exhibit10-2.htm


    Exhibit
10.2

    SENIOR
SECURED, SUPER-PRIORITY, DEBTOR-IN-POSSESSION CREDIT AGREEMENT

    dated
as of

     

    November
12, 2008

    Among

     

    CIRCUIT
CITY STORES, INC.

    as
Lead Borrower for:

     

    said
CIRCUIT CITY STORES, INC.

    CIRCUIT
CITY STORES WEST COAST, INC.

    CIRCUIT
CITY STORES PR, LLC

    as
Domestic Borrowers

    and

    INTERTAN
CANADA LTD.

    as
Canadian Borrower

     

    The
LENDERS Party Hereto,

     

    BANK
OF AMERICA, N.A.

    as
Administrative Agent and Collateral Agent

     

    GENERAL
ELECTRIC CAPITAL CORPORATION

    As
Co-Collateral Agent

     

    BANC
OF AMERICA SECURITIES LLC

    as
Lead Arranger

     

    BANC
OF AMERICA SECURITIES LLC

    GE
CAPITAL MARKETS, INC.

    WELLS
FARGO RETAIL FINANCE, LLC

    as
Joint Bookrunners

     

    BANK
OF AMERICA, N.A.

    (acting
through its Canada branch)

    as
Canadian Administrative Agent and Canadian Collateral Agent

     

    WELLS
FARGO RETAIL FINANCE, LLC

    as
Syndication Agent

     

    GENERAL
ELECTRIC CAPITAL CORPORATION

    and

    JPMORGAN
CHASE BANK, N.A.

    as
Co-Documentation Agents

     

     

    _______________________________________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      
        
          
            
              
                	 TABLE OF
      CONTENTS	 Page
	
                        ARTICLE
      I Definitions

                        SECTION 1.01. Defined Terms  

                        SECTION 1.02. Terms Generally  

                        SECTION 1.03. Accounting Terms; GAAP  

                        SECTION 1.04. Times of Day.  

                        SECTION 1.05. Letter of Credit
      Amounts.  

                        SECTION 1.06. Certifications  

                        SECTION 1.07. Dollar Equivalent  

                        ARTICLE II Amount and Terms of Credit  

                        SECTION 2.01. Commitment of the
      Lenders.  

                        SECTION 2.02. Increase of Domestic
      Commitments.  

                        SECTION 2.03. Reserves; Changes to
      Reserves.  

                        SECTION 2.04. Making of Loans.  

                        SECTION 2.05. Overadvances.  

                        SECTION 2.06. Swingline Loans.  

                        SECTION 2.07. Letters of Credit.  

                        SECTION 2.08. Settlements Amongst
      Lenders.  

                        SECTION 2.09. Notes; Repayment of
      Loans.  

                        SECTION 2.10. Intentionally Omitted.  

                        SECTION 2.11. Interest on Loans.  

                        SECTION 2.12. Default Interest.  

                        SECTION 2.13. Certain Fees.  

                        SECTION 2.14. Unused Commitment Fee.  

                        SECTION 2.15. Letter of Credit Fees.  

                        SECTION 2.16. Nature of Fees.  

                        SECTION 2.17. Termination or Reduction of
      Commitments.  

                        SECTION 2.18. Alternate Rate of
      Interest.  

                        SECTION 2.19. Conversion and Continuation of
      Loans.  

                        SECTION 2.20. Mandatory Prepayment; Cash Collateral;
      Commitment Termination.  

                        SECTION 2.21. Optional Prepayment of Loans;
      Reimbursement of Lenders.  

                        SECTION 2.22. Maintenance of Loan Account; Statements
      of Account.  

                        SECTION 2.23. Cash Receipts.  

                        SECTION 2.24. Application of Payments.  

                        SECTION 2.25. Increased Costs.  

                        SECTION 2.26. Change in Legality.  

                        SECTION 2.27. Payments; Sharing of
      Setoff.  

                        SECTION 2.28. Taxes.  

                        SECTION 2.29. Security Interests in
      Collateral.  

                        SECTION 2.30. Mitigation Obligations; Replacement of
      Lenders. 

                        ARTICLE III Representations and
      Warranties  

                        SECTION 3.01. Organization; Powers.  

                        SECTION 3.02. Authorization;
      Enforceability.  

                        SECTION 3.03. Governmental Approvals; No
      Conflicts.  

                        SECTION 3.04. Financial Condition.  

                        SECTION 3.05. Properties.  

                        SECTION 3.06. Litigation and Environmental
      Matters.  

                        SECTION 3.07. Compliance with Laws and
      Agreements.  

                        SECTION 3.08. Investment Company
      Status  

                        SECTION 3.09. Taxes.  

                        SECTION 3.10. ERISA.  

                        SECTION 3.11. Disclosure.  

                        SECTION 3.12. Subsidiaries.  

                        SECTION 3.13. Insurance.  

                        SECTION 3.14. Labor Matters.  

                        SECTION 3.15. Security Documents.  

                        SECTION 3.16. Federal Reserve
      Regulations.  

                        SECTION 3.17. Intentionally Omitted.  

                        SECTION 3.18. Material Contracts.  

                        SECTION 3.19. Bailees, Warehousemen,
      etc.  

                        SECTION 3.20. Consignment.  

                        ARTICLE IV Conditions  

                        SECTION 4.01. Closing Date.  

                        SECTION 4.02. Conditions Precedent to Each Loan and
      Each Letter of Credit.  

                        ARTICLE V Affirmative Covenants  

                        SECTION 5.01. Financial Statements and Other
      Information  

                        SECTION 5.02. Notices of Material
      Events.  

                        SECTION 5.03. Information Regarding
      Collateral.  

                        SECTION 5.04. Existence; Conduct of
      Business.  

                        SECTION 5.05. Payment of Obligations.  

                        SECTION 5.06. Maintenance of
      Properties.  

                        SECTION 5.07. Insurance.  

                        SECTION 5.08. Casualty and
      Condemnation.  

                        SECTION 5.09. Books and Records; Inspection and Audit
      Rights; Appraisals; Accountants; Physical Inventories.  

                        SECTION 5.10. Compliance with Laws.  

                        SECTION 5.11. Use of Proceeds and Letters of
      Credit.  

                        SECTION 5.12. Future Subsidiaries.  

                        SECTION 5.13. Further
      Assurances.  (a)  

                        SECTION 5.14. Material Contracts  

                        SECTION 5.15. Term Loan.  

                        SECTION 5.16. Retention of Independent
      Consultant.  

                        SECTION 5.17. Performance Within
      Budget.  

                        SECTION 5.18. Bankruptcy Related Affirmative
      Covenants.  

                        ARTICLE VI Negative Covenants  

                        SECTION 6.01. Indebtedness and Other
      Obligations  

                        SECTION 6.02. Liens.  

                        SECTION 6.03. Fundamental Changes.  

                        SECTION 6.04. Investments, Loans, Advances,
      Guarantees and Acquisitions.  

                        SECTION 6.05. Asset Sales.  

                        SECTION 6.06. Restricted Payments; Certain Payments
      of Indebtedness.  

                        SECTION 6.07. Transactions with
      Affiliates.  

                        SECTION 6.08. Amendment of Material
      Documents.  

                        SECTION 6.09. Fiscal Year.  

                        SECTION 6.10. Burdensome Agreements.  

                        SECTION 6.11. Intentionally Omitted.  

                        SECTION 6.12. Clean Down.  

                        SECTION 6.13. Bankruptcy Related Negative
      Covenants.  

                        ARTICLE VII Events of Default  

                        SECTION 7.01. Events of Default.  

                        SECTION 7.02. When Continuing.  

                        SECTION 7.03. Remedies on Default.  

                        SECTION 7.04. Application of Proceeds.  

                        ARTICLE VIII The Agents  

                        SECTION 8.01. Administration by Administrative
      Agent.  

                        SECTION 8.02. The Collateral Agent.  

                        SECTION 8.03. Sharing of Excess
      Payments.  

                        SECTION 8.04. Agreement of Required
      Lenders.  

                        SECTION 8.05. Liability of Agents.  

                        SECTION 8.06. Notice of Default.  

                        SECTION 8.07. Lenders’ Credit
      Decisions.  

                        SECTION 8.08. Reimbursement and
      Indemnification.  

                        SECTION 8.09. Rights of Agents.  

                        SECTION 8.10. Notice of Transfer.  

                        SECTION 8.11. Successor Agent.  

                        SECTION 8.12. Reports and Financial
      Statements.  

                        SECTION 8.13. Delinquent Lender.  

                        SECTION 8.14. Collateral and Guaranty
      Matters.  

                        SECTION 8.15. Agency for Perfection.  

                        SECTION 8.16. Intentionally Omitted.  

                        SECTION 8.17. Syndication Agent, Documentation
      Agents, and Arranger.  

                        SECTION 8.18. Co-Collateral Agent
      Rights.  

                        ARTICLE IX Miscellaneous  

                        SECTION 9.01. Notices  

                        SECTION 9.02. Waivers; Amendments.  

                        SECTION 9.03. Expenses; Indemnity; Damage
      Waiver.  

                        SECTION 9.04. Designation of Lead Borrower as
      Borrowers’ Agent.  

                        SECTION 9.05. Successors and Assigns.  

                        SECTION 9.06. Survival  

                        SECTION 9.07. Counterparts; Integration;
      Effectiveness.  

                        SECTION 9.08. Severability.  

                        SECTION 9.09. Right of Setoff.  

                        SECTION 9.10. Governing Law; Jurisdiction; Consent to
      Service of Process.  

                        SECTION 9.11. WAIVER OF JURY TRIAL  

                        SECTION 9.12. Headings  

                        SECTION 9.13. Interest Rate
      Limitation.  

                        SECTION 9.14. Joint and Several Obligations of the
      Loan Parties. 

                        SECTION 9.15. Confidentiality.  

                        SECTION 9.16. Judgment Currency.  

                        SECTION 9.17. No Advisory or Fiduciary
      Responsibility.  

                        SECTION 9.18. USA PATRIOT Act Notice  

                        SECTION 9.19. Press Releases.  

                        SECTION 9.20. No Strict Construction.  

                        SECTION 9.21. Relationship with DIP Orders and
      Initial Order. 

                        SECTION 9.22. Language.  

                         

                      	
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    EXHIBITS
[OMITTED*]

    
      
        	A. 	Assignment
      and Assumption
	B-1      	Domestic
      Borrowers Revolving Note
	B-2      	Domestic
      Borrowers Swingline Note
	B-3     	Canadian
      Borrower Revolving Note
	B-4   	Canadian
      Borrower Swingline Note
	C   	Compliance
      Certificate
	D-1  	Borrowing
      Base Certificate
	D-2	Canadian
      Borrowing Base Certificate
	
                E

              	
                Form
      of Notice of Borrowing for Domestic
Borrowers

              


      

    

    
      	
              F

            	
              Form
      of Notice of Borrowing for Canadian
Borrower

            


    

    
      	
              G

            	
              Form
      of Customs Broker Agreement

            


    

    
      	
              H-1

            	
              Form
      of Interim Borrowing Order

            


    

    
      	
              H-2

            	
              Form
      of Initial Order

            


    

     

    [*The Company will furnish supplementally any of the above exhibits
to the Securities and Exchange Commission upon request.]

     

    SCHEDULES
[OMITTED*]

    
      	
              1.1

            	
              Lenders
      and Commitments

            


    

    
      	
              1.2

            	
              Budget

            


    

    
      	
              1.3

            	
              Facility
      Guarantors

            


    

    
      	
              1.4

            	
              Pre-Petition
      Letters of Credit

            


    

    
      	
              2.23(a)

            	
              DDAs

            


    

    
      	
              2.23(b)

            	
              Credit
      Card Arrangements

            


    

    
      	
              3.05(c)(i)

            	
              Title
      to Properties; Real Estate Owned

            


    

    
      	
              3.05(c)(ii)

            	
              Leased
      Properties

            


    

    
      	
              3.06

            	
              Disclosed
      Matters

            


    

    
      	
              3.10

            	
              Plans

            


    

    
      	
              3.12

            	
              Subsidiaries

            


    

    
      	
              3.13

            	
              Insurance

            


    

    
      	
              3.14

            	
              Labor
      Matters

            


    

    
      	
              3.18

            	
              Material
      Contracts

            


    

    
      	
              5.01(A)

            	
              Financial
      Reporting Requirements

            


    

    
      	
              5.01(B)

            	
              Lead
      Borrower’s website

            


    

    
      	
              5.18

            	
              Identified
      Leases

            


    

    
      	
              6.01

            	
              Indebtedness

            


    

    
      	
              6.02

            	
              Liens

            


    

    
      	
              6.04

            	
              Investments

            


    

    
      	
              6.05

            	
              Asset
      Sales

            


    

     

    [*The Company will furnish supplementally any of the above schedules
to the Securities and Exchange Commission upon request.]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SENIOR
SECURED, SUPER-PRIORITY DEBTOR-IN-POSSESSION CREDIT
AGREEMENT dated as of November 12, 2008 (this “Agreement”)
among

     

     CIRCUIT
CITY STORES, INC., as a debtor and a debtor-in-possession, a corporation
organized under the laws of the Commonwealth of Virginia having a place of
business at 9950 Mayland Drive, Richmond, Virginia 23233, as Lead Borrower for
the Borrowers, being

     

    said
CIRCUIT CITY STORES, INC., as a debtor and a debtor-in-possession,

     

    CIRCUIT
CITY STORES WEST COAST, INC., as a debtor and a debtor-in-possession, a
corporation organized under the laws of the State of California having a place
of business at 680 S. Lemon Avenue, Walnut, California 91789;

     

    CIRCUIT
CITY STORES PR, LLC, as a debtor and a debtor-in-possession, a limited liability
company organized under the laws of the Commonwealth of Puerto Rico having a
place of business at  San Patricio Plaza 3369, Local C-02 St Ebano
& Tabonuco, Guaynabo, Puerto Rico; and

     

    INTERTAN
CANADA LTD., as a debtor company, a corporation organized under the laws of the
Province of Ontario, Canada having its head office at 279 Bayview Drive, Barrie,
Ontario, Canada L4M 4W5; and

     

     the
LENDERS party hereto; and

     

     BANK
OF AMERICA, N.A., as Administrative Agent and Collateral Agent for the Lenders
and the Issuing Bank, a national banking association, having a place of business
at 100 Federal Street, Boston, Massachusetts
02110;  and

     

     BANK
OF AMERICA, N.A. (acting through its Canada branch), as Canadian Administrative
Agent and Canadian Collateral Agent for Lenders having a Canadian Commitment, a
banking corporation carrying on business under the Bank Act
(Canada), having a place of business at 200 Front Street West, Toronto, Ontario,
Canada M5V 3L2; and

     

     GENERAL
ELECTRIC CAPITAL CORPORATION, as Co-Collateral Agent; and

     

     WELLS
FARGO RETAIL FINANCE, LLC, as Syndication Agent; and

     

     GENERAL
ELECTRIC CAPITAL CORPORATION and JPMORGAN CHASE BANK, N.A., as Co-Documentation
Agents;

     

    in
consideration of the mutual covenants herein contained and benefits to be
derived herefrom.

     

    W I T N E S S E T H:

     

    WHEREAS,
on November 10, 2008, the Domestic Borrowers and certain of their domestic
Subsidiaries commenced Chapter 11 Case Nos. 08-35653 through 08-35670 as
administratively consolidated at Chapter 11 Case No. 08-35653 (singly and
collectively, the “Chapter 11
Case”) by filing separate voluntary petitions for reorganization under
Chapter 11 of the Bankruptcy Code, with the United States Bankruptcy Court for
the Eastern District of Virginia (the “US Bankruptcy
Court”).  The Domestic Borrowers continue to operate their
business and manage their properties as debtors and debtors-in-possession
pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code; and

     

    WHEREAS,
on November 10, 2008, the Canadian Borrower commenced court proceedings bearing
Case No. 08-CV-7841 (the “Canadian
Bankruptcy Case” and together with the Chapter 11 Cases, collectively,
the “Cases”)
by filing a notice seeking an initial order under the Companies' Creditors
Arrangement Act (Canada) with the Ontario Superior Court of Justice, Commercial
List (the “Canadian
Bankruptcy Court”).  The Canadian Borrower continues to operate
its business and manage its properties as a debtor company; and

     

    WHEREAS,
the Borrowers have requested that the Agents and the Lenders provide a senior
secured, super-priority revolving credit facility to the Borrowers on the terms
and conditions set forth herein;

     

    NOW,
THEREFORE, in consideration of the mutual conditions and agreements set forth in
this Agreement, and for good and valuable consideration, the receipt of which is
hereby acknowledged, the Lenders, the Agents, and the Borrowers hereby agree as
follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
I

     

    Definitions

     

    SECTION
1.01. Defined
Terms.  As
used in this Agreement, the following terms have the meanings specified
below:

     

     “ACH”
shall mean automated clearing house transfers.

     

     “Account”
shall mean “accounts” as defined in the UCC (or as regards the Canadian Loan
Parties, the PPSA), and also means a right to payment of a monetary obligation,
whether or not earned by performance, (a) for property that has been or is to be
sold, leased, licensed, assigned, or otherwise disposed of, (b) for services
rendered or to be rendered, (c) for a secondary obligation incurred or to be
incurred, or (d) arising out of the use of a credit or charge card or
information contained on or for use with the card.

     

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

     

    “Administration
Charge” has the meaning set forth in the Initial Order.

     

     “Administrative
Agent” means Bank of America, in its capacity as administrative agent for
the Lenders and the Issuing Bank hereunder.

     

     “Affiliate”
means, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified, and, with respect to any
Agent or Lender, includes any branches or Affiliates of branches of such Agent
or Lender.

     

    “Agency
Agreement” means the Agency Agreement between the Lead Borrower and Hilco
Merchant Resources, LLC and Gordon Brothers Merchant Partners, LLC dated October
31, 2008 for the disposition of Inventory at certain of the Domestic Borrowers’
stores, as in effect on the date hereof.

     

     “Agents”
shall mean, collectively, the Administrative Agent, the Collateral Agent, and
the Canadian Agent.

     

     “Agreement”
means this Senior Secured, Super-Priority Debtor-in-Possession Credit Agreement,
as modified, amended, supplemented or restated, and in effect from time to
time.

     

    “Applicable
Law” means as to any Person: (i) all statutes, rules, regulations,
orders, or other requirements having the force of law and (ii) all court orders
and injunctions, and/or similar rulings, in each instance ((i) and (ii)) of or
by any Governmental Authority, or court, or tribunal which
has  jurisdiction over such Person, or any property of such Person, or
of any other Person for whose conduct such Person would be responsible. Without
limiting the foregoing, “Applicable Law’ shall include the Bankruptcy Code and
the CCAA.

     

     “Applicable
Margin” means, with respect to Prime Rate Loans, LIBO Loans and BA
Equivalent Loans, 4.00% per annum.  Upon the occurrence and during the
continuance of an Event of Default, interest shall be determined in the manner
set forth in Section 2.12.

     

    “Appraisal
Percentage” means (i) from the Closing Date through December 30, 2008,
90%, (ii) from December 31, 2008 through January 17, 2009, 87.5%, and (iii)
thereafter, 85%.

     

    “Appraised
Value” means the net cost liquidation value of the Borrowers’ Inventory
as set forth in the Stock Ledger (expressed as a percentage of the Cost of such
Inventory) as determined from time to time by Gordon Brothers or by another
independent appraiser reasonably satisfactory to the Administrative Agent, with
such appraisal conducted in accordance with Section 5.09(b) hereof.  Appraised Value shall be
determined based upon the most recent appraisal undertaken by Gordon Brothers or
such other appraiser (regardless of who bears the expense thereof under
Section
5.09(b)).

     

     “Arranger”
means Banc of America Securities LLC.

     

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

     

    “Availability
Block” means an amount equal to the greater of (a) the lesser of (i) ten
percent (10%) of the then Borrowing Base (without giving effect to clause (d)
thereof) and (ii) ten percent (10%) of the Total Commitments, and (b) at any
time from and including January 1 of any year to and including August 31 of such
year, $60,000,000, and at any time from and including September 1 of any year to
and including December 31 of such year, $75,000,000.

     

     “Availability
Reserves” means, without duplication of any other Reserves (including the
Directors’ Charge, the Administration Charge and the Professional Fee Carve Out)
or items that are otherwise addressed or excluded through eligibility criteria
or in any appraisal conducted pursuant to Section 5.09(b), such reserves as any
Agent or the Co-Collateral Agent (subject in all respects to the provisions of
Section 8.18) may from time to time determine in its reasonable discretion
(after consultation with the Lead Borrower (whose consent to any Availability
Reserve shall not be required)) are appropriate (a) to reflect the impediments
to the Agents’ ability to realize upon the Collateral, including, without
limitation, reserves as a result of the occurrence of, and on or after, the
Lease Assumption Reserve Commencement Date, (b) to reflect claims and
liabilities that the Administrative Agent, the Collateral Agent, or the Canadian
Agent (with respect to the Canadian Borrowing Base) or the Co-Collateral Agent
(subject in all respects to the provisions of Section 8.18) determines will need
to be satisfied in connection with the realization upon the Collateral
(including, without limitation, on account of (i) consignment arrangements
entered into by the Borrowers, (ii) wages and vacation pay, (iii) freight,
shipping, freight forwarding, customs brokers, import duties and other similar
charges, and (iv) with respect to the Canadian Borrowing Base only, tax
withholdings and source deductions, outstanding sales and goods and services
taxes, pension charges, Administration Charge, Directors’ Charge, KERP Charge
and statutory Liens and charges, in each case, not capable of being subordinated
by an order in the Canadian Bankruptcy Case), (c) to reflect events or
conditions which adversely affect the value of any assets included in the
Borrowing Base, (d) to reflect that a Default or an Event of Default then
exists, (e) to establish Bank Product Reserves or Cash Management Reserves, (f)
to establish the Lease Reserve, or (g) to establish any Reserve with respect to
the Term Loan required by the Intercreditor Agreement.  Availability
Reserves shall be established and calculated in a manner and methodology
consistent with the Agents’ practices as of the Closing Date with other
similarly situated borrowers.  For the avoidance of doubt, Reserves
established in connection with the Directors’ Charge and the Administration
Charge shall only be deducted from the calculation of the Canadian Borrowing
Base.

     

    “BA Equivalent
Loan” shall mean any Loan to the Canadian Borrower in CD$ bearing
interest at a rate determined by reference to the BA Rate in accordance with the
provisions of Article II.

     

    “BA Equivalent
Loan Borrowing” shall mean any Borrowing comprised of BA Equivalent
Loans.

     

    “BA
Rate” means, for the Interest Period of each BA Equivalent Loan, the rate
of interest per
annum equal to the annual rates applicable to CD$ bankers’ acceptances
having an identical or comparable term as the bankers’ acceptances proposed to
be issued displayed and identified as such on the display referred to as the
"CDOR Page" (or any display substituted therefor) of Reuter Monitor Money Rates
Service as at approximately 10:00 A.M. on such day (or, if such day is not a
Business Day, as of 10:00 A.M. on the immediately preceding Business Day),
provided that if such rates do not appear on CDOR Page at such time on such
date, the rate for such date will be the annual discount rate (rounded upward to
the nearest whole multiple of 1/100 of 1%) as of 10:00 A.M. on such day at which
The Toronto-Dominion Bank is then offering to purchase CD$ bankers’ acceptances
accepted by it having such specified term (or a term as closely as possible
comparable to such specified term).  In the event that the Canadian
Agent is unable to obtain any such quotation as provided above, it will be
deemed that a BA Rate pursuant to a BA Equivalent Loan Borrowing cannot be
obtained.

     

    “Bank of
America” means Bank of America, N.A., a national banking
association.

     

    “Bank
Products” means any services or facilities provided to any Loan Party by
a Lender or any of its Affiliates (but excluding Cash Management Services) on
account of (a) Hedging Agreements and (b) purchase cards.

     

    “Bank Product
Reserves” means Availability Reserves established to reflect the
liabilities and obligations of the Loan Parties with respect to Bank Products
then provided or outstanding.

     

    “Banker’s
Acceptance” means a time draft or bill of exchange relating to a
Commercial Letter of Credit (other than a Canadian Commercial Letter of Credit)
which has been accepted by the Issuing Bank.

     

    “Bankruptcy
Code” means Title 11, U.S.C., as now or hereafter in effect, or any
successor thereto.

     

    “Bankruptcy
Courts” means collectively the US Bankruptcy Court and the Canadian
Bankruptcy Court.

     

     “Bankruptcy
Recoveries” means any and all claims and causes of action which a Loan
Party may be entitled to assert by reason of any avoidance or other power vested
in or on behalf of a Loan Party or the estate of a Loan Party under Chapter 5 of
the Bankruptcy Code (other than those arising under §549 of the Bankruptcy
Code), the Initial Order or other Applicable Law and any and all recoveries or
proceeds of any such claims or causes of action.

     

     “Blocked
Account Agreements” shall mean agency agreements with the banks
maintaining deposit accounts of the Borrowers where funds from one or more DDAs
are concentrated, which agreements shall be in form and substance reasonably
satisfactory to the Administrative Agent, and the Canadian Agent, as
applicable.

     

     “Blocked
Account Banks” shall mean the banks with whom the Borrowers have entered
into Blocked Account Agreements.

     

     “Blocked
Accounts” shall mean each deposit account of the Borrowers which is the
subject of a Blocked Account Agreement.

     

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

     

     “Borrowers”
means collectively, the Domestic Borrowers and the Canadian
Borrower.

     

     “Borrowing”
shall mean (a) the incurrence of Loans of a single Type, on a single date and
having, in the case of LIBO Loans and BA Equivalent Loans, a single Interest
Period, or (b) a Swingline Loan.

     

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

     

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

     

    (b)           the
Appraisal Percentage multiplied by
(i) the Appraised Value of Eligible Inventory, multiplied by
(ii)(x) the Cost of Eligible Inventory minus (y) Inventory Reserves; plus

     

    (c)           with
respect to any Eligible Letter of Credit, the Appraisal Percentage multiplied by
(A) the Appraised Value of the Inventory supported by such Eligible Letter of
Credit, multiplied by
(B)(1) the Cost of such Inventory when completed minus (2) Inventory
Reserves,  minus

     

    (d)           the
Availability Block, minus

     

    (e)           the
then amount of all Availability Reserves established by the Administrative Agent
and the Co-Collateral Agent (subject in all respects to the provisions of
Section 8.18) from time to time in their Permitted Discretion, minus

     

    (f)           the
then amount of the Professional Fee Carve Out Reserve.

     

    “Borrowing Base
Certificate” has the meaning assigned to such term in Section
5.01(b)(iii).

     

     “Borrowing
Request” means a request by the Lead Borrower on behalf of the Borrowers
for a Borrowing in accordance with Section 2.04.

     

     “Breakage
Costs” shall have the meaning set forth in Section 2.21(b).

     

    “Budget”
means (a) the thirteen (13) week cash flow projections for the Domestic Loan
Parties and (b) the thirteen (13) week cash flow of the Canadian Loan Parties,
respectively, substantially in the forms of the initial Budgets annexed hereto
as Schedule
1.2, and any subsequent thirteen week cash flow projections furnished
pursuant to Section 5.01(b)(i) hereof, in each case, in substance reasonably
satisfactory to the Required Lenders, reflecting on a line-item basis, among
other things, anticipated sales, cash receipts, inventory levels, expenditures,
the Borrowing Base, the Canadian Borrowing Base (if applicable) and Excess
Availability for the subject period, which Budget may be amended and modified
solely with the written consent of the Required Lenders.

     

     “Business
Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in Boston, Massachusetts are authorized or required by law to
remain closed, provided
that, when used in connection with a LIBO Loan, the term “Business Day” shall
also exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.  Except as otherwise provided herein,
if any day on which a payment is due is not a Business Day, then the payment
shall be due on the next day following which is a Business Day and such
extension of time shall be included in computing interest and fees in connection
with such payment, provided
further that when used in connection with any Loan to the Canadian
Borrower, the term “Business Day” shall also exclude any day on which banks are
authorized or required by law to be closed in Toronto, Ontario,
Canada.

     

    “Canadian
Agent” means Bank of America, N.A. (acting through its Canada branch)
having a branch in Toronto, Ontario, Canada,  or any successor
appointed pursuant to the provisions hereof and includes its capacity as
“Canadian Administrative Agent” and “Canadian Collateral Agent”.

     

    “Canadian
Appraisal Percentage” means from January 1, 2009 through the earlier of
January 17, 2009 (or such later date agreed by the Canadian Lenders) and the
closing and initial funding of the Term Loan, 80%, and (B) at all other times,
75%.

     

    “Canadian
Availability” means the lesser of (a)(i)(A) from January 1, 2009 through
the earlier of January 17, 2009 (or such later date agreed by the Canadian
Lenders) and the closing and initial funding of the Term Loan $60,000,000, and
(B) at all other times, $50,000,000, minus
(ii) the aggregate unpaid balance of Credit Extensions made to, or for the
account of (other than with respect to Credit Extensions to the Domestic
Borrowers which will be used to make intercompany loans to the Canadian Borrower
as permitted in accordance with the provisions hereof) the Canadian Borrower,
minus
(iii) the aggregate unpaid balance of Pre-Petition Liabilities on account of
credit extensions made to, or for the benefit of, the Canadian Borrower, or (b)
through the earlier of January 17, 2009 (or such later date agreed by the
Canadian Lenders) and the closing and initial funding of the Term Loan, the
Canadian Borrowing Base.  After the earlier of January 17, 2009 (or
such later date agreed by the Canadian Lenders) and the closing and initial
funding of the Term Loan, Canadian Availability shall be determined based on
clause (a) only.

     

    “Canadian
Bankruptcy Case” has the meaning provided in the recitals to this
Agreement.

     

     “Canadian
Bankruptcy Court” has the meaning provided in the recitals to this
Agreement.

     

    “Canadian
Borrower” means InterTAN Canada Ltd.

     

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

     

    (a)           the
Canadian Appraisal Percentage multiplied by
(i) the Appraised Value of Eligible Inventory of the Canadian Borrower, multiplied by
(ii)(x) the Cost of Eligible Inventory of the Canadian Borrower, minus (y)
Inventory Reserves, minus

     

    (b)           the
then amount of all Availability Reserves established by the Canadian Agent from
time to time in its Permitted Discretion.

     

    “Canadian
Borrowing Base Certificate” has the meaning assigned to such term in
Section 5.01(b)(ii).

     

    “Canadian
Commitment” shall mean, with respect to each Lender, the commitment of
such Lender hereunder to make Credit Extensions to the Canadian Borrower in the
amount set forth opposite its name on Schedule
1.1 hereto or as may subsequently be set forth in the Register from time
to time, as the same may be reduced from time to time pursuant to Section 2.17 hereof.

     

    “Canadian
Commitment Fee” has the meaning provided therefor in Section 2.14(b).

     

    “Canadian
Commitment Percentage” shall mean, with respect to each Lender, that
percentage of the Canadian Commitments of all Lenders hereunder to make Credit
Extensions to the Canadian Borrower in the amount set forth opposite its name on
Schedule
1.1 hereto or as may subsequently be set forth in the Register from time
to time, as the same may be  reduced from time to time pursuant to
Section
2.17 hereof.

     

    “Canadian
Creditor Charge” has the meaning given to such term in the Initial
Order.

     

     “Canadian
Lenders” means the Lenders having Canadian Commitments from time to time
or at any time.

     

    “Canadian
Letter of Credit” shall mean a Letter of Credit that is issued pursuant
to this Agreement for the account of the Canadian Borrower.

     

     “Canadian
Letter of Credit Outstandings” shall mean, at any time, the sum of (a)
with respect to Canadian Letters of Credit outstanding at such time, the
aggregate maximum amount that then is or at any time thereafter may become
available for drawing or payment thereunder plus
(b) all amounts theretofore drawn or paid under Canadian Letters of Credit for
which the Issuing Bank has not then been reimbursed.

     

    “Canadian
Liabilities” means (a) the payment by the Canadian Loan Parties of (i)
the principal of, and interest on the Loans made hereunder to, or for the
benefit of, the Canadian Borrower, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by the Canadian Borrower under the Credit Agreement
in respect of any Letter of Credit, when and as due, including payments in
respect of reimbursement of disbursements, interest thereon and obligations to
provide cash collateral and (iii) all other monetary obligations, including
fees, costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise, of the Canadian Loan Parties to the Secured
Parties under the Credit Agreement and the other Loan Documents, (b)
the  performance of all covenants, agreements, obligations and
liabilities of the Canadian Loan Parties under or pursuant to this Agreement and
the other Loan Documents, and (c) all Other Liabilities of the Canadian Loan
Parties.

     

    “Canadian Loan
Parties” means the Canadian Borrower, Tourmalet Corp. and each Subsidiary
of the Canadian Borrower which executes a Facility Guaranty and is incorporated
or formed under Applicable Law of Canada or any of its provinces or
territories.

     

    “Canadian
Overadvance” means, at any time of calculation, a circumstance in which
the Credit Extensions to the Canadian Borrower exceed the Canadian
Availability.

     

    “Canadian Prime
Rate” means the higher of (a) the rate of interest publicly announced
from time to time by Bank of America, N.A. (acting through its Canada branch) as
its reference rate of interest for loans made in Canadian dollars to Canadian
customers and designated as its “prime” rate.  It is a rate set by
Bank of America, N.A. (acting through its Canada branch) based upon various
factors, including Bank of America, N.A. (acting through its Canada branch)’s
costs and desired return, general economic conditions and other factors and is
used as a reference point for pricing some loans, and (b) the BA Rate applicable
to Canadian dollar banker’s acceptances having a term of one month as displayed
on the “CDOR Page” or otherwise as determined pursuant to the definition of “BA
Rate”.  Any change in the Canadian Prime Rate due to a change in the
Bank of America, N.A. (acting through its Canada branch) prime rate shall be
effective on the effective date of such change in the Bank of America, N.A.
(acting through its Canada branch) prime rate.

     

    “Canadian
Security Documents” means the General Security Agreement and the deeds of
hypothec charging the universality of moveable property each granted by the
Canadian Loan Parties in favor of the Canadian Agent, each securing the payment
and performance of the Obligations.

     

    “Canadian Total
Commitments” means the aggregate of the Canadian Commitments of all
Canadian Lenders.

     

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

     

    “Cases”
has the meaning provided in the recitals to this Agreement.

     

    “Cash
Collateral Account” shall mean an interest-bearing account established by
the Domestic Borrowers with the Collateral Agent at Bank of America under the
sole and exclusive dominion and control of the Collateral Agent designated as
the “Circuit City Cash Collateral Account” and, in the case of the Canadian
Borrower, an interest-bearing account established by the Canadian Borrower with
the Canadian Agent at Bank of America, N.A. (acting through its Canada branch)
under the sole and exclusive dominion and control of the Canadian Agent
designated as the “InterTAN Canada Cash Collateral Account”.

     

    “Cash
Management Reserves ” means Availability Reserves established to reflect
the reasonably anticipated liabilities and obligations of the Loan Parties with
respect to Cash Management Services then provided or outstanding.

