARTICLE I
 DEFINITIONS AND ACCOUNTING TERMS

	
 

	
1


	
 

	
 

	
 


	
1.01

	
 

	
Defined
 Terms

	
 

	
1


	
1.02

	
 

	
Other
 Interpretive Provisions

	
 

	
41


	
1.03

	
 

	
Accounting
 Terms

	
 

	
42


	
1.04

	
 

	
Rounding

	
 

	
43


	
1.05

	
 

	
Times of Day

	
 

	
43


	
1.06

	
 

	
Letter of Credit
 Amounts

	
 

	
43


	
 

	
 

	
 


	
ARTICLE II
 THE COMMITMENTS AND CREDIT EXTENSIONS

	
 

	
43


	
 

	
 

	
 


	
2.01

	
 

	
Committed
 Loans; Reserves

	
 

	
43


	
2.02

	
 

	
Borrowings,
 Conversions and Continuations of Committed Loans

	
 

	
44


	
2.03

	
 

	
Letters of
 Credit

	
 

	
46


	
2.04

	
 

	
Swing Line
 Loans

	
 

	
53


	
2.05

	
 

	
Prepayments

	
 

	
56


	
2.06

	
 

	
Termination
 or Reduction of Commitments

	
 

	
57


	
2.07

	
 

	
Repayment of
 Loans

	
 

	
58


	
2.08

	
 

	
Interest

	
 

	
58


	
2.09

	
 

	
Fees

	
 

	
59


	
2.10

	
 

	
Computation
 of Interest and Fees

	
 

	
59


	
2.11

	
 

	
Evidence of
 Debt

	
 

	
59


	
2.12

	
 

	
Payments
 Generally; Administrative Agent’s Clawback

	
 

	
60


	
2.13

	
 

	
Sharing of
 Payments by Lenders

	
 

	
61


	
2.14

	
 

	
Settlement
 Amongst Lenders

	
 

	
62


	
2.15

	
 

	
Increase in
 Commitments

	
 

	
63


	
 

	
 

	
 


	
ARTICLE III
 TAXES, YIELD PROTECTION AND ILLEGALITY

	
 

	
64


	
 

	
 

	
 


	
3.01

	
 

	
Taxes

	
 

	
64


	
3.02

	
 

	
Illegality

	
 

	
66


	
3.03

	
 

	
Inability to
 Determine Rates

	
 

	
67


	
3.04

	
 

	
Increased
 Costs; Reserves on LIBO Rate Loans

	
 

	
67


	
3.05

	
 

	
Compensation
 for Losses

	
 

	
68


	
3.06

	
 

	
Mitigation
 Obligations; Replacement of Lenders

	
 

	
69


	
3.07

	
 

	
Survival

	
 

	
69


	
 

	
 

	
 


	
ARTICLE IV
 CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

	
 

	
69


	
 

	
 

	
 


	
4.01

	
 

	
Conditions
 of Initial Credit Extension

	
 

	
69


	
4.02

	
 

	
Conditions
 to all Credit Extensions

	
 

	
72


	
 

	
 

	
 


	
ARTICLE V
 REPRESENTATIONS AND WARRANTIES

	
 

	
73


	
 

	
 

	
 


	
5.01

	
 

	
Existence,
 Qualification and Power

	
 

	
73


	
5.02

	
 

	
Authorization;
 No Contravention

	
 

	
73


	
5.03

	
 

	
Governmental
 Authorization; Other Consents

	
 

	
74


	
5.04

	
 

	
Binding
 Effect

	
 

	
74


	
5.05

	
 

	
Financial
 Statements; No Material Adverse Effect

	
 

	
74


	
5.06

	
 

	
Litigation

	
 

	
75


	
5.07

	
 

	
No Default

	
 

	
75





(i)






	
 

	
 

	
 

	
 

	
 


	
5.08

	
 

	
Ownership of
 Property; Liens

	
 

	
75


	
5.09

	
 

	
Environmental
 Compliance

	
 

	
76


	
5.10

	
 

	
Insurance

	
 

	
76


	
5.11

	
 

	
Taxes

	
 

	
76


	
5.12

	
 

	
ERISA
 Compliance

	
 

	
77


	
5.13

	
 

	
Subsidiaries;
 Equity Interests

	
 

	
77


	
5.14

	
 

	
Margin
 Regulations; Investment Company Act

	
 

	
78


	
5.15

	
 

	
Disclosure

	
 

	
78


	
5.16

	
 

	
Compliance
 with Laws

	
 

	
78


	
5.17

	
 

	
Intellectual
 Property

	
 

	
78


	
5.18

	
 

	
Labor
 Matters

	
 

	
78


	
5.19

	
 

	
Security
 Documents

	
 

	
79


	
5.20

	
 

	
Solvency

	
 

	
79


	
5.21

	
 

	
Deposit
 Accounts; Credit Card Arrangements

	
 

	
79


	
5.22

	
 

	
Brokers

	
 

	
80


	
5.23

	
 

	
Customer and
 Trade Relations

	
 

	
80


	
5.24

	
 

	
Casualty

	
 

	
80


	
 

	
 

	
 


	
ARTICLE VI
 AFFIRMATIVE COVENANTS

	
 

	
80


	
 

	
 

	
 


	
6.01

	
 

	
Financial
 Statements

	
 

	
80


	
6.02

	
 

	
Certificates;
 Other Information

	
 

	
81


	
6.03

	
 

	
Notices

	
 

	
83


	
6.04

	
 

	
Payment of
 Obligations

	
 

	
84


	
6.05

	
 

	
Preservation
 of Existence, Etc.

	
 

	
84


	
6.06

	
 

	
Maintenance
 of Properties

	
 

	
84


	
6.07

	
 

	
Maintenance
 of Insurance

	
 

	
85


	
6.08

	
 

	
Compliance
 with Laws

	
 

	
86


	
6.09

	
 

	
Books and
 Records; Accountants

	
 

	
86


	
6.10

	
 

	
Inspection
 Rights

	
 

	
86


	
6.11

	
 

	
Use of
 Proceeds

	
 

	
87


	
6.12

	
 

	
Additional
 Loan Parties

	
 

	
87


	
6.13

	
 

	
Cash
 Management

	
 

	
87


	
6.14

	
 

	
Information
 Regarding the Collateral

	
 

	
89


	
6.15

	
 

	
Physical
 Inventories

	
 

	
89


	
6.16

	
 

	
Environmental
 Laws

	
 

	
89


	
6.17

	
 

	
Further
 Assurances

	
 

	
90


	
6.18

	
 

	
Compliance
 with Terms of Leaseholds

	
 

	
90


	
 

	
 

	
 


	
ARTICLE VII
 NEGATIVE COVENANTS

	
 

	
90


	
 

	
 

	
 


	
7.01

	
 

	
Liens

	
 

	
90


	
7.02

	
 

	
Investments

	
 

	
90


	
7.03

	
 

	
Indebtedness;
 Disqualified Stock

	
 

	
91


	
7.04

	
 

	
Fundamental
 Changes

	
 

	
91


	
7.05

	
 

	
Dispositions

	
 

	
91


	
7.06

	
 

	
Restricted
 Payments

	
 

	
91


	
7.07

	
 

	
Prepayments
 of Indebtedness

	
 

	
92


	
7.08

	
 

	
Change in
 Nature of Business

	
 

	
92


	
7.09

	
 

	
Transactions
 with Affiliates

	
 

	
92


	
7.10

	
 

	
Burdensome
 Agreements

	
 

	
92


	
7.11

	
 

	
Use of
 Proceeds

	
 

	
93


	
7.12

	
 

	
Amendment of
 Material Documents

	
 

	
93





(ii)






	
 

	
 

	
 

	
 

	
 


	
7.13

	
 

	
Fiscal Year

	
 

	
93


	
7.14

	
 

	
Deposit
 Accounts; Credit Card Processors

	
 

	
93


	
7.15

	
 

	
Adjusted
 Consolidated Fixed Charge Coverage Ratio

	
 

	
94


	
 

	
 

	
 

	
 

	
 


	
ARTICLE VIII
 EVENTS OF DEFAULT AND REMEDIES

	
 

	
94


	
 

	
 

	
 

	
 

	
 


	
8.01

	
 

	
Events of
 Default

	
 

	
94


	
8.02

	
 

	
Remedies
 Upon Event of Default

	
 

	
96


	
8.03

	
 

	
Application
 of Funds

	
 

	
97


	
 

	
 

	
 


	
ARTICLE IX
 ADMINISTRATIVE AGENT

	
 

	
98


	
 

	
 

	
 

	
 

	
 


	
9.01

	
 

	
Appointment
 and Authority

	
 

	
98


	
9.02

	
 

	
Rights as a
 Lender

	
 

	
99


	
9.03

	
 

	
Exculpatory
 Provisions

	
 

	
99


	
9.04

	
 

	
Reliance by
 Agents

	
 

	
100


	
9.05

	
 

	
Delegation
 of Duties

	
 

	
100


	
9.06

	
 

	
Resignation
 of Agents

	
 

	
100


	
9.07

	
 

	
Non-Reliance
 on Administrative Agent and Other Lenders

	
 

	
101


	
9.08

	
 

	
No Other
 Duties, Etc.

	
 

	
101


	
9.09

	
 

	
Administrative
 Agent May File Proofs of Claim

	
 

	
102


	
9.10

	
 

	
Collateral
 and Guaranty Matters

	
 

	
102


	
9.11

	
 

	
Notice of
 Transfer

	
 

	
103


	
9.12

	
 

	
Reports and
 Financial Statements

	
 

	
103


	
9.13

	
 

	
Agency for
 Perfection

	
 

	
104


	
9.14

	
 

	
Indemnification
 of Agents

	
 

	
104


	
9.15

	
 

	
Relation
 among Lenders

	
 

	
104


	
9.16

	
 

	
Defaulting
 Lender

	
 

	
104


	
 

	
 

	
 


	
ARTICLE X
 MISCELLANEOUS

	
 

	
105


	
 

	
 

	
 


	
10.01

	
 

	
Amendments,
 Etc.

	
 

	
105


	
10.02

	
 

	
Notices;
 Effectiveness; Electronic Communications

	
 

	
107


	
10.03

	
 

	
No Waiver;
 Cumulative Remedies

	
 

	
108


	
10.04

	
 

	
Expenses;
 Indemnity; Damage Waiver

	
 

	
109


	
10.05

	
 

	
Payments Set
 Aside

	
 

	
110


	
10.06

	
 

	
Successors
 and Assigns

	
 

	
111


	
10.07

	
 

	
Treatment of
 Certain Information; Confidentiality

	
 

	
114


	
10.08

	
 

	
Right of
 Setoff

	
 

	
115


	
10.09

	
 

	
Interest
 Rate Limitation

	
 

	
115


	
10.10

	
 

	
Counterparts;
 Integration; Effectiveness

	
 

	
115


	
10.11

	
 

	
Survival

	
 

	
116


	
10.12

	
 

	
Severability

	
 

	
116


	
10.13

	
 

	
Replacement
 of Lenders

	
 

	
116


	
10.14

	
 

	
Governing
 Law; Jurisdiction; Etc.

	
 

	
117


	
10.15

	
 

	
Waiver of
 Jury Trial

	
 

	
118


	
10.16

	
 

	
No Advisory
 or Fiduciary Responsibility

	
 

	
118


	
10.17

	
 

	
USA PATRIOT
 Act Notice

	
 

	
118


	
10.18

	
 

	
Foreign
 Asset Control Regulations

	
 

	
119


	
10.19

	
 

	
Time of the
 Essence

	
 

	
119


	
10.20

	
 

	
Press
 Releases

	
 

	
119


	
10.21

	
 

	
Additional
 Waivers

	
 

	
120


	
10.22

	
 

	
No Strict
 Construction

	
 

	
121


	
10.23

	
 

	
Attachments

	
 

	
121





(iii)






	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
SIGNATURES

	
 

	
S-1





(iv)






	
 

	
 

	
 


	
SCHEDULES

	
 


	
 

	
 

	
 


	
 

	
1.01

	
Guarantors


	
 

	
1.02

	
Immaterial
 Subsidiaries


	
 

	
2.01

	
Commitments
 and Applicable Percentages


	
 

	
4.01

	
Security
 Documents and other Loan Documents delivered on Closing Date


	
 

	
5.01

	
Loan Parties
 Organizational Information


	
 

	
5.05

	
Supplement
 to Interim Financial Statements


	
 

	
5.06

	
Litigation


	
 

	
5.08(b)(1)

	
Owned Real
 Estate


	
 

	
5.08(b)(2)

	
Leased Real
 Estate


	
 

	
5.09

	
Environmental
 Matters


	
 

	
5.10

	
Insurance


	
 

	
5.13

	
Subsidiaries;
 Other Equity Investments


	
 

	
5.17

	
Intellectual
 Property Matters


	
 

	
5.18

	
Collective
 Bargaining Agreements


	
 

	
5.21(a)

	
DDAs


	
 

	
5.21(b)

	
Credit Card
 Arrangements


	
 

	
6.02

	
Financial
 and Collateral Reporting


	
 

	
7.01

	
Existing
 Liens


	
 

	
7.02

	
Existing
 Investments


	
 

	
7.03

	
Existing
 Indebtedness


	
 

	
10.02

	
Administrative
 Agent’s Office; Certain Addresses for Notices








	
 

	
 

	
 


	
EXHIBITS

	
 


	
 

	
 

	
 


	
 

	
 

	
Form of


	
 

	
 

	
 


	
 

	
A

	
Committed
 Loan Notice


	
 

	
B

	
Swing Line
 Loan Notice


	
 

	
C-1

	
Revolving
 Note


	
 

	
C-2

	
Swing Line
 Note


	
 

	
D

	
Compliance
 Certificate


	
 

	
E

	
Assignment
 and Assumption


	
 

	
F

	
Borrowing
 Base Certificate


	
 

	
G

	
Collateral
 Access Agreement


	
 

	
H

	
Facility
 Guaranty


	
 

	
I

	
Credit Card
 Notification


	
 

	
J

	
Joinder
 Agreement





(v)






CREDIT AGREEMENT


          This CREDIT
AGREEMENT (“Agreement”) is entered into as of March 20, 2009, among 


          FOOT
LOCKER, INC., a New York corporation (the “Borrower”), 


          the Persons
named on Schedule 1.01 hereto (collectively with each other Person that
from time to time becomes a “Guarantor” hereunder, the “Guarantors”), 


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


          BANK OF
AMERICA, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and
L/C Issuer; 


          J.P. MORGAN
CHASE BANK, N.A. and WELLS FARGO RETAIL FINANCE, LLC, as Co-Syndication Agents;
and 


          U.S. BANK
NATIONAL ASSOCIATION, as Documentation Agent. 


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


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


ARTICLE I 

DEFINITIONS AND ACCOUNTING TERMS


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


          “Accelerated
Borrowing Base 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 twenty percent (20%) of the Loan Cap. For
purposes of this Agreement, the occurrence of an Accelerated Borrowing Base
Delivery Event shall be deemed continuing at the Administrative Agent’s option
(i) so long as such Event of Default is continuing, and/or (ii) if the
Accelerated Borrowing Base Delivery Event arises as a result of the Borrower’s
failure to achieve Availability as required hereunder, until Availability has
exceeded twenty percent (20%) of the Loan Cap for sixty (60) consecutive
calendar days, in which case an Accelerated Borrowing Base Delivery Event shall
no longer be deemed to be continuing for purposes of this Agreement. 


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


          “Account”
means “Account” 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, or (c) arising out of
the use of a credit or charge card or information contained on or for use with
the card. 


          “ACH” means
automated clearing house transfers. 


-1-






          “Acquisition”
means, with respect to any Person (a) an Investment in, or a purchase of a
Controlling interest in, the Equity Interests of any other Person, (b) a
purchase or other acquisition of all or substantially all of the assets or
properties of, another Person or of any business unit of another Person, (c) any
merger or consolidation of such Person with any other Person or other
transaction or series of transactions resulting in the acquisition of all or
substantially all of the assets, or a Controlling interest in the Equity
Interests, of any Person, or (d) any acquisition of Store locations of any
Person for which the aggregate consideration payable in connection with such
acquisition is $25,000,000 or more, in each case in any transaction or group of
transactions which are part of a common plan. 


          “Act” has
the meaning specified in Section 10.17. 


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


          “Adjusted
Consolidated EBITDA” means, for any Measurement Period, an amount equal to
EBITDA as set forth in Report 210 (as disclosed to the Lenders) of the
Borrower’s customary internal financial reports, as calculated in accordance
with the Borrower’s customary practices as in effect on the Closing Date. 


          “Adjusted
Consolidated Fixed Charge Coverage Ratio” means, at any date of determination,
the ratio of (a) (i) Adjusted Consolidated EBITDA for the most recently
completed Measurement Period plus (ii) dividends received by the Borrower from
its foreign Subsidiaries during such period minus (iii) the sum of (x) the Loan
Parties’ pro rata share (based on sales of the Loan Parties) of Corporate
Capital Expenditures plus (y) the Loan Parties’ pro rata share of Capital
Expenditures for U.S. store divisions (but excluding Champs Canada) as set
forth on Report 304I (as disclosed to the Lenders) of the Borrower’s customary
internal financial reports, minus (iv) the Loan Parties’ pro rata share (based
on income of the Loan Parties) of income taxes of the Borrower and its U.S.
Subsidiaries set forth on Report 135 (as disclosed to the Lenders) of the
Borrower’s customary internal financial reports 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 who are Loan Parties for
the most recently completed Measurement Period, all as determined on a
Consolidated basis in accordance with the Borrower’s customary accounting
practices as in effect on the Closing Date. 


           “Adjusted
LIBO Rate” means, with respect to any LIBO Borrowing for any Interest Period,
an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of
one percent (1%)) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate. The Adjusted LIBO Rate will be
adjusted automatically as to all LIBO Borrowings then outstanding as of the
effective date of any change in the Statutory Reserve Rate. 


          “Adjustment
Date” means the first day of each Fiscal Quarter, commencing May 1, 2009. 


          “Administrative
Agent” means Bank of America in its capacity as administrative agent under any
of the Loan Documents, or any successor administrative agent. 


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


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


-2-






          “Affiliate”
means, with respect to any Person, 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. 


          “Agent(s)”
means, individually, the Administrative Agent or the Collateral Agent, and
collectively means both of them. 


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


          “Aggregate
Commitments” means the Commitments of all the Lenders. 


          “Agreement”
means this Credit Agreement. 


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


          “Applicable
Commitment Fee Percentage” means the applicable percentage set forth in the
grid below: 


	
 

	
 

	
 


	
Average
 daily balance of the Credit Extensions in the immediately preceding Fiscal
 Quarter

	
 

	
Applicable
 Commitment Fee Percentage


	


	


	



	
Less than
 50% of the Aggregate Commitments

	
 

	
.75%


	
 


	


	


	



	
Equal to or
 greater than 50% of the Aggregate Commitments

	
 

	
.50%


	


	


	






          “Applicable
Margin” means: 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (b) From
 and after the first Adjustment Date, the Applicable Margin shall be
 determined from the following pricing grid based upon the Average Daily
 Availability as of the Fiscal Quarter ended immediately preceding such
 Adjustment Date; provided, however, that until the Adjustment Date
 which is four (4) full Fiscal Quarters after the Closing Date, the Applicable
 Margin shall not be established at Level I (even if the Average Daily
 Availability requirements for Level I have been met); provided further
 that notwithstanding anything to the contrary set forth herein, upon the
 occurrence and during the continuance of an Event of Default, the
 Administrative Agent may, and at the direction of the Required Lenders shall,
 immediately increase the Applicable Margin to that set forth in Level III
 (even if the Average Daily Availability requirements for a different Level
 have been met, without limiting the right of the Administrative Agent or the
 Required Lenders to charge interest at the Default Rate as provided in
 Section 2.08); provided further if the 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. 





-3-






	
 

	
 

	
 

	
 


	
Level

	
Average

 Daily

 Availability

	
LIBOR

 Margin

	
Base Rate

 Margin


	


	


	


	



	
I

	
Greater than $130,000,000

	
3.25%

	
2.75%


	


	


	


	



	
II

	
Less than $130,000,000 but equal to or greater than $60,000,000

	
3.50%

	
3.00%


	


	


	


	



	
III

	
Less than $60,000,000

	
3.75%

	
3.25%


	


	


	


	



	
 

	
 

	
 

	
 





          “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 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. 


          “Applicable
Rate” means, at any time of calculation, a per annum rate equal to the
Applicable Margin for LIBO Rate Loans. 


           “Appraised
Value” means, with respect to the Loan Parties’ 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 the Loan Parties’ Eligible Inventory as set forth in the
Loan Parties’ inventory stock ledger, which value shall be determined from time
to time by the most recent appraisal undertaken by an independent appraiser
engaged by the Administrative Agent. 


           “Approved
Fund” means any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender. 


          “Arrangers”
means, collectively, Banc of America Securities LLC and J.P. Morgan Securities
Inc., in their capacities as joint lead arrangers and joint book-runners. 


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


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


-4-






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


          “Audited
Financial Statements” means the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the Fiscal Year ended February 2, 2008, 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. 


          “Auto-Extension
Letter of Credit” has the meaning specified in Section 2.03(b)(iii). 


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


                    (a)
 the Loan Cap as of such date; 


Minus



                    (b)
the aggregate of the outstanding principal amount of Credit Extensions to, or
for the account of, the Borrower on such date. 


          “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 that are
otherwise addressed or excluded through eligibility criteria, such reserves as
the Administrative Agent from time to time determines in its Permitted
Discretion, as being appropriate (a) to reflect the impediments to the Agents’
ability to realize upon the Collateral, (b) to reflect claims and liabilities
that the Administrative Agent determines in its Permitted Discretion 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 or an Event of Default then exists. Without limiting the generality of
the foregoing, Availability Reserves may include, in the Administrative Agent’s
Permitted Discretion, (but are not limited to) reserves based on: (i) rent;
(ii) customs duties, and other costs to release Inventory which is being
imported into the United States; (iii) outstanding Taxes and other governmental
charges, including, without limitation, ad valorem, real estate, personal
property, sales, and other Taxes which have priority over the interests of the
Collateral Agent in the Collateral; (iv) during the continuance of a Triggering
Event only, salaries, wages and benefits due to employees of any Loan Party,
(v) Customer Credit Liabilities, (vi) reserves for reasonably anticipated
changes in Appraised Value of Eligible Inventory between appraisals, (vii)
warehousemen’s or bailee’s charges and other Permitted Encumbrances which have
priority over the interests of the Collateral Agent in the Collateral, (viii)
Cash Management Reserves, and (ix) Bank Products Reserves. 


          “Average
Daily Availability” means, as of any date of determination, the average daily
Availability for the immediately preceding Fiscal Quarter. 


          “Bank of
America” means Bank of America, N.A. and its successors. 


-5-






          “Bank
Products” means any services of facilities provided to any Loan Party by the
Administrative Agent or any Lender or any of their respective Affiliates,
including, without limitation, on account of (a) Swap Contracts and (b)
leasing, but excluding Cash Management Services. 


          “Bank
Product Reserves” means such reserves as the Administrative Agent from time to
time determines in its Permitted Discretion as reflecting the liabilities of
the Loan Parties with respect to Bank Products then provided or outstanding. 


          “Base Rate” means for any day a
fluctuating rate
per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%,
(b) the Adjusted LIBO Rate for a one month Interest Period plus 1.00% per annum
and (c) the rate of interest in effect for such day as publicly announced from
time to time by Bank of America as its “prime rate.” The “prime rate” is a rate
set by Bank of America based upon various factors including Bank of America’s
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate. Any change in such rate announced by Bank
of America shall take effect at the opening of business on the day specified in
the public announcement of such change. 


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


          “Blocked
Account” 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
Collateral Agent, establishing “control” (as defined in the UCC) of such
account by the Collateral Agent. 


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


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


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


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


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


	
 

	
 


	
 

	
          (a) the
 face amount of Eligible Credit Card Receivables multiplied by 90%


	
 

	
 


	
 

	
          plus 


	
 

	
 


	
 

	
          (b) the
 Cost of Eligible Inventory, net of Inventory Reserves, multiplied by 75%
 multiplied by the Appraised Value of Eligible Inventory; 


	
 

	
 


	
 

	
          minus 


	
 

	
 


	
 

	
          (c) the
 then amount of all Availability Reserves. 





          “Borrowing
Base Certificate” means a certificate substantially in the form of Exhibit F
hereto (with such changes therein as may be required by the Administrative
Agent to reflect the components of 


-6-






and Reserves against the Borrowing Base as provided for hereunder from
time to time), executed by a Responsible Officer of the Borrower. 


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


          “Capital
Expenditures” means, with respect to any Person for any period, (a) all
expenditures made (whether made in the form of cash or other property) or costs
incurred for the acquisition or improvement of fixed or capital assets of such
Person (excluding normal replacements and maintenance which are properly
charged to current operations), in each case that are (or should be) set forth
as capital expenditures in a Consolidated statement of cash flows of such
Person for such period, in each case prepared in accordance with GAAP, and (b)
Capital Lease Obligations incurred by a Person during such period. For purposes
of this definition, the purchase price of equipment that is purchased
substantially contemporaneously with the trade-in or sale of similar equipment
or with insurance proceeds therefrom shall be included in Capital Expenditures
only to the extent of the gross amount by which such purchase price exceeds the
credit granted to such Person for the equipment being traded in by the seller
of such new equipment, the proceeds of such sale or the amount of the insurance
proceeds, as the case may be. 


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


          “Cash
Collateral Account” means an account established by one or more of the Loan
Parties with Bank of America, in the name of the Collateral Agent (or as the
Collateral Agent shall otherwise direct) and under the sole and exclusive
dominion and control of the Collateral Agent, in which deposits are required to
be made in accordance with Section 2.03(g) or 8.02(c). 


          “Cash
Collateralize” has the meaning specified in Section 2.03(g). 


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


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


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


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


-7-






          “CFC” means
a Subsidiary that is (i) a controlled foreign corporation under Section 957 of
the Code, (ii) a Subsidiary substantially all of the assets of which consist of
Equity Interests in Subsidiaries described in clause (i) of this definition, or
(iii) an entity treated as disregarded for United States federal income tax
purposes, substantially all of the assets of which consist of more than 65% of
the voting Equity Interests of a Subsidiary described in clauses (i) or (ii) of
this definition. 


          “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. 


          “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), directly or indirectly, of 40% 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; or 


	
 

	
 


	
 

	
          (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
 (excluding, in the case of both clause (ii) and clause (iii), any individual
 whose initial nomination for, or assumption of office as, a member of that
 board or equivalent governing body occurs as a result of an actual or
 threatened solicitation of proxies or consents for the election or removal of
 one or more directors by any person or group other than a solicitation for
 the election of one or more directors by or on behalf of the board of
 directors); or 


	
 

	
 


	
 

	
          (c) any
 “change in control” or “sale” or “disposition” or similar event as defined 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 Collateral 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, and the regulations promulgated
thereunder, as amended and in effect. 


-8-






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


          “Collateral
Access Agreement” means an agreement in substantially the form attached hereto
as Exhibit G or otherwise reasonably satisfactory in form and substance
to the Agents executed by (a) a bailee or other Person in possession of
Collateral, or (b) a landlord of Real Estate leased by any Loan Party, pursuant
to which such Person (i) acknowledges the Collateral 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 and agrees not to exercise
any remedies with respect to such Person’s Liens, (iii) provides the Collateral
Agent with access to the Collateral held by such bailee or other Person or
located in or on such Real Estate, and (iv) as to any landlord, provides the
Collateral Agent with a reasonable time to sell and dispose of the Collateral
from such Real Estate. 


