Exhibit
10.1

    

     

     

    
      
        	
                Bank of America,
      N.A.

              	
                JPMorgan
      Chase Bank, N.A.

              	
                Wells
      Fargo Retail Finance, LLC

              
	
                Banc
      of America Securities LLC

              	
                J.P.
      Morgan Securities Inc.

              	
                One
      Boston Place

              
	
                One
      Bryant Park

              	
                270
      Park Avenue

              	
                Boston,
      MA 02108

              
	
                New
      York, NY 10036

              	
                New
      York, NY 10017

              	 
      


      

      


      


      


      AMENDED AND RESTATED
COMMITMENT LETTER

      


      


      August 7,
2009

      


      Barnes
& Noble, Inc.
122 Fifth
Avenue

      New York,
NY 10011

      


      
        Attention:  
Joseph J. Lombardi, Chief Financial Officer

         Maria
Florez, Vice President and Treasurer

      

      


      $1.0
Billion Senior Secured Credit Facility

      


      Ladies
and Gentlemen:

      


      This
letter and the Summary of Terms and Conditions (the "Summary of Terms") attached
as Exhibit A hereto (which Summary of
Terms is incorporated herein by reference and referred to collectively with this
letter as, the "Commitment
Letter") is being delivered by Bank of America, N.A. ("Bank of America"), Banc of
America Securities LLC ("BAS"), JPMorgan Chase Bank,
N.A. ("JPMorgan"),
J.P. Morgan Securities Inc. ("JPMS"), and Wells Fargo
Retail Finance, LLC ("WFRF") in connection with
the Transaction (defined below). Bank of America, BAS, JPMorgan, JPMS, and WFRF
are referred to collectively herein as the "Engagement Parties" and
each as an "Engagement
Party" and Bank of America, JPMorgan and WFRF are collectively referred
to herein as the "Initial
Lenders" and each as an "Initial Lender". This
Commitment Letter amends and restates in its entirety the letter agreement,
dated as of July 22, 2009, by and between you and the Engagement Parties (such
letter, together with the Summary of Terms and Conditions, attached as Exhibit A
thereto, the "Existing
Commitment Letter").

      


      You have
advised the Engagement Parties that Barnes & Noble, Inc., a Delaware
corporation (the "Company" and a "Borrower"), intends to
acquire from the holders thereof (the "Sellers") all of the equity
interests of Barnes & Noble College Booksellers, Inc. (the "Target"), including the
payment of certain indebtedness of the Target and certain fees and expenses in
connection therewith, all for certain cash consideration and the issuance to the
Sellers of the Seller Notes referred to below (the "Acquisition").


       

      You have
also advised the Engagement Parties that the Company intends to finance the
Acquisition, refinance the Existing Facility (as defined below) and fund all
costs and expenses related to the Transaction (as hereinafter defined)
(collectively, the "Financing") from the
following sources: (a) unsecured seller notes (collectively, the "Seller Notes") issued by
the Company and (b) a combination of (i) revolving loans funded under a $1.0
billion Senior Secured Credit Facility (the "Senior Credit Facility"),
all as described in the Summary of Terms, and (ii) cash of the Target. The
Senior Credit Facility will also be available to support the ongoing working
capital and other general corporate purposes of the Company and its subsidiaries
after consummation of the Acquisition. The Acquisition, the Financing, the
Senior Credit Facility, the issuance of the Seller Notes, and all related
transactions are hereinafter collectively referred to as the "Transaction ." The "Existing Facility" is that
certain Credit Agreement dated as of June 17, 2005, as amended (the "Existing Credit Agreement")
by and among the

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Barnes & Noble, Inc.
August 7,
2009

      Commitment
Letter, Page 2

      


      


      Company,
as borrower, certain of its subsidiaries, as co-borrowers, Bank of America, as
administrative agent, JPMorgan, as syndication agent, and the other agents and
lenders parties thereto.

      


      1. Commitments and Other
Agreements. In connection with the Transaction, (a) Bank of America is
pleased to offer to be the sole administrative agent (in such capacity, the
"Administrative
Agent") for the Senior Credit Facility and to offer its commitment to
lend up to $200 million of the Senior Credit Facility, (b) JPMorgan is pleased
to offer to be a co-syndication agent (in such capacity, a "Co- Syndication Agent") for
the Senior Credit Facility and to offer its commitment to lend up to $200
million of the Senior Credit Facility, and (c) WFRF is pleased to offer to be a
co-syndication agent (in such capacity, a "Co-Syndication Agent" and
collectively with the other Co-Syndication Agent, the "Syndication Agents") for
the Senior Credit Facility and to offer its commitment to lend up to $200
million of the Senior Credit Facility, each of the foregoing upon and subject to
the terms and conditions set forth in this Commitment Letter. Each of BAS, JPMS
and WFRF is pleased to advise you of its willingness, as a joint lead arranger
and a joint book runner (in such capacities, the "Joint Lead Arrangers" and
each a "Joint Lead
Arranger") for the Senior Credit Facility, to use its best efforts to
form a syndicate of financial institutions (including the Initial Lenders)
(collectively, the "Lenders") reasonably
acceptable to you for the Senior Credit Facility. No additional agents,
co-agents or arrangers will be appointed without our prior approval.
Notwithstanding any of the foregoing, only BAS and JPMS will receive credit as
Joint Lead Arrangers in the ABL League Tables with respect to the Senior Credit
Facility. You hereby agree that, effective upon your acceptance of this
Commitment Letter and continuing through the earlier of (i) the Closing Date
(defined in paragraph 4 below) and (ii) the Outside Date (as hereinafter
defined), you shall not solicit any other bank investment bank, financial
institution, person or entity to structure, arrange or syndicate any component
of the Senior Credit Facility or any other senior financing similar to or as a
replacement of any component of the Senior Credit Facility.


       

      2. Conditions
Precedent. The commitments of the Initial Lenders and the undertakings of
the Joint Lead Arrangers to provide the services described herein are subject to
the satisfaction of each of the following conditions precedent: (a) the accuracy
and completeness in all material respects of all representations that you and
your affiliates make to the Engagement Parties and your compliance in all
material respects with the terms of this Commitment Letter and the amended and
restated fee letter, dated as of the date hereof, between you and each of the
Engagement Parties (the "Fee
Letter") and (b) the satisfaction of each of the conditions set forth in
the Summary of Terms and the negotiation, execution and delivery of definitive
documentation for the Financing consistent with the Summary of Terms and
otherwise satisfactory to each Engagement Party.

      


      3. Syndication.
The Joint Lead Arrangers commenced syndication efforts promptly upon the effective
date of the Existing Commitment Letter to effect the Financing. The Company
acknowledges that a portion of the commitments of the Initial Lenders may be
allocated to and funded on the Closing Date by other Lenders joining in the
Senior Credit Facility through the syndication process if commitments are
received from the other Lenders in excess of the remaining $400 million of the
Senior Credit Facility (the "Minimum Commitments");
provided, however, that such
allocation shall not impair the commitment of each Initial Lender to fund the
full amount of its commitment hereunder if the conditions thereto are met and
such other Lenders fail to fund their allocated portion over the Minimum
Commitments. You agree to continue to actively assist the Joint Lead Arrangers
in obtaining a syndication of the Senior Credit Facility that is reasonably
satisfactory to the Joint Lead Arrangers. Such assistance shall include (a) your
providing and causing your advisors to provide the Engagement Parties and the
other Lenders upon request with all information reasonably deemed necessary by
the Engagement Parties to complete such syndication; (b) your assistance in the
preparation of a confidential offering memorandum (the "Offering Memorandum") to be
used in connection with such syndication; (c) your

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Barnes & Noble, Inc.

      August 7,
2009

      Commitment
Letter, Page 3

      


      


      using
reasonable efforts to ensure that the syndication efforts of the Joint Lead
Arrangers benefit materially from your existing banking relationships; (d) the
attendance by one or more senior officers of the Company, and your using
reasonable efforts to cause the attendance by one or more senior officers of the
Target, at one or more meetings with prospective Lenders; and (e) otherwise
assisting the Engagement Parties in their syndication efforts.

      


      It is
understood and agreed that the Joint Lead Arrangers will manage and control all
aspects of the syndication in consultation with you, including decisions as to
the selection of prospective Lenders, when commitments will be accepted and the
final allocations of the commitments among the Lenders.