     

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

     

     “Cash
Receipts” has the meaning provided therefor in Section 2.23(d).

     

    “CCAA”
means the Companies' Creditors Arrangement Act (Canada), as now or hereafter in
effect, or any successor thereto.

     

    “CD$”
means Canadian dollars.

     

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

     

     “Change in
Control” means, at any time, (a) occupation of a majority of the seats
(other than vacant seats) on the board of directors of the Lead Borrower by
Persons who were neither (i) nominated by the board of directors of the
Lead Borrower nor (ii) appointed by directors so nominated; or (b) any
person (within the meaning of the Securities and Exchange Act of 1934, as
amended) is or becomes the beneficial owner (within the meaning of Rule 13d-3
and 13d-5 of the Securities and Exchange Act of 1934, as amended), directly or
indirectly, of forty percent (40%) or more of the aggregate voting power
represented by the outstanding capital stock of the Lead Borrower on a fully
diluted basis, whether as a result of the issuance of securities of the Lead
Borrower, any merger, consolidation, or otherwise, or (c) the failure of the
Lead Borrower to own, directly or indirectly, 100% of the capital stock of all
of the Subsidiary Borrowers and other Loan Parties unless pursuant to a
transaction otherwise permitted hereunder.

     

     “Change in
Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.25(b), by
any lending office of such Lender or by such Lender’s or the Issuing Bank’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority, in each case, made,
issued or changed after the date of this Agreement.

     

    “Chapter 11
Case” has the meaning provided in the recitals to this
Agreement.

     

     “Charges”
has the meaning provided therefor in Section 9.13.

     

    “Closing
Date” means November 12, 2008.

     

     “Co-Collateral
Agent” means General Electric Capital Corporation.

     

    “Code”
means the Internal Revenue Code of 1986 and the rules and regulations
promulgated thereunder, as amended from time to time.

     

     “Collateral”
means any and all “Collateral” as defined in any applicable Security Document,
and all other property of whatever kind and nature subject or purported to be
subject from time to time to a Lien under any Security Document, the DIP Orders
or the Initial Order.  Notwithstanding anything to the contrary
contained in this definition, the term “Collateral” shall not, except as
expressly provided in the DIP Orders or the Initial Order, include Bankruptcy
Recoveries.

     

    “Collateral
Agent” means Bank of America, in its capacity as collateral agent under
the Security Documents (other than the Canadian Security
Documents).

     

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

     

     “Commitment”
shall mean, with respect to each Lender, the commitment of such Lender hereunder
to make Credit Extensions to the Borrowers in the amounts set forth opposite its
name on Schedule
1.1 hereto or as may subsequently be set forth in the Register from time
to time, as the same may be reduced from time to time pursuant to Section 2.17 hereof.

     

     “Commitment
Fee” has the meaning provided therefor in Section 2.14.

     

    “Commitment Fee
Percentage” means 0.75% per annum.

     

    “Commitment
Percentage” shall mean, with respect to each Lender, that percentage of
the Commitments of all Lenders hereunder to make Credit Extensions to the
Borrowers, in the amount set forth opposite its name on Schedule
1.1 hereto or as may subsequently be set forth in the Register from time
to time, as the same may be  reduced from time to time pursuant to
Section
2.17 hereof.

     

    “Concentration
Account” has the meaning provided therefor in Section 2.23(d).

     

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

     

    “Consummation
Date” means both (a) the date of substantial consummation (as defined in
Section 1101 of the Bankruptcy Code and which for purposes of this Agreement
shall be no later than the effective date) of a Plan of Reorganization confirmed
by a Final Order, and (b) the approval in a Final Order of, and the
effectiveness of, a Plan of Compromise under the CCAA.

     

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

     

    “Cost”
means the cost value of Inventory as reported on the Stock Ledger using the cost
method of accounting based on practices which are in effect on the date of this
Agreement.

     

     “Credit Card
Notification” has the meaning provided therefor in Section 2.23(c).

     

    “Credit
Extensions” as of any day, shall be equal to the sum of (a) the principal
balance of all Loans then outstanding, and (b) the then amount of the Letter of
Credit Outstandings.

     

    “Creditors’
Committee” means any official committee of creditors formed, appointed or
approved in the Chapter 11 Case pursuant to the Bankruptcy Code.

     

     “Customer
Credit Liabilities” means, at any time, the aggregate face value at such
time of (a) outstanding gift certificates and gift cards of the Borrowers, and
rewards certificates issued pursuant to the Lead Borrower’s rewards program
entitling the holder thereof to use all or a portion of the certificate to pay
all or a portion of the purchase price for any Inventory, and (b) outstanding
merchandise credits of the Borrowers.

     

    “Customs Broker
Agreement” means an agreement in substantially the form attached hereto
as Exhibit
G among a Domestic Borrower or the Canadian Borrower, as applicable, a
customs broker or other carrier, and the Collateral Agent or the Canadian Agent,
as applicable, in which the customs broker or other carrier acknowledges that it
has control over and holds the documents evidencing ownership of the subject
Inventory for the benefit of the Collateral Agent or the Canadian Agent, as
applicable, and agrees, upon notice from the Collateral Agent or the Canadian
Agent, as applicable, to hold and dispose of the subject Inventory solely as
directed by the Collateral Agent or the Canadian Agent, as
applicable.

     

     “DDAs”
means any checking or other demand deposit account maintained by any Loan Party
into which proceeds of Collateral are deposited.  All funds in such
DDAs shall be conclusively presumed to be Collateral and proceeds of Collateral
and the Agent and the Lenders shall have no duty to inquire as to the source of
the amounts on deposit in the DDAs.

     

     “DDA
Notification” has the meaning provided therefor in Section 2.23(c).

     

    “Default”
means any event or condition that constitutes an Event of Default or that upon
notice, lapse of time or both would, unless cured or waived, become an Event of
Default.

     

     “Delinquent
Lender” has the meaning given that term in Section 8.13.

     

     “Delinquent
Lender’s Future Commitment” has the meaning provided therefor in
Section
8.13.

     

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

     

     “DIP
Orders” means and refers to the Interim Borrowing Order and the Final
Borrowing Order.

     

    “Directors’
Charge” has the meaning set forth in the Initial Order.

     

    “Disclosure
Statement” means a disclosure statement filed in the Chapter 11 Case in
connection with a Plan of Reorganization.

     

    “dollars”
or “$”
refers to lawful money of the United States of America.

     

    “Dollar
Equivalent” of any amount means, at the time of determination thereof,
(a) if such amount is expressed in Dollars, such amount and (b) if such amount
is denominated in any other currency, the equivalent of such amount in Dollars
as determined by Administrative Agent using the published spot rate as quoted by
Bank of America or its branches or Affiliates to customers generally as its noon
spot rate at which such currency is offered on such day for
Dollars.

     

    “Domestic
Borrowers” means collectively, Circuit City Stores, Inc., Circuit City
Stores West Coast, Inc., and Circuit City Stores PR, LLC.

     

    “Domestic
Commitment” shall mean, with respect to each Lender, the commitment of
such Lender hereunder to make Credit Extensions to the Domestic Borrowers in the
amount set forth opposite its name on Schedule
1.1 hereto or as may subsequently be set forth in the Register from time
to time, as the same may be reduced from time to time pursuant to Section 2.17 hereof.

     

    “Domestic
Commitment Percentage” shall mean, with respect to each Lender, that
percentage of the Domestic Commitments of all Lenders hereunder to make Credit
Extensions to the Domestic Borrowers, in the amount set forth opposite its name
on Schedule
1.1 hereto or as may subsequently be set forth in the Register from time
to time, as the same may be reduced from time to time pursuant to Section 2.17 hereof.

     

    “Domestic
Lenders” means the Lenders having Domestic Commitments from time to time
or at any time.

     

    “Domestic Loan
Parties” means all Loan Parties other than the Canadian Loan
Parties.

     

    “Domestic Total
Commitments” means the aggregate of the Domestic Commitments of all
Domestic Lenders.

     

    “Effect of
Bankruptcy” means, with respect to any contractual obligation, contract
or agreement to which a Loan Party is a party, any default or other legal
consequences arising on account of the commencement or the filing of the Chapter
11 Case or the Canadian Bankruptcy Case, as applicable (including the
implementation of any stay), or the rejection of any such contractual
obligation, contract or agreement with the approval of the US Bankruptcy Court
or the Canadian Bankruptcy Court, as applicable, if required under Applicable
Law.

     

     “Eligible
Credit Card Receivables” means Accounts due to a Domestic Borrower on a
non-recourse basis from Visa, Mastercard, American Express Co., Discovercard and
other major credit card processors reasonably acceptable to the Administrative
Agent, as arise in the ordinary course of business and which have been earned by
performance. Without limiting the foregoing, none of the following shall be
deemed to be Eligible Credit Card Receivables:

     

     (a)           Accounts
that have been outstanding for more than five (5) Business Days from the date of
sale;

     

     (b)           Accounts
with respect to which a Domestic Borrower does not have good, valid and
marketable title thereto, free and clear of any Encumbrance (other than (i)
Liens granted to the Collateral Agent, for its benefit and the ratable benefit
of the Secured Parties, pursuant to the Security Documents or the Pre-Petition
Credit Documents), and (ii) Liens permitted herein which do not have priority
over the Lien in favor of the Collateral Agent;

     

     (c)           Accounts
that are not subject to a first priority security interest in favor of the
Collateral Agent, for the benefit of itself and the Secured
Parties;

     

    (d)           Accounts
which arise on account of any private label credit card issued by a Domestic
Borrower;

     

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

     

    (f)           Accounts
which the Administrative Agent determines in its Permitted Discretion to be
uncertain of collection.

     

    “Eligible
Inventory” shall mean, as of the date of determination thereof, without
duplication of Inventory which is the subject of Eligible Letters of Credit,
items of Inventory of the Domestic Borrowers (or with respect to the calculation
of the Canadian Borrowing Base only, the Canadian Borrower) that are finished
goods, merchantable and readily saleable to the public in the ordinary course of
business. Without limiting the foregoing, none of the following shall be deemed
to be Eligible Inventory:

     

     (a)           Inventory
that is not owned solely by a Domestic Borrower (or with respect to the
calculation of the Canadian Borrowing Base only, the Canadian Borrower), or is
leased or on consignment, or such Domestic Borrower (or with respect to the
calculation of the Canadian Borrowing Base only, the Canadian Borrower) does not
have good and valid title thereto;

     

     (b)           Inventory
(including any portion thereof in transit from vendors) that is not located at a
warehouse facility or store that is owned or leased by a Borrower or that is
located with any third party or bailee described in Section 3.19 hereof, unless an intercreditor agreement reasonably
acceptable to the Agent is executed and delivered by the owner of such
location;

     

     (c)           Inventory
that represents (i) goods damaged, defective or otherwise unmerchantable,
(ii) goods that are obsolete or slow moving, or custom items, work-in-process,
raw materials, samples, or that constitute parts, promotional, marketing,
packaging and shipping materials or labels, bags, supplies or other
non-merchandise categories, used or consumed in a Domestic Borrower’s (or with
respect to the calculation of the Canadian Borrowing Base only, the Canadian
Borrower’s) business, (iii) goods that do not conform in all material
respects to the representations and warranties contained in this Agreement or
any of the Security Documents, (iv) goods to be returned to the vendor, (v)
goods not in compliance with all standards imposed by any Governmental Authority
having regulatory authority over such Inventory, its use or sale, (vi) bill and
hold goods or (vii) goods in the following Stock Ledger locations: (A) Product
Return Center, (B) Service Inventory, (C) Damage Return Center, (D) Corporate
Office, (E) MAC Inventory, (F) Road Support Merchandise, (G) Class 710 CCA
Resource Kits, and (H) Class 800-898 Supply Merchandise;

     

     (d)           Inventory
that is not located in the United States of America (excluding territories and
possessions thereof) other than Inventory supported by an Eligible Letter of
Credit (or with respect to the calculation of the Canadian Borrowing Base only,
is not located in Canada);

     

     (e)           Inventory
that is not subject to a perfected first-priority security interest in favor of
the Collateral Agent for the benefit of the Secured Parties (or with respect to
the calculation of the Canadian Borrowing Base only, in favor of the Canadian
Agent) (subject only to Permitted Encumbrances having priority by operation of
Applicable Law);

     

     (f)           
Inventory as to which insurance in material compliance with the provisions of
Section
5.07 hereof is not in effect;
or

     

     (g)           Inventory
which has been sold but not yet delivered.

     

     “Eligible
Letter of Credit” shall mean, as of any date of determination thereof, a
Commercial Letter of Credit which supports the purchase of Inventory, (i) for
which no documents of title have then been issued; (ii) which Inventory
otherwise would constitute Eligible Inventory, (iii) which Commercial Letter of
Credit has an expiry within (x) prior to the Lease Assumption Reserve
Commencement Date, sixty (60) days of the date of initial issuance of such
Commercial Letter of Credit, and (y) on or after the Lease Assumption Reserve
Commencement Date, thirty (30) days of the date of initial issuance of such
Commercial Letter of Credit, and (iv) which Commercial Letter of Credit provides
that it may be drawn only after such Inventory is completed and after documents
of title have been issued for such Inventory reflecting a Borrower or the
Collateral Agent as consignee of such Inventory.

     

     “Environmental
Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any Governmental Authority, relating in
any way to the environment, handling, treatment, storage, disposal, Release or
threatened Release of any Hazardous Material or to health and safety
matters.

     

     “Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, natural resource damage, costs of environmental
remediation, administrative oversight costs, fines, penalties or indemnities),
of any Person directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or
(e) any contract, agreement or other consensual arrangement pursuant to
which liability is assumed or imposed with respect to any of the
foregoing.

     

     “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and rulings issued
thereunder.

     

     “ERISA
Affiliate” means any trade or business (whether or not incorporated)
that, together with the Lead Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.

     

     “ERISA
Event” means (a) with respect to the Domestic Borrowers, any
“reportable event”, as defined in Section 4043 of ERISA or the regulations
issued thereunder with respect to a Plan (other than an event for which the
30-day notice period is waived) or, with respect to the Canadian Borrower, any
such similar event under any other Applicable Law relating to Plans;
(b) with respect to the Domestic Borrowers, the existence with respect to
any Plan of an “accumulated funding deficiency” (as defined in Section 412
of the Code or Section 302 of ERISA), whether or not waived, and with
respect to the Canadian Borrower, the existence with respect to any Plan of any
unfunded contribution, special contribution, unfunded liability or solvency
deficiency, whether or not waived; (c) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA or, with respect
to the Canadian Borrower, any other Applicable Law, of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Lead Borrower or any of its ERISA Affiliates or the Canadian
Borrower or any of its Related Parties of any liability under Title IV of
ERISA or, with respect to the Canadian Borrower, any other Applicable Law, with
respect to the termination of any Plan; (e) the receipt by the Lead
Borrower or any ERISA Affiliate or the Canadian Borrower or any of its Related
Parties from the PBGC, the FSCO (with respect to the Canadian Borrower) or a
plan administrator of any notice relating to an intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan; (f) the incurrence
by the Lead Borrower or any of its ERISA Affiliates or the Canadian Borrower or
any of its Related Parties of any liability with respect to the withdrawal or
partial withdrawal from any Plan or Multiemployer Plan; (g) the receipt by
the Lead Borrower or any ERISA Affiliate or the Canadian Borrower or any of its
Related Parties of any notice, or the receipt by any Multiemployer Plan from the
Lead Borrower or any ERISA Affiliate or the Canadian Borrower or any of its
Related Parties of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA or, with
respect to the Canadian Borrower, any other Applicable Law; or (h) the failure
by the Canadian Borrower to make any required contribution to a Plan or any Lien
arises with respect to any Plan (other than contribution amounts not yet due and
payable).

     

     “Event of
Default” has the meaning assigned to such term in Section 7.01.

     

     “Excess
Availability” means, as of any date of determination, the excess, if any,
of (a)(i) from the Closing Date through the earlier of January 17, 2009 (or such
later date to which the Canadian Lenders may agree) or the closing and initial
funding of the Term Loan, the lesser of (i) the Domestic Total Commitments, or
(ii) the Borrowing Base, over (b) the outstanding Credit Extensions to or for
the account of the Domestic Borrowers, and (ii) from and after the earlier of
January 17, 2009 (or such later date to which the Canadian Lenders may agree) or
the closing and initial funding of the Term Loan, the lesser of (i) the Total
Commitments, or (ii) the Borrowing Base, over (b) the outstanding Credit
Extensions.

     

    “Excluded
Taxes” means, with respect to the Agents, any Lender, the Issuing Bank or
any other recipient of any payment to be made by or on account of any obligation
of the Borrowers hereunder, (a) income or franchise taxes imposed on (or
measured by) its gross or net income, (b) any branch profits taxes, and
(c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by a Borrower under Section 2.30(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender’s failure to comply
with Section
2.28(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrowers with respect to such withholding tax pursuant to
Section
2.28(a).

     

    “Facility
Guarantors” means the Subsidiaries listed on Schedule
1.3 and any other Subsidiaries which hereafter become Facility Guarantors
in favor of the Agents, the Issuing Bank and the Lenders.

     

    “Facility
Guaranty” means collectively any Guaranty of any or all of the
Obligations executed by the Facility Guarantors.

     

     “Federal Funds
Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by Bank of America from three Federal funds brokers of recognized
standing selected by it.

     

     “Fee
Letter” means the “Fee Letter” among the Lead Borrower, Bank of America
and the Arranger dated as of November 12, 2008, as such letter may from time to
time be amended.

     

    “Final
Borrowing Order” means an order of each of the Bankruptcy Courts which
order shall be in form, scope and substance reasonably acceptable to the
Required Lenders, which, among other matters but not by way of limitation,
authorizes the Loan Parties to obtain credit, incur (or guaranty) Obligations,
grant Liens under this Agreement, the other Loan Documents, the DIP Orders and
the Initial Order, as the case may be, and provides for the super priority of
the Agents’ and the Lenders’ claims, which order is a Final Order.

     

    “Final
Order” means an order or judgment of the US Bankruptcy Court or Canadian
Bankruptcy Court, as applicable, as entered on the docket of the Clerk of the US
Bankruptcy Court or issued and entered by the Canadian Bankruptcy Court, that
has not been reversed, stayed, modified or amended and as to which the time to
appeal or seek leave to appeal, petition for certiorari, reargue or seek
rehearing has expired and no proceeding for certiorari, reargument or rehearing
is pending or if an appeal, petition for certiorari, reargument, or rehearing
has been sought, the order or judgment of the US Bankruptcy Court or Canadian
Bankruptcy Court has been affirmed by the highest court to which the order was
appealed, from which the reargument or rehearing was sought, or certiorari has
been denied and the time to take any further appeal or to seek certiorari or
further reargument or rehearing has expired.

     

    “Financial
Officer” means, with respect to any Loan Party, the chief financial
officer, chief accounting officer, treasurer, assistant treasurer, director of
treasury and risk management, or controller of such Loan Party.

     

    “Foreign
Lender” means any Lender that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the
District of Columbia.

     

    “Foreign
Subsidiary” means any Subsidiary that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the
District of Columbia.

     

     “FSCO”
means the Financial Services Commission of Ontario and any Person succeeding to
the functions thereof and includes the Superintendent under such statute and any
other Governmental Authority empowered or created by the Pension Benefits
Act of Ontario or under any other Applicable Law related to
Plans.

     

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

     

     “GAAP”
means accounting principles which are consistent with those promulgated or
adopted by the Financial Accounting Standards Board and its predecessors (or
successors) in effect and applicable to that accounting period in respect of
which reference to GAAP is being made.

     

    “General
Security Agreement” means, collectively, the General Security Agreements
dated as of the Closing Date entered into by each of the Canadian Loan Parties
in favor of the Canadian Collateral Agent for the benefit of the Secured Parties
thereunder, as amended and in effect from time to time.

     

    “Gordon
Brothers” means GB Asset Advisors, LLC or any Affiliate
thereof.

     

    “Governmental
Authority” means the government of the United States of America, Canada,
any other nation or any political subdivision thereof, whether state,
provinicial, territorial, or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

     

     “Guarantee”
of or by any Person (the “guarantor”)
means any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness of any other Person
(the “primary
obligor”) in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (a) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of credit or
letter of guaranty issued to support such Indebtedness or obligation, provided
that the term “Guarantee” shall not include endorsements for collection or
deposit in the ordinary course of business.

     

     “Hazardous
Materials” means all explosive or radioactive substances or wastes and
all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes, mold, and
all other substances or wastes of any nature regulated pursuant to any
Environmental Law, including any material listed as a hazardous substance under
Section 101(14) of CERCLA.

     

     “Hedging
Agreement” means any interest rate protection agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
foreign currency exchange agreement, commodity price protection agreement, or
other interest or currency exchange rate or commodity price hedging arrangement
designed to hedge against fluctuations in interest rates or foreign exchange
rates.

     

    “Identified
Leases” means the Leases identified on Schedule
5.18 hereto.

     

    “Indebtedness”
of any Person means, without duplication, (a) all payment obligations of
such Person for borrowed money (including any obligations which are without
recourse to the credit of such Person but which are secured by a Lien on the
property of such Person), (b) all payment obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
payment obligations of such Person upon which interest charges are customarily
paid, (d) all payment obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(e) all payment obligations of such Person in respect of the deferred
purchase price of property or services, (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all payment
obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty (j) all payment
obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances, (k) all Hedging Agreements, (l) the principal and interest portions
of all rental obligations of such Person under any Synthetic Lease or similar
off-balance sheet financing where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP, and (m) all obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any equity
interest in such Person or any other Person, or in respect of any warrant, right
or option to acquire such equity interest, valued, in the case of a redeemable
preferred interest, at the greater of its voluntary or involuntary liquidation
preference plus
accrued and unpaid dividends.  The Indebtedness of any Person shall
(i) include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor and (ii) shall
exclude current accounts payable and accrued expenses incurred in the ordinary
course of business.

     

     “Indemnified
Taxes” means Taxes arising from any payment made hereunder or otherwise
with respect to this Agreement, other than Excluded Taxes.

     

     “Indemnitee”
has the meaning provided therefor in Section 9.03(b).

     

    “Independent
Consultant” means FTI Consulting, Inc. (or another independent third
party consultant reasonably acceptable to the Administrative
Agent).

     

    “Initial
Order” means an order issued and entered by the Canadian Bankruptcy
Court, substantially in the form of, and containing the provisions set forth in,
Exhibit
H-2 (or such other form and provisions as may be reasonably acceptable to
the Agents and the Required Lenders), which shall stay all proceedings against
the Canadian Loan Parties and which shall, inter alia, approve the Canadian Loan
Parties’ entering into and performing their respective obligations under this
Agreement and the other Loan Documents.

     

     “Initial Store
Closing Sale” has the meaning set forth in Section 5.18.

     

    “Initial Store
Closing Sale Order” has the meaning set forth in Section
5.18.

     

    “Intercreditor
Agreement” means an intercreditor agreement between the Agents and the
Term Loan Agent in form and substance reasonably satisfactory to the Agents and
the Required Lenders, to be entered into contemporaneously with the closing of
the Term Loan, as such intercreditor agreement may be amended, modified,
supplemented and in effect from time to time.

     

    “Interim
Borrowing Order” means an order entered by the US Bankruptcy Court,
substantially in the form of, and containing the provisions set forth in, Exhibit
H (or such other form and provisions as may be reasonable acceptable to
the Agents and the Required Lenders), approving, on an interim basis, the
Domestic Loan Parties’ entering into and performing their obligations under this
Agreement and the other Loan Documents.

     

     “Interest
Payment Date” means (a) with respect to any Prime Rate Loan
(including a Swingline Loan), the first Business Day of each calendar month, and
(b) with respect to any LIBO Loan or BA Equivalent Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a
part.

     

     “Interest
Period” means, with respect to any LIBO Borrowing or BA Equivalent Loan
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, or three
months thereafter, as the Lead Borrower may elect by notice to the
Administrative Agent in accordance with the provisions of this Agreement, provided
that (a) if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day,
and (b) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month during which such Interest Period ends) shall end on the
last Business Day of the last calendar month of such Interest Period, (c) any
Interest Period which would otherwise end after the Termination Date shall end
on the Termination Date, and (d) notwithstanding the provisions of clause (c),
no Interest Period shall have a duration of less than one month, and if any
Interest Period applicable to a LIBO Borrowing or BA Equivalent Loan Borrowing
would be for a shorter period, such Interest Period shall not be available
hereunder. For purposes hereof, the date of a Borrowing initially shall be the
date on which such Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such Borrowing.

     

     “Inventory”
has the meaning assigned to such term in the Security Documents and, as regards
the Canadian Borrower, includes all “inventory” as defined in the
PPSA.

     

    “Inventory
Reserves” means such reserves as may be established from time to time by
the Administrative Agent, the Canadian Agent (with respect to the Canadian
Borrowing Base) or the Co-Collateral Agent (subject in all respects to the
provisions of Section 8.18) in its Permitted Discretion (after consultation with
the Lead Borrower (whose consent to any Inventory Reserve shall not be
required)) with respect to the determination of the saleability, at retail, of
Eligible Inventory or which reflect such other factors as affect the appraised
value of Eligible Inventory.  Inventory Reserves shall be established
and calculated in a manner and methodology consistent with the Agents’ practices
as of the Closing Date with other similarly situated borrowers.

     

     “Investment”
has the meaning provided therefor in Section 6.04.

     

    “Issuer
Documents” means with respect to any Letter of Credit, the letter of
credit application, and any other document, agreement and instrument entered
into by the Issuing Bank and any Borrower or in favor of the Issuing Bank and
relating to any such Letter of Credit.

     

     “Issuing
Bank” means Bank of America, in its capacity as the issuer of Letters of
Credit hereunder, and as to the Canadian Borrower, Bank of America, N.A. (acting
through its Canada branch), and any other Lender as the Administrative Agent and
the Lead Borrower may agree, such agreement not to be unreasonably withheld. The
Issuing Bank may, in its reasonable discretion, arrange for one or more Letters
of Credit to be issued by Affiliates or branches of the Issuing Bank, in which
case the term “Issuing Bank” shall include any such Affiliate or branch with
respect to Letters of Credit issued by such Affiliate or branch.

     

    “Judgment
Conversion Date” has the meaning set forth in Section 9.16 hereof.

     

    “Judgment
Currency” has the meaning set forth in Section 9.16 hereof.

     

    “KERP
Charge” has the meaning given to such term in the Initial
Order.

     

    “L/C Credit
Support” has the meaning set forth in Section 2.07(k) hereof.

     

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

     

     “Lead
Borrower” means Circuit City Stores, Inc.

     

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

     

    “Lease
Assumption Reserve Commencement Date” means the date that is 12 weeks
(or, if longer, the length of the liquidation period assumed in the Inventory
appraisals received by Agents, plus 3 weeks) prior to the end of the 120 day
lease rejection/assumption period, as such period may be extended or shortened
by the US Bankruptcy Court.

     

    “Lease
Reserve” means a reserve, in an amount established by the Administrative
Agent or the Co-Collateral Agent (subject in all respects to the provisions of
Section 8.18) in their Permitted Discretion, in respect of (i) Inventory held at
any leased or rented location in the United States or Puerto Rico intended to be
closed with respect to which the lease therefor is or is intended to be
terminated by a Domestic Borrower, (ii) Inventory at leased locations in the
United States or Puerto Rico with respect to which the lease has not been
assumed commencing on the Lease Assumption Reserve Commencement Date, or with
respect to any specific location, the date that is 12 weeks (or, if longer, the
length of the liquidation period assumed in the Inventory appraisals received by
Agents, plus 3 weeks) prior to the expiration of such period of time as shall
have been consented to for rejection/assumption of such lease by the landlord
for such location, or (iii) Inventory held at any leased location in the United
States or Puerto Rico as to which there has been filed a motion to compel the
assumption or rejection of the lease, in each case in an amount determined by
the Administrative Agent or the Co-Collateral Agent (subject in all respects to
the provisions of Section 8.18) in their Permitted Discretion.

     

    “Lenders”
shall mean the Persons identified on Schedule
1.1 and each assignee that becomes a party to this Agreement as set forth
in Section
9.05(b).

     

     “Letter of
Credit” shall mean (a) a letter of credit that is issued pursuant to this
Agreement for the account of any Borrower, including, without limitation, any
Canadian Letter of Credit, and (b) any Banker’s Acceptance.  Without
limiting the foregoing, all Pre-Petition Letters of Credit (including, without
limitation, all Banker’s Acceptances issued in connection therewith) shall be
deemed to have been issued hereunder and shall for all purposes be deemed to be
“Letters of Credit” hereunder.

     

     “Letter of
Credit Fees” shall mean the fees payable in respect of Letters of Credit
pursuant to Section
2.15.

     

     “Letter of
Credit Outstandings” shall mean, at any time, the sum of (a) with respect
to Letters of Credit outstanding at such time, the aggregate maximum amount that
then is or at any time thereafter may become available for drawing or payment
thereunder plus
(b) all amounts theretofore drawn or paid under Letters of Credit for which the
Issuing Bank has not then been reimbursed.

     

     “LIBO
Borrowing” shall mean a Borrowing comprised of LIBO Loans.

     

     “LIBO
Loan” shall mean any Loan bearing interest at a rate determined by
reference to the Adjusted LIBO Rate in accordance with the provisions of Article
II.

     

     “LIBO
Rate” means, with respect to any LIBO Borrowing for any Interest Period,
the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or by such other commercially available
source providing quotations of BBA LIBOR as may be designated by the
Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for
Dollar deposits (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period.  If such rate is not
available at such time for any reason, then the “LIBO Rate” for such Interest
Period shall be the rate per annum determined by the Administrative Agent to be
the rate at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the LIBO
Borrowing being made, continued or converted and with a term equivalent to such
Interest Period would be offered by Bank of America’s London Branch to major
banks in the London interbank eurodollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.

     

     “Lien”
means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge, security interest, and, with respect
to any Canadian Loan Party, also includes any prior claim or deemed trust in, on
or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

     

    “Liquidation”
means the exercise by any of the Agents of those rights and remedies accorded to
such Agents under the Loan Documents and Applicable Law as a creditor of the
Loan Parties (subject to the terms of the DIP Orders and the Initial Order),
including (after the occurrence and during the continuation of an Event of
Default) the conduct by the Borrowers, acting with the consent of the
Administrative Agent, of  any public, private or
“Going-Out-Of-Business Sale” or other disposition of Collateral for the purpose
of liquidating the Collateral.  Derivations of the word “Liquidation”
(such as “Liquidate”)
are used with like meaning in this Agreement.

     

     “Loan
Account”  has the meaning assigned to such term in Section 2.22(a).

     

     “Loan
Documents” means this Agreement, the Notes, the Letters of Credit, the
Fee Letter, all Borrowing Base Certificates, the Blocked Account Agreements, the
DDA Notifications, the Credit Card Notifications, the Security Documents, the
Facility Guaranty, each Customs Broker Agreement, the Intercreditor Agreement,
and any other instrument or agreement now or hereafter executed and delivered in
connection herewith or therewith.

     

    “Loan
Parties” means, collectively, the Borrowers and each Person executing a
Facility Guaranty.

     

     “Loans”
shall mean all loans (including, without limitation, Revolving Loans and
Swingline Loans) at any time made to the Borrowers or for account of the
Borrowers pursuant to this Agreement.

     

     “Margin
Stock” has the meaning assigned to such term in
Regulation U.

     

     “Material
Adverse Effect” means a material adverse effect on (a) the business,
operations, property, assets, or financial condition, of the Lead Borrower and
its Subsidiaries taken as a whole, (b) the ability of the Loan Parties to
perform any material obligation or to pay any Obligations under this Agreement
or any of the other Loan Documents, or (c) the validity or enforceability
of this Agreement or any of the other Loan Documents or any of the material
rights or remedies of the Agents or the Lenders hereunder or thereunder,
including, without limitation, with respect to the Collateral; provided that a
“Material Adverse Effect shall not be deemed to exist as a result of the Effect
of Bankruptcy or the events leading up to and resulting therefrom.

     

    “Material
Contract” means, with respect to any Person, each contract(other than the
Loan Documents and the documents governing the Term Loan) to which such Person
is a party material to the business, operations, property, assets, or financial
condition of such Person, the cancellation of non-renewal of which would
reasonably be expected to result in a Material Adverse Effect.

     

     “Material
Indebtedness” means Indebtedness incurred subsequent to the commencement
of the Cases (other than the Loans and Letters of Credit) (including obligations
in respect of one or more Hedging Agreements and obligations in respect of the
Term Loan) of any one or more of the Loan Parties in an aggregate principal
amount exceeding $25,000,000.

     

     “Maturity
Date” means November 10, 2009.

     

     “Maximum
Rate” has the meaning provided therefor in Section 9.13.

     

     “Minority
Lenders” has the meaning provided therefor in Section 9.02(d).

     

    “Monitor”
means Alvarez and Marsal Canada ULC, the court appointed monitor in the Canadian
Bankruptcy Case or such other Person succeeding to such position agreed to by
the Canadian Agent and the Canadian Borrower.

     

     “Moody’s”
means Moody’s Investors Service, Inc.

     

     “Multiemployer
Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.

     

    “Net
Proceeds” means, with respect to any Prepayment Event, the excess, if
any, of (i) the sum of cash and cash equivalents received in connection with
such transaction (including any cash or cash equivalents received by way of
deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) over (ii) the sum of (A) the
principal amount of any Indebtedness that is secured by the applicable asset by
a Lien permitted hereunder which is senior to the Lien of the Collateral Agent
or the Canadian Agent on such asset and that is required to be repaid (or to
which an escrow for the future repayment thereof is required to be established)
in connection with such transaction (other than Indebtedness under the Loan
Documents), (B) the reasonable and customary out-of-pocket costs, fees and
expenses incurred by such Loan Party in connection with such transaction paid or
reasonably estimated to be payable by any Loan Party to third parties (other
than Affiliates) (including, without limitation, sales and underwriter’s
commissions, legal accounting, rating agency and investment banking fees and
taxes), and (C) amounts provided as a cash reserve, in accordance with GAAP, or
amounts placed in a funded escrow, against any liabilities under any
indemnification obligations or purchase price adjustments associated with such
Prepayment Event (provided that, to the extent and at the time any such amounts
are released from such reserve, such amounts shall constitute Net
Proceeds).

     

    “Noncompliance
Notice” has the meaning provided therefor in Section 2.06(b).

     

    “Notes”
shall mean (i) the promissory notes of the Domestic Borrowers substantially in
the form of Exhibit
B-1, each payable to the order of a Domestic Lender, evidencing the
Revolving Loans, and (ii) the promissory note of the Domestic Borrowers
substantially in the form of Exhibit
B-2, payable to the Swingline Lender, evidencing the Swingline Loans made
to the Domestic Borrowers, (iii) the promissory notes of the Canadian Borrower
substantially in the form of Exhibit
B-3 each payable to the order of a Canadian Lender, evidencing the
Revolving Loans made to the Canadian Borrower, and (iv) the promissory note of
the Canadian Borrower substantially in the form of Exhibit
B-4, payable to the Swingline Lender, evidencing the Swingline Loans made
to the Canadian Borrower.

