EX-10.1






Exhibit 10.1


Execution Copy




CREDIT AGREEMENT




by and among




CHICO’S FAS, INC.,

WHITE HOUSE | BLACK MARKET, INC.,

CHICO’S RETAIL SERVICES, INC.,

CHICO’S DISTRIBUTION SERVICES, LLC and

SOMA INTIMATES, LLC

as the Borrowers,




The Persons party hereto as the Guarantors,


The financial institutions party hereto as the Lenders,


SUNTRUST BANK,

as the Issuing Bank,


SUNTRUST BANK,

as the Administrative Agent,


and




SUNTRUST ROBINSON HUMPHREY, INC.,

as Lead Arranger




November 24, 2008





 









 





Execution Copy




INDEX




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	ARTICLE 1. DEFINITIONS, ACCOUNTING PRINCIPLES AND OTHER INTERPRETIVE MATTERS	 	 	1	 
	     Section 1.1	 	Definitions
	 	 	1	 
	     Section 1.2	 	Accounting Principles
	 	 	31	 
	     Section 1.3	 	Other Interpretive Matters
	 	 	32	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 2. THE LOANS AND THE LETTERS OF CREDIT	 	 	32	 
	     Section 2.1	 	Extension of Credit
	 	 	32	 
	     Section 2.2	 	Manner of Borrowing and Disbursement of Loans
	 	 	35	 
	     Section 2.3	 	Interest
	 	 	39	 
	     Section 2.4	 	Fees
	 	 	41	 
	     Section 2.5	 	Prepayment/Reduction of Commitment
	 	 	42	 
	     Section 2.6	 	Repayment
	 	 	43	 
	     Section 2.7	 	Notes; Loan Accounts
	 	 	44	 
	     Section 2.8	 	Manner of Payment
	 	 	45	 
	     Section 2.9	 	Reimbursement
	 	 	48	 
	     Section 2.10	 	Pro Rata Treatment
	 	 	48	 
	     Section 2.11	 	Application of Payments
	 	 	49	 
	     Section 2.12	 	Use of Proceeds
	 	 	51	 
	     Section 2.13	 	All Obligations to Constitute One Obligation
	 	 	51	 
	     Section 2.14	 	Maximum Rate of Interest
	 	 	51	 
	     Section 2.15	 	Letters of Credit
	 	 	52	 
	     Section 2.16	 	Bank Products
	 	 	56	 
	     Section 2.17	 	Additional Increase of Commitments; Additional Lenders
	 	 	56	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 3. GUARANTY	 	 	58	 
	     Section 3.1	 	Guaranty
	 	 	58	 
	     Section 3.2	 	Special Provisions Applicable to Subsidiary Guarantors
	 	 	62	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 4. CONDITIONS PRECEDENT	 	 	63	 
	     Section 4.1	 	Conditions Precedent to Closing
	 	 	63	 







 









 








	 	 	 	 	 	 	 	 	 
	     Section 4.2	 	Conditions Precedent to Initial Advance
	 	 	65	 
	     Section 4.3	 	Conditions Precedent to Each Advance
	 	 	66	 
	     Section 4.4	 	Conditions Precedent to Each Letter of Credit
	 	 	67	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 5. REPRESENTATIONS AND WARRANTIES	 	 	68	 
	     Section 5.1	 	General Representations and Warranties
	 	 	68	 
	     Section 5.2	 	Representations and Warranties Relating to Eligible Credit Card Receivables
	 	 	77	 
	     Section 5.3	 	Representations and Warranties Relating to Inventory
	 	 	77	 
	     Section 5.4	 	Survival of Representations and Warranties, etc.
	 	 	77	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 6. GENERAL COVENANTS	 	 	77	 
	     Section 6.1	 	Preservation of Existence and Similar Matters
	 	 	77	 
	     Section 6.2	 	Compliance with Applicable Law
	 	 	78	 
	     Section 6.3	 	Maintenance of Properties
	 	 	78	 
	     Section 6.4	 	Accounting Methods and Financial Records
	 	 	78	 
	     Section 6.5	 	Insurance
	 	 	78	 
	     Section 6.6	 	Payment of Taxes and Claims
	 	 	79	 
	     Section 6.7	 	Visits and Inspections
	 	 	79	 
	     Section 6.8	 	Conduct of Business
	 	 	80	 
	     Section 6.9	 	ERISA
	 	 	80	 
	     Section 6.10	 	Lien Perfection
	 	 	80	 
	     Section 6.11	 	Location of Collateral
	 	 	80	 
	     Section 6.12	 	Protection of Collateral
	 	 	81	 
	     Section 6.13	 	Assignments and Records of Accounts
	 	 	81	 
	     Section 6.14	 	Administration of Accounts
	 	 	82	 
	     Section 6.15	 	The Blocked Account
	 	 	83	 
	     Section 6.16	 	Further Assurances
	 	 	83	 
	     Section 6.17	 	Broker’s Claims
	 	 	84	 
	     Section 6.18	 	Indemnity
	 	 	84	 
	     Section 6.19	 	Environmental Matters
	 	 	84	 
	     Section 6.20	 	Formation of Subsidiaries
	 	 	85	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 7. INFORMATION COVENANTS	 	 	85	 






     -2-     





 









 







	 	 	 	 	 	 	 	 	 
	     Section 7.1	 	Monthly and Quarterly Financial Statements and Information
	 	 	86	 
	     Section 7.2	 	Annual Financial Statements and Information; Certificate of No Default.
	 	 	86	 
	     Section 7.3	 	Compliance Certificates
	 	 	87	 
	     Section 7.4	 	Intentionally Omitted
	 	 	87	 
	     Section 7.5	 	Additional Reports
	 	 	87	 
	     Section 7.6	 	Notice of Litigation and Other Matters
	 	 	89	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 8. NEGATIVE COVENANTS	 	 	91	 
	     Section 8.1	 	Funded Debt
	 	 	91	 
	     Section 8.2	 	Guaranties
	 	 	91	 
	     Section 8.3	 	Liens
	 	 	92	 
	     Section 8.4	 	Restricted Payments and Purchases
	 	 	92	 
	     Section 8.5	 	Investments
	 	 	92	 
	     Section 8.6	 	Affiliate Transactions
	 	 	93	 
	     Section 8.7	 	Liquidation; Change in Ownership, Name, or Year; Disposition or
Acquisition of Assets; Etc
	 	 	93	 
	     Section 8.8	 	Intentionally Omitted
	 	 	95	 
	     Section 8.9	 	Intentionally Omitted
	 	 	95	 
	     Section 8.10	 	Fixed Charge Coverage Ratio
	 	 	95	 
	     Section 8.11	 	Conduct of Business
	 	 	95	 
	     Section 8.12	 	Sales and Leasebacks
	 	 	95	 
	     Section 8.13	 	Amendment and Waiver
	 	 	95	 
	     Section 8.14	 	ERISA Liability
	 	 	95	 
	     Section 8.15	 	Prepayments
	 	 	96	 
	     Section 8.16	 	Negative Pledge
	 	 	96	 
	     Section 8.17	 	Inconsistent Agreements
	 	 	96	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 9. DEFAULT	 	 	96	 
	     Section 9.1	 	Events of Default
	 	 	96	 
	     Section 9.2	 	Remedies
	 	 	99	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 10. THE ADMINISTRATIVE AGENT	 	 	100	 
	     Section 10.1	 	Appointment and Authorization
	 	 	100	 






     -3-     




 








 








	 	 	 	 	 	 	 	 	 
	     Section 10.2	 	Interest Holders
	 	 	101	 
	     Section 10.3	 	Consultation with Counsel
	 	 	101	 
	     Section 10.4	 	Documents
	 	 	101	 
	     Section 10.5	 	Administrative Agent and Affiliates
	 	 	101	 
	     Section 10.6	 	Responsibility of the Administrative Agent
	 	 	101	 
	     Section 10.7	 	Action by Administrative Agent
	 	 	102	 
	     Section 10.8	 	Notice of Default
	 	 	102	 
	     Section 10.9	 	Responsibility Disclaimed
	 	 	102	 
	     Section 10.10	 	Indemnification
	 	 	103	 
	     Section 10.11	 	Credit Decision
	 	 	103	 
	     Section 10.12	 	Successor Administrative Agent
	 	 	104	 
	     Section 10.13	 	Administrative Agent May File Proofs of Claim
	 	 	104	 
	     Section 10.14	 	Collateral
	 	 	105	 
	     Section 10.15	 	Release of Collateral
	 	 	105	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 11. MISCELLANEOUS	 	 	106	 
	     Section 11.1	 	Notices
	 	 	106	 
	     Section 11.2	 	Expenses
	 	 	107	 
	     Section 11.3	 	Waivers
	 	 	108	 
	     Section 11.4	 	Set-Off
	 	 	109	 
	     Section 11.5	 	Assignment
	 	 	109	 
	     Section 11.6	 	Counterparts
	 	 	112	 
	     Section 11.7	 	Under Seal; Governing Law
	 	 	112	 
	     Section 11.8	 	Severability
	 	 	112	 
	     Section 11.9	 	Headings
	 	 	112	 
	     Section 11.10	 	Source of Funds
	 	 	112	 
	     Section 11.11	 	Entire Agreement
	 	 	112	 
	     Section 11.12	 	Amendments and Waivers
	 	 	113	 
	     Section 11.13	 	Other Relationships
	 	 	114	 
	     Section 11.14	 	Pronouns
	 	 	114	 
	     Section 11.15	 	Disclosure
	 	 	114	 
	     Section 11.16	 	Replacement of Lender
	 	 	114	 






     -4-     





 









 








	 	 	 	 	 	 	 	 	 
	     Section 11.17	 	Confidentiality
	 	 	115	 
	     Section 11.18	 	Revival and Reinstatement of Obligations
	 	 	115	 
	     Section 11.19	 	Electronic Transmissions
	 	 	116	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 12. YIELD PROTECTION	 	 	117	 
	     Section 12.1	 	Eurodollar Rate Basis Determination
	 	 	117	 
	     Section 12.2	 	Illegality
	 	 	117	 
	     Section 12.3	 	Increased Costs
	 	 	117	 
	     Section 12.4	 	Effect On Other Advances
	 	 	119	 
	     Section 12.5	 	Capital Adequacy
	 	 	119	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 13. JURISDICTION, VENUE AND WAIVER OF JURY TRIAL	 	 	120	 
	     Section 13.1	 	Jurisdiction and Service of Process
	 	 	120	 
	     Section 13.2	 	Consent to Venue
	 	 	121	 
	     Section 13.3	 	Waiver of Jury Trial
	 	 	121	 
	     Section 13.4	 	The Administrative Borrower
	 	 	121	 
	     Section 13.5	 	All Obligations to Constitute Joint and Several Obligations
	 	 	122	 






EXHIBITS




	 	 	 	 	 
	Exhibit A	 	—	 	Form of Assignment and Acceptance

	Exhibit B	 	—	 	Form of Borrowing Base Certificate

	Exhibit C	 	—	 	Form of Compliance Certificate

	Exhibit D	 	—	 	Form of Notice of Conversion/Continuation

	Exhibit E	 	—	 	Form of Request for Advance

	Exhibit F	 	—	 	Form of Request for Issuance of Letter of Credit

	Exhibit G	 	—	 	Form of Revolving Loan Note

	Exhibit H	 	—	 	Form of Guaranty Supplement

	Exhibit I	 	—	 	Form of Notice of Requested Commitment Increase







     -5-     





 












 








SCHEDULES




	 	 	 	 	 
	Schedule E-1	 	—	 	Existing Letters of Credit

	Schedule 1(a)	 	—	 	Commitment Ratios

	Schedule 1(b)	 	—	 	Liens

	Schedule 5.1(c)-1	 	—	 	Subsidiaries

	Schedule 5.1(c)-2	 	—	 	Partnerships/Joint Ventures

	Schedule 5.1(d)	 	—	 	Outstanding Capital Stock Ownership

	Schedule 5.1(h)	 	—	 	Material Contracts

	Schedule 5.1(i)	 	—	 	Labor Matters

	Schedule 5.1(j)	 	—	 	Taxes

	Schedule 5.1(m)	 	—	 	Investments/Guaranties as of the Agreement Date

	Schedule 5.1(n)	 	—	 	Litigation

	Schedule 5.1(o)	 	 	 	ERISA

	Schedule 5.1(p)	 	—	 	Intellectual Property; Licenses and Certifications

	Schedule 5.1(v)	 	—	 	Insurance

	Schedule 5.1(x)-1	 	—	 	Leased Real Property

	Schedule 5.1(x)-2	 	—	 	Owned Real Property

	Schedule 5.1(y)	 	—	 	Environmental Matters

	Schedule 5.1(aa)	 	—	 	Name Change of Borrower Parties

	Schedule 6.11	 	—	 	Location of Collateral

	Schedule 6.15	 	—	 	Bank and Investment Accounts

	Schedule 8.1	 	—	 	Outstanding Indebtedness as of the Agreement Date

	Schedule 8.5	 	—	 	Existing Investments

	Schedule 8.6	 	—	 	Affiliate Transactions

	Schedule 8.12	 	—	 	Permitted Sale Leasebacks







  -6-  




 









 








CREDIT AGREEMENT




     THIS CREDIT AGREEMENT dated as of November 24, 2008, is by and among CHICO’S FAS, INC., a
Florida corporation (“Parent”), WHITE HOUSE | BLACK MARKET, INC., a Florida corporation
(“WHBM”), CHICO’S RETAIL SERVICES, INC., a Florida corporation (“Chico’s Retail”),
CHICO’S DISTRIBUTION SERVICES, LLC, a Georgia limited liability company (“Chico’s
Distribution”), SOMA INTIMATES, LLC, a Florida limited liability company (“Soma”;
Parent, WHBM, Chico’s Retail, Chico’s Distribution and Soma are referred to herein each
individually as a “Borrower” and, collectively, as the “Borrowers”), the Persons
party hereto from time to time as Guarantors, the financial institutions party hereto from time to
time as Lenders, SUNTRUST BANK, as the Issuing Bank, and SUNTRUST BANK, as the Administrative
Agent.



W I T N E S S E T H:




     WHEREAS, the Borrowers have requested that the Administrative Agent, the Issuing Bank and the
Lenders make available to it the Revolving Loan Commitment, on the terms and conditions set forth
herein, to, among other things, refinance existing Funded Debt and to fund permitted acquisitions,
transaction costs and working capital needs of the Borrowers and to use borrowings thereunder for
other general corporate purposes; and



     WHEREAS, the Administrative Agent, the Issuing Bank and the Lenders are willing to make the
Revolving Loan Commitment available to the Borrowers upon the terms and conditions set forth
herein;



     NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained
herein and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:



ARTICLE 1.




DEFINITIONS, ACCOUNTING PRINCIPLES AND

OTHER INTERPRETIVE MATTERS




     Section 1.1 Definitions. For the purposes of this Agreement:



     “Account Debtor” shall mean any Person who is obligated to make payments in respect of
an Account.



 









 





     “Accounts” shall mean all “accounts,” as such term is defined in the UCC, of each
Borrower Party whether now existing or hereafter created or arising, including, without limitation,
(a) all accounts receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by chattel paper (as defined in the UCC) or instruments (as
defined in the UCC)) (including any such obligations that may be characterized as an account or
contract right under the UCC), (b) all of each Borrower Party’s rights in, to and under all
purchase orders or receipts for goods or services, (c) all of each Borrower Party’s rights to any
goods represented by any of the foregoing (including unpaid sellers’ rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed
goods), (d) all rights to payment due to a Borrower Party for property sold, leased, licensed,
assigned or otherwise disposed of, for a secondary obligation incurred or to be incurred, arising
out of the use of a credit card or charge card, or for services rendered or to be rendered by such
Borrower Party or in connection with any other transaction (whether or not yet earned by
performance on the part of such Borrower Party), and (e) all collateral security of any kind, given
by any Account Debtor or any other Person with respect to any of the foregoing; provided,
however, under no circumstances shall the term Accounts include any Excluded Accounts.



     “ACH Transactions” shall mean any cash management or related services including the
automated clearinghouse transfer of funds by the Administrative Agent (or any Affiliate of the
Administrative Agent) for the account of the Borrower Parties pursuant to agreement or overdrafts.



     “Activation Event” shall have the meaning specified in Section 6.15.



     “Activation Notice” shall have the meaning specified in Section 6.15.



     “additional amounts” shall have the meaning specified in Section 2.8(b)(i).



     “Administrative Agent” shall mean SunTrust Bank, acting as administrative agent for
the Lender Group, and any successor Administrative Agent appointed pursuant to Section
10.12.



     “Administrative Agent Indemnified Person” shall have the meaning specified in
Section 10.10.



     “Administrative Agent’s Office” shall mean the office of the Administrative Agent
located at 303 Peachtree Street, Twenty-Third Floor, Atlanta, Georgia 30308, Attention: Chico’s
Account Manager, or such other office as may be designated by the Administrative Agent pursuant to
the provisions of Section 11.1.



     “Administrative Borrower” shall have the meaning specified in Section 13.4.



     “Administrative Questionnaire” shall mean a questionnaire in form and substance




2









 




satisfactory to the Administrative Agent.



     “Advance” or “Advances” shall mean amounts of the Loans advanced by the
Lenders to, or on behalf of, the Borrowers pursuant to Section 2.2 on the occasion of any
borrowing and shall include, without limitation, all Agent Advances and Swing Loans.



     “Affiliate” shall mean, with respect to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with such Person, or
that is a director, officer, manager or partner of such Person. For purposes of this definition,
“control”, when used with respect to any Person, shall mean the direct or indirect beneficial
ownership of ten percent (10%) (or, if such Person is the owner of outstanding Equity Interests in
Parent, fifteen percent (15%)) or more of the outstanding Equity Interests of such Person. For
purposes of this definition, “officer,” when used with respect to any Person, shall mean its
president, any vice president of such Person in charge of a principal business unit, division or
function (such as sales, administration or finance) and any other Person who performs policy making
functions for such Person.



     “Agent Advances” shall have the meaning specified in Section 2.1(f).



     “Aggregate Commitment Ratio” shall mean, with respect to any Lender, the ratio,
expressed as a percentage, of (a) the unutilized portion of the Revolving Loan Commitment plus
Loans (other than Swing Loans and Agent Advances) outstanding plus participation interests in
Letter of Credit Obligations, Swing Loans and Agent Advances outstanding of such Lender, divided by
(b) the sum of the aggregate unutilized Revolving Loan Commitment plus Loans (other than Swing
Loans and Agent Advances) outstanding plus participation interests in Letter of Credit Obligations,
Swing Loans and Agent Advances of all Lenders, which, as of the Agreement Date, are set forth
(together with Dollar amounts thereof) on Schedule 1(a).



     “Aggregate Revolving Credit Obligations” shall mean, as of any particular time, the
sum of (a) the aggregate principal amount of all Revolving Loans then outstanding, plus (b) the
aggregate principal amount of all Swing Loans then outstanding, plus (c) the aggregate principal
amount of all Agent Advances then outstanding, plus (d) the aggregate principal amount of all
Letter of Credit Obligations then outstanding.



     “Agreement” shall mean this Credit Agreement, together with all Exhibits and Schedules
hereto.



     “Agreement Date” shall mean the date as of which this Agreement is dated.



     “Applicable Law” shall mean, in respect of any Person, all provisions of
constitutions, statutes, rules, regulations, and orders of governmental bodies or regulatory
agencies applicable, whether by law or by virtue of contract, to such Person, and all orders and
decrees of all courts and arbitrators in proceedings or actions to which the Person in question is
a party or by which it is bound.



3









 





     “Applicable Margin” shall mean a per annum rate of interest determined as follows:
with respect to each Advance (except Swing Loans and Agent Advances) and issuance of Letters of
Credit, the applicable margin shall be (a) from the Agreement Date through (and including) the date
five (5) Business Days after the fiscal quarter ending on or about January 31, 2009, 2.50% per
annum (provided that, if the results of the field audit required under Section
4.5(c) reduces Availability such that a different pricing Level would then be applicable, then
the initial pricing level will be adjusted based on the table set forth below), and (b) thereafter,
the applicable margin determined by the Administrative Agent based upon the Average Availability
for the fiscal quarter most recently ended, effective as of the fifth Business Day after the last
day of such fiscal quarter most recently ended, expressed as a per annum rate of interest as set
forth in the table below:



	 	 	 	 	 	 	 	 	 
	 
	 	Level	 	 	Availability	 	 	Applicable Margin	 
	 	I	 	 	Less than $20,000,000
	 	 	3.00%	 
	 	II	 	 	Greater than or equal to $20,000,000 but

less than $40,000,000
	 	 	2.75%	 
	 	III	 	 	Greater than or equal to $40,000,000
	 	 	2.50%	 
	 





     In the event that the information contained in any Borrowing Base Certificate is shown to be
inaccurate, and such inaccuracy, if corrected, would have led to the application of a higher
interest rate for any period (an “Applicable Period”) than the applicable margin actually
applied for such Applicable Period, then (i) the Borrowers shall immediately deliver to the
Administrative Agent a corrected Borrowing Base Certificate for such Applicable Period, (ii) such
higher applicable margin shall be deemed to have been in effect for such Applicable Period and
(iii) the Borrowers shall immediately deliver to the Administrative Agent full payment in respect
of the accrued additional interest on the Advances (except Swing Loans and Agent Advances) and
Letters of Credit as a result of such increased applicable margin for such Applicable Period, which
payment shall be promptly applied by the Administrative Agent in accordance with Section
2.11 (it being understood that nothing contained in this paragraph shall limit the rights of
the Administrative Agent and the other Lenders to exercise their rights under Section
2.3(b) or Section 9.2).



     “Applicable Period” shall have the meaning specified in the definition of Applicable
Margin.



     “Approved Freight Handler” shall mean any Freight Handler that has delivered a Lien
Acknowledgement Agreement in favor of the Administrative Agent, so long as such Lien
Acknowledgement remains in full force and effect and the Administrative Agent has not received any
notice of termination with respect thereto.



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



4









 





     “Assignment and Acceptance” shall mean that certain form of Assignment and Acceptance
attached hereto as Exhibit A, pursuant to which each Lender may, as further provided in
Section 11.5, sell a portion of its Loans or Revolving Loan Commitment.



     “Authorized Signatory” shall mean, with respect to any Borrower Party, such senior
personnel of such Borrower Party as may be duly authorized and designated in writing to the
Administrative Agent by such Borrower Party to execute documents, agreements, and instruments on
behalf of such Borrower Party.



     “Availability” shall mean, as of any date of determination, the amount (if any) by
which (a) the lesser of (i) the Revolving Loan Commitment, or (ii) the Borrowing Base as most
recently reported by the Borrower Parties on or prior to such date of determination, exceeds (b)
the Aggregate Revolving Credit Obligations on such date of determination.



     “Availability Block” shall mean a block against Availability in an amount equal to
$20,000,000, which shall remain in effect from the Agreement Date until such time as the
Administrative Agent has completed an Inventory appraisal, in form and substance reasonably
satisfactory to the Administrative Agent in its Permitted Discretion and completed by appraisers
selected by the Administrative Agent.



     “Available Letter of Credit Amount” shall mean, as of any particular time, an amount
equal to the lesser of (a) the Letter of Credit Commitment at such time less the aggregate amount
of all Letter of Credit Obligations then outstanding or (b) Availability at such time minus
the Availability Block, to the extent in effect at such time of determination.



     “Average Availability” shall mean, as of any date of determination with respect to any
period, an amount equal to the sum of the actual amount of Availability on each day during such
period, as determined by the Administrative Agent, divided by the number of days in such period.



     “Bank Product Reserves” shall mean all reserves that the Administrative Agent, from
time to time, establishes in its Permitted Discretion for Bank Products then provided or
outstanding.



     “Bank Products” shall mean any one or more of the following types of services or
facilities extended to the Borrower Parties by a Person who at the time such services or facilities
were extended was a Lender (or any Affiliate of a Lender): (a) credit cards; (b) ACH Transactions;
(c) cash management, including controlled disbursement services; and (d) the Lender Hedge
Agreements.



     “Bank Products Documents” shall mean all agreements entered into from time to time by
the Borrower Parties in connection with any of the Bank Products and shall include the Lender Hedge
Agreements.



5









 





     “Bankruptcy Code” shall mean the United States Bankruptcy Code (11 U.S.C. Section 101
et seq.), as now or hereafter amended, and any successor statute.



     “Base Rate” shall mean the higher of (i) the rate which the Administrative Agent
announces from time to time as its prime lending rate, as in effect from time to time, (ii) the
Federal Funds Rate, as in effect from time to time, plus one-half of one percent (1/2%) per annum
or (iii) the Eurodollar Rate determined on a daily basis for a period of one (1) month (any changes
in such rates to be effective as of the date of any change in such rate). The Administrative
Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or
best rate of interest actually charged to any customer of the Administrative Agent. The
Administrative Agent may make commercial loans or other loans at rates of interest at, above, or
below the Administrative Agent’s prime lending rate



     “Base Rate Advance” shall mean an Advance which the Borrowers request to be made as a
Base Rate Advance or which is converted to a Base Rate Advance, in accordance with the provisions
of Section 2.2.



     “Blocked Account” shall have the meaning specified in Section 6.15.



     “Blocked Account Agreement” shall mean any agreement executed by a depository bank and
the Administrative Agent, for the benefit of the Lender Group, and acknowledged and agreed to by
the applicable Borrower Party, in form acceptable to the Administrative Agent in its sole
discretion.



     “Borrower” and “Borrowers” shall have the meanings specified in the preamble.



     “Borrower Parties” shall mean, collectively, the Borrowers and the Guarantors; and
“Borrower Party” shall mean any one of the foregoing Borrower Parties.



     “Borrower Payments” shall have the meaning specified in Section 2.8(b)(i).



     “Borrowing Base” shall mean, at any particular time, the sum of:




	 	 	(a)	 	up to 90% of Eligible Credit Card Receivables; plus
	 
	 	 	(b)	 	up to 60% of the Value of Eligible Inventory, unless
Availability is less than the greater of (i) 30% of the Revolving Loan
Commitment or (ii) $20,000,000, then up to the lesser of (A) 60% of the Value
of Eligible Inventory or (B) 85% of the NOLV of Eligible Inventory;
plus
	 
	 	 	(c)	 	100% of Qualified Cash; minus
	 
	 	 	(d)	 	any Reserves.




6









 











     “Borrowing Base Certificate” shall mean a certificate of an Authorized Signatory of
the Administrative Borrower substantially in the form of Exhibit B, or in such form as
otherwise agreed to by the Administrative Agent and the Administrative Borrower.



     “Business Day” shall mean any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of Georgia or is a day on which banking institutions
located in such state are closed; provided, however, that when used with reference
to a Eurodollar Advance (including the making, continuing, prepaying or repaying of any Eurodollar
Advance), the term “Business Day” shall also exclude any day in which banks are not open
for dealings in deposits of Dollars on the London interbank market.



     “Capital Expenditures” shall mean, for any period, on a consolidated basis for the
Borrower Parties, the aggregate of all expenditures made by the Borrower Parties during such period
that, in conformity with GAAP, are required to be included in or reflected on the consolidated
balance sheet as a capital asset of the Borrower Parties, including, without limitation,
Capitalized Lease Obligations of the Borrower Parties, but, for the avoidance of doubt, excluding
EITF 97-10 Capital Lease Obligations.



     “Capitalized Lease Obligation” shall mean that portion of any obligation of a Person
as lessee under a lease which at the time would be required to be capitalized on the balance sheet
of such lessee in accordance with GAAP, other than EITF 97-10 Capital Lease Obligations.



     “Cash Equivalents” shall mean, collectively, (a) marketable, direct obligations of the
US and its agencies maturing within three hundred sixty-five (365) days of the date of purchase,
(b) commercial paper issued by corporations, each of which shall have a consolidated net worth of
at least $500,000,000, which commercial paper will mature within one hundred eighty (180) days from
the date of the original issue thereof and is rated “P-1” or better by Moody’s or “A-1” or better
by S&P, (c) certificates of deposit maturing within three hundred sixty-five (365) days of the date
of purchase and issued by a US national or state bank having deposits totaling more than
$500,000,000, and whose short-term debt is rated “P-1” or better by Moody’s or “A-1” or better by
S&P, (d) up to $100,000 per institution and up to $1,000,000 in the aggregate in (i) short-term
obligations issued by any local commercial bank or trust company located in those areas where any
Borrower conducts its business, whose deposits are insured by the Federal Deposit Insurance
Corporation, or (ii) commercial bank-insured money market funds, or any combination of the types of
investments described in this clause (d), and (e) overnight investments with such financial
institutions having a short term deposit rating of “P-1” or better by Moody’s, or “A-1” or better
by S&P.



     “Cash Management Bank” shall have the meaning specified in Section 6.15.



7









 





     “Change in Control” shall mean the occurrence of one or more of the following events:
(a) any Person or two or more Persons acting in concert shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the SEA) of thirty-five percent (35%) or more of the
outstanding shares of the voting Equity Interests of Parent; (b) as of any date a majority of the
board of directors of Parent consists (other than vacant seats) of individuals who were not either
(i) directors of Parent as of the Agreement Date, (ii) selected or nominated to become directors by
the board of directors of Parent of which a majority consisted of individuals described in clause
(i), or (iii) selected or nominated to become directors by the board of directors of Parent of
which a majority consisted of individuals described in clause (i) and individuals described in
clause (ii), or (c) except as specifically permitted hereunder, Parent ceases to directly or
indirectly own and control one hundred percent (100%) of the outstanding Equity Interests of all of
its Subsidiaries who are Borrower Parties.



     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.



     “Collateral” shall mean all property pledged as collateral security for the
Obligations pursuant to the Security Documents or otherwise, and all other property of any Borrower
Party that is now or hereafter in the possession or control of any member of the Lender Group, or
on which any member of the Lender Group has been granted a Lien.



     “Collateral Access Agreement” shall mean any agreement of any lessor, warehouseman,
processor, consignee or other Person in possession of, having a Lien upon or having rights or
interests in, any of the Collateral in favor of the Administrative Agent, for the benefit of the
Lender Group, in form and substance satisfactory to the Administrative Agent in its Permitted
Discretion, waiving or subordinating Liens or certain other rights or interests such Person may
hold in regard to the property of any of the Borrower Parties and providing the Administrative
Agent access to its Collateral.



     “Collateral Related Account” shall mean all deposit accounts into which any proceeds
of Credit Card Receivables or Inventory are deposited and any concentration accounts related
thereto (including all cash and other funds on deposit therein).



     “Commercial Letter of Credit” shall mean a documentary Letter of Credit issued by the
Issuing Bank in respect of the purchase of goods or services by the Borrower in the ordinary course
of its business.



     “Commitment Increase” shall have the meaning specified in Section 2.17(a).



     “Commitment Increase Cap” shall have the meaning specified in Section 2.17(a).



     “Compliance Certificate” shall mean a certificate executed by an Authorized Signatory
of the Administrative Borrower substantially in the form of Exhibit C.



8









 





     “Concentration Account” shall mean one or more deposit accounts established by the
Borrower Parties for the purpose of concentrating deposits made in the Collateral Related Accounts
in accordance with Section 6.15.



     “Confidential Information” shall have the meaning specified in Section 11.17.



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



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



     “Credit Card Receivables” shall mean each Account together with all income, payments
and proceeds thereof (net of any applicable reserves retained by a Credit Card Issuer or a Credit
Card Processor), owed by a Credit Card Issuer or Credit Card Processor to a Borrower Party
resulting from charges by a customer of a Borrower Party on credit or debit cards issued or
processed by such Credit Card Issuer or Credit Card Processor in connection with the sale of goods
by a Borrower Party, or services performed by a Borrower Party, in each case in the ordinary course
of its business.



     “Date of Issue” shall mean the date on which the Issuing Bank issues (or, at the
direction of the Issuing Bank, a Foreign Issuer issues) a Letter of Credit pursuant to Section
2.15.



     “Default” shall mean any Event of Default, and any of the events specified in
Section 9.1 regardless of whether there shall have occurred any passage of time or giving
of notice (or both) that would be necessary in order to constitute such event an Event of Default.



     “Default Rate” shall mean a simple per annum interest rate equal to, (a) with respect
to all outstanding principal, the sum of (i) the applicable Interest Rate Basis, plus (ii) the
Applicable Margin then in effect, plus (iii) two percent (2.00%), and (b) with respect to all other
Obligations (other than Obligations from Bank Products), the sum of (i) the Base Rate, plus (ii)
the Applicable Margin then in effect, plus (iii) two percent (2.00%); provided,
however, that (y) as to any Eurodollar Advance outstanding on the date that the Default
Rate becomes applicable, the Default Rate shall be based on the then



9









 





applicable Eurodollar Basis until the end of the current Eurodollar Advance Period and
thereafter the Default Rate shall be based on the Base Rate as in effect from time to time and (z)
as to any Base Rate Advance outstanding on the date that the Default Rate becomes applicable, the
Default Rate shall be based on the Base Rate as in effect from time to time.



     “Defaulting Lender” shall have the meaning specified in Section 2.2(e).



     “Disbursement Account” shall mean account number 003601213648 maintained at Bank of
America, N.A., or as otherwise designated to the Administrative Agent by the Administrative
Borrower.



     “Dividends” shall mean any direct or indirect distribution, dividend, or payment to
any Person on account of any Equity Interests of any Borrower Party.



     “Dollars” or “$” shall mean the lawful currency of the United States of
America.



     “Domestic Subsidiary” shall mean any Subsidiary of a Borrower that is organized and
existing under the laws of the US or any state or commonwealth thereof or under the laws of the
District of Columbia.



     “E-Fax” shall mean any system used to receive or transmit faxes electronically.



     “EBITDAR” shall mean, with respect to the Borrowers and their Subsidiaries for any
period, determined on a consolidated basis in accordance with GAAP, the Net Income for such period,
plus, without duplication and to the extent deducted in determining Net Income for such
period, (i) income taxes, (ii) Interest Expense, (iii) depreciation and amortization expense, (iv)
Lease Expense and (iv) the amount of any non-cash compensation as the result of any grant of Equity
Interests or Equity Interest equivalents to employees, officers, directors or consultants of the
Borrowers and their Subsidiaries; provided, however, that if any such calculation
includes any period in which an acquisition or sale of a Person or all or substantially all of the
assets of a Person occurred, then such calculation shall be made on a Pro Forma Basis.



     “EITF 97-10 Capital Lease Obligations” means obligations that are classified as
“Capital Lease Obligations” under GAAP due to the application of Emerging Issues Task Force
Regulation 97-10, and that, but for such regulation, would not constitute Capital Lease
Obligations.



     “Electronic Transmission” shall mean each document, instruction, authorization, file,
information and any other communication transmitted, posted or otherwise made or communicated by
e-mail or E-Fax, or otherwise to or from an E-System or other equivalent service.



     “Eligible Assignee” shall mean (a) a Lender; (b) an Affiliate of a Lender; (c) an




10









 





Approved Fund; or (d) any other Person approved by (i) the Administrative Agent, (ii) with
respect to any proposed assignee of the Revolving Loan Commitment, the Issuing Bank and, (iii)
unless (x) such Person is taking delivery of an assignment in connection with physical settlement
of a credit derivatives transaction or (y) a Default exists, the Administrative Borrower, such
approvals not to be unreasonably withheld or delayed; provided, however, that if
the consent of the Administrative Borrower to an assignment or to an Eligible Assignee is required
hereunder (including a consent to an assignment which does not meet the minimum assignment
thresholds specified in Section 11.5(b)), the Administrative Borrower shall be deemed to
have given its consent five (5) Business Days after the date notice thereof has been delivered by
the assigning Lender (through the Administrative Agent) unless such consent is expressly refused by
the Administrative Borrower prior to such fifth (5th) Business Day.



     “Eligible Credit Card Receivables” shall mean, at any particular date, 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, represents the bona fide amounts due to a Borrower Party from a Credit Card Issuer or
a Credit Card Processor, and was originated in the ordinary course of business of such Borrower
Party, and (ii) is not ineligible for inclusion in the calculation of the Borrowing Base pursuant
to any of clauses (a) through (l) below. Without limiting the foregoing, to qualify as an Eligible
Credit Card Receivable, a Credit Card Receivable shall indicate no Person other than a Borrower
Party as payee or remittance party. In determining the amount to be so included, the face amount
of a Credit Card Receivable shall be reduced by, without duplication, to the extent not reflected
in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits
pending, promotional program allowances, price adjustments, finance charges or other allowances
(including any amount that a Borrower Party may be obligated to rebate to a customer, a Credit Card
Issuer or a Credit Card Processor pursuant to the terms of any agreement or understanding) and (ii)
the aggregate amount of all cash received in respect of such Credit Card Receivable but not yet
applied by the applicable Borrower Party to reduce the amount of such Credit Card Receivable. Any
Credit Card Receivables meeting the foregoing criteria shall be deemed Eligible Credit Card
Receivables but only as long as such Credit Card Receivable is not included within any of the
following categories, in which case such Credit Card Receivable shall not constitute an Eligible
Credit Card Receivable:



     (a) Credit Card Receivables 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 of goods or services giving rise to such Credit Card Receivables;



11









 





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



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



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



     (f) Credit Card Receivables as to which the Credit Card Processor has the right under certain
circumstances to require a Borrower Party to repurchase the Credit Card Receivables from such
Credit Card Processor;



     (g) Credit Card Receivables due from a Credit Card Issuer or Credit Card 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 Credit Card 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 Administrative Agent
and, to the extent necessary or appropriate, endorsed to the Administrative Agent;



     (k) Credit Card Receivables arising from the use of a private label credit card (i.e., any
Credit Card Receivable where a Borrower Party or an Affiliate of a Borrower Party is the Credit
Card Issuer); or



     (l) Credit Card Receivables arising from the use of a “co-branded” credit card which are
deemed ineligible for inclusion in the Borrowing Base by the Administrative Agent in the exercise
of its Permitted Discretion.



     “Eligible Domestic Inventory” shall mean, as of any particular date, the portion of
the Inventory of the Borrowers that the Administrative Agent, in the exercise of its Permitted
Discretion, determines to be Eligible Inventory; provided, however, that



12









 





without limiting the right of the Administrative Agent to establish other criteria of
ineligibility, Eligible Inventory shall not include any of the following Inventory:




     (a) Inventory that is not owned solely by a Borrower;



     (b) Inventory that does not conform to all of the warranties and representations regarding the
same which are set forth in this Agreement or any of the other Loan Documents;



     (c) Inventory that is not located in the continental US either (i) on real property owned by a
Borrower Party or (ii) on leased premises; provided, that if the landlord with respect to
any leased premises thereof has a priming Lien (statutory or otherwise) with respect to the
Inventory at such location, then the Inventory at such location shall not be deemed “Eligible
Inventory” unless (A) such Person, and any bailee, warehouseman or similar party that will be in
possession of such Inventory, shall have executed and delivered to the Administrative Agent a
Collateral Access Agreement or (B) the Administrative Agent has established a Rent Reserve with
respect to such location, in each case at the option of the Administrative Borrower;



     (d) Inventory at any location where the fair market value of the Inventory stored or located
at such location is $50,000 or less;



     (e) Inventory in the possession of any bailee, warehouseman or similar party unless such
Person shall have executed and delivered to the Administrative Agent a Collateral Access Agreement;



     (f) Inventory that is subject to any claim of reclamation, Lien (other than the Liens in favor
of the Administrative Agent or Permitted Liens), adverse claim, interest or right of any other
Person;



     (g) Inventory that has been consigned to or by any Person;



     (h) Inventory that is not in good condition or does not meet all standards imposed by any
Person having regulatory authority over such goods or their use and/or sale, or Inventory that is
not currently saleable in the normal course of a Borrower’s business;



     (i) Inventory that consists of work-in-process, fabric, trim, components or raw materials;



     (j) Inventory scheduled for return to vendors, Inventory which is obsolete or slow-moving (for
purposes of this subsection, what constitutes “obsolete or slow-moving” Inventory shall be
determined by the Administrative Agent in its Permitted Discretion), display items, packaging
materials, labels or name plates or similar supplies;



13









 





     (k) Inventory that is not personal property in which a Borrower Party has granted a valid and
continuing first priority Lien in favor of the Administrative Agent, for the benefit of the Lender
Group, pursuant to the Security Documents, or as to which all action necessary to perfect such
security interest has not been taken;



     (l) Inventory that is covered, in whole or in part, by any security agreement, financing
statement, equivalent security or Lien instrument or continuation statement which is on file or of
record in any public office, except (i) such as may have been filed in favor of the Administrative
Agent, for the benefit of the Lender Group, pursuant to the Security Documents or (ii) such as may
have been filed with respect to Permitted Liens;



     (m) Inventory that is subject to any licensing, patent, royalty, trademark, trade name or
copyright agreement with any third party requiring the payment of royalties or fees or requiring
the consent of the licensor for a sale thereof by the Administrative Agent and is not subject to a
Licensor Consent Agreement that has been requested by the Administrative Agent in its Permitted
Discretion; or



     (n) Inventory that constitutes In-Transit Inventory.