      


      4. Borrower Covenants.
You hereby represent, warrant and covenant that (a) all written information,
other than the Projections (defined below), in the Offering Memorandum or which
otherwise has been or is hereafter made available to the Engagement Parties or
the Lenders by you or any of your representatives (or on your or their behalf)
in connection with the Transaction (the "Information"), taken as a
whole and to your knowledge to the extent that the Information relates to the
Target and its subsidiaries, is and will be complete and correct in all material
respects and does not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements contained
therein not materially misleading, and (b) all financial projections concerning
the Target, the Company and its subsidiaries that have been or are hereafter
made available to the Engagement Parties or the Lenders by you or any of your
representatives (the "Projections") have been or
will be prepared in good faith based upon assumptions believed by you to be
reasonable at the time such Projections were made. You agree to furnish us with
such Information and Projections as we may reasonably request and to supplement
the Information and the Projections from time to time until the date of the
initial borrowing under the Senior Credit Facility (the "Closing Date") so that the
representation, warranty and covenant in the preceding sentence is correct on
the Closing Date as if the Information were being furnished, and such
representation, warranty and covenant were being made, on such date. In issuing
this commitment and in arranging and syndicating the Senior Credit Facility, the
Engagement Parties are and will be using and relying on the Information and the
Projections without independent verification thereof.

      


      5. Company Materials.
You hereby acknowledge and agree that (a) the Engagement Parties, on your
behalf, will make available the Information and, if necessary, Projections
(collectively, "Company
Materials") to the proposed syndicate of Lenders by posting the Company
Materials on IntraLinks or another similar electronic system (the "Platform") and (b) none of
the proposed Lenders will be "public-side" Lenders (i.e., Lenders that do not
wish to receive material non-public information (within the meaning of United
States federal securities laws, "MNPI") with respect to the
Company, the Target, their subsidiaries, their affiliates or any of their
respective securities) (each, a "Public Lender"). You hereby
agree that (x) no Company Materials are to be made available to Public Lenders,
(y) all Company Materials shall be treated as private and may contain MNPI with
respect to the Company, the Target, their subsidiaries, their affiliates or
their respective securities for purposes of United States federal and state
securities laws and (z) the Engagement Parties shall treat all Company Materials
as being suitable only for posting on a portion of the Platform not designated
"Public
Investor". You further agree, however, that the definitive credit
documentation will contain provisions concerning Company Materials to be
provided to Public Lenders and the absence of MNPI therefrom. Prior to
distribution of the Offering Memorandum to prospective Lenders, if requested,
you shall provide us with a customary letter authorizing the dissemination
thereof.

      


      6. Expenses.
The Company shall reimburse the Engagement Parties from time to time on demand for
reasonable out-of-pocket expenses (including, but not limited to, reasonable
syndication expenses, reasonable due diligence expenses, reasonable travel
expenses, reasonable fees for external

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Barnes
& Noble, Inc.

      August 7,
2009

      Commitment
Letter, Page 4

      


      


      appraisers
and commercial finance examinations, and reasonable fees, disbursements and
charges of their respective counsel), in each instance incurred in connection
with the Transaction and the preparation of this Commitment Letter and the
definitive documentation for the Transaction, whether or not the Financing or
any other aspect of the Transaction is closed.

      


      7. Indemnification.
You agree to indemnify and hold harmless each Engagement Party, each Lender and
each of their affiliates and their respective officers, directors, employees,
agents, advisors and other representatives (each, an "Indemnified Party") from
and against (and will reimburse each Indemnified Party as the same are incurred
for) any and all claims, damages, losses, liabilities and expenses (including,
without limitation, the reasonable fees, disbursements and other charges of
counsel) that may be incurred by or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation or
proceeding or preparation of a defense in connection therewith) (a) any matters
contemplated by the Existing Commitment Letter, this Commitment Letter or the
Fee Letter or (b) the Transaction, including the Senior Credit Facility or any
use made or proposed to be made with the proceeds thereof, in each case, except
to the extent such claim, damage, loss, liability or expense is found in a
final, nonappealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence, willful misconduct or
bad faith. In the case of an investigation, litigation or proceeding to which
the indemnity in this paragraph applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by you,
your equity holders or creditors or an Indemnified Party, whether or not an
Indemnified Party is otherwise a party thereto and whether or not any aspect of
the Transaction is consummated. You also agree that no Indemnified Party shall
have any liability (whether direct or indirect, in contract or tort or
otherwise) to you or your subsidiaries or affiliates or to your or their
respective equity holders or creditors arising out of, related to or in
connection with any aspect of the Transaction, except to the extent of direct,
as opposed to special, indirect, consequential or punitive, damages determined
in a final, nonappealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence, willful misconduct or
bad faith. Without limitation of the immediately preceding sentence, it is
further agreed that each of the Engagement Parties shall only have liability to
you (as opposed to any other person), and that each of the Engagement Parties
shall be liable solely in respect of its own commitment to the Senior Credit
Facility on a several, and not joint, basis with any other Lender, and that such
liability shall only arise to the extent damages have been caused by a such
party’s failure to negotiate in good faith definitive documentation for the
Senior Credit Facility on the terms set forth herein, in each case, as
determined in a final, nonappealable judgment by a court of competent
jurisdiction. Notwithstanding any other provision of this Commitment Letter, no
Indemnified Party shall be liable for any damages arising from the use by others
of information or other materials obtained through electronic telecommunications
or other information transmission systems, except to the extent any damages
resulting therefrom are found in a final, nonappealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence, willful misconduct or bad faith.

      


      8. Confidentiality.
This Commitment Letter and the contents hereof and the Fee Letter and the
contents thereof are confidential and, except for disclosure hereof or thereof
on a confidential basis to your officers, directors, and employees, and to
accountants, attorneys and other professional advisors retained by you in
connection with the Transaction or as otherwise required by applicable laws or
regulations or by any subpoena or similar legal process may not be disclosed in
whole or in part to any person or entity without our prior written consent;
provided, however, it is understood and
agreed that you may disclose this Commitment Letter (including the Summary of
Terms), but not the Fee Letter, (i) after your acceptance of this Commitment
Letter, in filings with the Securities and Exchange Commission and other
applicable regulatory authorities and stock exchanges and (ii) to the Target,
its officers, directors,

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


      Barnes & Noble, Inc.

      August 7,
2009

      Commitment
Letter, Page 5

      


      


      employees,
accountants, attorneys and other professional advisors. The Engagement Parties
shall be permitted to use information related to the Transaction in connection
with marketing, press releases or other transactional announcements or updates
provided to investor or trade publications, provided that the content of any such
press releases/transactional updates shall be reasonably acceptable to the
Company.

      


      9. PATRIOT Act. The
Engagement Parties hereby notify you that pursuant to the requirements of the
USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001)
(the "PATRIOT Act"),
each of them is required to obtain, verify and record information that
identifies you, which information includes your name and address and other
information that will allow the Engagement Parties, as applicable, to identify
you in accordance with the PATRIOT Act. The Company agrees to furnish the
Engagement Parties, promptly after request therefor but in any event prior to
the Closing Date, all documentation and other information so requested by the
Engagement Parties and required by regulatory authorities under applicable "know
your customer" and anti-money laundering rules and regulations, including
without limitation the PATRIOT Act and the results of any investigation
undertaken in connection therewith shall be reasonably satisfactory to each of
the Engagement Parties.

      


      10. Conflicts of
Interest. You acknowledge that the Engagement Parties or their respective
affiliates may be providing financing or other services to parties whose
interests may conflict with yours. Each Engagement Party agrees that it will not
furnish confidential information obtained from you to any of their other
customers and shall only use such information in connection with the Transaction
and that they will treat confidential information relating to you and your
affiliates with the same degree of care as they treat their own confidential
information. Each Engagement Party further advises you that they will not make
available to you confidential information that they have obtained or may obtain
from any other customer. In connection with the services and transactions
contemplated hereby, you agree that the Engagement Parties are each permitted to
access, use and share with any of their bank or non-bank affiliates, agents,
advisors (legal or otherwise) or representatives any information concerning you
or any of your affiliates that is or may come into the possession of the
Engagement Parties, or any of such affiliates, provided that such bank or
non-bank affiliates, agents, advisors or representatives are informed of the
confidential nature of the information and agree to treat such information as
confidential in the same manner as required of the Engagement Parties under this
Commitment Letter.

      


      11. Arm’s Length
Transactions. In connection with all aspects of each transaction
contemplated by this Commitment Letter, you acknowledge and agree, and
acknowledge your affiliates’ understanding, that: (i) the Financing and the
Senior Credit Facility and any related arranging or other services described in
this letter is an arm’s-length commercial transaction between you and your
affiliates, on the one hand, and the Engagement Parties, on the other hand, and
you are capable of evaluating and understanding and understand and accept the
terms, risks and conditions of the Financing and the Senior Credit Facility and
such other services; (ii) in connection with the process leading to such
transaction, except as otherwise agreed by the Borrower and any Engagement Party
in writing, each of the Engagement Parties is and has been acting solely as a
principal and is not the financial advisor, agent or fiduciary, for you or any
of your affiliates, stockholders, creditors or employees or any other party;
(iii) unless otherwise agreed by the Borrower and any Engagement Party in
writing, no Engagement Party has assumed or will assume an advisory
responsibility in your or your affiliates’ favor with respect to any of the
transactions contemplated hereby or the process leading thereto (irrespective of
whether any Engagement Party has advised or is currently advising you or your
affiliates on other matters); (iv) no Engagement Party has assumed or will
assume an agency responsibility (except as may otherwise be agreed in writing by
the Borrower and any Engagement Party) or fiduciary responsibility in your or
your affiliates’ favor with respect to any of the transactions contemplated
hereby or the process leading thereto (irrespective of whether any Engagement
Party has advised or is currently advising you or your affiliates

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Barnes & Noble, Inc.