     

     “Obligations”
means (a) the payment by the Borrowers of (i) the principal of, and interest on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) each payment required to be
made by the Borrowers under the Credit Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral and
(iii) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise,
of the Borrowers to the Secured Parties under the Credit Agreement and the other
Loan Documents, (b) the  performance of all covenants, agreements,
obligations and liabilities of the Borrowers under or pursuant to this Agreement
and the other Loan Documents, and (c) the Other Liabilities.  Without
limiting the foregoing, the term “Obligations” includes all Canadian
Liabilities.

     

     “Online
Services Agreement” has the meaning assigned to such term in Section 2.07(d).

     

     “Other
Liabilities” means (a) the payment and performance of any Hedging
Agreements which are permitted pursuant to Section 6.01 hereof, and (b) the payment and performance of any
obligations with respect to any Cash Management Services or Bank Products, in
each case, in connection with this Agreement or the other Loan Documents, as
each may be amended from time to time.

     

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

     

     “Overadvance”
means, at any time of calculation, a circumstance in which the Credit Extensions
exceed the lesser of (a) the Total Commitments or (b) the Borrowing
Base.

     

    “Participant”
has the meaning provided therefor in Section 9.05(e).

     

    “PBGC”
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.

     

    “Permitted
Canadian Overadvance” means a Canadian Overadvance determined by the
Canadian Agent, in its reasonable discretion, (a) which is made to maintain,
protect or preserve the Collateral granted by the Canadian Loan Parties and/or
the Canadian Agent’s or Canadian Lenders’ rights under the Loan Documents, or
(b) which is otherwise in the Lenders’ interests; provided
that Permitted Canadian Overadvances shall not remain outstanding for
more than forty-five (45) consecutive Business Days unless the Required
Supermajority Lenders otherwise agree; and provided
further that the foregoing shall not (1) modify or abrogate any of the
provisions of Section 2.07(f) regarding the Lenders’ obligations with respect to
L/C Disbursements, or (2) result in any claim or liability against the Canadian
Agent (regardless of the amount of any Canadian Overadvance) for “inadvertent
Canadian Overadvances” (i.e. where a Canadian Overadvance results from changed
circumstances beyond the control of the Canadian Agent (such as a fluctuation in
the exchange rate of the CD$ against the dollar)), and further
provided that in no event shall the Canadian Agent make a Canadian
Overadvance, if after giving effect thereto, the principal amount of the Credit
Extensions to the Canadian Borrower would exceed (A) from January 1, 2009
through the earlier of January 17, 2009 (or such later date agreed by the
Canadian Lenders) and the closing and initial funding of the Term Loan
$65,000,000, and (B) at all other times $55,000,000.

     

    “Permitted
Discretion” means the Administrative Agent’s, Collateral Agent’s,
Canadian Agent’s or the Co-Collateral Agent’s good faith credit judgment based
upon any factor or circumstance which they reasonably believe in good faith: (i)
will or would reasonably be expected to adversely affect the value of the
Collateral, the enforceability or priority of the Collateral Agent’s or Canadian
Agent’s Liens thereon in favor of the Secured Parties or the amount which the
Collateral Agent, the Canadian Agent and the Secured Parties would likely
receive (after giving consideration to delays in payment and costs of
enforcement that the Administrative Agent, Collateral Agent, Canadian Agent, and
Co-Collateral Agent determine in their reasonable business judgment will need to
be satisfied in connection with the realization upon any Collateral) in the
liquidation of such Collateral; (ii) suggests that any collateral report or
financial information delivered to the Agents by or on behalf of the Loan
Parties is incomplete, inaccurate or misleading in any material respect; or
(iii) creates or reasonably would be expected to create a Default or Event of
Default.  In exercising such judgment, the Agents, Co-Collateral Agent
may consider, without limitation, any of the following factors or circumstances:
(A) the financial and business climate and prospects of any Loan Party’s
industry; (B) changes in demand for and pricing of Inventory; (C) changes in any
concentration of risk with respect to Inventory; (D) audits of books and records
by third parties, history of chargebacks or other credit adjustments; and (E)
any other factors that adversely change or would reasonably be expected to
adversely change the credit risk of lending to the Borrowers on the security of
the Accounts and Inventory.

     

    “Permitted
Encumbrances” means:

     

     (a)           Liens
imposed by law for taxes, rates, assessments or government charges or levies
that are not yet due or are being contested in compliance with Section 5.05;

     

     (b)           carriers’,
warehousemen’s, mechanics’, landlord’s, materialmen’s, repairmen’s and other
like Liens and imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.05;

     

     (c)           pledges,
deposits and Liens made in the ordinary course of business in compliance with
workers’ compensation, wages, vacation pay, unemployment insurance, old-age
pension and other social security laws or regulations;

     

     (d)           deposits,
pledges and Liens to secure the performance of bids, trade contracts, leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature, in each case in the ordinary course of business;

     

     (e)           judgment
Liens in respect of judgments that do not constitute an Event of Default under
Section
7.01(h);

     

     (f)           easements,
zoning restrictions, rights-of-way, servitudes, restrictive covenants, rights of
expropriation, access or use and similar encumbrances on real property imposed
by law or arising in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value of the
affected property or materially interfere with the ordinary conduct of business
of the Borrowers or any Subsidiary of the Borrowers;

     

    (g)           any
interest or title of a lessor or sublessor under any Lease of Real Estate
permitted hereunder;

     

    (h)           purported
Liens evidenced by the filing of precautionary UCC and PPSA financing statements
relating solely to operating leases or the consignment of personal property
entered into in the ordinary course of business;

     

    (i)           Liens
in favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.05;

     

    (j)           licenses
of patents, trademarks and other intellectual property rights granted by the
Lead Borrower or any of its Subsidiaries in the ordinary course of business and
not interfering in any respect with the ordinary conduct of the business of the
Lead Borrower or such Subsidiary and which licenses would not reasonably be
expected to have a Material Adverse Effect;

     

    (k)           The
Administration Charge and Directors’ Charge;

     

    (l)           Liens
in favor of third party liquidators performing Permitted Sales; and

     

    (m)           Liens
existing on the Closing Date described in Schedule
6.02.

     

    provided
that, except as provided in any one or more of clauses (a) through (f) above,
the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.

     

    "Permitted
Investments" means each of the following:

     

               (a)           direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by the government of Canada or the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the government of Canada or the United States of
America, as the case may be), in each case maturing within one year from the
date of acquisition thereof;

     

    (b)           any
obligation issued, sponsored or backed by the government of Canada or the United
States of America, including Federal Agency
Securities, with a maturity of 365 days or less with a credit rating of
at least "AAA" as used by S&P or "Aaa" as used by Moody's or the equivalent
rating by an established national credit rating agency in
Canada;

     

    (c)           fully
collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above (without regard to the limitation
on maturity contained in such clause) and entered into with a financial
institution satisfying the criteria described in clause (e) below or with
one of the primary dealers regulated by the Federal Reserve that is at least
102% collateralized by U.S. government obligations;

     

    (d)           Investments
in commercial paper issued by a corporation organized under the federal laws of
Canada or the laws of any province within Canada or the laws of any state of the
United States of America maturing within 270 days from the date of purchase and
having, at such date of purchase, a credit rating of at least "A-2" or "P-2"
from S&P or from Moody's or the equivalent rating by an established national
credit rating agency in Canada;

     

    (e)           Investments
in certificates of deposit, banker's acceptances and time deposits maturing
within 365 days from the date of acquisition thereof issued or guaranteed by or
placed with, and demand deposit and money market deposit accounts, and master
notes issued or offered by, any bank to which the Bank Act
(Canada) applies or by any company licensed to carry on the business of a trust
company in one or more provinces of Canada or any domestic office of any
commercial bank or financial institution organized under the laws of the United
States of America or any State thereof that has a combined capital and surplus
and undivided profits of not less than $500,000,000 (or the equivalent amount in
another currency);

     

    (f)           variable
rate demand obligations or Notes which have a rating of at least "A1" by S&P
or "P1" by Moody's or the equivalent rating by an established national credit
rating agency in Canada or which are backed by letters of credit, liquidity
facilities or special purchaser's agreement with a financial institution
satisfying the criteria described in clause (e) above and maturing not
later than 365 days after purchase;

     

    (g)           money
market funds which comply with the provisions of Rule 2a-7 of the Securities and
Exchange Commission or any investment fund regulated and advised by a registered
investment advisor under Rule 3c-7 or money market funds which comply with the
provisions of Rule 3c-7 of the Securities and Exchange
Commission;

     

    (h)           Shares
of mutual funds which have a rating of at least "AA" as used by S&P or "Aa"
as used by Moody's or the equivalent rating by an established national credit
rating agency in Canada and have a weighted average maturity of 365 days or less
when purchased;

     

    (i)           auction
rate securities or auction preferred stock-ARS, SAVRS, having a rating of single
A or better by one of the national credit rating agencies in Canada or the
United States of America and with an auction period of no longer than 90
days;

     

    (j)           Asset-backed
commercial paper which matures not later than 270 days following the date of
purchase and which certificates are rated at least "A-2" from S&P or "P-2"
from Moody's or the equivalent rating by an established national credit rating
agency in Canada;

     

     

    (k)           Obligations
of any corporation organized under the federal laws of Canada or the laws of any
province within Canada or the laws of any state of the United States of America
or under the laws of any other nation, payable in Canada or the United States of
America, as the case may be, maturing within 365 days from the date of purchase
and having a rating of at least "A" by S&P or Moody's or the equivalent
rating by an established national credit rating agency in Canada at the time of
purchase;

     

    provided that,
(i) other than overnight Investments of excess funds in the Domestic Borrowers’
disbursement account maintained with Wachovia Bank, National Association (not to
exceed $1,000,000 in the aggregate at any time), no such Investments may be made
unless there are no Loans then outstanding, and (ii) all such Investments are
pledged by the applicable Loan Party to the Collateral Agent as additional
collateral for the pursuant to such agreements, the DIP Orders or the Initial
Order as may be reasonably required by the Collateral
Agent.

     

     “Permitted
Overadvance” means an Overadvance determined by the Administrative Agent,
in its reasonable discretion, (a) which is made to maintain, protect or preserve
the Collateral and/or the Lenders’ rights under the Loan Documents, or (b) which
is otherwise in the Lenders’ interests; provided
that Permitted Overadvances shall not (i) exceed five percent (5%) of the
then Borrowing Base in the aggregate outstanding at any time or (ii) remain
outstanding for more than forty-five (45) consecutive Business Days, unless in
case of clause (ii), the Required Supermajority Lenders otherwise agree; and
provided
further that the foregoing shall not (1) modify or abrogate any of the
provisions of Section
2.07(f) regarding the Lender’s
obligations with respect to L/C Disbursements, or (2) result in any claim or
liability against the Administrative Agent (regardless of the amount of any
Overadvance) for “inadvertent Overadvances” (i.e. where an Overadvance results
from changed circumstances beyond the control of the Administrative Agent (such
as a reduction in the collateral value)), and further
provided that in no event shall the Administrative Agent make an
Overadvance, if after giving effect thereto, the principal amount of the Credit
Extensions would exceed the Total Commitments (as in effect prior to any
termination of the Commitments pursuant to Section 7.01 hereof).

     

    “Permitted
Sales”  means (i) the sale of all or substantially all of the
Domestic Borrowers’ and Canadian Borrower’s assets as a going concern in a
single transaction or series of related transactions as approved by the US
Bankruptcy Court or the Canadian Bankruptcy Court pursuant to the applicable
provisions of the Bankruptcy Code, the Initial Order and the CCAA or other
Applicable Law; provided
that any such going concern sale shall be for cash consideration in an amount in
excess of all outstanding Obligations and all Pre-Petition Liabilities, which
amount shall be paid to the Administrative Agent for application to the
Obligations, or (ii) the sale of all or substantially all of the assets or
equity interests in the Canadian Borrower as a going concern as approved by the
US Bankruptcy Court if required by Applicable Law or the Canadian Bankruptcy
Court pursuant to the applicable provisions of the Bankruptcy Code, the Initial
Order and the CCAA or other Applicable Law; provided
that any such going concern sale shall be for cash consideration in an amount in
excess of all outstanding Canadian Liabilities and all Pre-Petition Liabilities
of the Canadian Borrower, which amount shall be paid to the Canadian Agent for
application to the Canadian Liabilities, or (iii) a transaction or transactions
combining the sale of certain of the Borrowers’ business assets as a going
concern and the permanent closing of all or a portion of the Borrowers’ stores
and the sale of all Collateral located therein through the retention by the
Borrowers of one or more independent, nationally recognized, professional retail
inventory liquidation firms, reasonably acceptable to the Agents, as approved by
the US Bankruptcy Court or the Canadian Bankruptcy Court pursuant to the
applicable provisions of the Bankruptcy Code, the Initial Order or the CCAA or
other Applicable Law, which transaction or transactions shall be on terms
reasonably satisfactory to the Agents and Required Lenders and shall together,
be for cash consideration in excess of all outstanding Obligations and all
Pre-Petition Liabilities, which amount shall be paid to the Administrative Agent
for application to the Obligations, or (iv) the Initial Store Closing Sale and
other sales and dispositions in connection with additional store closures
through the retention by the Borrowers of one or more independent, nationally
recognized, professional retail inventory liquidation firms, reasonably
acceptable to the Agents, which transaction shall be on terms reasonably
satisfactory to the Agents and Required Lenders and approved by the applicable
Bankruptcy Courts to the extent required by Applicable Law.

     

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

     

    “Petition
Date” means November 10, 2008.

     

     “Plan”
means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the
Code or Section 302 of ERISA), or, with respect to the Canadian Borrower,
any employee pension benefit plan which is considered to be a pension plan for
the purposes of any applicable pension benefits standards or Applicable Law,
and: (a) in respect of which the Lead Borrower or any ERISA Affiliate is
(or, if such plan were terminated, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA; or
(b) in respect of the Canadian Borrower or any of its Related Parties, is a
plan maintained by the Canadian Borrower or any of its Related Parties as a plan
to which the Canadian Borrower or any of its Related Parties contributes or is
required to contribute or any other plan with respect to which the Canadian
Borrower or any of its Related Parties has incurred or may incur liability,
including contingent liability, either to such plan or to any Person,
administration or Governmental Authority, including the FSCO.

     

    “Plan of
Compromise” means a plan of compromise or arrangement filed in the
Canadian Bankruptcy Case.

     

    “Plan of
Reorganization” means a plan filed in the Chapter 11 Case pursuant to
Chapter 11 of the Bankruptcy Code.

     

    “PPSA”
means the Personal Property
Security Act of Ontario (or any successor statute) or similar legislation
of any other Canadian jurisdiction, including, without limitation, the Civil
Code of Quebec, the laws of which are required by such legislation to be applied
in connection with the issue, perfection, enforcement, opposability, priority,
validity or effect of security interests.

     

    “Prepayment
Event” means (a) any sale, transfer or other disposition of any property
or asset of a Loan Party, (b) any casualty or other insured damage to, or any
taking under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of a Loan Party, other than proceeds therefrom
required to be paid to Persons other than the Borrowers under the Agency
Agreement (c) the issuance by the Lead Borrower of any equity interests, or (d)
the incurrence by a Loan Party of any Indebtedness, including without limitation
the Term Loan, but excluding any other Indebtedness permitted
hereunder.

     

    “Pre-Petition
Credit Agreement” means that certain Second Amended and Restated Credit
Agreement dated as of January 31, 2008 entered into among the Borrowers, certain
of the Facility Guarantors, the Agents and the Lenders (as each of those terms
is defined therein), together with all instruments, documents and agreements
executed or delivered in connection therewith, in each case, as amended,
modified or supplemented to the date hereof.

     

    “Pre-Petition
Letters of Credit” means each of the Letters of Credit issued under the
Pre-Petition Credit Agreement and outstanding on the Closing Date, as listed on
Schedule
1.4 hereto.

     

    “Pre-Petition
Liabilities” means the “Secured Obligations” as defined in the security
agreement executed and delivered in connection with the Pre-Petition Credit
Agreement.

     

    “Pre-Petition
Loan Documents” means the “Loan Documents” as defined in the Pre-Petition
Credit Agreement.

     

     “Prime
Rate” shall mean, for any day, the highest of (a) the annual rate of
interest then most recently announced by Bank of America at its head office in
Charlotte, North Carolina as its “Prime Rate”, (b) the Federal Funds Effective
Rate in effect on such day plus 1⁄2 of 1% (0.50%) per annum and (c) the Adjusted
LIBO Rate for an Interest Period of one month; provided
that for purposes of clause (a) with respect to Credit Extensions to the
Canadian Borrower made in Dollars, the “Prime Rate” shall mean the “Base Rate”
of interest announced by Bank of America, N.A. (acting through its Canada
branch) for Loans to its Canadian customers in Dollars. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate being
charged to any customer.  If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative Agent to obtain
sufficient quotations thereof in accordance with the terms hereof, the Prime
Rate shall be determined without regard to clause (b), of the first sentence of
this definition, until the circumstances giving rise to such inability no longer
exist. Any change in the Prime Rate due to a change in Bank of America’s Prime
Rate, Adjusted LIBO Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change in Bank of America’s Prime Rate, the
Adjusted LIBO Rate or the Federal Funds Effective Rate,
respectively.

     

     “Prime Rate
Loan” shall mean any Loan bearing interest at a rate determined by
reference to the Prime Rate or the Canadian Prime Rate, as the case may be, in
accordance with the provisions of Article II.

     

    “Professional
Fee Carve Out” means an amount equal to $3,000,000, plus the Reported Fee
Accruals for Professional Fees and Expenses, but only to the extent such
Professional Fees and Expenses are allowed by the US Bankruptcy Court and
subject to any limitations contained in the DIP
Orders.  Notwithstanding anything to the contrary contained herein,
(i) so long as an Event of Default shall not have occurred and be continuing and
notice of such Event of Default has not been provided to the Lead Borrower by
the Administrative Agent, the Domestic Borrowers shall be permitted to pay
compensation and reimbursement of expense allowed and payable under 11 U.S.C.
Section 330 and 331, as the same may be due and payable, and the same shall not
reduce the Professional Expense Carve Out and (ii) to the extent the $3,000,000
limitation set forth above on fees and disbursements is reduced by any amount as
a result of payment of such fees and disbursements during the continuance of an
Event of Default, and such Event of Default is subsequently cured or waived,
then effective as of the effectiveness of such cure or waiver, such dollar
limitation shall be increased by an amount equal to the amount by which it has
been so reduced.

     

    “Professional
Fee Carve Out Reserve” means a Reserve equal to the maximum possible
amount of the Professional Fee Carve Out.

     

    “Professional
Fees and Expenses” means, subject to any limitations contained in the DIP
Orders, (a) allowed administrative expenses payable pursuant to 28 U.S.C. §
1930(a)(6), and (b) professional fees of, and expenses incurred by, attorneys,
accountants, financial advisors, consultants and other professionals retained by
the Domestic Loan Parties or the Creditors’ Committee or other statutory
committee appointed in the Cases pursuant to §§327 and 1103 of the Bankruptcy
Code.

     

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

     

     “Receivables
Advance Rate” means 90%.

     

     “Register”
has the meaning set forth in Section 9.05(c).

     

     “Regulation
U” means Regulation U of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

     

     “Regulation
X” means Regulation X of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

     

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

     

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

     

     “Release”
has the meaning set forth in Section 101(22) of CERCLA.

     

    “Reported Fee
Accruals” means the amount of Professional Fees and Expenses which have
been incurred, accrued or invoiced (but remain unpaid) prior to such time as the
Administrative Agent notifies the Lead Borrower of the occurrence and
continuation of an Event of Default.  For purposes of determining the
amount of the Professional Fee Carve Out, “Reported Fee Accruals” shall be equal
to the aggregate “Professional Fees” reflected in the approved Budget for the
relevant time period minus any payments received on account thereof, which
payments are reported to the Agents in accordance with the provisions of Section
5.01(a)(iii) hereof.  Any Professional Fees and Expenses which have
been incurred, accrued or invoiced (and remain unpaid) but are in excess of the
amounts reflected on the approved Budget for the relevant time period (subject
to the Variance Report delivered pursuant to Section 5.01(b)(i) hereof) shall
not constitute “Reported Fee Accruals.”

     

     “Required
Lenders” shall mean, at any time, Lenders (other than Delinquent Lenders)
having Commitments at least equal to 51% of the Total Commitments outstanding
(excluding the Commitments of any Delinquent Lender), or if the Commitments have
been terminated, Lenders (other than Delinquent Lenders) whose percentage of the
outstanding Credit Extensions (after settlement and repayment of all Swingline
Loans by the Lenders) aggregate not less than 51% of all such Credit Extensions
(excluding the Credit Extensions of a Delinquent Lender).

     

     “Required
Supermajority Lenders” shall mean, at any time, Lenders (other than
Delinquent Lenders) having Commitments outstanding representing at least 66 2/3%
of the Total Commitments outstanding (excluding the Commitments of any
Delinquent Lender) or if the Commitments have been terminated, Lenders (other
than Delinquent Lenders) whose percentage of the outstanding Credit Extensions
(after settlement and repayment of all Swingline Loans by the Lenders) aggregate
not less than 66 2/3% of all such Credit Extensions (excluding the Credit
Extensions of a Delinquent Lender).

     

     “Reserves”
means the Inventory Reserves and Availability Reserves.

     

     “Restricted
Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any shares of any class of capital
stock of any Loan Party, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such shares of capital stock or other equity interests of any Loan Party or
any option, warrant or other right to acquire any such shares of capital stock
or other equity interests of any Loan Party.

     

    “Revolving
Loans” means all Loans at any time made by a Lender pursuant to Section 2.01.

     

     “S&P”
means Standard & Poor’s Rating Services, a division of the McGraw-Hill
Companies, Inc.

     

    “Secured
Parties” has the meaning assigned to such term in the Security Agreement
and the Canadian Security Documents, respectively.

     

     “Security
Agreement” means the Security Agreement dated as of the Closing Date
among the Domestic Loan Parties in favor of the Collateral Agent for the benefit
of the Secured Parties, as amended, restated, modified or supplemented and in
effect from time to time.

     

     “Security
Documents” means the Security Agreement, the Canadian Security Documents,
and each other security agreement, guaranty, or other instrument or document, in
each case executed and delivered pursuant to Section 2.23, Section 5.12 or
any other provision hereof or any other Loan Document, to secure any of the
Obligations or the Canadian Liabilities and Other
Liabilities.

     

     “Settlement
Date” has the meaning provided in Section 2.08(b).

     

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

     

    “SPV”
has the meaning set forth in Section 9.05(h).

     

    “Standby Letter
of Credit” means any Letter of Credit other than a Commercial Letter of
Credit.

     

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

     

    “Stock
Ledger” means, without duplication, (i) the stock ledger of the Lead
Borrower relating to entertainment merchandise and (ii) the proprietary
merchandising stock ledger of the Lead Borrower, or any other stock ledger of
the Domestic Borrowers or the Canadian Borrower as the Administrative Agent may
otherwise agree.

     

     “Subsidiary”
means, with respect to any Person (the “parent”)
at any date, any corporation, limited or unlimited liability company,
partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as
of such date, as well as any other corporation, limited or unlimited liability
company, partnership, association or other entity (a) of which securities or
other ownership interests representing more than 50% of the equity or more than
50% of the ordinary voting power or, in the case of a partnership, more than 50%
of the general partnership interests are, as of such date, owned, controlled or
held, or (b) that is, as of such date, otherwise Controlled, by the parent
and/or one or more subsidiaries of the parent.

     

     “Subsidiary
Borrowers” means all Borrowers other than the Lead Borrower.

     

    “Swingline
Lender” means, as applicable, Bank of America, in its capacity as lender
of Swingline Loans to the Domestic Borrowers hereunder, and Bank of America,
N.A. (acting through its Canada branch), in its capacity as lender of Swingline
Loans to the Canadian Borrower hereunder.

     

     “Swingline
Loan” shall mean a Loan made by the Swingline Lender to the Domestic
Borrowers or the Canadian Borrower, as applicable, pursuant
to  Section
2.06 hereof.

     

    “Syndication
Agent” means Wells Fargo Retail Finance, LLC.

     

     “Synthetic
Lease” means any lease or other agreement for the use or possession of
property creating obligations which does not appear as Indebtedness on the
balance sheet of the lessee thereunder but which, upon the insolvency or
bankruptcy of such Person, would be characterized as Indebtedness of such lessee
without regard to the accounting treatment.

     

     “Taxes”
means any and all current or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.

     

    “Term
Loan” means a term loan to be made to the Borrowers in a principal amount
of not less than $75,000,000, which term loan shall be in amounts and on terms
reasonably satisfactory in form and substance to the Administrative Agent and
the Required Lenders.

     

    “Term Loan
Agent” means the administrative and collateral agent for the lenders
under the Term Loan.

     

    “Termination
Date” shall mean the earliest to occur of (i) the Maturity Date, (ii) the
date on which the maturity of the Loans are accelerated and the Commitments are
terminated in accordance with  Section 7.01, or
(iii) the date on which a sale pursuant to clauses (i) or (iii) of the
definition of Permitted Sales is consummated, and (iv) the Consummation
Date.

     

    “Total
Commitments” shall mean, at any time, the sum of the Domestic Commitments
and the Canadian Commitments at such time.

     

     “Type”,
when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined
by reference to the Adjusted LIBO Rate or the Prime Rate or the BA Rate, as
applicable.

     

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

     

    “Unused
Canadian Commitment” means on any day, (a) the then Canadian Total
Commitments minus
(b) the sum of (i) the principal amount of Loans to the Canadian Borrower then
outstanding, and (ii) the then Letter of Credit Outstandings of the Canadian
Borrower.

     

     “Unused
Commitment” shall mean, on any day, (a) the then Domestic Total
Commitments minus
(b) the sum of (i) the principal amount of Loans of the Domestic Borrowers then
outstanding, and (ii) the then Letter of Credit Outstandings of the Domestic
Borrowers.

     

    “Upfront
Fee” has the meaning set forth in Section 2.13(a) hereof.

     

    “US Bankruptcy
Court” has the meaning provided in the recitals to this
Agreement.

     

    “Variance
Report” means a report prepared by the Lead Borrower’s management
reflecting on a line-item basis the Loan Parties’ actual performance compared to
the Domestic Borrowers’ Budget for the immediately preceding week and on a
cumulative basis for the period after the Closing Date and the percentage
variance of the Loan Parties’ actual results from those reflected in the then
extant Domestic Borrowers’ Budget, along with management’s explanation of such
variance.

     

     “Wachovia”
means Wachovia Bank, National Association.

     

     “Wachovia
Blocked Account Agreement” shall have the meaning set forth in Section 2.23(c).

     

     “Wachovia
Concentration Account” shall have the meaning set forth in Section 2.23(c).

     

     “Withdrawal
Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of
ERISA.

     

    SECTION
1.02. Terms
Generally.  The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”.  The word “will” shall be construed to
have the same meaning and effect as the word “shall”.  Unless the
context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
amended and restated, supplemented or otherwise modified (subject to any
restrictions on such amendments, restatements, supplements or modifications set
forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement, (e) the term “security interest” shall
include a hypothec, (f) the term “solidary” as used herein shall be read
and interpreted in accordance with the Civil Code of Québec, (g) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible, moveable and immoveable,  and
intangible assets and properties, including cash, securities, accounts and
contract rights (h) all references to "$" or "dollars" or to amounts of
money shall, unless otherwise expressly provided to be CD$, be deemed to be
references to the lawful currency of the United States of America, and (i) any
reference to any law shall include all statutory and regulatory provisions
consolidating, amending replacing or interpreting such law and any reference to
any law or regulation shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to
time.

     

    For
purposes of any Collateral located in the Province of Quebec or charged by any
deed of hypothec (or any other Loan Document) and for all other purposes
pursuant to which the interpretation or construction of a Loan Document may be
subject to the laws of the Province of Quebec or a court or tribunal exercising
jurisdiction in the Province of Quebec, (i) “personal property” shall be deemed
to include “movable property”, (ii) “real property” shall be deemed to include
“immovable property” and an “easement” shall be deemed to include a “servitude”,
(iii) “tangible property” shall be deemed to include “corporeal property”, (iv)
“intangible property” shall be deemed to include “incorporeal property”, (v)
“security interest” and “mortgage” shall be deemed to include a “hypothec”, (vi)
all references to filing, registering or recording under the UCC shall be deemed
to include publication under the Civil Code of Quebec, and all references to
releasing any Lien shall be deemed to include a release, discharge and mainlevee
of a hypothec, (vii) all references to “perfection” of or “perfected” Liens
shall be deemed to include a reference to the “opposability” of such Liens to
third parties, (viii) any “right of offset”, “right of setoff” or similar
expression shall be deemed to include a “right of compensation”, (ix) “goods”
shall be deemed to include “corporeal movable property” other than chattel
paper, documents of title, instruments, money and securities, and (x) an “agent”
shall be deemed to include a “mandatary”.

     

    SECTION
1.03. Accounting
Terms; GAAP.  Except
as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time, provided that, if the Lead Borrower notifies the Administrative Agent that
the Borrowers request an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrowers that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
provision shall have been amended in accordance herewith.

     

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

     

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

     

    SECTION
1.06. Certifications

     

    All
certifications to be made hereunder by an officer or representative of a Loan
Party shall be made by such person in his or her capacity solely as an officer
or a representative of such Loan Party, on such Loan Party’s behalf and not in
such person’s individual capacity.

     

    SECTION
1.07. Dollar
Equivalent

     

    All
amounts referred to in this Agreement are to be calculated in Dollars. The
Administrative Agent shall determine the Dollar Equivalent of any amount
relating to the Canadian Loan Parties, and a determination thereof by
Administrative Agent shall be conclusive absent manifest error.  The
Administrative Agent may determine or redetermine the Dollar Equivalent of any
amount on any date either in its own discretion or upon the request of any
Lender or Issuing Bank.  The Administrative  Agent may set
up appropriate rounding off mechanisms or otherwise round-off amounts hereunder
to the nearest higher or lower amount in whole Dollar to ensure amounts owing by
any party hereunder or that otherwise need to be calculated or converted
hereunder are expressed in whole Dollars as may be necessary or
appropriate.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
II

     

    Amount and
Terms of Credit

     

    SECTION
2.01. Commitment of
the Lenders.

     

    (a) Each
Domestic Lender severally and not jointly with any other Lender, agrees, upon
the terms and subject to the conditions herein set forth, to extend credit to
the Domestic Borrowers, and each Canadian Lender severally and not jointly with
any other Lenders, agrees upon the terms and subject to the conditions herein
set forth, to extend credit to the Canadian Borrower on a revolving basis, in
the form of Revolving Loans and Letters of Credit, subject to the following
limitations:

     

    (i) Subject
to Sections 2.01(a)(iii), (a)(iv), (a)(vi), (a)(vii) and 2.21(c) hereof, the
aggregate outstanding amount of the Credit Extensions shall not at any time
exceed the lower of (x) (A) prior to December 29, 2008, $1,100,000,000 (of which
$1,050,000,000 shall be Domestic Commitments and $50,000,000 shall be Canadian
Commitments), (B) from December 29, 2008 through December 31, 2008, $900,000,000
(of which $850,000,000 shall be Domestic Commitments and $50,000,000 shall be
Canadian Commitments), (C) from January 1, 2009 through the earlier of January
17, 2009 (or such later date agreed by the Canadian Lenders) and the closing and
initial funding of the Term Loan, $910,000,000 (of which $850,000,000 shall be
Domestic Commitments and $60,000,000 shall be Canadian Commitments), and (D)
thereafter, $900,000,000 (of which $850,000,000 shall be Domestic Commitments
and $50,000,000 shall be Canadian Commitments); or (y) such lesser amount to
which the Total Commitments have then been decreased by the Borrowers pursuant
to Section 2.17 hereof, in each case minus
(1) from the Closing Date through the earlier of January 17, 2009 (or such later
date to which the Canadian Lenders may agree) or the closing and initial funding
of the Term Loan, the aggregate unpaid balance of Pre-Petition Liabilities on
account of credit extensions made to, or for the benefit of, the Domestic
Borrowers, and (2) from and after the earlier of January 17, 2009 (or such later
date to which the Canadian Lenders may agree) or the closing and initial funding
of the Term Loan, the aggregate unpaid balance of all Pre-Petition
Liabilities.

     

    (ii) No
Lender shall be obligated to issue any Letter of Credit, and Letters of Credit
shall be available from the Issuing Bank, subject to the ratable participation
of all Lenders, as set forth in Section 2.07. The
Borrowers will not at any time permit (A) the aggregate Letter of Credit
Outstandings to exceed $350,000,000 or (B) the aggregate Canadian Letter of
Credit Outstandings to exceed $40,000,000.

     

    (iii) The
Credit Extensions made to the Domestic Borrowers shall not (A) as to any
Domestic Lender, exceed the lesser of such Lender’s Domestic Commitment or such
Domestic Lender’s Commitment Percentage of the Borrowing Base, in each case less
the amount of such Domestic Lender’s pro rata share of the Pre-Petition
Liabilities, and (B) exceed amounts available under the Borrowing
Base.

     

    (iv) The
Credit Extensions made to the Canadian Borrower shall not as to any Canadian
Lender, exceed the lesser of such Lender’s Canadian Commitment or from the
Closing Date through the earlier of January 17, 2009 (or such later date to
which the Canadian Lenders may agree) or the closing and initial funding of the
Term Loan, such Canadian Lender’s Commitment Percentage of the Canadian
Borrowing Base, in each case less the amount of such Canadian Lender’s pro rata
share of the Pre-Petition Liabilities.

     

    (v) The
Loans made to and the Letters of Credit issued on behalf of, the Canadian
Borrower by the Canadian Lenders may be either in $ or CD$, at the option of the
Canadian Borrower, as herein set forth.

     

    (vi) The
aggregate outstanding amount of Credit Extensions to the Canadian Borrower shall
not at any time exceed the lower of (A) the Canadian Total Commitments or (B)(1)
from the Closing Date through the earlier of January 17, 2009 (or such later
date to which the Canadian Lenders may agree) or the closing and initial funding
of the Term Loan, exceed the amounts available under the Canadian Borrowing
Base, and (2) from and after the earlier of January 17, 2009 (or such later date
to which the Canadian Lenders may agree) or the closing and initial funding of
the Term Loan, the then amount of the Borrowing Base minus Credit Extensions
then outstanding in favor of the Domestic Borrowers.

     

    (vii) The
aggregate outstanding amount of Credit Extensions to the Domestic Borrowers
shall not at any time exceed the lower of (A) the Domestic Total Commitments, or
(B) the then amount of the Borrowing Base minus, from and after the earlier of
January 17, 2009 (or such later date to which the Canadian Lenders may agree) or
the closing and initial funding of the Term Loan, Credit Extensions then
outstanding in favor of the Canadian Borrower.