          “Collateral
Agent” means Bank of America, acting in such capacity for its own benefit and
the ratable benefit of the other Credit Parties. 


          “Commercial
Letter of Credit” means any letter of credit or similar instrument (including,
without limitation, bankers’ acceptances) 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. 


          “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. 


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


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


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


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



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


          “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. 


-9-






          “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
(net of refunds and credits), (iii) depreciation and amortization expense, (iv)
all non-cash charges and non-cash items for stock based compensation, non-cash
restructuring charges or non-cash reserves (including costs relating to
Acquisitions after the date hereof and to the closure or consolidation of
facilities) and (vi) other non-recurring expenses or non-cash charges which do
not represent a cash item in such period or any future period (in each case of
or by the Borrower and its Subsidiaries for such Measurement Period), minus (b)
all non-cash items increasing Consolidated Net Income (in each case of or by
the Borrower and its Subsidiaries for such Measurement Period), all as
determined on a Consolidated basis in accordance with GAAP.


          “Consolidated
Fixed Charge Coverage Ratio” means, at any date of determination, the ratio of
(a) (i) Consolidated EBITDA for the most recently completed Measurement Period
minus (ii) Capital Expenditures minus (iii) the aggregate amount of federal,
state, local and foreign income taxes paid in cash 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.


          “Consolidated Interest Charges” means,
for any period, the Consolidated interest expense (net of interest income) of
the Borrower and its Subsidiaries for such period, calculated in the same
manner as the amounts shown as “interest expense, net” under the heading
“Interest Expense” on page 12 of the Borrower’s annual report incorporated by
reference in the Borrower’s 2007 Form 10-K.


          “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 (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 (other than a
Loan Party) 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.


          “Corporate
Capital Expenditures” means, with respect to the Borrower and its Subsidiaries
for any period, all expenditures made in connection with information
technology, corporate shared services, 


-10-






logistics,
asset protection, human resources and multi-media, in each case as set forth on
Report 304I (as disclosed to the Lenders) of the Borrower’s customary internal
financial reports.


          “Cost”
means the cost value of Inventory determined based on the retail method of
accounting as set forth in the financial stock ledger of the Borrower.


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


          “Credit
Card Receivables” means each “Account” (as defined in the UCC) together with
all income, payments and proceeds thereof, owed by a major credit or debit card
issuer (including, but not limited to, Visa, Mastercard, Discover and American
Express and such other issuers approved by the Administrative Agent) to a Loan
Party resulting from charges by a customer of a Loan Party on credit or debit
cards issued by such issuer in connection with the sale of goods by a Loan
Party, or services performed by a Loan Party, in each case in the ordinary
course of its business.


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


          “Credit
Party” or “Credit Parties” means (a) individually, (i) each Lender, (ii) each
Agent, (iii) each L/C Issuer, (iv) each Arranger, (v) each beneficiary of each
indemnification obligation undertaken by any Loan Party under any Loan
Document, (vi) each Person providing Cash Management Services or Bank Products
to a Loan Party or a Subsidiary, and (vii) the successors and assigns of each
of the foregoing, and (b) collectively, all of the foregoing.


          
“Customer Credit Liabilities” means at any time, the aggregate remaining value
at such time of (a) outstanding gift certificates and gift cards of the Loan
Parties 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,
and (b) outstanding merchandise credits and customer deposits of the Loan
Parties.   


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


          “DDA”
means each checking, savings or other demand deposit account maintained by any
of the Loan Parties (other than any payroll, trust and tax withholding accounts
maintained in the ordinary course of business). All funds in each DDA shall be
conclusively presumed to be Collateral and proceeds of Collateral and the
Agents and the Lenders shall have no duty to inquire as to the source of the
amounts on deposit in any DDA.


          “Debt
Service Charges” means for any Measurement Period, the sum of (a) Consolidated
Interest Charges paid in cash or required to be paid in cash for such
Measurement Period (net of interest income for such Measurement Period), plus
(b) the principal amount of all scheduled amortization payments made or
required to be made on account of Indebtedness (excluding the Obligations and
Other Liabilities 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, 


-11-






receivership,
insolvency, reorganization, or similar debtor relief Laws of the United States
or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.


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


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


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


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


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


          “Disqualified
Stock” means any Equity Interest that, by its terms (or by the terms of any
security into which it is convertible, or for which it is exchangeable, in each
case at the option of the holder thereof), or upon the happening of any event,
matures or is mandatorily redeemable (other than solely for Equity Interests
that do not constitute Disqualified Stock), pursuant to a sinking fund
obligation or otherwise, or redeemable (other than solely for Equity Interests
that do not constitute Disqualified Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is 91 days after the Maturity
Date; provided, however, that (i) only the portion of such Equity
Interests which so matures or is mandatorily redeemable, is so convertible or
exchangeable or is so redeemable at the option of the holder thereof prior to
such date shall be deemed to be Disqualified Stock and (ii) with respect to any
Equity Interests issued to any employee or to any plan for the benefit of
employees of the 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.


-12-






          “Documentation
Agent” means U.S. Bank National Association.


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


          “Domestic
Subsidiary” means any Subsidiary that is organized under the laws of any
political subdivision of the United States.


          “Eligible
Assignee” means (a) a Credit Party or any of its Affiliates; (b) a bank,
insurance company, or company engaged in the business of making commercial
loans, which Person, together with its Affiliates, has a combined capital and
surplus in excess of $250,000,000; (c) an Approved Fund; and (d) any other
Person (other than a natural person) approved by (i) the Administrative Agent,
the L/C Issuer and the Swing Line Lender, 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: 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 payment processor
and/or credit card issuer, and in each case originated in the ordinary course
of business of such Loan Party, and (ii) is not ineligible for inclusion in the
calculation of the Borrowing Base pursuant to any of clauses (a) through (k)
below. Without limiting the foregoing, to qualify as an Eligible Credit Card
Receivable, an Account 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 an Account shall be reduced by, without duplication, to the
extent not reflected in such face amount, (x) the amount of all accrued and
actual discounts, claims, credits or credits pending, promotional program
allowances offered by the Loan Parties, 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 payment processor, or credit card issuer
pursuant to the terms of any agreement or understanding) and (y) the aggregate
amount of all cash received in respect of such Account but not yet applied by
the Loan Parties to reduce the amount of such Credit Card Receivable. Except as
otherwise agreed by the Administrative Agent, any Credit Card Receivable
included within any of the following categories shall not constitute an
Eligible Credit Card Receivable: 


	
 

	
 


	
 

	
          (a)
 Credit Card Receivable which do not constitute an “Account” (as defined in
 the UCC);


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (c)
 Credit Card Receivables with respect to which a Loan Party does not have good
 and valid title, free and clear of any Lien (other than Liens granted to the
 Collateral Agent and other Permitted Encumbrances);


	
 

	
 


	
 

	
          (d)
 Credit Card Receivables that are not subject to a first priority security
 interest in favor of the Collateral Agent (other than Permitted Encumbrances
 having priority over the Lien of the Collateral Agent under applicable Law)
 (it being the intent that chargebacks in the ordinary course by such
 processors shall not be deemed violative of this clause);





-13-






	
 

	
 


	
 

	
          (e)
 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); 


	
 

	
 


	
 

	
          (f)
 Credit Card Receivables as to which the processor has the right under certain
 circumstances to require a Loan Party to repurchase the Accounts from such
 credit card processor; 


	
 

	
 


	
 

	
          (g)
 Credit Card Receivables due from an issuer or payment processor of the
 applicable credit card which is the subject of any bankruptcy or insolvency
 proceedings;


	
 

	
 


	
 

	
          (h) Credit Card Receivables which are
 not a valid, legally enforceable obligation of the applicable issuer with
 respect thereto;


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (k)
 Credit Card Receivables which the Administrative Agent determines in its
 discretion to be uncertain of collection due to a material adverse change in
 the financial condition of a credit card payment processor and/or
 credit card issuer.





           “Eligible
Inventory” means, as of the date of determination thereof, without duplication,
items of Inventory of a Loan Party that are finished goods, merchantable and
readily saleable to the public in the ordinary course deemed by the
Administrative Agent in its Permitted Discretion to be eligible for inclusion
in the calculation of the Borrowing Base, in each case that, except as
otherwise agreed by the Administrative Agent, complies in all material respects
with each of the representations and warranties respecting Inventory made by
the Loan Parties in the Loan Documents, and that is not excluded as ineligible
by virtue of one or more of the criteria set forth below. Except as otherwise
agreed by the Administrative Agent, 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 (including, without limitation, In-Transit Inventory except to the
 extent set forth in clause (d) below) that is not located in the United
 States of America (excluding territories or possessions of the United States)
 at a location that is owned or leased by a Loan Party, except to the extent that (i) the Loan
 Parties have furnished the Administrative Agent with any UCC financing
 statements or other documents that the Administrative Agent reasonably
 determines to be necessary to perfect its security interest in such Inventory
 at such location, and (ii) if requested by the Collateral Agent, the Loan
 Parties have used commercially reasonable efforts to cause the Person owning
 any such location to enter into a Collateral Access Agreement on terms
 reasonably satisfactory to the Collateral Agent;





-14-






	
 

	
 


	
 

	
          (d)
 In-Transit Inventory until such time as the Administrative Agent is
 satisfied, in its reasonable discretion, with the Loan Parties’ reporting
 practices with respect to such Inventory and deems such Inventory as Eligible
 Inventory hereunder;


	
 

	
 


	
 

	
          (e)
 Inventory that is located in a distribution center leased by a Loan Party
 unless (i) the applicable lessor has delivered to the Collateral
 Agent, if requested by the Collateral Agent, a Collateral Access Agreement,
 or (ii) such Inventory is located at a distribution center where the
 aggregate book value of Inventory at such location is less than $250,000;


	
 

	
 


	
 

	
          (f)
 Inventory of the Loan Parties in trailers but not processed at month-end and
 early receipts for non-quarter-end months;


	
 

	
 


	
 

	
          (g)
 Inventory that is comprised of goods which (i) are damaged, defective, or
 “seconds,” (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
 spare parts, promotional, marketing, samples, labels, bags, 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, (v) are
 layaway merchandise, (vi) are not in compliance in all material respects with
 all standards imposed by any Governmental Authority having regulatory authority
 over such Inventory, or its use or sale, or (vi) are bill and hold goods;


	
 

	
 


	
 

	
          (h)
 Inventory that is not subject to a perfected first-priority security interest
 in favor of the Collateral Agent (other than Permitted Encumbrances having
 priority over the Lien of the Collateral Agent under applicable Law);


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (k)
 Inventory to be sold pursuant to the Loan Parties’ catalogue and internet
 business; 


	
 

	
 


	
 

	
          (l)
 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 written notice of a dispute in respect of any such agreement; or


	
 

	
 


	
 

	
          (m)
 Inventory acquired in a Permitted Acquisition, unless and until the Collateral
 Agent has completed or received (A) an appraisal of such Inventory from
 appraisers satisfactory to the Collateral Agent, establishes an advance rate
 and Inventory Reserves (if applicable) therefor, and (B) such other due
 diligence as the Agents may require, all of the results of the foregoing to
 be reasonably satisfactory to the Agents.





           “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 Materials or wastes, the emission to the air or discharge to waste or
public systems.


-15-






          “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, or (d) the release or
threatened release of any Hazardous Materials into the environment.


          “Equipment”
has the meaning specified in the Security Agreement.


          “Equity
Interests” means, with respect to any Person, all of the shares of capital
stock of (or other ownership or profit interests in) such Person, all of the
warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests
in) such Person, all of the securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or acquisition from such
Person of such shares (or such other interests), and all of the other ownership
or profit interests in such Person (including partnership, member or trust
interests therein), whether voting or nonvoting.


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


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


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


          “Event
of Default” has the meaning specified in Section 8.01.


          “Excluded
Taxes” means, with respect to the Administrative 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 which it is otherwise treated as
doing business, 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 of the Loan
Parties are 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 after such Foreign Lender becomes a party thereto) or is attributable to
such Foreign Lender’s failure or inability (other than as a result of a 


-16-






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), and (d) any
U.S. back-up withholding taxes.


          “Executive
Order” has the meaning specified in Section 10.18.


          “Existing
Credit Agreement” means that certain Sixth Amended and Restated Credit
Agreement dated as of May 16, 2008 among the Borrower, the Subsidiaries of the
Borrower party thereto, Bank of America, N.A., as agent, and a syndicate of
lenders.


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


          “Facility
Guaranty” means the Guaranty made by the Guarantors in favor of the Agents and
the other Credit Parties in the form attached hereto as Exhibit H.


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


          “Fee
Letter” means the letter agreement, dated January 27, 2009, among the Borrower,
the Administrative Agent and Banc of America Securities LLC.


          “Fiscal
Month” means any fiscal month of any Fiscal Year, which month shall generally
end on the last day of each calendar month in accordance with the fiscal
accounting calendar of the Loan Parties.


          “Fiscal
Quarter” means any fiscal quarter of any Fiscal Year, which quarters shall
generally end on the last day of each April, July, October and January of such
Fiscal Year in accordance with the fiscal accounting calendar of the Loan
Parties.


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


          “Foreign
Asset Control Regulations” has the meaning specified 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.


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


-17-






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


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


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


          “Guarantee”
means, as to any Person, any (a) any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the
“primary obligor”) in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services
for the purpose of assuring the obligee in respect of such Indebtedness or
other obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, or (iv) entered into for the purpose of
assuring in any other manner the obligee in respect of such Indebtedness or
other obligation of the payment or performance thereof or to protect such
obligee against loss in respect thereof (in whole or in part), or (b) any Lien
on any assets of such Person securing any Indebtedness or other obligation of
any other Person, whether or not such Indebtedness or other obligation is
assumed by such Person (or any right, contingent or otherwise, of any holder of
such Indebtedness to obtain any such Lien). The amount of any Guarantee shall
be deemed to be an amount equal to the stated or determinable amount of the
related primary obligation, or portion thereof, in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing
Person in good faith. The term “Guarantee” as a verb has a corresponding
meaning.


          “Guarantor”
means each Subsidiary of the Borrower (other than an Immaterial Subsidiary,
Footlocker.com, Inc., Eastbay, Inc., CCS Direct LLC, Foot Locker Australia,
Inc., Foot Locker New Zealand, Inc. and any CFC) set forth on Schedule 1.01
hereto and 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.


          “Honor
Date” has the meaning specified in Section 2.03(c)(i).


          “Immaterial
Subsidiary” means those Persons specified on Schedule 1.02 hereto and
each other Subsidiary of the Borrower that has been designated by the Borrower
in writing to the Administrative 


-18-






Agent as an
“Immaterial Subsidiary” for purposes of this Agreement and the other Loan
Documents, provided that for purposes of this Agreement, at no time
shall (i) the total assets of all Immaterial Subsidiaries, as of the end of the
most recent Fiscal Quarter for which financial statements have been delivered
pursuant to Section 6.01(a) or 6.01(b) hereof, equal or exceed five percent
(5%) of the Consolidated total assets of the Borrower and its Subsidiaries (and
in the event that the total assets of all Immaterial Subsidiaries as tested at
the end of any Fiscal Quarter exceed five percent (5%) of the Consolidated
total assets of the Borrower and its Subsidiaries, such Subsidiaries shall no
longer be deemed to be Immaterial Subsidiaries and the Borrower shall cause
such Subsidiaries to become Loan Parties as set forth in Section 6.12 hereof),
or (ii) the gross revenues of all Immaterial Subsidiaries for any Measurement
Period equal or exceed five percent (5%) of the Consolidated gross revenues of
the Borrower and its Subsidiaries for such Measurement Period, in each case as
determined in accordance with GAAP. For clarity, no Loan Party shall at any
time be deemed to be an Immaterial Subsidiary.


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


            “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 Attributable Indebtedness of such Person;


	
 

	
 


	
 

	
          (g)
 all obligations of such Person with respect to Disqualified Stock valued, in
 the case of a redeemable preferred interest, at the greater of its voluntary
 or involuntary liquidation preference plus accrued and unpaid
 dividends; and


	
 

	
 


	
 

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





            For
all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venture (but only to the extent of the
Indebtedness of such partnership or joint venture for which such Person is
liable), 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.


-19-






          “Indemnified
Taxes” means Taxes other than Excluded Taxes.


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


          “Indenture”
means that certain Indenture dated as of October 10, 1991 by Woolworth
Corporation, as predecessor in interest to the Borrower, to The Bank of New
York, as Trustee, as in effect on the Closing Date.


          “Information”
has the meaning specified in Section 10.07.


          “Intellectual
Property” means all intellectual property, including, without limitation, all
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 similar indicia of
source or origin, and all registrations or applications for registrations which
have heretofore been or may hereafter be issued thereon throughout the world;
copyrights, copyright registrations and copyright applications (including
copyrights in computer programs); unpatented inventions (whether or not
patentable); patents and patent applications; industrial design applications
and registered industrial designs; any Loan Party’s rights in any license
agreements related to any of the foregoing; intellectual property rights in
books, records, writings, computer tapes or disks, flow diagrams, specification
sheets, computer software, including source codes, object codes, executable
code, data, databases related thereto; and all common law and other rights
throughout the world in and to all of the foregoing.


          “Interest
Payment Date” means, (a) as to any Loan other than a Base Rate Loan, the last
day of each Interest Period applicable to such Loan and the Maturity Date;
provided, however, that if any Interest Period for a LIBO Rate Loan exceeds
three 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 Business Day
of each month and the Maturity Date.


          “Interest
Period” means, as to each LIBO Rate Loan, the period commencing on the date
such LIBO Rate Loan is disbursed or converted to or continued as a LIBO Rate
Loan and ending on the date one, two, three or six months thereafter, as
selected by the Borrower in its Committed Loan Notice, or, if available to all
of the Lenders, nine (9) or twelve (12) months as requested by the Borrower;
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; 


	
 

	
 


	
 

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


	
 

	
 


	
 

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





-20-






	
 

	
 


	
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, as of any date of determination thereof, 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 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 has passed to such Loan
 Party;


	
 

	
 


	
 

	
          (c)
 For which the document of title reflects a Loan Party as consignee or, if requested by the
 Collateral Agent, names the Collateral Agent as consignee, and in each case
 as to which the Collateral Agent has control over the documents of title
 which evidence ownership of the subject Inventory (such as, if requested by
 the Collateral Agent, by the delivery of a Customs Broker Agreement); 


	
 

	
 


	
 

	
          (d)
 Which is insured to the reasonable satisfaction of the Collateral Agent; and 


	
 

	
 


	
 

	
          (e)
 Which otherwise would constitute Eligible Inventory.





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


          “Inventory
Reserves” means such reserves as may be established from time to time by the
Administrative Agent in the Administrative Agent’s Permitted Discretion with
respect to the determination of the saleability, at retail, of the Eligible
Inventory or which reflect such other factors as affect the market value of the
Eligible Inventory. Without limiting the generality of the foregoing, Inventory
Reserves may, in the Administrative Agent’s Permitted Discretion, include (but
are not limited to) reserves based on:


	
 

	
 


	
 

	
          (a)
 Obsolescence; 


	
 

	
 


	
 

	
          (b)
 Seasonality; 


	
 

	
 


	
 

	
          (c)
 Shrink; 


	
 

	
 


	
 

	
          (d)
 Imbalance; 


	
 

	
 


	
 

	
          (e)
 Change in Inventory character; 


	
 

	
 


	
 

	
          (f)
 Change in Inventory composition;


	
 

	
 


	
 

	
          (g)
 Change in Inventory mix; 


	
 

	
 


	
 

	
          (h)
 Mark-downs (both permanent and point of sale); and





-21-






	
 

	
 


	
 

	
           (i)
 Retail mark-ons and mark-ups inconsistent with prior period practice and
 performance, industry standards, current business plans or advertising
 calendar and planned advertising events.





           “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 or
Equity Interests of another Person, (b) a loan, advance or capital contribution
to, Guarantee or assumption of debt of, or purchase or other acquisition of any
other debt or interest in, another Person, or (c) any Acquisition, or (d) any
acquisition of Store locations of any Person for which the aggregate
consideration payable in connection with such acquisition is less than
$25,000,000, in each case in any transaction or group of transactions which are
part of a common plan. For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.


           “IRS”
means the United States Internal Revenue Service.


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


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


           “Joinder
Agreement” means an agreement in the form attached hereto as Exhibit J pursuant
to which a Person become a party to, and bound by the terms of, this Agreement
and/or the other applicable Loan Documents in the same capacity and to the same
extent as wither a Borrower or Guarantor, as applicable.


           “Landlord
Lien State” means a state in which a landlord’s claim for rent has priority
over the lien of the Collateral Agent in any of the Collateral.


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


           “L/C
Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable
Percentage.


           “L/C
Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Committed Borrowing.


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


           “L/C
Issuer” means (a) Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder (which
successor may only be a Lender selected by the Administrative Agent in its
reasonable discretion), and (b) any other Lender selected by the 


-22-






Administrative
Agent in its discretion. The L/C Issuer may, in its discretion, arrange for one
or more Letters of Credit to be issued by Affiliates of the L/C Issuer, 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, and without duplication,
the aggregate undrawn amount available to be drawn under all outstanding
Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all
L/C Borrowings. 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 Rule
3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in
the amount so remaining available to be drawn.


          “Lease”
means any written agreement pursuant to which a Loan Party is entitled to the
use or occupancy of any real property 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
Administrative Agent.


          “Letter
of Credit” means each Standby Letter of Credit and each Commercial Letter of
Credit issued hereunder.


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


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


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


          “Letter
of Credit Sublimit” means an amount equal to $80,000,000. 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.


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


          “LIBO
Rate” means for any Interest Period with respect to a LIBO Rate Loan, the rate
per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time to
time) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period. If such rate is not available at such time for any reason, then the
“LIBO Rate” for such Interest Period shall be the rate per annum determined by
the Administrative Agent to be the rate at which deposits in Dollars for
delivery on the first day of such 


-23-






Interest
Period in same day funds in the approximate amount of the LIBO Rate Loan being
made, continued or converted by Bank of America and with a term equivalent to
such Interest Period would be offered by Bank of America’s London Branch to
major banks in the London interbank eurodollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.


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


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


          “Liquidation”
means the exercise by the Administrative Agent or Collateral Agent of those
rights and remedies accorded to such Agents 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 continuation
of an Event of Default) the conduct by the Loan Parties acting with the consent
of the Administrative Agent, of any public, private or “going-out-of-business”,
“store closing” or other similar sale or any other disposition of the
Collateral for the purpose of liquidating the Collateral. Derivations of the
word “Liquidation” (such as “Liquidate”) are used with like meaning in this
Agreement. 


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


          “Loan
Account” has the meaning specified in Section 2.11(a).


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


          “Loan
Documents” means this Agreement, each Note, each Issuer Document, the Fee
Letter, all Borrowing Base Certificates, the Blocked Account Agreements, the
Credit Card Notifications, the Security Documents, the Facility Guaranty, and
any other instrument or agreement now or hereafter executed and delivered in
connection herewith, each as amended and in effect from time to time. 


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


          “Material
Adverse Effect” means (a) a material adverse change in, or a material adverse
effect upon, the operations, business, properties, liabilities, or financial
condition of any Loan Party or the Borrower and its Subsidiaries taken as a
whole; (b) a material impairment of the ability of the Loan Parties to perform
their obligations under the Loan Documents; or (c) a material impairment of the
rights and remedies of the Agent or the Lenders under any Loan Document or a
material adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document to which it is a
party.


          “Material
Indebtedness” means (a) Indebtedness (other than the Obligations and Other
Liabilities) of the Loan Parties in an aggregate principal amount exceeding
$25,000,000 and (b) Indebtedness pursuant to the Indenture. For purposes of
determining the amount of Material Indebtedness at any time, 


-24-






the amount of
the obligations in respect of any Swap Contract at such time shall be
calculated at the Swap Termination Value thereof.


          “Maturity
Date” means March 20, 2013.


          “Maximum
Rate” has the meaning specified in Section 10.09.


          “Measurement
Period” means, at any date of determination, the most recently completed twelve
(12) months.


          “Minimum
Inventory Level” means, at any time of calculation, Eligible Inventory, the
Cost of which net of Inventory Reserves, multiplied by the Appraised Value of
Eligible Inventory is at least equal to two times the then Aggregate
Commitments.


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


          “Mortgages”
means each and every fee mortgage or deed of trust, security agreement and
assignment made by the Loan Party owning the Real Estate encumbered thereby in
favor of the Collateral Agent.


          “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.


          “Net
Proceeds” means with respect to any Disposition by any Loan Party or any of its Subsidiaries, or any Extraordinary
Receipt received or paid to the account of any Loan Party or any of its Subsidiaries, the excess, if any, of
(i) the sum of cash and cash equivalents received in connection with such
transaction (including any cash or cash equivalents received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) over (ii) the sum of (A) the principal amount of
any Indebtedness that is secured by the applicable asset by a Lien permitted
hereunder which is senior to the Collateral Agent’s Lien on such asset and that
is required to be repaid (or to establish an escrow for the future repayment
thereof) in connection with such transaction (other than Indebtedness under the
Loan Documents), plus (B) the reasonable and customary out-of-pocket
fees and expenses incurred by such Loan
Party or such Subsidiary in connection with such transaction (including,
without limitation, appraisals, and brokerage, legal, title and recording or
transfer tax expenses and commissions) paid by any Loan Party to third parties
(other than Affiliates)), plus (C) amounts provided as a funded reserve
against any liabilities under any indemnification obligation or purchase price
adjustment associated with such Disposition (provided that to the extent
and at the time any such amounts are released from such reserve, such amounts
shall constitute Net Proceeds).


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


          “Non-Extension
Notice Date” has the meaning specified in Section 2.03(b)(iii).


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


          “NPL” means
the National Priorities List under CERCLA.


-25-






          “Obligations”
means all advances to, and debts (including principal, interest, fees, costs,
and expenses), liabilities, covenants, and indemnities 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, cost and expenses that accrue after the commencement
by or against any Loan Party or any Subsidiary thereof of any proceeding under
any Debtor Relief Laws naming such Person as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such
proceeding.


          “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; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the applicable
Governmental Authority in the jurisdiction of its formation or organization
and, if applicable, any certificate or articles of formation or organization of
such entity.


          “Other
Liabilities” means any obligation on account of (a) any Cash Management
Services furnished to any of the Loan Parties or any of their Subsidiaries
and/or (b) any transaction which arises out of any Bank Product entered into
with any Loan Party, as each may be amended from time to time, and/or (c) any
transaction between a Subsidiary which is not a Loan Party and any Lender or
any Affiliate of a Lender, to the extent the obligations of such Subsidiary are
guaranteed by a Loan Party.


          “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, excluding, however, such amounts imposed as a result of an
assignment by a Lender of its Loans or Commitments.


          “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,
including as a result of any reimbursements by the Borrower of Unreimbursed
Amounts.


          “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 such
payment and (b) after giving effect to such transaction or payment, the Pro
Forma Availability Condition has been satisfied and the Consolidated Fixed
Charge Coverage Ratio, as projected on a pro-forma basis for the twelve months
following such transaction or payment, will be equal to or greater than 1.1:1.0.
Prior to undertaking any transaction or payment which is 


-26-






subject to the
Payment Conditions, the Loan Parties shall deliver to the Administrative Agent
either (i) evidence of satisfaction of the conditions contained in clause (b)
above on a basis (including, without limitation, giving due consideration to
results for prior periods) reasonably satisfactory to the Administrative Agent.