      August 7,
2009

      Commitment
Letter, Page 6

      


      


      on other
matters); (v) no Engagement Party has any obligation to you or your affiliates
with respect to the Transaction except those obligations expressly set forth in
this letter or in any other express writing executed and delivered by such
Engagement Party and the Borrower; (vi) the Engagement Parties and their
respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from yours and your affiliates and the Engagement
Parties have no obligation to disclose any of such interests by virtue of any
advisory, agency or fiduciary relationship; and (vii) the Engagement Parties
have not provided any legal, accounting, regulatory or tax advice with respect
to any aspect of the Transaction and you have consulted your own legal,
accounting, regulatory and tax advisors to the extent you have deemed
appropriate. You hereby waive and release, to the fullest extent permitted by
law, any claims that you may have against any Engagement Party with respect to
any breach or alleged breach of agency (except for any agency responsibilities
otherwise agreed by the Borrower and any Engagement Party in writing) or
fiduciary duty relating to the Transaction.

      


      12. Survival.
The provisions of paragraphs 6 through 11 hereof shall remain in full force
and effect
regardless of whether any definitive documentation for the Financing or the
other Transactions shall be executed and delivered, and notwithstanding the
termination of this letter or any undertaking hereunder, provided that upon the
execution, delivery and effectiveness of the definitive documentation for the
Senior Credit Facility, the provisions of paragraphs 6 through 9 shall be
superseded by the corresponding provisions of such definitive documentation and
shall therefore cease to be of any further force and effect.

      


      13. Execution and
Delivery. This Commitment Letter and the Fee Letter may be executed in
counterparts which, taken together, shall constitute an original. Delivery of an
executed counterpart of this Commitment Letter or the Fee Letter by facsimile or
email of a .pdf copy shall be effective as delivery of a manually executed
counterpart thereof.

      


      14. Governing Law. This
Commitment Letter and the Fee Letter shall be governed by, and construed in
accordance with, the laws of the State of New York (including, without
limitation, Section 5-1401 of the General Obligations Law of the State of New
York), without regard to conflicts of laws principles. The Company hereby
irrevocably submits to the non-exclusive jurisdiction of any New York State
court or federal court sitting in the County of New York in respect of any suit,
action or proceeding arising out of or relating to the provisions of this
Commitment Letter or the Fee Letter and irrevocably agrees, to the fullest
extent permitted by applicable law, that all claims in respect of any such suit,
action or proceeding may be heard and determined in any such court. The Company
hereby waives, to the fullest extent permitted by applicable law, any objection
that it may now or hereafter have to the laying of venue of any such suit,
action or proceeding brought in any such court, and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. The Company agrees that service of any process, summons,
notice or document by registered mail addressed to the Company shall be
effective service of process for any suit, action or proceeding brought in any
such court. Each of the Company and each Engagement Party hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Commitment
Letter or the Fee Letter, the transactions contemplated hereby and thereby or
the actions of any Engagement Party in the negotiation, performance or
enforcement hereof. The commitments and undertakings of the Engagement Parties
may be terminated by us, if you fail to perform in any material respect any of
your material obligations under this Commitment Letter or the Fee Letter on a
timely basis.

       

      15. Miscellaneous.
(a) This Commitment Letter and the Fee Letter embody the agreement and
understanding among the Engagement Parties and you with respect to the
Transaction and supersede

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Barnes & Noble, Inc.

      August 7,
2009

      Commitment
Letter, Page 7

      


      


      all prior
agreements (including, without limitation, the Existing Commitment Letter) and
understandings relating to the matters expressly set forth in the Commitment
Letter and the Fee Letter. However, please note that the terms and conditions of
the undertaking of the Engagement Parties hereunder are not limited to those set
forth herein or in the Summary of Terms. Those matters that are not covered or
made clear herein or in the Summary of Terms are subject to mutual agreement of
the applicable parties.

      


      (b) This
Commitment Letter is not assignable by the Company without our prior written
consent and is intended to be solely for the benefit of the Company, the
Engagement Parties and the Indemnified Parties.

      


      (c) This
Commitment Letter does not constitute an unconditional commitment to lend. Such
a commitment will exist only upon satisfaction of all conditions precedent
referenced herein, in the Summary of Terms, or in any of the loan
documents.

      


      16. Expiration. This
Commitment Letter will expire at 5:00 p.m. New York time on August 11, 2009
unless you execute this Commitment Letter and return it to us prior to that time
(which may be by facsimile or email transmission). Thereafter, this undertaking
will expire on the earlier of (a) receipt of (i) written notice from the Company
on or prior to August 17, 2009 that it has not executed and no longer intends to
execute the Purchase Agreement and does not intend to consummate the Acquisition
and (ii) all fees,
expenses and other amount due hereunder as of such date and (b) November 15,
2009, as such date may be extended in writing pursuant to the immediately
following sentence (the "Outside Date"), unless
definitive documentation for the Transaction is executed and delivered prior to
such date. The Engagement Parties acknowledge that they will use reasonable
efforts to obtain internal credit approval to extend their commitments hereunder
so that the date in clause (b) of this paragraph may be modified in writing to
correspond to the final deadline for consummation of the Acquisition set forth
in the Purchase Agreement, when executed.

      


      If the
foregoing is in accordance with your understanding of our agreement, please sign
three counterparts of this Commitment Letter in the space indicated below and
return one executed original to each of the Initial Lenders.

      


      [SIGNATURE
PAGES FOLLOW]

      


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        We look forward to working
with you on this transaction and continuing our mutually beneficial relationship
with you.

         

        
           

          
            	Very
      truly yours,	 
	 	 
	BANK
      OF AMERICA, N.A.	 
	 	 	 	 
	By:	/s/
      Andrew Cerussi	 
	 	Name:
      	Andrew
      Cerussi	 
	 	Title:
      	Senior
      Vice President	 


          

           

          
            
               

              
                	BANC
      OF AMERICA SECURITIES LLC	 
	 	 	 	 
	By:	/s/
      Matt Holbrook	 
	 	Name:
      	Matt
      Holbrook	 
	 	Title:
      	Vice
      President	 


              

               

            

            
              
                 

                
                  	JPMORGAN
      CHASE BANK, N.A.	 
	 	 	 	 
	By:	/s/ Kathleen
      C. Maggi	 
	 	Name:
      	Kathleen
      C. Maggi	 
	 	Title:
      	Senior
      Vice President	 


                

                 

              

              
                
                   

                  
                    	J.P.
      MORGAN SECURITIES INC.	 
	 	 	 	 
	By:	/s/
      Mac Fowle	 
	 	Name:
      	Mac
      Fowle	 
	 	Title:
      	Executive
      Director	 


                  

                   

                

                
                  
                     

                    
                      	WELLS
      FARGO RETAIL FINANCE, LLC	 
	 	 	 	 
	By:	/s/
      Cory Loftus	 
	 	Name:
      	Cory
      Loftus	 
	 	Title:
      	Vice
      President	 


                    

                     

                    ACCEPTED AND
AGREED TO

                    AS OF THE DATE
FIRST ABOVE WRITTEN:

                  

                  
                     

                    
                      	BARNES
      & NOBLE, INC.	 
	 	 	 	 
	By:	/s/
      Joseph J. Lombardi	 
	 	Name:
      	Joseph
      J. Lombardi	 
	 	Title:
      	Chief
      Financial Officer	 


                    

                     

                    Commitment
Letter

                    Signature Page

                     

                  

                

              

            

          

        

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

     

    SUMMARY OF TERMS AND CONDITIONS

     

    Barnes & Noble, Inc. -
$1.0 Billion Senior Secured Credit Facility

     

    Capitalized terms not otherwise defined
herein have the same meanings as specified therefor in the amended and restated
commitment letter, dated as of August 7, 2009 (the "Commitment
Letter"), to which this
Summary of Terms and Conditions is attached and of which it is made a
part.

     

    
      August 7,
2009

    

    


    
      	
              I. 

            	
              Parties 

            	 
      
	 	 	 
	 
      	
              Borrowers

            	
              Barnes & Noble, Inc., a
      Delaware corporation ("Company"),
      the Target, and each other direct and indirect, wholly-owned, domestic
      subsidiary of the Company and the Target (collectively, the "Borrowers"),
      to be determined based upon due diligence and a review of an
      organizational chart of the Company, the Target and their subsidiaries to
      be delivered by the Company.

            
	 
      	
            
	 
      	
              Guarantors

            	
              Each direct and indirect,
      wholly-owned, domestic subsidiary
      of the Company and the Target that is not a Borrower (the "Guarantors"
      and together with the Borrowers, collectively, the "Credit
      Parties").