     

    (viii) No
Lender shall be obligated to make any Credit Extension (A) to the Domestic
Borrowers in excess of such Lender’s Domestic Commitment, or (B) to the Canadian
Borrower in excess of such Lender’s Canadian Commitment.

     

    (ix) Subject
to all of the other provisions of this Agreement, Revolving Loans that are
repaid may be reborrowed prior to the Termination Date. No new Credit Extension,
however, shall be made to the Borrowers after the Termination
Date.

     

    (b) Each
Borrowing by the Domestic Borrowers of Revolving Loans (other than Swingline
Loans) shall be made by the Domestic Lenders pro
rata in
accordance with their Domestic Commitments, and each Borrowing by the Canadian
Borrower of Revolving Loans (other than Swingline Loans) shall be made by the
Canadian Lenders pro
rata in
accordance with their Canadian Commitments.  The failure of any
Domestic Lender or Canadian Lender, as applicable, to make any Loan to the
Domestic Borrowers or the Canadian Borrower, as applicable, shall neither
relieve any other Domestic Lender or Canadian Lender, as applicable, of its
obligation to fund its Loan to the Domestic Borrowers or the Canadian Borrower,
as applicable, in accordance with the provisions of this Agreement nor increase
the obligation of any such other Domestic Lender or Canadian Lender, as
applicable.

     

    SECTION
2.02. Increase of
Domestic Commitments.

     

    As
long as no Event of Default then exists or would arise therefrom,
contemporaneously with the termination of the Canadian Commitments and repayment
of all Canadian Liabilities, the Lead Borrower shall have the option to increase
the Domestic Commitments by an amount not to exceed the Canadian Commitments
then being terminated.  In the event that the Lead Borrower elects to
so increase such Domestic Commitments, then each Canadian Lender’s Canadian
Commitment shall be automatically converted to a Domestic Commitment by an
amount equal to its Canadian Commitment being so terminated, the Domestic
Commitments shall be automatically increased by a like amount, and the Domestic
Commitment Percentages of the Lenders shall be automatically modified to reflect
the increase in the amount of the Domestic Commitments.  In no event
in connection with such conversion shall any fees or other compensation be
payable by the Borrowers to the Canadian Lenders whose Canadian Commitments are
so converted to Domestic Commitments.

     

    SECTION
2.03. Reserves;
Changes to Reserves.

     

    (a) The
initial Inventory Reserves and Availability Reserves as of the date of this
Agreement are the following:

     

    (i) Shrink
(an Inventory Reserve):  An amount equal to the shrink reserve
maintained by the Domestic Borrowers in their general ledger, consistent with
past practices or determined based on such other methodology as the Lead
Borrower and the Administrative Agent may agree.

     

    (ii) Rent
(an Availability Reserve): An amount equal to (A) accrued and unpaid rent
arising prior to the commencement of the Chapter 11 Case for all of the Domestic
Borrowers’ leased locations in the states of Virginia, Pennsylvania, Washington
and other states in which Applicable Law provides a landlord with a Lien for
unpaid rent having priority over the Lien of the Collateral Agent, other than
(1) leased locations with respect to which the Collateral Agent has received a
landlord’s waiver of lien in form reasonably satisfactory to the Collateral
Agent or the applicable lease contains such a waiver in form reasonably
satisfactory to the Collateral Agent or (2) rent for November, 2008 unless and
until the U.S. Bankruptcy Court enters an order compelling payment thereof, plus
(B) accrued and unpaid rent which is past due and which is owed for periods
subsequent to the commencement of the Chapter 11 Case (other than on account of
(1) rent for November, 2008 unless and until the U.S. Bankruptcy Court enters an
order compelling payment thereof, or (2) Leases which have been rejected by the
Domestic Borrowers in accordance with the provisions hereof and the DIP Orders
or for rent not required to be paid subsequent to the commencement of the
Chapter 11 Case under Applicable Law).

     

    (iii) Customer
Deposits (an Availability Reserve): An amount equal to 100% of the customer
deposits made for layaway goods received by the Domestic
Borrowers.

     

    (iv) Customer
Credit Liabilities (an Availability Reserve): An amount equal to 50% of the
Domestic Borrowers’ Customer Credit Liabilities as reflected in the Domestic
Borrowers’ books and records.

     

    (v) Customer
Refunds (an Availability Reserve): An amount equal to 100% of the refunds made
to the Domestic Borrowers’ customers as reflected in the Domestic Borrowers’
books and records.

     

    (vi) Canadian
Priority Claims (an Availability Reserve with respect to the Canadian Borrowing
Base):  An amount equal to the sum of the Directors’ Charge, the
Administration Charge, and without duplication of the foregoing, employee
withholdings and deductions at source, payroll taxes, including health tax
remittances, federal and provincial sales and goods and services taxes, wages
and vacation pay, required pension plan contributions, workers’ compensation
assessments, and municipal and real estate taxes.

     

    (b) Each
Agent may hereafter establish additional Reserves or change any of the foregoing
Reserves in the exercise of its Permitted Discretion after furnishing one (1)
Business Day’s prior notice to the Lead Borrower.

     

    SECTION
2.04. Making of
Loans.

     

    (a) Except
as set forth in Section 2.18 and Section 2.26, Loans (other than Swingline Loans) by the
Lenders shall be either Prime Rate Loans or, with respect to the Domestic
Borrowers, LIBO Loans or with respect to the Canadian Borrower, BA Equivalent
Loans as the Lead Borrower on behalf of the Domestic Borrowers, or the Canadian
Borrower, may request (which request shall, in the case of the Domestic
Borrowers, be made substantially in the form attached hereto as Exhibit
E, and in the case of the Canadian Borrower, be made substantially in the
form attached hereto as Exhibit
F, and in the case of Prime Rate Loans of the Canadian Borrower, indicate
whether CD$ or $ advances are requested) subject to and in accordance with this
Section 2.04, provided that all Swingline Loans
shall be only Prime Rate Loans. All Loans made pursuant to the same Borrowing
shall, unless otherwise specifically provided herein, be Loans of the same Type.
Each Lender may fulfill its Commitment with respect to any Loan by causing any
lending office of such Lender to make such Loan; but any such use of a lending
office shall not affect the obligation of the Borrowers to repay such Loan in
accordance with the terms of the applicable Note.  Each Lender shall,
subject to its overall policy considerations, use reasonable efforts (but shall
not be obligated) to select a lending office which will not result in the
payment of increased costs by the Borrowers pursuant to Section 2.25.  Subject to the other
provisions of this Section 2.04 and the provisions
of Section 2.26, Borrowings of Loans of more than
one Type may be incurred at the same time, but no more than eight (8) Borrowings
of LIBO Loans and no more than eight (8) Borrowings of BA Equivalent Loans may
be outstanding at any time.

     

    (b) The
Lead Borrower shall give the Administrative Agent three (3) Business Days’ prior
telephonic notice (thereafter confirmed in writing) of each LIBO Borrowing or BA
Equivalent Loans Borrowing and one (1) Business Day’s prior notice of each
Borrowing of Prime Rate Loans. Any such notice, to be effective, must be
received by the Administrative Agent not later than 11:00 a.m., Boston time, on
the third Business Day in the case of LIBO Loans or BA Equivalent Loans prior
to, and on the first Business Day in the case of Prime Rate Loans prior to, the
date on which such Borrowing is to be made. Such notice shall be irrevocable and
shall specify the amount of the proposed Borrowing (which shall be in an
integral multiple of $1,000,000, but not less than $5,000,000 in the case of
LIBO Loans and be in a minimum principal amount of CD$1,000,000 and increments
of CD$500,000 in the case of BA Equivalent Loans) and the date thereof (which
shall be a Business Day) and shall contain disbursement
instructions.  Such notice shall specify whether the Borrowing then
being requested is to be a Borrowing of Prime Rate Loans or LIBO Loans or BA
Equivalent Loans and, if LIBO Loans or BA Equivalent Loans, the Interest Period
with respect thereto. If no election of Interest Period is specified in any such
notice for a Borrowing of LIBO Loans or BA Equivalent Loans, such notice shall
be deemed a request for an Interest Period of one month. If no election is made
as to the Type of Loan, such notice shall be deemed a request for a Borrowing of
Prime Rate Loans. The Administrative Agent shall promptly notify each Lender of
its proportionate share of such Borrowing, the date of such Borrowing, the Type
of Borrowing being requested and the Interest Period or Interest Periods
applicable thereto, as appropriate. On the borrowing date specified in such
notice, each Lender shall make its share of the Borrowing available at the
office of the Administrative Agent at 100 Federal Street, Boston, Massachusetts
02110, no later than 12:00 noon, Boston time, in immediately available funds.
Unless the Administrative Agent shall have received notice from a Lender prior
to the proposed date of any Borrowing that such Lender will not make available
to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with this Section and may, in reliance upon such
assumption, make available to the Borrowers a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
Borrowers severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrowers to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such Lender,
at the Federal Funds Effective Rate, or (ii) in the case of the Borrowers, the
interest rate applicable to Prime Rate Loans. If such Lender pays such amount to
the Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing. Upon receipt of the funds made available by the
Lenders to fund any Borrowing hereunder, the Administrative Agent shall disburse
such funds in the manner specified in the notice of borrowing delivered by the
Lead Borrower and shall use reasonable efforts to make the funds so received
from the Lenders available to the Borrowers no later than 1:00 p.m., Boston
time.

     

    (c) The
Administrative Agent or the Canadian Agent, as applicable, without the request
of the Lead Borrower or the Canadian Borrower, as applicable, may advance any
interest, fee, service charge, or other payment to which any Agent or their
Affiliates or any Lender is entitled from any Borrower pursuant hereto or any
other Loan Document and may charge the same to the Loan Account notwithstanding
that an Overadvance or a Canadian Overadvance, as applicable, may result
thereby.  The Administrative Agent or the Canadian Agent, as
applicable, shall advise the Lead Borrower or the Canadian Borrower, as
applicable, of any such advance or charge promptly after the making thereof.
Such action on the part of the Administrative Agent or the Canadian Agent, as
applicable, shall not constitute a waiver of the Administrative Agent’s or the
Canadian Agent’s, as applicable, rights and each Borrower’s obligations under Section 2.20(a). Any amount which is added to the
principal balance of the Loan Account as provided in this Section 2.04(c) shall bear interest at the interest
rate then and thereafter applicable to Prime Rate Loans.

     

    (d) Notwithstanding
anything to the contrary herein contained, with respect to the Canadian
Borrower, (i)  all references to “the Lead Borrower” and “the
Administrative Agent” in Section 2.04(b) and (c), Section 2.18, Section 2.19(a) and Section
2.21(a) shall mean and refer to the Canadian Borrower and the Canadian
Agent, respectively, (ii) the address of the Canadian Agent to which each
Canadian Lender must make its share of Borrowings to the Canadian Borrower
available is 200 Front Street West, Toronto, Ontario, Canada, M5V 3L2, and (iii)
the Canadian Agent shall promptly notify the Administrative Agent of each
Borrowing by the Canadian Borrower, the date of such Borrowing, the Type of
Borrowing being requested and the Interest Period or Periods applicable
thereto.

     

    SECTION
2.05. Overadvances. The
Agents and the Lenders have no obligation to make any Loan or to provide any
Letter of Credit if an Overadvance or a Canadian Overadvance would result. The
Administrative Agent may, in its reasonable discretion, make Permitted
Overadvances to the Domestic Borrowers, and the Canadian Agent may, in its
reasonable discretion, make Permitted Canadian Overadvances to the Canadian
Borrower, as applicable, without the consent of the Lenders and each Lender
shall be bound thereby. Any Permitted Overadvances or Permitted Canadian
Overadvances may constitute Swingline Loans. The making of any Permitted
Overadvance or Permitted Canadian Overadvance is for the benefit of the Domestic
Borrowers or the Canadian Borrower, as applicable; such Permitted Overadvances
or Permitted Canadian Overadvances, as applicable, constitute Revolving Loans
and Obligations. The making of any such Permitted Overadvances, or Permitted
Canadian Overadvances, as the case may be, on any one occasion shall not
obligate the Administrative Agent, Canadian Agent, or any Lender to make or
permit any Permitted Overadvances or Permitted Canadian Overadvances on any
other occasion or to permit such Permitted Overadvances or Permitted Canadian
Overadvances, as applicable, to remain outstanding.

     

    SECTION
2.06. Swingline
Loans.

     

    (a) The
Swingline Lender is authorized by the Domestic Lenders and the Canadian Lenders,
as applicable, and shall, subject to the provisions of this Section, make
Swingline Loans (i) to the Domestic Borrowers up to $60,000,000 in the aggregate
outstanding at any time (which requests for Borrowings of Swingline Loans shall
be in minimum integrals of $250,000) and (ii) to the Canadian Borrower up to
$10,000,000 in the aggregate outstanding at any time (which requests for
Borrowings of Swingline Loans shall be in minimum integrals of $250,000 or
CD$250,000, as applicable), in each case consisting only of Prime Rate Loans,
upon a notice of Borrowing received by the Administrative Agent or the Canadian
Agent, as applicable, and the Swingline Lender (which notice may be submitted
prior to 1:00 p.m., Boston time, on the Business Day on which such Swingline
Loan is requested). Swingline Loans shall be subject to periodic settlement with
the Domestic Lenders and the Canadian Lenders, as applicable, under Section 2.08 below.

     

    (b) Swingline
Loans may be made only in the following circumstances: (A) for administrative
convenience, the Swingline Lender shall, at the Lead Borrower’s request, make
Swingline Loans in reliance upon the Borrowers’ actual or deemed representations
under Section 4.02, that the applicable conditions
for borrowing are satisfied or (B) for Permitted Overadvances or Permitted
Canadian Overadvances, as applicable.  If the conditions for borrowing
under Section 4.02 cannot be fulfilled, the Lead
Borrower shall give immediate notice thereof to the Administrative Agent or the
Canadian Agent, as applicable, and the Swingline Lender (a “Noncompliance
Notice”), and the Administrative Agent or the Canadian Agent, as
applicable, shall promptly provide each Lender with a copy of the Noncompliance
Notice. If the conditions for borrowing under Section
4.02 cannot be fulfilled, the Required Lenders may direct the Swingline
Lender to, and the Swingline Lender thereupon shall, cease making Swingline
Loans (other than Permitted Overadvances or Permitted Canadian Overadvances, as
applicable) until such conditions can be satisfied or are waived in accordance
with Section 9.02. Unless the Required Lenders so
direct the Swingline Lender, the Swingline Lender may, but is not obligated to,
continue to make Swingline Loans beginning one Business Day after the
Non-Compliance Notice is furnished to the Lenders. Notwithstanding the
foregoing, no Swingline Loans shall be made pursuant to this subsection (b)
(other than Permitted Overadvances) if the limitations set forth in Section 2.01(a) would be exceeded.

     

    SECTION
2.07. Letters of
Credit.

     

    (a) Upon
the terms and subject to the conditions herein set forth, the Lead Borrower on
behalf of the Domestic Borrowers and the Canadian Borrower for itself, may
request the Issuing Bank or the Canadian Agent in the case of the Canadian
Borrower, at any time and from time to time after the date hereof and prior to
the Termination Date, to issue or to cause to be issued, and subject to the
terms and conditions contained herein, the Issuing Bank or Canadian Agent in the
case of the Canadian Borrower shall issue or cause to be issued, for the account
of the relevant Borrower one or more Letters of Credit; provided
that no Letter of Credit shall be issued if after giving effect to such issuance
(i) the aggregate Letter of Credit Outstandings shall exceed $350,000,000, (ii)
the aggregate Canadian Letter of Credit Outstandings shall exceed $40,000,000,
(iii) the aggregate of all Standby Letters of Credit outstanding would exceed
$200,000,000, or (iv) the limitations set forth in Section 2.01(a) would be exceeded; and provided,
further,
that no Letter of Credit shall be issued (A) if the Issuing Bank shall have
received notice from the Administrative Agent or the Canadian Agent, as
applicable, or the Required Lenders that the conditions to such issuance have
not been met, (B) if any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank
from issuing such Letter of Credit, or any Applicable Law binding on the Issuing
Bank or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over the Issuing Bank shall
prohibit, or request that the Issuing Bank refrain from, the issuance of letters
of credit or acceptances generally or such Letter of Credit in particular or
shall impose upon the Issuing Bank with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the Issuing Bank is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the Issuing Bank any unreimbursed loss, cost or expense which was
not applicable on the Closing Date and which the Issuing Bank in good faith
deems material to it (for which the Issuing Bank is not otherwise compensated
hereunder), (C) the issuance of such Letter of Credit would violate one or more
policies of the Issuing Bank applicable to letters of credit generally, (iii) a
default of any Lender’s obligations to fund hereunder exists or any Lender is at
such time a Delinquent Lender or Deteriorating Lender hereunder, unless the
Issuing Bank has entered into arrangements satisfactory to the Issuing Bank with
the Borrowers or such Lender to eliminate the Issuing Bank’s risk with respect
to such Lender.

     

    (b) Each
Standby Letter of Credit shall expire at or prior to the close of business on
the date that is five (5) Business Days prior to the Maturity Date unless at
least 30 days prior to the Maturity Date, the Borrowers have deposited in the
applicable Cash Collateral Account an amount in cash equal to 103% of the Letter
of Credit Outstandings as of such date plus any accrued and unpaid interest
thereon in accordance with the provisions of Section 2.07(j)
hereof.

     

    (c) Each
Commercial Letter of Credit shall expire at or prior to the close of business on
the earlier of (i) the date that is 120 days after the date of issuance of such
Commercial Letter of Credit, or (b) the date that is five (5) Business Days
prior to the then effective Maturity Date.

     

    (d) Drafts
drawn under any Letter of Credit shall be reimbursed by the Domestic Borrowers
in the case of any Letter of Credit issued for them and by the Canadian Borrower
in the case of a Canadian Letter of Credit, in the currency in which the Letter
of Credit is issued no later than the Business Day following the date of any
such payment thereof by the Issuing Bank by paying to the Administrative Agent
or the Canadian Agent, as applicable, an amount equal to such drawing (together
with interest as provided in Section 2.07(e)) not
later than 3:00 p.m., Boston time, on such date, provided
that the Lead Borrower or the Canadian Borrower as applicable may, subject to
the conditions to borrowing set forth herein, request in accordance with Section 2.04 or Section
2.06 that such payment be financed with a Revolving Loan consisting of a
Prime Rate Loan, or a Swingline Loan in an equivalent amount and, to the extent
so financed, the Borrowers’ obligation to make such payment shall be discharged
and replaced by the resulting Prime Rate Loan or Swingline Loan. The Issuing
Bank shall, promptly following its receipt thereof, examine all documents
purporting to represent a demand for payment under a Letter of Credit. The
Issuing Bank shall promptly notify the Administrative Agent or the Canadian
Agent, as applicable, and the Lead Borrower or the Canadian Borrower, as
applicable by electronic transmission pursuant to the online services agreement
then in effect between the Lead Borrower or the Canadian Borrower, as applicable
and the Issuing Bank (the “Online Services Agreement”) or if the Online Services
Agreement is not then in effect, by telephone (confirmed by telecopy) of such
demand for payment and whether the Issuing Bank has made or will make payment
thereunder (which payment shall not be made until two (2) Business Days after
such notice from the Issuing Bank to the Lead Borrower or the Canadian Borrower,
as applicable), provided
that any failure to give or delay in giving such notice shall not relieve the
Borrowers of their obligation to reimburse the Issuing Bank and the Lenders with
respect to any such payment.

     

    (e) If
the Issuing Bank shall make any L/C Disbursement, then, unless the applicable
Borrowers shall reimburse the Issuing Bank in full on the date such payment is
made, the unpaid amount thereof shall bear interest, for each day from and
including the date such payment is made to but excluding the date that such
Borrowers reimburse the Issuing Bank therefor, at the rate per annum then
applicable to Prime Rate Loans, provided that if such Borrowers fail to
reimburse such Issuing Bank when due pursuant to paragraph (d) of this Section,
then Section 2.12 shall apply. Interest accrued
pursuant to this paragraph shall be for the account of the Issuing Bank, except
that interest accrued on and after the date of payment by any Lender pursuant to
paragraph (g) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.

     

    (f) Immediately
upon the issuance of any Letter of Credit by the Issuing Bank (or the amendment
of a Letter of Credit increasing the amount thereof), and without any further
action on the part of the Issuing Bank, the Issuing Bank shall be deemed to have
sold to each Domestic Lender or Canadian Lender, as applicable, and each such
Lender shall be deemed unconditionally and irrevocably to have purchased from
the Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender’s Domestic Commitment Percentage or
Canadian Commitment Percentage, as applicable, in such Letter of Credit, each
drawing thereunder and the obligations of the Borrowers under this Agreement and
the other Loan Documents with respect thereto. Upon any change in the Domestic
Commitments or Canadian Commitments, as applicable, pursuant to Section 2.17, it is hereby agreed that with respect to
all Letter of Credit Outstandings, there shall be an automatic adjustment to the
participations hereby created to reflect the new Domestic Commitment Percentages
or Canadian Commitment Percentages, as applicable, of the assigning and assignee
Lenders and any Additional Commitment Lender.   Any action taken
or omitted by the Issuing Bank (or its employees, agents or officers) under or
in connection with a Letter of Credit, if taken or omitted in the absence of
gross negligence, bad faith or willful misconduct or material breach of its
contractual obligations, shall not create for the Issuing Bank any resulting
liability to any Lender.

     

    (g) In
the event that the Issuing Bank makes any L/C Disbursement and the Borrowers
shall not have reimbursed such amount in full to the Issuing Bank pursuant to Section 2.07(d), the Issuing Bank shall promptly notify
the Administrative Agent, or the Canadian Agent, as applicable, which shall
promptly notify each Domestic Lender or Canadian Lender, as applicable, of such
failure, and each Domestic Lender or Canadian Lender, as applicable, shall
promptly and unconditionally pay to the Administrative Agent or the Canadian
Agent, as applicable, for the account of the Issuing Bank the amount of such
Lender’s Domestic Commitment Percentage or Canadian Commitment Percentage, as
applicable, of such unreimbursed payment in dollars and in same day funds. If
the Issuing Bank so notifies the Administrative Agent, or the Canadian Agent, as
applicable, and the Administrative Agent, or the Canadian Agent, as applicable,
so notifies the Lenders prior to 11:00 a.m., Boston time, on any Business Day,
each such Domestic Lender or Canadian Lender, as applicable, shall make
available to the Issuing Bank such Lender’s Domestic Commitment Percentage or
Canadian Commitment Percentage, as applicable, of the amount of such payment on
such Business Day in same day funds (or if such notice is received by the
Domestic Lenders or Canadian Lenders, as applicable, after 11:00 a.m., Boston
time on the day of receipt, payment shall be made on the immediately following
Business Day).  If and to the extent such Domestic Lender or Canadian
Lender shall not have so made its Domestic Commitment Percentage or Canadian
Commitment Percentage, as applicable, of the amount of such payment available to
the Issuing Bank, such Domestic Lender or Canadian Lender, as applicable, agrees
to pay to the Issuing Bank, forthwith on demand such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to the Administrative Agent, or the Canadian Agent, as applicable, for the
account of the Issuing Bank at the Federal Funds Effective Rate. Each Lender
agrees to fund its Domestic Commitment Percentage or Canadian Commitment
Percentage, as applicable, of such unreimbursed payment notwithstanding a
failure to satisfy any applicable lending conditions or the provisions of Section 2.01 or Section
2.07, or the occurrence of the Termination Date. The failure of any Domestic
Lender or Canadian Lender to make available to the Issuing Bank its Domestic
Commitment Percentage or Canadian Commitment Percentage, as applicable, of any
payment under any Letter of Credit shall neither relieve any other Domestic
Lender or Canadian Lender, as applicable, of its obligation hereunder to make
available to the Issuing Bank its Domestic Commitment Percentage or Canadian
Commitment Percentage, as applicable, of any payment under any Letter of Credit
on the date required, as specified above, nor increase the obligation of such
other Domestic Lender or Canadian Lender. Whenever any Domestic Lender or
Canadian Lender, as applicable, has made payments to the Issuing Bank in respect
of any reimbursement obligation for any Letter of Credit, such Domestic Lender
or Canadian Lender shall be entitled to share ratably, based on its Domestic
Commitment Percentage or Canadian Commitment Percentage, as applicable, in all
payments and collections thereafter received on account of such reimbursement
obligation.

     

    (h) Whenever
the Borrowers desire that the Issuing Bank issue a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit), the Lead
Borrower or the Canadian Borrower, as applicable, shall submit a letter of
credit application or otherwise provide notice to the Issuing Bank by electronic
transmission pursuant to the Online Services Agreement or, if the Online
Services Agreement is not then in effect, by written (including telegraphic,
telex, facsimile or cable communication) notice specifying the date on which the
proposed Letter of Credit is to be issued, amended, renewed or extended (which
shall be a Business Day), the stated amount of the Letter of Credit so
requested, the expiration date of such Letter of Credit, the name and address of
the beneficiary thereof, and the provisions thereof.  If requested by
the Issuing Bank, the Borrowers shall also submit a letter of credit application
(confirming any application submitted pursuant to the first sentence of this
clause (h)) on the Issuing Bank’s standard form in connection with any request
for the issuance, amendment, renewal or extension of a Letter of
Credit.

     

    (i) The
obligations of the Borrowers to reimburse the Issuing Bank for any L/C
Disbursement shall be unconditional and irrevocable and shall be paid strictly
in accordance with the terms of this Agreement under all circumstances,
including, without limitation: (i) any lack of validity or enforceability of any
Letter of Credit; (ii) the existence of any claim, setoff, defense or other
right which the Borrowers may have at any time against a beneficiary of any
Letter of Credit or against the Issuing Bank or any of the Lenders, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction; (iii) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; (iv) payment by the Issuing Bank of any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit; (v) any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrowers’ obligations hereunder; or (vi) the fact that any Event of Default
shall have occurred and be continuing. None of the Administrative Agent, the
Lenders, the Issuing Bank or any of their Affiliates shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Bank, provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrowers to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrowers to the extent permitted by Applicable Law) suffered by the Borrowers
that are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence, bad faith or willful misconduct on the part of the Issuing
Bank or material breach of its contractual obligations (in each case, as finally
determined by a court of competent jurisdiction), the Issuing Bank shall be
deemed to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented that appear on their face to be in
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

     

    (j) If
any Event of Default shall occur and be continuing, on the Business Day (or the
next succeeding Business Day if such notice is furnished after 2:00 p.m.) that
the Borrowers receive notice from the Administrative Agent or the Canadian
Agent, as applicable, or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph, the Borrowers shall deposit in the
applicable Cash Collateral Account an amount in cash equal to 103% of the Letter
of Credit Outstandings as of such date plus any accrued and unpaid interest
thereon. Each such deposit shall be held by the Collateral Agent as collateral
for the payment and performance of the Obligations and the Other Liabilities as
long as such Event of Default is continuing; at such time as the Event of
Default is no longer continuing, and as long as no other Event of Default then
exists, the Administrative Agent or the Canadian Agent, as applicable, shall
release the cash collateral (to the extent not previously utilized to reimburse
any drawing under a Letter of Credit) to the Borrowers. The Collateral Agent or
the Canadian Agent, as applicable, shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such Cash Collateral Account.
Other than any interest earned on the investment of such deposits, which
investments shall be made at the request of the Lead Borrower and at the
Borrowers’ risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such Cash Collateral Account shall be applied by the Collateral Agent to
reimburse the Issuing Bank for payments on account of drawings under Letters of
Credit for which it has not been reimbursed and, to the extent not so applied,
shall be held for the satisfaction of the reimbursement obligations of the
Borrowers for the Letter of Credit Outstandings at such time or, if the Loans
have matured or the maturity of the Loans has been accelerated, be applied to
satisfy other Obligations and the Other Liabilities.

     

    (k) Notwithstanding
anything to the contrary contained herein, with respect to the Canadian Borrower
only, if the Issuing Bank for any Canadian Letter of Credit is not the Canadian
Agent, (i) the Canadian Borrower authorizes the Canadian Agent to arrange for
the issuance of Canadian Letters of Credit from such Issuing Bank and to pay and
indemnify (the “L/C Credit
Support”) such Issuing Bank all charges in connection with the issuance,
negotiation, settlement, amendment and processing of each such Canadian Letter
of Credit; and Canadian Borrower agrees to pay and indemnify the Canadian Agent
for and in respect of the L/C Credit Support and agrees that such obligation to
pay and indemnify shall be deemed Canadian Liabilities, (ii) any notices,
requests or applications under Section 2.07 shall
contemporaneously be delivered to both the Issuing Bank and the Canadian Agent,
(iii) drafts drawn under any Letters of Credit as provided in Section 2.07(d) and L/C Disbursements as provided in Section 2.07(e) shall immediately and on the same
Business Day be reimbursed by the Canadian Agent, and all interest accruing or
payable pursuant to Section 2.07(e) or Section 2.07(g) shall be for the account of the
Canadian Agent and not the Issuing Bank, and (iv) the Canadian Borrower’s
reimbursement obligation under Section 2.07(d), Section 2.07(e) and/or Section
2.07(g) shall be due to the Canadian Agent and the Lenders shall make
available to the Canadian Agent (for its own account) the amount of its payment
provided for in Section 2.07(g).

     

    (l) The
Borrowers, the Agents and the Lenders agree that the Pre-Petition Letters of
Credit shall be deemed Letters of Credit hereunder as if issued by the
applicable Issuing Bank.

     

    SECTION
2.08. Settlements
Amongst Lenders.

     

    (a) Each
Swingline Lender may at any time, but in any event no less frequently than
weekly shall, on behalf of the Domestic Borrowers or the Canadian Borrower, as
applicable (which hereby authorize the Swingline Lenders to act in their behalf
in that regard) request the Administrative Agent or the Canadian Agent, as
applicable, to cause the Domestic Lenders and the Canadian Lenders, as
applicable, to make a Revolving Loan (which shall be a Prime Rate Loan) in an
amount equal to such Lender’s Domestic Commitment Percentage or Canadian
Commitment Percentage of the outstanding amount of Swingline Loans made in
accordance with Section 2.06, which request may be
made regardless of whether the conditions set forth in Article IV have been
satisfied or waived. Upon such request, each Domestic Lender or Canadian Lender,
as applicable, shall make available to the Administrative Agent or the Canadian
Agent, as applicable, the proceeds of such Revolving Loan for the account of the
applicable Swingline Lender. If the Swingline Lender requires a Revolving Loan
to be made by the Domestic Lenders or the Canadian Lenders, as applicable, and
the request therefor is received prior to 12:00 Noon, Boston time, on a Business
Day, such transfers shall be made in immediately available funds no later than
3:00 p.m., Boston time, that day; and, if the request therefor is received after
12:00 Noon, Boston time, then no later than 3:00 p.m., Boston time, on the next
Business Day. The obligation of each such Lender to transfer such funds is
irrevocable, unconditional and without recourse to or warranty by the
Administrative Agent or the Canadian Agent, as applicable, or any Swingline
Lender. If and to the extent any Domestic Lender or Canadian Lender, as
applicable, shall not have so made its transfer to the Administrative Agent or
the Canadian Agent, as applicable, such Domestic Lender or Canadian Lender
agrees to pay to the Administrative Agent or the Canadian Agent, as applicable,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to the Administrative Agent or
the Canadian Agent, as applicable at the Federal Funds Effective
Rate.

     

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

     

    (c) The
Administrative Agent or the Canadian Agent, as applicable, shall deliver to each
of the Domestic Lenders or Canadian Lenders, as applicable, promptly after the
Settlement Date a summary statement of the amount of outstanding Revolving Loans
(including Swingline Loans) for the period and the amount of repayments received
for the period. As reflected on the summary statement: (x) the Administrative
Agent or the Canadian Agent, as applicable, shall transfer to each Domestic
Lender and Canadian Lender its applicable Domestic Commitment Percentage or
Canadian Commitment Percentage, as applicable, of repayments, and (y) each
Domestic Lender and Canadian Lender shall transfer to the Administrative Agent
or the Canadian Agent, as applicable, (as provided below), or the Administrative
Agent or the Canadian Agent, as applicable, shall transfer to each Domestic
Lender or Canadian Lender, as applicable, such amounts as are necessary to
insure that, after giving effect to all such transfers, the amount of Revolving
Loans made by each Domestic Lender and Canadian Lender with respect to Revolving
Loans to the Domestic Borrowers and the Canadian Borrower, respectively, shall
be equal to such Lender’s applicable Domestic Commitment Percentage or Canadian
Commitment Percentage, as applicable, of Revolving Loans outstanding as of such
Settlement Date. If the summary statement requires transfers to be made to the
Administrative Agent or the Canadian Agent, as applicable, by the Domestic
Lenders or the Canadian Lenders, as applicable, and is received prior to 12:00
Noon, Boston time, on a Business Day, such transfers shall be made in
immediately available funds no later than 3:00 p.m., Boston time, that day; and,
if received after 12:00 Noon, Boston time, then no later than 3:00 p.m., Boston
time, on the next Business Day. The obligation of each Domestic Lender and each
Canadian Lender to transfer such funds is irrevocable, unconditional and without
recourse to or warranty by the Administrative Agent or the Canadian Agent, as
applicable.  If and to the extent any Domestic Lender or Canadian
Lender shall not have so made its transfer to the Administrative Agent or the
Canadian Agent, as applicable, such Domestic Lender or Canadian Lender agrees to
pay to the Administrative Agent or the Canadian Agent, as applicable, forthwith
on demand such amount, together with interest thereon, for each day from such
date until the date such amount is paid to the Administrative Agent or the
Canadian Agent, as applicable, at the Federal Funds Effective
Rate.

     

    SECTION
2.09. Notes;
Repayment of Loans.

     

    (a) The
Loans made by each Domestic Lender and each Canadian Lender (and to the
Swingline Lender, with respect to Swingline Loans) shall, at the request of any
Domestic Lender, Canadian Lender, or Swingline Lender, be evidenced by a Note
duly executed on behalf of the Domestic Borrowers and the Canadian Borrower,
respectively, dated the Closing Date, in substantially the form attached hereto
as Exhibit B-1,  B-2, B-3 or B-4, as applicable, payable to the order
of each such Domestic Lender or Canadian Lender (or each Swingline Lender, as
applicable) which requests such Note in an aggregate principal amount equal to
such Domestic Lender’s or Canadian Lender’s Domestic Commitment or Canadian
Commitment, as applicable (or, in the case of the Notes evidencing the Swingline
Loans (i) to the Domestic Borrowers, $60,000,000 and (ii) to the Canadian
Borrower, $10,000,000).