           “PBGC”
means the Pension Benefit Guaranty Corporation.


           “PCAOB”
means the Public Company Accounting Oversight Board.


           “Pension
Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by the 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)
 such Acquisition shall have been approved by the Board of Directors of the
 Person (or similar governing body if such Person is not a corporation) which
 is the subject of such Acquisition and such Person shall not have announced
 that it will oppose such Acquisition or shall not have commenced any action
 which alleges that such Acquisition shall violate applicable Law;


	
 

	
 


	
 

	
          (c)
 the Borrower shall have furnished the Administrative Agent with at least
 fifteen (15) days’ prior written notice (or such shorter period as the
 Administrative Agent shall agree) of such intended Acquisition and shall have
 furnished the Administrative Agent with a current draft of the primary
 acquisition documents (and final copies thereof as and when executed), a
 summary of any due diligence undertaken by the Loan Parties in connection
 with such Acquisition, and, to the extent requested by the Administrative
 Agent, appropriate financial statements of the Person which is the subject of
 such Acquisition for such periods as the Administrative Agent shall
 reasonably request (individually, and on a Consolidated basis with all Loan
 Parties), and such other information as the Administrative Agent may
 reasonably require, all of which shall be reasonably satisfactory to the
 Administrative Agent;


	
 

	
 


	
 

	
          (d)
 the legal structure of the Acquisition shall be acceptable to the
 Administrative Agent in its Permitted Discretion; 


	
 

	
 


	
 

	
          (f)
 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;


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (h)
 either (i) the Loan Parties shall have satisfied the Payment Conditions, or
 (ii) (A) at the time of such Acquisition, (x) no Loans are then outstanding
 and (y) no Event of Default





-27-






	
 

	
 


	
 

	
then exists or would arise
 from the consummation of such Acquisition and (B) the aggregate consideration
 (whether in cash, tangible property, notes or other property) paid by any
 Loan Party for such Acquisition is funded entirely through the use of cash on
 hand of the Loan Parties.


	
 

	
 


	
           “Permitted
 Discretion” means a determination made by the Administrative Agent in good
 faith and in the exercise of its reasonable credit judgment determined in a
 manner consistent with its credit procedures for secured lending transactions
 in similar circumstances.


	
 

	
 


	
 

	
“Permitted
 Disposition” means any of the following:


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (b)
 as long as no Event of Default exists or would arise therefrom, bulk sales or
 other Dispositions of the Inventory and Equipment of a Loan Party or any
 Subsidiary not in the ordinary course of business in connection with Store
 closings or relocations, at arm’s length, provided, that the Minimum
 Inventory Level is satisfied after giving effect thereto;


	
 

	
 


	
 

	
          (c)
 Dispositions of Equipment and other assets (other than Inventory but
 including the abandonment of Intellectual Property) 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;


	
 

	
 


	
 

	
          (d)
 Dispositions among the Loan Parties or by any Subsidiary to a Loan Party; 


	
 

	
 


	
 

	
          (e)
 Dispositions by any Subsidiary which is not a Loan Party to another
 Subsidiary that is not a Loan Party;


	
 

	
 


	
 

	
          (f)
 Dispositions of any Equity Interests in Loan Parties or any other Subsidiary
 that is not a Loan Party to any other Subsidiary which is not a Loan Party, provided
 that any Loan Party, the Equity Interests of which are transferred pursuant
 to any Disposition permitted pursuant to this clause (f), shall remain a Loan
 Party hereunder;


	
 

	
 


	
 

	
          (g)
 Dispositions of any Indebtedness owed to a Loan Party by another Loan Party
 or any other Subsidiary that is not a Loan Party to any other Subsidiary that
 is not a Loan Party, provided that after giving effect to such
 transfer, such Indebtedness would otherwise be permitted under clause (b)(iv)
 of Permitted Indebtedness; 


	
 

	
 


	
 

	
          (h)
 as long as no Default then exists or would arise therefrom, Dispositions of
 Real Estate of any Loan Party or any Subsidiary (or sales of any Person or
 Persons created to hold such Real Estate or the Equity Interests in such
 Person or Persons), including sale-leaseback transactions involving any such
 Real Estate pursuant to leases on market terms, as long as, (A) such
 Disposition is made for fair market value, and (B) in the case of any
 sale-leaseback transaction permitted hereunder, such Loan Party or Subsidiary
 shall use commercially reasonable efforts to cause, if requested by the
 Agents, each purchaser or transferee to enter into a Collateral Access
 Agreement on terms and conditions reasonably satisfactory to the Agents;


	
 

	
 


	
 

	
          (i)
 Dispositions consisting of the compromise, settlement or collection of
 accounts receivable in the ordinary course of business, consistent with past
 practices;


	
 

	
 


	
 

	
          (j)
 leases, subleases, space leases, licenses or sublicenses, in each case in the
 ordinary course of business and which do not materially interfere with the
 business of the 





-28-






	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (k)
 Dispositions of cash, cash equivalents and Permitted Investments described in
 clauses (a) through (e) of the definition of “Permitted Investments”
 contained in this Agreement, in each case on ordinary business terms; and


	
 

	
 


	
 

	
          (l)
 other
 Dispositions, provided that the aggregate fair market value of
 all assets Disposed of in reliance upon this paragraph (l) shall not exceed
 $10,000,000 during any Fiscal Year of the Borrower.


	
 

	
 


	
 

	
          For
 the avoidance of doubt, transactions which are permitted by Sections 7.01 and
 7.02 of this Agreement which may be construed to constitute a “Disposition”
 of property by a Loan Party or any of its Subsidiaries shall not be
 prohibited by operation of Section 7.05.


	
 

	
 


	
 

	
“Permitted
 Encumbrances” means:


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (e)
 Liens in respect of judgments, decrees, attachments or awards for payment of
 money that do not constitute an Event of Default hereunder;


	
 

	
 


	
 

	
          (f)
 easements, covenants, conditions, restrictions, building code laws, zoning
 restrictions, encroachments, 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 interfere with the
 ordinary conduct of business of the Loan Parties, taken as a whole, 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 ordinary
 conduct of business of the Loan Parties, taken as a whole; 


	
 

	
 


	
 

	
          (g)
 Liens existing on the date hereof and listed on Schedule 7.01 and any
 renewals or extensions thereof, provided that (i) the property covered
 thereby is not changed other than after-acquired property affixed or
 incorporated thereto and proceeds or products thereof, (ii) the amount
 secured or benefited thereby is not increased except to the extent permitted
 hereunder, 





-29-






	
 

	
 


	
 

	
and (iii) any renewal or
 extension of the obligations secured or benefited thereby is otherwise
 permitted hereunder;


	
 

	
 


	
 

	
          (h)
 Liens on fixed or capital assets acquired by any Loan Party or any Subsidiary
 which are permitted under clause (c) of the definition of Permitted
 Indebtedness so long as (i) such Liens and the Indebtedness secured thereby
 are incurred prior to or within one hundred and eighty (180) days after such
 acquisition, (ii) the Indebtedness secured thereby does not exceed the cost
 of acquisition of such fixed or capital assets and (iii) such Liens
 shall not extend to any other property or assets of the Loan Parties;


	
 

	
 


	
 

	
          (i)
 Liens created pursuant to any Loan Document;


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (n)
 voluntary Liens on property (other than property of the type included in the
 Borrowing Base) in existence at the time such property is acquired pursuant
 to a Permitted Acquisition or other Permitted Investment 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 or other Permitted Investment; provided,
 that such Liens are not incurred in connection with or in anticipation of
 such Permitted Acquisition or other Permitted Investment 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 and securing obligations (i) that are not overdue by more than
 thirty (30) days, or (ii)(A) 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 (i) on cash advances in favor of the seller of any property to
 be acquired in any Permitted Investment to be applied against the purchase
 price for such Investment, and (ii) consisting of an agreement to transfer
 any property in a Permitted Disposition, in each case, solely to the extent
 such Investment or Disposition, as the case may be, would have been permitted
 on the date of the creation of such Lien;





-30-






	
 

	
 


	
 

	
          (q)
 any interest or title of a lessor or sublessor under leases or subleases or
 secured by a lessor’s or sublessor’s interests under leases entered into by
 the Borrower or any of its Subsidiaries in the ordinary course of business; 


	
 

	
 


	
 

	
          (r)
 Liens solely on any cash earnest money deposits made by the Borrower or any
 of its Subsidiaries in connection with any letter of intent or purchase
 agreement permitted hereunder; 


	
 

	
 


	
 

	
          (s)
 Liens in respect of the licensing of patents, copyrights, trademarks, trade
 names, other indications of origin, domain names and other forms of
 Intellectual Property in the ordinary course of business; 


	
 

	
 


	
 

	
          (t)
 Liens arising out of conditional sale, title retention, consignment or
 similar arrangements for sale of goods (including under Article 2 of the UCC)
 and Liens that are contractual rights of set-off relating to purchase orders
 and other similar agreements entered into by the Borrower or any of its
 Subsidiaries; 


	
 

	
 


	
 

	
          (u)
 Liens on insurance policies and the proceeds thereof securing the financing
 of the premiums with respect thereto incurred in the ordinary course of
 business; 


	
 

	
 


	
 

	
          (v)
 Liens on assets other than those of the type included in the Borrowing Base
 to secure Indebtedness permitted under clause (d) of “Permitted
 Indebtedness”; 


	
 

	
 


	
 

	
          (w)
 Liens on property of Domestic Subsidiaries which are not Loan Parties to
 secure Indebtedness permitted under clause (r) of the definition of
 “Permitted Indebtedness”; 


	
 

	
 


	
 

	
          (x)
 licenses or sublicenses, in each case in the ordinary course of business and
 which do not materially interfere with the business of the Borrower and its
 Subsidiaries; and 


	
 

	
 


	
 

	
          (y)
 other Liens on assets other than those of the type included in the Borrowing
 Base securing obligations outstanding in an aggregate principal amount not to
 exceed $10,000,000. 


	
 

	
 


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


	
 


	
 

	
          (a)
 Indebtedness outstanding on the date hereof and listed on Schedule 7.03
 and any refinancings, refundings, renewals or extensions thereof; provided
 that (i) the amount of such Indebtedness is not increased at the time of such
 refinancing, refunding, renewal or extension except by an amount equal to any
 premium or other amount paid, and fees and expenses reasonably incurred, in
 each case on then current market terms, in connection with such refinancing
 and by an amount equal to any existing commitments unutilized thereunder,
 (ii) the result of such extension, renewal or replacement shall not be an
 earlier maturity date or decreased weighted average life of such
 Indebtedness, and (iii) the terms relating to collateral (if any) and
 subordination (if any), of any such refinancing, refunding, renewing or
 extending Indebtedness, and of any agreement entered into and of any
 instrument issued in connection therewith, are not less favorable in any
 material respect to the Loan Parties or the Lenders than the terms of any
 agreement or instrument governing the Indebtedness being refinanced,
 refunded, renewed or extended and the interest rate applicable to any such
 refinancing, refunding, renewing or extending Indebtedness does not exceed
 the then applicable market interest rate; 





-31-






	
 

	
 


	
 

	
          (b)
 Indebtedness of (i) any Loan Party to any other Loan Party, (ii) any
 Subsidiary that is not a Loan Party to any Loan Party so long as either (x)
 the Payment Conditions are satisfied, or (y) (A) at the time of such
 Investment, no Loans are then outstanding and (B) the aggregate amount paid
 by any Loan Party on account of such Indebtedness is funded entirely through
 the use of cash on hand of the Loan Parties, (iii) any Subsidiary that is not
 a Loan Party to any other Subsidiary that is not a Loan Party, and (iv) any
 Loan Party to any Subsidiary that is not a Loan Party in an aggregate
 principal amount not to exceed $50,000,000 at any time outstanding unless the
 Payment Conditions are satisfied (in which event such dollar limitation shall
 not apply); 


	
 

	
 


	
 

	
          (c)
 Without duplication of Indebtedness described in clause (f) of this
 definition, purchase money Indebtedness of any Loan Party or any Subsidiary
 thereof to finance the acquisition of any fixed or capital assets, including
 Capital Lease Obligations and Synthetic Lease Obligations, and any
 Indebtedness assumed in connection with the acquisition of any such assets or
 secured by a Lien on any such assets prior to the acquisition thereof, and
 extensions, renewals and replacements of any such Indebtedness that do not
 increase the outstanding principal amount thereof or result in an earlier
 maturity date or decreased weighted average life thereof provided that the
 terms relating to collateral (if any) and subordination (if any), of any such
 refinancing, refunding, renewing or extending Indebtedness, and of any
 agreement entered into and of any instrument issued in connection therewith,
 are no less favorable in any material respect to the Loan Parties or the
 Lenders than the terms of any agreement or instrument governing the
 Indebtedness being refinanced, refunded, renewed or extended and the interest
 rate applicable to any such refinancing, refunding, renewing or extending Indebtedness
 does not exceed the then applicable market interest rate, provided
 that, if requested by the Collateral Agent, the Loan Parties shall use
 commercially reasonable efforts to cause the holders of such Indebtedness to
 enter into a Collateral Access Agreement on terms reasonably satisfactory to
 the Collateral Agent; 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (e)
 Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety
 bonds, performance and completion guarantees and similar obligations, or
 obligations in respect of letters of credit, bank guarantees or similar
 instruments related thereto, in each case provided in the ordinary course of
 business; 


	
 

	
 


	
 

	
          (f)
 Indebtedness incurred for the construction or acquisition or improvement of,
 or to finance or to refinance, any Real Estate owned by any Loan Party or any
 Subsidiary (including therein any Indebtedness incurred in connection with
 sale-leaseback transactions permitted hereunder), provided that, upon
 the request of the Collateral Agent, the Loan Parties shall use commercially
 reasonable efforts to cause the holders of such Indebtedness to enter into a
 Collateral Access Agreement on terms reasonably satisfactory to the
 Collateral Agent; 


	
 

	
 


	
 

	
          (g)
 Indebtedness with respect to the deferred purchase price for any Permitted
 Acquisition, provided that such Indebtedness is on terms reasonably
 acceptable to the Agents; 


	
 

	
 


	
 

	
          (h)
 Indebtedness of any Person that becomes a Subsidiary of a Loan Party in a
 Permitted Acquisition or other Permitted Investment, which Indebtedness is
 existing at the time 





-32-






	
 

	
 


	
 

	
such Person
 becomes a Subsidiary of a Loan Party (other than Indebtedness incurred solely
 in contemplation of such Person’s becoming a Subsidiary of a Loan Party); 


	
 

	
 


	
 

	
          (i)
 the Obligations and Other Liabilities; 


	
 

	
 


	
 

	
          (j)
 Indebtedness consisting of Securities (as defined in the Indenture) issued
 pursuant to the Indenture; 


	
 

	
 


	
 

	
          (k)
 (i) Indebtedness constituting indemnification obligations or obligations in
 respect of purchase price or other similar adjustments in connection with
 Permitted Acquisitions and other Permitted Investments and Permitted
 Dispositions; and (ii) Indebtedness consisting of obligations of the Borrower
 or any Subsidiary under deferred compensation or other similar arrangements
 incurred by such Person in connection with any Permitted Investment; 


	
 

	
 


	
 

	
          (l)
 Indebtedness consisting of the financing of insurance premiums in the
 ordinary course of business; 


	
 

	
 


	
 

	
          (m)
 Indebtedness in respect of netting services, overdraft protections and
 similar arrangements and related liabilities arising from treasury,
 depository and cash management services or any automated clearing house
 transfers of funds in the ordinary course of business (including, without
 limitation Guarantees of any such obligations of any Subsidiary which is not
 a Loan Party); 


	
 

	
 


	
 

	
          (n)
 unsecured guaranty obligations of the Borrower or any of its Subsidiaries of
 the obligations of any joint ventures permitted under this Agreement in which
 the Borrower or any of its Subsidiaries is a party, not exceeding $10,000,000
 in the aggregate at any time outstanding; 


	
 

	
 


	
 

	
          (p)
 Indebtedness representing deferred compensation to directors, officers and
 employees of the Borrower or any of its Subsidiaries incurred in the ordinary
 course of business; 


	
 

	
 


	
 

	
          (q)
 to the extent constituting Indebtedness, judgments, decrees, attachments or
 awards not constituting an Event of Default under Section 8.01(h); 


	
 

	
 


	
 

	
          (r)
 Indebtedness of any Domestic Subsidiary which is not a Loan Party; and 


	
 

	
 


	
 

	
          (s)
 other Indebtedness (not described in any other clause of this definition, as
 to which such clause shall govern the such Permitted Indebtedness and this
 clause (r) shall not be additive thereto) in an aggregate principal amount
 not to exceed $300,000,000 at any time outstanding; provided that not
 more than $50,000,000 of such Indebtedness may be secured. 


	
 

	
 


	
          “Permitted
 Investments” means each of the following as long as no 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 one year 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 the time of acquisition
 thereof, at least “Prime-2” (or 





-33-






	
 

	
 


	
 

	
the then
 equivalent grade) by Moody’s or at least “A-2” (or the then equivalent grade)
 by S&P, in each case with maturities of not more than one year from the
 date of acquisition thereof; 


	
 

	
 


	
 

	
          (c)
 any Investments of the Loan Parties consisting of demand deposits or 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, at the
 time of acquisition thereof, as described in clause (b) of this definition
 and (iii) has combined capital and surplus of at least $500,000,000, in each
 case with maturities of not more than one year 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, at the time of acquisition
 thereof, 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, mutual fund, or other investment companies
 that are registered under the Investment Company Act of 1940, as amended,
 which have the highest rating obtainable from either Moody’s or S&P, and
 which invest primarily in one or more of the types of securities described in
 clauses (a) through (d) above; 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (g)
 (i) Investments by any Loan Party and its Subsidiaries in their respective
 Subsidiaries outstanding on the date hereof, (ii) additional Investments by
 any Loan Party and its Subsidiaries in Loan Parties, (iii) additional
 Investments by any Subsidiary that is not a Loan Party in any other
 Subsidiary that is not a Loan Party, and (iv) additional Investments by any
 Loan Party in any Subsidiary that is not a Loan Party so long as either (x)
 the Payment Conditions are satisfied, or (y) (A) at the time of such
 Investment, no Loans are then outstanding and (B) the aggregate amount paid
 by any Loan Party for such Investment is funded entirely through the use of
 cash on hand of the Loan Parties; 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (i)
 Guarantees constituting Permitted Indebtedness; 


	
 

	
 


	
 

	
          (j)
 Investments in Swap Contracts not prohibited hereunder; 


	
 

	
 


	
 

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





-34-






	
 

	
 


	
 

	
          (l)
 (i) advances of payroll payments to employees in the ordinary course of
 business and (ii) other loans and advances to officers, directors and
 employees of the Loan Parties and Subsidiaries in the ordinary course of
 business in an aggregate amount not to exceed $10,000,000 at any time
 outstanding; 


	
 

	
 


	
 

	
          (m)
 Investments constituting (i) Permitted Acquisitions and/or (ii) any
 acquisition of Store locations of any Person for which the aggregate
 consideration payable in connection with such acquisition is less than
 $25,000,000 in any transaction or group of transactions which are part of a
 common plan; 


	
 

	
 


	
 

	
          (n)
 Investments of any Person existing at the time such Person becomes a
 Subsidiary of any Loan Party or consolidates or merges with the Borrower or
 any of its Subsidiaries (including in connection with a Permitted
 Acquisition) so long as such Investments were not made in contemplation of
 such Person becoming a Subsidiary or of such consolidation or merger; 


	
 

	
 


	
 

	
          (o)
 promissory notes and other non-cash consideration received in connection with
 Dispositions permitted by Section 7.05 hereof; 


	
 

	
 


	
 

	
          (p)
 lease, utility and other similar deposits in the ordinary course of business;
 


	
 

	
 


	
 

	
          (q)
 Investments in the ordinary course of business consisting of endorsements for
 collection or deposit pursuant to Article 3 of the UCC and customary trade
 arrangements with customers pursuant to Article 4 of the UCC, in each case in
 the ordinary course of business consistent with past practices; and 


	
 

	
 


	
 

	
          (r)
 other Investments of a nature not otherwise set forth in clauses (a) through
 (q) above in an aggregate amount not to exceed $25,000,000 in the aggregate
 at any time outstanding; 


	
 

	
 


	
provided,
 however, that notwithstanding the foregoing, at any time when
 Revolving Credit Loans are outstanding, the Investments specified in clauses
 (a) through (e) or clause (r) shall be subject to Control Agreements (as
 defined in the Security Agreement) to the extent required by the Security Agreement.
 


	
 


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


	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (d)
 together with all other Permitted Overadvances then outstanding, shall not
 (i) exceed five percent (5%) of the Borrowing Base at any time or (ii) unless
 a Liquidation is occurring, remain outstanding for more than forty-five (45)
 consecutive Business Days, unless in each case, the Required Lenders
 otherwise agree;





provided however, that the foregoing
shall not (i) modify or abrogate any of the provisions of Section 2.03
regarding the Lenders’ obligations with respect to Letters of Credit, or (ii)
result in any claim or 


-35-






liability
against the Administrative Agent (regardless of the amount of any Overadvance)
for “inadvertent Overadvances” (i.e. where an Overadvance results from changed
circumstances beyond the control of the Administrative Agent (such as a
reduction in the collateral value)), and such “inadvertent Overadvances” shall
not reduce the amount of Permitted Overadvances allowed hereunder, and further
provided that in no event shall the Administrative Agent make an
Overadvance, if after giving effect thereto, the principal amount of the Credit
Extensions would exceed the Aggregate Commitments (as in effect prior to any
termination of the Commitments pursuant to Section 2.06 hereof). 


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


          
“Plan” means any “employee benefit plan” (as such term is defined in Section
3(3) of ERISA) established by the Borrower or, with respect to any such plan
that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate and includes, without limitation, any Pension Plan or Multiemployer
Plan. 


          “Platform”
has the meaning specified in Section 6.02. 


          “Prepayment
Event” means: 


	
 

	
 


	
 

	
          (a)
 Any Disposition (including pursuant to a sale and leaseback transaction) of
 any property or asset of a Loan Party (other than the sale of Collateral in
 the ordinary course of business and the transfer of any Collateral among
 Stores and other locations of the Loan Parties); 


	
 

	
 


	
 

	
          (b)
 Any casualty or other insured damage to, or any taking under power of eminent
 domain or by condemnation or similar proceeding of, any property or asset of
 a Loan Party unless (i) the proceeds therefrom are required to be paid to the
 holder of a Lien on such property or asset having priority over the Lien of
 the Collateral Agent or (ii) prior to the occurrence of a Triggering Event,
 the proceeds therefrom are utilized for purposes of replacing or repairing
 the assets in respect of which such proceeds, awards or payments were
 received within 180 days of the occurrence of the damage to or loss of the
 assets being repaired or replaced; 


	
 

	
 


	
 

	
          (c)
 The issuance by a Loan Party of any Equity Interests, other than any such
 issuance of Equity Interests (i) to a Loan Party, (ii) as consideration for a
 Permitted Acquisition or (iii) as a compensatory issuance to any employee,
 director, or consultant (including under any option plan); 


	
 

	
 


	
 

	
          (d)
 The incurrence by a Loan Party of any Indebtedness for borrowed money
 pursuant to clause (j) of the definition of Permitted Indebtedness or for
 borrowed money that is not Permitted Indebtedness; or 


	
 

	
 


	
 

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





          “Pro
Forma Availability Condition” means, for any date of calculation with respect
to any transaction or payment, the Pro Forma Excess Availability following, and
after giving effect to, such transaction or payment, will be equal to or
greater than twenty-five percent (25%) of the Loan Cap. 


          “Pro
Forma Excess Availability” means, for any date of calculation, the projected
Average Daily Availability for each Fiscal Month during any projected twelve
(12) Fiscal Months. 


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


-36-






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


          “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. 


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


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


          “Reports”
has the meaning specified in Section 9.12(a). 


          “Request
for Credit Extension” means (a) with respect to a Borrowing, conversion or
continuation of Committed Loans, a Committed Loan Notice, (b) with respect to
an L/C Credit Extension, a Letter of Credit Application, and (c) with respect
to a Swing Line Loan, a Swing Line Loan Notice. 


          “Required
Lenders” means, as of any date of determination, at least three (3) Lenders
holding more than 50% of the Aggregate Commitments or, if the commitment of
each Lender to make Loans and the obligation of the L/C Issuer to make L/C
Credit Extensions have been terminated pursuant to Section 8.02, at least three
(3) 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 (if any) Inventory Reserves and Availability Reserves. 


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


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


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


-37-






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


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


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


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


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


          “Settlement
Date” has the meaning specified 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. 


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


          
“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 Sublimit” means $25,000,000. 


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


-38-






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


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


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


          “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. 


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


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


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


-39-






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


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


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


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


          “Swing
Line Note” means the promissory note of the 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. 


          “Termination
Date” means the earlier to occur of (i) the Maturity Date, and (ii) the date on
which the maturity of the Obligations is accelerated (or deemed accelerated)
and the Aggregate Commitments are irrevocably terminated (or deemed terminated)
in accordance with Article VII. 


          “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. 


          “Triggering
Event” means either (i) the occurrence and continuance of any Event of Default,
or (ii) the failure of the Borrower to maintain Availability for three
consecutive Business Days of at least seventeen and one-half (17.5%) percent of
the Loan Cap. For purposes of this Agreement, the occurrence of a Triggering
Event shall be deemed continuing at the Administrative Agent’s option (i) so
long as such Event of Default is continuing, and/or (ii) if the Triggering
Event arises as a result of the Borrower’s failure to achieve Availability as
required hereunder, until Availability has exceeded seventeen and one-half
(17.5%) percent of the Loan Cap for ninety (90) consecutive days, in which case
a Triggering Event shall no longer be deemed to be continuing for purposes of
this Agreement; provided that a
Triggering Event shall be deemed continuing (even if an Event of Default is no
longer continuing and/or Excess Availability exceeds the required amount for
ninety (90) consecutive days) at all times after a Triggering Event has
occurred and been discontinued on two (2) occasions after the Closing Date. 


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


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


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


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


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


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


          “Unreimbursed
Amount” has the meaning specified in Section 2.03(c)(i). 


          “Wholly
Owned Subsidiary” means, with respect to any Person, any corporation,
partnership or other entity of which all of the Equity Interests (other than,
in the case of a corporation, directors’ qualifying shares) are directly or
indirectly owned or controlled by such Person or one or more Wholly Owned
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Subsidiaries of such Person. 


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


	
 

	
 


	
 

	
          (a)
 The definitions of terms herein shall apply equally to the singular and
 plural forms of the terms defined. Whenever the context may require, any
 pronoun shall include the corresponding masculine, feminine and neuter forms.
 The words “include,” “includes” and “including” shall be
 deemed to be followed by the phrase “without limitation.” The word “will”
 shall be construed to have the same meaning and effect as the word “shall.”
 Unless the context requires otherwise, (i) any definition of or reference to
 any agreement, instrument or other document (including any Organization
 Document) shall be construed as referring to such agreement, instrument or
 other document as from time to time amended, restated, amended and restated,
 supplemented or otherwise modified (subject to any restrictions on such
 amendments, restatements, amendments and restatements, 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 





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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. 


	
 

	
 


	
 

	
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
 Administrative 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
 Administrative Agent and the Lenders financial statements and other documents
 required under this Agreement or as reasonably requested hereunder setting
 forth a reconciliation between calculations of such ratio or requirement made
 before and after giving effect to such change in GAAP. 