            
	 	 	 
	 
      	
              Administrative
      Agent

            	
              Bank of America, N.A. (in such
      capacity, the "Administrative
      Agent"). 

            
	 	 	 
	 
      	
              Collateral
      Agent

            	
              Bank of America, N.A. (in such
      capacity, the "Collateral Agent").

            
	 	 	 
	 
      	
              Syndication
      Agents 

            	
              JPMorgan Chase Bank N.A (in such
      capacity, a "Co-Syndication
      Agent") and
      Wells Fargo Retail Finance, LLC (in such capacity, a "Co-Syndication
      Agent").

            
	 	 	 
	 
      	
              Swing Line
      Lender

            	
              Bank of America,
      N.A. 

            
	 	 	 
	 
      	
              LC
      Issuers

            	
              Bank of America, N.A., JPMorgan
      Chase Bank, N.A. and/or
      Wells Fargo Retail Finance, LLC or their respective affiliates acceptable
      to the Company (it being understood that Wells Fargo Bank, N.A. is an
      affiliate acceptable to the Company) (each, in such capacity, an "LC
      Issuer").

            
	 	 	 
	 
      	
              Joint Lead
      Arrangers and Joint Book
      Runners 

            	
              Banc of America Securities LLC,
      J.P. Morgan Securities Inc.
      and Wells Fargo Retail Finance, LLC (in such capacity, the "Joint Lead
      Arrangers").

            


    

    


    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    
      	
              II. 

            	
              Senior
      Credit Facility

            	 
      
	 	 	 
	 
      	
              Revolving
      Credit Facility

            	
              Revolving credit facility in
      favor of the Borrowers in an aggregate
      principal amount of up to $1.0 billion (the "Senior
      Credit Facility").

            
	 	 	 
	 
      	
              Letters of
      Credit 

            	
              A portion of the Facility not in
      excess of $100,000,000 in the
      aggregate will be available for the issuance of letters of credit (the
      "Letters of
      Credit") by the L/C Issuers. The face amount of any outstanding
      Letters of Credit will reduce availability under the Senior Credit
      Facility on a dollar-for-dollar basis. No Letter of Credit will have an
      expiration date after the earlier of (i) one year after the date of
      issuance, unless the applicable LC Issuer otherwise agrees (provided that
      customary evergreen Letters of Credit shall be permitted), and (ii) five
      business days prior to the Stated Maturity Date. Each Lender will purchase
      an irrevocable and unconditional participation in each Letter of
      Credit.

            
	 	 	 
	 
      	
              Swing Line
      Loans 

            	
              A portion of the Senior Credit
      Facility in an amount of up to
      $75,000,000 will be available for swing line loans (the "Swing Line
      Loans") solely in the discretion of Bank of America, N.A. (in such
      capacity, the "Swing Line
      Lender") on same-day notice. Any such Swing Line Loans will reduce
      availability under the Senior Credit Facility on a dollar-for-dollar
      basis. Each Lender will purchase an irrevocable and unconditional
      participation in each Swing Line Loan. Swing Line Loans shall be settled
      no less frequently than weekly by the Swing Line Lender with the other
      Lenders.

            
	 
      	
            
	 
      	
              Availability 

            	
               Subject to the next paragraph,
      revolving loans, Swing Line
      Loans and Letters of Credit (each a "Credit
      Extension") under the Senior Credit Facility will be available on a
      revolving basis during the period commencing on the date all conditions to
      the initial funding are satisfied (the "Closing
      Date") and ending on the Stated Maturity Date (unless the Senior
      Credit Facility is terminated earlier in accordance with the terms of the
      definitive documentation therefor). 

                 

                The
      aggregate outstanding amount of Credit Extensions and, without
      duplication, unreimbursed letter of credit drawings under the Senior
      Credit Facility shall not exceed at any time the lesser of (A) the
      aggregate amount of then effective commitments under the Senior Credit
      Facility (the "Commitments")
      and (B) the then-applicable Borrowing Base (as defined below) as of such
      date (such lesser amount, the "Loan
      Cap").

              

            


    

    


    
    

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

       

      
        	 	 	
                For purposes of the Senior Credit Facility, "Excess
      Availability" shall mean as of any date of determination (i) the
      Loan Cap as of such date minus (ii) all
      outstanding Credit Extensions and unreimbursed letter of credit drawings
      as of such date.

                 

                The
      borrowing base (the "Borrowing
      Base") at any time will be the sum of (a) 85% of the value of
      eligible accounts receivable (other than credit card receivables) of the
      Borrowers, plus (b) 90% of
      the value of eligible credit card receivables of the Borrowers, plus (c) the
      lesser of (i) 75% of the cost of eligible inventory of the Borrowers and
      (ii) 85% of the Net Orderly Liquidation Value (as defined below) of
      eligible inventory of the Borrowers, plus (d) the lesser of (i) 50%
      of the Fair Market Value (as defined below) of eligible real estate and
      (ii) $25 million, minus (e)
      reserves established by the Administrative Agent in its reasonable credit
      judgment.

                 

                The
      initial reserves on the Closing Date and the definitions of "eligible
      accounts receivables," "eligible credit card receivables," “eligible real
      estate," and "eligible inventory" shall be determined by the Engagement
      Parties, based upon the results of due diligence, including, without
      limitation, a commercial finance examination, real estate appraisals,
      environmental assessments and an inventory appraisal. "Net Orderly
      Liquidation Value" means the orderly liquidation value (net of
      costs and expenses incurred in connection with the liquidation) of
      inventory as a percentage of the cost of such inventory, which percentage
      will be determined by reference to the most-recent third-party appraisal
      of such inventory received by, and satisfactory to, the Administrative
      Agent. "Fair Market
      Value" shall mean the fair market value established pursuant to
      appraisals of real estate conducted by appraisers and on assumptions
      acceptable to the Engagement Parties on the Closing Date and thereafter as
      provided in the definitive loan documentation.

                 

                The
      Borrowing Base will initially be computed monthly by the Company and a
      certificate (the "Borrowing
      Base Certificate") presenting the Company’s computation of the
      Borrowing Base will be delivered to the Administrative Agent within
      fifteen (15) calendar days (or such longer period as the Administrative
      Agent may agree in its reasonable discretion, but in any event not to
      exceed an additional five (5) calendar days) following the end of each
      month; provided
      that during any Trigger Period (as defined below), the Company will
      compute the Borrowing Base weekly and deliver a Borrowing
    Base

              


      

       

      
        
          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

       

    

    
      	 	 
      	
              Certificate
      to the Administrative Agent no later than the third business day following
      the end of each week (or the fourth business day if agreed by the
      Administrative Agent in its reasonable discretion).

               

              A
      "Trigger
      Event" shall occur on any date when Excess Availability is less
      than (a) the greater of (i) 20% of the Loan Cap as of such date and (ii)
      $135 million, in each case for five consecutive calendar days, or (b) 17%
      of the Loan Cap at any time. A "Trigger
      Period" shall commence on the date of the occurrence of a Trigger
      Event and shall continue until the date Excess Availability shall have
      been not less than 20% of the Loan Cap or $135 million at any time during
      forty-five (45) consecutive calendar days. A Trigger Period may be
      discontinued on only three occasions during the term of the Senior Credit
      Facility, notwithstanding that Excess Availability may have been not less
      than 20% of the Loan Cap and $135 million for forty-five (45) consecutive
      calendar days.

            
	 	 	 
	 	
              Stated
      Maturity Date

            	
              Fourth
      (4th)
      anniversary of the Closing Date.

            
	 	 	 
	 	
              Purpose

            	
              The
      proceeds of the Senior Credit Facility will be used for general corporate
      purposes of the Borrowers and their subsidiaries.

            
	 	 	 
	 	
              Increase
      Option:

            	
              Provided
      there is no event of default then existing or would arise therefrom, on
      and after ninety (90) calendar days following the Closing Date, the
      Company, at its option, may request that the Senior Credit Facility be
      increased by an aggregate amount not to exceed $300 million in minimum
      increments of $50 million, which increase shall be on the same terms and
      conditions as then exist for the Senior Credit Facility. Any or all of the
      existing Lenders shall initially have the right of first refusal (but not
      the obligation) to increase their respective commitments to satisfy the
      Company’s requested increase in the Senior Credit Facility. If the Lenders
      are unwilling to so increase their commitments, BAS will use commercially
      reasonable efforts to obtain one or more financial institutions that are
      not then Lenders and who are reasonably acceptable to the Company, or the
      Company may seek to obtain one or more financial institutions that are not
      Lenders and who are reasonably acceptable to the Administrative Agent, to
      become party to the Senior Credit Facility and to provide a commitment in
      an amount necessary to satisfy the Company’s requested increase in the
      Senior Credit Facility. The Company shall pay the Agent and the Lenders
      increasing their commitments or providing new commitments
    fees

            


    

    


    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

       

    

    
    

    
      	 	 	
              and
      other compensation which is customary and appropriate for the exercise of
      the Increase Option.