     

    (b) The
outstanding principal balance of all Swingline Loans shall be repaid on the
earlier of the Termination Date or, on the date otherwise requested by the
Swingline Lender in accordance with the provisions of Section 2.08(a). The outstanding principal balance of
all other Obligations shall be payable on the Termination Date (subject to
earlier repayment as provided below). Each Note shall bear interest from the
date thereof on the outstanding principal balance thereof as set forth in this
Article II. Each Domestic Lender is hereby authorized by the Domestic Borrowers,
and each Canadian Lender is hereby authorized by the Canadian Borrower, to
endorse on a schedule attached to each Note delivered to such Domestic Lender or
Canadian Lender (or on a continuation of such schedule attached to such Note and
made a part thereof), or otherwise to record in such Domestic Lender’s or
Canadian Lender’s internal records, an appropriate notation evidencing the date
and amount of each Loan from such Domestic Lender or Canadian Lender, each
payment and prepayment of principal of any such Loan, each payment of interest
on any such Loan and the other information provided for on such schedule; provided,
however,
that the failure of any Domestic Lender or Canadian Lender to make such a
notation or any error therein shall not affect the obligation of the Domestic
Borrowers or the Canadian Borrower, as applicable, to repay the Loans made by
such Domestic Lender or Canadian Lender in accordance with the terms of this
Agreement and the applicable Notes.

     

    (c) Promptly
following receipt of an affidavit of a Lender as to the loss, theft, destruction
or mutilation of such Lender’s Note and upon cancellation of such Note, the
Borrowers will issue, in lieu thereof, a replacement Note in favor of such
Lender, in the same principal amount thereof and otherwise of like
tenor.

     

    SECTION
2.10. Intentionally
Omitted.

     

    SECTION
2.11. Interest on
Loans.

     

    (a) Subject
to Section 2.12 and clause (d) hereof, each Prime
Rate Loan shall bear interest (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as applicable) at a rate per annum
that shall be equal to the then Prime Rate or Canadian Prime Rate, as
applicable, plus
the Applicable Margin.

     

    (b) Subject
to Section 2.12, each LIBO Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal, during each Interest Period applicable thereto,
to the Adjusted LIBO Rate for such Interest Period, plus
the Applicable Margin.

     

    (c) Subject
to Section 2.12, each BA Equivalent Loan shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 365 or 366 days, as applicable) at a rate per annum equal to the BA Rate,
plus
the Applicable Margin.

     

    (d) Subject
to Section 2.12, each Loan made to the Canadian Borrower in Dollars shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 365 or 366 days, as applicable) at a rate per annum that shall be equal to
the then Prime Rate plus
the Applicable Margin.

     

    (e) Accrued
interest on all Loans shall be payable in arrears on each Interest Payment Date
applicable thereto, on the Termination Date, after the Termination Date on
demand and (with respect to LIBO Loans and BA Equivalent Loans) upon any
repayment or prepayment thereof (on the amount prepaid).

     

    For
the purposes of the Interest Act (Canada) and disclosure thereunder, whenever
interest to be paid hereunder is to be calculated on the basis of a year of 360
days or any other period of time that is less than a calendar year, the yearly
rate of interest to which the rate determined pursuant to such calculation is
equivalent is the rate so determined multiplied by the actual number of days in
the calendar year in which the same is to be ascertained and divided by either
360 or such other period of time, as the case may be.  Calculations of
interest shall be made using the nominal rate method of calculation, and will
not be calculated using the effective rate method of calculation or any other
basis that gives effect to the principle of deemed reinvestment of
interest.

     

    SECTION
2.12. Default
Interest.

     

    Effective
upon the occurrence of any Event of Default and at all times thereafter while
such Event of Default is continuing, at the option of the Administrative Agent
or upon the direction of the Required Lenders, interest shall accrue on all
outstanding Loans (including Swingline Loans) (after as well as before judgment,
as and to the extent permitted by law) at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 360 days) equal to the
rate (including the Applicable Margin for Loans) in effect from time to
time
plus 2.00% per annum, and such interest shall be payable on
demand.

     

    SECTION
2.13. Certain
Fees.

     

    (a) The
Borrowers shall pay the Administrative Agent, for the account of the Lenders, an
upfront fee in an amount equal to 1.75% of the aggregate principal amount of the
Total Commitments as in effect on the Closing Date (the “Upfront
Fee”).  The Upfront Fee shall be paid by the Borrowers to the
Administrative Agent in full on the Closing Date.

     

    (b) In
addition to the Upfront Fee set forth in clause (a) above, the Borrowers shall
pay to the Administrative Agent, for the account of the Administrative Agent,
the fees set forth in the Fee Letter as and when payment of such fees is due as
therein set forth.

     

    SECTION
2.14. Unused
Commitment Fee.

     

    (a) The
Domestic Borrowers shall pay to the Administrative Agent for the account of the
Domestic Lenders, a commitment fee (the “Commitment
Fee”) equal to the Commitment Fee Percentage (on the basis of actual days
elapsed in a year of 365 or 366 days, as applicable) of the average daily
balance of the Unused Commitment for each day commencing on and including the
Closing Date and ending on but excluding the Termination Date. The Commitment
Fee so accrued in any calendar month shall be payable on the first Business Day
of the immediately succeeding calendar month, except that all Commitment Fees so
accrued as of the Termination Date shall be payable on the Termination
Date.

     

    (b) The
Canadian Borrower shall pay to the Canadian Agent for the account of the Lenders
holding a Canadian Commitment, a commitment fee (the “Canadian
Commitment
Fee”) equal to the Commitment Fee Percentage (on the basis of actual days
elapsed in a year of 365 or 366 days, as applicable) of the average daily
balance of the Unused Canadian Commitment for each day commencing on and
including the Closing Date and ending on but excluding the Termination Date. The
Canadian Commitment Fee so accrued in any calendar month shall be payable on the
first Business Day of the immediately succeeding calendar month, except that all
Canadian Commitment Fees so accrued as of the Termination Date shall be payable
on the Termination Date.

     

    SECTION
2.15. Letter of
Credit Fees.

     

    (a) The
Domestic Borrowers shall pay the Administrative Agent, and the Canadian Borrower
shall pay to the Canadian Agent, as applicable, for the account of the Domestic
Lenders or the Canadian Lenders, as applicable, for each calendar month, on the
first Business Day of the immediately succeeding calendar month, a fee (each, a
“Letter
of Credit Fee”) equal to the following per annum percentages of the
average face amount of the following categories of Letters of Credit outstanding
during the subject quarter:

     

    (i) Standby
Letters of Credit issued for the Domestic Borrowers:  Four (4%)
percent per annum.

     

    (ii) Commercial
Letters of Credit issued for the Domestic Borrowers and Banker’s Acceptances:
Four (4%) percent per annum.

     

    (iii) Standby
Letters of Credit issued for the Canadian Borrower:  Four (4%) percent
per annum.

     

    (iv) Commercial
Letters of Credit issued for the Canadian Borrower: Four (4%) percent per
annum.

     

    (v) After
the occurrence and during the continuance of an Event of Default, at the option
of the Administrative Agent or the Canadian Agent, as applicable, or upon the
direction of the Required Lenders, the Letter of Credit Fee set forth in clauses
(i) through (iv) above, shall be increased by an amount equal to two percent
(2%) per annum.

     

    (b) The
Domestic Borrowers or Canadian Borrower, as applicable, shall pay directly to
the applicable Issuing Bank for its own account a fronting fee with respect to
each Letter of Credit, at a rate equal to 0.125% per annum, computed on the face
amount of such Letter of Credit, and payable upon the issuance
thereof.  The Domestic Borrowers or Canadian Borrower, as applicable,
shall pay to the applicable Issuing Bank, in addition to all Letter of Credit
Fees otherwise provided for hereunder, other reasonable charges in connection
with the issuance, negotiation, settlement, amendment and processing of each
Letter of Credit issued by the Issuing Bank as are customarily imposed by the
Issuing Bank except as the Issuing Bank and the Lead Borrower or Canadian
Borrower, as applicable, may from time to time otherwise
agree.

     

    (c) All
Letter of Credit Fees shall be calculated on the basis of a 365/366 day year, as
applicable, and actual days elapsed.

     

    SECTION
2.16. Nature of
Fees.

     

    All
fees shall be paid on the dates due, in immediately available funds, to the
Administrative Agent, or the Canadian Agent, as applicable, for the respective
accounts of the Administrative Agent, or the Canadian Agent, as applicable, the
Issuing Bank, and the applicable Lenders, as provided herein. All fees shall be
fully earned on the date when due and shall not be refundable under any
circumstances, absent manifest error.

     

    SECTION
2.17. Termination or
Reduction of Commitments.

     

    (a) On
December 29, 2008, the Domestic Commitments shall be automatically and
permanently reduced to $850,000,000, without any further action on the part of
the Agents, the Lenders or the Borrowers.  Such reduction shall be
applied ratably to the Domestic Commitments of each Lender.  At the
effective time of such reduction, the Domestic Borrowers shall pay to the
Administrative Agent for application as provided herein (i) all Commitment Fees
accrued on the amount of the Domestic Commitments so reduced through the date
thereof, and (ii) any amount by which the Credit Extensions outstanding on such
date exceed the amount to which the Domestic Commitments are to be reduced
effective on such date (and, if, after giving effect to the prepayment in full
of all outstanding Loans such Credit Extensions have not been so reduced,
deposit cash into the applicable Cash Collateral Account in an amount equal to
103% of the Letters of Credit Outstanding to the extent necessary in order that
the Credit Extensions do not exceed the Domestic Commitments as so reduced), in
each case pro
rata
based on the amount prepaid.

     

    (b) On
the earlier of January 17, 2009 (or such later date agreed by the Canadian
Lenders) and the closing and initial funding of the Term Loan, the Canadian
Commitments shall be automatically and permanently reduced to $50,000,000,
without any further action on the part of the Agents, the Lenders or the
Borrowers.  Such reduction shall be applied ratably to the Canadian
Commitments of each Canadian Lender.  At the effective time of such
reduction, the Canadian Borrower shall pay to the Canadian Agent for application
as provided herein (i) all Commitment Fees accrued on the amount of the Canadian
Commitments so reduced through the date thereof, and (ii) any amount by which
the Credit Extensions to the Canadian Borrower outstanding on such date exceed
the amount to which the Canadian Commitments are to be reduced effective on such
date (and, if, after giving effect to the prepayment in full of all outstanding
Loans such Credit Extensions have not been so reduced, deposit cash into the
applicable Cash Collateral Account in an amount equal to 103% of the Letters of
Credit Outstanding of the Canadian Borrower to the extent necessary in order
that the Credit Extensions do not exceed the Canadian Commitments as so
reduced), in each case pro
rata
based on the amount prepaid.

     

    (c) Upon
at least two (2) Business Days’ prior written notice to the Administrative
Agent, the Lead Borrower may at any time in whole permanently terminate, or from
time to time in part permanently reduce, the Domestic Commitments. Each such
reduction shall be in the principal amount of $10,000,000 or any integral
multiple thereof. Each such reduction or termination shall (i) be applied
ratably to the Domestic Commitments of each Lender and (ii) be irrevocable when
given (other than to the extent that such reduction is in connection with a
refinancing of the Obligations which is not consummated). At the effective time
of each such reduction or termination, the Domestic Borrowers shall pay to the
Administrative Agent for application as provided herein (i) all Commitment Fees
accrued on the amount of the Domestic Commitments so terminated or reduced
through the date thereof, and (ii) any amount by which the Credit Extensions
outstanding on such date exceed the amount to which the Domestic Commitments are
to be reduced effective on such date (and, if, after giving effect to the
prepayment in full of all outstanding Loans such Credit Extensions have not been
so reduced, deposit cash into the applicable Cash Collateral Account in an
amount equal to 103% of the Letters of Credit Outstanding to the extent
necessary in order that the Credit Extensions do not exceed the Domestic
Commitments as so reduced), in each case pro
rata
based on the amount prepaid.

     

    (d) Upon
at least two (2) Business Days’ prior written notice to the Canadian Agent, the
Canadian Borrower may at any time in whole permanently terminate, or from time
to time in part permanently reduce, the Canadian Commitments. Each such
reduction shall be in the principal amount of $10,000,000 or any integral
multiple thereof. Each such reduction or termination shall (i) be applied
ratably to the Canadian Commitments of each Canadian Lender and (ii) be
irrevocable when given (other than to the extent that such reduction is in
connection with a refinancing of the Obligations which is not consummated). At
the effective time of each such reduction or termination, the Canadian Borrower
shall pay to the Canadian Agent for application as provided herein (i) all
Canadian Commitment Fees accrued on the amount of the Canadian Commitments so
terminated or reduced through the date thereof, and (ii) any amount by which the
Credit Extensions to the Canadian Borrower outstanding on such date exceed the
amount to which the Canadian Commitments are to be reduced effective on such
date (and, if, after giving effect to the prepayment in full of all outstanding
Loans to the Canadian Borrower such Credit Extensions have not been so reduced,
deposit cash into the applicable Cash Collateral Account in an amount equal to
103% of the Letters of Credit Outstanding of the Canadian Borrower to the extent
necessary in order that the Credit Extensions to the Canadian Borrower do not
exceed the Canadian Commitments as so reduced), in each case pro
rata
based on the amount prepaid.

     

    (e) The
Canadian Commitments shall be automatically terminated upon any termination of
the Domestic Commitments.

     

    SECTION
2.18. Alternate Rate
of Interest.

     

    If
prior to the commencement of any Interest Period for a LIBO Borrowing or BA
Equivalent Loan Borrowing:

     

    (a) the
Administrative Agent determines (which determination shall be presumptively
correct absent manifest error) that adequate and reasonable means do not exist
for ascertaining the Adjusted LIBO Rate or the BA Rate for such Interest Period;
or

     

    (b) the
Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
Rate or the BA Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included
in such Borrowing for such Interest Period;

     

    then
the Administrative Agent shall give notice thereof to the Domestic Borrowers or
the Canadian Borrower, as applicable, and the Domestic Lenders, in the case of a
requested LIBO Borrowing and the Canadian Lenders, in the case of a requested BA
Equivalent Loan Borrowing by telephone or telecopy as promptly as practicable
thereafter (but in any event, within two (2) Business Days) and, until the
Administrative Agent notifies the Domestic Borrowers or the Canadian Borrower,
as applicable and the Domestic Lenders or the Canadian Lenders, as applicable,
that the circumstances giving rise to such notice no longer exist, (i) any
Borrowing Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a LIBO Borrowing or a BA Equivalent Loan
Borrowing, as applicable, shall be ineffective and (ii) if any Borrowing
Request requests a LIBO Borrowing or a BA Equivalent Loan Borrowing, as
applicable, such Borrowing shall be made as a Borrowing of Prime Rate
Loans.

     

    SECTION
2.19. Conversion and
Continuation of Loans.

     

    (a) The
Lead Borrower on behalf of the Borrowers shall have the right at any
time,

     

    (i) on
three (3) Business Days’ prior irrevocable notice to the Administrative Agent
(which notice, to be effective, must be received by the Administrative Agent not
later than 11:00 a.m., Boston time, on the third Business Day preceding the date
of any conversion), (x) to convert any outstanding Borrowings
of  Prime Rate Loans (but in no event Swingline Loans) to Borrowings
of LIBO Loans in the case of the Domestic Borrowers and to Borrowings of BA
Equivalent Loans in the case of the Canadian Borrower, or (y) to continue an
outstanding Borrowing of LIBO Loans or BA Equivalent Loans for an additional
Interest Period,

     

    (ii) on
one Business Day’s prior irrevocable notice to the Administrative Agent (which
notice, to be effective, must be received by the Administrative Agent not later
than 11:00 a.m., Boston time, on the first Business Day preceding the date of
any conversion), to convert any outstanding Borrowings by the Domestic Borrowers
of LIBO Loans to a Borrowing of Prime Rate Loans, and to convert any outstanding
Borrowings by the Canadian Borrower of BA Equivalent Loans to a Borrowing of CD$
denominated Prime Rate Loans,

     

    subject
to the following:

     

    (b) no
Borrowing of Loans may be converted into, or continued as, LIBO Loans or BA
Equivalent Loans, at any time when an Event of Default has occurred and is
continuing;

     

    (c) if
less than a full Borrowing of Loans is converted, such conversion shall be made
pro
rata
among the Domestic Lenders and the Canadian Lenders, as applicable, in
accordance with the respective principal amounts of the Loans comprising such
Borrowing held by such Lenders immediately prior to such
refinancing;

     

    (d) the
aggregate principal amount of Loans being converted into or continued as LIBO
Loans shall be in an integral of $1,000,000 and at least $5,000,000, and the
aggregate principal amount of Loans being converted into or continued as BA
Equivalent Loans shall be in an integral of CD$1,000,000 and at least
CD$5,000,000;

     

    (e) each
Domestic Lender shall effect each conversion by applying the proceeds of its new
LIBO Loan or Prime Rate Loan, as the case may be, to its Loan being so converted
and each Canadian Lender shall effect each conversion by applying the proceeds
of its new BA Equivalent Loan or CD$ denominated Prime Rate Loan, as the case
may be, to its Loan being so converted;

     

    (f) the
Interest Period with respect to a Borrowing of LIBO Loans or BA Equivalent Loans
effected by a conversion or in respect to the Borrowing of LIBO Loans or BA
Equivalent Loans being continued as LIBO Loans or BA Equivalent Loans,
respectively, shall commence on the date of conversion or the expiration of the
current Interest Period applicable to such continuing Borrowing, as the case may
be;

     

    (g) a
Borrowing of LIBO Loans or BA Equivalent Loans may be converted only on the last
day of an Interest Period applicable thereto;

     

    (h) each
request for a conversion or continuation of a Borrowing of LIBO Loans or BA
Equivalent Loans which fails to state an applicable Interest Period shall be
deemed to be a request for an Interest Period of one month;
and

     

    (i) no
more than eight (8) Borrowings of LIBO Loans and eight (8) Borrowings of BA
Equivalent Loans may be outstanding at any time.

     

    If
the Lead Borrower does not give notice to convert any Borrowing of Prime Rate
Loans, or does not give notice to continue, or does not have the right to
continue, any Borrowing as LIBO Loans or BA Equivalent Loans, in each case as
provided above, such Borrowing shall automatically be converted to, or continued
as, as applicable, in the case of the Domestic Borrowers, a Borrowing of dollar
denominated Prime Rate Loans and, in the case of the Canadian Borrower, a
Borrowing of CD$ denominated Prime Rate Loans, at the expiration of the then
current Interest Period. The Administrative Agent shall, after it receives
notice from the Lead Borrower, promptly give each Lender notice of any
conversion, in whole or part, of any Loan made by such Lender.

     

    SECTION
2.20. Mandatory
Prepayment; Cash Collateral; Commitment
Termination.

     

    The
outstanding Obligations shall be subject to mandatory prepayment as
follows:

     

    (a) (i)   If
at any time the amount of the Credit Extensions exceeds the lower of (i) the
then amount of the Total Commitments, and (ii) the then amount of the Borrowing
Base, including, without limitation, as a result of one or more fluctuations in
the exchange rate of the CD$ against the dollar, the applicable Borrowers will
immediately upon notice from the Administrative Agent (A) prepay the Loans in an
amount necessary to eliminate such excess, and (B) if, after giving effect to
the prepayment in full of all outstanding Loans such excess has not been
eliminated, deposit cash into the applicable Cash Collateral Account in an
amount equal to 103% of the Letters of Credit Outstanding (which shall be
released to the Domestic Borrowers from such Cash Collateral Account, to the
extent not previously utilized to reimburse any drawing under a Letter of
Credit, at such time that the amount of the Credit Extensions, without giving
effect to amounts deposited in such Cash Collateral Account, do not exceed the
lower of the then amount of the Total Commitments, and the then amount of the
Borrowing Base, but only if no Event of Default then
exists).

     

    (ii)   If
at any time the amount of the Credit Extensions to the Canadian Borrower exceeds
the lower of (i) the then amount of the Canadian Total Commitments, and (ii)(A)
from the Closing Date through the earlier of January 17, 2009 (or such later
date as agreed by the Canadian Lenders) or the closing and initial funding of
the Term Loan, the amounts available under the Canadian Borrowing Base, or (B)
from and after the earlier of January 17, 2009 (or such later date as agreed by
the Canadian Lenders) or the closing and initial funding of the Term Loan, the
then amount of the Borrowing Base minus Credit Extensions then outstanding in
favor of the Domestic Borrowers, including, without limitation, as a result of
one or more fluctuations in the exchange rate of the CD$ against the dollar, the
Canadian Borrower will immediately upon notice from the Administrative Agent (A)
prepay such Loans in an amount necessary to eliminate such excess, and (B) if,
after giving effect to the prepayment in full of all outstanding Loans such
excess has not been eliminated, deposit cash into the applicable Cash Collateral
Account in an amount equal to 103% of the Letters of Credit Outstanding (which
shall be released to the Canadian Borrower from such Cash Collateral Account, to
the extent not previously utilized to reimburse any drawing under a Letter of
Credit, at such time that the amount of the Credit Extensions to the Canadian
Borrower, without giving effect to amounts deposited in such Cash Collateral
Account, do not exceed the lower of Canadian Availability, and the then amount
of the Borrowing Base minus Credit Extensions then outstanding in favor of the
Domestic Borrowers, but only if no Event of Default then exists).

     

    (iii)   If
at any time the amount of the Credit Extensions to the Domestic Borrowers
exceeds the lower of (i) the then amount of the Domestic Total Commitments, and
(ii) the then amount of the Borrowing Base minus, from and after the earlier of
January 17, 2009 (or such later date as agreed by the Canadian Lenders) or the
closing and initial funding of the Term Loan, Credit Extensions then outstanding
in favor of the Canadian Borrower, including, without limitation, as a result of
one or more fluctuations in the exchange rate of the CD$ against the dollar, the
Domestic Borrowers will immediately upon notice from the Administrative Agent
(A) prepay such Loans in an amount necessary to eliminate such excess, and (B)
if, after giving effect to the prepayment in full of all outstanding Loans such
excess has not been eliminated, deposit cash into the applicable Cash Collateral
Account in an amount equal to 103% of the Letters of Credit Outstanding (which
shall be released to the Domestic Borrowers from such Cash Collateral Account,
to the extent not previously utilized to reimburse any drawing under a Letter of
Credit, at such time that the amount of the Credit Extensions to the Domestic
Borrowers, without giving effect to amounts deposited in such Cash Collateral
Account, do not exceed the lower of the then amount of the Total Commitments,
and the then amount of the Borrowing Base minus Credit Extensions then
outstanding in favor of the Canadian Borrower, but only if no Event of Default
then exists).

     

    Without
in any way limiting the foregoing provisions, the Administrative Agent shall,
weekly or more frequently in the Administrative Agent’s sole discretion, make
the necessary Dollar Equivalent calculations to determine whether any such
excess exists on such date.

     

    (b) The
Revolving Loans shall be repaid daily in accordance with the provisions of said
Section 2.23 and Section
2.24.

     

    (c) Subject
to the foregoing, outstanding Prime Rate Loans shall be prepaid by the Domestic
Borrowers before outstanding LIBO Loans are prepaid and outstanding Prime Rate
Loans of the Canadian Borrower shall be prepaid before outstanding BA Equivalent
Loans are prepaid. Each partial prepayment of LIBO Loans shall be in an integral
multiple of $5,000,000. Each partial prepayment of BA Equivalent Loans shall be
in an integral multiple of CD$1,000,000.  No prepayment of LIBO Loans
or BA Equivalent Loans shall be permitted pursuant to this Section 2.20 other than on the last day of an Interest
Period applicable thereto, unless the applicable Borrowers simultaneously
reimburse the applicable Lenders for all Breakage Costs associated therewith. In
order to avoid such Breakage Costs, as long as no Event of Default has occurred
and is continuing, at the request of the Lead Borrower, the Administrative Agent
or the Canadian Agent, as applicable, shall hold all amounts required to be
applied to LIBO Loans or BA Equivalent Loans, as applicable, in the applicable
Cash Collateral Account and will apply such funds to the applicable LIBO Loans
or BA Equivalent Loans at the end of the then pending Interest Period therefor
(provided that the foregoing shall in no way limit or restrict the rights of the
Administrative Agent or the Canadian Agent upon the subsequent occurrence and
continuation of an Event of Default). No partial prepayment of a Borrowing of
LIBO Loans or BA Equivalent Loans shall result in the aggregate principal amount
of the LIBO Loans remaining outstanding pursuant to such Borrowing being less
than $5,000,000 or the aggregate principal amount of the BA Equivalent Loans
remaining outstanding pursuant to such Borrowing being less than CD$1,000,000
(unless all such outstanding LIBO Loans or BA Equivalent Loans are being prepaid
in full). Any prepayment of the Revolving Loans shall not permanently reduce the
Commitments.

     

    (d) All
amounts required to be applied to all Loans hereunder (other than Swingline
Loans) shall be applied ratably in accordance with each Domestic Lender’s
Domestic Commitment Percentage or Canadian Lender’s Canadian Commitment
Percentage, as applicable.

     

    (e) Upon
the Termination Date, the Commitments and the credit facility provided hereunder
shall be terminated in full and the Domestic Borrowers shall pay, in full and in
cash, all outstanding Loans and all other outstanding Obligations owing by them
and the Canadian Borrower shall pay in full and in cash, all outstanding Loans
to it and all Canadian Liabilities.

     

    (f) All
Obligations shall be payable to the Administrative Agent or the Canadian Agent,
as applicable, in the currency in which they are
denominated.

     

    SECTION
2.21. Optional
Prepayment of Loans; Reimbursement of Lenders.

     

    (a) The
Borrowers shall have the right at any time and from time to time to prepay
outstanding Loans in whole or in part, (x) with respect to LIBO Loans or BA
Equivalent Loans, upon at least two Business Days’ prior written, telex or
facsimile notice to the Administrative Agent prior to 11:00 a.m., Boston time,
and (y) with respect to Prime Rate Loans, on the same Business Day if written,
telex or facsimile notice is received by the Administrative Agent or the
Canadian Agent, as applicable, prior to 1:00 p.m., Boston time, subject to the
following limitations:

     

    (i) Outstanding
Prime Rate Loans of the Domestic Borrowers shall be prepaid before outstanding
LIBO Loans are prepaid and outstanding Prime Rate Loans of the Canadian Borrower
shall be prepaid before outstanding BA Equivalent Loans are prepaid. Each
partial prepayment of LIBO Loans shall be in an integral multiple of $5,000,000.
Each partial prepayment of BA Equivalent Loans shall be in an integral multiple
of CD$1,000,000. No prepayment of LIBO Loans or BA Equivalent Loans shall be
permitted pursuant to this Section 2.21 other than
on the last day of an Interest Period applicable thereto, unless the applicable
Borrowers simultaneously reimburse the applicable Lenders for all “Breakage
Costs” (as defined below) associated therewith. No partial prepayment of a
Borrowing of LIBO Loans shall result in the aggregate principal amount of the
LIBO Loans remaining outstanding pursuant to such Borrowing being less than
$5,000,000 (unless all such outstanding LIBO Loans are being prepaid in
full).  No partial prepayment of a Borrowing of BA Equivalent Loans
shall result in the aggregate principal amount of the BA Equivalent Loans
remaining outstanding pursuant to such Borrowing being less than CD$1,000,000
(unless all such outstanding BA Equivalent Loans are being prepaid in
full).

     

    (ii) Each
notice of prepayment shall specify the prepayment date, the principal amount and
Type of the Loans to be prepaid and, in the case of LIBO Loans or BA Equivalent
Loans, the Borrowing or Borrowings pursuant to which such Loans were made. Each
notice of prepayment shall be irrevocable and shall commit the Borrowers to
prepay such Loan by the amount and on the date stated therein (other than to the
extent that such prepayment is in connection with a refinancing of the
Obligations which is not consummated). The Administrative Agent or the Canadian
Agent, as applicable, shall, promptly after receiving notice from the Borrowers
hereunder, notify each Lender of the principal amount and Type of the Loans held
by such Lender which are to be prepaid, the prepayment date and the manner of
application of the prepayment.

     

    (b) The
Domestic Borrowers shall reimburse each Domestic Lender and the Canadian
Borrower shall reimburse each Canadian Lender promptly following written demand
for any loss incurred or to be incurred by the Domestic Lenders or the Canadian
Lenders, as applicable, in the reemployment of the funds released (i) resulting
from any prepayment (for any reason whatsoever, including, without limitation,
conversion to Prime Rate Loans or acceleration by virtue of, and after, the
occurrence of an Event of Default) of any LIBO Loan or BA Equivalent Loan
required or permitted under this Agreement, if such Loan is prepaid other than
on the last day of the Interest Period for such Loan or (ii) in the event that
after the Lead Borrower delivers a notice of borrowing under Section 2.04 in respect of LIBO Loans or BA Equivalent
Loans, such Loans are not borrowed on the first day of the Interest Period
specified in such notice of borrowing for any reason. Such loss shall be the
amount as reasonably determined by such Lender as the excess, if any, of (A) the
amount of interest which would have accrued to such Lender on the amount so paid
or not borrowed at a rate of interest equal to the Adjusted LIBO Rate or the BA
Rate, as applicable, for such Loan, for the period from the date of such payment
or failure to borrow to the last day (x) in the case of a payment or refinancing
of a LIBO Loan or a BA Equivalent Loan other than on the last day of the
Interest Period for such Loan, of the then current Interest Period for such Loan
or (y) in the case of such failure to borrow, of the Interest Period for such
LIBO Loan or BA Equivalent Loan which would have commenced on the date of such
failure to borrow, over (B) in the case of a LIBO Loan, the amount of interest
which would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the London interbank
market or, in the case of a BA Equivalent Loan, the amount of interest which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with The Toronto-Dominion Bank (collectively,
“Breakage
Costs”). Any Lender demanding reimbursement for such loss shall deliver
to the Borrowers from time to time one or more certificates setting forth the
amount of such loss as determined by such Lender and setting forth in reasonable
detail the manner in which such amount was determined.

     

    (c) In
the event the Domestic Borrowers or the Canadian Borrower, as applicable, fail
to prepay any Loan on the date specified in any prepayment notice delivered
pursuant to Section 2.21(a), the Domestic Borrowers
or the Canadian Borrower, as applicable, promptly following written demand by
any applicable Lender shall pay to the Administrative Agent or the Canadian
Agent, as applicable, for the account of such Lender any amounts required to
compensate such Lender for any actual loss incurred by such Lender as a result
of such failure to prepay, including, without limitation, any loss, cost or
expenses incurred by reason of the acquisition of deposits or other funds by
such Lender to fulfill deposit obligations incurred in anticipation of such
prepayment. Any such Lender demanding such payment shall deliver to the Domestic
Borrowers or the Canadian Borrower, as applicable, from time to time one or more
certificates setting forth the amount of such loss as determined by such Lender
and setting forth in reasonable detail the manner in which such amount was
determined.

     

    (d) Whenever
any partial prepayment of Loans are to be applied to LIBO Loans or BA Equivalent
Loans, such LIBO Loans or BA Equivalent Loans shall be prepaid in the
chronological order of their Interest Payment Dates.

     

    SECTION
2.22. Maintenance of
Loan Account; Statements of Account.

     

    (a) The
Administrative Agent and the Canadian Agent, as applicable, shall maintain an
account on its books in the name of the Borrowers (the “Loan
Account”) which will reflect (i) all Loans and other advances made by the
Lenders to the Borrowers or for the Borrowers’ account, (ii) all L/C
Disbursements, fees and interest that have become payable as herein set forth,
and (iii) any and all other monetary Obligations that have become
payable.

     

    (b) The
Loan Account will be credited with all amounts received by the Administrative
Agent or the Canadian Agent, as applicable, from the Borrowers, including all
amounts received in the Concentration Account from the Blocked Account Banks,
and the amounts so credited shall be applied as set forth in Section 2.24(a) and (b).
Within ten (10) Business Days after the end of each month, the Administrative
Agent or the Canadian Agent, as applicable, shall send to the Domestic Borrowers
or the Canadian Borrower, as applicable, a statement accounting for the charges,
loans, advances and other transactions occurring among and between the
Administrative Agent, or the Canadian Agent, as applicable, the Lenders and the
Borrowers during that month. The monthly statements shall, absent manifest
error, be presumptively correct.

     

    SECTION
2.23. Cash
Receipts.

     

    (a) Annexed
hereto as Schedule
2.23(a) is a list of all present DDAs maintained by the Borrowers, which
Schedule includes, with respect to each depository (i) the name and address of
that depository; (ii) the account number(s) maintained with such depository; and
(iii) to the extent known, a contact person at such
depository.

     

    (b) Annexed
hereto as Schedule
2.23(b) is a list describing all arrangements to which any Borrower is a
party with respect to the payment to any Borrower of the proceeds of all credit
card charges for sales by any Borrower.

     

    (c) On
or promptly following the Closing Date, the Borrowers shall:

     

    (i) deliver
to each depository institution identified on Schedule
2.23(a) as of the Closing Date, a copy of the Interim Borrowing Order or
Initial Order, as applicable, and cash management order entered by the US
Bankruptcy Court or the Canadian Bankruptcy Court setting forth the Agents’
rights in, and each such institution’s obligations with respect to, each related
DDA (each, a “DDA
Notification”),

     

    (ii) have,
in the case of the Domestic Borrowers, entered into a Blocked Account Agreement
with Wachovia with respect to the Wachovia Concentration Account (Account
No.2055275431509) (the “Wachovia Concentration Account”) in form and substance
reasonably satisfactory to the Administrative Agent (the “Wachovia
Blocked Account Agreement”), and

     

    (iii) deliver
to each credit card processor identified on Schedule
2.23(b), a copy of the Interim Borrowing Order or Initial Order, as
applicable, and cash management order entered by the US Bankruptcy Court or the
Canadian Bankruptcy Court setting forth the Agents’ rights in, and each such
processor’s obligations with respect to, credit card proceeds (each, a “Credit Card
Notification”).

     

    (iv) have
caused the Canadian Borrower to enter into a Blocked Account Agreement with each
of The Bank of Nova Scotia and Royal Bank of Canada in form and substance
reasonably satisfactory to the Canadian Agent.

     

    (d) The
DDA Notifications and the Credit Card Notifications shall require the sweep on
each Business Day of all available cash receipts and other proceeds from the
sale or disposition of any Collateral, including, without limitation, the
proceeds of all credit card charges (all such cash receipts and proceeds, “Cash
Receipts”), (and with respect to institutions which maintain a DDA, net
of a minimum balance not to exceed $10,000) to (x) a concentration account
maintained by the Administrative Agent at Bank of America (the “Concentration
Account”), (y) the Wachovia Concentration Account, or (z) a Blocked
Account, as the Administrative Agent may direct, provided
that amounts in DDAs established by the Canadian Borrower and amounts due
to the Canadian Borrower by credit card processors shall be delivered only to a
Blocked Account established by the Canadian Borrower or as the Canadian Agent
may otherwise direct.

     

    (e) Without
limiting the foregoing, upon the occurrence of any Prepayment Event, all Net
Proceeds received by the Borrowers on account of such Prepayment Event shall be
deposited in (x) the Concentration Account, (y) the Wachovia Concentration
Account, or (z) a Blocked Account, as the Administrative Agent may direct; provided
that such Net Proceeds received upon the occurrence of a Prepayment Event
arising with respect to the Canadian Borrower shall be deposited only to a
Blocked Account established by the Canadian Borrower or as the Canadian Agent
may otherwise direct.