	
 

	
 


	
 

	
          (c)
 Adoption of International Financial Reporting Standards. In the event
 that the Borrower elects to transition the accounting policies and reporting
 practices of the Loan Parties from GAAP to the International Financial
 Reporting Standards pursuant to Section 7.13 hereof, and any such adoption of
 the International Financial Reporting Standards 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
 Administrative 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 adoption of the International Financial Reporting
 Standards (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 adoption of the International Financial
 Reporting Standards and (ii) the Borrower shall provide to the Administrative
 Agent and the Lenders financial statements and other documents required under
 this Agreement or as reasonably requested hereunder setting forth a
 reconciliation between calculations of such ratio or requirement made before
 and after giving effect to such adoption of the International Financial
 Reporting Standards. 





-42-






          1.04
Rounding. Any financial ratios required to be
maintained by the Loan Parties 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.. 



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, and (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; and 


	
 

	
 


	
 

	
                    (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 LIBO Rate Loans, as further provided herein. 


                    (b)
The following are the Inventory Reserves and Availability Reserves as of the
Closing Date: 


	
 

	
 


	
 

	
                    (i)
 Shrink (an Inventory Reserve): An amount equal to $1,900,000; 


	
 

	
 


	
 

	
                    (ii)
 Rent (an Availability Reserve): An amount equal to two (2) months’ rent for
 all of the Loan Parties’ leased locations in each Landlord Lien State, other
 than leased locations with respect to which the Collateral Agent has received
 a Collateral Access Agreement; and 


	
 

	
 


	
 

	
                    (iii)
 Customer Credit Liabilities (an Availability Reserve): An amount equal to (x)
 fifty percent (50%) of the Customer Credit Liabilities set forth in clause
 (a) of the 





-43-






	
 

	
 


	
 

	
definition
 thereof plus (y) one hundred percent (100%) of the Customer Credit
 Liabilities set forth in clause (b) of the definition thereof (in each case
 as reflected in the Loan Parties’ books and records). 





                    (c)
The Administrative 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 upon three (3) Business Days’ prior written notice to the
Borrower (during which period the Administrative Agent shall be available to
discuss in good faith any such proposed Reserve with the Borrower and the
Borrower may take such action as may be required so that the event, condition
or matter that is the basis for such Reserve or modification no longer exists);
provided that no such prior notice shall be required for (1) changes to
any Reserves resulting solely by virtue of mathematical calculations of the
amount of the Reserve in accordance with the methodology of calculation
previously utilized (such as, but not limited to, Rent and Customer Credit
Liabilities), or (2) changes to Reserves or establishment of additional
Reserves if a Material Adverse Effect has occurred or it would be reasonably
likely that a Material Adverse Effect to the Lenders would occur were such
Reserve not changed or established prior to the expiration of such three (3)
Business Day period. 


          2.02
Borrowings, Conversions and Continuations of Committed Loans.


                    (a)
Committed Loans (other than Swing Line Loans) shall be either Base Rate Loans or
LIBO 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 Committed Borrowing, each conversion of Committed Loans from one Type to
the other, and each continuation of LIBO Rate Loans shall be made upon the
Borrower’s irrevocable notice to the Administrative Agent, which may be given
by telephone. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m. (i) three Business Days prior to the requested date of
any Borrowing of, conversion to or continuation of LIBO Rate Loans or of any conversion
of LIBO Rate Loans to Base Rate Loans, and (ii) on the requested date (which
shall be a Business Day) of any Borrowing of Base Rate Loans. Each telephonic
notice by the Borrower pursuant to this Section 2.02(b) must be confirmed
promptly by delivery to the Administrative Agent of a written Committed Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower. Each Borrowing of, conversion to or continuation of LIBO Rate Loans
shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000
in excess thereof. Each Committed Loan Notice (whether telephonic or written)
shall specify (i) whether the Borrower is requesting a Committed Borrowing, a
conversion of Committed Loans from one Type to the other, or a continuation of
LIBO Rate Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Committed Loans to be borrowed, converted or continued,
(iv) the Type of Committed Loans to be borrowed or to which existing Committed
Loans are to be converted, and (v) if applicable, the duration of the Interest
Period with respect thereto. If the Borrower fails to specify a Type of
Committed Loan in a Committed Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation, then the applicable
Committed Loans shall be made as, or converted to, Base Rate Loans. Any such
automatic conversion to Base Rate Loans shall be effective as of the last day
of the Interest Period then in effect with respect to the applicable LIBO Rate
Loans. If the Borrower requests a Borrowing of, conversion to, or continuation
of LIBO Rate Loans in any such Committed Loan Notice, but fails to specify an
Interest Period, it will be deemed to have specified an Interest Period of one
month. Notwithstanding anything to the contrary herein, a Swing Line Loan may
not be converted to a LIBO Rate Loan. 


-44-






                    (c)
Following receipt of a Committed Loan Notice, the Administrative Agent shall
promptly notify each applicable 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 Administrative
Agent shall notify each Lender of the details of any automatic conversion to
Base Rate Loans described in Section 2.02(b). In the case of a Committed
Borrowing, each Lender shall make the amount of its Committed Loan available to
the Administrative Agent in immediately available funds at the Administrative
Agent’s Office not later than 1:00 p.m. on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable
conditions set forth in Section 4.02 (and, if such Borrowing is the initial
Credit Extension, Section 4.01), the Administrative Agent shall promptly make
all funds so received available to the Borrower in like funds (but in any event
shall use reasonable efforts to make such funds available by 4:00 p.m.) on the
day of receipt by the Administrative Agent either by (i) crediting the account
of the Borrower on the books of Bank of America with the amount of such funds
or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to the Administrative Agent by the Borrower; provided,
however, that if, on the date the Committed Loan Notice with respect to
such Borrowing is given by the Borrower, there are L/C Borrowings outstanding,
then the proceeds of such Borrowing, first, shall be applied to the
payment in full of any such L/C Borrowings, and second, shall be made
available to the Borrower as provided above. 


                    (d)
In the event that the Borrower, after receipt of an invoice therefor, fails to
pay any interest, fee, service charge, expenses, or other payment to which any
Credit Party is entitled from the Loan Parties pursuant hereto or any other
Loan Document when due, the Administrative Agent, without the request of the
Borrower, may advance any such interest, fee, service charge, expenses, or
other payment to which any Credit Party is entitled from the Loan Parties
pursuant hereto or any other Loan Document and may charge the same to the Loan
Account notwithstanding that an Overadvance may result thereby. The Administrative
Agent shall advise the Borrower of any such advance or charge promptly after
the making thereof. Such action on the part of the Administrative Agent shall
not constitute a waiver of the Administrative Agent’s rights and the 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. 


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


                    (f)
The Administrative Agent shall promptly notify the Borrower and the Lenders of
the interest rate applicable to any Interest Period for LIBO Rate Loans upon
determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrower and the Lenders
of any change in Bank of America’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 ten (10) Interest Periods in effect
with respect to LIBO Rate Loans. 


                    (h)
The Administrative 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 Administrative Agent may, in its discretion,
make Permitted Overadvances without the consent of the Lenders, the Swing Line
Lender and the L/C Issuer and each Lender shall be bound thereby. Any Permitted
Overadvance may, at the option of the Administrative Agent, constitute a Swing
Line Loan. A Permitted Overadvance is for the account of the Borrower and shall
constitute a Base Rate 


-45-






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 Administrative Agent or any Lender to
make or permit any Permitted Overadvance on any other occasion or to permit
such Permitted Overadvances to remain outstanding. The making by the
Administrative Agent of a Permitted Overadvance shall not modify or abrogate
any of the provisions of Section 2.03 regarding the Lenders’ obligations to
purchase participations with respect to Letters of Credit or of Section 2.04
regarding the Lenders’ obligations to purchase participations with respect to
Swing Line Loans. The Administrative Agent shall have no liability for, and no
Loan Party or Credit Party shall have the right to, or shall, bring any claim
of any kind whatsoever against the Administrative Agent with respect to
“inadvertent Overadvances” (i.e. where an Overadvance results from changed
circumstances beyond the control of the Administrative Agent (such as a
reduction in the collateral value)) regardless of the amount of any such
Overadvance(s). 


          2.03
Letters of Credit.


                    (a)
The Letter of Credit Commitment. 


                              (i)
Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the period from
the Closing Date until and including the Letter of Credit Expiration Date, to
issue Letters of Credit for the account of the Borrower, and to amend or extend
Letters of Credit previously issued by it, in accordance with Section 2.03(b)
below, and (2) to honor drawings under the Letters of Credit; and (B) the
Lenders severally agree to participate in Letters of Credit issued for the account
of the Borrower and any drawings thereunder; provided that after giving
effect to any L/C Credit Extension with respect to any Letter of Credit, (w)
the Total Outstandings shall not exceed the Loan Cap, (x) 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, (y) the
Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit, and (z) the Outstanding Amount of the L/C Obligations with respect to
Standby Letters of Credit shall not exceed the Standby Letter of Credit
Sublimit. Each request by the Borrower for the issuance or amendment of a
Letter of Credit shall be deemed to be a representation by the Borrower that
the L/C Credit Extension so requested complies with the conditions set forth in
the proviso to the preceding sentence. Within the foregoing limits, and subject
to the terms and conditions hereof, the Borrower’s ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed. Any L/C Issuer (other
than Bank of America or any of its Affiliates) shall notify the Administrative
Agent in writing on each Business Day of all Letters of Credit issued on the
prior Business Day by such L/C Issuer, provided that (A) until the
Administrative Agent advises any such Issuing Bank that the provisions of
Section 4.02 are not satisfied, or (B) the aggregate amount of the Letters of
Credit issued in any such week exceeds such amount as shall be agreed by the
Administrative Agent and such L/C Issuer, such L/C Issuer shall be required to
so notify the Administrative Agent in writing only once each week of the
Letters of Credit issued by such L/C Issuer during the immediately preceding
week as well as the daily amounts outstanding for the prior week, such notice
to be furnished on such day of the week as the Administrative Agent and such
L/C Issuer may agree. 


 


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                              (ii)
The L/C Issuer shall not issue any Letter of Credit, if: 





	
 

	
 


	
 

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


	
 

	
 


	
 

	
                              (B)
 subject to Section 2.03(b)(iii), the expiry date of such requested Commercial
 Letter of Credit would occur more than 180 days after the date of issuance or
 last extension, unless the Required Lenders have approved such expiry date;
 or 


	
 

	
 


	
 

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





                              (iii)
The L/C Issuer shall not issue any Letter of Credit without the prior consent
of the Administrative Agent if: 


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

	
                          (C)
 such Letter of Credit is to be denominated in a currency other than Dollars; provided that if the L/C Issuer, in its discretion, issues a Letter of Credit
 denominated in a currency other than Dollars, all reimbursements by the
 Borrower of the honoring of any drawing under such Letter of Credit shall be
 paid in the currency in which such Letter of Credit was denominated; 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
                          (E)
 a default of any Lender’s obligations to fund under Section 2.03(c) exists or
 any Lender is at such time a Defaulting Lender or Deteriorating Lender
 hereunder, unless the L/C Issuer has entered into satisfactory arrangements
 with the Borrower or such Lender to eliminate the L/C Issuer’s risk with
 respect to such Lender. 





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


                              (v)
The L/C Issuer shall act on behalf of the Lenders with respect to any Letters
of Credit issued by it and the documents associated therewith, and the L/C
Issuer shall have all of 


-47-






the benefits
and immunities (A) provided to the Administrative 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 “Administrative Agent” as used in Article IX included the L/C
Issuer with respect to such acts or omissions, and (B) as additionally provided
herein with respect to the L/C Issuer. 


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


                              (i)
Each Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrower.
Such Letter of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 11:00 a.m. at least two (2) Business Days
(or such later date and time as the Administrative Agent and the L/C Issuer may
agree in a particular instance in their sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of a
request for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail reasonably satisfactory to the L/C
Issuer: (A) the proposed issuance date of the requested Letter of Credit (which
shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof;
(D) the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the full
text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other customary matters as the L/C Issuer may
reasonably require. In the case of a request for an amendment of any outstanding
Letter of Credit, such Letter of Credit Application shall specify in form and
detail reasonably satisfactory to the L/C Issuer (A) the Letter of Credit to be
amended; (B) the proposed date of amendment thereof (which shall be a Business
Day); (C) the nature of the proposed amendment; and (D) such other customary
matters as the L/C Issuer may reasonably require. Additionally, the Borrower
shall furnish to the L/C Issuer and the Administrative Agent such other
documents and information pertaining to such requested Letter of Credit
issuance or amendment, including any Issuer Documents, as the L/C Issuer or the
Administrative Agent may reasonably require. 


                              (ii)
Promptly after receipt of any Letter of Credit Application, the L/C Issuer will
confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the L/C Issuer will provide the Administrative
Agent with a copy thereof. Unless the L/C Issuer has received written notice
from any Lender, the Administrative Agent or any Loan Party, at least one
Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained
in Article IV shall not then be satisfied, then, subject to the terms
and conditions hereof, the L/C Issuer shall, on the requested date, issue a
Letter of Credit for the account of the Borrower (or the applicable Loan Party)
or enter into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer’s usual and customary business practices.
Immediately upon the issuance or amendment of each Letter of Credit, each
Lender shall be deemed to (without any further action), and hereby irrevocably
and unconditionally agrees to, purchase from the L/C Issuer, without recourse
or warranty, a risk participation in such Letter of Credit in an amount equal
to the product of such Lender’s Applicable Percentage times the Stated
Amount of such Letter of Credit. Upon any change in the Commitments under this
Agreement, it is hereby agreed that with respect to all L/C Obligations, there
shall be an automatic adjustment to the participations hereby created to
reflect the new Applicable Percentages of the assigning and assignee Lenders. 


                              (iii)
If the Borrower so requests in any applicable Letter of Credit Application, the
L/C Issuer shall, subject to the provisions of this Section 2.03, issue a
Standby Letter of 


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


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


                    (c)
Drawings and Reimbursements; Funding of Participations. 


                              (i)
   Upon receipt from the
beneficiary of any Letter of Credit of any notice of a drawing under such
Letter of Credit, the L/C Issuer shall notify the Borrower and the
Administrative Agent thereof; provided, however, that any failure
to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the L/C Issuer and the Lenders with respect to any such
payment. Not later than 11:00 a.m. on the date of any payment by the L/C Issuer
under a Letter of Credit (each such date, an “Honor Date”), the Borrower
shall reimburse the L/C Issuer through the Administrative Agent in an amount
equal to the amount of such drawing. If the Borrower fails to so reimburse the
L/C Issuer by such time, the Administrative Agent shall promptly notify each
Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed
Amount”), and the amount of such Lender’s Applicable Percentage thereof. In
such event, the Borrower shall be deemed to have requested a Committed
Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount
equal to the Unreimbursed Amount, without regard to the minimum and multiples
specified in Section 2.02 for the principal amount of Base Rate Loans, but
subject to the amount of the unutilized portion of the Aggregate Commitments
and the conditions set forth in Section 4.02 (other than the delivery of a
Committed Loan Notice). Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone
if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice. 


                              (ii)
  Each Lender shall upon any
notice pursuant to Section 2.03(c)(i) make funds available to the
Administrative Agent for the account of the L/C Issuer at the Administrative
Agent’s Office in an amount equal to its Applicable Percentage of the
Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in
such notice by the Administrative Agent, whereupon, subject to the provisions
of Section 2.03(c)(iii), each Lender that so makes funds available shall be 


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deemed to have
made a Base Rate Loan to the Borrower in such amount. The Administrative Agent
shall remit the funds so received to the L/C Issuer. 


                              (iii)
With respect to any Unreimbursed Amount that is not fully refinanced by a
Committed Borrowing of Base Rate Loans because the conditions set forth in Section
4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed
to have incurred from the L/C Issuer an L/C Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due
and payable on demand (together with interest) and shall bear interest at the
Default Rate. In such event, each Lender’s payment to the Administrative Agent
for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be
deemed payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Lender in satisfaction of its participation
obligation under this Section 2.03. 


                              (iv)
Until each Lender funds its Committed Loan or L/C Advance pursuant to this
Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any
Letter of Credit, interest in respect of such Lender’s Applicable Percentage of
such amount shall be solely for the account of the L/C Issuer. 



                              (v)
Each Lender’s obligation to make Committed Loans or L/C Advances to reimburse
the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by
this Section 2.03(c), shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any setoff, counterclaim,
recoupment, defense or other right which such Lender may have against the L/C
Issuer, the Borrower or any other Person for any reason whatsoever; (B) the
occurrence or continuance of a Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided, however,
that each Lender’s obligation to make Committed Loans pursuant to this Section
2.03(c) is subject to the conditions set forth in Section 4.02 (other than
delivery by the Borrower of a Committed Loan Notice). No such making of an L/C
Advance shall relieve or otherwise impair the obligation of the Borrower to
reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer
under any Letter of Credit, together with interest as provided herein.  


                              (vi)
If any Lender fails to make available to the Administrative Agent for the
account of the L/C Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled to recover
from such Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the L/C
Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a
rate determined by the L/C Issuer in accordance with banking industry rules on
interbank compensation plus any administrative, processing or similar fees
customarily charged by the L/C Issuer 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 L/C Advance in respect of the relevant L/C Borrowing, as
the case may be. A certificate of the L/C Issuer submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing under this
clause (vi) shall be conclusive absent manifest error. 


                    (d)
Repayment of Participations. 


                              (i)
At any time after the L/C Issuer has made a payment under any Letter of Credit
and has received from any Lender such Lender’s L/C Advance in respect of such
payment in accordance with Section 2.03(c), if the Administrative Agent
receives for the account of the L/C Issuer any payment in respect of the
related Unreimbursed Amount or interest thereon (whether directly from the
Borrower or otherwise, including proceeds of Cash Collateral applied thereto by
the Administrative 


-50-






Agent), the
Administrative Agent will distribute to such Lender its Applicable Percentage
thereof (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender’s L/C Advance was outstanding) in
the same funds as those received by the Administrative Agent. 


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


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


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


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


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


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


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


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


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


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                    (f)
Role of L/C Issuer. Each Lender and the Borrower agree that, in paying
any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the
request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; (iii) any error, omission, interruption, loss or delay
in transmission or delivery of any draft, notice or other communication under
or relating to any Letter of Credit or any error in interpretation of technical
terms; or (iv) the due execution, effectiveness, validity or enforceability of
any document or instrument related to any Letter of Credit or Issuer Document.
The Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit; provided,
however, that this assumption is not intended to, and shall not,
preclude the Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuer, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of the L/C Issuer shall
be liable or responsible for any of the matters described in clauses (i)
through (v) of Section 2.03(e); provided, however, that anything
in such clauses to the contrary notwithstanding, the Borrower may have a claim
against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to
the extent, but only to the extent, of any direct, as opposed to consequential
or exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C
Issuer’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary (or
the L/C Issuer may refuse to accept and make payment upon such documents if
such documents are not in strict compliance with the terms of such Letter of
Credit), and the L/C Issuer shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason. 


                    (g)
Cash Collateral. Upon the written request of the Administrative Agent,
if, as of the Letter of Credit Expiration Date, any L/C Obligation for any
reason remains outstanding, the Borrower shall, in each case, within one
Business Day after such request, 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 Administrative 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 103% of the Outstanding
Amount of all L/C Obligations, pursuant to documentation in form and substance
reasonably satisfactory to the Administrative Agent and the L/C Issuer (which
documents are hereby Consented to by the Lenders). Derivatives of such term
have corresponding meanings. The Borrower hereby grants to the Collateral 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 Bank of America, except that
Permitted Investments of the type listed in clauses (a) through (f) of the
definition thereof may be made at the request of the Borrower at the option and
in the sole discretion of the Collateral Agent (and at the Borrower’s risk and
expense); interest or profits, if any, on such investments shall accumulate in
such account. If at any time the Administrative Agent reasonably determines
that any funds held as Cash Collateral are subject to any right or claim of any
Person other than the Administrative Agent or that the total amount of such
funds is less than the aggregate Outstanding Amount of all L/C Obligations, the



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Borrower will,
forthwith upon demand by the Administrative Agent, pay to the Administrative
Agent, as additional funds to be deposited as Cash Collateral, an amount equal
to the excess of (x) such aggregate Outstanding Amount over (y) the total
amount of funds, if any, then held as Cash Collateral that the Administrative
Agent reasonably 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 and Other Liabilities.



                    (h)
Applicability of ISP and UCP. Unless otherwise expressly agreed by the
L/C Issuer and the Borrower when a Letter of Credit is issued, (i) the rules of
the ISP shall apply to each Standby Letter of Credit, and (ii) the rules of the
Uniform Customs and Practice for Documentary Credits, as most recently
published by the International Chamber of Commerce at the time of issuance
shall apply to each Commercial Letter of Credit. 


                    (i)
Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Applicable
Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for each
Letter of Credit equal to the Applicable Rate times the daily Stated
Amount under each 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 fifteenth day after
the end of each March, June, September and December, commencing with the first
such date to occur after the issuance of such Letter of Credit, on the Letter
of Credit Expiration Date and thereafter on demand, and (ii) computed on a
quarterly basis in arrears. If there is any change in the Applicable Rate
during any quarter, the daily amount available to be drawn under of each Letter
of Credit shall be computed and multiplied by the Applicable Rate separately
for each period during such quarter that such Applicable Rate was in effect.
Notwithstanding anything to the contrary contained herein, while any Event of
Default exists, Letter of Credit Fees shall accrue at the Default Rate as
provided in Section 2.12(b) hereof. 


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


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


          2.04
Swing Line Loans.


                    (a)
The Swing Line. Subject to the terms and conditions set forth herein,
the Swing Line Lender agrees, in reliance upon the agreements of the other
Lenders set forth in this Section 2.04, to 


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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 the
Loan Cap, and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender at such time, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all L/C Obligations at such time, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line
Loans at such time shall not exceed such Lender’s Commitment, and provided,
further, that the Borrower shall not use the proceeds of any Swing Line
Loan to refinance any outstanding Swing Line Loan, and provided further that
the Swing Line Lender shall not be obligated to make any Swing Line Loan at any
time when any Lender is at such time a Defaulting Lender or Deteriorating
Lender hereunder, unless the Swing Line Lender has entered into satisfactory
arrangements with the Borrower or such Lender to eliminate the Swing Line
Lender’s risk with respect to such Lender. Within the foregoing limits, and
subject to the other terms and conditions hereof, the 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 a rate based on the Base
Rate. 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 Administrative Agent in Article IX with
respect to any acts taken or omissions suffered by the Swing Line Lender in
connection with Swing Line Loans made by it or proposed to be made by it as if
the term “Administrative Agent” as used in Article IX included the Swing
Line Lender with respect to such acts or omissions, and (B) as additionally
provided herein with respect to the Swing Line Lender. 


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


 


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


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


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


                              (iv)
Each 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 (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. 


 


-55-







                    (d)
Repayment of Participations. 




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


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


                              (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 notice to the Administrative Agent, at any time or from
time to time voluntarily prepay Committed Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by
the Administrative Agent not later than 11:00 a.m. (A) two (2) Business Days
prior to any date of prepayment of LIBO Rate Loans and (B) on the date of
prepayment of Base Rate Loans; (ii) any prepayment of LIBO Rate Loans shall be
in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess
thereof; and (iii) any prepayment of Base Rate Loans shall be in a principal
amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in
each case, if less, the entire principal amount thereof then outstanding. Each
such notice shall specify the date and amount of such prepayment and the
Type(s) of Loans to be prepaid and, if LIBO Rate Loans, the Interest Period(s)
of such Loans. The Administrative Agent will promptly notify each Lender of its
receipt of each such notice, and of the amount of such Lender’s Applicable
Percentage of such prepayment. If such notice is given by the 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 LIBO Rate Loan shall be accompanied by all accrued interest on the amount
prepaid, together with any additional amounts required pursuant to Section
3.05. Each such prepayment shall be applied to the Committed Loans of the
Lenders in accordance with their respective Applicable Percentages. 


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


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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 L/C Borrowings and/or Cash Collateralize the L/C Obligations (other than
L/C Borrowings) 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 Loan Cap. 


                    (d)
The Borrower shall prepay the Loans and Cash Collateralize the L/C Obligations
in accordance with the provisions of Section 6.13 hereof. 


                    (e)
If any transaction constituting a Prepayment Event is consummated at any time
while Availability is less than $50,000,000 after giving effect to such
transaction, the Borrower shall prepay the Loans and Cash Collateralize the L/C
Obligations in an amount equal to the Net Proceeds received by a Loan Party on
account of such Prepayment Event, irrespective of whether a Triggering Event
then exists and is continuing. 


                    (f)
Prepayments made pursuant to Section 2.05(c), (d) and (e) above, first,
shall be applied ratably to the L/C Borrowings and 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 L/C
Borrowings, 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. 


                    (g)
Prepayments made pursuant to this Section 2.05 shall not reduce the Aggregate
Commitments hereunder. 


	
 

	
 


	
 

	
2.06 Termination or Reduction of Commitments. The
 Borrower may, upon irrevocable notice to the Administrative Agent, terminate
 the Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line
 Sublimit or from time to time permanently reduce the Aggregate Commitments,
 the Letter of Credit Sublimit or the Swing Line Sublimit; provided
 that (i) any such notice shall be received by the Administrative Agent not
 later than 11:00 a.m. three (3) Business Days prior to the date of termination
 or reduction, (ii) any such partial reduction shall be in an aggregate amount
 of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, (iii)
 the Borrower shall not terminate or reduce (A) the Aggregate Commitments if,
 after giving effect thereto and to any concurrent prepayments hereunder, the
 Total Outstandings would exceed the Aggregate Commitments, (B) the Letter of
 Credit Sublimit if, after giving effect thereto, the Outstanding Amount of
 L/C Obligations not fully Cash Collateralized hereunder would exceed the
 Letter of Credit Sublimit, and (C) the Swing Line Sublimit if, after giving
 effect thereto, and to any concurrent payments hereunder, the Outstanding
 Amount of Swing Line Loans hereunder would exceed the Swing Line Sublimit. 


	
 

	
 


	
 

	
          (b)
 If, after giving effect to any reduction of the Aggregate Commitments, the
 Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of
 the Aggregate 





-57-






	
 

	
 


	
 

	
Commitments,
 such Letter of Credit Sublimit or Swing Line Sublimit shall be automatically
 reduced by the amount of such excess. 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
2.07 Repayment of Loans.





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


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


                              (c)
On the Termination Date, the Borrower shall Cash Collateralize the L/C
Obligations outstanding as of such date in accordance with the terms hereof. 


          2.08
Interest.


                    (a)
Subject to the provisions of Section 2.08(b) below, (i) each LIBO Rate Loan
shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the LIBO 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. 


                    (b)
(i) If any amount payable under any Loan Document is not paid when due (after
giving effect 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 for so long as such Event of
Default is continuing. 


                              (ii)
  If any other Event of Default
exists, then the Administrative 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
while such Event of Default is continuing 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. 


-58-






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


                    (a) Commitment Fee.
The Borrower shall pay to the Administrative Agent for the account of each
Lender in accordance with its Applicable Percentage, a commitment fee equal to
the Applicable Commitment Fee Percentage times the actual daily amount by which
the Aggregate Commitments exceed the sum of (i) the Outstanding Amount of Loans
(but excluding the principal amount of Swing Line Loans then outstanding) and
(ii) the Outstanding Amount of L/C Obligations. The commitment fee shall accrue
at all times during the Availability Period, including at any time during which
one or more of the conditions in Article IV is not met, and shall be due
and payable quarterly in arrears on the fifteenth day after the end of each
March, June, September and December, commencing with the first such date to
occur after the Closing Date, and on the last day of the Availability Period.
The commitment fee shall be calculated quarterly in arrears, and if there is
any change in the Applicable Commitment Fee Percentage during any quarter, the
actual daily amount shall be computed and multiplied by the Applicable
Commitment Fee Percentage separately for each period during such quarter that
such Applicable Commitment Fee Percentage was in effect. Notwithstanding the
foregoing, in calculating the Commitment Fee payable to any Lender which is
also the Swing Line Lender, the principal amount of Swing Line Loans
outstanding shall be included in the calculation of the Outstanding Amount of
Loans of such Lender. 