            
	 	 	 
	
               III.

            	
              Certain
      Payment Provisions

            	 
	 	 	 
	 	
              Fees and
      Interest Rates

            	
              As set forth on Annex A
      hereto.

            
	 	 	 
	 	
              Optional
      Prepayments and 

              Commitment
      Reductions 

            	
              At the option of the Borrowers,
      Loans may be prepaid and
      commitments reduced, in each case from time to time and without premium or
      penalty (other than customary "LIBOR breakage costs") in minimum amounts
      to be mutually agreed upon.

            
	 	 	 
	 	
              Mandatory
      Prepayments

            	
              Subject to de minimus carve-outs
      to be agreed, 100% of the
      net cash proceeds of any sale or other disposition (including as a result
      of casualty or condemnation or from the issuance or sale of equity of a
      subsidiary) by the Borrowers or any of their subsidiaries of (i) inventory
      and receivables (in each case outside the ordinary course of business and
      subject to other customary exceptions to be agreed) and (ii) real estate
      constituting Collateral, will be applied to prepay the Loans and other
      amounts outstanding under the Senior Credit Facility but not cash
      collateralization of letters of credit unless an event of default then
      exists. No such mandatory prepayments will result in a reduction of
      commitments and each shall be made without premium or penalty (other than
      customary LIBOR breakage costs).

               

              If
      at any time the aggregate amount of the Credit Extensions and, without
      duplication, unreimbursed Letter of Credit drawings exceeds the Loan Cap
      as at such date of determination, then the Borrowers will immediately
      repay outstanding Loans and Swing Line Loans and unreimbursed letter of
      credit drawings and, if necessary thereafter, cash collateralize Letters
      of Credit in an aggregate amount equal to such excess.

               

              Following the
      occurrence and during the continuation of an event of default and at all
      times during a Trigger Period, all amounts deposited in the Collection
      Account (as defined below) will be promptly applied by the Administrative
      Agent to repay outstanding Loans and Swing  Line 
      Loans 
      and, 
      without 
      duplication, unreimbursed
      letter of credit drawings, and, if an event of default exists, to cash
      collateralize outstanding Letters of
      Credit.

            
	 	 	 
	
              IV. 

            	
              Collateral

            	
              The obligations of each Credit
      Party under the Senior Credit
      Facility and all bank products, including interest rate hedging
      agreements, foreign exchange contracts
  and

            


    

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              cash management services provided by the Lenders or their
      respective affiliates will be secured by a perfected first priority
      security interest (subject to exceptions to be mutually agreed upon by the
      Engagement Parties and the Company in the definitive documentation) in
      favor of the Collateral Agent for the benefit of the secured parties in
      substantially all of each Credit Party’s existing and future (a)
      inventory, accounts, deposit accounts, securities accounts, and investment
      property; (b) all material real estate owned by any Credit Party ("Mortgaged
      Property"),
      including all fixtures, rents and improvements with respect thereto, (c)
      all documents, commercial tort claims, books and records, supporting
      obligations and letters of credit relating to any of the foregoing and (d)
      all products and proceeds thereof, substitutions therefore and accessions
      thereto; provided, that such
      security interest shall not attach to and the Collateral shall not include
      (i) any of the equity interests of any direct and indirect foreign
      subsidiary or joint venture of the Company, (ii) any of the Credit
      Parties' intellectual property (other than the Collateral License defined
      below), (iii) any furniture and equipment of the Credit Parties or (iv)
      any leases, contract rights or general intangibles, the granting of a
      security interest in which is prohibited by an enforceable provision of
      any contract or law; provided further, that
      the security interest in favor of the Collateral Agent may not be
      perfected or first priority with respect to those assets as to which the
      Engagement Parties determine, in their reasonable discretion, that the
      costs of obtaining a perfected, first priority security interest are
      excessive in relation to the value of the security to be afforded thereby
      (all assets to be so secured or intended to be so secured, collectively,
      the "Collateral").

               

              The
      Collateral Agent shall have the right to utilize, at no cost or expense,
      all other properties and assets of the Borrowers not constituting
      Collateral (including, without limitation, furniture, fixtures, equipment,
      trade names, trademarks and other intellectual property and licenses
      thereof) to the extent necessary or appropriate to sell, lease or
      otherwise dispose of the Collateral after default (the "Collateral
      License").

               

              The
      Credit Parties will implement cash management procedures customary for
      facilities of this type and satisfactory to the Collateral Agent,
      including, but not limited to, customary lockbox arrangements and blocked
      account agreements, which will provide for the Administrative Agent to
      have control (for the benefit of the secured parties) of certain deposit
      and securities

            


    

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              accounts,
      subject to exceptions to be mutually agreed between the Company and the
      Engagement Parties; being understood and agreed that, upon the occurrence
      and during the continuance of an event of default and all times during a
      Trigger Period, the Borrowers and the Guarantors will cause or direct all
      cash (subject exceptions to be mutually agreed between the Company and the
      Engagement Parties) to be transferred daily to an account subject to a
      blocked account agreement or to an account of the Administrative Agent
      maintained at Bank of America, N.A. (the "Collection
      Account").  All amounts
      deposited or transferred into a blocked account during an event of default
      or a Trigger Period will be swept daily to the Collection Account, will be
      subject the Collateral Agent’s sole control and will be used reduce
      exposure (without any reduction in commitments) under the Senior Credit
      Facility as described in the third paragraph under the caption "Mandatory
      Prepayments".

            
	 	 	 
	
              V.

            	
              Certain
      Conditions

            	 
	 	 	 
	 	
              Initial
      Conditions Precedent 

            	
              The
      following: 

            
	 	 	 
	 	 	
              (a) 
      All governmental, shareholder and
      third party consents
      and approvals necessary for the Borrowers consummate the Financing shall
      have been obtained accordance with the definitive documentation for the
      Senior Credit Facility.

            
	 	 	 
	 	 	
              (b) 
      The Administrative Agent and
      Joint Lead Arrangers
      shall have received Uniform Commercial Code and other lien searches for
      the Company and its subsidiaries and the Target and its subsidiaries, each
      form and substance and with results acceptable to the Administrative Agent
      and the Joint Lead Arrangers.

            
	 	 	 
	 	 	
              (c)  The parties shall have executed
      and delivered the
      definitive documentation with respect to the Senior Credit Facility
      (including, without limitation, (i) loan agreement, security agreements,
      pledge agreements and mortgages, (ii) a Borrowing Base Certificate, and
      (iii) such other documents and agreements as are customary for
      transactions of the type contemplated hereby). The Borrower and Guarantors
      shall have executed and delivered and caused to have been executed and
      delivered by any applicable third party such control agreements,
      third-party lien waivers and other third party agreements as the
      Engagement Parties may require.

            
	 	 	 
	 	 	
              (d)  The Administrative Agent and the
      Joint Lead Arrangers shall have received (i) legal
      opinions counsel to the Borrowers and Guarantors (including local counsel
      in each jurisdiction where eligible
real

            


    

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

     

    
      
        	 	 	
                estate is located) reasonably satisfactory in form and
      substance to the Administrative Agent and the Joint Lead Arrangers,
      including, without limitation, with respect to the enforceability of the
      definitive documentation, the perfection of the Collateral Agent’s
      security interests and the absence of conflicts with specified material
      agreements, and (ii) such customary corporate resolutions, certificates
      and other corporate documents and certificates as the Administrative Agent
      and the Joint Lead Arrangers shall reasonably request, including, without
      limitation, a certificate from the chief financial officer of the Company
      certifying that the Company and its subsidiaries, on a consolidated basis
      after giving effect to the Transaction, are solvent.

                 

                (e)
      The Administrative Agent and the Joint Lead Arrangers shall have received
      fully executed copies of the Seller Notes (which shall contain
      subordination terms including, without limitation, restrictions on payment
      of principal and interest and limitations on the ability of the holders of
      the Seller Notes to accelerate the obligations, exercise remedies or seek
      repayment prior to maturity of the Seller Notes except in accordance with
      the definitive documentation for the Senior Credit Facility).

                 

                (f)
      The Administrative Agent shall have received an executed copy of the
      purchase agreement (including all schedules and exhibits thereto)
      regarding the Target and its subsidiaries (the "Purchase
      Agreement") and all other material agreements, instruments and
      documents relating to the Acquisition (such material agreements,
      instruments and documents, together with the Purchase Agreement, the
      "Acquisition
      Documents"). The Acquisition Documents (i) shall not have been
      altered, amended or otherwise changed or supplemented from the form of the
      Acquisition Documents presented to the Administrative Agent on the date
      hereof or (ii) any condition therein waived, in each case, in any manner
      that could reasonably be expected to have a material adverse effect (in
      the Lenders' reasonable determination) on the interests of the Lenders
      without the prior written consent of the Lenders; provided, that any
      increase in the aggregate amount of the purchase price under the Purchase
      Agreement over the amount described by the Company to the Administrative
      Agent and the Co-Lead Arrangers on August 6, 2009, shall be deemed to have
      a material adverse effect on the interests of the Lenders and shall
      require the prior written consent of the Lenders. The Acquisition shall
      have been consummated substantially concurrently with the consummation of
      the Senior Credit Facility on the Closing Date
  (the

              


      

       

      
        
          
          

        

        
          A-8

          
            

          

        

        
          
          

        

         

      

      
        	 	 	
                "Closing")
      in accordance with the terms of the Acquisition Documents and in
      compliance with applicable law and regulatory approvals.