     

    (f) The
Blocked Account Agreements shall require the sweep on each Business Day of all
Cash Receipts (net of a minimum balance not to exceed $10,000) to the
Concentration Account or to such other account as the Administrative Agent may
direct, and with respect to the Canadian Borrower, to a Blocked Account
established by the Canadian Borrower or as the Canadian Agent may otherwise
direct.

     

    (g) If
at any time any cash or cash equivalents owned by the Borrowers and constituting
proceeds of Collateral are deposited to any account (other than a DDA for which
a DDA Notification has been delivered), or held or invested in any manner,
otherwise than in a Blocked Account that is subject to a Blocked Account
Agreement as required herein, the Administrative Agent shall require the
Borrowers to close such account and have all funds therein transferred to the
Concentration Account, the Wachovia Concentration Account, or such other Blocked
Account as the Administrative Agent may direct, and with respect to the Canadian
Borrower, to a Blocked Account established by the Canadian Borrower or as the
Canadian Agent may otherwise direct.

     

    (h) The
Borrowers may close DDAs or Blocked Accounts and/or open new DDAs or Blocked
Accounts, subject to the execution and delivery to the Administrative Agent or
the Canadian Agent, as applicable, of appropriate DDA Notifications or Blocked
Account Agreements consistent with the provisions of this Section 2.23. Unless consented to in writing by the
Administrative Agent, or the Canadian Agent, as applicable, the Borrowers may
not enter into any agreements with additional credit card processors unless
contemporaneously therewith, a Credit Card Notification is executed and
delivered to the Administrative Agent or the Canadian Agent, as
applicable.

     

    (i) The
Concentration Account and the Blocked Accounts established by the Canadian
Borrower are and shall remain, under the sole dominion and control of the
Administrative Agent or the Canadian Agent, as applicable. Each Borrower
acknowledges and agrees that (i) such Borrower has no right of withdrawal from
the Concentration Account or the Blocked Accounts established by the Canadian
Borrower, (ii) the funds on deposit in the Concentration Account and the Blocked
Accounts established by the Canadian Borrower shall continue to be collateral
security for all of the Obligations and Other Liabilities, and (iii) the funds
on deposit in the Concentration Account and the Blocked Accounts established by
the Canadian Borrower shall be applied as provided in Section
2.24.

     

    (j) Whether
or not any Obligations are then outstanding, the Borrowers shall cause the ACH
or wire transfer to, upon the Administrative Agent’s or the Canadian Agent’s, as
applicable, instruction, the Wachovia Concentration Account or a Blocked Account
established by the Canadian Borrower in the case of the Canadian Borrower, or
another Blocked Account, no less frequently than daily (and whether or not there
is then an outstanding balance in the Loan Account, unless the Commitments have
been terminated hereunder and the Obligations (other than contingent
indemnification Obligations for which a claim has not been asserted and not then
due and owing) have been paid in full in cash) of the then contents of each DDA,
each such transfer to be net of any minimum balance, not to exceed $10,000, as
may be required to be maintained in the subject DDA by the bank at which such
DDA is maintained.

     

    (k) Whether
or not any Obligations are then outstanding, the Borrowers shall cause the ACH
or wire transfer, upon the Administrative Agent’s or the Canadian Agent’s, as
applicable, instruction, to the Concentration Account of the then entire ledger
balance of each Blocked Account (including the Wachovia Concentration Account),
net of such minimum balance, not to exceed $10,000, as may be required to be
maintained in the subject Blocked Account by the bank at which such Blocked
Account is maintained, provided
that amounts in Blocked Accounts established by the Canadian Borrower
shall be delivered only to a concentration account at Bank of America, N.A.
(acting through its Canada branch) or as the Canadian Agent may otherwise
direct; and provided
further that excess funds in the Domestic Borrowers’ disbursement account
maintained with Wachovia Bank, National Association not exceeding $1,000,000 in
the aggregate at any time may be retained in such account or invested in
overnight Investments.

     

    (l) In
the event that, notwithstanding the provisions of this Section 2.23, the Borrowers receive or otherwise have
dominion and control of any such proceeds or collections of Collateral, such
proceeds and collections shall be held in trust by the Borrowers for the
Administrative Agent or the Canadian Agent, as applicable, and shall not be
commingled with any of the Borrowers’ other funds or deposited in any account of
any Borrower other than as instructed by the Administrative Agent or the
Canadian Borrower, as applicable.

     

    SECTION
2.24. Application of
Payments.

     

    (a) (i)           As
long as no Event of Default exists, and the time for payment of the Obligations
has not been accelerated (if an Event of Default shall have occurred and the
Obligations have been accelerated, Section 7.04 shall apply), all amounts
received in the Concentration Account from any source, including the Blocked
Account Banks, and all payments made pursuant to Sections 2.21 and 2.22 hereof
(in each case, other than from the Canadian Loan Parties or the Collateral of
the Canadian Loan Parties) shall be applied, on the day of receipt, in the
following order: first,
to pay all outstanding Pre-Petition Liabilities of the Domestic Loan Parties
(other than contingent indemnification obligations not then due and owing) until
paid in full in cash; second,
to pay fees and expense reimbursements and indemnification then due and payable
to the Administrative Agent, Banc of America Securities LLC, the Issuing Bank
(other than any Issuing Bank issuing Canadian Letters of Credit) and the
Collateral Agent (other than fees, expense reimbursements and indemnification
payable in connection with Other Liabilities); third,
to pay interest due and payable on Credit Extensions to the Domestic Borrowers,
fourth,
to repay outstanding Swingline Loans to the Domestic Borrowers; fifth,
to repay other outstanding Revolving Loans that are Prime Rate Loans of the
Domestic Borrowers and all outstanding reimbursement obligations under Letters
of Credit and Banker’s Acceptances other than Canadian Letters of Credit; sixth,
to repay outstanding Revolving Loans that are LIBO Loans and all Breakage Costs
due in respect of such repayment pursuant to Section
2.21(b) or, at the Lead Borrower’s option, to fund a cash collateral deposit
to the Circuit City Cash Collateral Account sufficient to pay, and with
direction to pay, all such outstanding LIBO Loans on the last day of the
then-pending Interest Period therefor; seventh,
to fund a cash collateral deposit in the Circuit City Cash Collateral Account in
an amount equal to 103% of all Letter of Credit Outstandings other than Canadian
Letter of Credit Outstandings; eighth,
to pay all outstanding Pre-Petition Liabilities of the Canadian Loan Parties
(other than contingent indemnification obligations not then due and owing) until
paid in full in cash, ninth,
to pay fees and expense reimbursements and indemnification then due and payable
to the Canadian Agent and any Issuing Bank issuing Canadian Letters of Credit
(other than fees, expense reimbursements and indemnification payable in
connection with Other Liabilities of the Canadian Borrower); tenth,
to pay interest due and payable on Credit Extensions to the Canadian Borrower;
eleventh,
to repay outstanding Swingline Loans to the Canadian Borrower; twelfth,
to repay outstanding Revolving Loans that are Prime Rate Loans of the Canadian
Borrower and all outstanding reimbursement obligations under Canadian Letters of
Credit; thirteenth,
to repay outstanding Revolving Loans that are BA Equivalent Loans and all
Breakage Costs due in respect of such repayment pursuant to Section 2.21(b) or, at the Canadian Borrower’s option,
to fund a cash collateral deposit to the InterTAN Canada Cash Collateral Account
sufficient to pay, and with direction to pay, all such outstanding BA Equivalent
Loans on the last day of the then-pending Interest Period therefore; fourteenth,
to fund a cash collateral deposit in the InterTAN Canada Cash Collateral Account
(as defined in “Cash Collateral Account”) in an amount equal to 103% of all
Canadian Letter of Credit Outstandings; fifteenth,
to pay all other Obligations and all Other Liabilities of the Loan Parties that
are then outstanding and then due and payable.  If all amounts set
forth in clauses first
through and including fifteenth
above are paid, any excess amounts shall promptly be released to the Borrowers.
Any other amounts received by the Administrative Agent, the Issuing Bank, the
Canadian Agent, the Collateral Agent and the Co-Collateral Agent, or any Lender
as contemplated by Section 2.23 shall also be
applied in the order set forth above in this Section
2.24. 

     

    (ii)           As
long as no Event of Default exists, and the time for payment of the Obligations
has not been accelerated (if an Event of Default shall have occurred and the
Obligations have been accelerated, Section 7.04 shall apply), all amounts
received in the Concentration Account from any source, including the Blocked
Account Banks, and all payments made pursuant to Sections 2.21 and 2.22, in each
case from the Canadian Loan Parties or the Collateral of the Canadian Loan
Parties, hereof shall be applied, on the day of receipt, in the following order:
first,
to pay all outstanding Pre-Petition Liabilities of the Canadian Loan Parties
(other than contingent indemnification obligations not then due and owing) until
paid in full in cash; second,
to pay fees and expense reimbursements and indemnification then due and payable
to the Canadian Agent and any Issuing Bank issuing Canadian Letters of Credit)
(other than fees, expense reimbursements and indemnification payable in
connection with Other Liabilities); third,
to pay interest due and payable on Credit Extensions to the Canadian Borrower,
fourth,
to repay outstanding Swingline Loans to the Canadian Borrower; fifth,
to repay other outstanding Revolving Loans that are Prime Rate Loans of the
Canadian Borrower and all outstanding reimbursement obligations under Canadian
Letters of Credit; sixth,
to repay outstanding Revolving Loans that are BA Rate Loans and all Breakage
Costs due in respect of such repayment pursuant to Section 2.21(b) or, at the Lead Borrower’s option, to fund a cash
collateral deposit to the InterTAN Canada Cash Collateral Account (as defined in
“Cash Collateral Account”) sufficient to pay, and with direction to pay, all
such outstanding BA Rate Loans on the last day of the then-pending Interest
Period therefor; seventh,
to fund a cash collateral deposit in the InterTAN Canada Cash Collateral Account
in an amount equal to 103% of all Canadian Letter of Credit Outstandings, eighth,
at the option of the Agents, and subject to the terms of the Initial Order, (i)
to pay all outstanding Pre-Petition Liabilities of the Domestic Loan Parties
(other than contingent indemnification obligations not then due and owing) until
paid in full in cash; (ii), to pay fees and expense reimbursements and
indemnification then due and payable to the Administrative Agent, Banc of
America Securities LLC, the Issuing Bank (other than any Issuing Bank issuing
Canadian Letters of Credit) and the Collateral Agent (other than fees, expense
reimbursements and indemnification payable in connection with Other
Liabilities); (iii), to pay interest due and payable on Credit Extensions to the
Domestic Borrowers, (iv), to repay outstanding Swingline Loans to the Domestic
Borrowers; (v), to repay other outstanding Revolving Loans that are Prime Rate
Loans of the Domestic Borrowers and all outstanding reimbursement obligations
under Letters of Credit and Banker’s Acceptances other than Canadian Letters of
Credit; (vi), to repay outstanding Revolving Loans that are LIBO Loans and all
Breakage Costs due in respect of such repayment pursuant to Section 2.21(b) or, at the Lead Borrower’s option, to fund a cash
collateral deposit to the Circuit City Cash Collateral Account sufficient to
pay, and with direction to pay, all such outstanding LIBO Loans on the last day
of the then-pending Interest Period therefor; (vii), to fund a cash collateral
deposit in the Circuit City Cash Collateral Account in an amount equal to 103%
of all Letter of Credit Outstandings other than Canadian Letter of Credit
Outstandings; and ninth,
to pay all other Obligations and all Other Liabilities of the Loan Parties that
are then outstanding and then due and payable.  If all amounts set
forth in clauses first
through and including ninth
above are paid (other than, unless the Agents otherwise elect, amounts described
in clause Eighth),
any excess amounts shall promptly be released to the Borrowers. Any other
amounts received by the Administrative Agent, the Issuing Bank, the Canadian
Agent, the Collateral Agent and the Co-Collateral Agent or any Lender as
contemplated by Section 2.23 shall also be applied in the order set forth above in
this Section
2.24.

     

    (b) All
credits against the Obligations or the Canadian Liabilities shall be effective
on the day of receipt thereof, and shall be conditioned upon final payment to
the Administrative Agent of the items giving rise to such credits. If any item
deposited to the Concentration Account or otherwise credited to any Loan Account
is dishonored or returned unpaid for any reason, whether or not such return is
rightful or timely, the Administrative Agent or the Canadian Agent, as
applicable, shall have the right to reverse such credit and charge the amount of
such item to the Loan Account and the Borrowers shall indemnify the Agents, the
Issuing Bank and the Lenders against all claims and losses resulting from such
dishonor or return.

     

    SECTION
2.25. Increased
Costs.

     

    (a) If
any Change in Law shall:

     

    (i) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
any Lender or any holding company of any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;
or

     

    (ii) impose
on any Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or LIBO Loans or BA Equivalent Loans made by
such Lender or any Letter of Credit or participation
therein;

     

    and the result of any of the foregoing shall be to increase
the cost to such Lender of making or maintaining any LIBO Loan or BA Equivalent
Loan (or of maintaining its obligation to make any such Loan) or to increase the
cost to such Lender or the Issuing Bank of participating in, issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or
receivable by such Lender or the Issuing Bank hereunder (whether of principal,
interest or otherwise) other than Taxes, which shall be governed by Section 2.28 hereof, then the Domestic Borrowers or the Canadian
Borrower, as applicable, will pay to such Lender or the Issuing Bank, as the
case may be, such additional amount or amounts as will compensate such Lender or
the Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.

     

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

     

    (c) A
certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company,
as the case may be, as specified in paragraph (a) or (b) of this Section
and setting forth in reasonable detail the manner in which such amount or
amounts were determined shall be delivered to the Lead Borrower or the Canadian
Borrower, as applicable, and shall be presumptively correct absent manifest
error. The Domestic Borrowers or the Canadian Borrower, as applicable, shall pay
such Lender or the Issuing Bank, as the case may be, the amount shown as due on
any such certificate within ten (10) Business Days after receipt
thereof.

     

    (d) Failure
or delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section within three (3) months of the increased cost or
reduction in return shall constitute a waiver of such Lender’s or the Issuing
Bank’s right to demand such compensation.

     

    SECTION
2.26. Change in
Legality.

     

    (a) Notwithstanding
anything to the contrary contained elsewhere in this Agreement, if (x) any
Change in Law shall make it unlawful for a Lender to make or maintain a LIBO
Loan or BA Equivalent Loan or to give effect to its obligations as contemplated
hereby with respect to a LIBO Loan or BA Equivalent Loan or (y) at any time any
Lender determines that the making or continuance of any of its LIBO Loans or BA
Equivalent Loan has become impracticable as a result of a contingency occurring
after the date hereof which adversely affects the London interbank market or the
position of such Lender in the London interbank market, then, by written notice
to the Lead Borrower, such Lender may (i) declare that LIBO Loans or BA
Equivalent Loans will not thereafter be made by such Lender hereunder, whereupon
any request by the Borrowers for a LIBO Borrowing or BA Equivalent Loan
Borrowing shall, as to such Lender only, be deemed a request for a Prime Rate
Loan unless such declaration shall be subsequently withdrawn; and (ii) require
that all outstanding LIBO Loans or BA Equivalent Loans made by it be converted
to Prime Rate Loans, in which event all such LIBO Loans or BA Equivalent Loans
shall be automatically converted to Prime Rate Loans as of the effective date of
such notice as provided in paragraph (b) below. In the event any Lender shall
exercise its rights under clause (i) or (ii) of this paragraph (a), all payments
and prepayments of principal which would otherwise have been applied to repay
the LIBO Loans or BA Equivalent Loans that would have been made by such Lender
or the converted LIBO Loans or BA Equivalent Loans of such Lender shall instead
be applied to repay the Prime Rate Loans made by such Lender in lieu of, or
resulting from the conversion of, such LIBO Loans or BA Equivalent
Loans.

     

    (b) For
purposes of this Section 2.26, a notice to the
Borrowers by any Lender pursuant to paragraph (a) above shall be effective, if
lawful, and if any LIBO Loans or BA Equivalent Loans shall then be outstanding,
on the last day of the then-current Interest Period; and otherwise such notice
shall be effective on the date of receipt by the Borrowers.

     

    SECTION
2.27. Payments;
Sharing of Setoff.

     

    (a) The
Borrowers shall make each payment required to be made by it hereunder or under
any other Loan Document (whether of principal, interest, fees or reimbursement
of drawings under Letters of Credit, or of amounts payable under Section 2.21(b), Section
2.25, or Section 2.28, or otherwise) prior to
2:00 p.m., Boston time, on the date when due, in immediately available funds,
without setoff or counterclaim. Any amounts received after such time on any date
may, in the discretion of the Administrative Agent or the Canadian Agent, as
applicable, be deemed to have been received on the next succeeding Business Day
for purposes of calculating interest thereon. All such payments shall be made to
the Administrative Agent at its offices at 100 Federal Street, Boston,
Massachusetts 02110, or to the Canadian Agent, as applicable, at its offices at
200 Front Street West, Toronto, Ontario, Canada, M5V 3L2, except payments to be
made directly to the Issuing Bank or Swingline Lender as expressly provided
herein and except that payments pursuant to Section
2.21(b), Section 2.25, Section 2.28, and Section
9.03 shall be made directly to the Persons entitled thereto and payments
pursuant to other Loan Documents shall be made to the Persons specified therein.
The Administrative Agent or the Canadian Agent, as applicable, shall distribute
any such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document (other than payments with respect to LIBO Borrowings or BA
Equivalent Loan Borrowings) shall be due on a day that is not a Business Day,
the date for payment shall be extended to the next succeeding Business Day, and,
if any payment due with respect to LIBO Borrowings or BA Equivalent Loan
Borrowings shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, unless that
succeeding Business Day is in the next calendar month, in which event, the date
of such payment shall be on the last Business Day of subject calendar month,
and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension. All payments under each Loan Document
shall be made in dollars.

     

    (b) If
at any time insufficient funds are received by and available to the
Administrative Agent or the Canadian Agent, as applicable, to pay fully all
amounts of principal, unreimbursed drawings under Letters of Credit, interest
and fees then due hereunder, such funds shall be applied (i) first, towards
payment of interest and fees then due hereunder, ratably among the Domestic
Lenders or Canadian Lenders, as applicable, entitled thereto in accordance with
the amounts of interest and fees then due to such Lenders, and (ii) second,
towards payment of principal and unreimbursed drawings under Letters of Credit
then due hereunder, ratably among the Domestic Lenders or Canadian Lenders, as
applicable, entitled thereto in accordance with the amounts of principal and
unreimbursed drawings under Letters of Credit then due to such
parties.

     

    (c) If
any Domestic Lender or Canadian Lender, as applicable, shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in drawings under
Letters of Credit or Swingline Loans resulting in such Domestic Lender’s or
Canadian Lender’s receiving payment of a greater proportion of the aggregate
amount of its Loans and participations in drawings under Letters of Credit and
Swingline Loans and accrued interest thereon than the proportion received by any
other Domestic Lender or Canadian Lender, then the Domestic Lender or Canadian
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans and participations in drawings under Letters of
Credit and Swingline Loans of other Domestic Lenders or Canadian Lenders, as
applicable, to the extent necessary so that the benefit of all such payments
shall be shared by the Domestic Lenders and the Canadian Lenders, as applicable,
ratably in accordance with the aggregate amount of principal of and accrued
interest on their respective Loans and participations in drawings under Letters
of Credit and Swingline Loans, provided
that (i) if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Borrowers pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Domestic Lender or Canadian Lender as consideration for the assignment of or
sale of a participation in any of its Loans or participations in drawings under
Letters of Credit to any assignee or participant, other than to the Borrowers or
any Affiliate thereof (as to which the provisions of this paragraph shall
apply). The Borrowers consent to the foregoing and agree, to the extent they may
effectively do so under Applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrowers rights of setoff and counterclaim with respect to such participation
as fully as if such Domestic Lender or Canadian Lender were a direct creditor of
the Borrowers in the amount of such participation. 

     

    (d) Unless
the Administrative Agent or the Canadian Agent, as applicable, shall have
received notice from the Borrowers prior to the date on which any payment is due
to the Administrative Agent or the Canadian Agent, as applicable, for the
account of the Domestic Lenders, the Canadian Lenders or the Issuing Bank
hereunder that the Borrowers will not make such payment, the Administrative
Agent or the Canadian Agent, as applicable, may assume that the Borrowers have
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Domestic Lenders or the Canadian Lenders, as
applicable, or the Issuing Bank, as the case may be, the amount due. In such
event, if the Borrowers have not in fact made such payment, then each of the
Domestic Lenders or Canadian Lenders, as applicable, or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent or the
Canadian Agent, as applicable, forthwith on demand the amount so distributed to
such Domestic Lender, Canadian Lender or Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, or the Canadian
Agent, as applicable, at the Federal Funds Effective Rate or, with respect to
the Canadian Lenders, at the Canadian Prime Rate.

     

    (e) If
any Domestic Lender or Canadian Lender shall fail to make any payment required
to be made by it pursuant to this Agreement, then the Administrative Agent or
the Canadian Agent, as applicable, may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent or the Canadian Agent, as applicable, for the account of
such Domestic Lender or Canadian Lender to satisfy such Lender’s obligations
under this Agreement until all such unsatisfied obligations are fully
paid.

     

    SECTION
2.28. Taxes.

     

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

     

    (b) In
addition, the Borrowers shall pay any Other Taxes to the relevant Governmental
Authority in accordance with Applicable Law.

     

    (c) The
Borrowers shall indemnify the Agents, each Lender and the Issuing Bank and the
Canadian Borrower shall indemnify the Canadian Agent, each Canadian Lender and
the Issuing Bank of any Letter of Credit on its behalf, within ten (10) Business
Days after written demand therefor, for the full amount of any Indemnified Taxes
or Other Taxes paid by such Agent, such Lender or the Issuing Bank, as the case
may be, on or with respect to any payment by or on account of any obligation of
the Borrowers hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, to the extent that such penalties, interest
and expenses shall not result from any action or inaction on the part of the
Agent, the Lender or the Issuing Bank, as the case may be, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrowers by a Lender or the Issuing Bank,
or by any Agent on its own behalf or on behalf of a Lender or the Issuing Bank
setting forth in reasonable detail the manner in which such amount was
determined, shall be presumptively correct absent manifest
error.

     

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

     

    (e) Any
Foreign Lender other than a Canadian Lender that is entitled to an exemption
from or reduction in withholding tax shall deliver to the Domestic Borrowers and
the Administrative Agent two copies of either United States Internal Revenue
Service Form 1001 or Form 4224, or, in the case of a Foreign Lender’s claiming
exemption from or reduction in U.S. Federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of “portfolio interest”, a Form
W-8, or any subsequent versions thereof or successors thereto (and, if such
Foreign Lender delivers a Form W-8BEN, a certificate representing that such
Foreign Lender is not a bank for purposes of Section 881(c) of the Code, is not
a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Code) of the Domestic Borrowers and is not a controlled foreign corporation
related to the Domestic Borrowers (within the meaning of Section 864(d)(4) of
the Code)), properly completed and duly executed by such Foreign Lender claiming
complete exemption from or reduced rate of, United States federal withholding
tax on payments by the Domestic Borrowers under this Agreement and the other
Loan Documents. Such forms shall be delivered by each Foreign Lender other than
a Canadian Lender on or before the date it becomes a party to this Agreement
(or, in the case of a transferee that is a participation holder, on or before
the date such participation holder becomes a transferee hereunder) and on or
before the date, if any, such Foreign Lender changes its applicable lending
office by designating a different lending office (a “New Lending Office”). In
addition, each Foreign Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Foreign
Lender other than a Canadian Lender. Notwithstanding any other provision of this
Section 2.28(e), a Foreign Lender shall not be
required to deliver any form pursuant to this Section
2.28(e) that such Foreign Lender is not legally able to
deliver.

     

    (f) The
Borrowers shall not be required to indemnify any Foreign Lender or to pay any
additional amounts to any Foreign Lender in respect of U.S. Federal withholding
tax pursuant to paragraph (a) or (c) above to the extent that the obligation to
pay such additional amounts would not have arisen but for a failure by such
Foreign Lender to comply with the provisions of paragraph (e) above. Should a
Lender become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrowers shall, at such Lender’s expense, take such steps as
such Lender shall reasonably request to assist such Lender to recover such
Taxes.

     

    (g) The
Borrowers shall not be required to indemnify any Lender for any tax arising
under Part XIII of the Income Tax Act
(Canada) imposed on any payment made on an assignment or other transfer of all
or any part of a Lender’s interest in any Loan or Letter of Credit made to the
Canadian Borrower to a non-resident of Canada (for purposes of the Income Tax Act
(Canada)) with whom the Canadian Borrower is not dealing at arm’s
length.

     

    (h) If
the Lead Borrower determines in good faith that a reasonable basis exists for
contesting a Tax, the relevant Lender or the Administrative Agent, as
applicable, shall cooperate with the Lead Borrower in challenging such Tax at
the Lead Borrower’s expense, if requested by the Lead Borrower.  If
any Lender or the Administrative Agent, as applicable, obtains a credit against
or receives a refund or reduction (whether by way of direct payment or by
offset) of any Tax for which payment has been made pursuant to this Section,
which credit, refund or reduction in the good faith judgment of such Lender or
the Administrative Agent, as the case may be, (and without any obligation to
disclose its tax records) is allocable to such payment made under this Section,
the amount of such credit, refund or reduction (together with any interest
received thereon) promptly shall be paid to the Lead Borrower or Canadian
Borrower, as applicable, to the extent that payment has been made by the Lead
Borrower in full pursuant to this Section.

     

    SECTION
2.29. Security
Interests in Collateral.

     

    (a) All
of the Obligations are secured by Liens on all the assets of the Domestic Loan
Parties (other than Bankruptcy Recoveries) and, at all times, shall constitute
administrative expenses of the Loan Parties in the Chapter 11 Case with priority
under Section 364(c)(1) of the Bankruptcy Code over any and all other
administrative expenses of the kind specified in Sections 105, 326, 328, 330,
331, 364(c), 503(a), 503(b), 506(c), 507(a), 507(b), 546(c), 546(d), 726, and
1114 of the Bankruptcy Code, subject only to the Professional Fee Carve
Out.  All Liens which secure the Obligations shall constitute first
priority Liens under Section 364(d) of the Bankruptcy Code, subject only to the
Liens securing the Pre-Petition Liabilities and other Permitted Encumbrances
having priority under Applicable Law.  No other claims or Liens having
a priority superior or pari passu to that granted to or on behalf of the Agents
or the Lenders shall be granted or approved while any of the Obligations or the
Commitments remain outstanding.

     

    (b)  All
of the Obligations are secured by Liens on all the assets of the Canadian Loan
Parties and at all times will be entitled to a super priority claim status and
will be secured by a first priority perfected security interest and hypothec in
favor of the Canadian Agent (in each case subject only to (i) the Directors’
Charge, (ii) the Administration Charge and (iii) Permitted Encumbrances having
priority under Applicable Law.  All Liens on the assets of the
Canadian Loan Parties which secure the Obligations shall constitute first
priority Liens, subject only to the Liens securing the Pre-Petition Liabilities
and the items described in subclauses (i) through (iv) above to the extent that
such charges have priority under Applicable Law.  No other claims or
Liens having a priority superior or pari passu to that granted to or on behalf
of the Canadian Agent or the Lenders shall be granted or approved while any of
the Obligations or the Commitments remain outstanding.

     

    SECTION
2.30. Mitigation
Obligations; Replacement of Lenders.

     

    (a) If
any Lender requests compensation under Section 2.25,
or if the Borrowers are required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section 2.28, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the reasonable judgment of such Lender,
such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.25 or Section 2.28, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender. The Borrowers (in the
case of the Canadian Borrower, only in respect of any Canadian Lender) hereby
agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment; provided,
however,
that the Borrowers shall not be liable for such costs and expenses of a Lender
requesting compensation if (i) such Lender becomes a party to this
Agreement on a date after the Closing Date and (ii) the relevant Change in
Law occurs on a date prior to the date such Lender becomes a party
hereto.

     

    (b) If
any Lender requests compensation under Section 2.25,
or if the Borrowers are required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 2.28, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Borrowers may, at their sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section
9.05), all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided
that (i) except in the case of an assignment to another Lender, the
Borrowers shall have received the prior written consent of the Administrative
Agent, the Issuing Bank and Swingline Lender and the Canadian Agent only in the
case of a Canadian Lender, which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in unreimbursed drawings
under Letters of Credit and Swingline Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts) and (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.25 or payments required to be made pursuant
to Section 2.28, such assignment will result in a
reduction in such compensation or payments. A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrowers to
require such assignment and delegation cease to apply.

     

    
      
        
        

      

      
        
        

        
          

        

      

      ARTICLE
III

    

     

    Representations
and Warranties

     

    Each
Loan Party, for itself and on behalf of such Loan Party’s Subsidiaries
represents and warrants to the Agents and the Lenders that:

     

    SECTION
3.01. Organization;
Powers.  Each
Loan Party is, and each of its Subsidiaries is, duly organized, validly existing
and in good standing (to the extent such concept exists) under the laws of the
jurisdiction of its organization, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, and, subject to the entry of the DIP Orders and the
Initial Order, each such Person has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing (to the extent such concept exists) in, every jurisdiction where such
qualification is required.

     

    SECTION
3.02. Authorization;
Enforceability.  The
transactions contemplated hereby and by the other Loan Documents to be entered
into by each Loan Party are within such Loan Party’s corporate powers and, upon
the entry of the DIP Orders, as applicable, and the Initial Order, have been
duly authorized by all necessary corporate, and, if required, stockholder
action. This Agreement has been duly executed and delivered by each Loan Party
that is a party hereto and upon entry of the DIP Orders, as applicable, and the
Initial Order constitutes, and each other Loan Document to which any Loan Party
is a party, when executed and delivered by such Loan Party will constitute, a
legal, valid and binding obligation of such Loan Party (as the case may be),
enforceable in accordance with its terms, subject to the DIP Orders, as
applicable, the Initial Order and general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

     

    SECTION
3.03. Governmental
Approvals; No Conflicts.  »

     

    Subject
to the entry of the DIP Orders, as applicable, and the Initial Order, the
transactions to be entered into as contemplated by the Loan Documents (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except (i) for such as have been obtained
or made and are in full force and effect, (ii) for those for which the failure
to obtain could not be reasonably be expected to have a Material Adverse Effect,
and (iii) for filings, registrations and recordings necessary to perfect and
render opposable Liens created under the Loan Documents, (b) will not violate
any Applicable Law or regulation or the charter, by-laws or other organizational
documents of any Loan Party or any order of any Governmental Authority, except
for such violation which could not reasonably be expected to have a Material
Adverse Effect, (c) will not violate or result in a default under any indenture,
agreement or other instrument entered into after the Petition Date binding upon
any Loan Party or any of its Subsidiaries or their respective assets, except for
such violation or default which could not reasonably be expected to have a
Material Adverse Effect, or give rise to a right thereunder to require any
payment of a material amount to be made by any Loan Party or any of its
Subsidiaries, and (d) will not result in the creation or imposition of any Lien
on any asset of any Loan Party or any of its Subsidiaries, except Liens created
under the Loan Documents, the DIP Orders, the Initial Order or otherwise
permitted hereby or thereby.

     

    SECTION
3.04. Financial
Condition.  

     

    (a) Since
the Petition Date, there has been no event or circumstance, either individually
or in the aggregate, that has had or could reasonably be expected to have a
Material Adverse Effect.

     

    SECTION
3.05. Properties.

     

    (a) Each
Loan Party, and each of its Subsidiaries, has good title to, or valid leasehold
interests or rights in, all its real (immoveable) and personal (moveable)
property material to its business, except (i) as an Effect of Bankruptcy, or
(ii) for defects which could not reasonably be expected to have a Material
Adverse Effect.

     

    (b) Each
Loan Party, and each of its Subsidiaries owns, or is licensed to use, all
trademarks, trade names, copyrights, patents and other intellectual property
material to its business, and the use thereof by such Person does not infringe
upon the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

     

    (c) Schedule
3.05(c)(i) sets forth the address of all Real Estate that is owned by
each Loan Party as of the Closing Date, together with a list of the holders of
any mortgage or other Lien thereon. Schedule
3.05(c)(ii) sets forth the address of all Real Estate that is leased by
each Loan Party as of the Closing Date, together with a list of the landlords
and holders of any leasehold mortgage or hypothec thereon granted by a Loan
Party.

     

    SECTION
3.06. Litigation and
Environmental Matters.

     

    (a) With
the exception of the Cases, there are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or, to the
knowledge of any Loan Party or any of its Subsidiaries, threatened against any
such Person or involving any of the Loan Documents, which could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect (other than those set forth on Schedule
3.06).

     

    (b) Except
for the matters set forth on Schedule
3.06, and except as could not reasonably be expected to have a Material
Adverse Effect, no Loan Party and no Subsidiary of any Loan Party (i) has failed
to comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv) knows of any basis for
any Environmental Liability.

     

    (c) Since
the date of this Agreement, there has been no change in the status of the
matters set forth on Schedule
3.06 that, individually or in the aggregate, has resulted in, or could
reasonably be expected to result in, a Material Adverse
Effect.

     

    SECTION
3.07. Compliance
with Laws and Agreements.  Each
Loan Party, and each of its Subsidiaries, is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all Material Contracts and Material Indebtedness binding upon it or
its property, except (a) where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, or (b) as an Effect of Bankruptcy.  No Default has occurred
and is continuing, except as an Effect of Bankruptcy.

     

    SECTION
3.08. Investment
Company Status.
No Loan Party nor any Subsidiary of any Loan Party is an “investment company” as
defined in, or subject to regulation under, the Investment Company Act of
1940.

     

    SECTION
3.09. Taxes.  Each
Loan Party, and each of its Subsidiaries, has timely filed or caused to be filed
all tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes incurred after the Petition Date, except (a) Taxes that are
being contested in good faith by appropriate proceedings, for which such Person
has set aside on its books adequate reserves, and as to which no Lien has
arisen, or (b) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.

     

    SECTION
3.10. ERISA.  Except
as set forth on Schedule
3.10, as of the Closing Date, none of the Loan Parties is party to a
Plan.  No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability
is reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. Except as set forth on Schedule
3.10, the present value of all accumulated benefit obligations under each
Plan (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed the fair market value of
the assets of such Plan.

     

    SECTION
3.11. Disclosure.  None
of the reports, financial statements, certificates or other written information
(other than projections, Budgets, forward looking information or general market
data) furnished by or on behalf of any Loan Party or any of its Subsidiaries to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement or any other Loan Document or delivered hereunder or thereunder
(as modified or supplemented by other information so furnished) contains (when
taken as a whole) any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading, provided
that with respect to projected or pro forma financial information, the Loan
Parties represent only that such information was prepared in good
faith.

     

    SECTION
3.12. Subsidiaries. 