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


          2.10
Computation of Interest and Fees. All computations of
interest for Base Rate Loans when the Base Rate is determined by Bank of
America’s “prime rate” shall be made on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more fees or interest, as applicable, being paid than if
computed on the basis of a 365-day year). Interest shall accrue on each Loan
for the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.12(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error. 


          2.11
Evidence of Debt. 


                    (a)
The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by the Administrative Agent (the “Loan
Account”) in the ordinary course of business. In addition, each Lender may
record in such Lender’s internal records, an appropriate notation evidencing
the date and amount of each Loan from such Lender, each payment and prepayment
of principal of any such Loan, and each payment of interest, fees and other
amounts due in connection with the Obligations and Other Liabilities due to
such Lender. The accounts or records maintained by the Administrative Agent and
each Lender shall be conclusive absent manifest error of the amount of the
Credit Extensions made by the Lenders to the 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 and Other Liabilities. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall
control in the absence of manifest error. Upon the request of any Lender made
through the Administrative Agent, the Borrower shall execute and deliver to
such Lender (through the Administrative Agent) a Note, which shall evidence
such Lender’s Loans in addition to such accounts 


-59-






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


          2.12
Payments Generally; Administrative 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 Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent’s
Office in Dollars and in immediately available funds not later than 2:00 p.m.
on the date specified herein. The Administrative Agent will promptly distribute
to each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender’s Lending Office. All payments received by the Administrative Agent
after 2:00 p.m. shall, at the option of the Administrative Agent, be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue until such next succeeding Business Day. If any
payment (other than with respect to payment of a LIBO Rate Loan) 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 Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of LIBO Rate Loans (or in the case of any
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such
Borrowing) that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
Section 2.02 (or in the case of a Borrowing of Base Rate Loans, that such
Lender has made such share available in accordance with and at the time
required by Section 2.02) and may, in reliance upon such assumption, make
available to the 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 Administrative Agent, then the applicable Lender (on demand) and the
Borrower (within two Business Days after demand) severally agree to pay to the
Administrative Agent forthwith 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 Administrative Agent, at (A) in the case of a payment to be made
by such Lender, the greater of the Federal Funds Rate and a rate determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation plus any administrative processing or similar fees customarily
charged by the Administrative Agent in connection with the foregoing, and (B)
in the case of a payment to be made by the Borrower, the interest rate
applicable to Base Rate Loans. If the Borrower and such Lender shall pay such
interest to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the 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 


-60-






the Administrative
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 Administrative Agent. 


                              (ii)
Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the
time at which any payment is due to the Administrative Agent for the account of
the Lenders or the L/C Issuer hereunder that the Borrower will not make such
payment, the Administrative 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 Administrative 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 Administrative
Agent, at the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation. 


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


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


                    (d)
Obligations of Lenders Several. The obligations of the Lenders hereunder
to make Committed Loans, to fund participations in Letters of Credit and Swing
Line Loans and to make payments pursuant to Section 10.04(c) 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 under Section 10.04(c) 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 under Section 10.04(c). 


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


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


-61-






	
 

	
 


	
 

	
          (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). 





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


          2.14
Settlement Amongst Lenders. 


	
 

	
 


	
 

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


	
 

	
 


	
 

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





-62-






          2.15
Increase in Commitments. 


                    
(a) Request for Increase. Provided no Default or Event of Default then
exists or would arise therefrom, upon notice to the Administrative 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 $100,000,000; provided that (i) any such request for an
increase shall be in a minimum amount of $15,000,000, (ii) the Borrower may
make a maximum of four such requests, and (iii) such increase shall be on the
same terms as those set forth in this Agreement. At the time of sending such
notice, the Borrower (in consultation with the Administrative 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). 


                    (b)
Lender Elections to Increase. Each Lender shall notify the
Administrative 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. 


                    (c)
Notification by Administrative Agent; Additional Lenders. The
Administrative Agent shall promptly 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 Administrative
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 Administrative Agent, in consultation
with the Borrower, will provide the consenting Lenders with an opportunity to
further increase their Commitments in the amount equal to the total amount
requested by the Borrower and 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) (such
Lenders which increase their Commitments and such additional Lenders, the “Additional
Commitment Lenders”), provided, however,
that without the consent of the Administrative Agent, at no time shall the
Commitment of any Additional Commitment Lender be less than $5,000,000. 


                    (d)
Effective Date and Allocations. If the Aggregate Commitments are
increased in accordance with this Section, the Administrative Agent, in
consultation with the Borrower, shall determine the effective date (the “Increase
Effective Date”) and the final allocation of such increase. The
Administrative 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. 


                    (e)
Conditions to Effectiveness of Increase. As a condition precedent to
such increase, (i) the Borrower shall deliver to the Administrative Agent a
certificate of each Loan Party dated as of the Increase Effective Date 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
increase, and (B) in the case of the Borrower, certifying that, before and
after giving effect to such increase, (1) the representations and warranties
contained in Article V and the other Loan Documents are true and correct
on and as of the 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 


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clauses (a)
and (b), respectively, of Section 6.01, (ii) the Borrower, the Administrative
Agent, and any Additional Commitment Lender shall have executed and delivered a
Joinder Agreement; (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 Administrative Agent as the Borrower and the
Administrative Agent may agree; (v) the Borrower and the Additional Commitment
Lender shall have delivered such other instruments, documents and agreements as
the Administrative Agent may reasonably have requested; and (vi) no Default
exists. The Borrower shall prepay any Committed Loans outstanding on the
Increase Effective Date (and pay any additional amounts required pursuant to
Section 3.05) 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. 


                    (f)
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 Administrative 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. 


                    (c)
Indemnification by the Loan Parties. The Loan Parties shall indemnify
the Administrative Agent, each Lender and the L/C Issuer, within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or the L/C Issuer, as the case may be, and, unless resulting
from a Lender’s gross negligence, 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 setting forth in
reasonable detail the amount of and basis for calculating such payment or
liability delivered to the Borrower by a Lender or the L/C Issuer (with a copy
to the Administrative Agent), or by the Administrative Agent on its own behalf
or on behalf of a Lender or the 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 Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority 


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evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent. 


                    (e)
Status of Lenders. Any Lender or the L/C Issuer or Agent 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 Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower or the Administrative
Agent, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or
at a reduced rate of withholding. Such delivery shall be required on the
Closing Date (or, in the case of an assignee, on the date of assignment) and on
or before the date such documentation expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent documentation so
delivered or as may reasonably be requested by the Borrower or the
Administrative Agent. In addition, any Lender or the L/C Issuer, if requested
by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender or the L/C Issuer
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, (1) any Foreign Lender shall
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent),
whichever of the following is applicable: 


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

	
                    (iii)
 duly completed copies of Internal Revenue Service Form W-8IMY with any
 accompanying statements and certificates, 


	
 

	
 


	
 

	
                    (iv)
 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 


	
 

	
 


	
 

	
                    (v)
 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; and 





          (2)
any Lender which is not a Foreign Lender shall deliver to the Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Lender becomes a Lender under
this Agreement, whichever of the following is applicable: 


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                    (i)
 duly completed copies of Internal Revenue Service Form W-9; provided,
 however, that a Person that the Borrower may treat as an “exempt recipient”
 (within the meaning of Treasury Regulations Section 1.6049-4(c) (without
 regard to the third sentence thereof) shall not be required to deliver an
 Internal Revenue Service Form W-9, except to the extent necessary to avoid
 U.S. withholding taxes under Treasury Regulations Section 1.1441-1; and/or 


	
 

	
 


	
 

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





                    (f)
Treatment of Certain Refunds. If the Administrative Agent, any Lender or
the L/C Issuer shall become aware that it is entitled to claim a refund or
credit from a Governmental Authority in respect of any Indemnified 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
3.01, the Administrative Agent, or such Lender or the L/C Issuer, as
applicable, shall promptly notify the Borrower of the availability of such
refund claim and, if the Administrative Agent, or such Lender or the L/C Issuer
determines in good faith that making a claim for refund will not have a
materially adverse effect on its Taxes or business operations, shall, within sixty
(60) days after receipt of a request by the Borrower, make a claim to such
Governmental Authority for such refund. If the Administrative 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 Administrative 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 Administrative Agent, such Lender or the L/C
Issuer, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority applicable to the amounts received by the Borrower) to the
Administrative Agent, such Lender or the L/C Issuer in the event the Administrative
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
Administrative 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. 


          3.02
Illegality. If any Lender determines that any Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund LIBO Rate Loans, or to determine or charge interest rates based upon the
LIBO Rate, or any Governmental Authority has imposed material restrictions on
the authority of such Lender to purchase or sell, or to take deposits of,
Dollars in the London interbank market, then, on notice thereof by such Lender
to the Borrower through the Administrative Agent, any obligation of such Lender
to make or continue LIBO Rate Loans or to convert Base Rate Loans to LIBO Rate
Loans shall be suspended until such Lender notifies the Administrative Agent
and the 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 Administrative Agent), prepay or, if
applicable, convert all LIBO Rate Loans of such Lender to Base Rate Loans,
either on the last day of the Interest Period therefor, if such Lender may
lawfully continue to maintain such LIBO Rate Loans to such day, or immediately,
if such Lender may not lawfully continue to maintain such LIBO Rate Loans. Upon
any such prepayment or conversion, the Borrower shall also pay accrued interest
on the amount so prepaid or converted. 


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


          3.04
Increased Costs; Reserves on LIBO Rate Loans. 


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


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

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





and the result
of any of the foregoing shall be to increase the cost to such Lender of making
or maintaining any LIBO Rate Loan (or of maintaining its obligation to make any
such Loan), or to increase the cost to such Lender or the L/C Issuer of
participating in, issuing or maintaining any Letter of Credit (or of
maintaining its obligation to participate in or to issue any Letter of Credit),
or to reduce the amount of any sum received or receivable by such Lender or the
L/C Issuer hereunder (whether of principal, interest or any other amount) then,
upon request of such Lender or the L/C Issuer and delivery of the certificate
contemplated by Section 3.04(c), 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 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



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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 upon delivery of the
certificate contemplated by Section 3.04(c), 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, and the method
for calculating such amount or amounts 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 incurred or reductions
suffered more than six (6) 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 six-month period referred to above shall be extended to include the period
of retroactive effect thereof). 


                    (e)
Reserves on LIBO 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 LIBO Rate Loan equal to the actual costs of
such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such Loan, provided
the Borrower shall have received at least 10 days’ prior notice (with a copy to
the Administrative Agent) of such additional interest from such Lender. If a
Lender fails to give notice 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 Administrative 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 LIBO 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; 





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 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 LIBO Rate
Loan made by it at the LIBO Rate for such Loan by a matching deposit or other
borrowing in the London interbank market for a comparable amount and for a
comparable period, whether or not such LIBO Rate Loan was in fact so funded. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section and setting forth in reasonable
detail the manner in which such amount or amounts was determined shall be
delivered to the Borrower. 


          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 and Other Liabilities 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 its initial Credit Extension
hereunder is subject to satisfaction of the following conditions precedent: 


	
 

	
 


	
 

	
          (a)
 The Administrative Agent’s receipt of the following, each of which shall be
 originals or telecopies or other electronic image scan transmission (e.g.,
 “pdf” or “tiff” via e-mail) (followed promptly by originals) unless otherwise
 specified, 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 Administrative Agent: 


	
 

	
 


	
 

	
                    (i)
 executed counterparts of this Agreement; 





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


	
 

	
 


	
 

	
          (iii)
 certificates of resolutions or other action, incumbency certificates and/or
 other certificates of Responsible Officers of each Loan Party 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 be 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 be
 a party; 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (v)
 favorable opinions of (i) Skadden, Arps, Slate, Meagher & Flom, LLP,
 counsel to the Loan Parties, (ii) general corporate counsel to the Loan
 Parties, and (iii) local counsel to the Loan Parties in Florida, in each case
 addressed to the Administrative Agent and each Lender, as to such matters
 concerning the Loan Parties and the Loan Documents as the Administrative
 Agent may reasonably request; 


	
 

	
 


	
 

	
          (vi)
 a certificate signed by a Responsible Officer of the 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 the date of
 the Audited Financial Statements that has had or could be reasonably expected
 to have, either individually or in the aggregate, a Material Adverse Effect,
 (C) to the Solvency of the Loan Parties as of the Closing Date after giving
 effect to the transactions contemplated hereby and (D) that either that (1)
 no consents, licenses or approvals are required in connection with the
 execution, delivery and performance by any 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 all endorsements in favor of the Agents required under the Loan
 Documents have been obtained and are in effect; 


	
 

	
 


	
 

	
          (viii)
 a payoff letter from Bank of America, N.A., as agent for the lenders under
 the Existing Credit Agreement reasonably satisfactory in form and substance
 to the Administrative Agent evidencing that the Existing Credit Agreement has
 been or concurrently with the Closing Date is being terminated, all
 obligations thereunder are being paid in full, and all Liens securing
 obligations under the Existing Credit Agreement have been or concurrently
 with the Closing Date are being released; 


	
 

	
 


	
 

	
          (ix)
 the Security Documents and other Loan Documents set forth on Schedule 4.01
 hereto and certificates evidencing any stock being pledged thereunder (for
 clarity, other than Excluded Property as therein defined), together with
 undated stock powers executed in blank, each duly executed by the applicable
 Loan Parties; 





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          (x)
 (A) appraisals (based on net liquidation value) by a third party appraiser
 reasonably acceptable to the Collateral Agent of all Inventory of the Loan
 Parties, the results of which are reasonably satisfactory to the Collateral
 Agent and (B) a written report regarding the results of a customary
 commercial finance examination of the Loan Parties, which shall be reasonably
 satisfactory to the Collateral Agent; 


	
 

	
 

	
 


	
 

	
 

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


	
 

	
 

	
 


	
 

	
 

	
          (xii)
 (A) duly authorized Uniform Commercial Code financing statements, required by
 law or reasonably requested by the Collateral Agent to be filed, registered
 or recorded to create or perfect the first priority Liens to the extent
 intended to be created under the Loan Documents and all such documents and
 instruments shall have been concurrently submitted for filing registering or
 recordation to the satisfaction of the Collateral Agent, and (B) the Credit
 Card Notifications and Blocked Account Agreements required as of the Closing
 Date pursuant to Section 6.13 hereof; 


	
 

	
 

	
 


	
 

	
 

	
          (xiii)
 evidence that all other actions that the Collateral Agent may deem necessary
 in order to create valid Liens on the property described in the Mortgages
 have been taken; and 


	
 

	
 

	
 


	
 

	
 

	
          (xiv)
 without duplication of other requirements of this Section 4.01, such other
 assurances, certificates, documents, consents or opinions as are described in
 Schedule 4.01 hereto. 


	
 

	
 

	
 


	
 

	
          (b)
 After giving effect to (i) the first funding under the Loans, (ii) the
 payment of all fees and other amounts due under the Loan Documents on the
 Closing Date, and (iii) all Letters of Credit to be issued at, or immediately
 subsequent to, such establishment, Availability shall be not less than
 $100,000,000. 


	
 

	
 


	
 

	
          (c)
 The Administrative Agent shall have received a Borrowing Base Certificate
 dated the Closing Date, relating to the month ended on January 31, 2009, and
 executed by a Responsible Officer of the Borrower. 


	
 

	
 


	
 

	
          (d)
 The Administrative Agent shall have received the unaudited consolidated
 balance sheet of the Borrower and its Subsidiaries for the Fiscal Year ending
 January 31, 2009, and the related consolidated statements of income or
 operations and Shareholders’ Equity for such Fiscal Year, in form and substance
 reasonably satisfactory to the Administrative Agent. 


	
 

	
 


	
 

	
          (e)
 No event shall have occurred after November 1, 2008 that could reasonably be
 expected to have a Material Adverse Effect. 


	
 

	
 


	
 

	
          (f)
 The Administrative Agent shall have received and be satisfied with (i) a
 detailed forecast for Fiscal Year 2009, which shall include a balance sheet,
 consolidated statements of income or operations and statement of cash flow on
 an annual basis, each prepared in conformity 





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with GAAP
 and consistent with the Loan Parties’ then current practices and (ii) such
 other information (financial or otherwise) reasonably requested by the
 Administrative Agent. 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (h)
 The consummation of the transactions contemplated hereby shall not violate
 any Applicable Law or any Organization Document in any material respect. 


	
 

	
 


	
 

	
          (i)
 All fees required to be paid by the Loan Parties to the Agents or the
 Arranger on or before the Closing Date shall have been paid in full, and all
 fees required to be paid by the Loan Parties to the Lenders on or before the
 Closing Date shall have been paid in full. 


	
 

	
 


	
 

	
          (j)
 The Borrower shall have paid all reasonable and documented fees, charges and
 out-of-pocket disbursements of counsel to the Administrative Agent to the
 extent invoiced prior to or on the Closing Date, plus such additional amounts
 of such reasonable and documented fees, charges and out-of-pocket
 disbursements as shall constitute its reasonable estimate of such fees,
 charges and disbursements incurred or to be incurred by it through the
 closing proceedings (provided that such estimate shall not thereafter
 preclude a final settling of accounts between the Borrower and the
 Administrative Agent). 


	
 

	
 


	
 

	
          (k)
 The Administrative Agent 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 Act. 


	
 

	
 


	
 

	
          (l)
 No changes in governmental regulations or policies materially affecting any
 Loan Party or any Credit Party with respect to the transactions contemplated
 hereby 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 Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto. 


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


	
 

	
 


	
 

	
          (a)
 The representations and warranties of each other Loan Party contained in Article
 V or any other Loan Document, 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) any such representations which are qualified by “materiality” or
 “Material Adverse Effect” shall be true and correct in all respects, and
 (iii) except that 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. 





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


	
 

	
 


	
 

	
          (c)
 The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line
 Lender shall have received a Request for Credit Extension in accordance with
 the requirements hereof. 


	
 

	
 


	
 

	
          (d)
 No event or circumstance which could reasonably be expected to result in a
 Material Adverse Effect shall have occurred. 





Each Request
for Credit Extension (other than a Committed Loan Notice requesting only a
conversion of Committed Loans to the other Type or a continuation of LIBO Rate
Loans) submitted by the Borrower shall be deemed to be a representation and
warranty by the Borrower to each Agent, each L/C Issuer, the Swing Line Lender
and each Lender that the conditions specified in Sections 4.02(a) and (b) have
been satisfied on and as of the date of the applicable Credit Extension. The
conditions set forth in this Section 4.02 are for the sole benefit of the
Credit Parties but until the Required Lenders otherwise direct the
Administrative Agent to cease making Committed Loans in accordance with the
terms of this Agreement, the Lenders will fund their Applicable Percentage of
all Loans and L/C Advances 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 Administrative 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 Administrative Agent and the other Credit Parties that: 


          5.01
Existence, Qualification and Power. Each Loan Party
and each Subsidiary thereof (a) is a corporation, limited liability company,
partnership or limited partnership, duly organized or formed, validly existing
and, where applicable, in good standing under the Laws of the jurisdiction of
its incorporation or organization, (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 (a) (as it
relates to any Immaterial Subsidiary), (b)(i) or (c), to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect. Schedule 5.01 annexed hereto sets forth, as of the Closing Date,
each Loan Party’s name as it appears in official filings in its state of
incorporation or organization, its state of incorporation or organization,
organization type, and 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 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 


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contravention
of, or constitute a default under, or require any payment to be made under (i)
any Material Indebtedness to which such Person is a party or affecting such
Person or the properties of such Person or any of its Subsidiaries or (ii) any
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject that would reasonably be
expected to result in a Material Adverse Effect; (c) result in or require the
creation of any Lien upon any asset of any Loan Party (other than Liens in
favor of the Collateral Agent under the Loan Documents); or (d) violate any Law
in any material respect. 


          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 to
the extent specified in the Security Agreement) 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; and (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 other than public disclosures made pursuant to press releases
and public filings prior to the Closing Date. 


                    (b)
The unaudited Consolidated balance sheet of the Borrower and its Subsidiaries
dated January 31, 2009, and the related Consolidated statements of income or
operations, Shareholders’ Equity and cash flows for the Fiscal Year ended on
that date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments. Schedule 5.05 sets forth all Material Indebtedness of the
Loan Parties and their Consolidated Subsidiaries as of the date of such
financial statements. 


                    (c)
No event shall have occurred after November 1, 2008 that could reasonably be
expected to have a Material Adverse Effect. 


                    (d)
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’ reasonable estimate of its future financial performance (it
being understood that such forecasted 


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financial
information is subject to significant uncertainties and contingencies, many of
which are beyond the control of the Loan Parties, that no assurance is given
that any particular forecasts will be realized, that actual results may differ
and that such differences may be material). 


          5.06
Litigation. There are no actions, suits, proceedings,
claims or disputes pending or, to the knowledge of the Loan Parties, threatened
at law, in equity, in arbitration or before any Governmental Authority, by or
against any Loan Party or any of its Subsidiaries or against any of its
properties or revenues that (a) purport to affect or pertain to this Agreement
or any other Loan Document, or any of the transactions contemplated hereby, or
(b) except as disclosed in Schedule 5.06, either individually or in the
aggregate, could 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, or party to, any Material Indebtedness. No
Default has occurred and is continuing or would result from the consummation of
the transactions contemplated by this Agreement or any other Loan Document. 


          5.08
Ownership of Property; Liens. (a) Each of the Loan
Parties and each Subsidiary thereof has good record and marketable title in fee
simple to or valid leasehold interests in, all real property 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, except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. 


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


                    (c)
Schedule 7.01 sets forth a complete and accurate list of all effective
Liens on the property or assets of each Loan Party and each of its Subsidiaries
(other than Excluded Property as defined in the Security Agreement) in an
amount in excess of $100,000, showing as of the Closing Date the lienholder
thereof, the principal amount of the obligations secured thereby and the
property or assets of such Loan Party or such Subsidiary subject thereto. The
property of each Loan Party and each of its Subsidiaries is subject to no
Liens, other than Permitted Encumbrances. 


                    (d)
Schedule 7.02 sets forth a complete and accurate list of all Investments
in an amount in excess of $100,000 held by any Loan Party or any Subsidiary of
a Loan Party on the Closing Date, showing as of the date hereof the amount,
obligor or issuer and maturity, if any, thereof. 


                    (e)
Schedule 7.03 sets forth a complete and accurate list of all
Indebtedness in an amount in excess of $100,000 of each Loan Party or any
Subsidiary of a Loan Party on the Closing Date, showing as of the date hereof
the amount, obligor or issuer and maturity thereof. 


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            5.09
Environmental Compliance. Except as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and except as specifically disclosed in Schedule 5.09: 


	
 

	
 


	
 

	
          (a)
 No Loan Party or any Subsidiary thereof (i) has failed to comply with any
 Environmental Law or to obtain, maintain or comply with any permit, license
 or other approval required under any Environmental Law, (ii) has become
 subject to any Environmental Liability, (iii) has received notice of any
 claim with respect to any Environmental Liability or (iv) knows of any basis
 for any Environmental Liability. 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (c)
 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 (or otherwise reasonably acceptable to the Administrative Agent)
which are not Affiliates of the Loan Parties (or through self-insurance
arrangements), in such amounts (after giving effect to any self-insurance),
with such deductibles and covering such risks (including, without limitation,
workmen’s compensation, public liability, business interruption and property
damage insurance) as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Loan Parties
or the applicable Subsidiary operates. Schedule 5.10 sets forth a
description of all insurance maintained by or on behalf of the Loan Parties as
of the Closing Date and the Administrative Agent and the Lenders acknowledge
that such insurance and the insurance carriers are acceptable as of the Closing
Date. As of the Closing Date, each insurance policy listed on Schedule 5.10
is in full force and effect and all premiums in respect thereof that are due
and payable have been paid. 


            5.11
Taxes. The Loan Parties and their Subsidiaries have
filed all Federal, state and other material tax returns and reports required to
be filed, and have paid all Federal, state and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except (a) 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 Liens (other than Permitted
Encumbrances on account thereof) have been filed and which contest effectively
suspends the collection of the contested obligation 


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and the
enforcement of any Lien securing such obligation, or (b) which would not be
reasonably expected to result in a Material Adverse Effect. 


          5.12
ERISA Compliance.


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


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


                    (c)
(i) No ERISA Event has occurred or is reasonably expected to occur that
individually or in the aggregate could reasonably be expected to result in a
Material Adverse Effect; (ii) no Pension Plan has any Unfunded Pension
Liability that individually or in the aggregate could reasonably be expected to
result in a Material Adverse Effect; (iii) neither the Borrower 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) that individually or in the
aggregate could reasonably be expected to result in a Material Adverse Effect;
(iv) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability (and to the best knowledge of the Borrower, 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 that individually or in the aggregate
could reasonably be expected to result in a Material Adverse Effect; and (v)
neither the Borrower nor any ERISA Affiliate has engaged in a transaction that
could be subject to Sections 4069 or 4212(c) of ERISA that individually or in
the aggregate could reasonably be expected to result in a Material Adverse
Effect. 


          5.13
Subsidiaries; Equity Interests. As of the Closing Date,
the Loan Parties have no Subsidiaries other than those specifically disclosed
in Part (a) of Schedule 5.13, which Schedule sets forth the legal name,
jurisdiction of incorporation or formation of each such Subsidiary. All of the
outstanding Equity Interests in such Subsidiaries have been validly issued, are
fully paid and non-assessable and, as of the Closing Date, are owned by a Loan
Party (or a Subsidiary of a Loan Party) in the amounts specified on Part (a) of
Schedule 5.13 free and clear of all Liens except for those created under
the Security Documents. Except as set forth in Schedule 5.13, as of the
Closing Date, there are no outstanding rights to purchase any Equity Interests
in any Subsidiary. 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 (b) of Schedule 5.13 free and clear of
all Liens except for those created under the Security Documents. The copies of
the Organization Documents of each Loan Party and each amendment thereto
provided pursuant to Section 4.01 are true and correct copies of each such
document, each of which is valid and in full force and effect. Neither Foot
Locker Australia, Inc. nor Foot Locker New Zealand, Inc. maintains any assets
of the type included in the Borrowing Base (other than any immaterial assets of
a de minimus nature) in the United States. 


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          5.14
Margin Regulations; Investment Company Act. 


                    (a)
None of the proceeds of the Credit Extensions shall be used directly or
indirectly for any purpose that would entail a violation of Regulations T, U,
or X issued by the FRB. 


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



          5.15
Disclosure. No report, financial statement,
certificate or other information previously or hereafter furnished by or on
behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder or under any other Loan Document
(excluding projected financial information and general industry data) (in each
case, as modified or supplemented by other information so furnished (including
public disclosures made pursuant to press releases and public filings prior to
the Closing Date) and when taken as a whole) contains any material misstatement
of fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
materially 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 (it being understood that such projected financial information is
subject to significant uncertainties and contingencies, many of which are
beyond the control of the Loan Parties, that no assurance is given that any
particular projections will be realized, that actual results may differ and
that such differences may be material). 