                 

                (g)
      The Administrative Agent and the Joint Lead Arrangers shall have received
      pro forma
      consolidated projected financial statements as to the Company and
      its subsidiaries, giving effect to all elements of the Transaction to be
      effected on or before the Closing Date, and forecasts prepared by
      management of the Company, consisting of (i) pro forma consolidated
      balance sheets, income statements, and cash flow statements (including a
      projection of availability) on a monthly basis through December 31, 2010,
      and (ii) consolidated balance sheets, income statements, and cash flow
      statements (including a projection of availability) on an annual basis
      thereafter through and including the year in which the Stated Maturity
      Date occurs, each of which shall be reasonably satisfactory to the
      Engagement Parties.

                 

                (h)
      The Administrative Agent and the Joint Lead Arrangers shall have received
      the quarterly and monthly financial statements of the Target and its
      subsidiaries and for the Company and its subsidiaries for the most recent
      quarter and month ending thirty (30) days prior to the Closing Date, each
      in form reasonably satisfactory to the Engagement Parties, consisting of
      balance sheets, income statements, and cash flow statements.

                 

                (i)
      There shall not have occurred since April 30, 2009 any event or condition
      that has had or could be reasonably expected, either individually or in
      the aggregate, to have a Material Adverse Effect. "Material
      Adverse Effect" means (A) a material adverse change in, or a
      material adverse effect on, the operations, business, assets, properties
      or liabilities (actual or contingent), condition (financial or otherwise)
      of the Company, the Target and their subsidiaries, taken as a whole; (B) a
      material impairment of (x) the rights and remedies of the Administrative
      Agent or any Lender under any material loan document, or (y) the ability
      of any Credit Party to perform its material obligations under any material
      loan document to which it is a party; or (C) a material adverse effect
      upon the legality, validity, binding effect or enforceability against any
      Credit Party of any material loan document or material Acquisition
      Document to which it is a party.

                 

                (j)
      All costs, fees expenses (including, without limitation, legal fees and
      expenses) and other compensation contemplated by the Commitment Letter
      (including the Fee Letter) and this Summary of Terms shall have been paid
      to the extent due.

              


      

       

      
        
          
          

        

        
          A-9

          
            

          

        

        
          
          

        

         

      

      
        	 	 	
                (k) 
      Evidence of repayment in full and
      termination of the
      Existing Credit Agreement and related loan documents substantially
      concurrently with the Closing.

              
	 	 	 
	 	 	(l)  Minimum Excess Availability under
      the Senior Credit
      Facility at Closing Date, after giving effect to the initial funding under
      the Senior Credit Facility shall be equal to or greater than $400
      million.
	 	 	 
	 	
                On-Going
      Conditions Precedent

              	
                The following: (i) all of the
      representations and warranties
      in the loan documentation shall be true and correct in all material
      respects, or if such representation and warranty is subject to a
      materiality standard or material adverse effect provision, such
      representation and warranty shall be true and correct in all respects, in
      each case as of the date of such extension of credit (except in the case
      of any representation or warranty that applies as of a specific date or
      dates, in which case such representation or warranty shall have been true
      and correct in all material respects as of such date or dates); (ii) no
      event of default under the Senior Credit Facility or incipient default
      shall have occurred and be continuing, or would result from such extension
      of credit; (iii) the aggregate principal amount of all Credit Extensions
      and, without duplication, unreimbursed Letter of Credit draws outstanding
      on such date, after giving effect to the applicable borrowing (and
      application of the proceeds thereof) or issuance or renewal of a Letter of
      Credit, shall not exceed the Loan Cap; and (iv) delivery of applicable
      request for credit extension in form acceptable to the Administrative
      Agent.

              
	 	 	 
	
                VI. 

              	
                Certain
      Documentation Matters 

              	
                The definitive documentation for
      the Senior Credit Facility
      will contain representations, warranties, covenants and events of default
      as are customary for financings of this type and other terms deemed
      appropriate by Bank of America and the Joint Lead Arrangers for this
      transaction in particular, including, without
      limitation:

              
	 	 	 
	 	
                Representations
      and Warranties

              	
                (i) legal existence,
      qualification and power; (ii) due authorization
      and no contravention of law, contracts or organizational documents; (iii)
      governmental and third party approvals and consents; (iv) enforceability;
      (v) accuracy and completeness of specified financial statements and other
      information and no event or circumstance, either individually or in the
      aggregate, that has had or could reasonably be expected to have a material
      adverse effect; (vi) no material litigation (other than certain disclosed
      litigation), and no adverse change in the status, or the reasonably
      anticipated financial effect on the Borrower and its subsidiaries, of such
      disclosed

              


      


     

    
      
        
        

      

      
        A-10

        
          

        

      

      
        
        

      

    

     

    
      	 	 
      	
              litigation;
      (vii) no default; (viii) ownership of property (including disclosure of
      liens, properties, leases and investments); (ix) insurance matters; (x)
      environmental matters; (xi) tax matters; (xii) ERISA compliance; (xiii)
      identification of subsidiaries, equity interests and loan parties; (xiv)
      use of proceeds and not engaging in business of purchasing/carrying margin
      stock; (xv) status under Investment Company Act; (xvi) accuracy of
      disclosure; (xvii) compliance with laws; (xviii) intellectual property;
      (xix) solvency; and (xx) no casualty.

            
	 	 	 
	 	
              Affirmative
      Covenants

            	
              (i)
      delivery of (A) monthly consolidated financial statements, including
      delivery of monthly Borrowing Base Certificates and customary back-up
      materials (or more frequently if required as provided above under "Availability"),
      (B) quarterly compliance certificates (whether or not the Fixed Charge
      Coverage Ratio is then required to be tested), (C) annual unqualified and
      audited consolidated financial  statements, (D) annual consolidated
      budgets and forecasts, updated no more than sixty (60) days after the end
      of each fiscal year of the Company; and (E) on any Fixed Charge Trigger
      Date (as defined below), a compliance certificate as of the most recently
      ended trailing twelve month period for which the financial information
      relevant thereto is available, and thereafter during any Fixed Charge
      Trigger Period (as defined below), a monthly compliance certificate; provided, however, that,
      with respect to monthly financial reporting (including financial
      statements and compliance certificates), accommodation will be made for
      additional time in reporting results for the months of April and May of
      each year (30 and 15 days, respectively), provided that no permitted
      restricted payments, dividend, distributions or other actions under the
      definitive documentation which depend on the calculation of the Fixed
      Charge Coverage Ratio shall be permitted during any such extended
      reporting period unless current monthly financial information is provided;
      (ii) delivery of certificates and other information; (iii) delivery of
      notices, including notices of any default, material adverse condition,
      ERISA event, material change in accounting or financial reporting
      practices, sale of equity and events giving rise to any mandatory
      prepayment (including any repayment in accordance with cash management
      provisions); (iv) payment of obligations; (v) preservation of existence;
      (vi) maintenance of properties; (vii) maintenance of insurance; (viii)
      compliance with laws; (ix) maintenance of books and records; (x)
      inspection rights, including, at the Borrowers’ expense, (A) two updates
      of field audit and inventory appraisals in any calendar year if
      no

            


    

    


    
      
        
        

      

      
        A-11

        
          

        

      

      
        
        

      

    

     

    
      	 
      	 	
              Trigger
      Event Period has arisen during such calendar year, (B) three updates of
      field audit and inventory appraisals in any calendar year if a Trigger
      Event Period has arisen during such year and (C) if requested by the
      Administrative Agent, one real estate appraisal with respect to each
      Mortgaged Property in any calendar year (and up to one additional real
      estate appraisal in any calendar year if required by applicable law or
      regulatory authority); provided that following the
      occurrence and during the continuation of an event of default, such audits
      and appraisals may be conducted at the Borrowers’ expense as many times as
      the Administrative Agent shall consider necessary; (xi) use of proceeds;
      (xii) covenant to guarantee obligations, give security; (xiii) compliance
      with environmental laws; (xiv) preparation of environmental reports; (xv)
      further assurances; (xvi) compliance with terms of leaseholds; (xvii) lien
      searches; (xviii) compliance with material contracts; (xix) maintenance of
      cash management system acceptable to the Collateral Agent; and (xx)
      delivery of real estate support documents (including, without limitation,
      title policies, surveys, environmental indemnity agreements, FIRREA
      related documents, flood zone certifications and other real estate related
      documents).