     “Eligible In-Transit Inventory” shall mean all finished goods which constitute
In-Transit Inventory (without duplication of any Eligible Domestic Inventory) owned any Borrower
Party, which such Inventory is in transit to a Borrower Party’s location in the US or to a customer
of a Borrower Party that will take delivery of such Inventory at the port of destination located in
the US and as to which such In-Transit Inventory: (i) shall be the subject of a bill of lading or a
cargo receipt that (A)(x) in the case of a negotiable bill of lading or negotiable cargo receipt,
is consigned to the Administrative Agent or an Issuing Bank (either directly or by means of
endorsement) or (y) in the case of a non-negotiable bill of lading or non-negotiable cargo receipt,
is consigned to the Administrative Agent or an Issuing Bank (either directly or by means of
endorsements) or to a Borrower Party if such bill of lading or cargo receipt shall state “[Name of
applicable Borrower Party], subject to the security interest of SunTrust Bank, as agent, 303
Peachtree Street, N.E., Atlanta, Georgia 30308” thereon and (B) was issued by the carrier
respecting the subject In-Transit Inventory, (ii) is insured in accordance with Section
6.5, (iii) with respect to In-Transit Inventory that is subject to a non-negotiable bill of
lading or non-negotiable cargo receipt, such In-Transit Inventory shall be in the physical
possession of an Approved Freight Handler and (iv) would not be deemed ineligible for inclusion in
the Borrowing Base under clauses (a), (b), (f) (other than in respect of any possessory Lien of the
related common carrier or any Lien in favor of a related Approved Freight Handler), (g), (h), (i),
(j), (l) or (m) of the definition of Eligible Domestic Inventory, treating such eligibility
criteria as applicable to such In-Transit Inventory; provided, however, the gross
amount of Eligible In-Transit Inventory shall not, at any time, exceed $15,000,000. Upon the
request of the Administrative Agent, the Borrower Parties shall promptly deliver to the
Administrative Agent copies of all such bills of lading or cargo receipts.



14









 





     “Eligible Inventory” shall mean Eligible Domestic Inventory and Eligible In-Transit
Inventory.



     “Environmental Laws” shall mean, collectively, any and all applicable federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or
requirements of any Governmental Authority regulating, relating to or imposing liability or
standards of conduct concerning environmental protection matters, including without limitation,
Hazardous Materials or human health, as now or may at any time during the term of this Agreement be
in effect.



     “Equity Interests” shall mean, as applied to any Person, any capital stock, membership
interests, partnership interests or other equity interests of such Person, regardless of class or
designation, and all warrants, options, purchase rights, conversion or exchange rights, voting
rights, calls or claims of any character with respect thereto.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as in effect
on the Agreement Date and as such Act may be amended thereafter from time to time.



     “ERISA Affiliate” shall mean, with respect to any Borrower Party, any trade or
business (whether or not incorporated) that together with such Borrower Party, are treated as a
single employer under Section 414 of the Code.



     “ERISA Event” shall mean, with respect to any Borrower Party or any ERISA Affiliate,
(a) any “reportable event” within the meaning of Section 4043 of ERISA with respect to a Title IV
Plan for which the thirty (30) day notice period has not been waived; (b) the withdrawal of any
Borrower Party or ERISA Affiliate from a Title IV 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; (c)
the complete or partial withdrawal of any Borrower Party or any ERISA Affiliate from any
Multiemployer Plan; (d) the filing of a notice of intent to terminate a Title IV Plan or the
treatment of a plan amendment as a termination under Section 4041 of ERISA; (e) the institution or
threatened institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the
PBGC; (f) the reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245 of
ERISA; (g) the failure by any Borrower Party or ERISA Affiliate to make when due required
contributions to a Multiemployer Plan or Title IV Plan unless such failure is cured within thirty
(30) days; (h) any other event or condition that would reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer,
any Title IV Plan or Multiemployer Plan or for the imposition of liability under Section 4069 or
4212(c) of ERISA, or (i) the revocation or any action reasonably likely to threaten revocation of a
Plan’s tax-qualified status under Code Section 401(a).



15









 





     “E-System” shall mean any electronic system, including Intralinks® and any
other internet or extranet-based site, whether such electronic system is owned, operated or hosted
by the Administrative Agent, any of its Affiliates or any other Person, providing for access to
data protected by passcodes or other security system.



     “Eurodollar Advance” shall mean an Advance which the Administrative Borrower requests
to be made as a Eurodollar Advance or which is continued as or converted to a Eurodollar Advance,
in accordance with the provisions of Section 2.2.



     “Eurodollar Advance Period” shall mean, for each Eurodollar Advance, each one (1), two
(2), three (3) or six (6) month period, as selected by the Administrative Borrower pursuant to
Section 2.2, during which the applicable Eurodollar Rate (but not the Applicable Margin)
shall remain unchanged. Notwithstanding the foregoing, however: (a) any applicable Eurodollar
Advance Period which would otherwise end on a day which 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 Eurodollar Advance Period shall end on the next preceding Business Day; (b) any
applicable Eurodollar Advance Period which begins on a day for which there is no numerically
corresponding day in the calendar month during which such Eurodollar Advance Period is to end shall
(subject to clause (a) above) end on the last day of such calendar month; and (c) no Eurodollar
Advance Period shall extend beyond the Maturity Date or such earlier date as would interfere with
the repayment obligations of the Borrowers under Section 2.6.



     “Eurodollar Basis” shall mean, with respect to each Eurodollar Advance Period, a
simple per annum interest rate equal to the quotient of (a) the Eurodollar Rate divided by (b) one
minus the Eurodollar Reserve Percentage, stated as a decimal. The Eurodollar Basis shall remain
unchanged during the applicable Eurodollar Advance Period, except for changes to reflect
adjustments in the Eurodollar Reserve Percentage.



     “Eurodollar Rate” shall mean, for any Eurodollar Advance Period, the rate per annum
quoted on the display designated on that page of the Bloomberg reporting service, or similar
service as determined by the Administrative Agent, that displays British Banker’s Association
Interest Settlement Rates for Dollar deposits as of 11:00 a.m. (London, England time) two (2)
Business Days prior to the applicable date of determination; provided, however,
that if no such quoted rate appears on such page, the rate used for such Eurodollar Advance Rate
shall be the per annum rate of interest determined by the Administrative Agent to be the rate at
which Dollar deposits for such Eurodollar Advance Period are offered to the Administrative Agent as
of 11:00 a.m. (London, England time) two (2) business days prior to such date of determination.



     “Eurodollar Reserve Percentage” shall mean the aggregate of the maximum reserve
percentages (including, without limitation, any emergency, supplemental, special or other marginal
reserves) expressed as a decimal (rounded upwards to the next one one-hundredth of one percent
(1/100th of 1%)) in effect on any day to which the Administrative Agent is subject with respect to
the Eurodollar Basis pursuant to



16









 





regulations issued by the Board of Governors of the Federal Reserve System (or any
Governmental Authority succeeding to any of its principal functions) (“Regulation D”) with respect
to Eurocurrency Liabilities (as that term is defined in Regulation D). Eurodollar Advances shall
be deemed to constitute Eurocurrency Liabilities 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 the Administrative Agent under Regulation D. The Eurodollar Reserve Percentage shall be
adjusted automatically on and as of the effective date of any change in any reserve percentage.
The Eurodollar Basis for any Eurodollar Advance shall be adjusted as of the effective date of any
changes in the Eurodollar Reserve Percentage.



     “Event of Default” shall mean any of the events specified in Section 9.1,
provided that any requirement for notice or lapse of time, or both, has been satisfied.



     “Excluded Accounts” shall mean any Accounts related to (i) that certain promissory
note from J. McGarvey Construction Company, Inc. payable to Chico’s Retail Services, Inc. dated as
of August 1, 2007, (ii) receivables related to builder or lessor paid tenant improvements and other
tenant allowances, (iii) tax refunds, (iv) amounts due with respect to employee relocation
advances, (v) insurance receivables existing as of the Agreement Date with respect to property
damage resulting from the named storm commonly known as “Hurricane Ike”, and (vi) contingent
receivable existing as of the Agreement Date in connection with the disposition of Investments in
lucy activeware, inc.



     “Executive Order No. 13224” shall mean Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.



     “Existing Credit Agreement” shall mean that certain Second Restated Revolving Credit
Loan Agreement made and entered into as of June 23, 2005, by and among Parent, certain subsidiaries
of Parent party thereto and Bank of America, N.A., as amended, restated, supplemented or otherwise
modified from time to time.



     “Existing Letters of Credit” shall mean those certain letters of credit issued
pursuant to the Existing Credit Agreement outstanding on the Agreement Date, all such letters of
credit being listed on Schedule E-1.



     “Federal Funds Rate” shall mean, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, “H.15(519)”) on the preceding Business Day
opposite the caption “Federal Funds (Effective)”; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the arithmetic mean as
determined by the Administrative Agent of the rates for the last transaction in overnight Federal
funds arranged prior to 12:00 noon



17









 





(Atlanta, Georgia time) on that day by each of three (3) leading brokers of Federal funds
transactions in New York, New York selected by the Administrative Agent.



     “Fee Letter” shall mean that certain fee letter dated as of the Agreement Date,
executed by the Borrowers and addressed to SunTrust Bank.



     “Financial Covenant” shall mean the financial covenant applicable to the Borrower
Parties from time to time pursuant to Section 8.10.



     “Fixed Charge Coverage Ratio” shall mean, with respect to the Borrowers and their
Subsidiaries on a consolidated basis for any period, calculated on a Pro Forma Basis during such
period, the ratio of (a) the greater of (i) (x) EBITDAR for such period minus (y) the sum of (A)
Capital Expenditures made during such period and not financed with the proceeds of Funded Debt
(other than the proceeds of a Loan) and (B) tax payments paid in cash during such period, or (ii)
zero, to (b) the sum of without duplication (i) scheduled payments of principal made with respect
to Funded Debt during such period (which, for purposes of clarification, exclude (i) principal
payments (other than scheduled amortization payments, if any) made on any outstanding Funded Debt
prior to its maturity and (ii) prepayments under the Revolving Loans), (ii) Interest Expense during
such period, (iii) Restricted Purchases and Restricted Payments (other than Dividends paid in kind)
paid during such period and (iv) Lease Expense during such period.



     “Foreign Issuer” shall mean any foreign bank engaged by the Issuing Bank to issue
Commercial Letters of Credit on behalf of the Issuing Bank so long as (a) such foreign bank has
agreed to hold any and all documents, instruments or other Collateral in its possession in
connection with the issuance of any Commercial Letter of Credit as bailee on behalf of the
Administrative Agent to perfect the Administrative Agent’s security interest in such documents,
instruments or other Collateral and (b) the agreement between the Issuing Bank and the Foreign
Issuer is satisfactory to the Administrative Agent in its reasonable discretion.



     “Foreign Lender” shall have the meaning specified in Section 2.8(b).



     “Foreign Subsidiary” shall mean any Subsidiary of a Borrower Party that does not
constitute a Domestic Subsidiary.



     “Freight Handler” shall mean any freight forwarder, customs broker, customs agent,
shipper, shipping company or similar Person utilized by a Borrower Party from time to time in
connection with the importation of Inventory.



     “Fund” shall mean any 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.



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     “Funded Debt” shall mean, with respect to the Borrowers and their Subsidiaries on a
consolidated basis and without duplication, as of any calculation date, (a) any obligation of such
Person for borrowed money, including, without limitation, all of the Obligations; (b) any
obligation of such Person evidenced by bonds, debentures, notes or other similar instruments; (c)
any obligation of such Person to pay the deferred purchase price of property or for services (other
than in the ordinary course of business); (d) any Capitalized Lease Obligation; (e) any obligation
or liability of others secured by a Lien on property owned by such Person, whether or not such
obligation or liability is assumed; (f) any debt, liability or obligation of such Person arising
from or in connection with any Hedge Agreements and, without double counting, any other debt,
liability or obligation arising from or in connection with any Bank Products; (g) any reimbursement
obligations (contingent or otherwise) of such Person with respect to letters of credit, bankers
acceptances and similar instruments issued for the account of such Person; (h) any Guaranty (except
items of shareholders’ equity or Equity Interests or surplus or general contingency or deferred tax
reserves); (i) any financial obligation of such Person under purchase money mortgages; (j) any
financial obligation of such Person under asset securitization vehicles; (k) any obligations of
such Person under conditional sales contracts and similar title retention instruments with respect
to property acquired; and (l) any financial obligation of such Person as issuer of Equity Interests
redeemable in whole or in part at the option of a Person other than such issuer, at a fixed and
determinable date or upon the occurrence of an event not solely within the control of such issuer;
provided, however, that notwithstanding anything in GAAP to the contrary, the
amount of all obligations shall be the full face amount of such obligations.



     “Funding Losses” shall mean expenses incurred by any Lender or any participant of such
Lender permitted hereunder in connection with the re-employment of funds prepaid, repaid, not
borrowed, or paid, as the case may be, and any lost profit of such Lender or any participant of
such Lender over the remainder of the Eurodollar Advance Period for such prepaid Advance. For
purposes of calculating amounts payable to a Lender hereunder with respect to Funding Losses, each
Lender shall be deemed to have actually funded its relevant Eurodollar Advance through the purchase
of a deposit bearing interest at the Eurodollar Rate in an amount equal to the amount of that
Eurodollar Advance and having a maturity and repricing characteristics comparable to the relevant
Eurodollar Advance Period; provided, however, that each Lender may fund each of its
Eurodollar Advances in any manner it sees fit, and the foregoing assumption shall be utilized only
for the calculation of amounts payable hereunder.



     “GAAP” shall mean generally accepted accounting principles and practices set forth
from time to time 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 agencies with similar functions of comparable stature and
authority within the US accounting profession).



19









 





     “Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any government.



     “Guarantors” shall mean, collectively, the Subsidiary Guarantors and any other Person
that has executed a Guaranty Supplement or other document guaranteeing the Obligations; and
“Guarantor” shall mean any one of the foregoing Guarantors.



     “Guaranty” or “guaranteed,” as applied to an obligation (each a “primary
obligation”), shall mean and include (a) any guaranty, direct or indirect, in any manner, of any
part or all of such primary obligation, and (b) any agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or performance (or
payment of damages in the event of non-performance) of any part or all of such primary obligation,
including, without limiting the foregoing, any reimbursement obligations as to amounts drawn down
by beneficiaries of outstanding letters of credit, and any obligation of any Person, whether or not
contingent, (i) to purchase any such primary obligation or any property or asset constituting
direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or
payment of such primary obligation or (B) to maintain working capital, equity capital or the net
worth, cash flow, solvency or other balance sheet or income statement condition of any other
Person, (iii) to purchase property, assets, securities or services primarily for the purpose of
assuring the owner or holder of any primary obligation of the ability of the primary obligor with
respect to such primary obligation to make payment thereof or (iv) otherwise to assure or hold
harmless the owner or holder of such primary obligation against loss in respect thereof. All
references in this Agreement to “this Guaranty” shall be to the Guaranty provided for pursuant to
the terms of Article 3.



     “Guaranty Supplement” shall have the meaning specified in Section 6.20.



     “Hazardous Materials” shall mean any hazardous materials, hazardous wastes, hazardous
constituents, hazardous or toxic substances, petroleum products (including crude oil or any
fraction thereof), friable asbestos containing materials defined or regulated as such in or under
any Environmental Law.



     “Hedge Agreement” shall mean any and all transactions, agreements or documents now
existing or hereafter entered into between or among any Borrower Party, on the one hand, and a
third party, on the other hand, which provides for an interest rate, credit or equity swap, cap,
floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap,
currency option, or any combination of, or option with respect to, these or similar transactions,
for the purpose of hedging such Borrower Party’s exposure to fluctuations in interest or exchange
rates, loan, credit exchange, security or currency valuations.



     “Immaterial Subsidiary” means any Subsidiary of Parent that has been designated by
Parent in writing to the Administrative Agent as an “Immaterial Subsidiary” for



20









 





purposes of this Agreement and the other Loan Documents, provided that for purposes of
this Agreement, at no time shall (i) the book value of total assets of any Immaterial Subsidiary
equal or exceed $100,000 or the book value of total assets of all Immaterial Subsidiaries, in the
aggregate, exceed $500,000, or (ii) any Immaterial Subsidiary own assets of the type included in
the Borrowing Base in excess of $100,000 or all Immaterial Subsidiaries own assets of the type
included in the Borrowing Base, collectively, in an aggregate amount in excess of $500,000, or
(iii) the gross revenues of any Immaterial Subsidiary for any fiscal year equal or exceed $100,000
or the gross revenues of all Immaterial Subsidiaries for any fiscal year equal or exceed, in the
aggregate, $500,000. As of the Agreement Date, Pazo, Inc. and FitAppCo, Inc. are the sole
Subsidiaries designated by Parent as Immaterial Subsidiaries for purposes of this Agreement and the
other Loan Documents.



     “Indemnified Person” shall mean each member of the Lender Group, each Affiliate
thereof and each of their respective employees, representatives, officers, agents and directors.



     “Insolvency Proceeding” shall mean any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other state, federal or non-US bankruptcy
or insolvency law, assignments for the benefit of creditors, formal or informal moratoria,
compositions, extensions generally with creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.



     “Interest Expense” shall mean, for the Borrowers and their Subsidiaries, for any
period determined on a consolidated basis in accordance with GAAP, the sum of (i) interest expense
and loan fees, including capitalized and non-capitalized interest and the interest component of
Capitalized Lease Obligations (whether or not actually paid during such period) and (ii) the net
amount payable (or minus the net amount receivable) under any Hedge Agreement during such period
(whether or not actually paid or received during such period).



     “Interest Rate Basis” shall mean the Base Rate or the Eurodollar Basis, as applicable.



     “In-Transit Inventory” shall mean Inventory of a Borrower Party that is currently in
transit (whether by vessel, air or land) from (i) a location outside the United States to a
location in the United States or (ii) a location in the continental United States to another
location in the continental Untied States, but shall not include any Inventory from and after the
date on which it is delivered to a Borrower in the continental United States, even if such
Inventory is thereafter transported to another location of the Borrowers.



     “Inventory” shall mean all “inventory,” as such term is defined in the UCC, of each
Borrower Party, whether now existing or hereafter acquired, wherever located, and in any event
including inventory, merchandise, goods and other personal property that are held by or on behalf
of a Borrower Party for sale or lease or are furnished or are to be



21









 





furnished under a contract of service, goods that are leased by a Borrower Party as lessor, or
that constitute raw materials, samples, work-in-process, finished goods, returned goods,
promotional materials or materials or supplies of any kind, nature or description used or consumed
or to be used or consumed in such Borrower Party’s business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies and embedded
software; provided, however, with respect to any embedded software, Inventory
shall not include any licensed software to the extent if and only for so long as a grant of a
security interest in accordance with the Loan Documents would constitute or result in a breach,
termination or default under any such lease, license, permit, contract or agreement related
thereto; provided, further, that (a) in no event shall the foregoing be construed
to apply if any described prohibition is unenforceable under Section 9-406, 9-407, or 9-408 of the
UCC or other applicable law or principle of equity, and (b) such embedded software shall
immediately and automatically be included with respect to any portion of such lease, license,
permit, contract or agreement that does not result in any of the consequences specified above.



     “Investment” shall mean, with respect to any Person, any loan, advance or extension of
credit by such Person to, or any Guaranty with respect to the Equity Interests, Funded Debt or
other obligations of, or any contributions to the capital of, any other Person, or any ownership,
purchase or other acquisition by such Person of any Equity Interests of any other Person, other
than any acquisition of all or substantially all of the Equity Interests of a Person or all or
substantially all of the assets, property or business of a Person.



     “Issuing Bank” shall mean SunTrust Bank, or any other Person who hereafter may be
designated as the Issuing Bank pursuant to an Assignment and Acceptance or otherwise.



     “Lease Expense” shall mean, for any period, the aggregate amount of fixed and
contingent rentals paid or payable by the Borrowers and their Subsidiaries with respect to leases
of real and personal property (excluding Capitalized Lease Obligations) determined on a
consolidated basis in accordance with GAAP for such period.



     “Lender Agreement” shall mean a lender joinder agreement, in form and substance
satisfactory to the Administrative Agent.



     “Lender Group” shall mean, collectively, the Administrative Agent, the Issuing Bank
and the Lenders. In addition, if SunTrust Bank ceases to be the Administrative Agent, then for any
Lender Hedge Agreement entered into by any Borrower Party with SunTrust Bank while it was the
Administrative Agent, SunTrust Bank shall be a deemed to be a member of the Lender Group for
purposes of determining the secured parties under any Security Documents.



     “Lender Hedge Agreement” shall mean any and all Hedge Agreements now existing or
hereafter entered into between or among any Borrower Party, on the one hand,



22









 





and any Person that is a Lender (or an Affiliate of a Lender) at the time such Hedge Agreement
was entered into, on the other hand.



     “Lenders” shall mean those lenders whose names are set forth on the signature pages to
this Agreement under the heading “Lenders” and any assignees of the Lenders who hereafter become
parties hereto pursuant to and in accordance with Section 11.5; and “Lender” shall mean any
one of the foregoing Lenders.



     “Letter of Credit Commitment” shall mean the obligation of the Issuing Bank to issue,
or arrange for the issuance of, Letters of Credit in an aggregate face amount from time to time not
to exceed $10,000,000 pursuant to the terms of this Agreement.



     “Letter of Credit Obligations” shall mean, at any time, the sum of (a) an amount equal
to one hundred percent (100%) of the aggregate undrawn and unexpired stated amount (including the
amount to which any such Letter of Credit can be reinstated pursuant to its terms) of the then
outstanding Letters of Credit, plus (b) an amount equal to one hundred percent (100%) of the
aggregate drawn, but unreimbursed drawings of any Letters of Credit (excluding, for the avoidance
of doubt, such drawings that have been reimbursed with Advances made pursuant to Section
2.15).



     “Letter of Credit Reserve Account” shall mean any account maintained by the
Administrative Agent for the benefit of the Issuing Bank, the proceeds of which shall be applied as
provided in Section 9.2(d).



     “Letters of Credit” shall mean either Standby Letters of Credit or Commercial Letters
of Credit issued by the Issuing Bank for the account of any of the Borrowers from time to time in
accordance with Section 2.15.



     “License Agreement” shall mean any license agreement or other agreement between a
Borrower Party and a Person duly holding rights in a trademark, trade name or service mark pursuant
to which such Borrower Party is granted a license to use such trademark, trade name or service mark
on Inventory of such Borrower Party.



     “Licensor Consent Agreement” shall mean an agreement among the applicable Borrower
Party, the Administrative Agent and the applicable licensor in form and substance reasonably
acceptable to the Administrative Agent pursuant to which, among other things, the licensor
acknowledges the Lien of the Administrative Agent in the Inventory that is subject to the
applicable License Agreement and agrees to permit the Administrative Agent to sell the Inventory
that is subject to the License Agreement upon and during the continuance of an Event of Default.



     “Lien” shall mean, with respect to any property, any mortgage, lien, pledge, negative
pledge agreement, assignment for security purposes, charge, option, security interest, title
retention agreement, levy, execution, seizure, attachment, garnishment, any documents, notice,
instruments or other filings under the Federal Assignment of Claims



23









 





Act of 1940 or other encumbrance of any kind in respect of such property, whether or not
choate, vested, or perfected.



     “Lien Acknowledgement Agreement” shall mean an agreement between a Freight Handler and
the Administrative Agent, in form and substance satisfactory to the Administrative Agent, pursuant
to which, among other things, the Freight Handler (a) acknowledges the Lien of the Administrative
Agent in the Collateral in the possession of the Freight Handler and any documents evidencing same,
(b) agrees to hold any documents of title evidencing the Collateral as Administrative Agent’s agent
and bailee for purposes of perfecting the Administrative Agent’s Lien on such Collateral and (c) if
so instructed by the Administrative Agent, agrees to return to the Administrative Agent or
otherwise deliver at its direction, all of the Collateral in its custody, control or possession.



     “Loan Account” shall have the meaning specified in Section 2.7.



     “Loan Documents” shall mean this Agreement, any Revolving Loan Notes, the Security
Documents, the Blocked Account Agreements, the Fee Letter, the Guaranty Supplements, all
reimbursement agreements relating to Letters of Credit issued hereunder, all Collateral Access
Agreements, all Compliance Certificates, all Requests for Advance, all Requests for Issuance of
Letters of Credit, all Notices of Conversion/Continuation, all Borrowing Base Certificates, all
documents executed by a Borrower Party in connection with the Federal Assignment of Claims Act of
1940 (if any), and all other documents, lockbox agreements, instruments, certificates, and
agreements executed or delivered by a Borrower Party in connection with or contemplated by this
Agreement, including, without limitation, any security agreements or guaranty agreements from any
Borrower’s Subsidiaries to the Lender Group, or any of them; provided, however,
that, notwithstanding the foregoing, none of the Bank Product Documents shall constitute Loan
Documents.



     “Loans” shall mean, collectively, the Revolving Loans, the Swing Loans and the Agent
Advances.



     “Majority Lenders” shall mean, as of any date of calculation, Lenders the sum of whose
unutilized portions of the Revolving Loan Commitment plus Loans (other than Swing Loans and Agent
Advances) outstanding plus participation interests in Letter of Credit Obligations, Swing Loans and
Agent Advances outstanding on such date of calculation equals or exceeds fifty percent (50%) of the
sum of the aggregate unutilized Revolving Loan Commitment plus Loans (other than Swing Loans and
Agent Advances) outstanding plus participation interests in Letter of Credit Obligations, Swing
Loans and Agent Advances outstanding of all of the Lenders as of such date of calculation;
provided, however, that so long as there are only two Lenders party to this
Agreement, Majority Lenders shall mean both of such Lenders (other than a Defaulting Lender).



     “Margin Stock” shall have the meaning specified in Section 5.1(t).



24









 





     “Material Contracts” shall mean, collectively, all contracts, leases, instruments,
guaranties, licenses or other arrangements (other than the Loan Documents) to which any Borrower
Party or any Subsidiary of a Borrower Party is or becomes a party and which are required to be
filed with the U.S. Securities and Exchange Commission under Item 601(b)(4) or 601(b)(10) of
Regulation S-K (other than those required to be filed as a result of Item 601(b)(10)(ii)(A),
601(b)(10)(iii)(A) or 601(b)(10)(iii)(B) of Regulation S-K).



     “Materially Adverse Effect” shall mean, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any litigation, arbitration
or governmental investigation or proceeding), a material adverse change in, or a material adverse
effect on: (a) the business, operations, prospects, properties, condition (financial or otherwise),
assets or income of the Borrowers and their Subsidiaries, taken as a whole; (b) the ability of the
Borrowers and their Subsidiaries, taken as a whole, to perform any material obligations under the
Loan Documents, taken as a whole; or (c) (i) the validity, binding effect or enforceability of the
Loan Documents, taken as a whole, (ii) the rights, remedies or benefits available to the
Administrative Agent, the Issuing Bank or any Lender under the Loan Documents, taken as a whole, or
(iii) the attachment, perfection or priority of any Lien of the Administrative Agent under the
Security Documents on a material portion of the Collateral. In determining whether any individual
event, act, condition or occurrence of the foregoing types would result in a Materially Adverse
Effect, notwithstanding that a particular event, act, condition or occurrence does not itself have
such effect, a Materially Adverse Effect shall be deemed to have occurred if the cumulative effect
of such event, act, condition or occurrence and all other events, acts, conditions or occurrences
of the foregoing types which have occurred would result in a Materially Adverse Effect.



     “Maturity Date” shall mean November 24, 2011, or such earlier date as payment of the
Loans shall be due (whether by acceleration or otherwise).



     “Maximum Guaranteed Amount” shall have the meaning specified in Section
3.1(g).



     “Moody’s” shall mean Moody’s Investor Service, Inc., or any successor thereto.



     “Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section
4001(a)(3) of ERISA, and to which any Borrower Party or ERISA Affiliate is making, is obligated to
make or has made or been obligated to make at any time within the past five (5) years,
contributions on behalf of participants who are or were employed by any of them.



     “Necessary Authorizations” shall mean all material authorizations, consents, permits,
approvals, licenses, and exemptions from, and all filings and registrations with, and all reports
to, any Governmental Authority whether federal, state, local, and all agencies thereof, which are
required for the transactions contemplated by the Loan



25









 





Documents and the conduct of the businesses and the ownership (or lease) of the properties and
assets of the Borrower Parties.



     “Net Cash Proceeds” shall mean, with respect to any sale, lease, transfer, casualty
loss or other disposition or loss of assets by any Borrower Party or any issuance by any Borrower
Party of any Equity Interests or the incurrence by any Borrower Party of any Funded Debt (other
than the Obligations), the aggregate amount of cash received for such assets or Equity Interests,
or as a result of such Funded Debt, net of reasonable and customary transaction costs properly
attributable to such transaction and payable by such Borrower Party to a non-Affiliate in
connection with such sale, lease, transfer or other disposition of assets or the issuance of any
Equity Interests or the incurrence of any Funded Debt, including, without limitation, sales
commissions and underwriting discounts.



     “Net Income” shall mean, for any period, the consolidated net income (or loss) of the
Borrowers and their Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP, but excluding therefrom (to the extent otherwise included therein) (i) any extraordinary
gains or losses, (ii) any gains attributable to write-ups of assets, (iii) any non-cash losses
attributable to write-downs of intangible assets, (iv) any Equity Interest of any Borrower or any
Subsidiary of any Borrower in the unremitted earnings of any Person that is not a Subsidiary, and
(v) any income (or loss) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with any Borrower or any Subsidiary on the date that such Person’s
assets are acquired by such Borrower or such Subsidiary.



     “New Lender” shall have the meaning specified in Section 2.17(a).



     “NOLV” shall mean, as to any particular asset, the value that is estimated to be
recoverable in an orderly liquidation thereof, as determined from time to time by a qualified
appraiser selected by the Administrative Agent, net of all liquidation costs and expenses.



     “Notice of Conversion/Continuation” shall mean a notice in substantially the form of
Exhibit D.



     “Notice of Requested Commitment Increase” shall mean a notice substantially in the
form of Exhibit I



     “Obligations” shall mean (a) all payment and performance obligations as existing from
time to time of the Borrower Parties to the Lender Group, or any of them, under this Agreement and
the other Loan Documents (including all Letter of Credit Obligations and including any interest,
fees and expenses that, but for the provisions of the Bankruptcy Code, would have accrued), or as a
result of making the Loans or issuing the Letters of Credit, (b) the obligation to pay an amount
equal to the amount of any and all damages which the Lender Group, or any of them, may suffer by
reason of a breach by any



26









 





Borrower Party of any obligation, covenant, or undertaking with respect to this Agreement or
any other Loan Document, and (c) any debts, liabilities and obligations as existing from time to
time of any Borrower Party to the Administrative Agent (or an Affiliate of the Administrative
Agent) arising from or in connection with any Bank Products and, if SunTrust Bank ceases to be the
Administrative Agent, any debts, liabilities and obligations as existing from time to time of any
Borrower Party to SunTrust Bank (or an Affiliate of SunTrust Bank) arising from or in connection
with any Bank Products Documents entered into at a time when SunTrust Bank was the Administrative
Agent.



     “OFAC” shall mean the Office of Foreign Assets Control of the United States Department
of the Treasury.



     “Other Taxes” shall have the meaning specified in Section 2.8(b)(ii).



     “Overadvance” shall have the meaning specified in Section 2.1(e).



     “Participant” shall have the meaning specified in Section 11.5(d).



     “Payment Date” shall mean the last day of each Eurodollar Advance Period for a
Eurodollar Advance.



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



     “Permitted Discretion” shall mean a determination made in the exercise of reasonable
commercial discretion in accordance with the Administrative Agent’s customary or generally
applicable credit policies.



     “Permitted Liens” shall mean, as applied to any Person:



     (a) Any Lien in favor of the Administrative Agent or any other member of the Lender Group
given to secure the Obligations;



     (b) (i) Liens on real estate for real estate taxes not yet delinquent and (ii) Liens for
taxes, assessments, judgments, governmental charges or levies, or claims not yet delinquent or the
non-payment of which is being diligently contested in good faith by appropriate proceedings and for
which adequate reserves have been set aside on such Person’s books;



     (c) Liens of carriers, warehousemen, mechanics, laborers, suppliers, workers and materialmen
incurred in the ordinary course of business for sums not yet due or being diligently contested in
good faith, if such reserve or appropriate provision, if any, as shall be required by GAAP shall
have been made therefor;



27









 





     (d) Liens incurred in the ordinary course of business in connection with worker’s compensation
and unemployment insurance or other types of social security benefits;



     (e) Easements, rights-of-way, restrictions (including zoning or deed restrictions), and other
similar encumbrances on the use of real property which in the reasonable opinion of the
Administrative Agent do not interfere with the ordinary conduct of the business of such Person;



     (f) Purchase money security interests and Liens securing Capitalized Lease Obligations
provided that such Lien attaches only to the asset (which asset shall not constitute Inventory) so
purchased or leased by such Person and secures only Funded Debt incurred by such Person in order to
purchase or lease such asset, but only to the extent permitted by Section 8.1(e);



     (g) Deposits to secure the performance of bids, trade contracts, tenders, sales, leases,
statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;



     (h) Liens on assets of the Borrower Parties existing as of the Agreement Date which are set
forth on Schedule 1(b);



     (i) Liens of Bank of America, N.A. with respect to the cash collateralization of (i) the
Existing Letters of Credit in an amount not to exceed $5,000,000 and (ii) additional letters of
credit issued by Bank of America, N.A. within ninety (90) days after the Agreement Date in an
aggregate amount not to exceed $10,000,000;



     (j) Statutory Liens in favor of landlords with respect to Inventory at leased premises in a
state that provides for statutory Liens in favor of landlords or Liens arising under leases entered
into by a Borrower Party in the ordinary course of business; and



     (k) Liens on reserves retained by a Credit Card Issuer or a Credit Card Processor.



     “Person” shall mean an individual, corporation, partnership, trust, joint stock
company, limited liability company, unincorporated organization, other legal entity or joint
venture or a government or any agency or political subdivision thereof.



     “Plan” shall mean an employee benefit plan within the meaning of Section 3(3) of ERISA
that any Borrower Party or ERISA Affiliate maintains, contributes to or has an obligation to
contribute to or has maintained, contributed to or had an obligation to contribute to at any time
within the past six (6) years on behalf of participants who were employed by any Borrower Party or
ERISA Affiliate.



28









 





     “Pro Forma Basis” shall mean for purposes of determining compliance with the Financial
Covenant and the defined terms relating thereto, giving pro forma effect to any acquisition or sale
of a Person, all or substantially all of the business or assets of a Person, and any related
incurrence, repayment or refinancing of Funded Debt, Capital Expenditures or other related
transactions which would otherwise be accounted for as an adjustment permitted by Regulation S-X
under the Securities Act or on a pro forma basis under GAAP, in each case, as if such acquisition
or sale and related transactions were realized on the first day of the relevant period.



     “Property” shall mean any real property or personal property, plant, building,
facility, structure, underground storage tank or unit, equipment, Inventory or other asset owned,
leased or operated by the Borrower Parties, their Subsidiaries or any of them (including, without
limitation, any surface water thereon or adjacent thereto, and soil and groundwater thereunder).



     “Qualified Cash” shall mean, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of the Borrower Parties that is in deposit accounts or in
securities accounts, or any combination thereof, maintained at SunTrust Bank and which such deposit
account or securities account is the subject of a Blocked Account Agreement; provided,
however, the aggregate amount of “Qualified Cash” shall not at any time exceed $5,000,000.



     “Register” shall have the meaning specified in Section 11.5(c).



     “Reimbursement Obligations” shall mean the payment obligations of the Borrowers under
Section 2.15(d).



     “Rent Reserve” shall mean, with respect to any leased real property an amount equal to
three (3) months rental expense for such leased real property (or such other amount as the
Administrative Agent may deem appropriate in its Permitted Discretion based on the existence of any
statutory Lien).



     “Replacement Event” shall have the meaning specified in Section 11.16.



     “Replacement Lender” shall have the meaning specified in Section 11.16.



     “Request for Advance” shall mean any certificate signed by an Authorized Signatory of
the Administrative Borrower requesting a new Advance hereunder, which certificate shall be
denominated a “Request for Advance,” and shall be in substantially the form of Exhibit
E. Each Request for Advance shall, among other things, specify the date of the Advance, which
shall be a Business Day, the amount of the Advance, and the type of Advance.



     “Request for Issuance of Letter of Credit” shall mean any certificate signed by an
Authorized Signatory of the Administrative Borrower requesting that the Issuing Bank



29









 





issue a Letter of Credit hereunder, which certificate shall be in substantially the form of
Exhibit F, and shall, among other things, (a) specify that the requested Letter of Credit
is either a Commercial Letter of Credit or a Standby Letter of Credit, (b) the stated amount of the
Letter of Credit (which shall be in Dollars), (c) the effective date (which shall be a Business
Day) for the issuance of such Letter of Credit, (d) the date on which such Letter of Credit is to
expire (which shall be a Business Day and which shall be subject to Section 2.15(a)), (e)
the Person for whose benefit such Letter of Credit is to be issued, (f) other relevant terms of
such Letter of Credit, and (g) the Available Letter of Credit Amount as of the scheduled date of
issuance of such Letter of Credit.



     “Reserves” shall mean reserves that the Administrative Agent may establish from time
to time in its Permitted Discretion for such purposes as the Administrative Agent shall deem
necessary (without duplication of any amounts accounted for in the definitions of Eligible Credit
Card Receivables, Eligible Domestic Inventory, Eligible In-Transit Inventory or NOLV). Without
limiting the generality of the foregoing, the following reserves (without duplication) shall be
deemed an exercise of the Administrative Agent’s Permitted Discretion: (a) reserves for accrued
but unpaid ad valorem, excise and personal property tax liability; (b) Bank Product Reserves; (c)
reserves for warehousemen’s, bailees’, shippers’, brokers’ or carriers’ charges; (d) with respect
to Eligible In-Transit Inventory, reserves for duties, customs brokers, insurance and other
incidental charges pertaining thereto; (e) with respect to Eligible Inventory, reserves for any
required royalty or similar licensing payments, (f) Rent Reserves; and (g) reserves for any other
matter that has a negative impact on the value of the Collateral.



     “Restricted Payment” shall mean (a) Dividends, and (b) any redemption, purchase,
retirement, defeasance, sinking fund or similar payment or any claim of rescission with respect to
the Equity Interests of Parent.



     “Restricted Purchase” shall mean any payment on account of the purchase, redemption,
or other acquisition or retirement of any shares of Equity Interests of Parent.



     “Retiree Welfare Plan” shall mean a Plan that is an “employee welfare benefit plan”
within the meaning of Section 3(1) of ERISA that provides for continuing coverage or benefits for
any participant or any beneficiary of a participant after such participant’s termination of
employment, other than continuation coverage provided pursuant to Code Section 4980B (or applicable
state law mandating health insurance continuation coverage for employees) and at the sole expense
of the participant or the beneficiary.



     “Revolving Commitment Ratio” shall mean, with respect to any Lender, the ratio,
expressed as a percentage, of (a) the portion of the Revolving Loan Commitment of such Lender,
divided by (b) the Revolving Loan Commitment of all Lenders, which, as of the Agreement Date, are
set forth (together with Dollar amounts thereof) on Schedule 1(a).



     “Revolving Loan Commitment” shall mean the several obligations of the Lenders to
advance the aggregate amount of up to $55,000,000 to the Borrowers on or after the



30









 





Agreement Date, in accordance with their respective Revolving Commitment Ratios, pursuant to
the terms of this Agreement, as such amount may be reduced from time to time pursuant to the terms
of this Agreement or increased pursuant to Section 2.17.



     “Revolving Loan Notes” shall mean those certain promissory notes issued by the
Borrowers to each of the Lenders that requests a promissory note, in accordance with each such
Lender’s Revolving Commitment Ratio of the Revolving Loan Commitment, in substantially in the form
of Exhibit G.



     “Revolving Loans” shall mean, collectively, the amounts (other than Agent Advances and
Swing Loans) advanced from time to time by the Lenders to the Borrowers under the Revolving Loan
Commitment, not to exceed the amount of the Revolving Loan Commitment.



     “S&P” shall mean Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc., or
any successor thereto.