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


          5.17
Intellectual Property Except, in each case, as could
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, the Loan Parties and their Subsidiaries own, or
possess the right to use, all of the Intellectual Property that is reasonably
necessary for the operation of their respective businesses. Except, in each
case, as could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, to the knowledge of the Borrower, no slogan
or other advertising device, product, process, method, substance, part or other
material now employed by any Loan Party or any Subsidiary infringes upon any
Intellectual Property rights held by any other Person, and except as disclosed
in Schedule 5.17, no claim or litigation regarding any of the foregoing
is pending or, to the knowledge of the Borrower, threatened against any Loan
Party or Subsidiary, which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect. 


          5.18
Labor Matters.


          There
are no strikes, lockouts, slowdowns or other material labor disputes against
any Loan Party or any Subsidiary thereof pending or, to the knowledge of any
Loan Party, threatened. The hours worked by and payments made to employees of
the Loan Parties comply with the Fair Labor Standards Act and any other
applicable federal, state, local or foreign Law dealing with such matters,
except to the extent that any such violation could not reasonably be expected
to have a Material Adverse Effect. 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, on
account of wages and employee health and 


-78-






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, as of the Closing Date, no Loan Party is a party to or
bound by any collective bargaining agreement. There are no complaints, unfair
labor practice charges, grievances, arbitrations, unfair employment practices
charges or any other claims or complaints against any Loan Party or any
Subsidiary pending or, to the knowledge of any Loan Party, threatened to be
filed with any Governmental Authority or arbitrator based on, arising out of,
in connection with, or otherwise relating to the employment or termination of
employment of any employee of any Loan Party or any of its Subsidiaries, which
could reasonably be expected to have a Material Adverse Effect. 


            5.19
Security Documents. 


	
 

	
 


	
 

	
          (a)
 The Security Agreement creates in favor of the Collateral Agent, for the
 benefit of the Secured Parties referred to therein, a legal, valid, 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 UCC financing
 statements, releases and other filings are in appropriate form and have been
 or will be filed in the offices specified in the Due Diligence Certificate
 (as defined in the Security Agreement). Upon such filings and/or the
 obtaining of “control” (as such term is defined in the UCC), the Collateral
 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 to the extent required by the Loan Documents. 


	
 

	
 


	
 

	
          (b)
 The Mortgages create in favor of the Collateral Agent, for the benefit of the
 Secured Parties referred to therein, a legal, valid, and enforceable Lien in
 the Mortgaged Property (as defined in the Mortgages), 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. Upon the filing of the Mortgages with the
 appropriate Governmental Authorities and the payment of any mortgage
 recording taxes or fees, the Collateral 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 Mortgaged Property that may be perfected by such
 filing (including without limitation the proceeds of such Mortgaged
 Property), in each case prior and superior in right to any other Person to
 the extent required by the Loan Documents. 





            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. 


            5.21
Deposit Accounts; Credit Card Arrangements.


                    (a)
Annexed hereto as Schedule 5.21(a) is a list of all DDAs maintained by
the Loan Parties as of the Closing Date, which Schedule includes, with respect
to each DDA, in each case as of the Closing Date: (i) the name and address of
the depository, (ii) the account number(s) maintained with such 


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depository,
(iii) a contact person at such depository, and (iv) the identification of each
Blocked Account Bank. 


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


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


            5.23
Customer and Trade Relations. There exists no actual
or, to the knowledge of any Loan Party, threatened, termination or cancellation
of, any agreement with any supplier of any Loan Party which could reasonably be
expected to have a Material Adverse Effect. 


            5.24
Casualty. Neither the businesses nor the properties of
any Loan Party or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that, either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. 


ARTICLE VI 

AFFIRMATIVE COVENANTS


            So
long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation (other than contingent indemnification obligations for which no
claim has then been asserted) hereunder shall remain unpaid or unsatisfied, 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 Domestic Subsidiary to: 


            6.01
Financial Statements. Deliver to the Administrative
Agent (for distribution to each Lender): 


	
 

	
 


	
 

	
          (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 ended January
 31, 2009), 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 a
 report and unqualified opinion of a Registered Public Accounting Firm of
 nationally recognized standing reasonably acceptable to the Administrative
 Agent, which report and opinion shall be prepared in accordance with generally
 accepted auditing standards and shall not be subject to any “going concern”
 or like qualification or exception or any qualification or exception as to
 the scope of such audit; 


	
 

	
 


	
 

	
          (b)
 as soon as available, but in any event within 45 days after the end of each
 of the first three Fiscal Quarters of each Fiscal Year of the Borrower
 (commencing with the Fiscal Quarter ended May 2, 2009), 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 





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Fiscal Year
 then ended, setting forth in each case in comparative form the figures for (A)
 the corresponding Fiscal Quarter of the previous Fiscal Year and (B) the
 corresponding portion of the previous Fiscal Year, all in reasonable detail,
 such consolidated statements to be certified by a Responsible Officer of the
 Borrower as fairly presenting in all material respects 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)
 if requested by the Administrative Agent, then within 30 days after the end
 of each of the Fiscal Months of each fiscal year of the Borrower (or sooner
 if available), (a) (i) a consolidated balance sheet of the Borrower and its
 Subsidiaries as at the end of such Fiscal Month, (ii) OR 1 of the Borrower’s
 customary internal financial reports, (iii) Total Domestic Division Profit as
 set forth in OR 5 of the Borrower’s customary internal financial reports, and
 (iv) Report 135 of the Borrower’s customary internal financial reports
 showing U.S. cash flows, each for such Fiscal Month and for the portion of
 the Borrower’s Fiscal Year then ended, setting forth in each case in
 comparative form the figures for (A) the corresponding Fiscal Month of the
 previous Fiscal Year and (B) the corresponding portion of the previous Fiscal
 Year, all in reasonable detail, such statements to be certified by a
 Responsible Officer of the Borrower as fairly representing in all material
 respects the financial condition, results of operations, and cash flows of
 the Borrower and its Subsidiaries or domestic divisions, as applicable, as of
 the end of such Fiscal Month in accordance with the Borrower’s customary
 accounting practices in effect on the Closing Date, and (b) reasonably
 detailed calculations with respect to the Adjusted Consolidated Fixed Charge
 Coverage Ratio for such period (whether or not it is then required to be
 tested hereunder); 


	
 

	
 


	
 

	
          (d)
 as soon as available, but in any event within 45 days after the end of each
 Fiscal Year of the Borrower, forecasts prepared by management of the
 Borrower, in form satisfactory to the Administrative Agent, of consolidated
 balance sheets and statements of income or operations and cash flows of the
 Borrower and its Subsidiaries, and an Availability model, in each case on a
 quarterly 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, it
 being understood and agreed that (i) any forecasts furnished hereunder are
 subject to significant uncertainties and contingencies, which may be beyond
 the control of the Loan Parties, (ii) no assurance is given by the Loan
 Parties that the results or forecast in any such projections will be realized
 and (iii) the actual results may differ from the forecasted results set forth
 in such projections and such differences may be material. 


	
 

	
 


	
           6.02
 Certificates; Other Information. Deliver to the
 Administrative Agent (for distribution to each Lender), in form and detail
 satisfactory to the Administrative Agent: 


	
 


	
 

	
          (a)
 concurrently with the delivery of the financial statements referred to in
 Sections 6.01(a) and (b) (commencing with the delivery of the financial
 statements for the Fiscal Quarter ended May 2, 2009), (i) 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 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; 


	
 

	
 


	
 

	
          (b)
 on the fifteenth (15th) day of each Fiscal Month (or, if such day
 is not a Business Day, on the next succeeding Business Day) (or more
 frequently at the option of the Borrower), a Borrowing Base Certificate
 showing the Borrowing Base as of the close of business as of the last 





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day of the
 immediately preceding Fiscal Month, each Borrowing Base Certificate to be
 certified as complete and correct in all material respects by a Responsible
 Officer of the Borrower; provided that at any time that an Accelerated
 Borrowing Base Delivery Event has occurred and is continuing, such Borrowing
 Base Certificate shall be delivered on Wednesday of each week (or, if
 Wednesday is not a Business Day, on the next succeeding Business Day), as of
 the close of business for 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, but only to the
 extent that such reports, letters or recommendations could reasonably be
 expected to materially adversely impact (i) the calculation of the Borrowing
 Base, the Adjusted Consolidated Fixed Charge Coverage Ratio (or the
 components thereof), the Consolidated Fixed Charge Coverage Ratio (or the
 components thereof), or the Pro Forma Availability Condition or (ii) the
 accuracy of any financial statements furnished under Section 6.01 hereof; 


	
 

	
 


	
 

	
          (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 (other than registration statements on
 Form S-8 or its equivalent) which any Loan Party may file or be required to
 file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of
 1934 or with any national securities exchange, and in any case not otherwise
 required to be delivered to the Administrative Agent pursuant hereto; 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (f)
 promptly after the furnishing thereof, copies of any statement or report
 furnished to any holder of debt securities of any Loan Party or any
 Subsidiary thereof pursuant to the terms of the Indenture or any 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)
 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, in each case, could reasonably expected to
 have a Material Adverse Effect; and 


	
 

	
 


	
 

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





Documents
required to be delivered pursuant to Section 6.01(a), (b), or (c) or
Section 6.02(d) (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;
or (ii) on which such documents are posted on the 


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Borrower’s
behalf on an Internet or intranet website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that: (i) the
Borrower shall deliver paper copies of such documents to the Administrative
Agent or any Lender (through the Administrative Agent) that requests the
Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrower shall notify the Administrative Agent and each Lender (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e.,
soft copies) of such documents. The Administrative Agent shall have no
obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Loan Parties with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it (through the
Administrative Agent) or maintaining its copies of such documents. 


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


            6.03
Notices. Promptly notify the Administrative Agent of
the following promptly after any Responsible Officer of the Borrower obtains
knowledge thereof: 


	
 

	
 


	
 

	
          (a)
 the occurrence of any Default; 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (c)
 the occurrence of any ERISA Event; 


	
 

	
 


	
 

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


	
 

	
 


	
 

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





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          (f)
 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; 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (h)
 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; and 


	
 

	
 


	
 

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





Each notice
pursuant to this Section shall be accompanied by a statement of a Responsible
Officer of the 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, all its obligations and liabilities, including
(a) all 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, and carriers)
which, if unpaid, would by law become a Lien upon its property; and (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness, except, in each case, where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) such Loan Party
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP, (c) no Lien has been filed with respect thereto (other than
Permitted Encumbrances of the type described in clauses (a), (b) and (e) of
such definition), and (d) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect. Nothing
contained herein shall be deemed to limit the rights of the Agents 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, except to the extent the failure to do so
could not reasonably be expected to have a Material Adverse Effect, 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 could not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its Intellectual
Property, except to the extent such Intellectual Property is no longer used or
useful in the conduct of the business of the Loan Parties or that failure to do
so could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect. 


            6.06
Maintenance of Properties. (a) Except to the extent
that the failure to do so could not reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect, maintain, preserve and
protect all of its properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear and
casualty events excepted; and (b) make all 


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necessary
repairs thereto and renewals and replacements thereof except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect. 


          6.07
Maintenance of Insurance. Maintain with financially
sound and reputable insurance companies (or otherwise reasonably acceptable to
the Administrative Agent) which are not Affiliates of the Loan Parties (or
through self-insurance arrangements reasonably acceptable to the Administrative
Agent), insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business and operating in the same or similar locations or as is
required by applicable Law, of such types and in such amounts (after giving
effect to any self-insurance compatible with the following standards) as are
customarily carried under similar circumstances by such other Persons and as
are reasonably acceptable to the Administrative Agent. The Administrative Agent
and the Lenders acknowledge that the insurance described in Section 5.10 and
the insurance carriers priding such insurance are acceptable as of the Closing
Date. 


                    (a)
Fire and extended coverage policies maintained with respect to any Collateral
shall be endorsed or otherwise amended to include (i) a non-contributing
mortgage clause (regarding improvements to real property) and lenders’ loss
payable clause (regarding personal property), in form and substance reasonably
satisfactory to the Collateral 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 Collateral Agent (and the Collateral
Agent agrees, unless a Triggering Event is then continuing or the proceeds are
required to be applied to the Obligations and Other Liabilities in accordance
with the provisions of Sections 2.05(c) or 2.05(e), to deliver such insurance
proceeds as the Borrower may direct), (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 Collateral Agent may reasonably require from
time to time to protect the interests of the Credit Parties. Commercial general
liability policies shall be endorsed to name the Collateral Agent as an
additional insured. Business interruption policies shall name the Collateral
Agent as a loss payee and shall 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 Collateral Agent (and the Collateral Agent agrees, unless a Triggering
Event is then continuing or the proceeds are required to be applied to the Obligations
and Other Liabilities in accordance with the provisions of Sections 2.05(c) or
2.05(e), to deliver such insurance proceeds as the Borrower may direct), (ii) a
provision to the effect that none of the Loan Parties, the Administrative
Agent, the Collateral Agent or any other party shall be a co-insurer and (iii)
such other provisions as the Collateral Agent may reasonably require from time
to time to protect the interests of the Credit Parties. Each such policy
referred to in this Section 6.07(a) shall also provide that it shall not be
canceled or not renewed (i) by reason of nonpayment of premium except upon not
less than ten (10) days’ prior written notice thereof by the insurer to the
Collateral Agent (giving the Collateral Agent the right to cure defaults in the
payment of premiums) or (ii) for any other reason except upon not less than
thirty (30) days’ prior written notice thereof by the insurer to the Collateral
Agent. The Borrower shall deliver to the Collateral Agent, prior to the
cancellation 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 Collateral Agent, including an insurance binder)
together with evidence reasonably satisfactory to the Collateral Agent of
payment of the premium therefor. 


                    (b)
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 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 


-85-






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. 


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


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


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (b)
 at all times retain a Registered Public Accounting Firm which is reasonably
 satisfactory to the Administrative Agent and shall permit such Registered Public
 Accounting Firm to discuss the Loan Parties’ financial performance, financial
 condition, operating results, controls, and such other matters, within the
 scope of the retention of such Registered Public Accounting Firm, as may be
 raised by the Administrative Agent; provided
 that any such discussions between the Administrative Agent and the Registered
 Public Accounting Firm shall take place only with the participation of the
 Borrower (which agrees to make itself reasonable available therefor).


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (b)
 Upon the request of the Administrative Agent after reasonable prior notice,
 permit the Administrative Agent or professionals (including investment
 bankers, consultants, accountants, lawyers and appraisers) retained by the
 Administrative Agent to conduct appraisals, 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. The
 Loan Parties shall pay the reasonable and documented fees and out-of-pocket
 expenses of the Administrative Agent and such professionals with respect to
 one (1) appraisal of the Loan Parties’ Inventory and one (1) commercial
 finance examination





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during any
 twelve month period; provided that, if any Loans have been
 outstanding during any twelve month period, the Loan Parties shall pay the
 reasonable and documented fees and out-of-pocket expenses of the
 Administrative Agent and such professionals with respect to up to two (2)
 appraisals of the Loan Parties’ Inventory and up to two (2) commercial
 finance examinations during such twelve month period; and provided further that if Availability is at any time less than fifty (50%) of the Loan
 Cap during any twelve month period, the Loan Parties shall pay the reasonable
 and documented fees and out-of-pocket expenses of the Administrative Agent
 and such professionals with respect to up to three (3) appraisals of the Loan
 Parties’ Inventory and up to three (3) commercial finance examinations during
 such twelve month period. Notwithstanding the foregoing, the Administrative
 Agent may undertake additional appraisals and commercial finance examinations
 (i) as it in its discretion deems necessary or appropriate, at its own
 expense or, (ii) if required by applicable Law or if an Event of Default shall
 have occurred and be continuing, at the expense of the Loan Parties. 





            6.11
Use of Proceeds. Use the proceeds of the Credit
Extensions (a) to finance the acquisition of working capital assets of the Loan
Parties, including the purchase of inventory and equipment, in each case in the
ordinary course of business, (b) to finance Capital Expenditures of the Loan
Parties, and (c) for general corporate purposes of the Loan Parties, in each
case to the extent not prohibited under applicable Law and the Loan Documents. 


            6.12
Additional Loan Parties. Notify the Administrative
Agent at the time that any Person becomes a Subsidiary, and whether the
Borrower in its discretion elects to cause such Subsidiary to become a Loan
Party (it being acknowledged by the Credit Parties that the Borrower is not
obligated to cause such Subsidiary to become a Loan Party) and if any Equity
Interests or Indebtedness of such Person are owned by any Loan Party, to
promptly thereafter (and in any event within thirty (30) days or such longer
period as the Administrative Agent shall agree) cause such Loan Party to pledge
such Equity Interests and any promissory notes evidencing such Indebtedness to
the extent required pursuant by the Security Agreement, in each case in form,
content and scope reasonably satisfactory to the Administrative Agent. If the
Borrower elects to cause such Subsidiary to become a Loan Party: promptly
thereafter (and in any event within thirty (30) days or such longer period as
the Administrative Agent shall agree), cause any such Person (a) to become a
Loan Party by executing and delivering to the Administrative Agent a Joinder
Agreement, (b) to grant a Lien to the Collateral Agent on such Person’s assets
to secure the Obligations and Other Liabilities on the same types of assets
which constitute Collateral under the Security Documents, and (c) to deliver to
the Administrative Agent documents of the types referred to in clauses (iii)
and (iv) of Section 4.01(a) and, if requested by the Administrative Agent,
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 above). 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 Guarantor or permit the inclusion of any acquired assets in the
computation of the Borrowing Base. 


            6.13
Cash Management.


                    (a)
No later than sixty (60) days after the Closing Date (or such later date as the
Administrative Agent shall agree in its sole discretion): 


	
 

	
 


	
 

	
                          (i)
 deliver to the Administrative Agent copies of notifications (each, a “Credit
 Card Notification”) substantially in the form attached hereto as Exhibit
 I, which have





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been
 executed on behalf of such Loan Party and delivered to such Loan Party’s
 credit card clearinghouses and processors listed on Schedule 5.21(b);
 and


	
 

	
 


	
 

	
                          (ii)
 enter into a Blocked Account Agreement with each Blocked Account Bank
 (collectively, the “Blocked Accounts”).





                    (b)
Whether or not a Triggering Event has occurred and is continuing, the Loan
Parties shall (i) ACH or wire transfer, with such frequency as is consistent
with their respective practices in effect on the Closing Date, (and whether or
not there are then any outstanding Obligations) to a Blocked Account all
amounts on deposit and available in each such DDA (net of any minimum balance
as may be required to be kept in such DDA by the depository institution at
which such DDA is maintained) and (ii) cause all payments due from credit card
processors to be forwarded to a Blocked Account. 


                    (c)
After the occurrence and during the continuance of a Triggering Event (and delivery
of notice thereof from the Administrative Agent to the Borrower and the
applicable Blocked Account Bank), the Loan Parties and each Blocked Account
Bank shall ACH or wire transfer no less frequently than once each Business Day
(and whether or not there are then any outstanding Obligations) to the
concentration account maintained by the Collateral Agent at Bank of America
(the “Concentration Account”), of all cash receipts, all collections of
Accounts and all other proceeds of the Collateral, including, without
limitation, (i) all Net Proceeds, and all other cash payments received by a
Loan Party from any Person or from any source or on account of any sale or
other transaction or event, including, without limitation, any Prepayment
Event. (ii) the then contents of each DDA (net of any minimum balance, not to
exceed $2,500, as may be required to be kept in such DDA by the depository
institution at which such DDA is maintained); and (iii) the then entire ledger
balance of each Blocked Account (net of any minimum balance, not to exceed
$2,500, as may be required to be kept in the subject Blocked Account by the
Blocked Account Bank). 


                    (d)
The Concentration Account shall at all times be under the sole dominion and
control of the Collateral 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 Other Liabilities
and (iii) the funds on deposit in the Concentration Account shall be applied 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 proceeds or collections, such proceeds and collections
shall be held in trust by such Loan Party for the Collateral Agent, shall not
be deposited in any account of such Loan Party (other than a Blocked Account)
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 Collateral Agent. 


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


                    (f)
Without limiting the foregoing, so long as no Triggering Event shall have
occurred and be continuing, the Loan Parties may direct, and shall have sole
control over, the manner of disposition of funds in the Blocked Accounts. 


                    (g)
Any amounts held or received in the Concentration Account at any time when no
Triggering Event exists shall be applied to the Obligations and Other
Liabilities to the extent required 


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pursuant to
Sections 2.05(c) or 2.05(e) or promptly remitted to an account of the Borrower
or as the Borrower may otherwise direct. 


            6.14
Information Regarding the Collateral.


	
 

	
 


	
 

	
          (a)
 Furnish to the Administrative Agent at least ten (10) Business Days’ prior
 written notice (or such shorter period as the Administrative Agent may agree)
 of any change in any Loan Party’s legal name.


	
 

	
 


	
 

	
          (b)
 Furnish to the Administrative Agent at least twenty (20) days prior written
 notice (or such shorter period as the Administrative Agent may agree) of any
 change in: (i) the location of any Loan Party’s chief executive office or its
 principal place of business; (ii) any Loan Party’s type of organization or
 jurisdiction of organization; or (iii) any Loan Party’s Federal Taxpayer
 Identification Number or organizational identification number assigned to it
 by its state of organization.


	
 

	
 


	
 

	
          (c)
 Furnish to the Administrative Agent prompt written notice of any change in
 any trade name used to identify it in the conduct of its business or in the
 ownership of its properties.


	
 

	
 


	
 

	
          (d)
 The Loan Parties agree not to effect or permit any change referred to in the
 clauses (a) and (b) unless all filings have been made under the UCC that are
 required in order for the Collateral Agent to continue at all times following
 such change to have a valid, legal and perfected security interest in all the
 Collateral for its own benefit and the benefit of the other Credit Parties as
 required by this Agreement and the Security Agreement.





            6.15
Physical Inventories.


                      (a)
Cause not less than one physical inventory to be undertaken, at the expense of
the Loan Parties, in each twelve (12) month period and periodic cycle counts,
in each case consistent with past practices, conducted by such inventory takers
as are satisfactory to the Collateral Agent and following such methodology as
is consistent with the methodology used in the immediately preceding inventory
or as otherwise may be satisfactory to the Collateral Agent. The Collateral
Agent, at the expense of the Loan Parties, may observe each scheduled physical
count of Inventory which is undertaken on behalf of any Loan Party. 


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


            6.16
Environmental Laws.


                      (a)
Except, in each case, where failure to do so could not reasonably be expected
to result, individually or in the aggregate, in a Material Adverse Effect,
conduct its operations and keep and maintain its Real Estate in 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 appropriate
or necessary to maintain the value and marketability of the Real Estate or to
otherwise comply 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 


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 proper proceedings and adequate reserves have
been set aside and are being maintained by the Loan Parties with respect to
such circumstances in accordance with GAAP. 


          6.17 Further Assurances. 


                    (a)
Subject to the any exceptions set forth in any applicable Loan Document,
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 any 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. 


                    (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 Lien of the Security Documents upon acquisition thereof),
notify the Agents thereof, and the applicable Loan Party will cause such assets
to be subjected to a Lien securing the Obligations and Other Liabilities and
will take such actions as shall be necessary 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 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 otherwise expressly permitted hereunder, make all payments and otherwise
perform all obligations in respect of all Leases of real property to which any
Loan Party or any of its Subsidiaries is a party, keep such Leases in full
force and effect and not allow such Leases to lapse or be terminated or any
rights to renew such leases to be forfeited or cancelled, notify the
Administrative Agent of any default by any party with respect to such Leases
and cooperate with the Administrative Agent in all respects to cure any such
default, and cause each of its Subsidiaries to do so, except, in any case,
where the failure to do so, either individually or in the aggregate, could not
be reasonably likely to have a Material Adverse Effect. 


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, no Loan Party shall, nor shall it permit any
Domestic 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, other than, as to all of the
above, Permitted Encumbrances; provided that if any such financing statement is
filed without the knowledge or consent of the Borrower, the Borrower shall have
a reasonable period of time after obtaining knowledge thereof to obtain its
termination. 


          7.02
Investments. Make any Investments, except Permitted
Investments. 


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            7.03
Indebtedness; Disqualified Stock. 


                     (a)
Create, incur, assume, guarantee, suffer to exist or otherwise become or remain
liable with respect to, any Indebtedness, except Permitted Indebtedness or (b)
issue Disqualified Stock. 


            7.04
Fundamental Changes. Merge, dissolve, liquidate,
consolidate with or into another Person, (or agree to do any of the foregoing),
except that: 


	
 

	
 


	
 

	
          (a)
 any Subsidiary may merge with (i) a Loan Party, provided that the Loan
 Party shall be the continuing or surviving Person (and in any merger
 involving the Borrower, the Borrower shall be the continuing or surviving
 Person), or (ii) any one or more other Subsidiaries which are not Loan
 Parties, provided that when any Wholly-Owned Subsidiary is merging
 with another Subsidiary, such Wholly-Owned Subsidiary shall be the continuing
 or surviving Person;


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (c)
 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, any Subsidiary of the Borrower may
 liquidate or dissolve if the Borrower determines in good faith that such
 liquidation or dissolution is in the best interests of the Loan Parties and
 is not materially disadvantageous or materially adverse to the Credit
 Parties.


	
 

	
 





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


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


	
 

	
 


	
 

	
          (a)
 each Subsidiary may make Restricted Payments to any Loan Party or to any
 other Subsidiary; 


	
 

	
 


	
 

	
          (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)
 the Loan Parties and each Subsidiary may purchase, redeem or otherwise acquire
 Equity Interests issued by it either if (i) the Payment Conditions are
 satisfied, or (ii) (A) at the time of such purchase or redemption, no Loans
 are then outstanding and (B) such purchase or redemption is funded entirely
 through the use of cash on hand of the Loan Parties; 


	
 

	
 


	
 

	
          (d)
 the Borrower may declare and pay cash dividends to its stockholders if either
 (i) the Payment Conditions are satisfied, or (ii) (A) at the time of such
 payment, no Loans are then 





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outstanding
 and (B) such payment is funded entirely through the use of cash on hand of
 the Loan Parties; and


	
 

	
 


	
 

	
          (e)
 the Loan Parties may issue and sell Equity Interests provided that (i) (A)
 with respect to any Equity Interests, all dividends (other than cash dividends
 to be paid by the Borrower in accordance with clause (d) above) in respect of
 which are to be paid (and all other payments in respect of which are to be
 made) shall be in additional shares of such Equity Interests, in lieu of
 cash, (B) such Equity Interests shall not be subject to redemption other than
 redemption at the option of the Loan Party issuing such Equity Interests, and
 (C) all payments in respect of such Equity Interests are expressly
 subordinated to the Obligations, and (ii) no Loan Party shall issue any
 additional Equity Interests in a Subsidiary.


	
 

	
 





            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) payment in respect of the
Obligations, (b) as long as no Event of Default then exists, regularly
scheduled or mandatory repayments, repurchases, redemptions or defeasances of
Permitted Indebtedness (other than Subordinated Indebtedness), (c) as long as
no Event of Default then exists, repayments and prepayments of Subordinated
Indebtedness in accordance with the subordination terms thereof, (d) voluntary
prepayments, repurchases, redemptions or defeasances or other satisfaction of
Permitted Indebtedness (but excluding any payment in violation of any
subordination terms of any Subordinated Indebtedness) as long as either (i) the
Payment Conditions are satisfied or (ii) (A) at the time of such prepayment,
repurchase, redemption or defeasance, no Loans are then outstanding and (B) the
aggregate amount of such prepayment, repurchase, redemption or defeasance is
funded entirely through the use of cash on hand of the Loan Parties, (e)
payment of Permitted Indebtedness to the extent such payment is in kind, and
(f) refinancings and refundings of such Indebtedness to the extent permitted
hereunder. 