     

    (a) Schedule 3.12
sets forth the name of each Loan Party, and the ownership interest of each Loan
Party in each of its Subsidiaries, as of the Closing Date. All of the
outstanding ownership interests in such Subsidiaries have been validly issued,
are fully paid and non-assessable (to the extent such concept exists) and there
is no other capital stock or ownership interest of any class outstanding as of
the Closing Date. Except as set forth on Schedule
3.12, as of the Closing Date, the Loan Parties are not and each of their
respective Subsidiaries is  not party to any joint venture, general or
limited partnership, or limited liability company, agreements or any other
business ventures or entities.  The copies of the Organization
Documents of each Loan Party and each amendment thereto provided pursuant to
Section 4.01 are true and correct copies of each such document, each of which is
valid and in full force and effect as of the Closing Date.

     

    (b) The
Subsidiaries of the Lead Borrower designated with an asterisk on Schedule
3.12 do not, and will not, own any assets valued in excess of $100,000 or
conduct any business operations and are and shall remain
inactive.

     

    SECTION
3.13. Insurance.  Schedule
3.13 sets forth a description of all insurance maintained by or on behalf
of the Loan Parties and their respective Subsidiaries as of the Closing Date. As
of the Closing Date, each of such policies is in full force and effect. As of
the Closing Date, all premiums in respect of such insurance that are due and
payable have been paid.

     

    SECTION
3.14. Labor
Matters.  There
are no strikes, lockouts or slowdowns against any Loan Party or any of its
Subsidiaries pending or, to the knowledge of the Borrowers, threatened to the
extent that any such action could reasonably be expected to have a Material
Adverse Effect.  The hours worked by and payments made to employees of
the Loan Parties and their respective Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable federal, state, provincial,
territorial, local or foreign law dealing with such matters to the extent that
any such violation could reasonably be expected to have a Material Adverse
Effect. All payments due from any Loan Party or any of its Subsidiaries, or for
which any claim may be made against any such Person, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of such member, except for such payments or
claims as could not reasonably be expected to have a Material Adverse
Effect.  The consummation of the transactions contemplated by the Loan
Documents will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which any Loan Party or any of its Subsidiaries is bound. Except as set forth
on Schedule
3.14, no Loan Party or any Subsidiary is a party to or bound by any
collective bargaining agreement, management agreement, employment agreement,
bonus, restricted stock, stock option, or stock appreciation plan or agreement
or any similar plan, agreement or arrangement as of the Closing Date. There are
no representation proceedings pending or, to any Loan Party’s knowledge,
threatened to be filed with the National Labor Relations Board or any other
applicable Governmental Authority, and no labor organization or group of
employees of any Loan Party or any Subsidiary has made a pending demand for
recognition, except for such proceedings or demands that could not reasonably be
expected to have a Material Adverse Effect. Except as set forth on Schedule
3.14, there are no complaints, unfair labor practice charges, grievances,
arbitrations, unfair employment practices charges or any other claims or
complaints against any Loan Party or any Subsidiary pending or, to the knowledge
of any Loan Party, threatened to be filed with any Governmental Authority or
arbitrator based on, arising out of, in connection with, or otherwise relating
to the employment or termination of employment of any employee of any Loan Party
or any of its Subsidiaries, except for such complaints, charges, grievances or
arbitrations that could not reasonably be expected to have a Material Adverse
Effect.

     

    SECTION
3.15. Security
Documents.  Upon
entry of the DIP Orders and the Initial Order, the Security Documents, the DIP
Orders and the Initial Order, collectively, will create in favor of the
Collateral Agent or the Canadian Agent, as applicable, for the ratable benefit
of the Secured Parties, a legal, valid and enforceable security interest in the
Collateral, subject to the DIP Orders and the Initial Order, and the Security
Documents constitute, or will upon entry of the DIP Orders or the Initial Order,
as applicable, and/or the filing of financing statements or other requisite
registrations or assignments and the obtaining of “control”, in each case with
respect to the relevant Collateral as required under the applicable Uniform
Commercial Code or similar legislation of any jurisdiction including, without
limitation, the PPSA and the Civil Code of Québec, the creation of a fully
perfected and opposable first priority Lien on, and security interest in, and
hypothecation of, all right, title and interest of the Loan Parties thereunder
in such Collateral, in each case prior and superior in right to any other
Person, except as permitted hereunder or under any other Loan
Document.

     

    SECTION
3.16. Federal
Reserve Regulations.

     

    (a) Neither
the Borrowers nor any of their respective Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of buying or carrying Margin Stock.

     

    (b) No
part of the proceeds of any Loan or any Letter of Credit will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, (i)
to buy or carry Margin Stock or to extend credit to others for the purpose of
buying or carrying Margin Stock or to refund indebtedness originally incurred
for such purpose or (ii) for any purpose that entails a violation of the
provisions of the Regulations of the Board, including Regulation U or
X.

     

    SECTION
3.17. Intentionally
Omitted. 

     

    SECTION
3.18. Material
Contracts.

     

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

     

    SECTION
3.19. Bailees,
Warehousemen, etc.

     

    Except for Inventory, the value of which does not at any
time exceed $50,000,000 on an aggregate basis as to all Borrowers, no Inventory
is in the care or custody of any third party or stored or entrusted with a
bailee or other third party and none shall hereafter be placed under such care,
custody, storage, or entrustment except for goods in
transit.

     

    SECTION
3.20. Consignment.

     

    No Borrower has, and none shall have, possession of any
property on consignment, the value of which at any time exceeds $300,000,000 on
an aggregate basis as to all Borrowers.

    
      
        
        

      

      
        
        

        
          

        

      

      ARTICLE
IV

    

     

    Conditions

    SECTION
4.01. Closing
Date.  This
Agreement shall not become effective until the date on which each of the
following conditions precedent have been satisfied or waived by the
Administrative Agent:

     

    (a) The
Administrative Agent (or its counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement and all other Loan Documents
(including, without limitation, the Notes and the Security Documents) signed on
behalf of such party or (ii) written evidence reasonably satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement and all other Loan Documents.

     

    (b) The
Administrative Agent shall have received a favorable written opinion (addressed
to each Agent and the Lenders on the Closing Date and dated the Closing Date) of
Kirkland and Ellis LLP, counsel for the Domestic Borrowers, covering such
matters relating to the Loan Parties, the Loan Documents or the transactions
contemplated thereby as the Administrative Agent shall reasonably request. The
Borrowers hereby request such counsel to deliver such
opinions.

     

    (c) The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each Loan Party, the authorization
of the transactions contemplated by the Loan Documents and any other legal
matters relating to the Loan Parties, the Loan Documents or the transactions
contemplated thereby, all in form and substance reasonably satisfactory to the
Administrative Agent and its counsel.

     

    (d) The
Administrative Agent shall have received a certificate, reasonably satisfactory
in form and substance to the Administrative Agent, certifying that, as of the
Closing Date, the representations and warranties made by the Loan Parties in the
Loan Documents are true and complete in all material respects and that no event
has occurred (or failed to occur) which is or which, solely with the giving of
notice or passage of time (or both) would be a Default or an Event of
Default.

     

    (e) All
motions and other documents to be filed with and submitted to the US Bankruptcy
Court and the Canadian Bankruptcy Court in connection with the DIP Orders and
the Initial Order shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders.  The Interim Borrowing
Order and the Initial Order shall each have been entered, shall be in full force
and effect, and neither shall have been reversed, vacated or stayed, or modified
without the prior written consent of the Administrative Agent and the Required
Lenders, and all other necessary consents and approvals to the transactions
contemplated hereby shall have been obtained and shall be reasonably
satisfactory to the Administrative Agent.

     

    (f) The
US Bankruptcy Court shall have entered an order granting the lenders under the
Pre-Petition Agreement adequate protection of their interests, which order shall
be in form and substance reasonably acceptable to the Administrative Agent and
the Required Lenders.

     

    (g) The
Administrative Agent shall have received (i) an appraisal, in form and substance
reasonably satisfactory to the Administrative Agent, performed by an appraiser
reasonably acceptable to the Administrative Agent of the Inventory of the
Borrowers, and (ii) a commercial finance examination in form and substance
reasonably satisfactory to the Administrative Agent relating to inspections,
audits and field searches (which may include conversations with responsible
officers and employees) of each Borrower’s assets (including, without
limitation, accounts receivable and inventory), liabilities, books and records,
management information systems, cash management, vendor agreements and other
material agreements.

     

    (h) The
Administrative Agent shall be reasonably satisfied that any financial statements
delivered to them fairly present the business and financial condition of the
Lead Borrower and its Subsidiaries, and that, except as result of the
commencement of the Cases and the events leading up to and resulting therefrom,
there has been no material adverse change in the assets, business, financial
condition, or income of the Lead Borrower and its Subsidiaries (taken as a
whole) since the date of the most recent financial statements delivered to the
Administrative Agent.

     

    (i) The
Administrative Agent shall have received a Borrowing Base Certificate dated as
of the Closing Date.

     

    (j) The
Collateral Agent and the Canadian Agent shall have received results of searches
or other evidence reasonably satisfactory to the Collateral Agent or the
Canadian Agent, as applicable (in each case dated as of a date reasonably
satisfactory to the Collateral Agent or the Canadian Agent, as applicable)
indicating the absence of Liens on the Collateral and proceeds thereof,
including without limitation, receivables from credit card processors, except
for Liens for which termination statements and releases reasonably satisfactory
to the Collateral Agent or the Canadian Agent, as applicable, are being tendered
concurrently with such extension of credit or are otherwise permitted
hereunder.

     

    (k) The
Collateral Agent and the Canadian Agent shall be reasonably satisfied that the
Liens of the Collateral Agent and the Canadian Agent on the Collateral
constitute first priority perfected Liens (subject to Permitted Encumbrances
having priority by operation of law or by court order).

     

    (l) The
Collateral Agent and the Canadian Agent, as applicable, shall have received the
DDA Notifications, the Blocked Account Agreements and Credit Card Notifications
required to be delivered hereunder on or before the Closing
Date.

     

    (m) All
fees due at or immediately after the Closing Date and all reasonable invoiced
costs and out-of-pocket expenses incurred by the Administrative Agent, the
Co-Collateral Agent and the Canadian Agent in connection with the establishment
of the credit facility contemplated hereby (including the reasonable fees and
out-of-pocket expenses of counsel to the Administrative Agent and the Canadian
Agent and local bankruptcy counsel for each of them and local counsel in Canada,
as necessary, and of the Co-Collateral Agent) shall have been paid in full in
cash.

     

    (n) No
material changes in governmental regulations or policies regulating the Loan
Parties, the Agents, the Arranger or any Lender involved in this transaction
shall have occurred prior to the Closing Date which could, individually or in
the aggregate, materially and adversely effect the transaction contemplated by
this Agreement.

     

    (o) After
giving effect to the transactions contemplated hereby and by the other Loan
Documents, there shall be no Default or Event of Default on the Closing
Date.

     

    (p) The
Collateral Agent and, in respect of the Canadian Borrower and its Subsidiaries,
the Canadian Agent, shall have received, and be reasonably satisfied with,
evidence of the Loan Parties’ insurance, together with such endorsements as are
required by the Loan Documents.

     

    (q) The
Agents and the Lenders shall have received the initial Budget and a reasonably
detailed professional fee budget, each of which shall be in form and substance
reasonably satisfactory to the Administrative Agent and the Required
Lenders.

     

    (r) All
first day motions and applications and other documents to be filed with and
submitted to the US Bankruptcy Court and the Canadian Bankruptcy Court in
connection with this Agreement (other than the DIP Orders and the Initial Order
which are subject to the provisions of Section 4.01(e)) shall be in form and
substance reasonably satisfactory to the Administrative
Agent.

     

    (s) There
shall have been delivered to the Administrative Agent and/or the Canadian Agent
such additional instruments and documents as the Administrative Agent or its
counsel reasonably may require or request.

     

    The Administrative Agent shall notify the Borrowers and the
Lenders of the Closing Date, and such notice shall be conclusive and
binding.

     

    SECTION
4.02. Conditions
Precedent to Each Loan and Each Letter of
Credit.

     

    The
obligation of the Lenders to make each Revolving Loan and of the Issuing Bank to
issue each Letter of Credit, is subject to the following conditions
precedent:

     

    (a) Notice.
The Administrative Agent shall have received a notice with respect to such
Borrowing or issuance, as the case may be, as required by Article
II.

     

    (b) Representations
and Warranties. All representations and warranties contained in this
Agreement and any Borrowing Base Certificate shall be true and correct in all
material respects on and as of the date of each Borrowing or the issuance of
each Letter of Credit hereunder with the same effect as if made on and as of
such date, other than representations and warranties that relate solely to an
earlier date.

     

    (c) Intentionally
Omitted.

     

    (d) No
Default. On the date of each Borrowing hereunder and the issuance of each
Letter of Credit and after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing.

     

    (e) Borrowing Base
Certificate. The Administrative Agent shall have received
the  most recently required Borrowing Base Certificate, with each such
Borrowing Base Certificate including schedules as required by this
Agreement.

     

    The request
by the respective Borrowers for, and the acceptance by the respective Borrowers
of, each extension of credit hereunder shall be deemed to be a representation
and warranty by the respective Borrowers that the conditions specified in this
Section
4.02(b) and
(d) have
been satisfied at that time and that after giving effect to such extension of
credit the respective Borrowers shall continue to be in compliance with the
Borrowing Base.  The conditions set forth in this Section
4.02 are
for the sole benefit of the Administrative Agent and each Lender and may be
waived by the Administrative Agent in whole or in part without prejudice to the
Administrative Agent or any Lender.

    
      
        
        

        
          

        

      

      ARTICLE
V

    

     

    Affirmative
Covenants

     

    Until
the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full in cash and all Letters of Credit shall have expired or terminated or cash
collateralized in a manner reasonably acceptable to the Issuing Bank and all L/C
Disbursements shall have been reimbursed, each Loan Party covenants and agrees
with the Agents and the Lenders that:

     

    SECTION
5.01. Financial
Statements and Other Information

     

    (a) The
Borrowers will furnish to the Administrative Agent for further distribution to
the Lenders:

     

    (i) within
thirty (30) days after the end of each fiscal month of the Lead Borrower, its
consolidated balance and related statements of operations, stockholders’ equity
and cash flows as of the end of and for such fiscal month and for the elapsed
portion of the current fiscal year, with comparative results to the same fiscal
periods of the prior fiscal year, in each case certified by one of its Financial
Officers as presenting in all material respects the financial condition and
results of operations of the Lead Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP, subject to normal year end audit
adjustments and the absence of footnotes; and

     

    (ii) concurrently
with any delivery of financial statements under clause (i) above, a certificate
of a Financial Officer of the Lead Borrower substantially in the form of Exhibit
C (i) certifying, to the best knowledge of such Financial Officer, as to
whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, and (ii) stating whether any change in GAAP or in the application
thereof has occurred since the date of the Lead Borrower’s most recent audited
financial statements, and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such certificate;
and

     

    (iii) Contemporaneously
with the delivery of the first Borrowing Base Certificate in any calendar month,
a summary of the then Reported Fee Accruals as of the end of the previous
calendar month (or more frequently at the Lead Borrower’s election);
and

     

    (iv) promptly
after the same become publicly available, copies of all reports on Forms 10-K
and 10-Q and proxy statements filed by the Lead Borrower with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or all of
the functions of said Commission, or with any national securities exchange, as
the case may be.

     

    (b) The
Borrowers will furnish to the Administrative Agent (for further distribution to
the Lenders with respect to the items set forth in clauses (i) through (iv) and
(vi) through (ix) below) and the Co-Collateral Agent:

     

    (i) On
Wednesday of each week (or, if Wednesday is not a Business Day, on the next
succeeding Business Day), a Variance Report; and

     

    (ii) On
the 10th day of
each calendar month (or, if such day is not a Business Day, on the next
succeeding Business Day), an updated Budget; and

     

    (iii) Daily,
a certificate substantially in the form of Exhibit
D-1 (a “Borrowing Base
Certificate”) showing the Borrowing Base as of the close of business on
the immediately preceding day, each Borrowing Base Certificate to be certified
as complete and correct in all material respects on behalf of the Lead Borrower
by a Financial Officer of the Lead Borrower; provided that prior to December 15,
2008, the amount of Eligible Inventory shall be required to be updated only
weekly, and thereafter the amount of Eligible Inventory shall be updated daily
based on sales made the previous day and conformed weekly to the Stock Ledger;
and

     

    (iv) Until
the earlier of (a) January 17, 2009 (or such later date as agreed to by the
Canadian Lenders) and (b) the date upon which the Term Loan is funded, daily, a
certificate substantially in the form of Exhibit
D-2 (a “Canadian
Borrowing Base
Certificate”) showing the Canadian Borrowing Base as of the close of
business on the immediately preceding day, each Canadian Borrowing Base
Certificate to be certified as complete and correct in all material respects on
behalf of the Canadian Borrower by a Financial Officer of the Lead Borrower;
provided that the amount of Eligible Inventory shall be required to be updated
only weekly; and

     

    (v) The
financial and collateral reports described on Schedule
5.01(A) at the times set forth in such Schedule; and

     

    (vi) after
the occurrence and during the continuance of an Event of Default, promptly upon
receipt thereof, copies of all reports submitted to the Lead Borrower by
independent certified public accountants in connection with each annual, interim
or special audit of the books of the Lead Borrower and its Subsidiaries made by
such accountants, including any management letter submitted by such accountants
to management in connection with their annual audit, but excluding any
accountant “agreed upon procedures” report; and

     

    (vii) promptly
after the furnishing or filing thereof, copies of any statement, report or
pleading furnished to or filed with the US Bankruptcy Court, the Canadian
Bankruptcy Court or the Creditors’ Committee in connection with the Cases,
including, without limitation, all Monitor’s reports in the Canadian Bankruptcy
Case; provided that the receipt of such documents by counsel to the
Administrative Agent and the Co-Collateral Agent in accordance with normal
noticing provisions and practices under the Bankruptcy Code or the CCAA shall
satisfy this requirement;

     

    (viii) promptly
after receipt thereof, copies of all reconciliations with respect to the Initial
Store Closing Sale; and

     

    (ix) promptly
following any reasonable request therefor, such other information regarding the
operations, business affairs and financial condition of any Loan Party, or
compliance with the terms of any Loan Document, as the Administrative Agent or
any Lender may reasonably request.

     

    Documents
required to be delivered pursuant to Section
5.01 may be delivered electronically and, if so delivered, shall be
deemed to have been delivered on the date (i) on which the Lead Borrower posts
such documents, or provides a link thereto on the Lead Borrower’s website on the
Internet at the website address listed on Schedule
5.01(B); or (ii) on which such documents are posted on the Lead
Borrower’s behalf on an Internet or intranet website, if any, to which each
Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided
that: (i) the Lead Borrower shall deliver paper copies of such documents to the
Administrative Agent or any Lender that requests the Lead Borrower to deliver
such paper copies until a written request to cease delivering paper copies is
given by the Administrative Agent or such Lender and (ii) the Lead Borrower
shall notify the Administrative Agent and each Lender (by telecopier or
electronic mail) of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e.,
soft copies) of such documents.  The Administrative Agent shall have
no obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Loan Parties with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

     

    The
Loan Parties hereby acknowledge that (a) the Administrative Agent will make
available to the Lenders and the Issuing Banks materials and/or information
provided by or on behalf of the Loan Parties hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”)
and (b) certain of the Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with respect
to the Loan Parties or their securities) (each, a “Public
Lender”).  The Loan Parties hereby agree that they will use
commercially reasonable efforts to identify that portion of the Borrower
Materials that may be distributed to the Public Lenders and that (w) all such
Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at
a minimum, shall mean that the word “PUBLIC” shall appear prominently on the
first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Loan Parties
shall be deemed to have authorized the Administrative Agent, the Issuing Banks
and the Lenders to treat such Borrower Materials as not containing any material
non-public information (although it may be sensitive and proprietary) with
respect to the Loan Parties or their securities for purposes of United States
Federal and state securities laws; (y) all Borrower Materials marked “PUBLIC”
are permitted to be made available through a portion of the Platform designated
“Public Investor”; and (z) the Administrative Agent shall be entitled to treat
any Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public
Investor.”

     

    SECTION
5.02. Notices of
Material Events.  The
Borrowers will furnish to the Administrative Agent prompt written notice of the
following:

     

    (a) after
a Financial Officer obtains knowledge thereof, the occurrence of any Default or
Event of Default;

     

    (b) after
a Financial Officer obtains knowledge thereof, the filing or commencement of any
action, suit or proceeding by or before any arbitrator or Governmental Authority
against any Loan Party or any Subsidiary or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect;

     

    (c) after
a Financial Officer obtains knowledge thereof, the occurrence of any ERISA Event
that, alone or together with any other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse
Effect;

     

    (d) after
a Financial Officer obtains knowledge thereof, any other development that
results in, or could reasonably be expected to result in, a Material Adverse
Effect;

     

    (e) any
change in any the Lead Borrower’s executive officers;

     

    (f) after
a Financial Officer obtains knowledge thereof, the filing of any Lien after the
Petition Date for unpaid taxes against any Loan Party;

     

    (g) the
discharge by any Loan Party of their present independent accountants or any
withdrawal or resignation by such independent accountants;

     

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

     

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

     

    Each
notice delivered under this Section shall be accompanied by a statement of a
Financial Officer or other executive officer of the Lead Borrower setting forth
the details of the event or development requiring such notice and, if
applicable, any action taken or proposed to be taken with respect
thereto.

     

    SECTION
5.03. Information
Regarding Collateral.

     

    (a) The
Lead Borrower will furnish to the Administrative Agent prompt written notice of
any change of the following (except that with respect to the events described in
clauses (i), (iii) and (iv), the Lead Borrower shall provide the Administrative
Agent with at least ten (10) days prior written notice of the date that any such
event shall occur): (i) in any Loan Party’s corporate name, (ii) in the location
of any Loan Party’s chief executive office or its principal place of business,
(iii) in any Loan Party’s identity or corporate structure, (iv) in the Canadian
Borrower’s or any of its Subsidiaries’ jurisdictions of operation including any
change in any office or store in which it maintains books or records relating to
Collateral owned by it or any office, store or facility at which Collateral
owned by it is located (including the establishment of any such new office or
facility) or location from which Accounts are invoiced or paid, provided
that such information shall be required to be furnished only quarterly
with the delivery of the financial statements required pursuant to Section
5.01(a)(i) hereof except for notices of jurisdictions, provinces, territories
and locations in which the Canadian Borrower or any other Canadian Loan Party
was not previously operating if the Canadian Agent’s Lien would not be perfected
therein without additional filings or registrations, or (v) in any Loan Party’s
jurisdiction of incorporation, Federal Taxpayer Identification Number or
organizational identification number assigned to it by its jurisdiction of
organization.  Notwithstanding the foregoing, if any Loan Party’s
Federal Taxpayer Identification Number or organizational identification number
assigned to it by its jurisdiction of organization is changed by the applicable
Governmental Authority, Lead Borrower will furnish to the Administrative Agent
prompt written notice of any such change not later than ten (10) days from the
date such Loan Party has been notified by such Governmental Authority of such
change.   The Lead Borrower also agrees promptly to notify the
Administrative Agent if any material portion of the Collateral is damaged or
destroyed.  In addition, the Lead Borrower will furnish to the
Administrative Agent written notice promptly after the end of each fiscal
quarter of any change in any office or store in which it maintains books or
records relating to Collateral owned by it or any office, store or facility at
which Collateral owned by it is located (including the establishment of any such
new office or facility).

     

    (b) Should
any of the information on any of the Schedules hereto become misleading in any
material respect as a result of changes after the Closing Date, the Lead
Borrower shall advise the Administrative Agent in writing of such revisions or
updates as may be necessary or appropriate to update or correct the same; provided
however that no update to any such Schedule shall result in the
modification or expansion of any permissible transactions set forth in Article 6
hereof from those in existence immediately prior to the delivery of such updated
schedules.

     

    SECTION
5.04. Existence;
Conduct of Business.  Subject
to the provisions of the Bankruptcy Code, the Initial Order and the CCAA and
other Applicable Law, each Loan Party will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to comply with its
respective charter, certificate and articles of incorporation, articles of
organization, and/or other organizational documents, as applicable, and by-laws
and/or other instruments which deal with corporate governance, and to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges, franchises, patents, copyrights, trademarks and
trade names used in the conduct of its business, except to the  extent
that failure to perform such obligations would not reasonably be expected to
result in a Material Adverse Effect; provided that the foregoing shall not
prohibit any transaction permitted under Section
6.03 or Section 6.05 or prohibit any such Person
from discontinuing any business or forfeiting any right, license, permit,
privilege, franchise, patent, copyright, trademark or trade name it reasonably
deems appropriate in the ordinary course of business.

     

    SECTION
5.05. Payment of
Obligations.  Subject
to the Effect of Bankruptcy, each Loan Party will, and will cause each of its
Subsidiaries to, pay its Indebtedness and other obligations, including tax
liabilities, in each case to the extent incurred after the Petition Date, before
the same shall become delinquent or in default, except where (a)(i) the validity
or amount thereof is being contested in good faith by appropriate proceedings,
(ii) such Loan Party or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, (iii) such contest
effectively suspends collection of the contested obligation, and (iv) no Lien
secures such obligation or (b) the failure to make payment could not reasonably
be expected to result in a Material Adverse Effect. Nothing contained herein
shall be deemed to limit the rights of the Administrative Agent under Section 2.03(b).

     

    SECTION
5.06. Maintenance of
Properties.  Each
Loan Party will, and will cause each of its Subsidiaries to, keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear, casualty and condemnation each excepted and
with the exception of asset dispositions permitted
hereunder.

     

    SECTION
5.07. Insurance.

     

    (a) Each
Loan Party will, and will cause each of its Subsidiaries to,  (i)
maintain insurance with financially sound and reputable insurers having a rating
of at least A- or better by A.M. Best Rating Guide (or, to the extent consistent
with prudent business practice, a program of self-insurance) on such of its
property and in at least such amounts and against at least such risks as is
customary with companies in the same or similar businesses operating in the same
or similar locations, including commercial general liability insurance against
claims for personal injury or death occurring upon, in or about or in connection
with the use of any properties owned, occupied or controlled by it (including
the insurance required pursuant to the Security Documents); (ii) maintain such
other insurance as may be required by law, except where the failure to do so
would not have a Material Adverse Effect; and (iii) furnish to the
Administrative Agent, promptly following written request, information as to the
insurance carried.  The Administrative Agent acknowledges that the
current insurers of the Loan Parties are reasonably acceptable to the
Administrative Agent.

     

    (b) Commercial
property insurance policies maintained with respect to any Collateral shall be
endorsed or otherwise amended to include (i) a lenders’ loss payable clause, in
form and substance reasonably satisfactory to the Administrative Agent, which
endorsements or amendments shall provide that the insurer shall pay all proceeds
otherwise payable to the Loan Parties under the policies with respect to the
Collateral directly to the Administrative Agent or the Canadian Agent, as the
case may be, and (ii) a provision to the effect that none of the Loan Parties,
the Agents or any other party shall be a coinsurer (it being understood that the
inclusion of a deductible shall not be deemed to cause the Loan Parties to be a
co-insurer).  Commercial general liability policies shall be endorsed
to name the Agents as an additional insured.  Each such policy
referred to in this paragraph also shall provide that it shall not be canceled,
modified or not renewed, except upon not less than 30 days’ prior written notice
thereof by the insurer to the Administrative Agent or the Canadian Agent, as the
case may be. The Domestic Borrowers shall deliver to the Administrative Agent
and the Canadian Borrower shall deliver to the Canadian Agent, prior to the
cancellation, modification or nonrenewal of any such policy of insurance,
evidence of a replacement policy or renewal of a policy previously delivered to
the Administrative Agent or the Canadian Agent, as the case may be, together
with evidence reasonably satisfactory to the Administrative Agent or the
Canadian Agent, as the case may be, of payment of the premium
therefor.

     

    (c) None
of the Agents or the Lenders, or their agents or employees shall be liable for
any loss or damage insured by the insurance policies required to be maintained
under this Section 5.07.  Each Loan Party shall look solely to its
insurance companies or any other parties other than the Agents and the Lenders
for the recovery of such loss or damage and such insurance companies shall have
no rights of subrogation against any Agent or Lender or its agents or
employees.  If, however, the insurance policies do not provide waiver
of subrogation rights against such parties, as required above, then the Loan
Parties hereby agree, to the extent permitted by law, to waive their right of
recovery, if any, against the Agents and the Lenders and their agents and
employees.  The designation of any form, type or amount of insurance
coverage by any Agent under this Section 5.07 shall in no event be deemed a
representation, warranty or advice by such Agent or any Lender that such
insurance is adequate for the purposes of the business of the Loan Parties or
the protection of their properties.

     

    (d) Each
Loan Party will permit any representatives designated by any Agent, upon
reasonable prior notice during normal business hours (unless an Event of Default
then exists and is continuing, in which case no prior notice shall be required
or time periods shall apply), to inspect the insurance policies maintained by or
on behalf of the Loan Parties and to inspect books and records related thereto
and any properties covered thereby, all at such reasonable times and as often as
may be reasonably requested, provided
that the business of the Loan Parties shall not be unreasonably
disrupted. The Loan Parties shall pay the reasonable fees and out-of-pocket
expenses of any representatives retained by the Administrative Agent, the
Collateral Agent or the Canadian Agent to conduct any such
inspection.

     

    SECTION
5.08. Casualty and
Condemnation.  Each
Loan Party will furnish to the Administrative Agent and the Lenders prompt
written notice of any property or other insured damage to any material portion
of the Collateral or the commencement of any action or proceeding for the taking
of any material portion of the Collateral under power of eminent domain or by
condemnation or similar proceeding.

     

    SECTION
5.09. Books and
Records; Inspection and Audit Rights; Appraisals; Accountants; Physical
Inventories.

     

    (a) Each
Loan Party will, and will cause each of its Subsidiaries to, keep proper books
of record and account in which full, true and correct entries are made of all
material dealings and transactions in relation to its business and activities.
Each Loan Party will permit any representatives designated by any Agent, upon
reasonable prior notice (unless an Event of Default then exists and is
continuing), to visit and inspect its properties and to discuss its affairs,
finances and condition with its officers, all at such reasonable times during
normal business hours and as often as may be reasonably requested, provided
that the business of the Loan Parties shall not be unreasonably
disrupted.

     

    (b) Each
Loan Party will, and will cause each of its Subsidiaries to, from time to time
upon the reasonable request of the Administrative Agent or the Canadian Agent,
as the case may be, or the Co-Collateral Agent in accordance with the provisions
of Section 8.18, or the Required Lenders through the Administrative Agent or the
Canadian Agent, as applicable, permit any Agent or professionals (including
investment bankers, consultants, accountants, lawyers and appraisers) retained
by the Agents to conduct appraisals, commercial finance examinations and other
evaluations, including, without limitation, of (i) the Loan Parties’ practices
in the computation of the Borrowing Base and (ii) the assets included in the
Borrowing Base and related financial information such as, but not limited to,
sales, gross margins, payables, accruals and reserves, and pay the reasonable
fees and out-of-pocket expenses of the Administrative Agent, the Collateral
Agent or the Canadian Agent or such professionals with respect to such
evaluations and appraisals. Notwithstanding the foregoing, the Agents and the
Loan Parties acknowledge and agree that so long as no Event of Default has
occurred and is continuing, the Loan Parties shall only be obligated to
reimburse the Agents for (i) four (4) commercial finance examinations following
the Closing Date, (ii) one (1) Inventory appraisal per month following the
Closing Date, provided
that if, commencing five months after the Petition Date, Excess Availability is
not less than (x) 35% of the lesser of the Total Commitments or the Borrowing
Base for five consecutive Business Days or (y) 25% of the lesser of the Total
Commitments or the Borrowing Base at any time, Inventory appraisals will only be
undertaken on a quarterly basis; provided
that,  if any Event of Default shall have occurred and be
continuing, the Loan Parties shall pay the reasonable costs of all appraisals
and commercial finance examinations undertaken by the Agents during the
continuation of such Event of Default, provided
further that nothing contained in this sentence shall limit the right of
the Agents to undertake additional appraisals and commercial finance
examinations at their expense if no Event of Default then
exists.

     

    (c) The
Loan Parties shall, at all times, retain independent certified public
accountants who are nationally recognized or are otherwise reasonably
satisfactory to the Administrative Agent and shall instruct such accountants to
cooperate with, and be available to, the Administrative Agent or its
representatives to discuss the Loan Parties’ financial performance, financial
condition, operating results, controls, and such other matters, within the scope
of the retention of such accountants, as may be raised by the Administrative
Agent, provided that the Lead Borrower shall be given the opportunity to be
present at any discussions with such independent
accountants.

     

    (d) The
Borrowers, at their own expense, shall cause not less than one (1) physical
inventory to be undertaken in each twelve (12) month period conducted by such
inventory takers as are reasonably satisfactory to the Administrative Agent or
the Canadian Agent, as the case may be, and the Lead Borrower and following such
methodology as is consistent with the methodology used in the immediately
preceding physical inventory or as otherwise may be reasonably satisfactory to
the Administrative Agent or the Canadian Agent, as the case may be, and the Lead
Borrower. The Administrative Agent or the Canadian Agent, as the case may be, at
the reasonable expense of the Borrowers, may participate in and/or observe each
scheduled physical count of Inventory which is undertaken on behalf of any
Borrower. The Lead Borrower, within seventy-five (75) days following the
completion of such inventory, shall provide the Administrative Agent or the
Canadian Agent, as the case may be, with a reconciliation of the results of each
such inventory (as well as of any other physical inventory undertaken by any
Borrower) and shall post such results to the Stock Ledger and, as applicable to
the Borrowers’ other financial books and records.

     

    SECTION
5.10. Compliance
with Laws.  Each
Loan Party will, and will cause each of its Subsidiaries to, comply with all
laws, rules, regulations and orders of any Governmental Authority applicable to
it or its property, except (a) as otherwise permitted under the Bankruptcy Code,
the CCAA, the DIP Orders or the Initial Order, or (b) where the failure to do
so, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.

     

    SECTION
5.11. Use of
Proceeds and Letters of Credit.  
The
proceeds of Loans made hereunder and Letters of Credit issued hereunder will be
used only (a) to repay the Pre-Petition Liabilities, (b) to finance the
acquisition of working capital assets of the Borrowers, including the purchase
of inventory and equipment in the ordinary course of business, (c) to finance
capital expenditures of the Borrowers, (d) to pay fees, costs and expenses in
connection with the transactions contemplated hereby, and to the extent approved
by the Bankruptcy Courts and as set forth in the DIP Orders and the Initial
Order, in connection with the Cases, (e) for other payments permitted to be made
by the DIP Orders, the Initial Order and any other order of the US Bankruptcy
Court or Canadian Bankruptcy Court, and (f) for general corporate purposes, in
each case to the extent expressly permitted under Applicable Law, the Loan
Documents, the DIP Orders, the Initial Order and in accordance with the Budget,
subject to Section 5.17.  No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U and
X.