     “Sanctioned Country” shall mean a country subject to a sanctions program identified on
the list maintained by OFAC and available at
http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwise published from time
to time.



     “Sanctioned Person” shall mean (i) a Person named on the list of “Specially Designated
Nationals and Blocked Persons” maintained by OFAC available at
http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as otherwise published from time to
time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization
controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned Country, to the extent
subject to a sanctions program administered by OFAC.



     “SEA” shall mean the Securities and Exchange Act of 1934 and the rules promulgated
thereunder by the Securities and Exchange Commission, as amended from time to time or any similar
Federal law then in force.



     “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar
Federal law then in force.



     “Security Agreement” shall mean that certain Security Agreement dated as of the
Agreement Date among the Borrower Parties and the Administrative Agent, on behalf of, and for the
benefit of, the Lender Group.



     “Security Documents” shall mean, collectively, the Security Agreement, all UCC-1
financing statements and any other document, instrument or agreement granting Collateral for the
Obligations, as the same may be amended or modified from time to time.



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     “Standby Letter of Credit” shall mean a Letter of Credit issued to support obligations
of any Borrower Party incurred in the ordinary course of its business, and which is not a
Commercial Letter of Credit.



     “Subsidiary” shall mean, as applied to any Person, (a) any corporation of which more
than fifty percent (50%) of the outstanding stock (other than directors’ qualifying shares) having
ordinary voting power to elect a majority of its board of directors, regardless of the existence at
the time of a right of the holders of any class or classes of securities of such corporation to
exercise such voting power by reason of the happening of any contingency, or any partnership or
limited liability company of which more than fifty percent (50%) of the outstanding partnership
interests or membership interests, as the case may be, is at the time owned by such Person, or by
one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such
Person, and (b) any other entity which is controlled or capable of being controlled by such Person,
or by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of
such Person.



     “Subsidiary Guarantors” shall mean all Domestic Subsidiaries of the Borrowers
signatory to this Agreement as a “Guarantor” and all Domestic Subsidiaries of the Borrowers that
have executed and delivered a Guaranty Supplement.



     “Swing Bank” shall mean SunTrust Bank, or any other Lender who shall agree with the
Administrative Agent to act as Swing Bank.



     “Swing Loans” shall mean, collectively, the amounts advanced from time to time by the
Swing Bank to the Borrowers under the Revolving Loan Commitment in accordance with Section
2.2(g).



     “Swingline Rate” shall mean the rate offered to the Borrowers by the Administrative
Agent and accepted by the Administrative Borrower with respect to Swing Loans; provided,
however, the Administrative Borrower is under no obligation to accept the rate offered by
the Administrative Agent and the Administrative Agent is under no obligation to fund any Swing
Loans.



     “Taxes” shall have the meaning specified in Section 2.8(b)(i).



     “Title IV Plan” shall mean a Plan that is an “employee pension benefit plan,” within
the meaning of Section 3(2) of ERISA, that is covered by Title IV of ERISA.



     “UCC” shall mean the Uniform Commercial Code as the same may, from time to time, be
enacted and in effect in the State of Georgia; provided, that to the extent that the UCC is
used to define any term herein and such term is defined differently in different Articles or
Divisions of the UCC, the definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of law,
any or all of the attachment, perfection or priority of, or remedies with



32









 





respect to, the Administrative Agent’s Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State of Georgia, the
term “UCC” shall mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such provisions.



     “Unfunded Pension Liability” shall mean at any time, the aggregate amount, if any, of
the sum of (a) the amount by which the present value of all accrued benefits under each Title IV
Plan exceeds the fair market value of all assets of such Title IV Plan allocable to such benefits
in accordance with Title IV of ERISA, all determined as of the most recent valuation date for each
such Title IV Plan using the actuarial assumptions for funding purposes in effect under such Title
IV Plan, and (b) for a period of five (5) years following a transaction which might reasonably be
expected to be covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that
could be avoided by any Borrower Party or any ERISA Affiliate as a result of such transaction.



     “Uniform Customs” shall mean the Uniform Customs and Practice for Documentary Credits
(2007 Revision), International Chamber of Commerce Publication No. 600, as the same may be amended
from time to time.



     “Unused Line Fee” shall have the meaning specified in Section 2.4(b).



     “USA Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Pub.
L. No. 107-56, 115 Stat. 272 (2001), as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.



     “US” or “United States” shall mean the United States of America, including the
District of Columbia and its possessions and territories.



     “Value” shall mean, at any particular date, with respect to any item of Inventory (a)
such item of Inventory’s cost, valued in accordance with the “Weighted Average Cost” method of
accounting, minus (b) an amount which is equal to the amount of reserves where such Inventory is
reasonably estimated for GAAP purposes to have a value below such Inventory’s cost, as so valued.



     “Voidable Transfer” shall have the meaning specified in Section 11.18.



     Section 1.2 Accounting Principles. The classification, character and amount of all
assets, liabilities, capital accounts and reserves and of all items of income and expense to be
determined, and any consolidation or other accounting computation to be made, and the
interpretation of any definition containing any financial term, pursuant to this Agreement shall be
determined and made in accordance with GAAP consistently applied, unless such principles are
inconsistent with the express requirements of this Agreement;



33









 





provided that if because of a change in GAAP after the date of this Agreement any
Borrower or any of its Subsidiaries would be required to alter a previously utilized accounting
principle, method or policy in order to remain in compliance with GAAP, such determination shall
continue to be made in accordance with such Borrower’s or such Subsidiary’s previous accounting
principles, methods and policies. All accounting terms used herein without definition shall be
used as defined under GAAP. All financial calculations hereunder shall, unless otherwise stated,
be determined for the Borrowers on a consolidated basis with their Subsidiaries.



     Section 1.3 Other Interpretive Matters. Each definition of an agreement in this
Article 1 shall include such instrument or agreement as amended, restated, supplemented or
otherwise modified from time to time with, if required, the prior written consent of the Majority
Lenders, except as provided in Section 11.12 and otherwise to the extent permitted under
this Agreement and the other Loan Documents. Except where the context otherwise requires,
definitions imparting the singular shall include the plural and vice versa. The words “hereof”,
“herein” and “hereunder” and words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this Agreement, unless otherwise
specifically provided herein. References in this Agreement to “Articles”, “Sections”, “Schedules”
or “Exhibits” shall be to Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided. The words “include”, “includes” and “including” shall be deemed
to be followed by the phrase “without limitation”, whether or not so expressly stated in each such
instance, and the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or”. The word “will” shall be construed to have the same meaning
and effect as the word “shall”. “Writing”, “written” and comparable terms refer to printing,
typing, computer disk, e-mail and other means of reproducing words in a visible form. Except where
otherwise specifically restricted, reference to a party to a Loan Document includes that party and
its successors and assigns. An Event of Default, if one occurs, shall “exist”, “continue” or be
“continuing” until such Event of Default has been waived in writing in accordance with Section
11.12. All terms used herein which are defined in Article 9 of the UCC and which are not
otherwise defined herein shall have the same meanings herein as set forth therein.



     Section 1.4 Certain Provisions Cumulative. The permissive subsections and clauses in
each Section of Article 8 are intended to be and are to be construed as cumulative provisions. To
the extent that any item, transaction, event, fact or circumstance would be permitted under more
than one such subsection or clause of any Section of Article 8, such item, transaction, event, fact
or circumstance shall be deemed permitted under one such subsection or clause without reducing the
amount permitted under or otherwise limiting any other subsection or clause of such Section. In
any such case, the Borrowers may elect which such subsection or clause shall be deemed to permit
any item, transaction, event, fact or circumstance, and notwithstanding any such election, may
thereafter elect that such item, transaction, event, fact or circumstance be deemed



34









 





permitted under another such subsection or clause that otherwise permits such item,
transaction, event, fact or circumstance.



ARTICLE 2.




THE LOANS AND THE LETTERS OF CREDIT




     Section 2.1 Extension of Credit. Subject to the terms and conditions of, and in
reliance upon the representations and warranties made in, this Agreement and the other Loan
Documents, the Lenders agree, severally in accordance with their respective Revolving Commitment
Ratios, and not jointly, to extend credit to the Borrowers in an aggregate principal amount not to
exceed the Revolving Loan Commitment.



          (a) The Revolving Loans. Each Lender agrees, severally in accordance with its
Revolving Commitment Ratio and not jointly with the other Lenders, upon the terms and subject to
the conditions of this Agreement, to lend and relend to the Borrowers, from time to time on any
Business Day prior to the Maturity Date, amounts which do not exceed such Lender’s ratable share
(based upon such Lender’s Revolving Commitment Ratio) of (i) Availability minus (ii) the
Availability Block, to the extent in effect at such time of determination, as of such Business Day.
Subject to the terms and conditions hereof and prior to the Maturity Date, Advances under the
Revolving Loan Commitment may be repaid and reborrowed from time to time on a revolving basis.



          (b) Intentionally Omitted.



          (c) The Letters of Credit. Subject to the terms and conditions of this Agreement, the
Issuing Bank agrees to issue Letters of Credit (or to arrange with a Foreign Issuer for the
issuance of a Letter of Credit on behalf of the Issuing Bank) for the account of the Borrowers,
from time to time on any Business Day prior to the date thirty (30) days prior to the Maturity
Date, pursuant to Section 2.15 in an aggregate outstanding face amount not to exceed the
Letter of Credit Commitment; provided, however, until such time that the
Administrative Agent has completed a satisfactory field exam, in form and substance satisfactory to
the Administrative Agent, the Borrowers shall be permitted to request that the Issuing Bank issue,
and the Issuing Bank shall issue, Letters of Credit so long as (i) the Administrative Agent has
received cash collateral in an amount equal to one hundred and five percent (105%) of the face
amount of such Letters of Credit, together with such other documents, instruments and information
as the Administrative Agent or Issuing Bank may reasonably request and (ii) the Borrowers have
satisfied all conditions set forth in Section 4.4.



          (d) The Swing Loans. Subject to the terms and conditions of this Agreement, the Swing
Bank, in its sole discretion, may from time to time on any Business Day after the Agreement Date
but prior to the Maturity Date, make Swing Loans to the Borrowers (i) in an amount not to exceed
(i) Availability minus (ii) the Availability Block, to the extent in effect at such time of
determination, as of such



35









 





Business Day and (ii) in an aggregate amount (including all Swing Loans outstanding as of such
Business Day) not to exceed the lesser of (A) the excess of (1) the Swing Bank’s ratable share (in
accordance with its Revolving Commitment Ratio) of the Revolving Loan Commitment less (2) the sum
of the aggregate outstanding principal amount of Swing Loans and Revolving Loans made by it and the
Swing Bank’s ratable share (in accordance with its Revolving Commitment Ratio) of the outstanding
Letter of Credit Obligations and Agent Advances, or (B) $5,000,000.



          (e) Overadvances. If at any time the amount of the Aggregate Revolving Credit
Obligations exceeds the Revolving Loan Commitment, the Borrowing Base or any other applicable
limitation set forth in this Agreement (including, without limitation, the limitations on Swing
Loans, Agent Advances and Letters of Credit) such excess (an “Overadvance”) shall
nevertheless constitute a portion of the Obligations that are secured by the Collateral and are
entitled to all benefits thereof. In no event, however, shall the Borrowers have any right
whatsoever to (i) receive any Revolving Loan, (ii) receive any Swing Loan, or (iii) request the
issuance of any Letter of Credit if, before or after giving effect thereto, there shall exist a
Default. In the event that (1) the Lenders shall make any Revolving Loans, (2) the Swing Bank
shall make any Swing Loan, (3) the Administrative Agent shall make any Agent Advances or (4) the
Issuing Bank shall agree to the issuance of any Letter of Credit, which in any such case gives rise
to an Overadvance, the Borrowers shall make, on demand, a payment on the Obligations to be applied
to the Revolving Loans, the Swing Loans, the Agent Advances and the Letter of Credit Reserve
Account, as appropriate, in an aggregate principal amount equal to such Overadvance.



          (f) Agent Advances.



               (i) Subject to the limitations set forth below and notwithstanding anything else in this
Agreement to the contrary, the Administrative Agent is authorized by the Borrowers and the Lenders,
from time to time in the Administrative Agent’s sole discretion, (A) at any time that a Default
exists, (B) at any time that any of the other conditions precedent set forth in Article 4 have not
been satisfied, or (C) at any time an Overadvance exists or would result from any Agent Advance (as
defined below), to make Base Rate Advances to the Borrowers on behalf of the Lenders in an
aggregate amount outstanding at any time not to exceed (together with all other Aggregate Revolving
Credit Obligations) the lesser of (y) the Revolving Loan Commitment or (z) $5,000,000, which the
Administrative Agent, in its reasonable business judgment, deems necessary or desirable (1) to
preserve or protect the Collateral, or any portion thereof, (2) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or (3) to pay any other
amount chargeable to the Borrowers pursuant to the terms of this Agreement, including costs, fees
and expenses as provided under this Agreement (any of such advances are herein referred to as
“Agent Advances”); provided, that (i) such amount shall not be outstanding more
than



36









 





30 days and (ii) the Majority Lenders may at any time revoke the Administrative Agent’s
authorization to make Agent Advances. Any such revocation must be in writing and shall become
effective prospectively upon the Administrative Agent’s receipt thereof. The Administrative Agent
shall promptly provide to the Administrative Borrower written notice of any Agent Advance.



               (ii) The Agent Advances shall be secured by the Collateral and shall constitute Obligations
hereunder. Each Agent Advance shall bear interest as a Base Rate Advance. Each Agent Advance
shall be subject to all terms and conditions of this Agreement and the other Loan Documents
applicable to Revolving Loans, except that all payments thereon shall be made to the Administrative
Agent solely for its own account and the making of any Agent Advance shall not require the consent
of the Borrowers. The Administrative Agent shall have no duty or obligation to make any Agent
Advance hereunder.



               (iii) The Administrative Agent shall notify each Lender no less frequently than weekly, as
determined by the Administrative Agent, of the principal amount of Agent Advances outstanding as of
12:00 noon (Atlanta, Georgia time) as of such date, and each Lender’s pro rata share thereof. Each
Lender shall before 2:00 p.m. (Atlanta, Georgia time) on such Business Day make available to the
Administrative Agent, in immediately available funds, the amount of its pro rata share of such
principal amount of Agent Advances outstanding. Upon such payment by a Lender, such Lender shall
be deemed to have made a Revolving Loan to the Borrowers, notwithstanding any failure of the
Borrowers to satisfy the conditions in Section 4.3. The Administrative Agent shall use
such funds to repay the principal amount of Agent Advances. Additionally, if at any time any Agent
Advances are outstanding, any of the events described in Sections 9.1(g) or 9.1(h)
shall have occurred, then each Lender shall automatically, upon the occurrence of such event, and
without any action on the part of the Administrative Agent, the Borrowers or the Lenders, be deemed
to have purchased an undivided participation in the principal and interest of all Agent Advances
then outstanding in an amount equal to such Lender’s Revolving Commitment Ratio and each Lender
shall, notwithstanding such Event of Default, immediately pay to the Administrative Agent in
immediately available funds, the amount of such Lender’s participation (and upon receipt thereof,
the Administrative Agent shall deliver to such Lender, a loan participation certificate dated the
date of receipt of such funds in such amount). The disbursement of funds in connection with the
settlement of Agent Advances hereunder shall be subject to the terms and conditions of Section
2.2(e).



     Section 2.2 Manner of Borrowing and Disbursement of Loans.



          (a) Choice of Interest Rate, etc.  Any Advance shall, at the option of the Borrowers,
be made either as a Base Rate Advance or as a Eurodollar Advance (except for the first three (3)
Business Days after the Agreement Date, during which period the Loans shall bear interest as a Base
Rate Advance); provided, however, that (i)



37









 





if the Administrative Borrower fails to give the Administrative Agent written notice
specifying whether a Eurodollar Advance is to be repaid, continued or converted on a Payment Date,
such Advance shall be converted to a Base Rate Advance on the Payment Date in accordance with
Section 2.3(a)(iii), (ii) the Administrative Borrower may not select a Eurodollar Advance
(A) with respect to Swing Loans, (B) with respect to an Advance, the proceeds of which are to
reimburse the Issuing Bank pursuant to Section 2.15, or (C) if, at the time of such Advance
or at the time of the continuation of, or conversion to, a Eurodollar Advance pursuant to
Section 2.2(c), a Default exists and (iii) all Agent Advances shall be made as Base Rate
Advances. Any notice given to the Administrative Agent in connection with a requested Advance
hereunder shall be given to the Administrative Agent prior to 11:00 a.m. (Atlanta, Georgia time) in
order for such Business Day to count toward the minimum number of Business Days required.



          (b) Base Rate Advances.



               (i) Initial and Subsequent Advances. The Administrative Borrower shall give the
Administrative Agent in the case of Base Rate Advances irrevocable notice by telephone not later
than 11:00 a.m. (Atlanta, Georgia time) one Business Day prior to the date of such Base Rate
Advance and shall immediately confirm any such telephone notice with a written Request for Advance;
provided, however, that the failure by the Administrative Borrower to confirm any
notice by telephone with a written Request for Advance shall not invalidate any notice so given.



               (ii) Repayments and Conversions. The Borrowers may (A) subject to Section
2.5, at any time without prior notice repay a Base Rate Advance, or (B) upon at least three (3)
Business Days’ irrevocable prior written notice by the Administrative Borrower to the
Administrative Agent in the form of a Notice of Conversion/Continuation, convert all or a portion
of the principal thereof to one or more Eurodollar Advances. Upon the date indicated by the
Administrative Borrower, such Base Rate Advance shall be so repaid or converted.



          (c) Eurodollar Advances.



               (i) Initial and Subsequent Advances. The Administrative Borrower shall give the
Administrative Agent in the case of Eurodollar Advances irrevocable notice by telephone not later
than 11:00 a.m. (Atlanta, Georgia time) three (3) days prior to the date of such Eurodollar Advance
and shall immediately confirm any such telephone notice with a written Request for Advance;
provided, however, that the failure by the Administrative Borrower to confirm any
notice by telephone with a written Request for Advance shall not invalidate any notice so given.



               (ii) Repayments, Continuations and Conversions. At least three (3) Business Days
prior to each Payment Date for a Eurodollar Advance, the Administrative Borrower shall give the
Administrative Agent written notice in the form of a Notice of Conversion/Continuation specifying
whether all or a portion of such



38









 





Eurodollar Advance outstanding on such Payment Date is to be continued in whole or in part as
one or more new Eurodollar Advances and also specifying the new Eurodollar Advance Period
applicable to each such new Eurodollar Advance (and subject to the provisions of this Agreement,
upon such Payment Date, such Eurodollar Advance shall be so continued). Upon such Payment Date,
any Eurodollar Advance (or portion thereof) not so continued shall be converted to a Base Rate
Advance or, subject to Section 2.5, be repaid.



               (iii) Miscellaneous. Notwithstanding any term or provision of this Agreement which
may be construed to the contrary, at no time shall the aggregate number of all Eurodollar Advances
then outstanding exceed six (6).



          (d) Notification of Lenders. Upon receipt of a (i) Request for Advance or a telephone
or telecopy request for Advance, (ii) notification from the Issuing Bank that a draw has been made
under any Letter of Credit (unless the Issuing Bank will be reimbursed through the funding of a
Swing Loan), or (iii) notice from the Administrative Borrower with respect to the prepayment of any
outstanding Eurodollar Advance prior to the Payment Date for such Advance, the Administrative Agent
shall promptly notify each Lender by telephone or telecopy of the contents thereof and the amount
of each Lender’s portion of any such Advance. Each Lender shall, not later than 1:00 p.m.
(Atlanta, Georgia time) on the date specified for such Advance (under clause (i) or (ii) above) in
such notice, make available to the Administrative Agent at the Administrative Agent’s Office, or at
such account as the Administrative Agent shall designate, the amount of such Lender’s portion of
the Advance in immediately available funds.



          (e) Disbursement. Prior to 3:00 p.m. (Atlanta, Georgia time) on the date of an
Advance hereunder, the Administrative Agent shall, subject to the satisfaction of the conditions
set forth in Article 4, disburse the amounts made available to the Administrative Agent by the
Lenders in like funds by (i) transferring the amounts so made available by wire transfer to the
Borrowers’ Disbursement Account or (ii) in the case of an Advance the proceeds of which are to
reimburse the Issuing Bank pursuant to Section 2.15, transferring such amounts to such
Issuing Bank. Unless the Administrative Agent shall have received notice from a Lender prior to
12:00 Noon (Atlanta, Georgia time) on the date of any Advance that such Lender will not make
available to the Administrative Agent such Lender’s ratable portion of such Advance, the
Administrative Agent may assume that such Lender has made or will make such portion available to
the Administrative Agent on the date of such Advance and the Administrative Agent may, in its sole
discretion and in reliance upon such assumption, make available to the Borrowers or the Issuing
Bank, as applicable, on such date a corresponding amount. If and to the extent such Lender shall
not have so made such ratable portion available to the Administrative Agent (a “Defaulting
Lender”), such Lender agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date such amount is made
available to the Borrowers or the Issuing Bank, as applicable, until the date such amount is repaid
to the



39









 





Administrative Agent, (x) for the first two (2) Business Days, at the Federal Funds Rate for
such Business Days, and (y) thereafter, at the Base Rate. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall constitute such
Lender’s portion of the applicable Advance for purposes of this Agreement and if both such Lender
and the Borrowers shall pay and repay such corresponding amount, the Administrative Agent shall
promptly relend to the Borrowers such corresponding amount. If such Lender does not repay such
corresponding amount immediately upon the Administrative Agent’s demand therefor, the
Administrative Agent shall notify the Administrative Borrower and the Borrowers shall immediately
pay such corresponding amount to the Administrative Agent. The failure of any Lender to fund its
portion of any Advance shall not relieve any other Lender of its obligation, if any, hereunder to
fund its respective portion of the Advance on the date of such borrowing, but no Lender shall be
responsible for any such failure of any other Lender. In the event that a Lender for any reason
fails or refuses to fund its portion of an Advance in violation of this Agreement, then, until such
time as such Lender has funded its portion of such Advance, or all other Lenders have received
payment in full (whether by repayment or prepayment) of the principal and interest due in respect
of such Advance, such non-funding Lender shall not (i) have the right to vote regarding any issue
on which voting is required or advisable under this Agreement or any other Loan Document and, with
respect to any such Lender, the amount of the Revolving Loan Commitment or Loans, as applicable,
held by such Lender shall not be counted as outstanding for purposes of determining “Majority
Lenders” hereunder, and (ii) be entitled to receive any payments of principal, interest or fees
from the Borrowers or the Administrative Agent (or the other Lenders) in respect of its Loans.



          (f) Deemed Requests for Advance. Unless payment is otherwise timely made by the
Borrowers, the becoming due of any amount required to be paid under this Agreement or any of the
other Loan Documents as principal, interest, reimbursement obligations in connection with Letters
of Credit, premiums, fees, reimbursable expenses or other sums payable hereunder shall be deemed
irrevocably to be a Request for Advance on the due date of, and in an aggregate amount required to
pay, such principal, interest, reimbursement obligations in connection with Letters of Credit,
premiums, fees, reimbursable expenses or other sums payable hereunder, and the proceeds of a
Revolving Loan made pursuant thereto may be disbursed by way of direct payment of the relevant
Obligation and shall bear interest as a Base Rate Advance. The Lenders shall have no obligation to
the Borrowers to honor any deemed Request for Advance under this Section 2.2(f) unless all
the conditions set forth in Section 4.3 have been satisfied, but, with the consent of the
Lenders required under the last sentence of Section 4.3, may do so in their sole discretion
and without regard to the existence of, and without being deemed to have waived, any Default and
without regard to the existence or creation of an Overadvance or the failure by the Borrowers to
satisfy any of the conditions set forth in Section 4.3. No further authorization,
direction or approval by the Borrowers shall be required to be given by the Borrowers for any
deemed Request for Advance under this Section 2.2(f). The Administrative Agent shall
promptly provide to



40









 





the Administrative Borrower written notice of any Advance pursuant to this Section
2.2(f).




          (g) Special Provisions Pertaining to Swing Loans.



               (i) The Administrative Borrower shall give the Swing Bank written notice in the form of a
Request for Advance, or notice by telephone no later than 12:00 noon. (Atlanta, Georgia time) on
the date on which the Borrowers wish to receive an Advance of any Swing Loan followed immediately
by a written Request for Advance, with a copy to the Administrative Agent; provided,
however, that the failure by the Administrative Borrower to confirm any notice by telephone
with a written Request for Advance shall not invalidate any notice so given; provided
further, however, that any request by the Administrative Borrower of a Base Rate
Advance under the Revolving Loan Commitment shall be deemed to be a request for a Swing Loan unless
the Administrative Borrower specifically requests otherwise. Each Swing Loan shall bear interest
at the rate equal to the Swingline Rate. If the Swing Bank, in its sole discretion, elects to make
the requested Swing Loan, the Swing Loan shall be made on the date specified in the notice or the
Request for Advance and such notice or Request for Advance shall specify (i) the amount of the
requested Swing Loan, and (ii) instructions for the disbursement of the proceeds of the requested
Swing Loan. Each Swing Loan shall be subject to all the terms and conditions applicable to
Revolving Loans, except that all payments thereon shall be payable to the Swing Bank solely for its
own account. The Swing Bank shall have no duty or obligation to make any Swing Loans hereunder.
The Swing Bank shall not make any Swing Loans if the Swing Bank has received written notice from
any Lender (or the Swing Bank has actual knowledge) that one or more applicable conditions
precedent set forth in Section 4.3 will not be satisfied (or waived pursuant to the last
sentence of Section 4.3) on the requested Advance date. In the event the Swing Bank in its
sole and absolute discretion elects to make any requested Swing Loan, the Swing Bank shall make the
proceeds of such Swing Loan available to the Borrowers by deposit of Dollars in same day funds by
wire transfer to the Disbursement Account. In the event that the Swing Bank informs the
Administrative Agent that it will not make the requested Advance as a Swing Loan, then such request
will be deemed a request for a Base Rate Advance under the Revolving Loan Commitment.



               (ii) The Swing Bank shall notify the Administrative Agent and each Lender no less frequently
than weekly, as determined by the Administrative Agent, of the principal amount of Swing Loans
outstanding as of 3:00 p.m. (Atlanta, Georgia time) as of such date and each Lender’s pro rata
share (based on its Revolving Commitment Ratio) thereof. Each Lender shall before 12:00 Noon
(Atlanta, Georgia time) on the next Business Day make available to the Administrative Agent, in
immediately available funds, the amount of its pro rata share (based on its Revolving Commitment
Ratio) of such principal amount of Swing Loans outstanding. Upon such payment by a Lender, such
Lender shall be deemed to have made a Revolving Loan to the Borrowers, notwithstanding any failure
of the Borrowers to satisfy the conditions in



41









 





Section 4.3. The Administrative Agent shall use such funds to repay the principal
amount of Swing Loans to the Swing Bank. Additionally, if at any time any Swing Loans are
outstanding, any of the events described in Sections 9.1(g) or 9.1(h) shall have
occurred, then each Lender shall automatically upon the occurrence of such event and without any
action on the part of the Swing Bank, the Borrowers, the Administrative Agent or the Lenders be
deemed to have purchased an undivided participation in the principal and interest of all Swing
Loans then outstanding in an amount equal to such Lender’s Revolving Commitment Ratio of the
principal and interest of all Swing Loans then outstanding and each Lender shall, notwithstanding
such Event of Default, immediately pay to the Administrative Agent for the account of the Swing
Bank in immediately available funds, the amount of such Lender’s participation (and upon receipt
thereof, the Swing Bank shall deliver to such Lender a loan participation certificate dated the
date of receipt of such funds in such amount). The disbursement of funds in connection with the
settlement of Swing Loans hereunder shall be subject to the terms and conditions of Section
2.2(e).



     Section 2.3 Interest.



          (a) On Loans. Interest on the Loans, subject to Sections 2.3(b) and
(c), shall be payable as follows:



               (i) On Base Rate Advances and Swing Loans. Interest on each Base Rate Advance and
each Swing Loan shall be computed for the actual number of days elapsed on the basis of a
hypothetical year of three hundred sixty (360) days and shall be payable monthly in arrears on the
first day of each calendar month for the prior calendar month, commencing on December 1, 2008.
Interest on Base Rate Advances and Swing Loans then outstanding shall also be due and payable on
the Maturity Date (or the date of any earlier prepayment in full of the Obligations). Interest
shall accrue and be payable on each Base Rate Advance at the simple per annum interest rate equal
to the sum of (A) the Base Rate and (B) the Applicable Margin. Interest shall accrue and be
payable on each Swing Loan at the simple per annum interest rate equal to the Swingline Rate.



               (ii) On Eurodollar Advances. Interest on each Eurodollar Advance shall be computed
for the actual number of days elapsed on the basis of a hypothetical year of three hundred sixty
(360) days and shall be payable in arrears on (x) the Payment Date for such Advance, and (y) if the
Eurodollar Advance Period for such Advance is greater than three (3) months, on the last day of
such three (3) month period and on the last day of the applicable Eurodollar Advance Period for
such Advance. Interest on Eurodollar Advances then outstanding shall also be due and payable on
the Maturity Date (or the date of any earlier prepayment in full of the Obligations). Interest
shall accrue and be payable on each Eurodollar Advance at a rate per annum equal to the sum of (A)
the Eurodollar Basis applicable to such Eurodollar Advance and (B) the Applicable Margin.



42









 





               (iii) If No Notice of Selection of Interest Rate. If the Administrative Borrower
fails to give the Administrative Agent timely notice of its selection of a Eurodollar Basis, or if
for any reason a determination of a Eurodollar Basis for any Advance is not timely concluded, the
Base Rate shall apply to such Advance. If the Administrative Borrower fails to elect to continue
any Eurodollar Advance then outstanding prior to the last Payment Date applicable thereto in
accordance with the provisions of Section 2.2, as applicable, the Base Rate shall apply to
such Advance commencing on and after such Payment Date.



          (b) Upon Default. Immediately upon the occurrence and during the continuance of an
Event of Default, interest on the outstanding Obligations shall accrue at the Default Rate.
Interest accruing at the Default Rate shall be payable on demand and in any event on the Maturity
Date (or the date of any earlier prepayment in full of the Obligations) and shall accrue until the
earliest to occur of (i) waiver of the applicable Event of Default in accordance with Section
11.12, (ii) agreement by the Majority Lenders to rescind the charging of interest at the
Default Rate, or (iii) payment in full of the Obligations. The Lenders shall not be required to
(A) accelerate the maturity of the Loans, (B) terminate the Revolving Loan Commitments, or (C)
exercise any other rights or remedies under the Loan Documents in order to charge interest
hereunder at the Default Rate.



          (c) Computation of Interest. In computing interest on any Advance, the date of making
the Advance shall be included and the date of payment shall be excluded; provided,
however, that if an Advance is repaid on the date that it is made, one (1) day’s interest
shall be due with respect to such Advance.



     Section 2.4 Fees.



          (a) Fee Letter. The Borrowers jointly and severally agree to pay to the
Administrative Agent such fees as are set forth in the Fee Letter.



          (b) Unused Line Fee. The Borrowers jointly and severally agree to pay to the
Administrative Agent, for the account of the Lenders in accordance with their respective Revolving
Commitment Ratios, an unused line fee (“Unused Line Fee”) on the aggregate amount by which
the Revolving Loan Commitment exceeded the sum of the average daily amount of Aggregate Revolving
Credit Obligations (other than with respect to any Swing Loans and Agent Advances) for each day
from the Agreement Date through the Maturity Date (or the date of any earlier prepayment in full of
the Obligations), at a per annum rate equal to 0.50%. Such Unused Line Fee shall be computed on
the basis of a hypothetical year of three hundred sixty (360) days for the actual number of days
elapsed, shall be payable in arrears on December 1, 2008, for the immediately preceding calendar
month and thereafter shall be payable monthly in arrears on the first day of each calendar month
thereafter for the immediately preceding calendar month, and if then unpaid, on the Maturity Date
(or the date of any earlier prepayment in full of the Obligations), and shall be fully earned when
due and non-refundable when paid.



43









 





          (c) Letter of Credit Fees.



               (i) The Borrowers shall pay to the Administrative Agent for the account of the Lenders, in
accordance with their respective Revolving Commitment Ratios, a fee on the stated amount of each
outstanding Letter of Credit for each day such Letter of Credit is outstanding from the Date of
Issue through the Maturity Date (or the date of any earlier prepayment in full of the Obligations)
at a rate per annum on the amount of the Letter of Credit Obligations equal to the Applicable
Margin in effect from time to time. Such Letter of Credit fee shall be computed on the basis of a
hypothetical year of three hundred sixty (360) days for the actual number of days elapsed, shall be
payable monthly in arrears for each calendar month on the first day of the immediately succeeding
calendar month, commencing on December 1, 2008, and if then unpaid, on the Maturity Date (or the
date of any earlier prepayment in full of the Obligations), and shall be fully earned when due and
non-refundable when paid.



               (ii) The Borrowers shall also pay to the Administrative Agent, for the account of the Issuing
Bank, (A) a fee on the stated amount of each outstanding Letter of Credit for each day such Letter
of Credit is outstanding from the Date of Issue through the expiration date of each such Letter of
Credit (or any earlier prepayment in full of the Obligations) at a rate of one-fourth of one
percent (0.25%) per annum which fee shall be computed on the basis of a hypothetical year of three
hundred sixty (360) days for the actual number of days elapsed, shall be payable quarterly in
arrears on the first day of each calendar quarter for the immediately preceding calendar quarter,
commencing on January 1, 2008, and, if then unpaid on the Maturity Date (or any earlier prepayment
in full of the Obligations) and (B) any reasonable and customary fees charged by the Issuing Bank
for issuance and administration of such Letters of Credit. The foregoing fees shall be fully
earned when due, and non-refundable when paid.



          (d) Computation of Fees. In computing any fees payable under this Section
2.4, the first day of the applicable period shall be included and the date of the payment shall
be excluded.



     Section 2.5 Prepayment/Reduction of Commitment. 



          (a) The principal amount of any Base Rate Advance may be repaid in full or in part at any
time, without penalty or prior notice; and the principal amount of any Eurodollar Advance may be
prepaid prior to the applicable Payment Date, upon five (5) days’ prior written notice to the
Administrative Agent, provided that the Borrowers shall reimburse the Lenders and the
Administrative Agent, on the earlier of demand or the Maturity Date, for any Funding Loss or
reasonable out-of-pocket expense incurred by the Lenders or the Administrative Agent in connection
with such prepayment, as set forth in Section 2.9. Each notice of prepayment of any
Eurodollar Advance shall be irrevocable, and each prepayment or repayment made under this
Section 2.5(a) shall include the accrued interest on the amount so prepaid or repaid. Upon
receipt of any notice of repayment or prepayment, the Administrative Agent shall promptly notify
each Lender of



44









 





the contents thereof by telephone or telecopy and of such Lender’s portion of the repayment or
prepayment. Notwithstanding the foregoing, the Borrowers shall not make any repayment or
prepayment of the Revolving Loans unless and until the balance of the Swing Loans and the Agent
Advances then outstanding is zero. Except as provided in Section 2.5(b), any repayment and
prepayment of Advances outstanding under the Revolving Loan Commitment shall not reduce the
Revolving Loan Commitment. Any prepayment of the Loans shall not affect the Borrowers’ obligation
to continue to make payments under any swap agreement (as defined in 11 U.S.C. §101), including,
without limitation any such swap agreement that is a Lender Hedge Agreement, which shall remain in
full force and effect notwithstanding such prepayment, subject to the terms of the applicable swap
agreement.



          (b) The Borrowers shall have the right, at any time and from time to time after the Agreement
Date and prior to the Maturity Date, upon at least ten (10) days’ prior written notice to the
Administrative Agent, without premium or penalty, to cancel or reduce permanently all or a portion
of the Revolving Loan Commitment on a pro rata basis among the Lenders in accordance with their
respective Revolving Commitment Ratios; provided, that (i) the Revolving Loan Commitment
may not be reduced to an amount below the then outstanding Letter of Credit Obligations and (ii)
after giving effect to any partial reduction in the Revolving Loan Commitment, at least $20,000,000
of the Revolving Loan Commitment shall remain in place. As of the date of cancellation or
reduction set forth in such notice, the Revolving Loan Commitment shall be permanently canceled or
reduced to the amount stated in the Administrative Borrower’s notice for all purposes herein, and
the Borrowers shall pay to the Administrative Agent for the account of the Lenders the amount
necessary to repay in full the principal amount of the Revolving Loans, Swing Loans and Agent
Advances or reduce the principal amount of the Revolving Loans, Swing Loans and Agent Advances then
outstanding to not more than the amount of the Revolving Loan Commitment as so reduced, together
with accrued interest on the amount so prepaid and the Unused Line Fee set forth in Section
2.4(b) accrued through the date of the reduction with respect to the amount reduced, and shall
reimburse the Administrative Agent and the Lenders for any Funding Loss or reasonable out-of-pocket
expense incurred by any of them in connection with such payment as set forth in Section 2.9
and, in the case of cancellation of the Revolving Loan Commitment, shall secure the Letter of
Credit Obligations through the delivery of cash collateral in an amount equal to 105% of the
Letters of Credit Obligations.



     Section 2.6 Repayment.



          (a) The Revolving Loans. All unpaid principal and accrued interest on the Revolving
Loans shall be due and payable in full on the Maturity Date. Notwithstanding the foregoing,
however, in the event that at any time and for any reason there shall exist an Overadvance, the
Borrowers shall pay to the Administrative Agent, on demand, an amount equal to the Overadvance,
which payment shall constitute a



45









 




mandatory payment of the Revolving Loans, Agent Advances, Swing Loans and Letter of Credit
Reserve Account, as appropriate.



          (b) Intentionally Omitted.



          (c) Other Mandatory Repayments.



               (i) In the event that after the Agreement Date, any Borrower Party shall issue any Equity
Interests or shall incur any Funded Debt other than Funded Debt permitted under Section
8.1, one hundred percent (100%) of the Net Cash Proceeds received by such Borrower Party from
such issuance or incurrence shall be paid within one (1) Business Day of receipt of the proceeds
thereof by such Borrower Party to the Lenders as a mandatory payment of the Loans. Any payment due
hereunder shall be applied first to repay outstanding Agent Advances, second to repay outstanding
Swing Loans, third to repay outstanding Revolving Loans, and fourth, if an Event of Default has
occurred and is continuing, to fund the Letter of Credit Reserve Account to the extent of one
hundred five percent (105%) of any Letter of Credit Obligations then outstanding. So long as no
Event of Default exists, all such other Net Cash Proceeds shall be applied in the manner set forth
in Section 2.11(a). Notwithstanding the foregoing, if an Event of Default exists, all such
Net Cash Proceeds shall be applied in the manner set forth in Section 2.11(b). The
Revolving Loan Commitment shall not be permanently reduced by the amount of any payment of the
Agent Advances, Swing Loans or Revolving Loans due under this Section 2.6(c)(i). Nothing in
this Section shall authorize any Borrower Party to incur any Funded Debt except as expressly
permitted by this Agreement or to issue any Equity Interests except to the extent not prohibited by
this Agreement.



               (ii) One hundred percent (100%) of the Net Cash Proceeds from the sale (other than the sale of
Inventory in the ordinary course of business and other asset dispositions in a aggregate amount not
to exceed $1,000,000 per fiscal year), transfer, assignment or other disposition, or casualty or
condemnation loss of any Collateral or other assets of any Borrower Party shall be paid within one
(1) Business Day of receipt thereof by the Borrower Parties as a mandatory payment of the
Obligations. So long as no Event of Default exists, all such Net Cash Proceeds (other than Net
Cash Proceeds from the sale of Inventory in the ordinary course of business or other asset
dispositions in an aggregate amount not to exceed $1,000,000 per fiscal year) shall be applied
first to repay outstanding Agent Advances, second to repay outstanding Swing Loans, third to repay
outstanding Revolving Loans, and fourth, if an Event of Default has occurred and is continuing, to
fund the Letter of Credit Reserve Account to the extent of one hundred five percent (105%) of any
Letter of Credit Obligations then outstanding. So long as no Event of Default exists, all such
other Net Cash Proceeds shall be applied in the manner set forth in Section 2.11(a).
Notwithstanding the foregoing, if an Event of Default exists, all such Net Cash Proceeds shall be
applied in the manner set forth in Section 2.11(b). The Revolving Loan Commitment shall
not be



46









 




permanently reduced by the amount of any payment of the Agent Advances, Swing Loans or
Revolving Loans due under this Section 2.6(c)(ii).