            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 date hereof or any business
reasonably related, complementary, ancillary or incidental thereto. 


            7.09
Transactions with Affiliates. Enter into, renew,
extend or be a party to any transaction of any kind with any Affiliate of any
Loan Party, whether or not in the ordinary course of business, other than on
fair and reasonable terms substantially as favorable to the Loan Parties or
such Subsidiary as would be obtainable by the Loan Parties or such Subsidiary
at the time in a comparable arm’s length transaction with a Person other than
an Affiliate, provided that the foregoing restriction shall not apply to
(a) a transaction between or among the Loan Parties, (b) a transaction between
or among any Subsidiaries of the Borrower that are not Loan Parties, (c)
transactions, arrangements, reimbursements and indemnities permitted between or
among such parties under this Agreement, (d) the payment of reasonable fees and
out-of-pocket costs to directors, and compensation and employee benefit
arrangements paid to, and indemnities provided for the benefit of, directors,
officers or employees of the Borrower or its Subsidiaries, (e) any issuances of
securities 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 approved by the Borrower’s board of directors, or (f)
non-exclusive, royalty-free licenses of any of the Borrower’s’ or Subsidiaries’
trademarks, trade names and business sytems by Loan Parties to Subsidiaries
which are not Loan Parties. 


            7.10
Burdensome Agreements. Enter into or permit to exist
any Contractual Obligation (other than this Agreement or any other Loan
Document or the Indenture and except in the case of 


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restrictions
and conditions imposed by law) 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 and Other Liabilities, (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 Collateral Agent; provided, however,
that this clause (iv) shall not prohibit (A) any restriction incurred or
provided in favor of any holder of Indebtedness permitted under clauses (c) or
(f) of the definition of Permitted Indebtedness solely to the extent any such
restriction relates to the property financed by or the subject of such
Indebtedness, (B) customary anti-assignment provisions in licenses and other
contracts entered into in the ordinary course of business restricting the
assignment thereof or in contracts for the Disposition of any assets or any
Subsidiary, provided that the restrictions in any such contract shall apply
only to the assets or Subsidiary that is subject to such contract or to be
Disposed of, (C) provisions in leases of real property that prohibit mortgages
or pledges of the lessee’s interest under such lease or restricting subletting
or assignment of such lease; (D) any encumbrance or restriction contained in
any agreement of a Person acquired in a Permitted Investment, which encumbrance
or restriction was in existence at the time of such Permitted Investment (but
not created in connection therewith or in contemplation thereof) and which
encumbrance or restriction is not applicable to any Person or the properties or
assets of any Person, other than the Person or the property and assets of the
Person so acquired, or (E) customary provisions in joint venture agreements and
other similar agreements applicable to joint ventures to the extent such joint
ventures are permitted hereunder; 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, 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. 


          7.12
Amendment of Material Documents.


          (a)
Amend, modify or waive any of a Loan Party’s rights under its Organization
Documents in a manner materially adverse to the Credit Parties, or (b) amend,
modify or waive any material document governing any 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 be reasonably likely to have a Material Adverse Effect. 


          7.13
Fiscal Year.


          Either
(a) change the Fiscal Year of any Loan Party, or (b) change the accounting
policies or reporting practices of the Loan Parties, except as required by GAAP
or except for the adoption by the Borrower of the International Financial
Reporting Standards (subject to Section 1.03 hereof) (the foregoing not being
intended to waive or modify the Loan Parties’ furnishing notice to the
Administrative Agent of such change in accounting policies in accordance with
the provisions of Section 6.03). 


          7.14
Deposit Accounts; Credit Card Processors.


          Either
(a) open new Blocked Accounts unless the Loan Parties shall have delivered to
the Collateral Agent appropriate Blocked Account Agreements consistent with the
provisions of Section 6.13 and otherwise satisfactory to the Collateral Agent;
or (b) enter into any agreements with credit card processors other than the
ones expressly contemplated herein or in Section 6.13 hereof unless the Loan
Parties shall have delivered to the Collateral Agent appropriate Credit Card
Notifications consistent with the provisions of Section 6.13 and reasonably
satisfactory to the Collateral Agent. 


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             7.15 Adjusted Consolidated Fixed Charge Coverage
Ratio. 


             During
the continuance of a Triggering Event, permit the Adjusted Consolidated Fixed
Charge Coverage Ratio, calculated as of the last day of each Fiscal Month for
the most recently ended Measurement Period, to be less than 1.1:1.0. 


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, which failure continues for three Business Days, or (iii)
 any other amount payable hereunder or under any other Loan Document, which
 failure continues for three Business Days; or 


	
 

	
 


	
 

	
          (b)
 Specific Covenants. Any Loan Party fails to perform or observe any
 term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03,
 6.05(a), 6.07, 6.10, 6.11, 6.12, 6.13 or 6.14 or Article VII, provided that no Event of Default shall
 be deemed to have arisen herein (i) with respect to Sections 6.02(a) and
 6.02(b), unless such failure continues for two Business Days and such failure
 has not occurred more than twice in any consecutive twelve month period, (ii)
 with respect to Section 6.14(a), unless such failure continues for two Business
 Days, or (iii) with respect to Section 6.14(b), unless such failure continues
 for five Business Days; 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 after the earlier of notice thereof from
 the Administrative Agent or the Required Lenders to the Borrower or a
 Responsible Officer of the Borrower obtaining knowledge thereof; or 


	
 

	
 


	
 

	
          (d)
 Representations and Warranties. Any representation, warranty,
 certification or statement of fact made or deemed made by or on behalf of the
 Borrower or any other Loan Party herein, in any other Loan Document, or in
 any document delivered in connection herewith or therewith 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) and such payment is not made
 within any applicable grace period 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 a trustee or agent on behalf of
 such holder or holders) 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; provided that this
 clause (i)(B) shall not apply to secured Indebtedness 





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of a Loan
 Party or a Subsidiary permitted hereunder that becomes due upon the sale or
 transfer by such Loan Party or Subsidiary of the assets securing such
 Indebtedness, 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 $5,000,000 and
 such Loan Party or Subsidiary is unable to pay such amount upon such
 termination; or 


	
 

	
 


	
 

	
          (f)
 Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
 (other than any Immaterial Subsidiary) institutes or consents to the
 institution of any proceeding under any Debtor Relief Law, or makes an
 assignment for the benefit of creditors; or applies for or consents to the
 appointment of any receiver, trustee, custodian, conservator, liquidator,
 rehabilitator or similar officer for it or for all or any material part of
 its property; or a proceeding shall be commenced or a petition filed, without
 the application or consent of such Person, seeking or requesting the
 appointment of any receiver, trustee, custodian, conservator, liquidator,
 rehabilitator or similar officer is appointed and the appointment continues
 undischarged, undismissed or unstayed for 60 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 (other than any Immaterial Subsidiary) 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 20 days after its issuance or levy; or 


	
 

	
 


	
 

	
          (h)
 Judgments. There is entered against any Loan Party or any Subsidiary
 thereof (i) one or more final judgments or orders for the payment of money in
 an aggregate amount (as to all such judgments and orders) exceeding
 $15,000,000 and such judgment(s) or order(s) shall continue unsatisfied or
 unstayed for a period of 10 consecutive days, or (ii) any one or more non-monetary
 judgments that have, or could reasonably be expected to have, individually or
 in the aggregate, a Material Adverse Effect and, in either case, (A)
 enforcement proceedings are commenced by any creditor upon such judgment or
 order, or (B) such judgment or order, by reason of a pending appeal or
 otherwise, shall not have been satisfied, vacated, discharged, stayed or
 bonded for a period of 20 consecutive days; or 


	
 

	
 


	
 

	
          (i)
 ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer
 Plan which has resulted or could reasonably be expected to result in
 liability of any Loan Party under Title IV of ERISA to a Pension Plan,
 Multiemployer Plan or the PBGC which would reasonably likely result in a
 Material Adverse Effect, or (ii) a Loan Party 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 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 





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hereunder or
 thereunder or satisfaction in full of all the Obligations, ceases to be in
 full force and effect; or any Loan Party 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 (other than pursuant to the terms thereof), or
 shall be asserted by any Loan Party (or, with respect to any material assets
 of the type included in the Borrowing Base, any other Person) not to be, a
 valid and perfected Lien on any Collateral (other than an immaterial portion
 of the Collateral not of the type included in the Borrowing Base, as
 determined by the Administrative Agent in its Permitted Discretion), with the
 priority required by the applicable Security Document, except to the extent
 resulting from the failure of the Agents to file UCC continuation statements
 or Mortgages or to maintain “control” (as such term is defined in the UCC),
 as applicable; 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 to suspend the operation of
 the business of the Loan Parties, taken as a whole, in the ordinary course,
 including, without limitation, liquidation of all or a material portion of
 its assets or Store locations, or employ an agent or other third party to
 conduct a program of closings, liquidations or “Going-Out-Of-Business” sales
 of any material portion of its business; or 


	
 

	
 


	
 

	
          (m)
 Indictment. The indictment of any Loan Party, under any Applicable Law
 where the crime alleged would constitute a felony under Applicable Law and
 such indictment remains unquashed or such legal process remains undismissed
 for a period of 90 days or more, unless the Administrative Agent, in its
 reasonable discretion, determines that the indictment is not material; or 


	
 

	
 


	
 

	
          (n)
 Subordination. Any payments of principal of or premium and interest on
 any Subordinated Indebtedness are made or received in violation of the
 subordination provisions of the documents evidencing or governing such
 Subordinated Indebtedness or any other breach of the subordination provisions
 of the documents evidencing or governing such Subordinated Indebtedness
 occurs. 


	
 

	
 


	
           8.02 Remedies Upon Event of Default. If
 any Event of Default occurs and is continuing, the Administrative Agent may,
 or, at the request of the Required Lenders shall, take any or all of the
 following actions: 


	
 


	
 

	
          (a)
 declare the Commitments of each Lender to make Loans and any obligation of
 the 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 amounts owing or payable hereunder
 or under any other Loan Document to be immediately due and payable, without
 presentment, demand, protest or other notice of any kind, all of which are
 hereby expressly waived by the Loan Parties; 


	
 

	
 


	
 

	
          (c)
 require that the Loan Parties Cash Collateralize the L/C Obligations; and 





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          (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 or Other Liabilities 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 entry
of an order for relief with respect to any Loan Party or any Subsidiary thereof
under the Bankruptcy Code of the United States of America, 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 Administrative Agent or any
Lender. 


             No
remedy herein is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of Law. 


             8.03 Application of Funds. After the
exercise of remedies provided for in Section 8.02 (or after the Loans have
automatically become immediately due and payable and the 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
and Other Liabilities shall be applied by the Administrative Agent in the
following order: 


	
 

	
 


	
 

	
          First,
 to payment of that portion of the Obligations constituting fees, indemnities,
 expenses and other amounts (including fees, charges and disbursements of
 counsel to the Administrative Agent and the Collateral Agent and amounts
 payable under Article III) payable to the Administrative Agent and the
 Collateral Agent, each in its capacity as such; 


	
 

	
 


	
 

	
          Second,
 to payment of that portion of the Obligations constituting indemnities,
 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; 


	
 

	
 


	
 

	
          Third,
 to the extent not previously reimbursed by the Lenders, to payment to the
 Lenders of that portion of the Obligations constituting principal and accrued
 and unpaid interest on any Permitted Overadvances, ratably among the Lenders
 in proportion to the amounts described in this clause Third payable to
 them; 


	
 

	
 


	
 

	
          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 Loans, L/C Borrowings 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; 





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          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 Loans and L/C Borrowings, ratably among the Lenders and the L/C Issuer
 in proportion to the respective amounts described in this clause Seventh
 held by them; 


	
 

	
 


	
 

	
          Eighth,
 to the Administrative Agent for the account of the 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 as provided in
 Section 10.04), 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 Other Liabilities arising from Cash
 Management Services to the extent secured under the Security Documents,
 ratably among the Credit Parties in proportion to the respective amounts
 described in this clause Tenth held by them; 


	
 

	
 


	
 

	
          Eleventh,
 to payment of all other Other Liabilities arising from Bank Products to the
 extent secured under the Security Documents, ratably among the Credit Parties
 in proportion to the respective amounts described in this clause Eleventh
 held by them; and 


	
 

	
 


	
 

	
          Last,
 the balance, if any, after all of the Obligations and Other Liabilities 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 and Other Liabilities, if any, in the order set forth
above. 


ARTICLE IX 

ADMINISTRATIVE AGENT


             9.01 Appointment and Authority. 


	
 

	
 


	
 

	
          (a)
 Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of
 America to act on its behalf as the Administrative Agent hereunder and under
 the other Loan Documents and authorizes the Administrative Agent to take such
 actions on its behalf and to exercise such powers as are delegated to the
 Administrative Agent by the terms hereof or thereof, together with such
 actions and powers as are reasonably incidental thereto. The provisions of
 this Article (other than the provisions of Section 9.06) are solely for the
 benefit of the Administrative Agent, the Collateral 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. 


	
 

	
 


	
 

	
          (b)
 Each of the Lenders (in its capacities as a Lender), Swing Line Lender and
 the L/C Issuer hereby irrevocably appoints Bank of America as Collateral
 Agent and authorizes the Collateral Agent to act as the agent of such Lender
 and the L/C Issuer for purposes of acquiring, 





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holding and
 enforcing any and all Liens on Collateral granted by any of the Loan Parties
 to secure any of the Obligations and Other Liabilities, together with such
 powers and discretion as are reasonably incidental thereto. In this
 connection, the Collateral Agent, as “collateral agent” and any co-agents,
 sub-agents and attorneys-in-fact appointed by the Collateral Agent pursuant
 to Section 9.05 for purposes of holding or enforcing any Lien on the
 Collateral (or any portion thereof) granted under the Collateral Documents,
 or for exercising any rights and remedies thereunder at the direction of the
 Collateral Agent), shall be entitled to the benefits of all provisions of
 this Article IX and Article X (including Section 10.04(c)), as
 though such co-agents, sub-agents and attorneys-in-fact were the “collateral
 agent” under the Loan Documents, as if set forth in full herein with respect
 thereto.





             9.02 Rights as a Lender. The Persons
serving as the Agents hereunder shall have the same rights and powers in their
capacity as a Lender as any other Lender and may exercise the same as though
they were not the Administrative Agent or the Collateral Agent and the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as the Administrative
Agent or the Collateral Agent hereunder in its individual capacity. Such Person
and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Loan Parties or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent or the Collateral
Agent hereunder and without any duty to account therefor to the Lenders. 


             9.03 Exculpatory Provisions. The Agents
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 Agents: 


	
 

	
 


	
 

	
          (a)
 shall not be subject to any fiduciary or other implied duties, regardless of
 whether a Default has occurred and is continuing; 


	
 

	
 


	
 

	
          (b)
 shall not have any duty to take any discretionary action or exercise any
 discretionary powers, except discretionary rights and powers expressly
 contemplated hereby or by the other Loan Documents that the Administrative
 Agent or the Collateral Agent, as applicable, 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 no Agent shall be required to
 take any action that, in its respective opinion or the opinion of its
 counsel, may expose such Agent to liability or that is contrary to any Loan
 Document or applicable law; and 


	
 

	
 


	
 

	
          (c)
 shall not, except as expressly set forth herein and in the other Loan
 Documents, have any duty to disclose, and shall not be liable for the failure
 to disclose, any information relating to the Loan Parties or any of its
 Affiliates that is communicated to or obtained by the Person serving as the
 Administrative Agent, the Collateral Agent or any of its Affiliates in any
 capacity. 





No Agent shall
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 such 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
Agents shall not be deemed to have knowledge of any Default unless and until
notice describing such Default is given to such Agent by the Loan Parties, a
Lender or the L/C Issuer. In the 


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event that the
Agents obtains such actual knowledge or receives such a notice, the Agents
shall give prompt notice thereof to each of the other Credit Parties. Upon the
occurrence of an Event of Default, the Agents 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 Agents shall have received such
direction, the Agents 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 they shall deem advisable in the best interest of the Credit
Parties. In no event shall the Agents be required to comply with any such
directions to the extent that any Agent believes that its compliance with such
directions would be unlawful. 


          The
Agents shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
this Agreement or any other Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or the creation, perfection or priority
of any Lien purported to be created by the Security Documents, (v) the value or
the sufficiency of any Collateral, or (vi) the satisfaction of any condition
set forth in Article IV or elsewhere herein, other than to confirm receipt
of items expressly required to be delivered to the Agents. 


          9.04 Reliance by Agents. 


          Each
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. Each 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 Administrative Agent may
presume that such condition is satisfactory to such Lender or the L/C Issuer
unless the Administrative Agent shall have received written notice to the
contrary from such Lender or the L/C Issuer prior to the making of such Loan or
the issuance of such Letter of Credit. Each 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. Each 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 such Agent. Each 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 Agents 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 such Agent. 


          9.06 Resignation of Agents. Either Agent
may at any time give written notice of its resignation to the Lenders, the L/C
Issuer and the Borrower. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right 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 and shall, unless an Event of Default has
occurred and is continuing at the time of such appointment, be reasonably
acceptable to the Borrower. If no such successor shall have been so appointed
by the 


-100-






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 Administrative
Agent or Collateral Agent, as applicable, meeting the qualifications set forth
above; provided that if the Administrative Agent or the Collateral 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 Collateral
Agent on behalf of the Lenders or the L/C Issuer under any of the Loan
Documents, the retiring Collateral Agent shall continue to hold such collateral
security until such time as a successor Collateral Agent is appointed) and (2)
all payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender and
the L/C Issuer directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section. Upon the
acceptance of a successor’s appointment as Administrative Agent or Collateral
Agent, as applicable, 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 Administrative 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
Administrative Agent or Collateral Agent hereunder. 


          Upon
the acceptance of a successor’s appointment as Administrative Agent hereunder,
(a) such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring L/C Issuer and Swing Line Lender,
(b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all
of their respective duties and obligations hereunder or under the other Loan
Documents, and (c) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to the retiring L/C Issuer
to effectively assume the obligations of the retiring L/C Issuer with respect
to such Letters of Credit. 


          9.07 Non-Reliance on Administrative Agent and Other
Lenders. Each Lender and the L/C Issuer acknowledges that it has,
independently and without reliance upon the Agents 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 Agents 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 Agents 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 Agents. 


          9.08 No Other Duties, Etc. Anything herein
to the contrary notwithstanding, none of the Bookrunners, Arrangers,
Co-Syndication Agents or Documentation Agent listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any
of the other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent, Collateral Agent, a Lender or the L/C Issuer hereunder. 


-101-






             9.09 Administrative Agent May File Proofs of Claim.
In case of the pendency of any proceeding under any Debtor Relief Law or any
other judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Loan Parties) shall be entitled and empowered, by intervention in such
proceeding or otherwise 


	
 

	
 


	
 

	
          (a)
 to file and prove a claim for the whole amount of the principal and interest
 owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations
 and Other Liabilities 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 Administrative 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 Administrative
 Agent, such Credit Parties and their respective agents and counsel and all
 other amounts due the Lenders, the L/C Issuer the Administrative Agent and
 such Credit Parties under Sections 2.03(i), 2.03(j) and 2.03(k) as
 applicable, 2.09 and 10.04) allowed in such judicial proceeding; and 


	
 

	
 


	
 

	
          (b)
 to collect and receive any monies or other property payable or deliverable on
 any such claims and to distribute the same; 





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 Administrative Agent
and, if the Administrative Agent shall consent to the making of such payments
directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent
any amount due for the reasonable compensation, expenses, disbursements and advances
of the Administrative Agent and its agents and counsel, and any other amounts
due the Administrative Agent under Sections 2.09 and 10.04. 


             Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender or the L/C
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or Other Liabilities or the rights of any Lender or
the L/C Issuer or to authorize the Administrative Agent to vote in respect of
the claim of any Lender or the L/C Issuer in any such proceeding. 


             9.10 Collateral and Guaranty Matters. The
Credit Parties irrevocably authorize the Agents, at their option and in their
discretion, 


	
 

	
 


	
 

	
          (a)
 to release any Lien on any property granted to or held by the Collateral
 Agent under any Loan Document (i) upon termination of the Aggregate
 Commitments and payment in full of all Obligations (other than contingent
 indemnification obligations for which no claim has been asserted) and the
 expiration or termination of all Letters of Credit (unless cash
 collateralized or supported by back-to-back letters of credit reasonably
 satisfactory to the L/C Issuer), (ii) that is Disposed of or to be Disposed
 of as part of or in connection with any Disposition permitted hereunder or
 under any other Loan Document, or (iii) if approved, authorized or ratified
 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) in accordance with Section 10.01; 


	
 

	
 


	
 

	
          (b)
 to subordinate any Lien on any property granted to or held by the Collateral
 Agent under any Loan Document to the holder of any Lien on such property that
 is permitted by clause (h) of the definition of Permitted Encumbrances; and 





-102-






	
 

	
 


	
 

	
          (c)
 to release any Guarantor from its obligations under the Facility Guaranty and
 each other applicable Loan Document) if such Person ceases to be a Subsidiary
 as a result of a transaction permitted hereunder.





Upon request
by any Agent at any time, 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) will confirm in writing such 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 and each
other applicable Loan Document pursuant to this Section 9.10. In each case as
specified in this Section 9.10, the Agents 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 Lien 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 and each other applicable Loan
Document, in each case in accordance with the terms of the Loan Documents and
this Section 9.10. 


             9.11 Notice of Transfer. 


             The
Agents 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 Administrative Agent after the occurrence and during
 the continuance of a Triggering Event (and thereafter at such frequency as
 the Administrative 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 Administrative Agent shall be
 entitled to assume that no amounts are due to any Lender on account of Other
 Liabilities unless the Administrative Agent has received written notice thereof
 from such Lender; 


	
 

	
 


	
 

	
          (b)
 is deemed to have requested that the Administrative Agent furnish such
 Lender, promptly after they become available, copies of all financial
 statements required to be delivered by the Borrower hereunder and all commercial
 finance examinations and appraisals of the Collateral received by the Agents
 (collectively, the “Reports”); 


	
 

	
 


	
 

	
          (c)
 expressly agrees and acknowledges that the Administrative Agent makes no
 representation or warranty as to the accuracy of the Reports, and shall not
 be liable for any information contained in any Report; 


	
 

	
 


	
 

	
          (d)
 expressly agrees and acknowledges that the Reports are not comprehensive
 audits or examinations, that the Agents 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 Agents and any such
 other Lender preparing a Report 





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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 Agents 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
 Agents 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 Agents 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
Agents) obtain possession of any such Collateral, such Lender shall notify the
Agents thereof, and, promptly upon the Collateral Agent’s request therefor
shall deliver such Collateral to the Collateral Agent or otherwise deal with
such Collateral in accordance with the Collateral Agent’s instructions. 


             9.14 Indemnification of Agents. The Lenders
shall indemnify the Agents (to the extent not reimbursed by the Loan Parties
and without limiting the obligations of Loan Parties hereunder), ratably
according to their respective Applicable Percentages, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against any Agent in any way
relating to or arising out of this Agreement or any other Loan Document or any
action taken or omitted to be taken by any Agent 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 such Agent’s 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 Agents)
authorized to act for, any other Lender. 


             9.16 Defaulting Lender. 


	
 

	
 


	
 

	
          (a)
 If for any reason any Lender shall fail or refuse to abide by its obligations
 under this Agreement, including without limitation its obligation to make
 available to Administrative Agent its Applicable Percentage of any Loans,
 expenses or setoff or purchase its Applicable Percentage of a participation
 interest in the Swingline Loans or L/C Borrowings and such failure is not
 cured within two (2) days of receipt from the Administrative Agent of written
 notice thereof, then, in addition to the rights and remedies that may be available
 to the other Credit Parties, the Loan Parties or any other party at law or in
 equity, and not at limitation thereof, (i) such Defaulting Lender’s right to
 participate in the administration of, or decision-making rights related to,
 the Obligations and Other Liabilities, this Agreement or the other Loan
 Documents shall be suspended during the pendency of such failure or refusal,
 (ii) a Defaulting Lender shall be deemed to have assigned any and all
 payments due to it from the Loan Parties, whether on account of outstanding
 Loans, interest, fees or otherwise, to the remaining non-Defaulting Lenders
 for application to, and reduction of, their proportionate shares of all
 outstanding Obligations and Other Liabilities until, as a result of
 application of such assigned payments the Lenders’ respective Applicable
 Percentages of all outstanding Obligations and Other Liabilities 





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shall have
 returned to those in effect immediately prior to such delinquency and without
 giving effect to the nonpayment causing such delinquency, and (iii) At the
 option of the Administrative Agent, any amount payable to such Defaulting
 Lender hereunder (whether on account of principal, interest, fees or
 otherwise) shall, in lieu of being distributed to such Defaulting Lender, be
 retained by the Administrative Agent as cash collateral for future funding
 obligations of the Defaulting Lender in respect of any Loan or existing or
 future participating interest in any Swing Line Loan or Letter of Credit. The
 Defaulting Lender’s decision-making and participation rights and rights to
 payments as set forth in clauses (i) and (ii) hereinabove shall be restored
 only upon the payment by the Defaulting Lender of its Applicable Percentage
 of any Obligations, any participation obligation, or expenses as to which it
 is delinquent, together with interest thereon at a rate equal to the Federal
 Funds Rate from time to time in effect from the date when originally due
 until the date upon which any such amounts are actually paid. 


	
 

	
 


	
 

	
          (b)
The non-Defaulting Lenders shall also have the right, but not the obligation,
in their respective, sole and absolute discretion, to cause the termination
and assignment, without any further action by the Defaulting Lender for no
cash consideration (pro rata, based on the respective Commitments of those
Lenders electing to exercise such right), of the Defaulting Lender’s
Commitment to fund future Loans. Upon any such purchase of the Applicable
Percentage of any Defaulting Lender, the Defaulting Lender’s share in future
Credit Extensions and its rights under the Loan Documents with respect
thereto shall terminate on the date of purchase, and the Defaulting Lender
shall promptly execute all documents reasonably requested to surrender and
transfer such interest, including, if so requested, an Assignment and
Acceptance.  


	
 

	
 


	
 

	
          (c)
 Each Defaulting Lender shall indemnify the Administrative Agent and each
 non-Defaulting Lender from and against any and all loss, damage or expenses,
 including but not limited to reasonable attorneys’ fees and funds advanced by
 the Administrative Agent or by any non-Defaulting Lender, on account of a
 Defaulting Lender’s failure to timely fund its Applicable Percentage of a
 Loan or to otherwise perform its obligations under the Loan Documents. 