            
	 	 	 
	 	
              Financial
      Covenants

            	
              If,
      at any time (each such date, a "Fixed
      Charge Trigger Date"), Excess Availability is less than the greater
      of (a) 15% of the Loan Cap and (b) $110 million, then the Company will be
      required to maintain a minimum Fixed Charge Coverage Ratio of 1.1 to 1.0,
      determined based on a compliance certificate as of the most recently ended
      trailing twelve month period for which the financial information relevant
      thereto is available. Such minimum Fixed Charge Coverage Ratio shall be
      maintained from such Fixed Charge Trigger Date until the date Availability
      has equaled or exceeded the greater of 15% of the Loan Cap and $110
      million at all times for forty- five (45) consecutive calendar days (each,
      a "Fixed
      Charge
      Trigger Period"). "Fixed
      Charge Coverage Ratio" means (a) EBITDA less (i) capital expenditures
      (other than permitted acquisitions) less (ii) cash taxes, divided by
      (b) cash interest plus (i)
      all mandatory and voluntary principal payments of debt (other than
      permitted refinancings and payments and prepayments of any Seller Note
      having a stated maturity prior to the Stated Maturity Date of the Senior
      Credit Facility so long as such payments or prepayments are made in
      accordance with any subordination provisions applicable thereto and do not
      result in a default or event of default under the documentation for the
      Senior Credit Facility) plus (ii) cash restricted
      payments (other than share
repurchases

            


    

    


    
      
        
        

      

      
        A-12

        
          

        

      

      
        
        

      

       

    

    
    

    
      	 	 
      	
              prior
      to the Closing Date). "EBITDA" shall have
      substantially the same meaning as that contained in the Existing Facility,
      provided that there shall be excluded from the calculation thereof (x) the
      add-back of proceeds from exercise of equity rights by directors officers
      and employees and (y) any extraordinary non-cash gains and, without
      duplication, non-recurring non-cash gains otherwise included
      therein.

            
	 	 
      
	 	
              Negative
      Covenants

            	
              Restrictions
      on (i) liens; (ii) indebtedness, including guarantees and other contingent
      obligations; (iii) investments (including loans and advances) and
      acquisitions; (iv) mergers and other fundamental changes; (v) sales and
      other dispositions of property or assets; (vi) payments of cash dividends,
      equity purchases and other distributions and prepayments of certain
      indebtedness; (vii) changes in the nature of business; (viii) transactions
      with affiliates; (ix) burdensome agreements; (x) use of proceeds; (xi)
      amendments of organizational documents; (xii) changes in accounting
      policies or reporting practices; and (xiii) amendment, modification or
      termination of documents related to the Seller Notes or any other material
      debt in a manner (A) that would violate, or compliance with which could
      reasonably be expected to result in the violation of, the definitive
      documentation for the Senior Credit Facility or (B) otherwise materially
      adverse (in the reasonable determination of the Lenders) to the interests
      of the Lenders, taken as a whole, in each case with such exceptions as may
      be agreed upon in the loan documentation.

            
	 	 	 
	 	 
      	Notwithstanding the foregoing, the definitive documentation shall permit the
      following:
	 	 
      	
            
	 	 
      	
              (a)
      acquisitions or investments if (i) non-hostile and the business of the
      target is substantially similar or related to the business of the Company
      and its subsidiaries, and (ii) after giving effect to each such
      acquisition or investment, Excess Availability is greater than 20% of the
      Loan Cap on a pro forma
      and twelve month projected basis following such acquisition or
      investment and that the Fixed Charge Coverage Ratio, after giving effect
      to each such acquisition or investment, is equal to or greater than 1.1 to
      1.0 on a pro forma
      basis and calculated on a trailing twelve months
basis;

               

              (b)
      (i) cash dividends of up to $65,000,000 in any fiscal year payable to
      holders of common stock of the Company if, after giving effect to such
      dividend, Excess Availability is equal to or greater than 25% of the Loan
      Cap on a pro forma
      and twelve month projected
basis

            


    

     

    
      
        
        

      

      
        A-13

        
          

        

      

      
        
        

      

       

    

    
      	 	 	
              following such dividend; and (ii) other cash dividends,
      distributions, repurchases of equity interests and prepayments (other than
      permitted refinancings) of certain indebtedness if, (A) after giving
      effect to such payments, Excess Availability is equal to or greater than
      25% of the Loan Cap on a pro forma and twelve
      month projected basis following such dividend, distribution, repurchase or
      repayment and (B) the Adjusted Fixed Charge Coverage Ratio is equal to or
      greater than 1.25 to 1.0 on a pro forma basis and calculated on a trailing
      twelve months basis; provided that it is understood and agreed that any
      tax distribution payment made by the Company to the Seller pursuant to the
      terms of the Purchase Agreement in respect of the income tax liability of
      the Seller associated with the ordinary business income of the Target
      through the Closing in an aggregate amount not exceeding $50,000,000 shall
      be deemed not to constitute a dividend or other restricted payment for
      purposes of (i) the restricted payment covenant and (ii) any calculation
      of the Fixed Charge Coverage Ratio or the Adjusted Fixed Charge Coverage
      Ratio. "Adjusted
      Fixed Charge Coverage Ratio" shall mean the Fixed Charge Coverage
      Ratio for such period calculated such that fixed charges included in the
      denominator thereof shall exclude (1) any such dividend, distribution or
      repurchase the permissibility of which the calculation is being made,
      together with, if a repurchase of equity interests, such all related
      repurchases that have previously been made as part of a single stock
      repurchase plan approved by the board of directors of the Company, if any,
      and (2) any prepayment of indebtedness the permissibility of which the
      calculation is being made and, if such prepayment is a prepayment of
      Seller Notes, all other prior prepayments of Seller
Notes;

               

              (c)
      prepayments (other than permitted refinancings) of up to $250,000,000 of
      certain indebtedness if, after giving effect to such payments, Excess
      Availability is equal to or greater than 50% of the Loan Cap on a pro
      forma and twelve month projected basis following such prepayment;
      and

               

              (d)
      incurrence of additional secured or unsecured indebtedness in an aggregate
      amount of up to $750,000,000, on terms acceptable to the Engagement
      Parties which shall be set forth in the definitive loan documentation but
      no more restrictive, taken as a whole, to the Credit Parties than
      customary market terms for the type of indebtedness incurred (including,
      without limitation, a maturity at least 180 days after the Stated Maturity
      Date, intercreditor agreements acceptable to
the

            


    

     

    
      
        
        

      

      
        A-14

        
          

        

      

      
        
        

      

       

    

    
      	 	 	
              Lenders
      (the terms of which may not be specified in the definitive loan
      documentation) and the absence of any event of
default).

            
	 	 	 
	 	
              Events
      of Default

            	
              The
      following: (i) nonpayment of principal, interest, fees or other amounts;
      (ii) failure to perform or observe covenants set forth in the loan
      documentation within a specified period of time, where customary and
      appropriate, after such failure; (iii) any representation or warranty
      proving to have been materially incorrect when made or confirmed; (iv)
      cross-default to other indebtedness in an amount to be agreed; (v)
      bankruptcy and insolvency defaults; (vi) inability to pay debts; (vii)
      monetary judgment defaults in an amount to be agreed and nonmonetary
      judgment defaults that could reasonably be expected to have a material
      adverse effect; (viii) customary ERISA defaults; (ix) actual or asserted
      (in writing by any Credit Party) invalidity or impairment of any loan
      documentation; (x) obligations under the Senior Credit Facility cease to
      constitute senior indebtedness under any subordinated indebtedness or
      other subordination provision or such subordination provisions cease to be
      valid or enforceable; and (xi) change of control.

            
	 	 	 
	 	
              Voting

            	
              Amendments
      and waivers of the provisions of the loan agreement and other definitive
      credit documentation will require the approval of Lenders holding loans
      and commitments representing more than 50% of the aggregate amount of the
      loans and commitments under the Senior Credit Facility (the "Required
      Lenders"), except that (a) the consent of each Lender shall be
      required with respect to (i) the waiver of certain conditions precedent to
      the initial credit extension under the Senior Credit Facility; (ii) the
      amendment of the pro rata sharing provisions, (iii) the amendment of the
      voting percentages of the Lenders; (iv) the release of all or
      substantially all of the collateral securing the Senior Credit Facility;
      (v) the release of any material Credit Party (or any material portion of
      the value of the guaranties of the Senior Credit Facility) other than in
      transactions otherwise permitted under the loan documents; or (vi) any
      increase in any of the advance rates under the Borrowing Base; (b) the
      consent of Lenders holding loans and commitments representing more than
      66T% of the aggregate amount of loans and commitments under the Senior
      Credit Facility shall be required with respect to (i) changes to the
      Borrowing Base (other than increases in the advance rates) in a manner
      that would increase the availability thereunder, (ii) changes to the
      eligibility criteria with respect to
the

            


    

     

    
      
        
        

      

      
        A-15

        
          

        

      

      
        
        

      

       

    

    
      	 	 	
              Borrowing
      Base in a manner that would increase the availability thereunder or (iii)
      any other changes that would increase the availability thereunder (other
      than with respect to increases in reserves implemented or released by the
      Administrative Agent); and (c) the consent of each Lender affected thereby
      shall be required with respect to (i) increases or extensions in the
      commitment of such Lender, (ii) reductions of principal, interest or fees,
      and (iii) extensions of scheduled maturities or times for
      payment.