          (d) The Other Obligations. In addition to the foregoing, the Borrowers hereby promise
to pay all Obligations (other than Obligations in respect of Bank Products), including, without
limitation, the principal amount of the Loans, amounts drawn under Letters of Credit and interest
and fees on the foregoing, as the same become due and payable hereunder and, in any event, on the
Maturity Date.



     Section 2.7 Notes; Loan Accounts.



          (a) The Loans shall be repayable in accordance with the terms and provisions set forth herein
and, upon request by any Lender, the Loans owed to such Lender shall be evidenced by Revolving Loan
Notes. A Revolving Loan Note shall be payable to the order of each Lender requesting such a Note
in accordance with the Revolving Commitment Ratio of such Lender. Each such Note shall be issued
by the Borrowers to the applicable Lender and shall be duly executed and delivered by an Authorized
Signatory of each Borrower.



          (b) The Administrative Agent shall open and maintain on its books in the name of the Borrowers
a loan account with respect to the Loans and interest thereon (the “Loan Account”). The
Administrative Agent shall debit such Loan Account for the principal amount of each Advance made by
it on behalf of the Lenders, accrued interest thereon, and all other amounts which shall become due
from the Borrowers pursuant to this Agreement and shall credit the Loan Account for each payment
which the Borrowers shall make in respect to the Obligations. The records of the Administrative
Agent with respect to such Loan Account shall be conclusive evidence of the Loans and accrued
interest thereon, absent manifest error.



     Section 2.8 Manner of Payment.



          (a) When Payments Due.



               (i) Each payment (including any prepayment) by the Borrowers on account of the principal of or
interest on the Loans, fees, and any other amount owed to any member of the Lender Group under this
Agreement or the other Loan Documents shall be made not later than 12:00 noon (Atlanta, Georgia
time) on the date specified for payment under this Agreement or any other Loan Document to the
Administrative Agent at the Administrative Agent’s Office, for the account of the Lenders, the
Issuing Bank or the Administrative Agent, as the case may be, in Dollars in immediately available
funds. Any payment received by the Administrative Agent after 12:00 noon (Atlanta, Georgia time)
shall be deemed received on the next Business Day. In the case of a payment for the account of a
Lender, the Administrative Agent will promptly thereafter distribute the amount so received in like
funds to such Lender. In the case of a payment for the account of the Issuing Bank, the
Administrative Agent will



47









 





promptly thereafter distribute the amount so received in like funds to the Issuing Bank. If
the Administrative Agent shall not have received any payment from the Borrowers as and when due,
the Administrative Agent will promptly notify the Lenders accordingly.



               (ii) Except as provided in the definition of Eurodollar Advance Period, if any payment under
this Agreement or any other Loan Document shall be specified to be made on a day which is not a
Business Day, it shall be made on the next succeeding day which is a Business Day, and such
extension of time shall in such case be included in computing interest and fees, if any, in
connection with such payment.



          (b) No Deduction.



               (i) Any and all payments of principal and interest, or of any fees or indemnity or expense
reimbursements by the Borrowers hereunder or under any other Loan Documents (the “Borrower
Payments”) shall be made without setoff or counterclaim and free and clear of and without
deduction for any and all current or future taxes, levies, imposts, deductions, charges or
withholdings with respect to such Borrower Payments and all interest, penalties or similar
liabilities with respect thereto, excluding taxes imposed on the net income of any member of the
Lender Group by the jurisdiction under the laws of which such member of the Lender Group is
organized or conducts business or any political subdivision thereof (all such nonexcluded taxes,
levies, imposts, deductions, charges or withholdings and liabilities collectively or individually
“Taxes”). If any Borrower shall be required to deduct any Taxes from or in respect of any
sum payable to any member of the Lender Group hereunder or under any other Loan Document, (i) the
sum payable shall be increased by the amount (an “additional amount”) necessary so that
after making all required deductions (including deductions applicable to additional sums payable
under this Section 2.8(b)(i)) such member of the Lender Group shall receive an amount equal
to the sum it would have received had no such deductions been made, (ii) such Borrower shall make
such deductions, and (iii) such Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with Applicable Law.



               (ii) In addition, the Borrowers shall pay to the relevant Governmental Authority in accordance
with Applicable Law any current or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this Agreement or any other
Loan Document (such taxes being “Other Taxes”).



               (iii) The Borrowers shall indemnify the members of the Lender Group for the full amount of
Taxes and Other Taxes with respect to Borrower Payments paid by such Person, and any liability
(including penalties, interest and expenses (including reasonable attorney’s fees and expenses))
arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted by the relevant Governmental Authority. A certificate setting forth and
containing an



48









 





explanation in reasonable detail of the manner in which such amount shall have been determined
and the amount of such payment or liability prepared by a member of the Lender Group or the
Administrative Agent on its behalf, absent manifest error, shall be final, conclusive and binding
for all purposes. Such indemnification shall be made within thirty (30) days after the date the
Administrative Agent or such member, as the case may be, makes written demand therefor. If any
Taxes or Other Taxes for which the Administrative Agent or any member of the Lender Group has
received indemnification from the Borrowers hereunder shall be finally determined to have been
incorrectly or illegally asserted and are refunded to the Administrative Agent or such member, the
Administrative Agent or such member, as the case may be, shall promptly forward to the Borrowers
any such refunded amount (after deduction of any Tax or Other Tax paid or payable by any member of
the Lender Group as a result of such refund), not exceeding the increased amount paid by the
Borrowers pursuant to this Section 2.8(b).



               (iv) As soon as practicable after the date of any payment of Taxes or Other Taxes by the
Borrowers to the relevant Governmental Authority, the Administrative Borrower will deliver to the
Administrative Agent, at its address, the original or a certified copy of a receipt issued by such
Governmental Authority evidencing payment thereof.



               (v) On or prior to the Agreement Date (or, in the case of any Lender that becomes a party to
this Agreement pursuant to an Assignment and Acceptance, on or prior to the effective date of such
Assignment and Acceptance), each Lender which is organized in a jurisdiction other than the United
States or a political subdivision thereof (a “Foreign Lender”) shall provide each of the
Administrative Agent and the Administrative Borrower with either (A) two (2) properly executed
originals of Form W-8ECI or Form W-8BEN (or any successor forms) prescribed by the Internal Revenue
Service or other documents satisfactory to the Administrative Borrower and the Administrative
Agent, as the case may be, certifying (1) as to such Foreign Lender’s status for purposes of
determining exemption from United States withholding taxes with respect to all payments to be made
to such Foreign Lender hereunder and under any other Loan Documents or Bank Products Documents or
(2) that all payments to be made to such Foreign Lender hereunder and under any other Loan
Documents and Bank Products Documents are subject to such taxes at a rate reduced to zero by an
applicable tax treaty, or (B)(1) a certificate executed by such Lender certifying that such Lender
is not a “bank” and that such Lender qualifies for the portfolio interest exemption under Section
881(c) of the Code, and (2) two (2) properly executed originals of Internal Revenue Service Form
W-8BEN (or any successor form), in each case, certifying such Lender’s entitlement to an exemption
from United States withholding tax with respect to payments of interest to be made hereunder or
under any other Loan Documents or Bank Products Documents. Each such Foreign Lender agrees to
provide the Administrative Agent and the Administrative Borrower with new forms prescribed by the
Internal Revenue Service upon the expiration or obsolescence of any previously delivered form, or
after the



49









 




occurrence of any event requiring a change in the most recent forms delivered by it to the
Administrative Agent and the Administrative Borrower.



               (vi) The Borrowers shall not be required to indemnify any Foreign Lender, or to pay any
additional amounts to such Foreign Lender pursuant to Section 2.8(b)(i) or (b)(iii)
to the extent that (A) the obligation to withhold amounts with respect to United States Federal,
state or local withholding tax existed on the date such Foreign Lender became a party to this
Agreement (or, in the case of a transferee, on the effective date of the Assignment and Acceptance
pursuant to which such transferee became a Lender) or, with respect to payments to a new lending
office, the date such Foreign Lender designated such new lending office; provided,
however, that this clause (A) shall not apply to any Foreign Lender that became a Lender or
new lending office that became a new lending office as a result of an assignment or designation
made at the request of the Administrative Borrower; and provided further,
however, that this clause (A) shall not apply to the extent the indemnity payment or
additional amounts, if any, that any member of the Lender Group through a new lending office would
be entitled to receive (without regard to this clause (A)) do not exceed the indemnity payment or
additional amounts that the Person making the assignment or transfer to such member of the Lender
Group making the designation of such new lending office would have been entitled to receive in the
absence of such assignment, transfer or designation or (B) the obligation to pay such additional
amounts or such indemnity payments would not have arisen but for a failure by such member of the
Lender Group to comply with the provisions of Section 2.8(b)(v).



               (vii) Nothing contained in this Section 2.8(b) shall require any member of the Lender
Group to make available to the Borrowers any of its tax returns (or any other information) that it
deems confidential or proprietary.



     Section 2.9 Reimbursement. Whenever any Lender shall sustain or incur any Funding
Losses (including losses of anticipated profits) or reasonable out-of-pocket expenses in connection
with (a) failure by the Borrowers to borrow or continue any Eurodollar Advance, or convert any
Advance to a Eurodollar Advance, in each case, after having given notice of their intention to do
so in accordance with Section 2.2 (whether by reason of the election of the Borrowers not
to proceed or the non-fulfillment of any of the conditions set forth in this Agreement), or (b)
prepayment of any Eurodollar Advance in whole or in part for any reason or (c) failure by the
Borrowers to prepay any Eurodollar Advance after giving notice of its intention to prepay such
Advance, the Borrowers agree to pay to such Lender, promptly upon such Lender’s demand therefor, an
amount sufficient to compensate such Lender for all such Funding Losses and reasonable
out-of-pocket expenses. Such Lender’s good faith determination of the amount of such Funding
Losses and reasonable out-of-pocket expenses, absent manifest error, shall be binding and
conclusive. Losses subject to reimbursement hereunder shall include, without limitation, expenses
incurred by any Lender or any participant of such Lender permitted hereunder in connection with the
re-employment of funds prepaid, repaid, not borrowed,



50









 





or paid, as the case may be, and any lost profit of such Lender or any participant of such
Lender over the remainder of the Eurodollar Advance Period for such prepaid Advance. For purposes
of calculating amounts payable to a Lender under this paragraph, each Lender shall be deemed to
have actually funded its relevant Eurodollar Advance through the purchase of a deposit bearing
interest at the Eurodollar Rate in an amount equal to the amount of that Eurodollar Advance and
having a maturity and repricing characteristics comparable to the relevant Eurodollar Advance
Period; provided, however, that each Lender may fund each of its Eurodollar
Advances in any manner it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this Section.



     Section 2.10 Pro Rata Treatment.



          (a) Advances. Each Advance with respect to the Revolving Loans from the Lenders under
this Agreement shall be made pro rata on the basis of their respective Revolving Commitment Ratios.



          (b) Payments. Each payment and prepayment of the principal of the Revolving Loans and
each payment of interest on the Revolving Loans received from the Borrowers shall be made by the
Administrative Agent to the Lenders pro rata on the basis of their respective unpaid principal
amounts thereof outstanding immediately prior to such payment or prepayment (except in cases when a
Lender’s right to receive payments is restricted pursuant to Section 2.2(e)). If any
Lender shall obtain any payment (whether involuntary, through the exercise of any right of set-off
or otherwise) on account of the Loans in excess of its ratable share of Loans under its Aggregate
Commitment Ratio (or in violation of any restriction set forth in Section 2.2(e)), such
Lender shall forthwith purchase from the other Lenders such participation in the Loans made by them
as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each
of them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded
and such Lender shall repay to the purchasing Lender the purchase price to the extent of such
recovery without interest thereon unless the Lender obligated to repay such amount is required to
pay interest. The Borrowers agree that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.10(b) may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the Borrowers in the amount of
such participation.



     Section 2.11 Application of Payments.



          (a) Payments Prior to Event of Default. Prior to the occurrence and continuance of an
Event of Default, all amounts received by the Administrative Agent from the Borrowers (other than
payments specifically earmarked for application to certain principal, interest, fees or expenses
hereunder or payments made pursuant to Section 2.6(c) (which shall be applied as earmarked
or, with respect to payments under



51









 




Section 2.6(c), as set forth in Section 2.6(c))), shall be distributed by the
Administrative Agent in the following order of priority:



               FIRST, pro rata, to the payment of (i) out-of-pocket costs and expenses (including reasonable
attorneys’ fees) of the Administrative Agent incurred by the Administrative Agent in connection
with the enforcement of the rights of the Lender Group under the Loan Documents and (ii) any Agent
Advances made by the Administrative Agent under or pursuant to the terms of the Loan Documents and
interest accrued thereon;



               SECOND, pro rata, to the payment of any fees then due and payable to the Administrative Agent,
the Issuing Bank or the Swing Bank hereunder or under any other Loan Documents;



               THIRD, pro rata, to the payment of all Obligations consisting of accrued fees and interest
then due and payable to the Lenders hereunder;



               FOURTH, to the payment of principal then due and payable on the Swing Loans;



               FIFTH, to the payment of principal then due and payable on the Revolving Loans;



               SIXTH, to the payment of the Obligations arising in respect of Bank Products then due and
payable; and



               SEVENTH, to the payment of all other Obligations not otherwise referred to in this Section
2.11(a) then due and payable.



          (b) Payments Subsequent to Event of Default. Notwithstanding anything in this
Agreement or any other Loan Document which may be construed to the contrary, subsequent to the
occurrence and during the continuance of an Event of Default, payments and prepayments with respect
to the Obligations made to the Lender Group, or any of them, or otherwise received by any member of
the Lender Group (from realization on Collateral or otherwise) shall be distributed in the
following order of priority (subject, as applicable, to Section 2.10):



               FIRST, pro rata, to the payment of (i) out-of-pocket costs and expenses (including reasonable
attorneys’ fees) of the Administrative Agent incurred in connection with the enforcement of the
rights of the Lender Group under the Loan Documents, and (ii) any Agent Advances made by the
Administrative Agent under or pursuant to the terms of the Loan Documents (including any costs
incurred in connection with the sale or disposition of any Collateral);



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               SECOND, pro rata, to payment of any fees owed to the Administrative Agent, the Issuing Bank or
the Swing Bank hereunder or under any other Loan Document;



               THIRD, to the payment of out-of-pocket costs and expenses (including reasonable attorneys’
fees) of the Lenders incurred in connection with the enforcement of their respective rights under
the Loan Documents;



               FOURTH, to the payment of all obligations consisting of accrued fees and interest payable to
the Lenders hereunder;



               FIFTH, to the payment of the principal of the Swing Loans then outstanding;



               SIXTH, pro rata, to (i) the payment of principal on the Revolving Loans then outstanding, and
(ii) the Letter of Credit Reserve Account to the extent of one hundred five percent (105%) of any
Letter of Credit Obligations then outstanding;



               SEVENTH, to the payment of any Obligation arising in respect of the Bank Products;



               EIGHTH, to any other Obligations not otherwise referred to in this Section 2.11(b);
and



               NINTH, upon satisfaction in full of all Obligations, to the Borrowers or as otherwise required
by law.



     Section 2.12 Use of Proceeds. The proceeds of the Loans shall be used by the
Borrowers to refinance existing Funded Debt, to fund transaction costs, to fund future acquisitions
permitted hereunder, to provide for working capital and for the Borrowers’ general corporate
purposes.



     Section 2.13 All Obligations to Constitute One Obligation. All Obligations shall
constitute one general obligation of the Borrowers and shall be secured by the Administrative
Agent’s security interest (on behalf of, and for the benefit of, the Lender Group) and Lien upon
all of the Collateral, and by all other security interests and Liens heretofore, now or at any time
hereafter granted by any Borrower Party to the Administrative Agent or any other member of the
Lender Group, to the extent provided in the Security Documents under which such Liens arise.



     Section 2.14 Maximum Rate of Interest. The Borrowers and the Lender Group hereby
agree and stipulate that the only charges imposed upon the Borrowers for the use of money in
connection with this Agreement are and shall be the specific interest and fees described in this
Article 2 and in any other Loan Document. Notwithstanding the foregoing, the Borrowers and the
Lender Group further agree and stipulate that all closing



53









 





fees, agency fees, syndication fees, facility fees, underwriting fees, default charges, late
charges, funding or “breakage” charges, increased cost charges, attorneys’ fees and reimbursement
for costs and expenses paid by any member of the Lender Group to third parties or for damages
incurred by the Lender Group, or any of them, are charges to compensate the Lender Group for
underwriting and administrative services and costs or losses performed or incurred, and to be
performed and incurred, by the Lender Group in connection with this Agreement and the other Loan
Documents and shall under no circumstances be deemed to be charges for the use of money pursuant to
Official Code of Georgia Annotated Sections 7-4-2 and 7-4-18 or any other Applicable Law. In no
event shall the amount of interest and other charges for the use of money payable under this
Agreement exceed the maximum amounts permissible under any law that a court of competent
jurisdiction shall, in a final determination, deem applicable. The Borrowers and the Lender Group,
in executing and delivering this Agreement, intend legally to agree upon the rate or rates of
interest and other charges for the use of money and manner of payment stated within it;
provided, however, that, anything contained herein to the contrary notwithstanding,
if the amount of such interest and other charges for the use of money or manner of payment exceeds
the maximum amount allowable under Applicable Law, then, ipso facto as of the
Agreement Date, the Borrowers are and shall be liable only for the payment of such maximum as
allowed by law, and payment received from the Borrowers in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of the Revolving Loans to the extent of
such excess.



     Section 2.15 Letters of Credit.



          (a) Subject to the terms and conditions of this Agreement, the Issuing Bank, on behalf of the
Lenders, and in reliance on the agreements of the Lenders set forth in Section 2.15(c)
below, hereby agrees to issue (or arrange with a Foreign Issuer for the issuance of) one or more
Letters of Credit up to an aggregate face amount equal to the Letter of Credit Commitment;
provided, however, that, except as described in the last sentence of Section
4.4, the Issuing Bank shall not issue (or arrange with a Foreign Issuer for the issuance of)
any Letter of Credit unless the conditions precedent to the issuance thereof set forth in
Section 4.4 have been satisfied. Each Letter of Credit shall (i) be denominated in
Dollars, and (ii) expire no later than the earlier to occur of (A) the date thirty (30) days prior
to the Maturity Date, and (B) three hundred sixty (360) days after its date of issuance (but may
contain provisions for automatic renewal provided that no Default exists on the renewal date or
would be caused by such renewal and provided no such renewal shall extend beyond the date thirty
(30) days prior to the Maturity Date). Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of Georgia. The
Issuing Bank shall not at any time be obligated to issue, or cause to be issued, any Letter of
Credit if such issuance would conflict with, or cause the Issuing Bank to exceed any limits imposed
by, any Applicable Law.



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          (b) The Administrative Borrower may from time to time request that the Issuing Bank issue (or
arrange with a Foreign Issuer for the issuance of) a Letter of Credit. The Administrative Borrower
shall execute and deliver to the Administrative Agent and the Issuing Bank a Request for Issuance
of Letter of Credit for each Letter of Credit to be issued by the Issuing Bank, not later than
11:00 a.m. (Atlanta, Georgia time) on the third (3rd) Business Day preceding the date on which the
requested Letter of Credit is to be issued, or such shorter notice as may be acceptable to the
Issuing Bank and the Administrative Agent. Upon receipt of any such Request for Issuance of Letter
of Credit, subject to satisfaction of all conditions precedent thereto as set forth in Section
4.4 or waiver of such conditions pursuant to the last sentence of Section 4.4, the
Issuing Bank shall process such Request for Issuance of Letter of Credit and the certificates,
documents and other papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall promptly issue (or arrange with a Foreign Issuer for the
issuance of) the Letter of Credit requested thereby. The Issuing Bank shall furnish a copy of such
Letter of Credit to the Administrative Borrower and the Administrative Agent following the issuance
thereof. In addition to the fees payable pursuant to Section 2.4(c)(ii), the Borrowers
shall pay or reimburse the Issuing Bank for normal and customary costs and expenses incurred by the
Issuing Bank in issuing, effecting payment under, amending or otherwise administering the Letters
of Credit.



          (c) Immediately upon the issuance by the Issuing Bank of a Letter of Credit and in accordance
with the terms and conditions of this Agreement, the Issuing Bank shall be deemed to have sold and
transferred to each Lender, and each Lender shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty, an undivided interest
and participation, to the extent of such Lender’s Revolving Commitment Ratio, in such Letter of
Credit and the obligations of the Borrowers with respect thereto (including, without limitation,
all Letter of Credit Obligations with respect thereto). The Issuing Bank shall promptly notify the
Administrative Agent of any draw under a Letter of Credit. At such time as the Administrative
Agent shall be notified by the Issuing Bank that the beneficiary under any Letter of Credit has
drawn on the same, the Administrative Agent shall promptly notify the Administrative Borrower and
the Swing Bank (or, at its option, all Lenders), by telephone or telecopy, of the amount of the
draw and, in the case of each Lender, such Lender’s portion of such draw amount as calculated in
accordance with its Revolving Commitment Ratio.



          (d) The Borrowers hereby agree to immediately reimburse the Issuing Bank for amounts paid by
the Issuing Bank in respect of draws under each Letter of Credit. In order to facilitate such
repayment, the Borrowers hereby irrevocably request the Lenders, and the Lenders hereby severally
agree, on the terms and conditions of this Agreement (other than as provided in Article 2 with
respect to the amounts of, the timing of requests for, and the repayment of Advances hereunder and
in Article 4 with respect to conditions precedent to Advances hereunder), with respect to any
drawing under a Letter of Credit, to make a Base Rate Advance on each day on which a draw is made
under any



55









 





Letter of Credit and in the amount of such draw, and to pay the proceeds of such Advance
directly to the Issuing Bank to reimburse the Issuing Bank for the amount paid by it upon such
draw. Each Lender shall pay its share of such Base Rate Advance by paying its portion of such
Advance to the Administrative Agent in accordance with Section 2.2(e) and its Revolving
Commitment Ratio, without reduction for any set-off or counterclaim of any nature whatsoever and
regardless of whether any Default exists or would be caused thereby. The disbursement of funds in
connection with a draw under a Letter of Credit pursuant to this Section shall be subject to the
terms and conditions of Section 2.2(e). The obligation of each Lender to make payments to
the Administrative Agent, for the account of the Issuing Bank, in accordance with this Section
2.15 shall be absolute and unconditional and no Lender shall be relieved of its obligations to
make such payments by reason of noncompliance by any other Person with the terms of the Letter of
Credit or for any other reason (other than the gross negligence or willful misconduct of the
Issuing Bank in paying such Letter of Credit, as determined by a final non-appealable judgment of a
court of competent jurisdiction). The Administrative Agent shall promptly remit to the Issuing
Bank the amounts so received from the other Lenders. Any overdue amounts payable by the Lenders to
the Issuing Bank in respect of a draw under any Letter of Credit shall bear interest, payable on
demand, (x) for the first two (2) Business Days, at the Federal Funds Rate, and (y) thereafter, at
the Base Rate. Notwithstanding the foregoing, at the request of the Administrative Agent, the
Swing Bank may, at its option and subject to the conditions set forth in Section 2.2(g)
other than the condition that the applicable conditions precedent set forth in Article 4 be
satisfied, make Swing Loans to reimburse the Issuing Bank for amounts drawn under Letters of
Credit.



          (e) The Borrowers agree that each Advance by the Lenders to reimburse the Issuing Bank for
draws under any Letter of Credit, shall, for all purposes hereunder, unless and until converted
into a Eurodollar Advance pursuant to Section 2.2(b)(ii), be deemed to be a Base Rate
Advance under the Revolving Loan Commitment and shall be payable and bear interest in accordance
with all other Base Rate Advances of Revolving Loans.



          (f) The Borrowers agree that any action taken or omitted to be taken by the Issuing Bank in
connection with any Letter of Credit, except for such actions or omissions as shall constitute
gross negligence or willful misconduct on the part of such Issuing Bank as determined by a final
non-appealable judgment of a court of competent jurisdiction, shall be binding on the Borrowers as
between the Borrowers and the Issuing Bank, and shall not result in any liability of the Issuing
Bank to the Borrowers. The obligation of the Borrowers to reimburse the Issuing Bank for a drawing
under any Letter of Credit or the Lenders for Advances made by them to the Issuing Bank on account
of draws made under the Letters of Credit shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under all circumstances
whatsoever (except if arising from the gross negligence or willful misconduct on the part of such
Issuing Bank as determined by a final non-appealable



56









 





judgment of a court of competent jurisdiction), including, without limitation, the following
circumstances:


               (i) Any lack of validity or enforceability of any Loan Document;



               (ii) Any amendment or waiver of or consent to any departure from any or all of the Loan
Documents;



               (iii) Any improper use which may be made of any Letter of Credit or any improper acts or
omissions of any beneficiary or transferee of any Letter of Credit in connection therewith;



               (iv) The existence of any claim, set-off, defense or any right which any Borrower may have at
any time against any beneficiary or any transferee of any Letter of Credit (or Persons for whom any
such beneficiary or any such transferee may be acting), any Lender or any other Person, whether in
connection with any Letter of Credit, any transaction contemplated by any Letter of Credit, this
Agreement, or any other Loan Document, or any unrelated transaction;



               (v) Any statement or any other documents presented under any Letter of Credit proving to be
insufficient, forged, fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;



               (vi) The insolvency of any Person issuing any documents in connection with any Letter of
Credit;



               (vii) Any breach of any agreement between any Borrower and any beneficiary or transferee of
any Letter of Credit;



               (viii) Any irregularity in the transaction with respect to which any Letter of Credit is
issued, including any fraud by the beneficiary or any transferee of such Letter of Credit;



               (ix) Any errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, wireless or otherwise, whether or not they are in code;



               (x) Any act, error, neglect or default, omission, insolvency or failure of business of any of
the correspondents of the Issuing Bank;



               (xi) Any other circumstances arising from causes beyond the control of the Issuing Bank;



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               (xii) Payment by the Issuing Bank under any Letter of Credit against presentation of a sight
draft or a certificate which does not comply with the terms of such Letter of Credit, provided that
such payment shall not have constituted gross negligence or willful misconduct of the Issuing Bank
as determined by a final non-appealable judgment of a court of competent jurisdiction; and



               (xiii) Any other circumstance or happening whatsoever, whether or not similar to any of the
foregoing.



          (g) The Borrowers will indemnify and hold harmless each Indemnified Person from and against
any and all claims, liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever (including reasonable
attorneys’ fees) which may be imposed on, incurred by or asserted against such Indemnified Person
in any way relating to or arising out of the issuance of a Letter of Credit, except that the
Borrowers shall not be liable to an Indemnified Person for any portion of such claims, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or willful misconduct of such Indemnified Person
as determined by a final non-appealable judgment of a court of competent jurisdiction. This
Section 2.15(g) shall survive termination of this Agreement.



          (h) Each Lender shall be responsible (to the extent the Borrowers are obligated to reimburse
the Issuing Bank under the Loan Documents and the Issuing Bank is not reimbursed by the Borrowers)
for its pro rata share (based on such Lender’s Revolving Commitment Ratio) of any and all
reasonable out-of-pocket costs, expenses (including reasonable legal fees) and disbursements which
may be incurred or made by the Issuing Bank in connection with the collection of any amounts due
under, the administration of, or the presentation or enforcement of any rights conferred by any
Letter of Credit, any Borrower’s or any Guarantor’s obligations to reimburse draws thereunder or
otherwise. In the event the Borrowers shall fail to pay such expenses of the Issuing Bank within
fifteen (15) days of demand for payment by the Issuing Bank, each Lender shall thereupon pay to the
Issuing Bank its pro rata share (based on such Lender’s Revolving Commitment Ratio) of such
expenses within ten (10) days from the date of the Issuing Bank’s notice to the Lenders of the
Borrowers’ failure to pay; provided, however, that if the Borrowers shall
thereafter pay such expenses, the Issuing Bank will repay to each Lender the amounts received from
such Lender hereunder.



          (i) Unless otherwise expressly agreed by the Issuing Bank and the Borrowers when a Letter of
Credit is issued and subject to Applicable Laws, (i) each Standby Letter of Credit shall be
governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be
published by the Institute of International Banking Law & Practice on any date any Letter of Credit
may be issued) and (ii) each Commercial Letter of Credit shall be governed by the Uniform Customs
and (iii) in both



58









 




cases, to the extent not inconsistent therewith, the governing law of this Agreement set forth
in Section 11.7.



     Section 2.16 Bank Products. Any Borrower Party may request and any Lender may, in its
sole and absolute discretion, arrange for such Borrower Party to obtain from such Lender or any
Affiliate of such Lender, Bank Products although no Borrower Party is required to do so. If any
Bank Products are provided by an Affiliate of any Lender, the Borrower Parties agree to indemnify
and hold the Lender Group, or any of them, harmless from any and all costs and obligations now or
hereafter incurred by the Lender Group, or any of them, which arise from any indemnity given by
such Lender to any of its Affiliates, as applicable, related to such Bank Products;
provided, however, nothing contained herein is intended to limit the Borrower
Parties’ rights, with respect to such Lender or any of its Affiliates, as applicable, if any, which
arise as a result of the execution of documents by and between the Borrower Parties and such Person
which relate to any Bank Products. The agreement contained in this Section shall survive
termination of this Agreement. The Borrower Parties acknowledge and agree that the obtaining of
Bank Products from any Lender or its Affiliates (a) is in the sole and absolute discretion of such
Lender or such Affiliates, and (b) is subject to all rules and regulations of such Lender or such
Affiliates.



     Section 2.17 Additional Increase of Commitments; Additional Lenders.



          (a) Increase of the Revolving Loan Commitment.



               (i) So long as no Event of Default has occurred and is continuing, Parent, on behalf of
Borrowers, may request the right to effectuate increases in the Revolving Loan Commitment (any such
increase, a “Commitment Increase”), by an aggregate additional amount of up to $45,000,000
for all such Commitment Increases (the “Commitment Increase Cap”), during the term of this
Agreement by delivering a Notice of Requested Commitment Increase to the Administrative Agent
substantially in the form of Exhibit I (a “Notice of Requested Commitment
Increase”), provided that, in each case: (A) each Commitment Increase shall be in minimum
increments of $15,000,000; (B) the proposed Commitment Increase shall have been consented to in
writing by the Administrative Agent (such consent not to be unreasonably withheld), each Lender (if
any) who is increasing its portion of the Revolving Loan Commitment and any other bank or financial
institution acceptable to the Borrowers and the Administrative Agent that has agreed to become a
Lender in respect of all or a portion of the Commitment Increase (a “New Lender”); and (C)
the proposed Commitment Increase, together with any prior Commitment Increase, shall not exceed the
Commitment Increase Cap. Each Notice of Requested Commitment Increase shall specify: (1) the
amount of the proposed Commitment Increase and (2) the requested date of the proposed Commitment
Increase (which shall be at least thirty (30) days from the date of delivery of the Notice of
Requested Commitment Increase). Each Notice of Requested Commitment Increase shall be binding on
all Borrowers. Upon the effective



59









 





date of any Commitment Increase, Parent shall deliver to the Administrative Agent a
certificate of the chief financial officer of Parent certifying that no Default or Event of Default
then exists or would be caused thereby. No Commitment Increase shall be effective until the
Administrative Agent shall have received amendments to this Agreement and the other Loan Documents,
commitments of Lenders or New Lenders in an aggregate amount equal to such Commitment Increase,
Lender Agreements for each Lender or New Lender committing to such Commitment Increase, any upfront
fees to be paid to the Lenders committing to such Commitment Increase, and, if requested, opinion
letters, Revolving Loan Notes and such other agreements, documents and instruments requested by and
reasonably satisfactory to the Administrative Agent in its Permitted Discretion evidencing and
setting forth the conditions of such Commitment Increase.



               (ii) If the Administrative Agent approves a proposed Commitment Increase, the Administrative
Agent shall deliver a copy of the Notice of Requested Commitment Increase relating thereto to each
Lender. No Lender (or any successor thereto) shall have any obligation to increase its portion of
the Revolving Loan Commitment or its other obligations under this Agreement or the other Loan
Documents, and any decision by a Lender to increase its portion of the Revolving Loan Commitment
shall be made in its sole discretion independently from any other Lender. If the Administrative
Agent receives commitments from the Lenders or the New Lenders in excess of the amount of the
proposed Commitment Increase, the Administrative Agent shall have the right, in its sole
discretion, to reduce and reallocate (within the minimum and maximum amounts specified by each such
Lender or New Lender in its notice to the Administrative Agent) the shares of such Commitment
Increase of the Lenders or New Lenders willing to fund the proposed Commitment Increase so that the
total committed shares of the proposed Commitment Increase equals the proposed Commitment Increase.
The Administrative Agent shall notify each Lender or New Lender, as the case may be, whether its
proposed share of the proposed Commitment Increase has been accepted and, if so, the amount of its
share of such Commitment Increase, and such Lender shall thereafter execute and deliver a Lender
Agreement with respect to its respective share of such Commitment Increase.



               (iii) Notwithstanding anything to the contrary contained herein, each Commitment Increase
meeting the conditions set forth in Section 2.17(a)(i) shall not require the consent of any
Lender other than those Lenders, if any, which have agreed to increase their portions of the
Revolving Loan Commitment in connection with such Commitment Increase and shall not constitute an
amendment, modification or waiver that is subject to Section 11.12 and shall be effective
as of the later of (a) the date specified in the applicable Notice of Requested Commitment Increase
and (b) the date upon which the foregoing conditions shall have been satisfied or waived by the
Administrative Agent and the Lenders which have agreed to increase their portions of the Revolving
Loan Commitment, or by the requisite Lenders in accordance with Section 11.12 in the case
of a waiver of an Event of Default, as applicable.



60









 





          (b) Effect of Commitment Increase. After giving effect to any Commitment Increase,
the outstanding Revolving Loans may not be held pro rata in accordance with the new Revolving Loan
Commitment. In order to remedy the foregoing, on the effective date of each Commitment Increase,
the Lenders (including any New Lenders) shall reallocate the Revolving Loans owed to them among
themselves so that, after giving effect thereto, the Revolving Loans will be held by the Lenders
(including any New Lenders) on a pro rata basis in accordance with their respective Revolving
Commitment Ratios (after giving effect to such Commitment Increase). Each Lender agrees to wire
immediately available funds to the Administrative Agent in accordance with this Agreement as may be
required by the Administrative Agent in connection with the foregoing. Notwithstanding the
provisions of Section 11.5, the reallocations so made by each Lender whose Revolving
Commitment Ratio has increased shall be deemed to be a purchase of a corresponding amount of the
Revolving Loans of the Lender or Lenders whose Revolving Commitment Ratio have decreased and shall
not be considered an assignment for purposes of Section 11.5



ARTICLE 3.




GUARANTY




     Section 3.1 Guaranty.



          (a) Each Guarantor hereby guarantees to the Administrative Agent, for the benefit of the
Lender Group, the full and prompt payment of the Obligations, including, without limitation, any
interest therein (including, without limitation, interest as provided in this Agreement, accruing
after the filing of a petition initiating any Insolvency Proceedings, whether or not such interest
accrues or is recoverable against the Borrowers after the filing of such petition for purposes of
the Bankruptcy Code or is an allowed claim in such proceeding), plus reasonable attorneys’ fees and
expenses if the obligations represented by this Guaranty are collected by law, through an
attorney-at-law, or under advice therefrom.



          (b) Regardless of whether any proposed guarantor or any other Person shall become in any other
way responsible to the Lender Group, or any of them, for or in respect of the Obligations or any
part thereof, and regardless of whether or not any Person now or hereafter responsible to the
Lender Group, or any of them, for the Obligations or any part thereof, whether under this Guaranty
or otherwise, shall cease to be so liable, each Guarantor hereby declares and agrees that this
Guaranty shall be a joint and several obligation, shall be a continuing guaranty and shall be
operative and binding until the Obligations shall have been indefeasibly paid in full in cash (or
in the case of Letter of Credit Obligations, secured through delivery of cash collateral in an
amount equal to one hundred and five percent (105%) of the Letter of Credit Obligations) and the
Revolving Loan Commitment shall have been terminated.



61









 





          (c) Each Guarantor absolutely, unconditionally and irrevocably waives any and all right to
assert any defense (other than the defense of payment in cash in full, to the extent of its
obligations hereunder, or a defense that such Guarantor’s liability is limited as provided in
Section 3.1(g)), set-off, counterclaim or cross-claim of any nature whatsoever with respect
to this Guaranty or the obligations of the Guarantors under this Guaranty or the obligations of any
other Person or party (including, without limitation, the Borrowers) relating to this Guaranty or
the obligations of any of the Guarantors under this Guaranty or otherwise with respect to the
Obligations in any action or proceeding brought by the Administrative Agent or any other member of
the Lender Group to collect the Obligations or any portion thereof, or to enforce the obligations
of any of the Guarantors under this Guaranty.



          (d) The Lender Group, or any of them, may from time to time, without exonerating or releasing
any Guarantor in any way under this Guaranty, (i) take such further or other security or securities
for the Obligations or any part thereof as they may deem proper, or (ii) release, discharge,
abandon or otherwise deal with or fail to deal with any Guarantor of the Obligations or any
security or securities therefor or any part thereof now or hereafter held by the Lender Group, or
any of them, or (iii) amend, modify, extend, accelerate or waive in any manner any of the
provisions, terms, or conditions of the Loan Documents, all as they may consider expedient or
appropriate in their sole discretion. Without limiting the generality of the foregoing, or of
Section 3.1(e), it is understood that the Lender Group, or any of them, may, without
exonerating or releasing any Guarantor, give up, modify or abstain from perfecting or taking
advantage of any security for the Obligations and accept or make any compositions or arrangements,
and realize upon any security for the Obligations when, and in such manner, and with or without
notice, all as such Person may deem expedient.



          (e) Each Guarantor acknowledges and agrees that no change in the nature or terms of the
Obligations or any of the Loan Documents, or other agreements, instruments or contracts evidencing,
related to or attendant with the Obligations (including any novation), shall discharge all or any
part of the liabilities and obligations of such Guarantor pursuant to this Guaranty; it being the
purpose and intent of the Guarantors and the Lender Group that the covenants, agreements and all
liabilities and obligations of each Guarantor hereunder are absolute, unconditional and irrevocable
under any and all circumstances. Without limiting the generality of the foregoing, each Guarantor
agrees that until each and every one of the covenants and agreements of this Guaranty is fully
performed, and without possibility of recourse, whether by operation of law or otherwise, such
Guarantor’s undertakings hereunder shall not be released, in whole or in part, by any action or
thing which might, but for this paragraph of this Guaranty, be deemed a legal or equitable
discharge of a surety or guarantor, or by reason of any waiver, omission of the Lender Group, or
any of them, or their failure to proceed promptly or otherwise, or by reason of any action taken or
omitted by the Lender Group, or any of them, whether or not such action or failure to act varies or
increases the risk of, or affects the rights or remedies of, such Guarantor or by reason of any
further dealings



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between the Borrowers, on the one hand, and any member of the Lender Group, on the other hand,
or any other guarantor or surety, and such Guarantor hereby expressly waives and surrenders any
defense to its liability hereunder, or any right of counterclaim or offset of any nature or
description which it may have or may exist based upon, and shall be deemed to have consented to,
any of the foregoing acts, omissions, things, agreements or waivers.



          (f) The Lender Group, or any of them, may, without demand or notice of any kind upon or to any
Guarantor, at any time or from time to time when any amount shall be due and payable hereunder by
any Guarantor following and during the continuance of an Event of Default, if the Borrowers shall
not have timely paid any of the Obligations (or in the case of Letter of Credit Obligations,
secured through delivery of cash collateral in an amount equal to one hundred and five percent
(105%) of the Letter of Credit Obligations), set-off and appropriate and apply to any portion of
the Obligations hereby guaranteed, and in such order of application as the Administrative Agent may
from time to time elect in accordance with this Agreement, any deposits, property, balances, credit
accounts or moneys of any Guarantor in the possession of any member of the Lender Group or under
their respective control for any purpose. If and to the extent that any Guarantor makes any
payment to the Administrative Agent or any other Person pursuant to or in respect of this Guaranty,
any claim which such Guarantor may have against any Borrower by reason thereof shall be subject and
subordinate to the prior payment in full of the Obligations to the satisfaction of the Lender
Group.



          (g) The creation or existence from time to time of Obligations in excess of the amount
committed to or outstanding on the date of this Guaranty is hereby authorized, without notice to
any Guarantor, and shall in no way impair or affect this Guaranty or the rights of the Lender Group
herein. It is the intention of each Guarantor and the Administrative Agent that each Guarantor’s
obligations hereunder shall be, but not in excess of, the Maximum Guaranteed Amount (as herein
defined). The “Maximum Guaranteed Amount” with respect to any Guarantor, shall mean the
maximum amount which could be paid by such Guarantor without rendering this Guaranty void or
voidable as would otherwise be held or determined by a court of competent jurisdiction in any
action or proceeding involving any state or Federal bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws relating to the insolvency of debtors.