ARTICLE X 

MISCELLANEOUS


             10.01 Amendments, Etc. No amendment or
waiver of any provision of this Agreement or any other Loan Document, and no
Consent to any departure by any Loan Party therefrom, shall be effective unless
in writing signed by the Administrative Agent, with the Consent of the Required
Lenders, and the Borrower or the applicable Loan Party, as the case may be, 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)
 extend or, increase the Commitment of any Lender (or reinstate any Commitment
 terminated pursuant to Section 8.02) without the written Consent of such
 Lender; 


	
 

	
 


	
 

	
          (b)
 postpone any date fixed by this Agreement or any other Loan Document for (i)
 any payment or mandatory prepayment of principal, interest, fees or other
 amounts due to the applicable Lenders (or any of them) hereunder or under any
 of the other Loan Documents without the written Consent of each Lender
 entitled to such payment, or (ii) any scheduled or mandatory reduction of the
 Aggregate Commitments hereunder or under any other Loan Document without the
 written Consent of each applicable Lender; 


	
 

	
 


	
 

	
          (c)
 reduce the principal of, or the rate of interest specified herein on, any
 Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to
 this Section 10.01) any fees or 





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other
 amounts payable hereunder or under any other Loan Document, without the
 written Consent of each Lender entitled to such amount; provided, however,
 that only the Consent of the Required Lenders shall be necessary 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; 


	
 

	
 


	
 

	
          (d)
 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 each Lender;
 


	
 

	
 


	
 

	
          (e)
 change any provision of this Section or the definition of “Required Lenders”,
 or any other provision hereof specifying the number or percentage of Lenders
 required to amend, waive or otherwise modify any rights hereunder or make any
 determination or grant any consent hereunder, without the written Consent of
 each Lender; 


	
 

	
 


	
 

	
          (f)
 except as expressly permitted hereunder or under any other Loan Document,
 release, or limit the liability of, any Loan Party without the written
 Consent of each Lender; 


	
 

	
 


	
 

	
          (g)
 except for Permitted Dispositions, release all or substantially all of the
 Collateral from the Liens of the Security Documents without the written
 Consent of each Lender; 


	
 

	
 


	
 

	
          (h)
 change the definition of the term “Borrowing Base” or any component
 definition thereof if as a result thereof the amounts available to be
 borrowed by the Borrower would be increased without the written Consent of
 each Lender, provided that the
 foregoing shall not limit the discretion of the Administrative Agent to
 change, establish or eliminate any Reserves; 


	
 

	
 


	
 

	
          (i)
 modify the definition of Permitted Overadvance so as to increase the amount
 thereof or, except as provided in such definition, the time period for a
 Permitted Overadvance without the written Consent of each Lender; and 


	
 

	
 


	
 

	
          (j)
 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 Administrative
Agent in addition to the Lenders required above, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document; (iv)
no amendment, waiver or Consent shall, unless in writing and signed by the
Collateral Agent in addition to the Lenders required above, affect the rights
or duties of the Collateral Agent under this Agreement or any other Loan
Document, and (v) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall
have any right to approve or disapprove any amendment, waiver or Consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender. 


             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  


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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 in the case of notices and other
 communications expressly permitted to be given by telephone (and except as
 provided in subsection (b) below), all notices and other communications
 provided for herein shall be in writing and shall be delivered by hand or
 overnight courier service, mailed by certified or registered mail or sent by
 telecopier as follows, and all notices and other communications expressly
 permitted hereunder to be given by telephone shall be made to the applicable
 telephone number, as follows: 


	
 

	
 


	
 

	
                    (i)
 if to the Loan Parties, the Agents, the L/C Issuer or the Swing Line Lender,
 to the address, telecopier number, electronic mail address or telephone
 number specified for such Person on Schedule 10.02; and 


	
 

	
 


	
 

	
                    (ii)
 if to any other Lender, to the address, telecopier number, electronic mail
 address or telephone number specified in its Administrative Questionnaire. 


	
 

	
 


	
Notices sent
 by hand or overnight courier service, or mailed by certified or registered
 mail, shall be deemed to have been given when received; notices sent by
 telecopier shall be deemed to have been given when sent (except that, if not
 given during normal business hours for the recipient, shall be deemed to have
 been given at the opening of business on the next Business Day for the
 recipient). Notices delivered through electronic communications to the extent
 provided in subsection (b) below, shall be effective as provided in such
 subsection (b). 


	
 


	
 

	
          (b)
 Electronic Communications. Notices and other communications to the
 Lenders and the 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 Administrative 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 Administrative Agent that it is incapable of
 receiving notices under such Article by electronic communication. Each Agent
 or the Borrower may, in its discretion, agree to accept notices and other
 communications to it hereunder by electronic communications pursuant to
 procedures approved by it, provided that approval of such procedures
 may be limited to particular notices or communications. 





             Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication
is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor. 


	
 

	
 


	
 

	
          (c)
 The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE
 AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS
 OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY
 DISCLAIM LIABILITY FOR





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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 Agents or any
 of their 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
 Administrative Agent’s transmission of Borrower Materials through the
 Internet, except to the extent that such losses, claims, damages, liabilities
 or expenses are determined by a 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 Agents, the L/C
 Issuer and the Swing Line Lender may change its address, telecopier or
 telephone number for notices and other communications hereunder by notice to
 the other parties hereto. Each other Lender may change its address,
 telecopier or telephone number for notices and other communications hereunder
 by notice to the Borrower, the Agents, the L/C Issuer and the Swing Line
 Lender. In addition, each Lender agrees to notify the Administrative Agent
 from time to time to ensure that the Administrative Agent has on record (i)
 an effective address, contact name, telephone number, telecopier number and
 electronic mail address to which notices and other communications may be sent
 and (ii) accurate wire instructions for such Lender. 


	
 

	
 


	
 

	
          (e)
 Reliance by Agents, L/C Issuer and Lenders. The Agents, the L/C Issuer
 and the Lenders shall be entitled to rely and act upon any notices (including
 telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly
 given by or on behalf of the Loan Parties even if (i) such notices were not
 made in a manner specified herein, were incomplete or were not preceded or
 followed by any other form of notice specified herein, or (ii) the terms
 thereof, as understood by the recipient, varied from any confirmation
 thereof. The Loan Parties shall indemnify the Agents, the L/C Issuer, each
 Lender and the Related Parties of each of them from all losses, costs,
 expenses and liabilities resulting from the reliance by such Person on each
 notice purportedly given by or on behalf of the Loan Parties. All telephonic
 notices to and other telephonic communications with the Agents may be
 recorded by the Agents, and each of the parties hereto hereby consents to
 such recording. 





             10.03 No Waiver; Cumulative Remedies. No
failure by any Credit Party to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder or under any other Loan Document preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges provided herein
and in the other Loan Documents are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
any Credit Party may have had notice or knowledge of such Default at the time. 


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           10.04 Expenses; Indemnity; Damage
Waiver.


	
 

	
 


	
 

	
          (a)
 Costs and Expenses. The Borrower shall pay (i) all reasonable and
 documented out-of-pocket expenses incurred by the Agents, the Arranger and
 any Person providing Cash Management Services or furnishing Bank Products to
 any of the Loan Parties, in connection with this Agreement and the other Loan
 Documents, including without limitation (A) the reasonable and documented
 fees, charges and disbursements of (1) counsel for the Agents and the
 Arranger, (2) appraisers, (3) commercial finance examiners, and (4) all such
 out-of-pocket expenses incurred during any workout, restructuring or
 negotiations in respect of the Obligations and Other Liabilities, as wells as
 expenses of any outside consultants engaged by the Agents, (B) in connection
 with (1) the syndication of the credit facilities provided for herein, (2)
 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), (3) 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 in connection with any proceeding under any Debtor Relief
 Laws, or (4) any workout, restructuring or negotiations in respect of any
 Obligations and Other Liabilities, and (ii) with respect to the L/C Issuer,
 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 (iii) all reasonable out-of-pocket
 expenses incurred by the Credit Parties who are not the Agents, the Arranger,
 the L/C Issuer or any Person providing Cash Management Services or furnishing
 Bank Products to any of the Loan Parties, 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). 


	
 

	
 


	
 

	
          (b)
 Indemnification by the Loan Parties. The Loan Parties shall indemnify
 the Agents (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 from, any
 and all losses, claims, causes of action, damages, liabilities, settlement
 payments, costs, and related expenses (including the fees, charges and
 disbursements of any counsel for any Indemnitee but excluding Taxes, which
 shall be governed by Section 3.01), 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 Agents (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), (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 the Loan Parties’ directors, shareholders or creditors, and
 regardless of whether any Indemnitee is a party thereto, in all cases,
 whether or not caused by or arising, in whole or in part, out of the
 comparative, contributory or sole negligence of the 





-109-






	
 

	
 


	
 

	
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, bad faith
 or willful misconduct of such Indemnitee or (y) result from a claim brought
 by the 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 Agents
(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 Agents (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 Agents (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 (accompanied by back-up documentation to the extent available). 


	
 

	
 


	
 

	
          (f)
 Survival. The agreements in this Section shall survive the resignation
 of any Agent and the L/C Issuer, the assignment of any Commitment or Loan by
 any Lender, the replacement of any Lender, the termination of the Aggregate
 Commitments and the repayment, satisfaction or discharge of all the other
 Obligations. 





             10.05 Payments Set Aside. To the extent
that any payment by or on behalf of the Loan Parties is made to any Credit
Party, or any Credit Party exercises its right of setoff, and such payment or
the proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by such Credit Party in its discretion)
to be repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief 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 


-110-






severally
agrees to pay to the Agents upon demand its Applicable Percentage (without
duplication) of any amount so recovered from or repaid by the Agents, 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 Administrative Agent and each Lender and no Lender may assign or
 otherwise transfer any of its rights or obligations hereunder except (i) to
 an Eligible Assignee in accordance with the provisions of Section 10.06(b),
 (ii) by way of participation in accordance with the provisions of subsection
 Section 10.06(d), or (iii) by way of pledge or assignment of a security
 interest subject to the restrictions of Section 10.06(f) (and any other
 attempted assignment or transfer by any party hereto shall be null and void).
 Nothing in this Agreement, expressed or implied, shall be construed to confer
 upon any Person (other than the parties hereto, their respective successors
 and assigns permitted hereby, Participants to the extent provided in
 subsection (d) of this Section and, to the extent expressly contemplated
 hereby, the Related Parties of each of the Credit Parties) any legal or
 equitable right, remedy or claim under or by reason of this Agreement. 


	
 


	

                    (b)
Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment(s) and the Loans
(including for purposes of this Section 10.06(b), participations in 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 


	
 

	
 


	
 

	
                              (B)
 in any case not described in subsection (b)(i)(A)of this Section, the aggregate
 amount of the Commitment (which for this purpose includes Loans outstanding
 thereunder) or, if the Commitment is not then in effect, the principal
 outstanding balance of the Loans of the assigning Lender subject to each such
 assignment, determined as of the date the Assignment and Assumption with
 respect to such assignment is delivered to the Administrative Agent or, if
 “Trade Date” is specified in the Assignment and Assumption, as of the Trade
 Date, shall not be less than $5,000,000 unless each of the Administrative
 Agent and, so long as no Default has occurred and is continuing, the Borrower
 otherwise consents (each such consent not to be unreasonably withheld or
 delayed); provided, however, that concurrent assignments to
 members of an Assignee Group and concurrent assignments from members of an
 Assignee Group to a single Eligible Assignee (or to an Eligible 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; 





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                    (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) a Default has occurred and is
 continuing at the time of such assignment or (2) such assignment is to a
 Lender, an Affiliate of a Lender or an Approved Fund; and 


	
 

	
 


	
 

	
                              (B)
 the consent of the Administrative Agent (such consent not to be unreasonably
 withheld or delayed) shall be required for assignments in respect of any
 Commitment if such assignment is to a Person that is not a Lender, an
 Affiliate of such Lender or an Approved Fund with respect to such Lender; and
 


	
 

	
 


	
 

	
                              (C)
 the consent of the L/C Issuer (such consent not to be unreasonably withheld
 or delayed) shall be required for any assignment that increases the
 obligation of the assignee to participate in exposure under one or more
 Letters of Credit (whether or not then outstanding); and 


	
 

	
 


	
 

	
                              (D)
 the consent of the Swing Line Lender (such consent not to be unreasonably
 withheld or delayed) shall be required for any assignment in respect of the
 assignment of any Commitment. 


	
 

	
 


	
 

	
                    (iv)
 Assignment and Assumption. The parties to each assignment shall
 execute and deliver to the Administrative Agent an Assignment and Assumption,
 together with a processing and recordation fee of $3,500, provided, however,
 that the Administrative Agent may, in its sole discretion, elect to waive
 such processing and recordation fee in the case of any assignment. The
 assignee, if it shall not be a Lender, shall deliver to the Administrative
 Agent an Administrative Questionnaire. 





Subject to
acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04
with respect to facts and circumstances occurring prior to the effective date
of such assignment. Upon request, the 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 Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, 


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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 Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower and
any Lender at any reasonable time and from time to time upon reasonable prior
notice. This Section 10.06(c) shall be construed so that the Loans and L/C
Obligations are at all times maintained in “registered form” within the meaning
of section 163(f), 871(h)(2) and 881(c) of the Code. 


                    (d)
Participations. Any Lender may at any time, without the consent of, or
notice to, the Loan Parties or the Administrative Agent, sell participations to
any Person (other than a natural person or the Loan Parties or any of the Loan
Parties’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in 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, (iii) such lender
shall remain the holder of its Loans and owner of its participation or other
interest in any Letter of Credit for all purposes hereunder, and (iv) the Loan
Parties, the Agents, the Lenders and the L/C Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement. 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 


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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 Bank
of America assigns all of its Commitment and Loans pursuant to subsection (b)
above, Bank of America may, (i) upon 10 days’ notice to the Borrower and the
Lenders, resign as L/C Issuer and/or (ii) upon 10 days’ notice to the Borrower,
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 Bank of America as L/C Issuer or Swing Line Lender,
as the case may be. If Bank of America 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 or fund
risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If
Bank of America 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 Bank of
America to effectively assume the obligations of Bank of America 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 (only if such Credit Party has no knowledge that such source itself is
not in breach of a confidentiality obligation) other than the Loan Parties. 


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          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 if such information is furnished by a source known to such Credit Party to
be subject to a confidentiality obligation, such source, to the knowledge of
such Credit Party, is not in violation of such obligation by such disclosure).
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. 


          Each
of the Credit Parties acknowledges that (a) the Information may include
material non-public information concerning the Loan Parties or a Subsidiary, as
the case may be, (b) it has developed compliance procedures regarding the use
of material non-public information and (c) it will handle such material non-public
information in accordance with applicable Law, including Federal and state
securities Laws. 


          10.08
Right of Setoff. If an Event of Default shall have
occurred and be continuing, 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 Administrative Agent or the
Required Lenders, to the fullest extent permitted by applicable law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final, in whatever currency) at any time held and other obligations (in
whatever currency) at any time owing by such Lender, the 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 and Other Liabilities then due
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 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 Administrative Agent promptly after any
such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application. 


          10.09
Interest Rate Limitation. Notwithstanding anything to
the contrary contained in any Loan Document, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”). If the
Administrative Agent or any Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.
In determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to
the extent permitted by applicable Law, (a) characterize any payment that is
not principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder. 


          10.10
Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement
and the other Loan Documents constitute the entire contract among the parties
relating to the subject matter 


-115-






hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or other electronic image scan transmission
(e.g., “pdf” or “tiff” via email) shall be as effective as delivery of a
manually executed counterpart of this Agreement. 


           10.11
Survival. All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery hereof and thereof. Such representations and warranties
have been or will be relied upon by the Credit Parties, regardless of any
investigation made by any Credit Party or on their behalf and notwithstanding
that any Credit Party may have had notice or knowledge of any Default at the
time of any Credit Extension, and shall continue in full force and effect as long
as any Loan or any other Obligation (other than any contingent indemnification
obligations for which no claim has then been asserted) 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 Agents 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, and (y) any obligations that may thereafter arise with
respect to the Other Liabilities. 


           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 any Lender delivers a notice described
in Section 3.02, 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 Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 10.06), all of its interests,
rights and obligations under this Agreement and the related Loan Documents to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that: 


	
 

	
 


	
 

	
          (a)
 the Borrower shall have paid to the Administrative Agent the assignment fee
 specified in Section 10.06(b); 


	
 

	
 


	
 

	
          (b)
 such Lender shall have received payment of an amount equal to the outstanding
 principal of its Loans and L/C Advances being so assigned, accrued interest
 thereon, accrued fees and all other amounts payable to it in respect thereof
 hereunder and under the other Loan Documents (including any amounts under
 Section 3.05) from the assignee (to the extent of such 





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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 (EXCEPT FOR THE CONFLICT OF
LAWS RULES THEREOF, BUT INCLUDING GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND
5-1402). 


                      (b)
SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION (EXCEPT AS PROVIDED IN CLAUSE (e) BELOW) 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 PARTY MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION. 


                      (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. 


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                    (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.  


          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 AND WHETHER INITIATED BY OR AGAINST SUCH
PERSON OR IN WHICH ANY SUCH PERSON IS JOINED AS A PARTY LITIGANT). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 


          10.16
No Advisory or Fiduciary Responsibility. In connection
with all aspects of each transaction contemplated hereby, the Loan Parties each
acknowledge and agree that: (i) the credit facility provided for hereunder and
any related arranging or other services in connection therewith (including in
connection with any amendment, waiver or other modification hereof or of any
other Loan Document) are an arm’s-length commercial transaction between the
Loan Parties, on the one hand, and the Credit Parties, on the other hand, and
each of the Loan Parties is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with the
process leading to such transaction, each Credit Party is and has been acting
solely as a principal and is not the financial advisor, agent or fiduciary, for
the Loan Parties or any of their respective Affiliates, stockholders, creditors
or employees or any other Person; (iii) none of the Credit Parties has assumed
or will assume an advisory, agency or fiduciary responsibility in favor of the
Loan Parties with respect to any of the transactions contemplated hereby or the
process leading thereto, including with respect to any amendment, waiver or
other modification hereof or of any other Loan Document (irrespective of
whether any of the Credit Parties has advised or is currently advising any Loan
Party or any of its Affiliates on other matters) and none of the Credit Parties
has any obligation to any Loan Party or any of its Affiliates with respect to
the transactions contemplated hereby except those obligations expressly set
forth herein and in the other Loan Documents; (iv) the Credit Parties and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Loan Parties and their
respective Affiliates, and none of the Credit Parties has any obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Credit Parties have not provided and will not provide
any legal, accounting, regulatory or tax advice with respect to any of the
transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Loan Document) and each of the Loan Parties
has consulted its own legal, accounting, regulatory and tax advisors to the
extent it has deemed appropriate. Each of the Loan Parties hereby waives and
releases, to the fullest extent permitted by law, any claims that it may have
against each of the Credit Parties with respect to any breach or alleged breach
of agency or fiduciary duty. 


          10.17
USA PATRIOT Act Notice. Each Lender that is subject to
the Act (as hereinafter defined) and the Administrative Agent (for itself and
not on behalf of any Lender) hereby notifies the 


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Loan Parties
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required to
obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of each Loan Party and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify each Loan Party in accordance with the Act. Each Loan
Party is in compliance, in all material respects, with the Patriot Act. No part
of the proceeds of the Loans will be used by the Loan Parties, directly or
indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.  


           10.18
Foreign Asset Control Regulations. Neither of the
advance of the Loans nor the use of the proceeds of any thereof will violate
the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) (the “Trading
With the Enemy Act”) or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) (the “Foreign Assets Control Regulations”)
or any enabling legislation or executive order relating thereto (which for the
avoidance of doubt shall include, but shall not be limited to (a) Executive
Order 13224 of September 21, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)). Furthermore,
none of the Loan Parties or their Affiliates (a) is or will become a “blocked
person” as described in the Executive Order, the Trading With the Enemy Act or
the Foreign Assets Control Regulations or (b) engages or will engage in any
dealings or transactions, or be otherwise associated, with any such “blocked
person” or in any manner violative of any such order. 


           10.19
Time of the Essence. Time is of the essence of the
Loan Documents. 


           10.20
Press Releases.


	
 

	
 


	
 

	
         (a)
 Each Credit Party agrees that neither it nor its Affiliates will in the
 future issue any press releases or other public disclosure using the name of
 the Administrative Agent or its Affiliates or referring to this Agreement or
 the other Loan Documents without at least two (2) Business Days’ prior notice
 to the Administrative Agent and without the prior written consent of the
 Administrative Agent unless (and only to the extent that) such Credit Party
 or Affiliate is required to do so under applicable Law and then, in any
 event, such Credit Party or Affiliate will consult with the Administrative
 Agent before issuing such press release or other public disclosure. 


	
 

	
 


	
 

	
         (b)
 Each Credit Party agrees that neither it nor its Affiliates will in the
 future issue any press releases or other public disclosure using the name of
 the Borrower or its Subsidiaries without at least two (2) Business Days’
 prior notice to the Administrative Agent and the Borrower and without the
 prior written consent of the Administrative Agent and the Borrower 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 Borrower before issuing such press release or
 other public disclosure. Subject to the foregoing, each Loan Party consents
 to the publication by Administrative Agent or any Lender of advertising
 material relating to the financing transactions contemplated by this
 Agreement using any Loan Party’s name, product photographs, logo or trademark
 upon the Borrower’s approval, not to be unreasonably withheld. Administrative
 Agent or such Lender shall provide a draft reasonably in advance of any
 advertising material to the Borrower for review and comment prior to the 





-119-






	
 

	
 


	
 

	
publication
 thereof. Administrative Agent reserves the right to provide to industry trade
 organizations 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
Collateral Agent or any other Credit Party. 


                      (b)
The obligations of each Loan Party shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations after the termination
of the Commitments), including any claim of waiver, release, surrender,
alteration or compromise of any of the Obligations, and shall not be subject to
any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of any of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Loan Party hereunder shall not be discharged or impaired or
otherwise affected by the failure of any 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 Collateral 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)
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 


-120-






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
Administrative Agent to be credited against the payment of the Obligations,
whether matured or unmatured, in accordance with the terms of this Agreement
and the other Loan Documents. Subject to the foregoing, to the extent that any
Loan Party shall, under this Agreement as a joint and several obligor, repay
any of the Obligations constituting Loans made to the Borrower hereunder or
other Obligations incurred directly and primarily by the Borrower or any other
Loan Party (an “Accommodation Payment”), then the Loan Party making such
Accommodation Payment shall be entitled to contribution and indemnification
from, and be reimbursed by, each of the other Loan Parties in an amount, for
each of such other Loan Parties, equal to a fraction of such Accommodation
Payment, the numerator of which fraction is such other Loan Party’s Allocable
Amount and the denominator of which is the sum of the Allocable Amounts
of all of the Loan Parties. As of any date of determination, the “Allocable
Amount” of each Loan Party shall be equal to the maximum amount of liability
for Accommodation Payments which could be asserted against such Loan Party
hereunder without (a) rendering such Loan Party “insolvent” within the meaning
of Section 101 (31) of the Bankruptcy Code, Section 2 of the Uniform Fraudulent
Transfer Act (“UFTA”) or Section 2 of the Uniform Fraudulent Conveyance
Act (“UFCA”), (b) leaving such Loan Party 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 Loan Party
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. 


[signature pages follow]


-121-






          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:


	
 

	
 


	
 

	
FOOT LOCKER,
 INC.








	
 

	
 

	
 


	
 

	
By: 

	
/s/ John A.
 Maurer


	
 

	
 

	



	
 

	
Name: 

	
  John
 A. Maurer


	
 

	
Title: 

	
  Vice
 President and Treasurer








	
 

	
 


	
 

	
GUARANTORS:


	
 

	
 


	
 

	
FOOT LOCKER
 RETAIL, INC.


	
 

	
TEAM EDITION
 APPAREL, INC.


	
 

	
FOOT LOCKER
 STORES, INC.


	
 

	
FOOT LOCKER
 SPECIALTY, INC.


	
 

	
ROBBY’S
 SPORTING GOODS, INC.


	
 

	
FOOT LOCKER
 CORPORATE SERVICES, INC.


	
 

	
FOOT LOCKER
 HOLDINGS, INC.


	
 

	
FOOT LOCKER
 SOURCING, INC.


	
 

	
FOOT LOCKER
 OPERATIONS, LLC


	
 

	
FL RETAIL
 OPERATIONS LLC


	
 

	
FL SPECIALTY
 OPERATIONS LLC


	
 

	
FL EUROPE
 HOLDINGS, INC.


	
 

	
FL CANADA
 HOLDINGS, INC.


	
 

	
FOOT LOCKER
 ASIA, INC.


	
 

	
FL CORPORATE
 NY, LLC


	
 

	
FL RETAIL
 NY, LLC


	
 

	
FL SPECIALTY
 NY, LLC


	
 

	
FOOT LOCKER
 CARD SERVICES LLC


	
 

	
as to each
 of the foregoing








	
 

	
 

	
 


	
 

	
By: 

	
/s/ John A.
 Maurer


	
 

	
 

	



	
 

	
Name: 

	
  John
 A. Maurer


	
 

	
Title: 

	
  Vice
 President and Treasurer





Signature Page to Credit Agreement






	
 

	
 

	
 


	
 

	
BANK OF AMERICA, N.A., as


	
 

	
Administrative
 Agent and as Collateral Agent


	
 

	
 

	
 


	
 

	
By: 

	
/s/
 Christine Hutchinson


	
 

	
 

	



	
 

	
Name: 

	
Christine
 Hutchinson


	
 

	
Title: 

	
Principal





Signature Page to Credit Agreement






	
 

	
 

	
 


	
 

	
BANK OF AMERICA, N.A., as L/C Issuer, as


	
 

	
Swing Line
 Lender and as a Lender


	
 

	
 

	
 


	
 

	
By: 

	
/s/
 Christine Hutchinson


	
 

	
 

	



	
 

	
Name: 

	
Christine
 Hutchinson


	
 

	
Title: 

	
Principal





Signature Page to Credit Agreement






	
 

	
 

	
 


	
 

	
JPMORGAN CHASE BANK, N.A., as Co-


	
 

	
Syndication
 Agent and as a Lender


	
 

	
 

	
 


	
 

	
By: 

	
/s/ Kathleen
 C. Maggi


	
 

	
 

	



	
 

	
Name: 

	
Kathleen C.
 Maggi


	
 

	
 

	



	
 

	
Title:

	
SVP


	
 

	
 

	






Signature Page to Credit Agreement






	
 

	
 

	
 


	
 

	
WELLS FARGO RETAIL FINANCE, LLC,


	
 

	
as
 Co-Syndication Agent and as a Lender


	
 

	
 

	
 


	
 

	
By: 

	
/s/ James R.
 Dore


	
 

	
 

	



	
 

	
Name: 

	
James R.
 Dore


	
 

	
 

	



	
 

	
Title: 

	
Executive
 Vice President


	
 

	
 

	






Signature Page to Credit Agreement






	
 

	
 

	
 


	
 

	
U.S. BANK NATIONAL ASSOCIATION, as


	
 

	
Documentation
 Agent and as a Lender


	
 

	
 

	
 


	
 

	
By: 

	
/s/ Jeffrey
 S. Gruender


	
 

	
 

	



	
 

	
Name: 

	
Jeffrey S.
 Gruender


	
 

	
 

	



	
 

	
Title: 

	
VP –
 Business Credit


	
 

	
 

	






Signature Page to Credit Agreement






	
 

	
 

	
 


	
 

	
CAPITAL ONE LEVERAGE FINANCE


	
 

	
CORPORATION, as a Lender


	
 

	
 

	
 


	
 

	
By: 

	
/s/ Nick
 Malatestinic


	
 

	
 

	



	
 

	
Name: 

	
Nick
 Malatestinic


	
 

	
 

	



	
 

	
Title: 

	
SVP


	
 

	
 

	






Signature Page to Credit Agreement






	
 

	
 

	
 


	
 

	
HSBC BUSINESS CREDIT (USA) INC., and


	
 

	
as a Lender


	
 

	
 

	
 


	
 

	
By: 

	
/s/ Thomas
 A. Getty, Jr.


	
 

	
 

	



	
 

	
Name: 

	
Thomas A.
 Getty, Jr.


	
 

	
 

	



	
 

	
Title: 

	
Vice
 President


	
 

	
 

	






Signature Page to Credit Agreement