            
	 	 	 
	 	
              Assignments

            	
              Subject
      to the consents described below (which consents will not be unreasonably
      withheld or delayed), each Lender will be permitted to make assignments to
      other financial institutions in respect of the Revolving Credit Facility
      in a minimum amount equal to $5 million. 

               

              The
      consent of the Borrower will be required unless (i) an event of default
      has occurred and is continuing (provided that the Borrower shall be
      notified of such assignment in any event) or (ii) the assignment is to a
      Lender, an affiliate of a Lender or an Approved Fund (as such term shall
      be defined in the loan documentation). The consent of the Administrative
      Agent, each LC Issuer and the Swing Line Lender will be required for any
      assignment to an entity that is not a Lender, an affiliate of such Lender
      or an Approved Fund.

               

              An
      assignment fee in the amount of $3,500 will be charged with respect to
      each assignment unless waived by the Administrative Agent in its sole
      discretion. Each Lender will also have the right, without consent of the
      Borrowers or the Administrative Agent, to assign as security all or part
      of its rights under the loan documentation to any Federal Reserve
      Bank.

               

              Lenders
      will be permitted to sell participations with voting rights limited to
      significant matters such as changes in amount, rate, maturity date and
      releases of all or substantially all of the collateral securing the Senior
      Credit Facility, or any material Credit Party (or any material portion of
      the value of the guaranties of the Senior Credit Facility) other than in
      transactions otherwise permitted under the loan
  documents.

            
	 	 	 
	 	
              Yield
      Protection

            	
              The
      Senior Credit Facility documentation will contain customary provisions (i)
      protecting the Lenders against increased costs or loss of yield resulting
      from changes in reserve, tax, capital adequacy and other requirements of
      law and from the imposition of or changes in withholding or other taxes
      and (ii) indemnifying the Lenders for actual "LIBOR breakage costs"
      incurred in connection with, among other things, any prepayment
      of

            


    

     

    
      
        
        

      

      
        A-16

        
          

        

      

      
        
        

      

       

    

    
      	 	 	
              a
      LIBOR Loan (as defined in Annex A to this Exhibit A) on a day other than
      the last day of an interest period with respect
thereto.

            
	 	 	 
	 	
              Expenses

            	
              The
      Borrowers will pay all reasonable out-of-pocket expenses of the
      Administrative Agent and the Joint Lead Arrangers associated with the
      preparation, negotiation, execution, delivery and administration of the
      definitive documentation for the Transaction (including the reasonable
      fees, disbursements and other charges of counsel, auditors and appraisers,
      and the charges for any field exams.

            
	 	 	 
	 	
              Governing
      Law and Forum

            	
              State
      of New York.

            
	 	 	 
	 	
              Counsel
      to the Administrative
      Agent

            	
              McGuireWoods,
      LLP.

            


    

     

    
      
        
        

      

      
        A-17

        
          

        

      

      
        
        

      

    

    
    

     

    
    

    
      Annex
A

    

    


    
      Interest and Certain
Fees

    

    


    
      	
              Interest
      Rate Options

            	
              The
      interest rates per annum applicable to the Senior Credit Facility (other
      than Swing Line Loans) will be LIBOR plus the Applicable
      Margin (as hereinafter defined) or, at the option of the Company, the Base
      Rate plus the
      Applicable Margin. Each Swing Line Loan shall bear interest at the Base
      Rate plus the Applicable Margin for Base Rate loans.

               

              "Applicable
      Margin" shall mean a per annum rate equal to
      the rates set forth in the pricing grid attached hereto as Annex B (the "Pricing
      Grid") based on Excess Availability.

               

              "LIBOR"
      will be defined in accordance with Administrative Agent’s standard
      practices. The Company may select interest periods of one, two or three
      months for LIBOR loans.

               

              "Base
      Rate" shall mean the higher of (x) the Bank of America prime rate,
      (y) the Federal Funds rate plus 0.50% and (z) the
      one-month LIBOR rate plus
    1.00%.

            
	 	 
	
              Interest
      Payment Dates

            	
              Interest
      on LIBOR Loans shall be payable at the end of the selected interest
      period, but no less frequently than quarterly. Interest on Base Rate Loans
      shall be payable monthly in arrears on the first business day of the
      following month.

            
	 	 
	
              Commitment
      Fees

            	
              The
      Borrowers will pay a commitment fee to the Lenders calculated from the
      Closing Date equal to (a) 1.00% per annum on the
      average daily unused portion of the Senior Credit Facility if usage of the
      Senior Credit Facility is less than 33.3%, (ii) 0.750% per annum on the
      average daily unused portion of the Senior Credit Facility if usage of the
      Senior Credit Facility is greater than or equal to 33.3% but less than
      66.6% and (iii) 0.50% per annum on the
      average daily unused portion of the Senior Credit Facility if usage of the
      Senior Credit Facility is greater than or equal to 66.6%, in each case,
      payable quarterly in arrears and upon the Stated Maturity Date. Swing Line
      Loans will, for purposes of the commitment fee calculations only, not be
      deemed to be a utilization of the Senior Credit
  Facility.

            
	 	 
	
              Letter
      of Credit Fees

            	
              Letter
      of Credit fees shall be payable on the maximum amount available to be
      drawn under each Letter of Credit at a rate per annum equal to the
      Applicable Margin from time to time applicable to LIBOR loans. Such fees
      will be (a) payable quarterly in arrears, commencing on
  the

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 
      	
              first
      quarterly payment date to occur after the Closing Date, and (b) shared
      proportionately by the Lenders under the Senior Credit Facility. In
      addition, a fronting fee shall be payable to the applicable LC Issuer for
      its own account in an amount equal to (i) 0.125% of the face amount of
      each documentary Letters of Credit, payable upon issuance and (ii) 0.125%
      per annum on the maximum amount available to be drawn under each standby
      Letter of Credit, payable quarterly in arrears.

            
	 	 
	
              Default
      Rate

            	
              During
      the continuance of any event of default under the loan documentation, at
      the option of the Administrative Agent or at the request of the Required
      Lenders, the Applicable Margin on obligations owing under the loan
      documentation shall increase by 2% per annum.

            
	 	 
	
              Rate
      and Fee Basis

            	
              All
      interest and per annum fees would be calculated on the basis of actual
      number of days elapsed in a year of 360 days (or 365 (or 366 in a leap
      year) days, in the case of Base Rate Loans the interest rate payable on
      which is then based on the prime
rate).

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      
        Annex
B

      

    

     

    
    

     

    Pricing
Grid

     

    
      	 
      	 
      	
              Applicable
      Margin 

            
	
              Level 

            	
              Excess
      Availability 

            	
              LIBOR
      Loans 

            	
              Base
      Rate Loans 

            
	 	 	 	 
	
              I 

            	
              < 33.33% of the Loan
      Cap 

            	
              4.25% 

            	
              3.25% 

            
	 	 	 	 
	
              II 

            	
              ≥33.3% of the Loan Cap
      but 

            	
              4.00% 

            	
              3.00% 

            
	 
      	
              < 66.6% of the Loan
      Cap 

            	 
      	 
      
	 	 	 	 
	
              III 

            	
              ≥66.6%of the Loan
      Cap 

            	
              3.75% 

            	
              2.75% 

            


    

     

    The
Applicable Margin shall initially be set at Level II of the
Pricing Grid and shall be adjusted based on Excess Availability after the fourth
complete fiscal quarter ending after the Closing Date. If the Borrowing Base
Certificate is not delivered within the required time periods as set forth in
the definitive documentation, then until the date that is one business day after
the date on which such Borrowing Base Certificate is delivered the highest rate
set forth in each column of each pricing grid shall apply. At all times after
maturity or acceleration of the maturity of the Loans or the occurrence and
continuance of an event of default, the highest rate set forth in each column
shall apply (without limiting the right of the Administrative Agent or the
Required Lenders to impose the Default Rate).

     

    If any
certificate required to be delivered in the definitive documentation reflecting
the calculation of the Applicable Margin is shown to be inaccurate, and such
inaccuracy, if corrected, would have led to the application of a higher
Applicable Margin for any period (an "Applicable
Period") than the Applicable Margin applied for such Applicable Period,
then the highest rate set forth in each column of each pricing grid shall apply
and the Borrowers shall immediately pay to Administrative Agent the accrued
additional interest owing as a result of such increased Applicable Margin for
such Applicable Period.

     

     

    B-1