          (h) Upon the bankruptcy or winding up or other distribution of assets of any Borrower, or of
any surety or guarantor (other than the applicable Guarantor) for any Obligations of the Borrowers
to the Lender Group, or any of them, the rights of the Administrative Agent against any Guarantor
shall not be affected or impaired by the omission of any member of the Lender Group to prove its
claim, or to prove the full claim, as appropriate, against the Borrowers, or any such other
guarantor or surety, and the Administrative Agent may prove such claims as it sees fit and may
refrain from proving any claim and in its discretion may value as it sees fit or refrain from
valuing any



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security held by it without in any way releasing, reducing or otherwise affecting the
liability to the Lender Group of each of the Guarantors.



          (i) Each Guarantor hereby absolutely, unconditionally and irrevocably expressly waives, except
to the extent such waiver would be expressly prohibited by Applicable Law, the following: (i)
notice of acceptance of this Guaranty, (ii) notice of the existence or creation of all or any of
the Obligations, (iii) presentment, demand, notice of dishonor, protest and all other notices
whatsoever (other than notices expressly required hereunder or under any other Loan Document to
which any Guarantor is a party), (iv) all diligence in collection or protection of or realization
upon the Obligations or any part thereof, any obligation hereunder, or any security for any of the
foregoing, (v) all rights to enforce any remedy which the Lender Group, or any of them, may have
against any Borrower, (vi) until the Obligations shall have been paid in full in cash (or in the
case of a Letter of Credit Obligations, secured through delivery of cash collateral in an amount
equal to one hundred and five percent (105%) of the Letter of Credit Obligations), all rights of
subrogation, indemnification, contribution and reimbursement from any Borrower for amounts paid
hereunder and any benefit of, or right to participate in, any collateral or security now or
hereinafter held by the Lender Group, or any of them, in respect of the Obligations, and (vii) any
and all rights under Official Code of Georgia Sections 10-7-23 and 10-7-24. If a claim is ever
made upon any member of the Lender Group for the repayment or recovery of any amount or amounts
received by such Person in payment of any of the Obligations and such Person repays all or part of
such amount by reason of (A) any judgment, decree or order of any court or administrative body
having jurisdiction over such Person or any of its property, or (B) any settlement or compromise of
any such claim effected by such Person with any such claimant, including any Borrower, then in such
event each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall
be binding upon such Guarantor, notwithstanding any revocation hereof or the cancellation of any
promissory note or other instrument evidencing any of the Obligations, and such Guarantor shall be
and remain obligated to such Person hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by such Person.



          (j) This Guaranty is a continuing guaranty of the Obligations and all liabilities to which it
applies or may apply under the terms hereof and shall be conclusively presumed to have been created
in reliance hereon. No failure or delay by any member of the Lender Group in the exercise of any
right, power, privilege or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Administrative Agent of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy and no course of dealing between any
Guarantor and any member of the Lender Group shall operate as a waiver thereof. No action by any
member of the Lender Group permitted hereunder shall in any way impair or affect this Guaranty.
For the purpose of this Guaranty, the Obligations shall include, without limitation, all
Obligations of the Borrowers to the Lender Group, notwithstanding any right or power of any third
party, individually or in the name of any Borrower and the
Lender Group, or any of them, to assert any claim or defense as to the invalidity or
unenforceability of any such Obligation, and no such claim or defense shall impair or affect the
obligations of any Guarantor hereunder.



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          (k) This is a guaranty of payment and not of collection. In the event the Administrative
Agent makes a demand upon any Guarantor in accordance with the terms of this Guaranty, such
Guarantor shall be held and bound to the Administrative Agent directly as debtor in respect of the
payment of the amounts hereby guaranteed. All costs and expenses, including, without limitation,
reasonable attorneys’ fees and expenses, incurred by the Administrative Agent in obtaining
performance of or collecting payments due under this Guaranty shall be deemed part of the
Obligations guaranteed hereby.



          (l) Each Subsidiary Guarantor is a direct or indirect wholly owned Domestic Subsidiary of a
Borrower. Each Guarantor expressly represents and acknowledges that any financial accommodations
by the Lender Group to the Borrowers, including, without limitation, the extension of credit, are
and will be of direct interest, benefit and advantage to such Guarantor.



          (m) Each Guarantor shall be entitled to subrogation and contribution rights from and against
the Borrowers to the extent any Guarantor is required to pay to any member of the Lender Group any
amount in excess of the Loans advanced directly to, or other Obligations incurred directly by, such
Guarantor or as otherwise available under Applicable Law; provided, however, that such subrogation
and contribution rights are and shall be subject to the terms and conditions of this Section
3.1 and Section 13.5. The payment obligation of a Guarantor to any other Guarantor
under any Applicable Law regarding contribution rights among co-obligors or otherwise shall be
subordinate and subject in right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Guaranty, and such Guarantor shall not exercise any
right or remedy with respect to such rights until payment and satisfaction in full of all such
obligations.



     Section 3.2 Special Provisions Applicable to Subsidiary Guarantors.



          (a) Pursuant to Section 6.20 of this Agreement, any new Domestic Subsidiary of any
Borrower is required to enter into this Agreement by executing and delivering to the Administrative
Agent a Guaranty Supplement. Upon the execution and delivery of a Guaranty Supplement by such new
Domestic Subsidiary, such Domestic Subsidiary shall become a Guarantor and Borrower Party hereunder
with the same force and effect as if originally named as a Guarantor or Borrower Party herein. The
execution and delivery of any Guaranty Supplement (or any other supplement to any Loan Document
delivered in connection therewith) adding an additional Guarantor as a party to this Agreement or
any other Applicable Loan Document shall not require the consent of any other party hereto. The
rights and obligations of each party hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor hereunder.



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ARTICLE 4.




CONDITIONS PRECEDENT




     Section 4.1 Conditions Precedent to Closing. The obligations of the Lenders to
undertake the Revolving Loan Commitments and to make any initial Advance hereunder, and the
obligation of the Issuing Bank to issue (or arrange for the issuance of) any initial Letter of
Credit hereunder, are subject to the prior fulfillment of each of the following conditions:



          (a) The Administrative Agent shall have received each of the following, in form and substance
satisfactory to the Administrative Agent:



               (i) This duly executed Agreement;



               (ii) A duly executed Revolving Loan Note to the order of each Lender requesting a promissory
note in the amount of such Lender’s Revolving Commitment Ratio of the Revolving Loan Commitment;



               (iii) The Security Agreement duly executed by the Borrower Parties, together with Uniform
Commercial Code financing statements related thereto;



               (iv) The Fee Letter duly executed by the Borrowers;



               (v) The legal opinion of in-house counsel of Parent, addressed to the Lender Group;



               (vi) The legal opinion of Trenam, Kemker, Scharf, Barkin, Frye, O’Neill & Mullis, P.A, Florida
counsel to the Borrower Parties, addressed to the Lender Group;



               (vii) A loan certificate signed by an Authorized Signatory of each Borrower Party, including a
certificate of incumbency with respect to each Authorized Signatory of such Borrower Party,
together with appropriate attachments which shall include, without limitation, the following: (A) a
copy of Certificate of Incorporation or Formation of such Borrower Party certified to be true,
complete and correct by the Secretary of State of the State of such Borrower Party’s incorporation
or formation, (B) a true, complete and correct copy of the By-Laws of such Borrower Party, (C) a
true, complete and correct copy of the resolutions of such Borrower Party authorizing the
execution, delivery and performance by such Borrower Party of the Loan Documents and the Bank
Products Documents and authorizing the borrowings or guaranty, as applicable, hereunder, (D)
certificates of active status or good standing from the jurisdiction where such Borrower Party was
organized or incorporated, (E) copies of employment contracts for key management level employees of
such Borrower Party, and



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(F) copies of all agreements among the shareholders of such Borrower Party to which such
Borrower Party is a party and plans and agreements (other than agreements entered into pursuant to
or in connection with a disclosed plan) providing for the grant, issuance or sale of Equity
Interests of such Borrower Party;



               (viii) Parent and its Subsidiaries (a) projected financial statements for the remainder of
fiscal year 2008 and 2009, including its income statement, balance sheet, statement of cash flows
and availability forecast, on a quarter by quarter basis, and (b) projected financial statements,
including income statement, balance sheet and statement of cash flows, for fiscal year 2010 on an
annual basis;



               (ix) Certificates of insurance and loss payable endorsements with respect to the Borrower
Parties and certified copies of all insurance policies of the Borrower Parties, in each case,
meeting the requirements of Section 6.5;



               (x) Pay-off letters, termination statements, canceled mortgages and the like required by the
Administrative Agent in connection with the removal of any Liens (other than Permitted Liens),
including, without limitation, all tax liens, against the assets of the Borrower Parties;



               (xi) Lien search results with respect to the Borrower Parties from all appropriate
jurisdictions and filing offices;



               (xii) Evidence satisfactory to the Administrative Agent that the Liens granted pursuant to the
Security Documents will be first priority perfected Liens on the Collateral (subject only to
Permitted Liens);



               (xiii) Payment of all fees and expenses payable to the Administrative Agent, the Affiliates of
the Administrative Agent, and the Lenders in connection with the execution and delivery of this
Agreement, including, without limitation, fees and expenses of counsel to the Administrative Agent;



               (xiv) (A) An affidavit by an Authorized Signatory of each Borrower Party that the Loan
Documents executed by such Borrower Party have been executed and delivered outside of the State of
Florida or (B) evidence that all applicable stamp tax or other tax related to the Loan Documents
have been paid; and



               (xv) All such other documents as the Administrative Agent may reasonably request, certified by
an appropriate governmental official or an Authorized Signatory if so requested.



          (b) The Lender Group shall have received evidence satisfactory to them that no change in the
business assets, management, operations, financial condition or prospects of the Borrower Parties
shall have occurred since August 2, 2008, which change has had or would be reasonably expected to
have a Materially Adverse Effect,



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and the Lender Group shall have received a certificate of an Authorized Signatory of the
Administrative Borrower so stating.



          (c) The Lender Group shall have received the financial statements described in Section
5.1(k), each in form and substance to the members of the Lender Group.



          (d) The Lender Group shall have received evidence satisfactory to them that all Necessary
Authorizations are in full force and effect and are not subject to any pending or threatened
reversal or cancellation, that no other consents or approvals are required and that no Default
exists, after giving effect to the initial Advance hereunder, and the Lender Group shall have
received a certificate of an Authorized Signatory of the Administrative Borrower so stating.



          (e) The Administrative Agent shall have received confirmation that the original Uniform
Commercial Code financing statements as debtor and naming the Administrative Agent as secured party
have been duly filed in all appropriate jurisdictions, in such form as shall be satisfactory to the
Administrative Agent.



          (f) The Administrative Agent shall have completed such other business and legal due diligence
with respect to the Borrowers and the results thereof shall be acceptable to the Administrative
Agent, in its sole discretion.



     Section 4.2 Conditions Precedent to Initial Advance. The obligations of the Lenders
to undertake the Revolving Loan Commitments and to make the initial Advance hereunder, and the
obligation of the Issuing Bank to issue the initial Letter of Credit hereunder, are subject to the
prior fulfillment of each of the following conditions:



          (a) The Administrative Agent shall have received duly executed Blocked Account Agreements for
each Concentration Account and, to the extent required by Section 6.15, each Collateral
Related Account.



          (b) The Administrative Agent shall have received a duly executed Request for Advance for the
initial Advance of the Loans.



          (c) The Administrative Agent shall have received a Borrowing Base Certificate, in form and
substance satisfactory to the Lender Group, reflecting that, among other things, as of such date,
after giving effect to any borrowings hereunder on such date and any issuance of any Letters of
Credit hereunder on such date, Availability shall not be less than $25,000,000 (with trade
payables, expenses and liabilities being paid in the ordinary course of business).



          (d) The Lender Group shall have received evidence satisfactory to them that no change in the
business assets, management, operations, financial condition or prospects of the Borrower Parties
shall have occurred since August 2, 2008, which



68









 




change has had or would be reasonably expected to have a Materially Adverse Effect, and the Lender
Group shall have received a certificate of an Authorized Signatory of the Administrative Borrower
so stating.



          (e) The Administrative Agent shall have completed background checks with respect to certain
key officers of the Borrower Parties and such background checks shall be satisfactory to the
Administrative Agent.



          (f) The Administrative Agent shall have received evidence satisfactory to it that the field
audit of all Credit Card Receivables and Inventory has been completed by auditors and appraisers
selected by the Administrative Agent and such audit is in form and substance reasonably
satisfactory to the Administrative Agent.



     Section 4.3 Conditions Precedent to Each Advance. The obligation of the Lenders to
make each Advance, including the initial Advance hereunder (but excluding Advances, the proceeds of
which are to reimburse (i) the Swing Bank for Swing Loans, (ii) the Administrative Agent for Agent
Advances or (iii) the Issuing Bank for amounts drawn under a Letter of Credit), is subject to the
fulfillment of each of the following conditions immediately prior to or contemporaneously with such
Advance:



          (a) All of the representations and warranties of the Borrower Parties under this Agreement and
the other Loan Documents, which, pursuant to Section 5.4, are made at and as of the time of
such Advance, shall be true and correct in all material respects (without duplication of any
materiality qualifier contained therein) at such time, both before and after giving effect to the
application of the proceeds of the Advance;



          (b) Since August 2, 2008, there shall have been no change that has had or would be reasonably
expected to have a Materially Adverse Effect;



          (c) There shall not exist on the date of such Advance and after giving effect thereto, a
Default; and



          (d) The Administrative Agent and the Lenders shall have received all such other certificates,
reports, statements, opinions of counsel, or other documents as the Administrative Agent or Lenders
may reasonably request and all other conditions to the making of such Advance which are set forth
in this Agreement shall have been fulfilled.



          The Borrowers hereby agree that the delivery of any Request for Advance hereunder or any
telephonic request for an Advance hereunder shall be deemed to be the certification of the
Authorized Signatory thereof that all of the conditions set forth in this Section 4.3 have
been satisfied. Notwithstanding the foregoing, if the conditions, or any of them, set forth above
are not satisfied, such conditions may be waived by the requisite Lenders under Section
11.12, and, in any event the Majority Lenders may waive the condition set forth in Section
4.3(c).



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     Section 4.4 Conditions Precedent to Each Letter of Credit. The obligation of the
Issuing Bank to issue (or arrange for the issuance of) each Letter of Credit (including the initial
Letter of Credit) hereunder is subject to the fulfillment of each of the following conditions
immediately prior to or contemporaneously with the issuance of such Letter of Credit:



          (a) All of the representations and warranties of the Borrower Parties under this Agreement and
the other Loan Documents, which, pursuant to Section 5.4, are made at and as of the time of
the issuance of such Letter of Credit, shall be true and correct in all material respects (without
duplication of any materiality qualifier contained therein) at such time, both before and after
giving effect to the issuance of such Letter of Credit;



          (b) Since August 2, 2008, there shall have been no change that has had or would be reasonably
expected to have a Materially Adverse Effect;



          (c) There shall not exist on the date of issuance of such Letter of Credit, and after giving
effect thereto, a Default; and



          (d) The Administrative Agent and the Issuing Bank shall have received all such other
certificates, reports, statements, opinions of counsel, or other documents as the Administrative
Agent or the Issuing Bank may reasonably request and all other conditions to the issuance of such
Letter of Credit which are set forth in this Agreement shall have been fulfilled.



     Notwithstanding anything to the contrary contained herein, if Borrowers shall have failed to
satisfy any condition precedent contained in Section 4.2, then Borrowers shall nonetheless
be entitled to have Letters of Credit issued hereunder so long as the conditions in this Section
4.4 have been satisfied and the Administrative Agent has received cash collateral in an amount
equal to one hundred and five percent (105%) of the face amount of such Letters of Credit.



     Subject to the immediately preceding sentence, the Borrowers hereby agree that the delivery of
any Request for Issuance of a Letter of Credit hereunder shall be deemed to be the certification of
the Authorized Signatory thereof that all of the conditions set forth in this Section 4.4
have been satisfied. Notwithstanding the foregoing, if the conditions, or any of them, set forth
above are not satisfied, such conditions may be waived by the requisite Lenders under Section
11.12, and, in any event the Majority Lenders may waive the condition set forth in Section
4.4(c).



     Section 4.5 Conditions Subsequent to Closing. The following conditions subsequent
shall have been satisfied within the time frames set forth below (as may be extended by the
Administrative Agent in its sole discretion):



          (a) Within 45 days after the Agreement Date, the Administrative


70









 





Agent shall have received duly executed Blocked Account Agreements for each Concentration
Account and, to the extent required by Section 6.15, each Collateral Related Account.



          (b) Within 45 days after the Agreement Date, the Administrative Agent shall have completed
background checks with respect to certain key officers of the Borrower Parties and such background
checks shall be satisfactory to the Administrative Agent.



          (c) Within 60 days after the Agreement Date, the Administrative Agent shall have received
evidence satisfactory to it that the field audit of all Credit Card Receivables and Inventory has
been completed by auditors and appraisers selected by the Administrative Agent and such audit is in
form and substance reasonably satisfactory to the Administrative Agent.



     With respect to the conditions subsequent in items (b) and (c) above, the Administrative Agent
shall be diligent in its efforts to complete each such condition within the required timeframe and
the Borrowers will diligently cooperate with the Administrative Agent to help facilitate the
completion of each such condition subsequent.



ARTICLE 5.




REPRESENTATIONS AND WARRANTIES




     Section 5.1 General Representations and Warranties. In order to induce the Lender
Group to enter into this Agreement and to extend the Loans and issue the Letters of Credit for the
benefit of the Borrowers, each Borrower Party hereby represents, and warrants that:



          (a) Organization; Power; Qualification. Each Borrower Party and each Subsidiary of a
Borrower Party (i) is a corporation, partnership or limited liability company duly organized,
validly existing, and in active status or good standing under the laws of its state of
incorporation or formation, (ii) has the corporate or other company power and authority to own or
lease and operate its properties and to carry on its business as now being and hereafter proposed
to be conducted, and (iii) is duly qualified and is in active status or good standing as a foreign
corporation or other company, and authorized to do business, in each jurisdiction in which the
character of its properties or the nature of its business requires such qualification or
authorization except in each case where the failure to have such power and authority described in
clause (ii) above or to be so qualified as described in clause (iii) above would not reasonably be
expected to have a Materially Adverse Effect.



71









 





          (b) Authorization; Enforceability. Each Borrower Party has the power and has taken
all necessary action, corporate or otherwise, to authorize it to execute, deliver, and perform its
obligations under this Agreement and each of the other Loan Documents to which it is a party in
accordance with the terms thereof and to consummate the transactions contemplated hereby and
thereby. Each of this Agreement and each other Loan Document to which a Borrower Party is a party
has been duly executed and delivered by such Borrower Party, and (except for Requests for Advance,
Requests for Issuance of Letters of Credit, Notices of Conversion/Continuation, Notices of
Requested Commitment Increases and Uniform Commercial Code financing statements solely to the
extent they do not contain any affirmative obligations of the Borrower Parties) is a legal, valid
and binding obligation of such Borrower Party, enforceable in accordance with its terms except to
the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditor’s rights generally or by
general principles of equity (regardless of whether such enforcement is considered in a proceeding
in equity or at law).



          (c) Partnerships; Joint Ventures; Subsidiaries. Except as disclosed on Schedule
5.1(c)-1, as of the Agreement Date, no Borrower Party or any Subsidiary of a Borrower Party has
any Subsidiaries, which Subsidiaries are identified on such Schedule as Domestic Subsidiaries or
Foreign Subsidiaries. As of the Agreement Date, no Borrower Party or any Subsidiary of a Borrower
Party is a partner or joint venturer in any partnership or joint venture other than (i) the
Subsidiaries listed on Schedule 5.1(c)-1 and (ii) the partnerships and joint ventures (that
are not Subsidiaries) listed on Schedule 5.1(c)-2. Schedule 5.1(c)-1 and
Schedule 5.1(c)-2 set forth, for each Person set forth thereon, a complete and accurate
statement of (i) the percentage ownership of each such Person by the applicable Borrower Party or
Subsidiary of a Borrower Party as of the Agreement Date, (ii) the state or other jurisdiction of
incorporation or formation, as appropriate, of each such Person as of the Agreement Date, (iii)
each state in which each such Person is qualified to do business as of the Agreement Date and (iv)
all of each such Person’s trade names, trade styles or doing business forms which such Person has
used or under which such Person has transacted business during the five (5) year period immediately
preceding the Agreement Date.



          (d) Capital Stock and Related Matters. The authorized Equity Interests as of the
Agreement Date of each Borrower Party and each Subsidiary of a Borrower Party that is a corporation
and the number of shares of such Equity Interests that are issued and outstanding as of the
Agreement Date are as set forth on Schedule 5.1(d). All of the shares of such Equity
Interests in each Borrower Party (other than Parent) and each Domestic Subsidiary that are issued
and outstanding as of the Agreement Date have been duly authorized and validly issued and are fully
paid and non-assessable. None of such Equity Interests in each Borrower Party (other than Parent)
and each Domestic Subsidiary have been issued in violation of the Securities Act, or the
securities, “Blue Sky” or other Applicable Laws of any applicable jurisdiction. As of the
Agreement Date, the Equity Interests of each such Borrower Party (other than Parent) and



72









 





each such Subsidiary of a Borrower Party are owned by the parties listed on Schedule
5.1(d) in the amounts set forth on such schedule and a description of the Equity Interests of
each such party is listed on Schedule 5.1(d). As of the Agreement Date, except as
described on Schedule 5.1(d), no Borrower Party (other than Parent) or any Subsidiary of a
Borrower Party has outstanding any stock or securities convertible into or exchangeable for any
shares of its Equity Interests, nor are there any preemptive or similar rights to subscribe for or
to purchase, or any other rights to subscribe for or to purchase, or any options for the purchase
of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls,
commitments, or claims of any character relating to, any Equity Interests or any stock or
securities convertible into or exchangeable for any Equity Interests. Except as set forth on
Schedule 5.1(d), as of the Agreement Date, no Borrower Party or any Subsidiary of any
Borrower Party is subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its Equity Interests or to register any shares of its Equity
Interests, and there are no agreements restricting the transfer of any shares of such Borrower
Party’s or such Subsidiary’s Equity Interests or restricting the ability of any Subsidiary of any
Borrower from making distributions, dividends or other Restricted Payments to such Borrower.



          (e) Compliance with Law, Loan Documents, and Contemplated Transactions. The
execution, delivery, and performance of this Agreement and each of the other Loan Documents and the
Bank Products Documents in accordance with their respective terms and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) violate any Applicable Law,
(ii) conflict with, result in a breach of, or constitute a default under the certificate of
incorporation or formation or by-laws, partnership agreement or operating agreement of any Borrower
Party or under any indenture, agreement, or other instrument to which any Borrower Party is a party
or by which any Borrower Party or any of its properties may be bound, or (iii) result in or require
the creation or imposition of any Lien upon or with any assets or property of any Borrower Party
except Permitted Liens.



          (f) Necessary Authorizations. Each Borrower Party and each Subsidiary of a Borrower
Party has obtained all Necessary Authorizations, and all such Necessary Authorizations are in full
force and effect except, other than with respect to the transactions contemplated by the Loan
Documents, where failure to obtain such Necessary Authorizations, or the failure of such Necessary
Authorizations to be in full force and effect, could not reasonably be expected to have a
Materially Adverse Effect. None of such Necessary Authorizations is the subject of any pending or,
to the best of each Borrower Party’s knowledge, threatened attack or revocation, by the grantor of
the Necessary Authorization except, other than with respect to the transactions contemplated by the
Loan Documents, where the revocation by the grantor of such Necessary Authorizations could not
reasonably be expected to have a Materially Adverse Effect.



          (g) Title to Properties. Each Borrower Party has good, marketable and legal title to,
or a valid leasehold interest in, all of its properties and assets except as



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could not, individually or in the aggregate, be expected to have a Materially Adverse Effect,
and none of such properties or assets is subject to any Liens, other than Permitted Liens.



          (h) Material Contracts. Schedule 5.1(h) contains a complete list, as of the
Agreement Date, of each Material Contract, true, correct and complete copies of which have been
delivered to the Administrative Agent. Schedule 5.1(h) further identifies, as of the
Agreement Date, each Material Contract that requires consent to the granting of a Lien in favor of
the Administrative Agent on the rights of any Borrower Party thereunder, with the exception of
consents from one of the other Borrower Parties, which consent is granted by virtue of execution of
this Agreement. No Borrower Party or any Subsidiary of a Borrower Party is in default under or
with respect to any Material Contract to which it is a party or by which it or any of its
properties are bound which default gives rise to a right of termination by the non-defaulting party
and which Material Contract, if terminated, could reasonably be expected to have a Materially
Adverse Effect.



          (i) Labor Matters. Except as disclosed on Schedule 5.1(i): as of the
Agreement Date, (i) no Borrower Party is engaged in any unfair labor practice; (ii) there is no
unfair labor practice complaint pending against any Borrower Party before the National Labor
Relations Board and no grievance or arbitration proceeding arising out of or under any collective
bargaining agreement that is so pending against any Borrower Party; and (iii) no strike or work
stoppage is in existence involving any employees of any Borrower Party, except (with respect to any
matter specified in clause (i) or (ii) above) such as could not reasonably be expected to have a
Materially Adverse Effect.



          (j) Taxes. Except as set forth on Schedule 5.1(j), all federal, state and
other material tax returns of each Borrower Party and each Subsidiary of a Borrower Party required
by law to be filed have been duly filed, all such tax returns are true, complete and correct in all
material respects, and all federal, state, and other material taxes (including without limitation,
all real estate and personal property, income, franchise, transfer and gains taxes), all general or
special assessments, and other governmental charges or levies upon each Borrower Party and each
Subsidiary of a Borrower Party and any of their respective properties, income, profits, and assets,
which are shown thereon as due and payable, have been paid, except any payment of any of the
foregoing which such Borrower Party or such Subsidiary, as applicable, is currently contesting in
good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP
have been provided on the books of such Borrower Party or such Subsidiary, as the case may be. As
of the Agreement Date, no adjustment relating to any tax returns has been proposed formally or
informally by any Governmental Authority and, to the knowledge of each Borrower Party no basis
exists for any such adjustment, except as reflected in the charges, accruals and reserves on the
books of the Borrower Parties and their Subsidiaries or except such as could not reasonably be
expected to have a Materially Adverse Effect. The charges, accruals, and reserves on the books of
the



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Borrower Parties and their Subsidiaries in respect of taxes are, in the reasonable judgment of
the Borrower Parties, adequate. Except as set forth on Schedule 5.1(j), as of the Agreement
Date, no Borrower Party or any Subsidiary of a Borrower Party has been audited, or has knowledge of
any pending audit, by the Internal Revenue Service or any other taxing authority. Except as
described in Schedule 5.1(j), no Borrower Party has executed or filed with the Internal
Revenue Service or any other Governmental Authority any agreement or other document extending, or
having the effect of extending, the period for assessment or collection of any taxes. Except as
set forth on Schedule 5.1(j), as of the Agreement Date, none of the Borrower Parties and
their respective predecessors are liable for any taxes: (i) under any agreement (including any tax
sharing agreements) or (ii) to each Borrower Party’s knowledge, as a transferee. As of the
Agreement Date, no Borrower Party has agreed, or been requested, to make any adjustment under Code
Section 481(a), by reason of a change in accounting method or otherwise, which would have a
Materially Adverse Effect.



          (k) Financial Statements. The Borrowers have furnished, or have caused to be
furnished, to the Lenders (i) the consolidated audited financial statements of the Borrowers which
are complete and correct in all material respects and present fairly in accordance with GAAP the
respective financial positions of the Borrowers for fiscal years ending on January 28, 2006,
February 3, 2007 and February 2, 2008, and the results of operations for the fiscal year then
ended, (ii) the unaudited interim financial statements of the Borrowers which are complete and
correct in all material respects and present fairly in accordance with GAAP, subject to normal year
end adjustments, the respective financial positions of the Borrowers as at August 2, 2008, and the
results of operations for the six month period then ended, and (iii) draft management prepared
financial statements of the Borrowers for the fiscal quarter ended on November 1, 2008. Except as
disclosed in such financial statements, no Borrower Party has any material liabilities, contingent
or otherwise, and there are no material unrealized or anticipated losses of such Borrower Party
which have not heretofore been disclosed in writing to the Lenders.



          (l) No Adverse Change. Since August 2, 2008, there has occurred no event which has
had or could reasonably be expected to have a Materially Adverse Effect.



          (m) Investments and Guaranties. As of the Agreement Date, no Borrower Party or any
Subsidiary of a Borrower Party owns any Equity Interests of any Person except as disclosed on
Schedules 5.1(c)-1 and 5.1(c)-2, or has outstanding loans or advances to, or
guaranties of the obligations of, any Person, except as reflected in the financial statements
referred to in Section 5.1(k) or disclosed on Schedule 5.1(m).



          (n) Liabilities, Litigation, etc. As of the Agreement Date, except for liabilities
incurred in the normal course of business, no Borrower Party or any Subsidiary of any Borrower
Party has any material (individually or in the aggregate) liabilities, direct or contingent, except
as disclosed or referred to in the financial statements referred to in



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Section 5.1(k) or with respect to the Obligations. As of the Agreement Date, except
as described on Schedules 5.1(n) and 5.1(y), there is no litigation, legal or
administrative proceeding, investigation, or other action of any nature pending or, to the
knowledge of the Borrower Parties, threatened against or affecting any Borrower Party, any
Subsidiary of any Borrower Party or any of their respective properties which could reasonably be
expected to result in any judgment against or liability of such Borrower Party or Subsidiary in
excess of $1,000,000 individually or in the aggregate with respect to all Borrower Parties and
their Subsidiaries, or the loss of any certification or license material to the operation of such
Borrower Party’s or Subsidiary’s business. None of such litigation disclosed on Schedules
5.1(n) and 5.1(y), individually or collectively, could reasonably be expected to have a
Materially Adverse Effect.



          (o) ERISA. Schedule 5.1(o) lists (i) all ERISA Affiliates and (ii) all Plans
and separately identifies all Title IV Plans, Multiemployer Plans, and Retiree Welfare Plans.
Copies of all such listed Plans, together with a copy of the latest IRS/DOL 5500-series form for
each such Plan, have been delivered to the Administrative Agent. Except with respect to
Multiemployer Plans, each Plan intended to be qualified under Code Section 401 has been determined
by the Internal Revenue Service to qualify under Section 401 of the Code, the trusts created
thereunder have been determined to be exempt from tax under the provisions of Sections 501 of the
Code, and nothing has occurred that would cause the loss of such qualification or tax-exempt
status. Each Borrower Party and each ERISA Affiliate and each of their respective Plans are in
compliance in all material respects with ERISA and the Code and no Borrower Party nor any of its
ERISA Affiliates has incurred any accumulated funding deficiency with respect to any such Plan
within the meaning of ERISA or the Code. No Borrower Party or, to each Borrower Party’s knowledge,
any of its ERISA Affiliates has made any promises of retirement or other benefits to employees,
except as set forth in the Plans. No Borrower Party or ERISA Affiliate has incurred any material
liability to the PBGC in connection with any such Plan (other than the payment of premiums that are
not past due). No Title IV Plan has any Unfunded Pension Liability. No ERISA Event or event
described in Section 4062(e) of ERISA has occurred and is continuing with respect to any such Plan.
There are no pending, or to the knowledge of any Borrower Party, threatened claims (other than
claims for benefits in the normal course), sanctions, actions or lawsuits, asserted or instituted
against any Plan or any Person as fiduciary (as defined in Section 3(21) of ERISA) or sponsor of
any Plan. No such Plan or trust created thereunder, or party in interest (as defined in Section
3(14) of ERISA), or any fiduciary (as defined in Section 3(21) of ERISA), has engaged in a
non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA or Section
4975 of the Code) which would subject such Plan or any other Plan of any Borrower Party or any of
its ERISA Affiliates, any trust created thereunder, or any such party in interest or fiduciary, or
any party dealing with any such Plan or any such trust to any material penalty or tax on
“prohibited transactions” imposed by Section 502 of ERISA or Section 4975 of the Code.



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          (p) Intellectual Property; Licenses; Certifications. As of the Agreement Date, the
Borrower Parties own or otherwise have the right to use all patents, trademarks, service marks or
copyrights necessary for the operation of the business of the Borrower Parties and their
Subsidiaries as currently conducted, except for any such the failure to so own or have the right to
use could not reasonably be expected to have a Materially Adverse Effect. Except as set forth on
Schedule 5.1(p), as of the Agreement Date, the Borrower Parties have all material licenses
or certifications necessary for the operation of the Borrower Parties’ and their Subsidiaries’
business as currently conducted, except for any such the failure where the failure to so have could
not reasonably be expected to have a Materially Adverse Effect.



          (q) Compliance with Law; Absence of Default. Each Borrower Party and each Subsidiary
of a Borrower Party is in compliance with all Applicable Laws and with all of the provisions of its
certificate of incorporation or formation and by-laws or other governing documents except where the
failure to be in compliance could not reasonably be expected to have a Materially Adverse Effect,
and no event has occurred or has failed to occur which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes (i) a Default, or (ii) except with respect to
Funded Debt in an aggregate principal amount equal to or less than $1,000,000, a default under any
other indenture, agreement, or other instrument, or any judgment, decree, or order to which such
Borrower Party or such Subsidiary is a party or by which such Borrower Party or such Subsidiary or
any of their respective properties may be bound.



          (r) Intentionally Omitted.



          (s) Accuracy and Completeness of Information. All written information, reports, other
papers and data relating to the Borrower Parties and their Subsidiaries furnished by or at the
direction of the Borrower Parties to the Lender Group were, at the time furnished, complete and
correct in all material respects. No fact is currently known to any Borrower Party which has, or
could reasonably be expected to have, a Materially Adverse Effect. With respect to projections,
estimates and forecasts given to the Lender Group, such projections, estimates and forecasts are
based on the Borrower Parties’ good faith assessment of the future of the business at the time
made. The Borrower Parties had a reasonable basis for such assessment at the time made.



          (t) Compliance with Regulations T, U, and X. No Borrower Party or any Subsidiary of a
Borrower Party is engaged principally in the business of or has as one of its important activities
in the business of extending credit for the purpose of purchasing or carrying, and no Borrower
Party or any Subsidiary of a Borrower Party owns or presently intends to acquire, any “margin
security” or “margin stock” as defined in Regulations T, U and X of the Board of Governors of the
Federal Reserve System (herein called “Margin Stock”). None of the proceeds of the Loans
will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock or
for the purpose of reducing or retiring any Funded Debt which was originally incurred to purchase
or



77









 





carry Margin Stock or for any other purpose which might constitute this transaction a “purpose
credit” within the meaning of said Regulations T, U and X. None of any Borrower Party, any
Subsidiary of a Borrower Party or any bank acting on its behalf has taken or will take any action
which might cause this Agreement or any other Loan Documents to violate Regulation T, U or X or any
other regulation of the Board of Governors of the Federal Reserve System or to violate the SEA, in
each case as now in effect or as the same may hereafter be in effect. If so requested by the
Administrative Agent, the Borrower Parties and their Subsidiaries will furnish the Administrative
Agent with (i) a statement or statements in conformity with the requirements of Federal Reserve
Form U-1 referred to in Regulation U of said Board of Governors and (ii) other documents evidencing
its compliance with the margin regulations reasonably requested by the Administrative Agent,
including without limitation an opinion of counsel in form and substance reasonably satisfactory to
the Administrative Agent. Neither the making of the Loans nor the use of proceeds thereof will
violate, or be inconsistent with, the provisions of Regulation T, U or X of said Board of
Governors.



          (u) Solvency. As of the Agreement Date and after giving effect to the transactions
contemplated by the Loan Documents (i) the property of each Borrower, at a fair valuation on a
going concern basis, will exceed its debt; (ii) the capital of each Borrower will not be
unreasonably small to conduct its business; and (iii) no Borrower will have incurred debts, or have
intended to incur debts, beyond its ability to pay such debts as they mature. For purposes of this
Section, “debt” shall mean any liability on a claim, and “claim” shall mean (A) the right to
payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, undisputed, legal, equitable, secured or unsecured, or (B) the
right to an equitable remedy for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, undisputed, secured or unsecured.



          (v) Insurance. The Borrower Parties and their Subsidiaries have insurance meeting the
requirements of Section 6.5, and such insurance policies are in full force and effect. As
of the Agreement Date, all insurance maintained by the Borrower Parties and their Subsidiaries is
fully described on Schedule 5.1(v).



          (w) Broker’s or Finder’s Commissions. No broker’s or finder’s fee or commission will
be payable with respect to the execution and delivery of this Agreement and the other Loan
Documents (except to the extent such claim for such fees arises out of any utilization or
engagement by the Administrative Agent or by any Lender of such broker or finder), and no other
similar fees or commissions will be payable by the Borrower Parties for any other services rendered
to the Borrower Parties ancillary to the credit transactions contemplated herein.



          (x) Real Property. All real property leased by each Borrower Party as of the
Agreement Date where Collateral is located is set forth in Schedule 5.1(x)-1. All



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real property owned by each Borrower Party as of the Agreement Date is set forth in
Schedule 5.1(x)-2.



          (y) Environmental Matters.



               (i) Except as specifically disclosed in Schedule 5.1(y) or as could not,
individually or in the aggregate, reasonably be expected to have a Materially Adverse
Effect, no Borrower Party or any Subsidiary thereof (A) 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, (B) has received notice of any claim with
respect to any Environmental Law or (C) knows of any basis for any liability under any
Environmental Law.



               (ii) Except in each case, as could not, individually or in the aggregate, reasonably
be expected to have a Materially Adverse Effect or as otherwise set forth in Schedule
5.1(y), (A) 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, to the knowledge of any Borrower Party, operated by any Borrower Party; (B) there
is no asbestos or asbestos-containing material on any property currently owned or, to the
knowledge of any Borrower Party, operated by any Borrower Party or; and (C) to the
knowledge of the Borrower Parties, Hazardous Materials have not been released, discharged
or disposed of on any property currently or formerly owned or operated by any Borrower
Party or any Subsidiary thereof.



               (iii) Except in each case, as could not, individually or in the aggregate, reasonably be
expected to have a Materially Adverse Effect or as otherwise set forth on Schedule 5.1(y),
(i) no Borrower Party or any Subsidiary thereof is undertaking, 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 (ii) 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 Borrower Party or any Subsidiary thereof have been disposed of in a manner
not reasonably expected to result in liability to any Borrower Party or any Subsidiary thereof.



          (z) Intentionally Omitted.



          (aa) Name of Borrower Party. Except as set forth on Schedule 5.1(aa), no
Borrower Party or any Subsidiary of any Borrower Party has changed its name within the preceding
five (5) years from the Agreement Date, nor has any Borrower Party or any Subsidiary of a Borrower
Party transacted business under any other name or trade name.



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          (bb) Investment Company Act; Public Utility Holding Company Act. No Borrower Party or
any Subsidiary of a Borrower Party is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance by the Borrower
Parties of this Agreement nor the issuance of any Revolving Loan Notes violates any provision of
such Act or requires any consent, approval, or authorization of, or registration with, any
governmental or public body or authority pursuant to any of the provisions of such Act.



          (cc) Patriot Act. Neither any Borrower Party nor any of its Subsidiaries is an
“enemy” or an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act
of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended or any enabling
legislation or executive order relating thereto. Neither any Borrower Party nor any or its
Subsidiaries is in violation of (a) the Trading with the Enemy Act, as amended, (b) any of the
foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating thereto or (c) the
USA Patriot Act. None of the Borrower Parties (i) is a blocked person described in section 1 of
the Executive Order No. 13224 or (ii) to the best of its knowledge, engages in any dealings or
transactions, or is otherwise associated, with any such blocked person.



          (dd) OFAC. None of the Borrower Parties, any Subsidiary of Parent, any Affiliate of
the Borrower Parties (other than an Affiliate that is a shareholder of Parent) or, to the knowledge
of any Borrower Party as of the Agreement Date, any Affiliate that is a shareholder of Parent (i)
is a Sanctioned Person, (ii) has more than 15% of its assets in Sanctioned Countries, or (iii)
derives more than 15% of its operating income from investments in, or transactions with Sanctioned
Persons or Sanctioned Countries. No part of the proceeds of any Loans hereunder will be used
directly or indirectly to fund any operations in, finance any investments or activities in or make
any payments to, a Sanctioned Person or a Sanctioned Country or 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.



     Section 5.2 Representations and Warranties Relating to Eligible Credit Card
Receivables. As to each Account that is identified by such Borrower Party as an Eligible
Credit Card Receivables in the most recent Borrowing Base Certificate submitted to the
Administrative Agent by the Administrative Borrower, such Account is not ineligible (to the
Administrative Borrower’s knowledge with respect to any Credit Card Receivable deemed ineligible by
the Administrative Agent in the exercise of its Permitted Discretion) by virtue of one or more of
the excluding criteria set forth in the definition of Eligible Credit Card Receivables.



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     Section 5.3 Representations and Warranties Relating to Inventory. With respect to all
Eligible Inventory, the Administrative Agent may rely upon all statements, warranties, or
representations made in any Borrowing Base Certificate in determining the classification of such
Inventory and in determining which items of Inventory listed in such Borrowing Base Certificate
meet the requirements of eligibility.



     Section 5.4 Survival of Representations and Warranties, etc. All representations and
warranties made under this Agreement and the other Loan Documents shall be deemed to be made, and
shall be true and correct, at and as of the Agreement Date and the date of each Advance or issuance
of a Letter of Credit hereunder, except to the extent previously fulfilled in accordance with the
terms of this Agreement or the other Loan Documents and to the extent subsequently inapplicable.
All representations and warranties made under this Agreement and the other Loan Documents shall
survive, and not be waived by, the execution hereof by the Lender Group, or any of them, any
investigation or inquiry by any member of the Lender Group, or the making of any Advance or the
issuance of any Letter of Credit under this Agreement.



ARTICLE 6.




GENERAL COVENANTS




     Until the later of the date the Obligations are repaid in full or the date the Borrowers no
longer have the right to borrow, or have Letters of Credit issued, hereunder (whether or not the
conditions to borrowing have been or can be fulfilled), and unless the Majority Lenders shall
otherwise give their prior consent in writing:



     Section 6.1 Preservation of Existence and Similar Matters. Each Borrower Party will,
and will cause each of its Subsidiaries to (i) except as expressly permitted by Section
8.7, preserve and maintain its existence, and, solely with respect to its Domestic
Subsidiaries, maintain its due organization, valid existence and good standing, in each case in its
jurisdiction of incorporation or organization, (ii) qualify and remain qualified and authorized to
do business in each jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization except where the failure to be so qualified
would not reasonably be expected to have a Materially Adverse Effect, and (iii) maintain all
Necessary Authorizations except where the failure to maintain such Necessary Authorizations could
not reasonably be expected to have a Materially Adverse Effect.



     Section 6.2 Compliance with Applicable Law. Each Borrower Party will, and will cause
each of its Subsidiaries to, comply with the requirements of all Applicable Law, except where the
failure to so comply could not reasonably be expected to have a Materially Adverse Effect.



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     Section 6.3 Maintenance of Properties. Each Borrower Party will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained in the ordinary course of business in
good repair, working order and condition, normal wear and tear and disposal of obsolete equipment
excepted, all properties used or useful in its business (whether owned or held under lease), and
from time to time make or cause to be made all needed and appropriate repairs, renewals,
replacements, additions, betterments, and improvements thereto, except where the failure to do so
could not reasonably be expected to have a Materially Adverse Effect.



     Section 6.4 Accounting Methods and Financial Records. Parent and its Subsidiaries
shall maintain, on a consolidated basis, a system of accounting established and administered in
accordance with GAAP (other than with respect to standalone financial information for any Foreign
Subsidiary; provided that the financial information for any such Foreign Subsidiary will be
converted to GAAP for consolidated financial reporting purposes) and will keep adequate records and
books of account in which complete entries will be made in accordance with such accounting
principles consistently applied and reflecting all transactions required to be reflected by such
accounting principles.



     Section 6.5 Insurance. Each Borrower Party will, and will cause each of its
Subsidiaries to, maintain insurance including, but not limited to, property insurance,
comprehensive general liability with respect to losses and claims in excess of $50,000
individually, or $2,000,000 in the aggregate during any policy year, business interruption and
fidelity coverage insurance, in such amounts and against such risks as would be customary for
companies in the same industry and of comparable size as the Borrower Parties and their
Subsidiaries from financially sound and reputable insurance companies having and maintaining an
A.M. Best rating of “A minus” or better and being in a size category of VI or larger or otherwise
acceptable to the Administrative Agent. In addition to the foregoing, each Borrower Party further
agrees to maintain and pay for insurance upon all goods constituting Collateral wherever located,
in storage or in transit in vehicles, vessels or aircraft, including goods evidenced by documents,
covering casualty, hazard, public liability and such other risks and in such amounts as would be
customary for companies in the same industry and of comparable size as the Borrower Parties, from
financially sound and reputable insurance companies having and maintaining an A.M. Best rating of
“A minus” or better and being in a size category of VI or larger or otherwise acceptable to the
Administrative Agent to insure the Lender Group’s interest in such Collateral. All such property
insurance policies covering goods that constitute Collateral shall name the Administrative Agent as
loss payee and all liability insurance policies shall name the Administrative Agent as additional
insured. Each Borrower Party shall deliver the original certificates of insurance evidencing that
the required insurance is in force together with satisfactory lender’s loss payable and additional
insured, as applicable, endorsements. Each policy of insurance or endorsement shall contain a
clause requiring the insurer to give not less than thirty (30) days’ prior written notice to the
Administrative Agent in the event of cancellation or modification of the policy for any



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reason whatsoever and a clause that the interest of the Administrative Agent shall not be
impaired or invalidated by any act or neglect of any Borrower Party or owner of the Collateral nor
by the occupation of the premises for purposes more hazardous than are permitted by said policy.
If any Borrower Party fails to provide and pay for such insurance, the Administrative Agent may, at
the Borrowers’ expense, procure the same, but shall not be required to do so. Each Borrower Party
agrees to deliver to the Administrative Agent, promptly as rendered, true copies of all reports
made in any reporting forms to insurance companies.



     Section 6.6 Payment of Taxes and Claims. Each Borrower Party will, and will cause
each of its Subsidiaries to, pay and discharge all taxes, assessments, and governmental charges or
levies imposed upon it or its income or profit or upon any properties belonging to it prior to the
date on which penalties attach thereto, and all lawful claims for labor, materials and supplies
which have become due and payable and which by law have or may become a Lien upon any of its
Property; except that, no such tax, assessment, charge, levy, or claim need be paid which is being
contested in good faith by appropriate proceedings and for which adequate reserves shall have been
set aside on the appropriate books, but only so long as such tax, assessment, charge, levy, or
claim does not become a Lien or charge other than a Permitted Lien and no foreclosure, distraint,
sale, or similar proceedings shall have been commenced and remain unstayed for a period thirty (30)
days after such commencement. Each Borrower Party shall, and shall cause each of its Subsidiaries
to, timely file all information returns required by federal, state, or local tax authorities.



     Section 6.7 Visits and Inspections. Each Borrower Party will, and will permit each of
its Subsidiaries to, permit representatives of the Administrative Agent to (a) visit and inspect
the properties of the Borrower Parties and their Subsidiaries during normal business hours, (b)
inspect and make extracts from and copies of the Borrower Parties’ and their Subsidiaries’ books
and records, (c) conduct appraisals, field examinations and audits of Credit Card Receivables,
Inventory and other personal property of the Borrower Parties and their Subsidiaries and (d)
discuss with the Borrower Parties’ and their Subsidiaries’ respective principal officers the
Borrower Parties’ or such Subsidiaries’ businesses, assets, liabilities, financial positions,
results of operations, and business prospects relating to the Borrower Parties or such
Subsidiaries; provided, however, (i) if there are no outstanding Advances and the
aggregate amount of all outstanding Letters of Credit is $5,000,000 or less, then the Borrowers
shall only be obligated to pay the Administrative Agent for one (1) field audit every twelve (12)
months, (ii) if there are outstanding Advances but Availability is greater than $20,000,000, then
the Borrowers shall only be obligated to pay the Administrative Agent for up to two (2) field
audits every twelve (12) months and (iii)(A) if there are outstanding Advances and Availability is
less than or equal to $20,000,000 or (B) an Event of Default has occurred and is continuing, then
the Borrowers shall pay for as many field audits and appraisals that the Administrative Agent
requests in its Permitted Discretion. Any other member of the Lender Group may, at its expense,
accompany the Administrative Agent on any regularly



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scheduled visit (or at any time that a Default exists any visit regardless of whether it is
regularly scheduled) to the Borrower Parties and their Subsidiaries’ properties.


     Section 6.8 Intentionally Omitted.



     Section 6.9 ERISA. Each Borrower Party shall at all times make, or cause to be made,
prompt payment of contributions required to meet the minimum funding standards set forth in ERISA
with respect to each Borrower Party’s and its ERISA Affiliates’ Plans that are subject to such
funding requirements; furnish to the Administrative Agent, promptly upon the Administrative Agent’s
request therefor, copies of any annual report required to be filed pursuant to ERISA in connection
with each such Plan of each Borrower Party and its ERISA Affiliates; notify the Administrative
Agent as soon as practicable of any ERISA Event regarding any such Plan that could reasonably be
expected to have a Materially Adverse Effect; and furnish to the Administrative Agent, promptly
upon the Administrative Agent’s request therefor, such additional information concerning any such
Plan as may be reasonably requested by the Administrative Agent.



     Section 6.10 Lien Perfection. Each Borrower Party agrees to take such action as may
be reasonably requested by the Administrative Agent to perfect or continue the perfection of the
Administrative Agent’s (on behalf of, and for the benefit of, the Lender Group) security interest
in the Collateral.



     Section 6.11 Location of Collateral. All tangible property owned by a Borrower Party
constituting Collateral, other than Inventory in transit, Inventory sold in the ordinary course of
business and raw materials and work-in-process located at manufacturing sites operated by a third
party, will at all times be kept by the Borrower Parties at one or more of the business locations
of the Borrower Parties set forth in Schedule 6.11. The Inventory shall not, without the
prior written approval of the Administrative Agent, be moved from the locations set forth on
Schedule 6.11 except as permitted in the immediately preceding sentence and except for,
prior to an Event of Default, (a) sales or other dispositions of assets permitted pursuant to
Section 8.7 and (b) the storage of Inventory at locations within the continental US other
than those specified in the first sentence of this Section 6.11 if (i) the Administrative
Borrower gives the Administrative Agent written notice of the new storage location at least thirty
(30) days prior to storing Inventory at such location, (ii) the Lender Group’s security interest in
such Inventory is and continues to be a duly perfected, first priority Lien thereon, (iii) neither
any Borrower Party’s nor the Administrative Agent’s right of entry upon the premises where such
Inventory is stored or its right to remove the Inventory therefrom, is in any way restricted, (iv)
either (A) the owner of such premises, and any bailee, warehouseman or similar party that will be
in possession of such Inventory, shall have executed and delivered to the Administrative Agent a
Collateral Access Agreement or (B) the Administrative Agent shall have established a Rent Reserve,
in each case, to the extent such Person has a statutory priming Lien with respect to the Inventory
at such location, and (v) all negotiable documents and receipts in respect of any



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Collateral maintained at such premises are promptly delivered to the Administrative Agent and any
non-negotiable documents and receipts in respect of any Collateral maintained at such premises are
issued to the Administrative Agent and promptly delivered to the Administrative Agent.


     Section 6.12 Protection of Collateral. All insurance expenses and expenses of
protecting, storing, warehousing, insuring, handling, maintaining and shipping the Collateral
(including, without limitation, all rent payable by any Borrower Party to any landlord of any
premises where any of the Collateral may be located), and any and all excise, property, sales, and
use taxes imposed by any state, federal, or local authority on any of the Collateral or in respect
of the sale thereof, shall be borne and paid by the Borrower Parties. If the Borrower Parties fail
to promptly pay any portion thereof when due, the Lenders may, at their option during the existence
of an Event of Default, but shall not be required to, make a Base Rate Advance for such purpose and
pay the same directly to the appropriate Person. The Borrowers agree to reimburse the Lenders
promptly therefor with interest accruing thereon daily at the Default Rate provided in this
Agreement. All sums so paid or incurred by the Lenders for any of the foregoing and all reasonable
costs and expenses (including attorneys’ fees, legal expenses, and court costs) which the Lenders
may incur in enforcing or protecting the Lien on or rights and interest in the Collateral or any of
their rights or remedies under this or any other agreement between the parties hereto or in respect
of any of the transactions to be had hereunder until paid by the Borrowers to the Lenders with
interest at the Default Rate, shall be considered Obligations owing by the Borrowers to the Lenders
hereunder. Such Obligations shall be secured by all Collateral and by any and all other
collateral, security, assets, reserves, or funds of the Borrower Parties in or coming into the
hands or inuring to the benefit of the Lenders. Neither the Administrative Agent nor the Lenders
shall be liable or responsible in any way for the safekeeping of any of the Collateral or for any
loss or damage thereto (except for reasonable care in the custody thereof while any Collateral is
in the Lenders’ actual possession) or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other person whomsoever, but the same
shall be at the Borrower Parties’ sole risk.



     Section 6.13 Assignments and Records of Accounts and Credit Card Receivables. If so
requested by the Administrative Agent following and during the continuance of an Event of Default,
each Borrower Party shall execute and deliver to the Administrative Agent, for the benefit of the
Lender Group, formal written assignments of all of the Accounts and Credit Card Receivables daily,
which shall include all Accounts and Credit Card Receivables that have been created since the date
of the last assignment, together with copies of invoices or invoice registers related thereto.
Each Borrower Party shall keep in all material respects accurate and complete records of the
Accounts and Credit Card Receivables and all payments and collections thereon.



     Section 6.14 Administration of Accounts and Credit Card Receivables.



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          (a) The Administrative Agent retains the right after the occurrence and during the continuance
of an Event of Default to notify the Account Debtors, Credit Card Processors and Credit Card
Issuers that the Accounts and Credit Card Receivables have been assigned to the Administrative
Agent, for the benefit of the Lender Group, and to collect the Accounts and Credit Card Receivables
directly in its own name and to charge the collection costs and expenses, including attorneys’
fees, to the Borrowers. The Administrative Agent has no duty to protect, insure, collect or
realize upon the Accounts and Credit Card Receivables or preserve rights in them. Each Borrower
Party irrevocably makes, constitutes and appoints the Administrative Agent as such Borrower Party’s
true and lawful attorney and agent-in-fact to endorse such Borrower Party’s name on any checks,
notes, drafts or other payments relating to, the Accounts and Credit Card Receivables which come
into the Administrative Agent’s possession or under the Administrative Agent’s control as a result
of its taking any of the foregoing actions. Additionally, upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent, for the benefit of the Lender Group,
shall have the right to collect and settle or adjust all disputes and claims directly with the
Account Debtor, Credit Card Processors and Credit Card Issuers and to compromise the amount or
extend the time for payment of the Accounts and Credit Card Receivables upon such terms and
conditions as the Administrative Agent may deem advisable, and to charge the deficiencies,
reasonable costs and expenses thereof, including attorney’s fees, to the Borrowers.



          (b) If an Account or a Credit Card Receivable includes a charge for any tax payable to any
governmental taxing authority, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent on behalf of the Lenders is authorized, in its sole discretion,
to pay the amount thereof to the proper taxing authority for the account of the applicable Borrower
Party and to make a Base Rate Advance to the Borrowers to pay therefor. The Borrower Parties shall
notify the Administrative Agent if any Account or Credit Card Receivable includes any tax due to
any governmental taxing authority and, in the absence of such notice, the Administrative Agent
shall have the right to retain the full proceeds of the Account or Credit Card Receivable and shall
not be liable for any taxes to any governmental taxing authority that may be due by any Borrower
Party by reason of the sale and delivery creating the Account or Credit Card Receivable.



          (c) Whether or not a Default has occurred, any of the Administrative Agent’s officers,
employees or agents shall have the right after prior notice to the Administrative Borrower
(provided no prior notice shall be required if an Event of Default shall have occurred and be
continuing), at any time or times hereafter, in the name of the Lenders, or any designee of the
Lenders or the Borrower Parties, to verify the validity, amount or other matter relating to any
Accounts or Credit Card Receivables by mail, telephone, telegraph or otherwise. The Borrower
Parties shall cooperate fully with the Administrative Agent and the Lenders in an effort to
facilitate and promptly conclude any such verification process.



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     Section 6.15 The Blocked Account.



          (a) Each Collateral Related Account for which a Blocked Account is required to be in place
pursuant to this Section 6.15 and each Concentration Account owned or maintained by the
Borrower Parties shall be maintained at a bank or financial institution which is reasonably
acceptable to the Administrative Agent (each such bank, a “Cash Management Bank”). As of
the Agreement Date, each deposit account of the Borrower Parties is listed on Schedule 6.15
and such schedule designates which accounts are Collateral Related Accounts and Concentration
Accounts. Each (i) Concentration Account and (ii) Collateral Related Account maintained by any
Borrower Party shall be subject to a control agreement (a “Blocked Account Agreement”) in
form and substance satisfactory to the Administrative Agent and such bank or financial institution
(each such account, a “Blocked Account”); provided, however, so long as the
Borrower Parties have established and maintain a cash management system in which each store level
depository account (“Store Level Account”) is swept (subject to maintaining nominal
balances in such account in an amount not to exceed $1,000 per account) to a Concentration Account
that is a Blocked Account no less frequently than once every five (5) Business Days (or at any time
after an Activation Event, on a daily basis), then the Borrower Parties shall not be required to
enter into a Blocked Account Agreement with respect to any such Store Level Account. Each such
Blocked Account Agreement shall provide, among other things, that from and after the Agreement
Date, the relevant Cash Management Bank, agrees, from and after the receipt of a notice (an
“Activation Notice”) from the Administrative Agent (which Activation Notice shall be given
by the Administrative Agent at any time at which (i) an Event of Default has occurred and is
continuing or (ii) Availability for three (3) consecutive Business Days is less than the greater of
(A) $20,000,000 or (B) thirty percent (30%) of the amount of the Revolving Loan Commitment then
outstanding (the foregoing being referred to herein as an “Activation Event”)), to forward
immediately all amounts in each Blocked Account, as the case may be to the Administrative Agent per
its instructions and to commence the process of daily sweeps from such account to the
Administrative Agent.



          (b) Notwithstanding anything to the contrary contained herein, upon and at all times after an
Activation Event, all amounts deposited in the Collateral Related Accounts and the Concentration
Accounts, all other proceeds of Collateral and all proceeds of Loans shall be used solely for (i)
expenditures made in connection with the operations of the business of the Borrower Parties, (ii)
repayment of outstanding Obligations, and/or (iii) Investments made in any account which is subject
to a Blocked Account Agreement.



          (c) The Borrower Parties shall take all steps to ensure that all of their Credit Card
Processors forward all items of payment to a Blocked Account including, without limitation,
irrevocably instructing the Credit Card Processors to forward all payments owing to the Borrower
Parties directly to a Blocked Account.



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          (d) In the event that any Borrower Party shall at any time after an Activation Event receive
any remittances of any of the foregoing directly or shall receive any other funds representing
proceeds of the Collateral, such Borrower Party shall hold the same as trustee for the
Administrative Agent, shall segregate such remittances from its other assets, and shall promptly
deposit the same into a Blocked Account.



     Section 6.16 Further Assurances. Upon the request of the Administrative Agent, each
Borrower Party will promptly cure, or cause to be cured, defects in the creation and issuance of
any Revolving Loan Notes and the execution and delivery of the Loan Documents (including this
Agreement) and any Bank Products Documents, resulting from any act or failure to act by any
Borrower Party or any employee or officer thereof. Each Borrower Party at its expense will
promptly execute and deliver to the Administrative Agent and the Lenders, or cause to be executed
and delivered to the Administrative Agent and the Lenders, all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the covenants and agreements of
the Borrower Parties in the Loan Documents (including this Agreement) and the Bank Products
Documents, or to correct any omissions in the Loan Documents or any Bank Products Documents, or
more fully to state the obligations set out herein or in any of the Loan Documents or the Bank
Products Documents, or to obtain any consents, all as may be necessary or appropriate in connection
therewith as may be reasonably requested.



     Section 6.17 Broker’s Claims. Each Borrower Party hereby indemnifies and agrees to
hold each member of the Lender Group harmless from and against any and all losses, liabilities,
damages, costs and expenses which may be suffered or incurred by such member of the Lender Group in
respect of any claim, suit, action or cause of action now or hereafter asserted by a broker or any
Person acting in a similar capacity arising from or in connection with the execution and delivery
of this Agreement or any other Loan Document or Bank Products Document or the consummation of the
transactions contemplated herein or therein; provided, however, no Borrower Party
shall be responsible for any such claim that arises out of any utilization or engagement by the
Administrative Agent or by any Lender of such a broker or any Person acting in a similar capacity.
This Section 6.17 shall survive termination of this Agreement.



     Section 6.18 Indemnity. Each Borrower Party will indemnify and hold harmless each
Indemnified Person from and against any and all claims, liabilities, investigations, losses,
damages, actions, demands, penalties, judgments, suits, investigations and costs, expenses
(including reasonable fees and expenses of experts, agents, consultants and counsel) and
disbursements, in each case, of any kind or nature (whether or not the Indemnified Person is a
party to any such action, suit or investigation) whatsoever which may be imposed on, incurred by,
or asserted against an Indemnified Person resulting from any breach or alleged breach by the
Borrower Parties of any representation or warranty made hereunder, or otherwise in any way relating
to or arising out of the Revolving Loan Commitments, this Agreement, the other Loan Documents, the
Bank Products Documents or any other document contemplated by this Agreement, the



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making, administration or enforcement of the Loan Documents and the Loans or any Bank Products
Documents, any transaction contemplated hereby or any related matters unless, with respect to any
of the above, such Indemnified Person is determined by a final non-appealable judgment of a court
of competent jurisdiction to have acted or failed to act with gross negligence or willful
misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON
ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER
OR UNDER ANY OTHER LOAN DOCUMENT. This Section 6.18 shall survive termination of this
Agreement.



     Section 6.19 Environmental Matters. Each Borrower Party shall (a) conduct its
operations and keep and maintain its Properties in compliance with all Environmental Laws, except
where the failure to do so could not reasonably be expected to have a Materially Adverse Effect;
(b) obtain and renew all environmental permits necessary for its operations and Properties, except
where the failure to do so could not reasonably be expected to have a Materially Adverse Effect;
and (c) implement any and all investigation, remediation, removal and response actions that are
appropriate or necessary to maintain the value and marketability of its Properties 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 Properties, provided, however, that no Borrower Party shall be
required to undertake any such investigation, remediation, removal or response action to the extent
that (i) its obligation to do so is being contested in good faith and by proper proceedings and
adequate reserves have been set aside and are being maintained by the Borrower Parties with respect
to such circumstances in accordance with GAAP, or (ii) failure to undertake any investigation,
remediation, removal or response action could not reasonably be expected to have a Materially
Adverse Effect.



     Section 6.20 Formation of Subsidiaries. At the time of the formation of any direct or
indirect Subsidiary of any Borrower after the Agreement Date or the acquisition of any direct or
indirect Subsidiary of any Borrower after the Agreement Date or any Immaterial Subsidiary ceases to
satisfy the requirements of the definition of an “Immaterial Subsidiary”, the Borrower Parties, as
appropriate, shall (a) cause such Domestic Subsidiary to provide to the Administrative Agent, for
the benefit of the Lender Group, a joinder and supplement to this Agreement substantially in the
form of Exhibit H (each, a “Guaranty Supplement”), pursuant to which such Domestic
Subsidiary shall agree to join as a Guarantor of the Obligations under Article 3 and as a Borrower
Party under this Agreement, a supplement to the Security Agreement, and such other security



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documents, together with appropriate Uniform Commercial Code financing statements, all in form
and substance reasonably satisfactory to the Administrative Agent, (b) provide to the
Administrative Agent, for the benefit of the Lender Group, a pledge agreement and appropriate
certificates and powers or Uniform Commercial Code financing statements, pledging all direct or
beneficial ownership interest in any new Foreign Subsidiary, in form and substance reasonably
satisfactory to the Administrative Agent, provided, however, such pledge will only be required to
the extent the Equity Interests of such Foreign Subsidiary are directly owned and held by a
Borrower Party or a Domestic Subsidiary of a Borrower Party, and such pledge shall be limited to
sixty-five percent (65%) of the Equity Interests of such Foreign Subsidiary, and (c) provide to
the Administrative Agent, for the benefit of the Lender Group, all other documentation, including
one or more opinions of counsel satisfactory to the Administrative Agent, which in its reasonable
opinion is appropriate with respect to such formation and the execution and delivery of the
applicable documentation referred to above. Nothing in this Section 6.20 shall authorize
any Borrower Party or any Subsidiary of a Borrower Party to form or acquire any Subsidiary absent
express authorization to so form or acquire such Subsidiary pursuant to Article 8. Any
document, agreement or instrument executed or issued pursuant to this Section 6.20 shall be
a “Loan Document” for purposes of this Agreement.



ARTICLE 7.




INFORMATION COVENANTS




     Until the earlier of the date the Obligations are repaid in full or the date the Borrowers no
longer have a right to borrow, or have Letters of Credit issued, hereunder (whether or not the
conditions to borrowing have been or can be fulfilled) and unless the Majority Lenders shall
otherwise give their prior consent in writing, the Borrower Parties will furnish or cause to be
furnished to each member of the Lender Group provided, however, that the
Administrative Borrower, at its option, may deliver such items described in Sections 7.1,
7.2, 7.3, 7.5 and 7.6 to the Administrative Agent with instructions
to post such items on “IntraLinks” or any similar website for viewing by the Lenders or to send
such items to the Lenders via electronic mail and the Administrative Agent shall post or send via
electronic mail such items within a reasonable period of time after delivery thereby by the
Administrative Borrower to it and such posting or sending via electronic mail shall constitute
delivery of such items to the Lenders:



     Section 7.1 Monthly and Quarterly Financial Statements and Information. (a) Within
thirty (30) days (or forty-five (45) days with respect to the last month of any fiscal quarter)
after the last day of each fiscal month in each fiscal year of the Borrowers, the balance sheet of
Parent and its Subsidiaries as at the end of such fiscal month, and the related statement of income
and retained earnings and related statement of cash flows for such fiscal month and for the fiscal
year to date period ended with the last day of such fiscal month, which financial statements shall
set forth in comparative form such figures



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(i) as at the end of such month during the previous fiscal year and for such month during the
previous fiscal year and (ii) as contained in Parent’s and its Subsidiaries’ budget most recently
delivered to the Administrative Agent for such periods, all of which shall be on a consolidated
basis, and shall include information regarding “brand” sales and gross margin, and shall be
certified by an Authorized Signatory of the Administrative Borrower to be, in his or her opinion,
complete and correct in all material respects and to present fairly in accordance with GAAP the
financial position of Parent and its Subsidiaries, as at the end of such period and the results of
operations for such period, and for the elapsed portion of the year ended with the last day of such
period, subject only to normal year-end adjustments and lack of footnotes.



          (b) Within forty-five (45) days after the last day of each fiscal quarter in each fiscal year
of the Borrowers, the balance sheet of Parent and its Subsidiaries as at the end of such fiscal
quarter, and the related statement of income and retained earnings and related statement of cash
flows for such fiscal quarter which financial statements shall set forth in comparative form (i)
such figures as at the end of such quarter during the previous fiscal year and for such quarter
during the previous fiscal year and (ii) as contained in Parent’s and its Subsidiaries’ budget most
recently delivered to the Administrative Agent for such periods, all of which shall be on a
consolidated basis, and shall include information regarding “brand” sales and gross margin, and
shall be certified by an Authorized Signatory of the Administrative Borrower to be, in his or her
opinion, complete and correct in all material respects and to present fairly in accordance with
GAAP the financial position of Parent and its Subsidiaries, as at the end of such period and the
results of operations for such period, subject only to normal year-end adjustments and lack of
footnotes.



     Section 7.2 Annual Financial Statements and Information; Certificate of No Default.
Within ninety (90) days after the end of each fiscal year of Parent, the audited balance sheet of
Parent and its Subsidiaries as at the end of such year and the related audited statements of income
and retained earnings and related audited statements of cash flows for such year, all of which
shall be on a consolidated basis, which financial statements shall set forth in comparative form
such figures as at the end of and for the previous year, and shall be accompanied by an opinion of
independent certified public accountants of recognized standing satisfactory to the Administrative
Agent, stating that such financial statements are unqualified and prepared in all material respects
in accordance with GAAP, without any explanatory paragraphs.



     Section 7.3 Compliance Certificates.



          (a) Compliance Certificates. At the time the financial statements are furnished
pursuant to Section 7.1 and Section 7.2, a Compliance Certificate:



          (b) Setting forth as at the end of such period, the arithmetical calculations required to
establish whether or not the Borrower Parties were in compliance with the requirements of the
Financial Covenant, to the extent applicable;



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          (c) Stating whether any material change in GAAP or the application thereof has occurred since
the date of the Borrowers’ audited financial statements delivered on the Agreement Date, and, if
any change has occurred, specifying the effect of such change on the financial statements
accompanying such certificate; and



          (d) Stating that, to the best of his or her knowledge, no Default has occurred as at the end
of such period, or, if a Default has occurred, disclosing each such Default and its nature, when it
occurred and whether it is continuing.



     Section 7.4 Intentionally Omitted.



     Section 7.5 Additional Reports.



          (a) Within three (3) Business Days after the end of each fiscal week, if Availability is less
than the greater of (i) thirty percent (30%) of the Revolving Loan Commitment or (ii) $20,000,000,
then prior to 2:00 p.m. (Atlanta, Georgia time), the Administrative Borrower shall deliver to the
Administrative Agent, (A) a Borrowing Base Certificate as of the close of business on the
immediately preceding Business Day, which shall be in such form as shall be reasonably satisfactory
to the Administrative Agent, including (without limitation) a roll-forward of all origination and
collection activity for Eligible Credit Card Receivables, (B) an Inventory status report with
respect to “on hand” Inventory, (C) a categorical breakdown of all Inventory and Credit Card
Receivables and (D) account statements with respect to each Concentration Account as reasonably
requested by the Administrative Agent, in each case in form and substance reasonably satisfactory
to the Administrative Agent, together with such other reports and supporting documentation as the
Administrative Agent may reasonably request regarding the calculation of the Borrowing Base.



          (b) Within (i) thirty (30) days after the end of each fiscal month, if the Aggregate Revolving
Credit Obligations are less than $5,500,000 and (ii) twenty (20) days after the end of each fiscal
month, if the Aggregate Revolving Credit Obligations are equal to or greater than $5,500,000, then
prior to 2:00 p.m. (Atlanta, Georgia time), the Administrative Borrower shall deliver to the
Administrative Agent, (A) a Borrowing Base Certificate as of the last day of the prior fiscal
month, which shall be in such form as shall be reasonably satisfactory to the Administrative Agent,
including (without limitation) a roll-forward of all origination and collection activity for
Eligible Credit Card Receivables, (B) an Inventory status report, (C) a categorical breakdown of
all Inventory and Credit Card Receivables and (D) account statements with respect to each
Concentration Account as reasonably requested by the Administrative Agent, in each case in form and
substance reasonably satisfactory to the Administrative Agent, together with such other reports and
supporting documentation as the Administrative Agent may reasonably request regarding the
calculation of the Borrowing Base; provided, however, so long as there are no
outstanding Advances during the applicable fiscal month, Borrowers shall only be required to
deliver the Borrowing Base Certificate without such supporting documentation.



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          (c) Promptly upon receipt thereof, the Borrower Parties shall deliver to the Lender Group
copies of all final reports, if any, submitted to any Borrower Party or any Subsidiary of a
Borrower Party by the Borrower Parties’ and their Subsidiaries’ independent public accountants in
connection with any annual or interim audit of the Borrower Parties and their Subsidiaries,
including, without limitation, any final management report prepared in connection with the annual
audit referred to in Section 7.2;



          (d) Within forty-five (45) days after the end of each fiscal year, the Borrower Parties shall
deliver to the Lender Group an annual budget approved by the board of directors of Parent
including, without limitation, a 12 month income statement, balance sheet, statement of cash flows
and availability forecast on a month-by-month basis;



          (e) To the extent not covered elsewhere in this Article 7, promptly after the sending thereof,
the Borrower Parties shall, and shall cause their Subsidiaries to, deliver to the Administrative
Agent and the Lenders copies of all financial statements, reports and other information which any
Borrower Party or any such Subsidiary sends to any holder of its Funded Debt (or its securities or
which any Borrower Party or any such Subsidiary files with the Securities and Exchange Commission
or any national securities exchange (other than periodic reports filed on Form 10-Q or Form 10-K or
current reports filed on Form 8-K));



          (f) If there is a material change in GAAP after February 2, 2008, that affects the
presentation of the financial statements referred to in Section 7.1 and 7.2, then,
in addition to delivery of such financial statements, and on the date such financial statements are
required to be delivered, the Borrower Parties shall furnish the adjustments and reconciliations
necessary to enable the Borrowers and each Lender to determine compliance with the Financial
Covenant, if at such time the Financial Covenant is applicable, all of which shall be determined in
accordance with GAAP consistently applied; and



          (g) From time to time and promptly upon each request, the Borrower Parties shall, and shall
cause their Subsidiaries to, deliver to the Administrative Agent on behalf of the Lender Group such
data, certificates, reports, statements, opinions of counsel, documents, or further information
regarding the business, assets, liabilities, financial position, projections, results of
operations, or business prospects of the Borrower Parties, such Subsidiaries, or any of them, as
the Administrative Agent may reasonably request.



     Section 7.6 Notice of Litigation and Other Matters.



          (a) Promptly upon (and in any event within three (3) Business Days of) any Borrower Party’s
obtaining knowledge of the institution of, or a written threat of, any action, suit, governmental
investigation or arbitration proceeding against any



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Borrower Party, any Subsidiary of a Borrower Party or any Property, which action, suit,
governmental investigation or arbitration proceeding, if adversely determined, would expose, in
such Borrower Party’s reasonable judgment, any Borrower Party or any Subsidiary of a Borrower Party
to liability in an aggregate amount in excess of $5,000,000, such Borrower Party shall notify the
Lender Group of the occurrence thereof, and the Borrower Parties shall provide such additional
information with respect to such matters as the Lender Group, or any of them, may reasonably
request.



          (b) Promptly upon (and in any event within three (3) Business Days of) any Borrower Party’s
obtaining knowledge of the occurrence of any default (whether or not any Borrower Party has
received notice thereof from any other Person) on Funded Debt of any Borrower Party or any
Subsidiary of a Borrower Party which singly, or in the aggregate, exceeds $2,500,000, such Borrower
Party shall notify the Lender Group of the occurrence thereof;



          (c) Promptly upon (and in any event within three (3) Business Days of) any Borrower Party’s
receipt of notice of the pendency of any proceeding for the condemnation or other taking of any
material Property (excluding any condemnation or other taking that does not have a material impact
on the use or value of such Property) of any Borrower Party or any Subsidiary of a Borrower Party,
such Borrower Party shall notify the Lender Group of the occurrence thereof;



          (d) Promptly upon (and in any event within three (3) Business Days of) any Borrower Party’s
receipt of notice of any event that could reasonably be expected to result in a Materially Adverse
Effect, such Borrower Party shall notify the Lender Group of the occurrence thereof;



          (e) Promptly (and in any event within three (3) Business Days) following any material
amendment or change approved by the board of directors of any Borrower to the budget submitted to
the Lender Group pursuant to Section 7.5(d), the Borrower Parties shall notify the Lender
Group of the occurrence thereof;



          (f) Promptly upon (and in any event within three (3) Business Days of) any officer of Parent
becoming aware of any (i) Default under any Loan Document, or (ii) default under any other
agreement (other than those referenced in clause (i) of this Section 7.6(f) above or in
Section 7.6(b)) to which any Borrower Party or any Subsidiary of a Borrower Party is a
party or by which any Borrower Party’s or any such Subsidiary’s properties is bound which could
reasonably be expected to have a Materially Adverse Effect, then the Borrower Parties shall notify
the Lender Group of the occurrence thereof giving in each case the details thereof and specifying
the action proposed to be taken with respect thereto;



          (g) Promptly (but in any event within three (3) Business Days) following the occurrence of (i)
any ERISA Event or (ii) a “prohibited transaction” (as such term is defined in Section 406 of ERISA
or Section 4975 of the Code) with respect



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to any Plan of any Borrower Party or any of its ERISA Affiliates which would subject any
Borrower Party to any penalty or tax on “prohibited transactions” imposed by Section 502 of ERISA
or Section 4975 of the Code or the commencement or threatened commencement of any litigation
regarding any such Plan or naming it or the trustee of any such Plan with respect to such Plan
(other than claims for benefits in the ordinary course of business), the Borrower Parties shall
notify the Administrative Agent and the Lenders of the occurrence thereof, provided such
occurrence, proceeding, or failure exposes such Borrower Party or ERISA Affiliate to liability in
an aggregate amount in excess of $2,500,000.



          (h) The Administrative Borrower shall deliver updates or supplements to the following
schedules (i) within sixty (60) days after the end of the end of each fiscal year, as of the last
day of such fiscal year: Schedule 5.1(c)-1, Schedule 5.1(c)-2, Schedule
5.1(d), Schedule 5.1(h), Schedule 5.1(p), Schedule 5.1(aa),
Schedule 6.11 and Schedule 6.15, in each case, as may be required to render correct
the representations and warranties contained in the applicable sections to which such schedules
relate as of the last day of such fiscal year without giving effect to any references therein to
the “Agreement Date” in each case, appropriately marked to show the changes made therein;
provided that no such supplement to any such Schedules or representation shall be deemed a
waiver of any Default resulting from the matters disclosed therein, except as consented to by the
Majority Lenders in writing.



ARTICLE 8.




NEGATIVE COVENANTS




     Until the earlier of the date the Obligations are repaid in full or the date the Borrowers no
longer have a right to borrow, or have Letters of Credit issued, hereunder (whether or not the
conditions to borrowing have been or can be fulfilled) and unless the Majority Lenders shall
otherwise give their prior consent in writing:



     Section 8.1 Funded Debt. No Borrower Party will, or will permit any of its
Subsidiaries to, create, assume, incur, or otherwise become or remain obligated in respect of, or
permit to be outstanding, any Funded Debt except:



          (a) Funded Debt under this Agreement and the other Loan Documents and the Bank Products
Documents;



          (b) The Funded Debt existing on the Agreement Date and described on Schedule 8.1;



          (c) Reimbursement obligations with respect to (i) Existing Letters of Credit listed on
Schedule E-1 in an aggregate amount not to exceed $5,000,000 and (ii) additional letters of
credit issued by Bank of America, N.A. within ninety (90) days after the Agreement Date in an
aggregate amount not to exceed $10,000,000;



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          (d) Trade or accounts payable and/or similar obligations, and accrued expenses, incurred in
the ordinary course of business, other than for borrowed money;



          (e) Funded Debt of a Borrower Party or any Subsidiary of a Borrower Party that is unsecured or
secured by Permitted Liens described in clause (f) of the definition of Permitted Liens set forth
in Article 1 (including, without limitation, Capitalized Lease Obligations), collectively, not to
exceed the aggregate principal amount of $20,000,000 at any time;



          (f) Guaranties permitted by Section 8.2;



          (g) Unsecured Funded Debt of any Borrower Party owed to another Borrower Party;



          (h) Obligations under Hedge Agreements not entered into for speculative purposes approved by
the Administrative Agent;



          (i) Funded Debt with respect to any sale and lease transaction permitted under Section
8.12.



     Section 8.2 Guaranties. No Borrower Party will, or will permit any Subsidiary of a
Borrower Party to, at any time guarantee or enter into or assume any Guaranty, or be obligated with
respect to, or permit to be outstanding, any Guaranty, other than (a) guaranties of the
Obligations, (b) guaranties by any Borrower Party of obligations under agreements of any other
Borrower Party entered into in connection with the acquisition of services, supplies, and equipment
in the ordinary course of business of such Borrower Party, (c) endorsements of instruments in the
ordinary course of business, (d) guaranties by any Borrower Party of any obligation of any other
Borrower Party and (e) guaranties of any Funded Debt permitted by Section 8.1.



     Section 8.3 Liens. No Borrower Party will, or will permit any Subsidiary of a
Borrower Party to, create, assume, incur, or permit to exist or to be created, assumed, or
permitted to exist, directly or indirectly, any Lien on any of its property, real or personal, now
owned or hereafter acquired, except for Permitted Liens.



     Section 8.4 Restricted Payments and Purchases. No Borrower Party shall, or shall
permit any Subsidiary of a Borrower Party to, directly or indirectly declare or make any Restricted
Payment or Restricted Purchase, or set aside any funds for any such purpose, other than Dividends
on common stock which accrue (but are not paid in cash) or are paid in kind or Dividends on
preferred stock which accrue (but are not paid in cash) or are paid in kind; provided,
however, that (a) any Borrower’s Subsidiaries may make Restricted Payments to any Borrower
or a wholly owned Domestic Subsidiary of any Borrower that is a Borrower Party, (b) Parent may make
Restricted Payments to the holders of the Equity Interests of Parent for and in the amount of
Federal and state taxes payable by such holders which are attributable to the operations or assets
of Parent and,



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to the extent Parent has received a distribution in such amount from the Subsidiaries of
Parent, the Subsidiaries of Parent and (c) Parent may make Restricted Payments and Restricted
Purchases after the Agreement Date if, before and after giving effect to such Restricted Payment,
no Default has occurred and is continuing or would result from the making of such Restricted
Payment, so long as (i) there are no outstanding Advances and aggregate face amount of all
outstanding Letters of Credit are less than $5,000,000 or (ii) if there are outstanding Advances or
aggregate face amount of all outstanding Letters of Credit are equal to or greater than $5,000,000,
Parent, on behalf of the Borrower Parties, delivers to the Administrative Agent a certificate,
together with supporting documents in form and substance reasonably satisfactory to the
Administrative Agent, executed by an Authorized Signatory certifying that as of such date of such
proposed Restricted Payment or Restricted Purchase: (A) Availability is not less than the greater
of (1) thirty percent (30%) of the amount of the Revolving Loan Commitment then in effect or (2)
$20,000,000 and (B)(1) Availability is not projected to be less than the greater of (x) twenty
percent (20%) of the amount of the Revolving Loan Commitment then in effect or (y) $15,000,000, at
all times during the twelve (12) month period immediately following such Restricted Payment or
Restricted Purchase and (2) Borrower Parties and their Subsidiaries have, on a consolidated bases,
a Fixed Charge Coverage Ratio of at least 1.10:1.00 as of such date of determination.



     Section 8.5 Investments. No Borrower Party will, or will permit any Subsidiary of a
Borrower Party to, make Investments, except that (a) any Borrower may purchase or otherwise acquire
and own and may permit any of its Subsidiaries to purchase or otherwise acquire and own Cash
Equivalents; (b) the Borrowers may hold the Investments in existence on the Agreement Date and
described on Schedule 5.1(c)-2; (c) the Borrowers may hold the Investments in existence on
the Agreement Date and described on Schedule 8.5 or any other Investments made after the Agreement
Date that are substantially similar to the Investments listed on Schedule 8.5; (d) so long
as no Default exists, the Borrowers may convert any of its Accounts that are in excess of ninety
(90) days past due into notes or Equity Interests from the applicable Account Debtor so long as the
Administrative Agent, for the benefit of the Lender Group, is granted a first priority security
interest in such Equity Interests or notes which Lien is perfected contemporaneously with the
conversion of such Account to Equity Interests or notes; (e) the Borrower Parties and their
Subsidiaries may hold the Equity Interests of their respective Subsidiaries in existence as of the
Agreement Date and their Subsidiaries created after the Agreement Date in accordance with
Section 6.20 and Section 8.7(g); (f) without limiting Section 8.2, any
Borrower Party may make Investments in any other Borrower Party; (g) the Borrower Parties may hold
Investments arising out of Hedge Agreements not entered into for speculative purposes and approved
by the Administrative Agent; and (h) any Borrower may make additional Investments after the
Agreement Date, if, before and after giving effect to such Investment, no Default has occurred and
is continuing or would result from the making of such Investment, so long as (i) there are no
outstanding Advances and aggregate face amount of all outstanding Letters of Credit are less than
$5,000,000 or (ii) if there are outstanding Advances or aggregate face



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amount of all outstanding Letters of Credit are equal to or greater than $5,000,000, Parent,
on behalf of the Borrower Parties, delivers to the Administrative Agent a certificate, together
with supporting documents in form and substance reasonably satisfactory to the Administrative
Agent, executed by an Authorized Signatory certifying that as of such date of such proposed
Investment: (A) Availability is not less than the greater of (1) thirty percent (30%) of the
amount of the Revolving Loan Commitment then in effect or (2) $20,000,000 and (B)(1) Availability
is not projected to be less than the greater of (x) twenty percent (20%) of the amount of the
Revolving Loan Commitment then in effect or (y) $15,000,000, at all times during the twelve (12)
month period immediately following such Investment and (2) Borrower Parties and their Subsidiaries
have, on a consolidated bases, a Fixed Charge Coverage Ratio of at least 1.10:1.00 as of such date
of determination.



     Section 8.6 Affiliate Transactions. No Borrower Party shall, or shall permit any
Subsidiary of a Borrower Party to, enter into or be a party to any agreement or transaction with
any Affiliate (other than a Borrower Party or a Subsidiary of a Borrower Party) except (a) as
described on Schedule 8.6, (b) upon fair and reasonable terms that are no less favorable to
such Borrower Party or such Subsidiary than it would obtain in a comparable arms length transaction
with a Person not an Affiliate of such Borrower Party or such Subsidiary or (c) as permitted by
Sections 8.4 and 8.5.



     Section 8.7 Liquidation; Change in Ownership, Name, or Year; Disposition or Acquisition of
Assets; Etc. No Borrower Party shall, or shall permit any Subsidiary to, at any time:



          (a) Liquidate or dissolve itself (or suffer any liquidation or dissolution) or otherwise wind
up its business, except that any Subsidiary of Parent may liquidate or dissolve itself in
accordance with Applicable Law;



          (b) Sell, lease, abandon, transfer or otherwise dispose of, in a single transaction or a
series of related transactions, any assets, property or business (including any Equity Interests),
except for (i) the sale of Inventory in the ordinary course of business at the fair market value
thereof and for cash or cash equivalents, (ii) physical assets used or consumed in the ordinary
course of business, (iii) bulk sales or other sales, transfers, abandonment or dispositions of
Inventory and equipment of a Borrower Party or a Subsidiary of a Borrower Party not in the ordinary
course of business in connection with store closings so long as during any fiscal year of Parent
not more than five percent (5%) of the number of the Borrower Parties’ existing stores as of the
beginning of such fiscal year (net of new store openings) are closed, (iv) the sale or other
disposal of other assets with a sale value not greater than $15,000,000 in the aggregate for all
such assets that may be sold during any year if the purchase price therefor is paid solely in cash,
(v) any sale and leaseback transaction permitted under Section 8.12, and (vi) charitable
donations of Inventory so long as (A) no Default or Event of Default shall have occurred and be
continuing or result from such charitable donation, (B) an Activation Event shall



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not have occurred or result from such charitable donation, (C) the Inventory donated shall
have been reported as “ineligible Inventory” for at least 35 days prior to the date of such
donation and (D) the aggregate value of such donated Inventory shall not exceed $2,500,000 per
fiscal year.



          (c) Acquire (i) any Person, (ii) all or any substantial part of the assets, property or
business of a Person, or (iii) any assets that constitute a division or operating unit of the
business of any Person; provided, however, that the Borrower Parties and their
Subsidiaries shall be permitted to consummate an acquisition described above if, before and after
giving effect to such acquisition, no Default has occurred and is continuing or would result from
the making of such acquisition, so long as (i) there are no outstanding Advances and aggregate face
amount of all outstanding Letters of Credit are less than $5,000,000 or (ii) if there are
outstanding Advances or aggregate face amount of all outstanding Letters of Credit are equal to or
greater than $5,000,000, Parent, on behalf of the Borrower Parties, delivers to the Administrative
Agent a certificate, together with supporting documents in form and substance reasonably
satisfactory to the Administrative Agent, executed by an Authorized Signatory certifying that as of
such date of such proposed acquisition: (A) Availability is not less than the greater of (1)
thirty percent (30%) of the amount of the Revolving Loan Commitment then in effect or (2)
$20,000,000 and (B)(1) Availability is not projected to be less than the greater of (x) twenty
percent (20%) of the amount of the Revolving Loan Commitment then in effect or (y) $15,000,000, at
all times during the twelve (12) month period immediately following such acquisition and (2)
Borrower Parties and their Subsidiaries have, on a consolidated bases, a Fixed Charge Coverage
Ratio of at least 1.10:1.00 as of such date of determination; provided, further,
that the acquired assets shall not be eligible for inclusion in the Borrowing Base until the
Administrative Agent has successfully completed a field audit with respect to such acquired assets
(at Borrowers’ sole cost and expense) and shall only be included thereafter to the extent such
assets satisfy the applicable eligibility criteria;



          (d) Merge or consolidate with any other Person; provided, however, that (i)
any Borrower may merge into another Borrower so long as, with respect to any merger with Parent,
Parent is the surviving entity after such merger, (ii) any Subsidiary of Parent may merge into any
Borrower Party so long as, with respect to any merger with a Borrower, such Borrower shall be the
surviving entity after such merger and, with respect to any merger with any other Borrower Party,
such other Borrower Party shall be the surviving entity after such merger, (iii) any Foreign
Subsidiary may merge into another Foreign Subsidiary, and (iv) any Borrower Party or any Subsidiary
of a Borrower Party may merge with any Person in order to consummate an acquisition permitted under
Section 8.7(c) so long as, with respect to any merger with a Borrower, such Borrower shall
be the surviving entity after such merger, and, with respect to any merger with any other Borrower
Party, such other Borrower Party shall be the surviving entity after such merger;



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          (e) Change its legal name, state of incorporation or formation or structure without giving the
Administrative Agent at least thirty (30) days prior written notice of its intention to do so and
complying with all reasonable requirements of the Lenders in regard thereto;



          (f) Change its year-end for accounting purposes from the fiscal year ending the Saturday
closest to January 31 without giving the Administrative Agent thirty (30) days written notice prior
to the end of the new year-end for accounting purposes and complying with all reasonable
requirements of the Lenders in regard thereto; or



          (g) Create any Subsidiary; provided, however, that any Borrower or any
Subsidiary of any Borrower may create wholly owned Subsidiaries so long as such Borrower and such
Subsidiaries comply with Sections 6.10 and 6.20.



     Section 8.8 Intentionally Omitted.



     Section 8.9 Intentionally Omitted.



     Section 8.10 Fixed Charge Coverage Ratio. If Availability is less than the greater of
(a) $10,000,000 or (b) fifteen percent (15%) of the Revolving Loan Commitment, the Borrower Parties
and their Subsidiaries shall maintain, on a consolidated basis, a Fixed Charge Coverage Ratio,
measured on a quarterly basis, of not less than 1.10:1.00.



     Section 8.11 Conduct of Business. The Borrower Parties shall not engage substantially
in any line of business substantially different from the lines of business conducted by the
Borrower Parties and their Subsidiaries on the Agreement Date or from any lines of business
reasonably related, complementary, ancillary or incidental thereto.



     Section 8.12 Sales and Leasebacks. No Borrower Party shall enter into any
arrangement, directly or indirectly, with any third party whereby such Borrower Party shall sell or
transfer any property, real or personal, whether now owned or hereafter acquired, and whereby such
Borrower Party shall then or thereafter rent or lease as lessee such property or any part thereof
or other property which such Borrower Party intends to use for substantially the same purpose or
purposes as the property sold or transferred except with respect to the real property listed on
Schedule 8.12 as of the Agreement Date.



     Section 8.13 Amendment and Waiver. Except as permitted hereunder, no Borrower Party
shall, or shall permit any Subsidiary of a Borrower Party to (a) enter into any amendment of, or
agree to or accept any waiver, which would adversely affect the rights of such Borrower Party or
such Subsidiary, as applicable, or any member of the Lender Group, of its articles or certificate
of incorporation or formation and by-laws, partnership agreement or other governing documents, or
(b) permit any Material Contract to be cancelled or terminated prior to its stated maturity if such
cancellation or termination could reasonably be likely to result in a Materially Adverse Effect.



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     Section 8.14 ERISA Liability. No Borrower Party shall fail to meet all of the
applicable minimum funding requirements of ERISA and the Code, without regard to any waivers
thereof, to the extent such failure could reasonably be expected to have a Materially Adverse
Effect and, to the extent that the assets of any of their Plans would be less (by $1,000,000 or
more) than an amount sufficient to provide all accrued benefits payable under such Plans, the
Borrower Parties shall make the maximum deductible contributions allowable under the Code (based on
the Borrower’s current actuarial assumptions). No Borrower Party shall, or shall cause or permit
any ERISA Affiliate to, (a) cause or permit to occur any event that could result in the imposition
of a Lien under Section 430 of the Code or Section 302 or 4068 of ERISA, or (b) cause or permit to
occur an ERISA Event to the extent the event described in (a) or (b) individually or in the
aggregate could reasonably be expected to have a Materially Adverse Effect.



     Section 8.15 Prepayments. No Borrower Party shall, or shall permit any Subsidiary of
a Borrower Party to, prepay, redeem, defease or purchase in any manner, or deposit or set aside
funds for the purpose of any of the foregoing, make any payment in respect of principal of, or make
any payment in respect of interest on, any Funded Debt, except the Borrowers may (i) make regularly
scheduled payments of principal or interest required in accordance with the terms of the
instruments governing any Funded Debt permitted hereunder, (ii) make payments, including
prepayments permitted or required hereunder, with respect to the Obligations and (iii) make such
other payments or prepayments of Funded Debt so long as (a) no Default or Event of Default shall
have occurred or is continuing or results therefrom and (b) Administrative Borrower delivers a
certificate, together with supporting documentation in form and substance reasonably satisfactory
to the Administrative Agent, to the Administrative Agent executed by an Authorized Signatory
evidencing that immediately after giving effect to such payment, (A) Availability is not less than
the greater of (1) thirty percent (30%) of the amount of the Revolving Loan Commitment then in
effect or (2) $20,000,000 and (B)(1) Availability is not projected to be less than the greater of
(x) twenty percent (20%) of the amount of the Revolving Loan Commitment then in effect or (y)
$15,000,000, at all times during the twelve (12) month period immediately following such payment
and (2) Borrower Parties and their Subsidiaries have, on a consolidated bases, a Fixed Charge
Coverage Ratio of at least 1.10:1.00 as of such date of determination.



     Section 8.16 Negative Pledge. No Borrower Party shall, or shall permit any Subsidiary
of any Borrower Party to, directly or indirectly, enter into any agreement (other than the Loan
Documents) with any Person that prohibits or restricts or limits the ability of any Borrower Party
or any such Subsidiary to create, incur, pledge, or suffer to exist any Lien upon any of its
respective assets, or restricts the ability of any Subsidiary of a Borrower to pay Dividends to
such Borrower.



     Section 8.17 Inconsistent Agreements. No Borrower Party shall, or shall permit any
Subsidiary of any Borrower Party to, enter into any contract or agreement which



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would violate the terms hereof, any other Loan Document or any Bank Products Document.


ARTICLE 9.




DEFAULT




     Section 9.1 Events of Default. Each of the following shall constitute an Event of
Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment or order of any court or any order, rule,
or regulation of any governmental or non-governmental body:



          (a) Any representation or warranty made under this Agreement, any other Loan Document or any
Bank Products Document with respect to a Lender Hedge Agreement shall prove incorrect or misleading
in any material respect when made or deemed to have been made pursuant to Section 5.4;



          (b) (i) Any payment of any principal hereunder, or any reimbursement obligations with respect
to any Letter of Credit shall not be received by the Administrative Agent on the date such payment
is due, or (ii) any payment of any interest hereunder or any fees payable hereunder or under the
other Loan Documents by any Borrower Party shall not be received by the Administrative Agent within
three (3) Business Days from the date on which such payment is due;



          (c) Any Borrower Party shall default in the performance or observance of any agreement or
covenant contained in Sections 2.12, 4.5 (other than a default solely resulting
from the action or inaction of the Administrative Agent or its agents and representatives),
6.1, or 6.15, or in Article 7 or Article 8 (other than Section
8.16);



          (d) Any Borrower Party shall default in the performance or observance of any other agreement
or covenant contained in this Agreement not specifically referred to elsewhere in this Section
9.1, and such default, if curable, shall not be cured to the Majority Lenders’ satisfaction
within the earlier of (i) a period of thirty (30) days from the date that an officer of such
Borrower Party knew or should have known of the occurrence of such default, or (ii) a period of
thirty (30) days after written notice of such default is given by the Administrative Agent to the
Administrative Borrower;



          (e) There shall occur any default in the performance or observance by any Borrower Party of
any agreement or covenant contained in any of the other Loan Documents or in the Bank Products
Documents with respect to Lender Hedge Agreements (other than this Agreement or the Security
Documents or as otherwise provided in this Section 9.1) which shall not be cured to the
Majority Lenders’ satisfaction within the applicable cure period, if any, provided for in such Loan
Document or Bank Products Document, or, if there is no applicable cure period set forth



102









 







in such Loan Document or Bank Product Document, within the earlier of (i) a period of thirty
(30) days from the date that an officer of a Borrower knew of the occurrence of such default, or
(ii) a period of thirty (30) days after written notice of such default is given by the
Administrative Agent to the Administrative Borrower;



          (f) There shall occur any Change in Control;



          (g) (i) There shall be entered a decree or order for relief in respect of any Borrower Party
or any Subsidiary of a Borrower Party under the Bankruptcy Code, or any other applicable federal or
state bankruptcy law or other similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator, or similar official of any Borrower Party or any Subsidiary of a Borrower
Party or of any substantial part of its properties, or ordering the winding-up or liquidation of
the affairs of any Borrower Party or any Subsidiary of a Borrower Party, or (ii) an involuntary
petition shall be filed against any Borrower Party or any Subsidiary of a Borrower Party and a
temporary stay entered and (A) such petition and stay shall not be diligently contested, or (B) any
such petition and stay shall continue undismissed for a period of sixty (60) consecutive days;



          (h) Any Borrower Party or any Subsidiary of a Borrower Party shall commence an Insolvency
Proceeding or any Borrower Party or any Subsidiary of a Borrower Party shall consent to the
institution of an Insolvency Proceeding or to the appointment or taking of possession of a
receiver, liquidator, assignee, trustee, custodian, sequestrator, or other similar official of such
Borrower Party or any Subsidiary of a Borrower Party or of any substantial part of its properties,
or any Borrower Party or any Subsidiary of a Borrower Party shall fail generally to pay its debts
as they become due, or any Borrower Party or any Subsidiary of a Borrower Party shall take any
action in furtherance of any such action;



          (i) A final judgment (other than a money judgment or judgments fully covered (except for
customary deductibles or copayments not to exceed $500,000 in the aggregate) by insurance as to
which the insurance company has acknowledged coverage) shall be entered by any court against any
Borrower Party or any Subsidiary of any Borrower Party for the payment of money which exceeds,
together with all such other judgments of the Borrower Parties and their Subsidiaries, $3,000,000
in the aggregate, or a warrant of attachment or execution or similar process shall be issued or
levied against property of any Borrower Party or any Subsidiary of a Borrower Party pursuant to a
final judgment which, together with all other such property of the Borrower Parties and their
Subsidiaries subject to other such process, exceeds in value $3,000,000 in the aggregate, and if,
within thirty (30) days after the entry, issue, or levy thereof, such judgment, warrant, or process
shall not have been paid or discharged or stayed pending appeal, or if, after the expiration of any
such stay, such judgment, warrant, or process shall not have been paid or discharged;


          (j) There shall be at any time (i) any “accumulated funding deficiency,” as defined in ERISA
or in Section 412 of the Code, with respect to any Plan



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maintained by any Borrower Party or any ERISA Affiliate of a Borrower Party, or to which any
Borrower Party or any of its ERISA Affiliates has any liabilities; (ii) a trustee shall be
appointed by a United States District Court to administer any Plan maintained by any Borrower Party
or any ERISA Affiliate of a Borrower Party, or to which any Borrower Party or any of its ERISA
Affiliates has any liabilities; (iii) the PBGC shall institute proceedings to terminate any such
Plan; (iv) any Borrower Party or any ERISA Affiliate of any Borrower Party shall incur any
liability to the PBGC in connection with the termination of any such Plan; (v) any Plan or trust
created under any Plan of any Borrower Party or any ERISA Affiliate of any Borrower Party shall
engage in a non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) which would subject any such Plan, any trust created thereunder, any
trustee or administrator thereof, or any party dealing with any such Plan or trust to any tax or
penalty on “prohibited transactions” imposed by Section 502 of ERISA or Section 4975 of the Code;
(vi) any Borrower Party or any ERISA Affiliate of any Borrower Party shall enter into or become
obligated to contribute to a Multiemployer Plan; (vii) there shall be at any time a Lien imposed
against the assets of a Borrower Party or ERISA Affiliate under Code Section 430, or ERISA Sections
302 or 4068; or (viii) there shall occur at any time an ERISA Event; provided, however that no
Event of Default shall occur as a result of an event described in clauses (i), (ii), (iii), (iv),
(v), (vii) or (viii) of this Section 9.1(j) unless such event either individually or in the
aggregate with other events described therein could reasonably be expected result in an aggregate
liability greater than $2,000,000.



          (k) (i) There shall occur any default (after the expiration of any applicable grace or cure
period) under any indenture, agreement, or instrument evidencing Funded Debt of any Borrower Party
or any Subsidiary of a Borrower Party in an aggregate principal amount exceeding $2,500,000
(determined singly or in the aggregate with other Funded Debt) or (ii) there shall occur any
default under any Hedge Agreement (after the expiration of any applicable cure period set forth
therein);



          (l) All or any portion of any Loan Document or any Bank Products Document shall at any time
and for any reason be declared to be null and void, the effect of which is to render any such
material Loan Document or Bank Product Document inadequate for the practical realization of the
rights and benefits afforded thereby, or a proceeding shall be commenced by any Borrower Party, any
Subsidiary of a Borrower Party or any Affiliate thereof, or by any Governmental Authority having
jurisdiction over any Borrower Party, any Subsidiary of a Borrower Party or any Affiliate thereof,
seeking to establish the invalidity or unenforceability thereof (exclusive of questions of
interpretation of any provision thereof), or any Borrower Party, any Subsidiary of a Borrower Party
or any Affiliate thereof shall deny that it has any liability or obligation for the payment of any
Obligation provided under any Loan Document or any Bank Products Document, or any Lender Hedge
Agreement shall be terminated as a result of a default or event of default thereunder by any
Borrower Party; or



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          (m) If a notice of termination for default or the actual termination for default of any
Material Contract shall have been issued to or received by any Borrower or any Subsidiary of any
Borrower and such termination could reasonably be expected to have a Materially Adverse Effect.



     Section 9.2 Remedies. If an Event of Default shall have occurred and shall be
continuing, in addition to the rights and remedies set forth elsewhere in this Agreement, the other
Loan Documents and any Bank Products Documents:



          (a) With the exception of an Event of Default specified in Sections 9.1(g) or
(h), the Administrative Agent may in its discretion (unless otherwise instructed by the
Majority Lenders) or shall at the direction of the Majority Lenders, (i) terminate the Revolving
Loan Commitment and the Letter of Credit Commitment, or (ii) declare the principal of and interest
on the Loans and all other Obligations (other than any Obligations existing from time to time of
any Borrower Party to the Administrative Agent (or an Affiliate of the Administrative Agent)
arising in connection with any Bank Products Documents) to be forthwith due and payable without
presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived,
anything in this Agreement or in any other Loan Document to the contrary notwithstanding, or both.



          (b) Upon the occurrence and continuance of an Event of Default specified in Sections
9.1(g) or (h), such principal, interest, and other Obligations (other than any
Obligations existing from time to time of any Borrower Party to the Administrative Agent (or an
Affiliate of the Administrative Agent) arising in connection with any Bank Products Documents)
shall thereupon and concurrently therewith become due and payable, and the Revolving Loan
Commitment and the Letter of Credit Commitment, shall forthwith terminate, all without any action
by the Lender Group, or any of them and without presentment, demand, protest, or other notice of
any kind, all of which are expressly waived, anything in this Agreement or in any other Loan
Document to the contrary notwithstanding.



          (c) The Administrative Agent may in its discretion (unless otherwise instructed by the
Majority Lenders) or shall at the direction of the Majority Lenders exercise all of the
post-default rights granted to the Lender Group, or any of them, under the Loan Documents or under
Applicable Law. The Administrative Agent, for the benefit of the Lender Group, shall have the
right to the appointment of a receiver for the Property of the Borrower Parties, and the Borrower
Parties hereby consent to such rights and such appointment and hereby waive any objection the
Borrower Parties may have thereto or the right to have a bond or other security posted by the
Lender Group, or any of them, in connection therewith.



          (d) In regard to all Letters of Credit with respect to which presentment for honor shall not
have occurred at the time of any acceleration of the Obligations pursuant to the provisions of this
Section 9.2 or, upon the request of the Administrative Agent, after the occurrence of an
Event of Default and prior to acceleration, the



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Borrowers shall promptly upon demand by the Administrative Agent deposit in a Letter of Credit
Reserve Account opened by the Administrative Agent for the benefit of the Lender Group an amount
equal to one hundred and five percent (105%) of the aggregate then undrawn and unexpired amount of
such Letter of Credit Obligations. Amounts held in such Letter of Credit Reserve Account shall be
applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit,
and the unused portion thereof after such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay other Obligations in the manner set forth in Section
2.11. Pending the application of such deposit to the payment of the Reimbursement Obligations,
the Administrative Agent shall, to the extent reasonably practicable, invest such deposit in an
interest bearing open account or similar available savings deposit account and all interest accrued
thereon shall be held with such deposit as additional security for the Obligations. After all such
Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall
have been satisfied, and all other Obligations shall have been paid in full, the balance, if any,
in such Letter of Credit Reserve Account shall be returned to the Borrowers. Except as expressly
provided hereinabove, presentment, demand, protest and all other notices of any kind are hereby
expressly waived by the Borrowers.



          (e) The rights and remedies of the Lender Group hereunder shall be cumulative, and not
exclusive.



ARTICLE 10.




THE ADMINISTRATIVE AGENT




     Section 10.1 Appointment and Authorization. Each member of the Lender Group hereby
irrevocably appoints and authorizes, and hereby agrees that it will require any transferee of any
of its interest in this Agreement and the other Loan Documents and its Loans, its portion of the
Revolving Loan Commitment and, if applicable, Letter of Credit Commitment irrevocably to appoint
and authorize, the Administrative Agent to take such actions as its agent on its behalf and to
exercise such powers hereunder and under the other Loan Documents as are delegated by the terms
hereof and thereof, together with such powers as are reasonably incidental thereto. Without
limiting the foregoing, each member of the Lender Group hereby authorizes the Administrative Agent
to execute and deliver each Loan Document to which the Administrative Agent is, or is required to
be, a party. Neither the Administrative Agent nor any of its directors, officers, employees, or
agents shall be liable for any action taken or omitted to be taken by it hereunder or in connection
herewith, except for its own gross negligence or willful misconduct as determined by a final
non-appealable order of a court of competent jurisdiction.



     Section 10.2 Interest Holders. The Administrative Agent may treat each Lender, or the
Person designated in the last notice filed with the Administrative Agent


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under this Section 10.2, as the holder of all of the interests of such Lender in this
Agreement and the other Loan Documents, its Loans and its portion of the Revolving Loan Commitment
until written notice of transfer, signed by such Lender (or the Person designated in the last
notice filed with the Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall have been filed
with the Administrative Agent.



     Section 10.3 Consultation with Counsel. The Administrative Agent may consult with
legal counsel selected by it and shall not be liable to any Lender or the Issuing Bank for any
action taken or suffered by it in good faith in reliance on the advice of such counsel.



     Section 10.4 Documents. The Administrative Agent shall not be under any duty to
examine, inquire into, or pass upon the validity, effectiveness, or genuineness of this Agreement,
any other Loan Document, or any instrument, document, or communication furnished pursuant hereto or
in connection herewith, and the Administrative Agent shall be entitled to assume that they are
valid, effective, and genuine, have been signed or sent by the proper parties, and are what they
purport to be.



     Section 10.5 Administrative Agent and Affiliates. With respect to the Revolving Loan
Commitment and Loans, the Administrative Agent shall have the same rights and powers hereunder as
any other Lender, and the Administrative Agent and its Affiliates, as the case may be, may accept
deposits from, lend money to, and generally engage in any kind of business with the Borrower
Parties or any Affiliates of, or Persons doing business with, the Borrower Parties, as if it were
not the Administrative Agent or affiliated with the Administrative Agent and without any obligation
to account therefor. The Lenders and the Issuing Bank acknowledge that the Administrative Agent
and its Affiliates have other lending and investment relationships with the Borrower Parties and
their Affiliates and in the future may enter into additional such relationships.



     Section 10.6 Responsibility of the Administrative Agent. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary
relationship with any other member of the Lender Group, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Administrative Agent. Without limiting the generality
of the foregoing sentence, the use of the term “agent” in this Agreement with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any Applicable Law. Instead, such term is used merely
as a matter of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. The Administrative Agent shall be entitled
to assume that no Default exists unless it has actual knowledge, or has been notified by any



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Borrower Party, of such fact, or has been notified by a Lender that such Lender considers that
a Default exists, and such Lender shall specify in detail the nature thereof in writing. The
Administrative Agent shall provide each Lender with copies of such documents received from any
Borrower Party as such Lender may reasonably request.



     Section 10.7 Action by Administrative Agent.



          (a) The Administrative Agent shall be entitled to use its discretion with respect to
exercising or refraining from exercising any rights which may be vested in it by, and with respect
to taking or refraining from taking any action or actions which it may be able to take under or in
respect of, this Agreement, unless the Administrative Agent shall have been instructed by the
Majority Lenders to exercise or refrain from exercising such rights or to take or refrain from
taking such action. The Administrative Agent shall incur no liability under or in respect of this
Agreement with respect to anything which it may do or refrain from doing in the reasonable exercise
of its judgment or which may seem to it to be necessary or desirable in the circumstances.



          (b) The Administrative Agent shall not be liable to the Lenders and the Issuing Bank, or any
of them, in acting or refraining from acting under this Agreement or any other Loan Document in
accordance with the instructions of the Majority Lenders (or all Lenders if expressly required by
Section 11.12), and any action taken or failure to act pursuant to such instructions shall
be binding on all Lenders and the Issuing Bank.



     Section 10.8 Notice of Default. In the event that any member of the Lender Group
shall acquire actual knowledge, or shall have been notified in writing, of any Default, such member
of the Lender Group shall promptly notify the other members of the Lender Group, and the
Administrative Agent shall take such action and assert such rights under this Agreement as the
Majority Lenders shall request in writing, and the Administrative Agent shall not be subject to any
liability by reason of its acting pursuant to any such request. If the Majority Lenders shall fail
to request the Administrative Agent to take action or to assert rights under this Agreement in
respect of any Default after their receipt of the notice of any
Default from a member of the Lender Group, or shall request inconsistent action with respect to such Default, the Administrative Agent
may, but shall not be required to, take such action and assert such rights (other than rights under
Article 9) as it deems in its discretion to be advisable for the protection of the Lender Group,
except that, if the Majority Lenders have instructed the Administrative Agent not to take such
action or assert such right, in no event shall the Administrative Agent act contrary to such
instructions.



     Section 10.9 Responsibility Disclaimed. The Administrative Agent shall not be under
any liability or responsibility whatsoever as Administrative Agent:



          (a) To any Borrower Party or any other Person or entity as a consequence of any failure or
delay in performance by or any breach by, any member of the Lender Group of any of its obligations
under this Agreement;



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          (b) To any Lender Group, or any of them, as a consequence of any failure or delay in
performance by, or any breach by, any Borrower Party or any other obligor of any of its obligations
under this Agreement or any other Loan Document; or



          (c) To any Lender Group, or any of them, for any statements, representations, or warranties in
this Agreement, or any other document contemplated by this Agreement or any information provided
pursuant to this Agreement, any other Loan Document, or any other document contemplated by this
Agreement, or for the validity, effectiveness, enforceability, or sufficiency of this Agreement,
any other Loan Document, or any other document contemplated by this Agreement.



     Section 10.10 Indemnification. The Lenders agree to indemnify (to the extent not
reimbursed by the Borrowers) and hold harmless the Administrative Agent and each of its Affiliates,
employees, representatives, officers and directors (each an “Administrative Agent Indemnified
Person”) pro rata in accordance with their Aggregate Commitment Ratios from and against any and
all claims, liabilities, investigations, losses, damages, actions, demands, penalties, judgments,
suits, investigations, costs, expenses (including fees and expenses of experts, agents, consultants
and counsel) and disbursements, in each case, of any kind or nature (whether or not an
Administrative Agent Indemnified Person is a party to any such action, suit or investigation)
whatsoever which may be imposed on, incurred by, or asserted against an Administrative Agent
Indemnified Person resulting from any breach or alleged breach by the Borrower Parties of any
representation or warranty made hereunder, or otherwise in any way relating to or arising out of
the Revolving Loan Commitment, this Agreement, the other Loan Documents or any other document
contemplated by this Agreement or any action taken or omitted by the Administrative Agent under
this Agreement, any other Loan Document, or any other document contemplated by this Agreement
(other than Bank Products Documents), the making, administration or enforcement of the Loan
Documents and the Loans or any transaction contemplated hereby or any related matters unless, with
respect to any of the above, such Administrative Agent Indemnified Person is determined by a final
non-appealable judgment of a court of competent jurisdiction to have acted or failed to act with
gross negligence or willful misconduct. This Section 10.10 is for the benefit of each
Administrative Agent Indemnified Person and shall not in any way limit the obligations of the
Borrower Parties under Section 6.18. The provisions of this Section 10.10 shall
survive the termination of this Agreement.



     Section 10.11 Credit Decision. Each member of the Lender Group represents and
warrants to each other member of the Lender Group that:



          (a) In making its decision to enter into this Agreement and to make its Advances it has
independently taken whatever steps it considers necessary to evaluate the financial condition and
affairs of the Borrower Parties and that it has made an independent credit judgment, and that it
has not relied upon information provided by the Administrative Agent or any of its Affiliates;



109









 





          (b) So long as any portion of the Obligations remains outstanding, it will continue to make
its own independent evaluation of the financial condition and affairs of the Borrower Parties; and



          (c) Except for notices, reports and other documents expressly herein required to be furnished
to the Lenders by the Administrative Agent, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or creditworthiness of the Borrower
Parties which may come into the possession of any of the Administrative Agent or any Affiliates of
the Administrative Agent.



     Section 10.12 Successor Administrative Agent. Subject to the appointment and
acceptance of a successor Administrative Agent as provided below, the Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the Administrative Borrower.
Upon any such resignation, the Majority Lenders shall have the right to appoint a successor
Administrative Agent (with the consent of the Administrative Borrower if no Event of Default then
exists). If no successor Administrative Agent shall have been so appointed by the Majority
Lenders, and shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent’s giving of notice of resignation, then the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative Agent which shall be any Lender or a
Person organized under the laws of the US, a State or any political subdivision thereof which has
combined capital and reserves in excess of $250,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers, privileges, duties,
and obligations of the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder. After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of Article 10 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by it while it was
acting as the Administrative Agent.



     Section 10.13 Administrative Agent May File Proofs of Claim. The Administrative Agent
may file such proofs of claim and other papers or documents as may be necessary or advisable in
order to have the claims of the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Administrative Agent, its agents,
financial advisors and counsel), the Lenders and the Issuing Bank allowed in any judicial
proceedings relative to any Borrower Party, or any of their respective creditors or property, and
shall be entitled and empowered to collect, receive and distribute any monies, securities or other
property payable or deliverable on any such claims and any custodian in any such judicial
proceedings is hereby authorized by each Lender and the Issuing Bank to make such payments to the
Administrative Agent and, in the event that the Administrative Agent



110









 







shall consent to the making of such payments directly to the Lenders and the Issuing Bank, to
pay to the Administrative Agent any amount due to the Administrative Agent for the reasonable
compensation, expenses, disbursements and advances of the Administrative Agent, its agents,
financial advisors and counsel, and any other amounts due the Administrative Agent under
Section 11.2. Nothing contained in this Agreement or the Loan Documents shall be deemed to
authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any
Lender or the Issuing Bank any plan of reorganization, arrangement, adjustment or composition
affecting this Agreement, any Revolving Loan Notes, the Letters of Credit or the rights of any
holder thereof, or to authorize the Administrative Agent to vote in respect of the claim of any
Lender or the Issuing Bank in any such proceeding.



     Section 10.14 Collateral. The Administrative Agent is hereby authorized to hold all
Collateral pledged pursuant to any Loan Document and to act on behalf of the Lender Group, in its
own capacity and through other agents appointed by it, under the Security Documents;
provided, that the Administrative Agent shall not agree to the release of any Collateral
except in accordance with the terms of this Agreement. The Lender Group acknowledges that the
Loans, any Overadvances, all Obligations with respect to Bank Products Documents and all interest,
fees and expenses hereunder constitute one Funded Debt, secured by all of the Collateral. The
Administrative Agent hereby appoints each Lender and the Issuing Bank as its agent (and each Lender
and the Issuing Bank hereby accepts such appointment) for the purpose of perfecting the
Administrative Agent’s Liens in assets which, in accordance with the UCC, can be perfected by
possession. Should any Lender or the Issuing Bank obtain possession of any such Collateral,
subject to the limitations set forth in the Blocked Account Agreements, promptly upon the
Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent
or in accordance with the Administrative Agent’s instructions.



     Section 10.15 Release of Collateral.



          (a) Each Lender and the Issuing Bank hereby directs, in accordance with the terms of this
Agreement, the Administrative Agent to release any Lien held by the Administrative Agent for the
benefit of the Lender Group:



               (i) against all of the Collateral, upon final and indefeasible payment in full of the
Obligations and termination of the Revolving Loan Commitments; or



               (ii) against any part of the Collateral sold, transferred or disposed of by the Borrower
Parties if such sale, transfer or other disposition is permitted by Section 8.7 or is
otherwise consented to by the requisite Lenders for such release as set forth in Section
11.12, as certified to the Administrative Agent by the Administrative Borrower in a certificate
of an Authorized Signatory of the Administrative Borrower.



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          (b) Each Lender and the Issuing Bank hereby directs the Administrative Agent to execute and
deliver or file or authorize the filing of such termination and partial release statements and do
such other things as are necessary to release Liens to be released pursuant to this Section
10.15 promptly upon the effectiveness of any such release. Upon request by the Administrative
Agent at any time, the Lenders and the Issuing Bank will confirm in writing the Administrative
Agent’s authority to release particular types or items of Collateral pursuant to this Section
10.15.



ARTICLE 11.




MISCELLANEOUS




     Section 11.1 Notices.



          (a) All notices and other communications under this Agreement shall be in writing and shall be
deemed to have been given five (5) days after deposit in the mail, designated as certified mail,
return receipt requested, postage-prepaid, or one (1) day after being entrusted to a reputable
commercial overnight delivery service, or when delivered to the telegraph office or sent out (with
receipt confirmed) by telex or telecopy (or to the extent specifically permitted under Section
11.1(c) only, when sent out by electronic means) addressed to the party to which such notice is
directed at its address determined as in this Section 11.1. All notices and other
communications under this Agreement shall be given to the parties hereto at the following
addresses:



               (i) If to any Borrower Party, to such Borrower Party in care of the Administrative Borrower
at:




			
	                              	 	Chico’s FAS, Inc.

11215 Metro Parkway

Fort Myers, Florida 33966

Attn: Kent Kleeberger

Telecopy No.: (239) 274-4622

Email: sandy.rhodes@chicos.com


with a copy to:


Gary I. Teblum

Trenam, Kemker, Scharf,

Barkin, Frye, O’Neill & Mullis, P.A.

101 E. Kennedy Boulevard

Suite 2700

Tampa, FL 33602

Telecopy: (813) 229-6553

Email: gteblum@trenam.com





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               (ii) If to the Administrative Agent, to it at:




			
	                              	 	SunTrust Bank

303 Peachtree Street

Twenty Third Floor

Atlanta, Georgia 30308

Attn: Chico’s Account Manager

Telecopy No.: (404) 588-7061

Email: haynes.gentry@suntrust.com


with a copy to:


Chris D Molen, Esq.

Paul, Hastings, Janofsky & Walker LLP

600 Peachtree Street, N.E.

Suite 2400

Atlanta, Georgia 30308

Telecopy No.: (404) 815-2424

Email: chrismolen@paulhastings.com





               (iii) If to the Lenders, to them at the addresses set forth on the signature pages of this
Agreement; and



               (iv) If to the Issuing Bank, at the address set forth on the signature pages of this
Agreement.



          (b) Any party hereto may change the address to which notices shall be directed under this
Section 11.1 by giving ten (10) days’ written notice of such change to the other parties.



          (c) The Borrowers may make delivery of the items required by Sections 7.1, 7.2
and 7.3 via Electronic Transmission to the Lender Group.



     Section 11.2 Expenses. The Borrowers agree to promptly pay or promptly reimburse:



          (a) All reasonable out-of-pocket costs and expenses of the Administrative Agent and its
Affiliates in connection with the preparation, negotiation, execution, delivery and syndication of
this Agreement, the other Loan Documents and the Bank Products Documents, the transactions
contemplated hereunder and thereunder, and the making of the initial Advance hereunder, including,
but not limited to, the reasonable fees and disbursements of counsel for the Administrative Agent
and its Affiliates;



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          (b) All reasonable out-of-pocket costs and expenses of the Administrative Agent in connection
with the administration of the transactions contemplated in this Agreement, the other Loan
Documents and the Bank Products Documents, and the preparation, negotiation, execution, and
delivery of any waiver, amendment, or consent by the Lenders relating to this Agreement, the other
Loan Documents or the Bank Products Documents, including, but not limited to, all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with their periodic
field audits, appraisals and examinations, a fee of $1,000 per day (as may be increased from time
to time by the Administrative Agent), per auditor, plus reasonable out-of-pocket costs and expenses
for each field audit or examination of a Borrower Party performed by personnel employed by the
Administrative Agent, the reasonable fees and disbursements of counsel for the Administrative
Agent;



          (c) All out-of-pocket costs and expenses of the Administrative Agent, the Issuing Bank and any
Lender in connection with any restructuring, refinancing, or “work out” of the transactions
contemplated by this Agreement, and of obtaining performance under this Agreement, the other Loan
Documents and the Bank Products Documents, and all out-of-pocket costs and expenses of collection
if default is made in the payment of the Obligations, which in each case shall include fees and
out-of-pocket expenses of counsel for the Administrative Agent, the Issuing Bank and any Lender,
and the fees and out-of-pocket expenses of any experts of the Administrative Agent, or consultants
of the Administrative Agent;



          (d) All taxes, assessments, general or special, and other charges levied on, or assessed,
placed or made against any of the Collateral, any Revolving Loan Notes or the Obligations; and



          (e) All reasonable out-of-pocket costs and expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder.



     Section 11.3 Waivers. The rights and remedies of the Lender Group under this
Agreement, the other Loan Documents and the Bank Products Documents shall be cumulative and not
exclusive of any rights or remedies which they would otherwise have. No failure or delay by the
Lender Group, or any of them, or the Majority Lenders in exercising any right shall operate as a
waiver of such right. The Lender Group expressly reserves the right to require strict compliance
with the terms of this Agreement in connection with any funding of a request for an Advance. In
the event the Lenders decide to fund a request for an Advance at a time when the Borrowers are not
in strict compliance with the terms of this Agreement, such decision by the Lenders shall not be
deemed to constitute an undertaking by the Lenders to fund any further requests for Advances or
preclude the Lenders from exercising any rights available to the Lenders under the Loan Documents
or at law or equity. Any waiver or indulgence granted by the Lenders or by the Majority Lenders
shall not constitute a modification of this Agreement,



114









 







except to the extent expressly provided in such waiver or indulgence, or constitute a course
of dealing by the Lenders at variance with the terms of the Agreement such as to require further
notice by the Lenders of the Lenders’ intent to require strict adherence to the terms of the
Agreement in the future. Any such actions shall not in any way affect the ability of the Lenders,
in their discretion, to exercise any rights available to them under this Agreement or under any
other agreement, whether or not the Lenders are party, relating to the Borrowers.



     Section 11.4 Set-Off. In addition to any rights now or hereafter granted under
Applicable Law and not by way of limitation of any such rights, except to the extent limited by
Applicable Law, at any time that an Event of Default exists, each member of the Lender Group and
each subsequent holder of the Obligations is hereby authorized by the Borrower Parties at any time
or from time to time, without notice to the Borrower Parties or to any other Person, any such
notice being hereby expressly waived, to set-off and to appropriate and apply any and all deposits
(general or special, time or demand, including, but not limited to, Funded Debt evidenced by
certificates of deposit, in each case whether matured or unmatured, but not including any amounts
held by any member of the Lender Group or any of its Affiliates in any escrow account) and any
other Funded Debt at any time held or owing by any member of the Lender Group or any such holder to
or for the credit or the account of any Borrower Party, against and on account of the obligations
and liabilities of the Borrower Parties, to any member of the Lender Group or any such holder under
this Agreement, any Revolving Loan Notes, any other Loan Document and any Bank Products Documents,
including, but not limited to, all claims of any nature or description arising out of or connected
with this Agreement, any Revolving Loan Notes, any other Loan Document or any Bank Products
Document, irrespective of whether or not (a) the Lender Group shall have made any demand hereunder
or (b) the Lender Group shall have declared the principal of and interest on the Loans and any
Revolving Loan Notes and other amounts due hereunder to be due and payable as permitted by
Section 9.2 and although said obligations and liabilities, or any of them, shall be
contingent or unmatured. Any sums obtained by any member of the Lender Group or by any subsequent
holder of the Obligations shall be subject to the application of payments provisions of Article 2.



     Section 11.5 Assignment.



          (a) 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
Borrower Party may assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or transfer by any Borrower
Party without such consent 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 and, to the extent expressly contemplated
hereby, the Affiliates



115









 




of the Administrative Agent) any legal or equitable right, remedy or claim under or by reason
of this Agreement.



          (b) Any Lender (and any Lender that is an Issuing Bank) may 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 portion of the Revolving Loan Commitment and the Loans at the time owing to it and,
if applicable, all or a portion of its portion of the Letter of Credit Commitment and excluding
rights and obligations with respect to Bank Products Documents); provided that (i) except in the
case of an assignment of the entire remaining amount of the assigning Lender’s portion of the
Revolving Loan 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, the aggregate
amount of the Revolving Loan Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent), shall not be less than $1,000,000, unless each of the
Administrative Agent and, so long as no Default exists, the Administrative Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed), and (ii) the parties to
each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500 (unless such assignment is to a Lender, an
Affiliate of a Lender or an Approved Fund), and the Eligible 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 Section 11.5(c), from and
after the effective date specified in each Assignment and Acceptance, the Eligible Assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment
and Acceptance, 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 Acceptance,
be released from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance 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 2.8(b), 2.9, 6.18, 12.3 and 12.5). Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does not comply with
this paragraph 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 paragraph (d) of this Section.



          (c) The Administrative Agent, acting solely for this purpose as an agent of the Borrowers,
shall maintain at the Administrative Agent’s Office a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of the Lenders, and
the portion of the Revolving Loan Commitment of, and principal amount of the Loans owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive, and the Borrowers, 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




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all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.




          (d) Any Lender may, without the consent of, or notice to, the Borrowers or the Administrative
Agent, sell participations to one or more banks or other entities (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 portion of the Revolving Loan Commitment and/or the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers and the Lender Group shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement. 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, modification or waiver described in Section
11.12(a)(i) that affects such Participant. Subject to paragraph (e) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.8(b),
2.9, 6.18 and 12.3 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 11.5(b). To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 11.4 as though
it were a Lender, provided such Participant agrees to be subject to Section 2.8(b)
as though it were a Lender.



          (e) A Participant shall not be entitled to receive any greater payment under Section
2.8(b) or Section 12.3 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 Administrative 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 2.8(b) unless the Administrative Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with
Section 2.8(b) as though it were a Lender.



          (f) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including without limitation
(i) any pledge or assignment to secure obligations to a Federal Reserve Bank and (ii) in the case
of any Lender that is a Fund, any pledge or assignment of all or any portion of such Lender’s
rights under this Agreement to any holders of obligations owed, or securities issued, by such
Lender as security for such obligations or securities, or to any trustee for, or any other
representative of, such holders, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security interest shall
release a Lender



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from any of its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.



     Section 11.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument. In proving this Agreement or any other
Loan Document in any judicial proceedings, it shall not be necessary to produce or account for more
than one such counterpart signed by the party against whom such enforcement is sought. Any
signatures delivered by a party by facsimile transmission or by e-mail transmission shall be deemed
an original signature hereto.



     Section 11.7 Under Seal; Governing Law. This Agreement and the other Loan Documents
are intended to take effect as sealed instruments and shall be construed in accordance with and
governed by the laws of the State of Georgia, without regard to the conflict of laws principles
thereof, except to the extent otherwise provided in the Loan Documents.



     Section 11.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.



     Section 11.9 Headings. Headings used in this Agreement are for convenience only and
shall not be used in connection with the interpretation of any provision hereof.



     Section 11.10 Source of Funds. Notwithstanding the use by the Lenders of the Base
Rate and the Eurodollar Rate as reference rates for the determination of interest on the Loans, the
Lenders shall be under no obligation to obtain funds from any particular source in order to charge
interest to the Borrowers at interest rates tied to such reference rates.



     Section 11.11 Entire Agreement. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOAN
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. Each Borrower Party represents and warrants to the
Lender Group that it has read the provisions of this Section 11.11 and discussed the
provisions of this Section 11.11 and the rest of this Agreement with counsel for such
Borrower Party, and such Borrower Party acknowledges and agrees that the Lender Group is expressly
relying upon such representations and warranties of such Borrower Party (as well as the other
representations and warranties of such Borrower Party set forth in this Agreement and the other
Loan Documents) in entering into this Agreement.



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     Section 11.12 Amendments and Waivers.



          (a) Neither this Agreement, any other Loan Document nor any term hereof or thereof may be
amended orally, nor may any provision hereof be waived orally but only by an instrument in writing
signed by the Majority Lenders, or in the case of Loan Documents executed by the Administrative
Agent (and not the other members of the Lender Group), signed by the Administrative Agent and
approved by the Majority Lenders and, in the case of an amendment, also by the Borrowers, except
that: (i) the consent of each of the Lenders and, in the case of an amendment, the Borrowers,
shall be required for (A) any sale or release of, or the subordination of the Administrative
Agent’s security interest in, any material Collateral except in conjunction with sales or transfers
of Collateral permitted hereunder, (B) except in conjunction with transactions permitted hereunder,
any release of any guarantor of the Obligations, (C) any extensions, postponements or delays of the
Maturity Date or the scheduled date of payment of interest or principal or fees, or any reduction
of principal (without a corresponding payment with respect thereto), or reduction in the rate of
interest or fees due to the Lenders hereunder or under any other Loan Documents, (D) any amendment
of this Section 11.12 or of the definition of “Majority Lenders” or any other provision of
the Loan Documents specifying the number or percentage of Lenders required to waive, amend or
modify any rights thereunder or make any determination or grant any consent thereunder; (E) any
amendment increasing the Revolving Loan Commitment (it being understood and agreed that a waiver of
any Default or Event of Default or modification of any of the defined terms contained herein (other
than those defined terms specifically addressed in this Section 11.12) shall not constitute
a change in the terms of the Revolving Loan Commitments of any Lender); (F) any amendment
increasing the amounts or percentages set forth in the definition of “Borrowing Base” and the
defined terms used therein; (G) any amendment to the definition of “Availability” and the defined
terms used therein; and (H) any amendment to Section 2.11; (ii) the consent of the
Administrative Agent, the Majority Lenders and the Borrowers shall be required for any amendment to
Section 2.1(f) or Article 10; (iii) the consent of the Issuing Bank, the Majority
Lenders and the Borrowers shall be required for any amendment to Section 2.1(c) or
2.15 or the definition of “Letter of Credit Commitment”; (iv) the consent of the Guarantors
and the Majority Lenders shall be required for any amendment to Article 3; (v) the consent of the
Swing Bank, the Majority Lenders and the Borrowers shall be required for any amendment to
Section 2.1(d) or Section 2.2(g); (vi) the consent of the Administrative Agent only
shall be required to amend Schedule 1(a) to reflect assignments of the Revolving Loan
Commitments and Loans in accordance with this Agreement. In addition to the required consents set
forth above, if SunTrust Bank or any Affiliate thereof has entered into a Lender Hedge Agreement
with any Borrower Party and SunTrust Bank is no longer the Administrative Agent or a Lender, the
consent of SunTrust Bank or such Affiliate shall be required for any amendment to Section
2.11 or any amendment described in clause (i)(A) above. Any amendment, modification, waiver,
consent, termination or release of any Bank Products Documents may be effected by the parties
thereto without the consent of the Lender Group.



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          (b) Each Lender grants to the Administrative Agent the right to purchase all (but not less
than all) of such Lender’s portion of the Revolving Loan Commitment, portion of the Letter of
Credit Commitment, the Loans and Letter of Credit Obligations owing to it and any Revolving Loan
Notes held by it and all of its rights and obligations hereunder and under the other Loan Documents
at a price equal to the outstanding principal amount of the Loans payable to such Lender plus any
accrued but unpaid interest on such Loans and accrued but unpaid commitment fees and letter of
credit fees owing to such Lender plus the amount necessary to cash collateralize any Letters of
Credit issued by such Lender, which right may be exercised by the Administrative Agent if such
Lender refuses to execute any amendment, waiver or consent which requires the written consent of
all of the Lenders and to which the Majority Lenders, the Administrative Agent and the Borrowers
have agreed. Each Lender agrees that if the Administrative Agent exercises its option hereunder,
it shall promptly execute and deliver an Assignment and Acceptance and other agreements and
documentation necessary to effectuate such assignment. The Administrative Agent may assign its
purchase rights hereunder to any assignee if such assignment complies with the requirements of
Section 11.5(b).



          (c) If any fees are paid to the Lenders as consideration for amendments, waivers or consents
with respect to this Agreement, at Administrative Agent’s election, such fees may be paid only to
those Lenders that agree to such amendments, waivers or consents within the time specified for
submission thereof.



     Section 11.13 Other Relationships. No relationship created hereunder or under any
other Loan Document shall in any way affect the ability of any member of the Lender Group to enter
into or maintain business relationships with the Borrowers, or any of its Affiliates, beyond the
relationships specifically contemplated by this Agreement and the other Loan Documents.



     Section 11.14 Pronouns. The pronouns used herein shall include, when appropriate,
either gender and both singular and plural, and the grammatical construction of sentences shall
conform thereto.



     Section 11.15 Disclosure. The Borrower Parties agree that the Administrative Agent,
and the Administrative Agent agrees that the Borrower Parties, shall each have the right, with the
consent of the other (such consent not to be unreasonably withheld), to issue press releases
regarding the making of the Loans and the issuance and the Revolving Loan Commitment to the
Borrowers pursuant to the terms of this Agreement.



     Section 11.16 Replacement of Lender. In the event that a Replacement Event occurs and
is continuing with respect to any Lender, the Administrative Borrower may designate another
financial institution (such financial institution being herein called a “Replacement
Lender”) acceptable to the Administrative Agent, and which is not a Borrower or an Affiliate of
any Borrower, to assume such Lender’s Revolving Loan Commitment hereunder, to purchase the Loans
and participations of such Lender and



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such Lender’s rights hereunder and (if such Lender is the Issuing Bank) to issue Letters of
Credit in substitution for all outstanding Letters of Credit issued by such Lender, without
recourse to or representation or warranty by, or expense to, such Lender for a purchase price equal
to the outstanding principal amount of the Loans payable to such Lender plus any accrued but unpaid
interest on such Loans and accrued but unpaid commitment fees and letter of credit fees owing to
such Lender plus amounts necessary to cash collateralize any Letters of Credit issued by such
Lender, and upon such assumption, purchase and substitution, and subject to the execution and
delivery to the Administrative Agent by the Replacement Lender of documentation satisfactory to the
Administrative Agent (pursuant to which such Replacement Lender shall assume the obligations of
such original Lender under this Agreement), the Replacement Lender shall succeed to the rights and
obligations of such Lender hereunder and such Lender shall no longer be a party hereto or have any
rights hereunder provided that the obligations of the Borrowers to indemnify such Lender with
respect to any event occurring or obligations arising before such replacement shall survive such
replacement. “Replacement Event” shall mean, with respect to any Lender, (a) the
commencement of or the taking of possession by, a receiver, custodian, conservator, trustee or
liquidator of such Lender, or the declaration by the appropriate regulatory authority that such
Lender is insolvent or (b) the making of any claim by any Lender under Section 2.8(b),
12.3 or 12.5, unless the changing of the lending office by such Lender would
obviate the need of such Lender to make future claims under such Sections.



     Section 11.17 Confidentiality. No member of the Lender Group shall disclose any
non-public confidential information regarding the Borrower Parties (“Confidential
Information”) to any other Person without the consent of the Administrative Borrower, other
than (i) to such member of the Lender Group’s Affiliates and their officers, directors, employees,
agents and advisors, to other members of the Lender Group and, as contemplated by Section
11.5, to actual or prospective assignees and participants, and then only on a confidential
basis, (ii) as required by any law, rule or regulation or judicial process, (iii) to any rating
agency when required by it, provided, that, prior to any such disclosure, such rating
agency shall undertake to preserve the confidentiality of any Confidential Information relating to
the Borrower Parties received by it from such member of the Lender Group, (iv) as requested or
required by any state, federal or foreign authority or examiner regulating banks or banking, and
(v) in connection with the exercise of any remedy hereunder or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder.



     Section 11.18 Revival and Reinstatement of Obligations. If the incurrence or payment
of the Obligations by any Borrower or any Guarantor, or the transfer to the Lender Group of any
property, should for any reason subsequently be declared to be void or voidable under any state or
federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences or other voidable or recoverable payments of money or transfers
of property (collectively, a



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“Voidable Transfer”), and if the Lender Group, or any of them, is required to repay or
restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable
advice of its counsel, then, as to any such Voidable Transfer, or the amount thereof that the
Lender Group, or any of them, is required or elects to repay or restore, and as to all reasonable
costs, expenses and attorneys fees of the Lender Group related thereto, the liability of the
Borrowers or such Guarantor, as applicable, automatically shall be revived, reinstated and restored
and shall exist as though such Voidable Transfer had never been made.



     Section 11.19 Electronic Transmissions. (a) Authorization. Subject to the
provisions of this Section 11.19(a), each of the Administrative Agent, the Borrowers, the
Lenders, the Issuing Bank and each of their Affiliates is authorized (but not required) to
transmit, post or otherwise make or communicate, in its sole discretion, Electronic Transmissions
in connection with any Loan Document and the transactions contemplated therein. Each of the
Borrowers and the other Borrower Parties hereby acknowledges and agrees, and each of the Borrowers
and the other Borrower Parties shall cause each of their Subsidiaries to acknowledge and agree,
that the use of Electronic Transmissions is not necessarily secure and that there are risks
associated with such use, including risks of interception, disclosure and abuse and each indicates
it assumes and accepts such risks by hereby authorizing the transmission of Electronic
Transmissions.



          (b) Separate Agreements. All uses of an E-System shall be governed by and subject to,
in addition to the terms and conditions of this Agreement, separate terms and conditions posted or
referenced in such E-System and related contractual obligations executed by Borrower Parties or the
members of the Lender Group in connection with the use of such E-System.



          (c) Limitation of Liability. All E-Systems and Electronic Transmissions shall be
provided “as is” and “as available”. None of Administrative Agent or any of its Affiliates
warrants the accuracy, adequacy or completeness of any E-Systems or Electronic Transmission, and
each disclaims all liability for errors or omissions therein. No warranty of any kind is made by
the Administrative Agent or any of its Affiliates in connection with any E-Systems or Electronic
Transmission, including any warranty of merchantability, fitness for a particular purpose,
non-infringement of third-party rights or freedom from viruses or other code defects. Each of the
Borrowers and the other Borrower Parties agrees that the Administrative Agent has no responsibility
for maintaining or providing any equipment, software, services or any testing required in
connection with any Electronic Transmission or otherwise required for any E-System.



ARTICLE 12.




YIELD PROTECTION




     Section 12.1 Eurodollar Rate Basis Determination. Notwithstanding anything contained
herein which may be construed to the contrary, if with respect to any proposed



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Eurodollar Advance for any Eurodollar Advance Period, the Administrative Agent determines that
deposits in Dollars (in the applicable amount) are not being offered to leading banks in the London
interbank market for such Eurodollar Advance Period, the Administrative Agent shall forthwith give
notice thereof to the Administrative Borrower and the Lenders, whereupon until the Administrative
Agent notifies the Administrative Borrower that the circumstances giving rise to such situation no
longer exist, the obligations of the Lenders to make Eurodollar Advances shall be suspended.



     Section 12.2 Illegality. If any change in Applicable Law, any change in the
interpretation or administration of any Applicable Law by any Governmental Authority, central bank,
or comparable agency charged with the interpretation or administration thereof, or any change in
compliance with Applicable Law as a result of compliance by any Lender with any request or
directive (whether or not having the force of law) of any such authority, central bank, or
comparable agency after the Agreement Date, shall make it unlawful for any Lender to make,
maintain, or fund its Eurodollar Advances, such Lender shall so notify the Administrative Agent,
and the Administrative Agent shall forthwith give notice thereof to the other Lenders and the
Administrative Borrower. Before giving any notice to the Administrative Agent pursuant to this
Section 12.2, such Lender shall designate a different lending office if such designation
will avoid the need for giving such notice and will not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender. Upon receipt of such notice, notwithstanding anything
contained in Article 2, the Borrowers shall repay in full the then outstanding principal amount of
each affected Eurodollar Advance of such Lender, together with accrued interest thereon, either (a)
on the last day of the then current Eurodollar Advance Period applicable to such Eurodollar Advance
if such Lender may lawfully continue to maintain and fund such Eurodollar Advance to such day or
(b) immediately if such Lender may not lawfully continue to fund and maintain such Eurodollar
Advance to such day. Concurrently with repaying each affected Eurodollar Advance of such Lender,
notwithstanding anything contained in Article 2, the Borrowers shall borrow a Base Rate Advance
from such Lender, and such Lender shall make such Advance in an amount such that the outstanding
principal amount of the Revolving Loans held by such Lender shall equal the outstanding principal
amount of such Revolving Loans immediately prior to such repayment.



     Section 12.3 Increased Costs.



          (a) If any change in Applicable Law, any change in the interpretation or administration of any
Applicable Law by any Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof or any change in compliance with Applicable Law as a
result of any request or directive (whether or not having the force of law) of such Governmental
Authority, central bank, or comparable agency after the Agreement Date:



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               (i) Shall subject any Lender to any tax, duty, or other charge with respect to its obligation
to make Eurodollar Advances, or its Eurodollar Advances, or shall change the basis of taxation of
payments to any Lender of the principal of or interest on its Eurodollar Advances or in respect of
any other amounts due under this Agreement in respect of its Eurodollar Advances or its obligation
to make Eurodollar Advances (except for changes in the rate of tax on the overall net income of
such Lender);



               (ii) Shall impose, modify, or deem applicable any reserve (including, without limitation, any
imposed by the Board of Governors of the Federal Reserve System, but excluding any included in an
applicable Eurodollar Reserve Percentage), special deposit, assessment, or other requirement or
condition against assets of, deposits (other than as described in Section 12.5) with or for
the account of, or commitments or credit extended by any Lender, or shall impose on any Lender or
the eurodollar interbank borrowing market any other condition affecting its obligation to make such
Eurodollar Advances or its Eurodollar Advances; and the result of any of the foregoing is to
increase the cost to such Lender of making or maintaining any such Eurodollar Advances, or to
reduce the amount of any sum received or receivable by the Lender under this Agreement or under any
Revolving Loan Notes with respect thereto, and such increase is not given effect in the
determination of the Eurodollar Rate;



               (iii) Shall subject the Issuing Bank or any Lender to any tax, duty or other charge with
respect to the obligation to issue Letters of Credit, maintain Letters of Credit or participate in
Letters of Credit, or shall change the basis of taxation of payments to the Issuing Bank or any
Lender in respect of amounts drawn under Letters of Credit or in respect of any other amounts due
under this Agreement in respect of Letters of Credit or the obligation of the Issuing Bank to issue
Letters of Credit or maintain Letters of Credit or the obligation of the Lenders to participate in
Letters of Credit (except for changes in the rate of tax on the overall net income of the Issuing
Bank or any Lender); or



               (iv) Shall impose, modify, or deem applicable any reserve (including, without limitation, any
imposed by the Board of Governors of the Federal Reserve System), special deposit, assessment, or
other requirement or condition against assets of, deposits (other than as described in Section
12.5) with or for the account of, or commitments or credit extended by the Issuing Bank, or
shall impose on the Issuing Bank or any Lender any other condition affecting the obligation to
issue Letters of Credit, maintain Letters of Credit or participate in Letters of Credit; and the
result of any of the foregoing is to increase the cost to the Issuing Bank or any Lender of
issuing, maintaining or participating in any such Letters of Credit or to reduce the amount of any
sum received or receivable by the Issuing Bank or any Lender under this Agreement with respect
thereto,



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then promptly upon demand by such Lender or Issuing Bank, the Borrowers agree to pay, without
duplication of amounts due under Section 2.8(b), to such Lender or Issuing Bank such
additional amount or amounts as will compensate such Lender or Issuing Bank for such increased
costs. Each Lender or Issuing Bank will promptly notify the Administrative Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Lender or the Issuing Bank to compensation pursuant to this Section 12.3
and will designate a different lending office if such designation will avoid the need for, or
reduce the amount of, such compensation and will not, in the sole judgment of such Lender or the
Issuing Bank, be otherwise disadvantageous to such Lender or the Issuing Bank.



          (b) A certificate of any Lender or the Issuing Bank claiming compensation under this
Section 12.3 and setting forth the additional amount or amounts to be paid to it hereunder
and calculations therefor shall be conclusive in the absence of manifest error. In determining
such amount, such Lender or the Issuing Bank may use any reasonable averaging and attribution
methods. If any Lender demands compensation under this Section 12.3, the Borrowers may at
any time, upon at least five (5) Business Days’ prior notice to such Lender, prepay in full the
then outstanding affected Eurodollar Advances of such Lender, together with accrued interest
thereon to the date of prepayment, along with any reimbursement required under Section 2.9.
Concurrently with prepaying such Eurodollar Advances, the Borrowers shall borrow a Base Rate
Advance, or a Eurodollar Advance not so affected, from such Lender, and such Lender shall make such
Advance in an amount such that the outstanding principal amount of the Revolving Loans held by such
Lender shall equal the outstanding principal amount of such Revolving Loans immediately prior to
such prepayment.



     Section 12.4 Effect On Other Advances. If notice has been given pursuant to
Sections 12.1, 12.2 or 12.3 suspending the obligation of any Lender to make
any, or requiring Eurodollar Advances of any Lender to be repaid or prepaid, then, unless and until
such Lender (or, in the case of Section 12.1, the Administrative Agent) notifies the
Administrative Borrower that the circumstances giving rise to such repayment no longer apply, all
Advances which would otherwise be made by such Lender as to the Eurodollar Advances affected shall,
at the option of the Administrative Borrower, be made instead as Base Rate Advances.



     Section 12.5 Capital Adequacy. If after the Agreement Date, any Lender or Issuing
Bank (or any Affiliate of the foregoing) shall have reasonably determined that the adoption of any
Applicable Law, governmental rule, regulation or order regarding the capital adequacy of banks or
bank holding companies, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by such Lender or Issuing Bank (or
any Affiliate of the foregoing) with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such Governmental Authority, central bank or comparable
agency (but



125









 







only if such adoption, change, request or directive occurs after the Agreement Date), has or
would have the effect of reducing the rate of return on such Lender’s or Issuing Bank’s (or any
Affiliate of the foregoing) capital as a consequence of such Lender’s or Issuing Bank’s Revolving
Loan Commitment or obligations hereunder to a level below that which it could have achieved but for
such adoption, change or compliance (taking into consideration such Lender’s or Issuing Bank’s (or
any Affiliate of the foregoing) policies with respect to capital adequacy immediately before such
adoption, change or compliance and assuming that such Lender’s or Issuing Bank’s (or any Affiliate
of the foregoing) capital was fully utilized prior to such adoption, change or compliance), then,
promptly upon demand by such Lender or Issuing Bank, the Borrowers shall immediately pay to such
Lender or Issuing Bank such additional amounts as shall be sufficient to compensate such Lender or
Issuing Bank for any such reduction actually suffered; provided, however, that
there shall be no duplication of amounts paid to a Lender pursuant to this sentence and Section
12.3. A certificate of such Lender or Issuing Bank setting forth the amount to be paid to such
Lender or Issuing Bank by the Borrowers as a result of any event referred to in this paragraph
shall, absent manifest error, be conclusive.



ARTICLE 13.




JURISDICTION, VENUE AND WAIVER OF JURY TRIAL




     Section 13.1 Jurisdiction and Service of Process. FOR PURPOSES OF ANY LEGAL ACTION OR
PROCEEDING BROUGHT BY ANY MEMBER OF THE LENDER GROUP WITH RESPECT TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR ANY BANK PRODUCTS DOCUMENT, EACH BORROWER PARTY HEREBY IRREVOCABLY SUBMITS TO THE
PERSONAL JURISDICTION OF THE FEDERAL AND STATE COURTS SITTING IN THE STATE OF GEORGIA AND HEREBY
IRREVOCABLY DESIGNATES AND APPOINTS, AS ITS AUTHORIZED AGENT FOR SERVICE OF PROCESS IN THE STATE OF
GEORGIA, THE ADMINISTRATIVE BORROWER, OR SUCH OTHER PERSON AS SUCH BORROWER PARTY SHALL DESIGNATE
HEREAFTER BY WRITTEN NOTICE GIVEN TO THE ADMINISTRATIVE AGENT. THE CONSENT TO JURISDICTION HEREIN
SHALL NOT BE EXCLUSIVE. THE LENDER GROUP SHALL FOR ALL PURPOSES AUTOMATICALLY, AND WITHOUT ANY ACT
ON THEIR PART, BE ENTITLED TO TREAT SUCH DESIGNEE OF EACH BORROWER PARTY AS THE AUTHORIZED AGENT TO
RECEIVE FOR AND ON BEHALF OF SUCH BORROWER PARTY SERVICE OF WRITS, OR SUMMONS OR OTHER LEGAL
PROCESS IN THE STATE OF GEORGIA, WHICH SERVICE SHALL BE DEEMED EFFECTIVE PERSONAL SERVICE ON SUCH
BORROWER PARTY SERVED WHEN DELIVERED, WHETHER OR NOT SUCH AGENT GIVES NOTICE TO SUCH BORROWER
PARTY; AND DELIVERY OF SUCH SERVICE TO ITS AUTHORIZED AGENT SHALL BE DEEMED TO BE MADE WHEN
PERSONALLY DELIVERED OR THREE (3) BUSINESS DAYS AFTER MAILING BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH AUTHORIZED



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AGENT. EACH BORROWER PARTY FURTHER IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL TO SUCH
BORROWER PARTY AT THE ADDRESS SET FORTH ABOVE, SUCH SERVICE TO BECOME EFFECTIVE THREE (3) BUSINESS
DAYS AFTER SUCH MAILING. IN THE EVENT THAT, FOR ANY REASON, SUCH AGENT OR ITS SUCCESSORS SHALL NO
LONGER SERVE AS AGENT OF EACH BORROWER PARTY TO RECEIVE SERVICE OF PROCESS IN THE STATE OF GEORGIA,
EACH BORROWER PARTY SHALL SERVE AND ADVISE THE ADMINISTRATIVE AGENT THEREOF SO THAT AT ALL TIMES
EACH BORROWER PARTY WILL MAINTAIN AN AGENT TO RECEIVE SERVICE OF PROCESS IN THE STATE OF GEORGIA ON
BEHALF OF SUCH BORROWER PARTY WITH RESPECT TO THIS AGREEMENT, ALL OTHER LOAN DOCUMENTS AND THE BANK
PRODUCTS DOCUMENTS. IN THE EVENT THAT, FOR ANY REASON, SERVICE OF LEGAL PROCESS CANNOT BE MADE IN
THE MANNER DESCRIBED ABOVE, SUCH SERVICE MAY BE MADE IN SUCH MANNER AS PERMITTED BY LAW.



     Section 13.2 Consent to Venue. EACH BORROWER PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION IT WOULD MAKE NOW OR HEREAFTER FOR THE LAYING OF VENUE OF ANY SUIT, ACTION, OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY BANK PRODUCTS DOCUMENT
BROUGHT IN THE FEDERAL COURTS OF THE UNITED STATES SITTING IN FULTON COUNTY, GEORGIA, AND HEREBY
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION, OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.



     Section 13.3 Waiver of Jury Trial. EACH BORROWER PARTY AND EACH MEMBER OF THE LENDER
GROUP TO THE EXTENT PERMITTED BY APPLICABLE LAW WAIVES, AND OTHERWISE AGREES NOT TO REQUEST, A
TRIAL BY JURY IN ANY COURT AND IN ANY ACTION, PROCEEDING OR COUNTERCLAIM OF ANY TYPE IN WHICH ANY
BORROWER PARTY, ANY MEMBER OF THE LENDER GROUP OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS
A PARTY, AS TO ALL MATTERS AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, THE BANK PRODUCTS DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN
THIS ARTICLE 13.



     Section 13.4 The Administrative Borrower. Each Borrower hereby irrevocably appoints
Parent as the borrowing agent and attorney-in-fact for all Borrowers (the “Administrative
Borrower”), which appointment shall remain in full force and effect unless and until the
Administrative Agent shall have received prior written notice signed by each Borrower that such
appointment has been revoked and that another Borrower has



127









 







been appointed the Administrative Borrower. Each Borrower hereby irrevocably appoints and
authorizes the Administrative Borrower (i) to provide the Administrative Agent with all notices
with respect to Loans and Letters of Credit obtained for the benefit of any Borrower and all other
notices and instructions under this Agreement and (ii) to take such action as the Administrative
Borrower deems appropriate on its behalf to obtain Loans and Letters of Credit and to exercise such
other powers as are reasonably incidental thereto to carry out the purposes of this Agreement.



     Section 13.5 All Obligations to Constitute Joint and Several Obligations.



          (a) All Obligations shall constitute joint and several obligations of the Borrowers and shall
be secured by the Administrative Agent’s Lien upon all of the Collateral, and by all other Liens
heretofore, now or at any time hereafter granted by each Borrower to the Administrative Agent, for
the benefit of the Lender Group, to the extent provided in the Loan Documents or Bank Product
Documents under which such Lien arises. Each Borrower expressly represents and acknowledges that
it is part of a common enterprise with the other Borrowers and that any financial accommodations by
the Administrative Agent, and the other members of the Lender Group to any other Borrower hereunder
and under the other Loan Documents and the Bank Product Documents are and will be of direct and
indirect interest, benefit and advantage to all Borrowers. Each Borrower acknowledges that any
Request for Advance, Notice of Conversion/Continuation, Notice of Requested Commitment Increase,
Request for Issuance of Letter of Credit or other notice or request given by any Borrower
(including the Administrative Borrower) to the Administrative Agent shall bind all Borrowers, and
that any notice given by the Administrative Agent or any other member of the Lender Group to any
Borrower shall be effective with respect to all Borrowers. Each Borrower acknowledges and agrees
that each Borrower shall be liable, on a joint and several basis, for all of the Loans and other
Obligations, regardless of which Borrower actually may have received the proceeds of any of the
Loans or other extensions of credit or have had Letters of Credit issued hereunder or the amount of
such Loans received, Letters of Credit issued or the manner in which the Administrative Agent or
any other member of the Lender Group accounts among the Borrowers for such Loans, Letters of Credit
or other extensions of credit on its books and records, and further acknowledges and agrees that
Loans and other extensions of credit to any Borrower inure to the mutual benefit of all of the
Borrowers and that the Administrative Agent and the other members of the Lender Group are relying
on the joint and several liability of the Borrowers in extending the Loans and other financial
accommodations hereunder. Each Borrower shall be entitled to subrogation and contribution rights
from and against the other Borrowers to the extent any Borrower is required to pay to any member of
the Lender Group any amount in excess of the Loans advanced directly to, or other Obligations
incurred directly by, such Borrower or as otherwise available under Applicable Law;
provided, however, that such subrogation and contribution rights are and shall be
subject to the terms and conditions of this Section 13.5.



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          (b) In the event any Borrower Party (a “Funding Borrower Party”) shall make any
payment or payments under this Agreement or shall suffer any loss as a result of any realization
upon any collateral granted by it to secure its obligations hereunder, such Funding Borrower Party
shall have the right to seek contribution payments from each other Borrower Party (each, a
“Contributing Borrower Party”) to the extent permitted by Applicable Law. Nothing in this
Section 13.5(b) shall affect any Borrower Party’s joint and several liability to the Lender
Group for the entire amount of its Obligations. Each Borrower Party covenants and agrees that (i)
its right to receive any contribution hereunder from a Contributing Borrower Party shall be
subordinate and junior in right of payment to all obligations of the Borrower Parties to the Lender
Group hereunder and (ii) it shall not exercise any such contribution rights unless and until the
Obligations shall have been paid in full in cash (or, with respect to Letters of Credit, cash
collateralized or supported by a letter of credit) and the Revolving Loan Commitments terminated.



          (c) Nothing in this Section 13.5 shall affect any Borrower’s joint and several
liability to the Lender Group for the entire amount of its Obligations. Each Borrower Party
covenants and agrees that its right to receive any contribution hereunder from a contributing
Borrower Party shall be subordinate and junior in right of payment to all Obligations of the
Borrowers to the Lender Group hereunder. No Borrower Party will exercise any rights that it may
acquire by way of subrogation hereunder or under any other Loan Document or any Bank Product
Document or at law by any payment made hereunder or otherwise, nor shall any Borrower Party seek or
be entitled to seek any contribution or reimbursement from any other Borrower Party in respect of
payments made by such Borrower Party hereunder or under any other Loan Document or under any Bank
Product Document, until all amounts owing to the Lender Group on account of the Obligations are
paid in full in cash (or, with respect to Letters of Credit, are either cash collateralized or
supported by a letter of credit) and the Revolving Loan Commitments are terminated. If any amounts
shall be paid to any Borrower Party on account of such subrogation or contribution rights at any
time when all of the Obligations shall not have been paid in full, such amount shall be held by
such Borrower Party in trust for the Lender Group segregated from other funds of such Borrower
Party, and shall, forthwith upon receipt by such Borrower Party, be turned over to the
Administrative Agent in the exact form received by such Borrower Party (duly endorsed by such
Borrower Party to the Administrative Agent, if required), to be applied against the Obligations,
whether matured or unmatured, as provided for herein.



[remainder of page intentionally left blank]





129









 








     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized officers, all as of the day and year first above written.



	 	 	 	 	 
	 	BORROWERS: CHICO’S FAS, INC.

 	 
	 	By:  	/s/ Kent A. Kleeberger
 	 
	 	 	Name:  	Kent A. Kleeberger 	 
	 	 	Title:  	Executive Vice President — Chief Financial

Officer
and Treasurer 	 
	 
	 	WHITE HOUSE | BLACK MARKET, INC.

 	 
	 	By:  	/s/ Kent A. Kleeberger
 	 
	 	 	Name:  	Kent A. Kleeberger 	 
	 	 	Title:  	Executive Vice President — Chief Financial

Officer and Treasurer 	 
	 
	 	CHICO’S RETAIL SERVICES, INC.

 	 
	 	By:  	/s/ Kent A. Kleeberger
 	 
	 	 	Name:  	Kent A. Kleeberger 	 
	 	 	Title:  	Executive Vice President — Chief Financial

Officer
and Treasurer 	 
	 
	 	CHICO’S DISTRIBUTION SERVICES, LLC

 	 
	 	By:  	/s/ Kent A. Kleeberger
 	 
	 	 	Name:  	Kent A. Kleeberger 	 
	 	 	Title:  	Executive Vice President — Chief Financial

Officer
and Treasurer 	 
	 
	 	SOMA INTIMATES, LLC

 	 
	 	By:  	/s/ Kent A. Kleeberger
 	 
	 	 	Name:  	Kent A. Kleeberger 	 
	 	 	Title:  	Executive Vice President — Chief Financial

Officer
and Treasurer 	 



 









 









ADMINISTRATIVE AGENT,

ISSUING BANK AND LENDER:







SUNTRUST BANK, as the Administrative Agent,

the Issuing Bank, a Lender and the Swing Bank









	 	 	 	 	 
	 	 	 
	 	By:  	/s/ J. Haynes Gentry, III
 	 
	 	 	Name:  	J. Haynes Gentry, III 	 
	 	 	Title:  	Vice President 	 
	 




 









 








Schedule 1(a)




Commitment Ratios




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Revolving Loan	 	 	Revolving	 	 	Aggregate	 	 	Aggregate	 
	Lender	 	Commitment	 	 	Commitment Ratio	 	 	Commitment	 	 	Commitment Ratio	 
	 
	SunTrust Bank
	 	$	55,000,000	 	 	 	100.00	%	 	$	55,000,000	 	 	 	100.00	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Totals
	 	$	55,000,000	 	 	 	100	%	 	$	55,000,000	 	 	 	100	%