     

    SECTION
5.12. Future
Subsidiaries.  Upon
the formation or acquisition, after the Closing Date, of any Subsidiary of any
Loan Party, such Subsidiary shall, promptly following the request of the
Administrative Agent, execute and deliver a joinder to this Agreement and the
other Loan Documents as an additional “borrower” or a Guaranty of the
Obligations and the Other Liabilities and a security agreement granting a Lien
in such of its assets of the same nature and type as constitute Collateral, all
such documents to be in form and substance reasonably satisfactory to the
Administrative Agent.  Nothing contained in this Section shall permit
any Loan Party to form or acquire any Subsidiary which is otherwise prohibited
by this Agreement.

     

    SECTION
5.13. Further
Assurances. 

     

    (a) Each
Loan Party and its Subsidiaries will execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements and other
documents), that may be required under any Applicable Law, or which any Agent or
the Required Lenders may reasonably request, to effectuate the transactions
contemplated by the Loan Documents or to grant, preserve, protect or perfect the
Liens created or intended to be created by the Security Documents or the
validity or priority of any such Lien, all at the expense of the Loan Parties.
The Loan Parties also agree to provide to the Collateral Agent and the Canadian
Agent, from time to time promptly following a reasonable request, evidence
reasonably satisfactory to the Collateral Agent and the Canadian Agent as to the
perfection and priority of the Liens created or intended to be created by the
Security Documents.

     

    (b) Upon
the reasonable request of the Administrative Agent, each Domestic Borrower shall
use commercially reasonable efforts to cause each of its customs brokers to
deliver a Customs Broker Agreement to the Collateral Agent covering such matters
and in such form as the Administrative Agent may reasonably
require.

     

    SECTION
5.14. Material
Contracts.  

     

    Except as otherwise permitted under the Bankruptcy Code,
the CCAA, the DIP Orders, the Initial Order, or any Final Order made in the
Canadian Bankruptcy Case, the Loan Parties shall perform and observe all the
terms and provisions of each Material Contract to be performed or observed by
them, maintain each such Material Contract in full force and effect, enforce
each such Material Contract in accordance with its terms, take all such action
to such end as may be from time to time reasonably requested by the
Administrative Agent and, promptly following a reasonable request of the
Administrative Agent, make to each other party to each such Material Contract
such demands and requests for information and reports or for action as any Loan
Party or any of its Subsidiaries is entitled to make under such Material
Contract, and cause each of its Subsidiaries to do so, except, in each case,
where the failure to do so, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse
Effect.

     

    SECTION
5.15. Term
Loan.

     

    By
no later than January 17, 2009 (or such later date to which the Loan Parties,
the Administrative Agent and the Required Lenders may otherwise
agree),

     

    (a)           the
Term Loan shall have closed on terms and evidenced by documents reasonably
acceptable to the Administrative Agent and the Required Lenders,
and

     

    (b)           the
Borrowers shall have received the Net Proceeds therefrom and such Net proceeds
shall have been applied to the Pre-Petition Liabilities and the Obligations as
set forth herein, in the Initial Order and in the DIP Orders; and

     

    (c)           the
Administrative Agent and the Canadian Agent shall have entered into the
Intercreditor Agreement, in form and substance reasonably satisfactory to the
Administrative Agent, the Canadian Agent and the Required Lenders.

     

    SECTION
5.16. Retention of
Independent Consultant.

     

    Until
such time as all Pre-Petition Liabilities and all Obligations have been repaid
in full in cash (other than contingent indemnification Obligations for which a
claim has not been asserted) and all Commitments thereunder have been
terminated, the Borrowers shall continue to retain the Independent Consultant to
assist the Borrowers with preparation of the Budget and the other financial and
collateral reporting required to be delivered to the Administrative Agent
pursuant to this Agreement, to assist in the consummation of any Permitted
Sales, and to perform financial and restructuring services on terms reasonably
satisfactory to the Agents.

     

    SECTION
5.17. Performance
Within Budget.

     

    The
Domestic Borrowers shall perform in accordance with the Budget with respect to
the following: (i) the Domestic Borrowers’ total cash expenditures (excluding
disbursements for the purchase of Inventory) shall not be greater than 110% of
the projected total amount set forth in the Budget, and (ii) the average amount
of Eligible Inventory per retail store of the Domestic Borrowers shall not be
less than $1,300,000.

     

    The
covenant described in (A) clause (i) shall be tested each week pursuant to the
Variance Report delivered by the Lead Borrower to the Administrative Agent on
Wednesday of each week for the immediately preceding week, beginning on December
13, 2008 on a cumulative basis during the period from the Petition Date to
December 13, 2008 and, thereafter, on a four (4) week trailing basis, and (B)
clause (ii) shall be tested each week beginning on January 10,
2009.

     

    SECTION
5.18. Bankruptcy
Related Affirmative Covenants.

     

    (a) Within
thirty (30) days after the Petition Date (or such later date to which the Loan
Parties, the Administrative Agent and the Required Lenders may otherwise agree),
the Domestic Borrowers shall have obtained an order of the US Bankruptcy Court
extending the time period of the Domestic Borrowers to assume or reject Leases
to not less than 210 days from the Petition Date.

     

    (b) On
or before November 14, 2008 (or such later date to which the Loan Parties, the
Administrative Agent and the Required Lenders may otherwise agree), the Domestic
Borrowers shall file (i) a motion seeking authority to reject the Identified
Leases, and (ii) a motion seeking authority to assume the Agency Agreement for
the sale of the Domestic Borrowers’ Inventory, fixtures and equipment at the
locations covered by the Identified Leases (the “Initial Store
Closing Sale”), all of the foregoing to be on terms reasonably acceptable
to the Administrative Agent.

     

    (c) By
no later than November 24, 2008 (or such later date to which the Loan Parties,
the Administrative Agent and the Required Lenders may otherwise agree), the
Domestic Borrowers shall have obtained a US Bankruptcy Court order approving the
assumption of the Agency Agreement (the “Initial Store
Closing Sale Order”), on terms reasonably acceptable to the
Administrative Agent.  The Net Proceeds from the Initial Store Closing
Sale shall be paid directly to the Administrative Agent for application to the
Prepetition Liabilities and thereafter to the Obligations in accordance with the
terms hereof.

     

    (d) By
no later than the Lease Assumption Reserve Commencement Date, the Domestic
Borrowers shall have prepared and distributed informational packages soliciting
bids from potentially interested parties for the sale of their assets. 
Prior to the Lease Assumption Reserve Commencement Date, the Domestic Borrowers
(i) shall have entered into a stalking horse bid (on an equity basis) on terms
reasonably acceptable to the Administrative Agent with respect to the sale of
their assets, which shall be conducted pursuant to bidding procedures and agency
documents, each in form and substance reasonably acceptable to Administrative
Agent and the Required Lenders, and (ii) filed a motion seeking the approval of
a sales procedures order in connection with such stalking horse bid and bidding
procedures, in form and substance reasonably acceptable to the Administrative
Agent and the Required Lenders. The Domestic Borrowers shall provide the
Administrative Agent copies of any informational packages provided to potential
bidders, draft agency agreements, the deadlines established as to receipt of
bids and, promptly following the reasonable request of the Administrative Agent,
a status report and updated information relating to the Permitted Store Closings
and copies of any such bids and any updates, modifications or supplements to
such information and materials

     

    (e) By
no later than March 1, 2009, the Domestic Borrowers shall file a Plan of
Reorganization and Disclosure Statement, which Plan of Reorganization provides
for payment in full of the Pre-Petition Liabilities and the Obligations upon the
Consummation Date and which shall otherwise be reasonably acceptable to the
Required Lenders.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
VI

     

    Negative
Covenants

     

    Until
the Commitments have expired or terminated and the principal of and interest on
each Loan and all fees payable hereunder have been paid in full in cash and all
Letters of Credit have expired or terminated or cash collateralized in a manner
reasonably acceptable to the Issuing Bank, and all L/C Disbursements shall have
been reimbursed, each Loan Party covenants and agrees with the Agents and the
Lenders that:

     

    SECTION
6.01. Indebtedness
and Other Obligations.
The Loan Parties will not, and will not permit any of their respective
Subsidiaries to, create, incur, assume or permit to exist any Indebtedness,
except:

     

    (a) Indebtedness
created under the Loan Documents;

     

    (b) Indebtedness
incurred prior to the Petition Date;

     

    (c) Indebtedness
of any Loan Party to any other Loan Party otherwise permitted hereunder; provided
that the principal amount of any Indebtedness owed to the Domestic Loan Parties
by the Canadian Loan Parties, together with Investments by the Domestic Loan
Parties in the Canadian Loan Parties, shall not exceed $75,000,000 at any time
outstanding;

     

    (d) Indebtedness
created under the loan documents governing the Term Loan;

     

    (e) the
Pre-Petition Liabilities;

     

    (f) Indebtedness
under Hedging Agreements with any Lender or an Affiliate of a
Lender;

     

    (g) Indebtedness
which may be deemed to exist pursuant to any guaranties, performance, surety,
statutory, appeal or similar obligations incurred in the ordinary course of
business;

     

    (h) Indebtedness
existing on the Closing Date, described in Schedule
6.01, but not any extensions, renewals or replacements of such
Indebtedness (other than extensions, renewals or replacements of Indebtedness
relating to Capital Lease Obligations);

     

    (i) Indebtedness
incurred to finance insurance premiums and owing to the applicable insurance
company providing the applicable policy; and

     

    (j) Other
Indebtedness in an aggregate principal amount not to exceed $1,000,000
outstanding at any time.

     

    SECTION
6.02. Liens.  The
Loan Parties will not create, incur, or assume any Lien on any property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof,
except:

     

    (a) Liens
created under the Loan Documents;

     

    (b) Permitted
Encumbrances;

     

    (c) any
Lien on any property or asset of any Loan Party set forth in Schedule
6.02, provided
that (i) such Lien shall not apply to any other property or asset of any Loan
Party and (ii) such Lien shall secure only those obligations that it secures as
of the Closing Date, and extensions, renewals and replacements thereof that do
not increase the outstanding principal amount thereof; and

     

    (d) Liens
securing the Term Loan;

     

    (e) Liens
securing the Pre-Petition Liabilities;

     

    (f) Subject
to the limitations contained in Section 3.20, Liens arising out of consignment
arrangements for the sale of goods entered into by any Loan Party in the
ordinary course of business in accordance with the past practices of such Loan
Party;

     

    (g) Liens
securing Indebtedness permitted by Section 6.01(i) (solely with respect to such
insurance policies and the proceeds thereof);

     

    (h) Liens
arising by operation of law under Article 2 of the UCC in favor of reclaiming
seller of goods or buyer of goods;

     

    (i) Security
given to a public or private utility or any governmental authority as required
in the ordinary course of business;

     

    (j) Liens
in the nature of the right of setoff in favor of counterparties (including
depositories) to contractual agreements with the Loan Parties in the ordinary
course of business;

     

    (k) Liens
granted to a joint venture composed of Hilco Merchant Resources, LLC and Gordon
Brothers Retail Partners, LLC pursuant to the Agency Agreement; provided that
the Collateral Agent shall have entered into an intercreditor agreement with
such Persons on terms reasonably acceptable to the Collateral
Agent;

     

    (l) Liens
granted to vendors providing trade support to the Borrowers on terms and subject
to requirements acceptable to the Required Lenders; and

     

    (m) Other
Liens securing obligations in the aggregate amount not to exceed at any time
$1,000,000.

     

    After
any Loan Party obtains knowledge of any Lien which has been involuntarily
attached to its assets or properties, the Loan Parties shall use their best
efforts to, and shall promptly seek, to cause the release or termination
thereof.

     

    SECTION
6.03. Fundamental
Changes.

     

    (a) The
Loan Parties and their respective Subsidiaries will not merge into or
consolidate or amalgamate with any other Person, or permit any other Person to
merge into, amalgamate, or consolidate with it, or liquidate or dissolve, except
that, if at the time thereof and immediately after giving effect thereto, no
Event of Default shall have occurred and be continuing, (i) any Subsidiary may
merge or amalgamate with and into a Borrower in a transaction in which a
Borrower is the surviving corporation, (ii) any Subsidiary that is not a
Borrower may merge or amalgamate with and into any other Subsidiary that is not
a Borrower, (iii) any Subsidiary may consummate through mergers,
amalgamations or consolidations any disposition of assets permitted under
Section 6.05, (iv) Facility Guarantors may merge with, or amalgamate into a
Borrower so long as the Borrower is the surviving, or continuing, entity, (v)
any Subsidiary of the Lead Borrower may be liquidated, wound up or dissolved, or
all or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a series of
transactions, to a Borrower or Facility Guarantor, and (vi) any Foreign
Subsidiary (other than the Canadian Loan Parties) may be merged with or
amalgamate into any other Foreign Subsidiary  (other than the Canadian
Loan Parties) or be liquidated.

     

    (b) The
Loan Parties and their respective Subsidiaries will not engage to any material
extent in any business other than businesses of the type conducted by the Loan
Parties and their Subsidiaries on the date of execution of this Agreement and
businesses reasonably related, ancillary or complementary
thereto.

     

    SECTION
6.04. Investments,
Loans, Advances, Guarantees and Acquisitions.  The
Loan Parties and their respective Subsidiaries will not purchase, hold or
acquire (including pursuant to any merger with any Person that was not a wholly
owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit (each of the foregoing, an “Investment”),
except for:

     

    (a) Investments
by any Loan Party to any other Loan Party; provided
that Investments by the Domestic Loan Parties in the Canadian Loan Parties,
together with the principal amount of any Indebtedness owed to the Domestic Loan
Parties by the Canadian Loan Parties, shall not exceed $75,000,000 at any time
outstanding;

     

    (b) Investments
existing on the Closing Date, and set forth on Schedule
6.04, to the extent such investments would not be permitted under any
other clause of this Section;

     

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

     

    (d) Loans
or advances to employees for the purpose of travel, entertainment or relocation
in the ordinary course of business in an amount not to exceed $2,000,000 in the
aggregate at any time outstanding;

     

    (e) Permitted
Investments;

     

    (f) Investments
deposits, prepayments and other credits to suppliers made in the ordinary course
of business consistent with the past practices of Lead Borrower and its
Subsidiaries;

     

    (g) Hedging
Agreements to the extent permitted by Section 6.01;

     

    (h) The
Loan Parties may sell or transfer amounts to other Loan Parties and acquire
assets of other Loan Parties to the extent permitted by Section
6.05;

     

    (i) Guarantees
and other Investments permitted under Section 6.01;

     

    (j) Investments
in deposit accounts or securities accounts opened in the ordinary course of
business provided such deposit accounts or securities accounts are subject to
deposit account control agreements or securities account control
agreement;

     

    (k) Capital
Expenditures;

     

    (l)  Investments
in Northern National Insurance Ltd. to the extent required to support its
working capital insurance obligations; and

     

    (m) Other
Investments in an amount not to exceed $1,000,000 in the aggregate at any time
outstanding.

     

    SECTION
6.05. Asset
Sales.

     

    (a) The
Loan Parties and their respective Subsidiaries will not sell, transfer, lease or
otherwise dispose of any asset, including any capital stock (other than capital
stock of the Lead Borrower as long as an Event of Default does not arise
therefrom), nor will the Loan Parties issue any additional shares of its capital
stock or other ownership interest in such Loan Party (other than the Lead
Borrower as long as an Event of Default does not arise therefrom),
except:

     

    (i) sales
and dispositions of Inventory and other assets in the ordinary course of
business; and

     

    (ii) sales,
transfers and dispositions among the Loan Parties;

     

    (iii) Permitted
Sales; and

     

    (iv) leases,
subleases, licenses or sublicenses of property or abandonment of non-material
intellectual property in the ordinary course of business and which do not
materially interfere with the business of Lead Borrower and its Subsidiaries or
would not reasonably be expected to have a Material Adverse
Effect;

     

    (v) rejection,
disclaimer and termination of leases otherwise permitted or required
herein;

     

    (vi) Asset
sales set forth on Schedule
6.05;

     

    (vii) Asset
sales pursuant to an order approved by the Bankruptcy Courts and the Agents and
Required Lenders;

     

    (viii) discounts
or forgiveness of accounts receivables in the ordinary course of business or in
connection with collection or compromise thereof so long as the applicable
account debtor is not an Affiliate of the Loan Parties;

     

    (ix) sales
not made for cash consideration in connection with the Borrowers’ “Builder
Install Initiative” in an amount not to exceed $10,000,000 at any time;
and

     

    (x) any
mandatory disposition of real property to a Governmental Authority as a result
of a condemnation or expropriation of such real property and such disposition
shall not have either (i) a Material Adverse Effect or (ii) affect a material
portion of the Collateral;

     

    provided
that all sales, transfers, leases and other dispositions permitted hereby (other
than sales, transfers and other disposition permitted under clauses (ii), (iv),
(v), (vii), (viii) and (ix)) shall be made at arm’s length and for fair value
(other than with respect to store closing or similar liquidation sales) and,
with respect to Inventory and Accounts, solely for cash consideration (which
term shall include credit card sales).

     

    SECTION
6.06. Restricted
Payments; Certain Payments of Indebtedness.

     

    (a) The
Loan Parties will not, and will not permit any Subsidiaries to, declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, except
as long as no Default or Event of Default exists or would arise therefrom (i)
the Subsidiaries of the Lead Borrower may declare and pay cash dividends or
other distributions with respect to their capital stock to any Domestic Loan
Party; and the Subsidiaries of the Canadian Borrower may declare and pay cash
dividends or other distributions with respect to their capital stock to any
Canadian Loan Party and (ii) the Loan Parties may declare and pay dividends with
respect to their capital stock payable solely in additional shares of their
common stock.

     

    (b) The
Loan Parties will not at any time, and will not permit any of their
Restricted  Subsidiaries to make, directly or indirectly, any payment
or other distribution (whether in cash securities or other property) of or in
respect of principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:

     

    (i) payment
of regularly scheduled interest and principal payments as and when due in
respect of any Indebtedness incurred after the Petition Date (other than the
Term Loan)  and permitted under Section
6.01;

     

    (ii) as
long as no Event of Default exists or would arise therefrom and subject to the
provisions of the Intercreditor Agreement, payment of regularly scheduled
interest and mandatory prepayments of principal as and when due on account of
the Term Loan; and

     

    (iii) adequate
protection payments on the Pre-Petition Liabilities;

     

    (iv) as
long as no Event of Default exists or arises therefrom, payments to Persons
party to profit sharing agreements with the Canadian Loan Parties as and when
due;

     

    (v) other
payments reflected in the approved Budget; and

     

    (vi) refinancing,
extensions and renewals of Indebtedness described in clause (i), above, to the
extent permitted by Section
6.01.

     

    SECTION
6.07. Transactions
with Affiliates.  The
Loan Parties will not at any time sell, lease or otherwise transfer any property
or assets to, or purchase, lease or otherwise acquire any property or assets
from, or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions in the ordinary course of business that are at prices
and on terms and conditions not less favorable to the Loan Parties than could be
obtained on an arm’s-length basis from unrelated third parties, (b) transactions
between or among the Borrowers and/or the Facility Guarantors not involving any
other Affiliate, which would not otherwise violate the provisions of the Loan
Documents, (c) compensation arrangements for officers and other employees of
Lead Borrower and its Subsidiaries entered into in the ordinary course of
business, and (d) transactions otherwise permitted
hereunder.

     

    SECTION
6.08. Amendment of
Material Documents.  The
Loan Parties will not, and will not permit any Subsidiary to, amend, modify or
waive any of its rights under its certificate of incorporation, by-laws or other
organizational documents, in each case to the extent that such amendment,
modification or waiver would be materially adverse to the interests of the
Lenders.  The Loan Parties will not, and will not permit any
Subsidiary to, amend, modify or waive any of its rights under any Material
Contracts, the Agency Agreement (including, without limitation the extension of
the sale term beyond December 31, 2008 or of the time or manner of disposition
of the proceeds from the Initial Store Sales) , or any document governing
Material Indebtedness (including, without limitation, except as permitted in the
Intercreditor Agreement, any documentation governing the Term Loan) without the
Administrative Agent’s prior written consent.

     

    SECTION
6.09. Fiscal
Year.  The
Loan Parties shall not change their fiscal year without the prior written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld. The Borrowers and the Lenders acknowledge that the adoption of the
retail calendar for accounting purposes by the Borrowers shall not, in and of
itself, be deemed a change of their fiscal year.

     

    SECTION
6.10. Burdensome
Agreements.

     

               The
Loan Parties shall not enter into or permit to exist any contractual obligation
(other than this Agreement or any other Loan Document or documentation
evidencing the Term Loan) that (a) limits the ability (i) of any Subsidiary to
make Restricted Payments or other distributions to any Loan Party or to
otherwise transfer property to or invest in a Loan Party, (ii) of any Subsidiary
to Guarantee the Obligations, (iii) of any Subsidiary to make or repay loans to
a Loan Party, or (iv) of the Loan Parties or any Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person in favor of the
Collateral Agent; provided, however, that this clause (iv) shall not prohibit
(A) any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under Section 6.01 solely to the extent any such negative
pledge relates to the property financed by or the subject of such Indebtedness,
(B) any limitation imposed in connection with a sale, transfer or disposition of
assets permitted under Section 6.05 pending the consummation of such sale, transfer or
disposition or (C) any limitation that restricts in a customary manner the
assignment or transfer of any property or asset that is subject to a lease or
license or the assignment or transfer of a lease, license or other contractual
obligation; or (b) requires the grant of a Lien to secure an obligation of such
Person if a Lien is granted to secure another obligation of such
Person.

     

    SECTION
6.11. Intentionally
Omitted.

     

    SECTION
6.12. Clean
Down.

     

    For
the period (1) December 20 through December 27, 2008, the actual “Net
Availability” (as calculated in accordance with the initial Budget) shall in no
event be less than $75,000,000, (2) December 28, 2008 through January 3, 2009,
the  actual “Net Availability” (as calculated in accordance with the
initial Budget) shall in no event be less than $50,000,000, (3) January 4, 2009
through January 10, 2009, the actual “Net Availability” (as calculated in
accordance with the initial Budget) shall in no event be less than $50,000,000,
and (4) January 11, 2009 through January 17, 2009, the actual “Net Availability”
(as calculated in accordance with the initial Budget) shall in no event be less
than $35,000,000.

     

    SECTION
6.13. Bankruptcy
Related Negative Covenants.

     

    The
Loan Parties will not consent to or permit to exist any of the
following:

     

    (a) Any
order which authorizes the rejection or assumption of any Leases (other than the
Identified Leases) of any Domestic Loan Party without the Administrative Agent’s
prior consent, whose consent shall not be unreasonably
withheld;

     

    (b) Any
modification (other than extension of the Initial Order in Canada in the
ordinary course with the prior written consent of the Canadian Agent), stay,
vacation or amendment to the DIP Orders or the Initial Order to which the Agents
and the Required Lenders have not consented in writing;

     

    (c) A
priority claim or administrative expense or unsecured claim against any Borrower
(now existing or hereafter arising or any kind or nature whatsoever, including,
without limitation, any administrative expense of the kind specified in Sections
105, 326, 328, 330, 331,  364(c), 503(a), 503(b), 506(c), 507(a),
507(b), 546(c), 546(d), 726 or 1114 of the Bankruptcy Code) equal or superior to
the priority claim of the Agents and the Lenders in respect of the Obligations
and the Pre-Petition Liabilities, except with respect to the Professional Fee
Carve Out and, with respect to the Canadian Borrower, (i) statutory Liens and
charges not capable of being subordinated by the entry of the Initial Order,
(ii) the Directors’ Charge, and (iii) the Administration
Charge;

     

    (d) Any
Lien on any Collateral having a priority equal or superior to the Lien securing
the Obligations, other than with respect to (i) the Professional Fee Carve Out,
(ii) Permitted Encumbrances having priority by operation of Applicable Law,
(iii) with respect to the Canadian Borrower, (A) the Directors’ Charge, (B) the
Administration Charge, and (C) Permitted Encumbrances having priority by
operation of Applicable Law, (iv) the Liens securing the Pre-Petition
Liabilities, and (v) subject to the terms and conditions of the Intercreditor
Agreement, the Liens securing the Term Loan;

     

    (e) Any
order which authorizes the return of any of the Loan Parties’ property pursuant
to Section 546(h) of the Bankruptcy Code or any similar provision of the CCAA or
Applicable Law in Canada;

     

    (f) Any
order which authorizes the payment of any Indebtedness (other than the
Pre-Petition Liabilities, Indebtedness reflected in the approved Budget, and
other Indebtedness approved by the Agents) incurred prior to the Petition Date
or the grant of “adequate protection” (whether payment in cash or transfer of
property) with respect to any such Indebtedness which is secured by a Lien;
or

     

    (g) Any
order seeking authority to take any action that is prohibited by the terms of
this Agreement or the other Loan Documents or refrain from taking any action
that is required to be taken by the terms of this Agreement or any of the other
Loan Documents.

    
      
      

      
        

      

    

    
      
      

    

    ARTICLE
VII

     

    Events of
Default

     

    SECTION
7.01. Events of
Default.  If
any of the following events (“Events of Default”) shall
occur:

     

    (a) the
Loan Parties shall fail to pay any principal of any Loan or any reimbursement
obligation in respect of any L/C Disbursement when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;

     

    (b) the
Loan Parties shall fail to pay any interest on any Loan or any fee or any other
amount (other than an amount referred to in clause (a) of this Article) payable
under this Agreement or any other Loan Document, within three (3) Business Days
when the same shall become due and payable;

     

    (c) any
representation or warranty made or deemed made by or on behalf of any Loan Party
in or in connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, or in any report, certificate, financial statement
or other document furnished pursuant to or in connection with any Loan Document
or any amendment or modification thereof or waiver thereunder, shall prove to
have been incorrect in any material respect when made or deemed
made;

     

    (d) (i)
the Loan Parties shall fail to observe or perform any covenant, condition or
agreement contained in Section 2.23, Section 5.01
(other than Section 5.01(a)(iv) and Section 5.01(b)(vi)), Section 5.02(a), Section
5.07, Section 5.09, Section 5.11, Section
5.15, Section 5.17, Section 5.18 or in Article
VI; or (ii) the Loan Parties shall fail to observe or perform any covenant,
condition or agreement contained in Sections 5.01(a)(iv), 5.01(b)(vi) or 5.16,
which failure continues unremedied for a period of ten days;

     

    (e) any
Loan Party shall fail to observe or perform any covenant, condition or agreement
contained in any Loan Document (other than those specified in clause (a), (b),
(c), or (d) of this Article), and such failure shall continue unremedied for a
period of 30 days after notice thereof from the Administrative Agent to the
Lead Borrower (which notice will be given at the request of any
Lender);

     

    (f) except
as a result of the commencement of the Cases or unless payment is stayed by the
US Bankruptcy Court or the Canadian Bankruptcy Court, any Loan Party
shall fail to make any payment (whether of principal or interest and
regardless of amount) in respect of any Material Indebtedness when and as the
same shall become due and payable (after giving effect to the expiration of any
grace or cure period set forth therein) and the holder of such Material
Indebtedness shall have accelerated the time for, or demanded, payment
thereof;

     

    (g) except
as a result of the commencement of the Cases or unless payment is stayed by the
US Bankruptcy Court or the Canadian Bankruptcy Court, any event or condition
occurs (after giving effect to any grace period, waiver or amendment) that
results in any Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any such Material Indebtedness
or any trustee or agent on its or their behalf to cause any such Material
Indebtedness to become due, or to require the prepayment, repurchase, redemption
or defeasance thereof, prior to its scheduled maturity (other than on account of
the sale of assets otherwise permitted under this Agreement which secure such
Material Indebtedness);

     

    (h) one
or more uninsured post-petition final judgments for the payment of money in an
aggregate amount in excess of $5,000,000 (to the extent not covered by third
party indemnities reasonably acceptable to the Administrative Agent) shall be
rendered against any Loan Party or any combination thereof and the same shall
remain undischarged for a period of 45 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any material assets of any Loan Party
to enforce any such judgment;

     

    (i)  (i)           any
challenge in any legal proceeding by or on behalf of any Loan Party to the
validity of any Loan Document or the applicability or enforceability of any Loan
Document strictly in accordance with the subject Loan Document’s terms or which
seeks to void, avoid, limit, or otherwise adversely affect any security interest
created by or in any Loan Document or any payment made pursuant
thereto.

     

    (ii)           any
challenge in any legal proceeding by or on behalf of any other Person to the
validity of any Loan Document or the applicability or enforceability of any Loan
Document strictly in accordance with the subject Loan Document’s terms or which
seeks to void, avoid, limit, or otherwise adversely affect any security interest
created by or in any Loan Document or any payment made pursuant thereto, in each
case, as to which an order or judgment has been entered adverse to the Agents
and the Lenders

     

    (iii)           any
Lien purported to be created under any Security Document shall cease to be, or
shall be asserted by any Loan Party not to be, a valid, perfected and opposable
Lien on any Collateral, with the priority required by the applicable Security
Document, except (i) as a result of the sale or other disposition of the
applicable Collateral in a transaction permitted under the Loan Documents, or
(ii) with respect to Collateral (other than Inventory and Accounts), if the
failure of the Lien relating thereto to be a valid, perfected and opposable Lien
would not reasonably be expected to result in a Material Adverse
Effect;

     

    (j) a
Change in Control shall occur;

     

    (k) an
ERISA Event shall have occurred after the Petition Date that when taken together
with all such other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Loan Parties in an aggregate amount
exceeding $5,000,000;

     

    (l) the
occurrence of any uninsured loss to any material portion of the
Collateral;

     

    (m) the
indictment of, or institution of any legal process or proceeding against, any
Loan Party, under any federal, state, provincial, municipal, and other civil or
criminal statute, rule, regulation, order, or other requirement having the force
of law where the relief, penalties, or remedies sought or available include the
forfeiture of any material property of any Loan Party and/or the imposition of
any stay or other order, the effect of which could reasonably be to restrain in
any material way the conduct by the Loan Parties, taken as a whole, of their
business in the ordinary course, and in each case where such indictment or
institution of legal process could reasonably be expected to have a Material
Adverse Effect;

     

    (n) except
as otherwise permitted herein, the determination by any Loan Party, whether by
vote of such Loan Party’s board of directors or otherwise to: suspend the
operation of such Loan Party’s business in the ordinary course, liquidate all or
a material portion of such Loan Party’s assets or store locations, or employ an
agent or other third party to conduct any so-called store closing, store
liquidation or “Going-Out-Of-Business” sales relating to all or a substantial
portion of such Loan Party’s assets or store locations;

     

    (o) The
entry of an order in the Cases which stays, modifies (other than extensions of
the Interim Order in Canada with the prior written consent of the Canadian
Agent), or reverses any DIP Order or the Initial Order or which otherwise
materially adversely affects the effectiveness of any DIP Order or the Initial
Order without the express written consent of the Agents and the Required
Lenders;

     

    (p) Either
(i) the appointment in the Chapter 11 Case of a trustee or of any examiner
having expanded powers to operate all or any part of any Loan Party’s business,
or (ii) the conversion of the Chapter 11 Case to a case under Chapter 7 of the
Bankruptcy Code, or (iii) the Canadian Loan Parties are declared bankrupt or a
proceeding is taken to have a receiver, interim receiver, receiver and manager,
agent, liquidator or other like Person appointed over all or any material
portion of their property and assets or, except for the Monitor in the Canadian
Bankruptcy Case, any such appointment is made or any creditor takes possession
of all or a material portion of such property and assets or otherwise enforces
any of its rights against the Canadian Loan Parties;

     

    (q) The
failure of the US Bankruptcy Court to enter a Final Borrowing Order, in form and
substance reasonably satisfactory to the Administrative Agent, within 45 days
after the Petition Date;

     

    (r) The
entry of any order without the prior written consent of the Agents and the
Required Lenders which provides relief from the automatic stay otherwise imposed
pursuant to Section 362 of the Bankruptcy Code or the stay made under the
Initial Order or the CCAA which permits any creditor to realize upon, or to
exercise any right or remedy with respect to, any asset of any Loan Party or to
terminate any license, franchise, or similar agreement, where the exercise of
such right or remedy or such realization or termination would reasonably be
likely to have a Material Adverse Effect;

     

    (s) The
filing of any application by any Loan Party without the express prior written
consent of the Agents and the Required Lenders for the approval of any
super-priority claim in the Cases which is pari passu with or senior to the
priority of the claims of the Agents and the Lenders for the Obligations, or
there shall arise any such super-priority claim under the Bankruptcy Code or
CCAA (in each case, other than the Professional Fee Carve Out, the
Administration Charge, the Directors’ Charge and the claim of the lenders under
the Term Loan);

     

    (t) The
payment or other discharge by any Loan Party of any pre-petition Indebtedness,
except as expressly permitted hereunder, or in the Budget or by order in the
Cases to which order the Agents have provided their written
consent;

     

    (u) The
entry of any order in the Chapter 11 Case which provides adequate protection, or
the granting by any Loan Party of similar relief in favor of any one or more of
a Loan Party’s pre-petition creditors, contrary to the terms and conditions of
any DIP Order or the Initial Order;

     

    (v) The
failure of any Loan Party (i) to comply with each and all of the terms and
conditions of any DIP Order or the Initial Order, or (ii) to materially comply
with any other order entered in the Cases, if such failure would reasonably
likely result in a Material Adverse Effect;

     

    (w) The
filing of any motion by any Loan Party or the entry of any order in the Cases:
(i) (A) permitting working capital or other financing (other than ordinary
course trade credit or unsecured debt) for any Loan Party from any Person other
than the Administrative Agent (unless the proceeds of such financing are used to
pay in full of all Pre-Petition Liabilities, all Obligations, cash
collateralization of all Letter of Credit Outstandings, and all Obligations then
due and owing in connection with any Hedging Agreement, cash management,
depository or similar products (collectively, the “Unliquidated Claims”), and
the establishment of a reserve account for all Other Liabilities and
indemnification obligations hereunder), (B) granting a Lien on, or security
interest in any of the Collateral, other than with respect to this Agreement and
the Term Loan or as otherwise permitted herein (unless such Liens are granted in
connection with a financing, the proceeds of which are applied to the payment in
full of all Pre-Petition Liabilities, all Obligations and the cash
collateralization of all Letter of Credit Outstanding, other Unliquidated Claims
and indemnification obligations hereunder), (C) except as permitted by this
Agreement, permitting the use of any of the Collateral pursuant to Section
363(c) of the Bankruptcy Code without the prior written consent of the
Administrative Agent, (iv) permitting recovery from any portion of the
Collateral any costs or expenses of preserving or disposing of such Collateral
under Section 506(c) of the Bankruptcy Code or the Initial Order, or (D)
dismissing any of the Cases or (ii) the filing of any motion by any Loan Party
(or by any party in interest or any Creditors’ Committee appointed in the
Chapter 11 Case) seeking any of the matters specified in the foregoing clause
(i) that is not dismissed or denied within forty-five (45) days of the date of
the filing of such motion (or such later date agreed to in writing by the
Agents);

     

    (x) The
filing of a motion by any Loan Party seeking approval of a Disclosure Statement
and a Plan of Reorganization or Plan of Compromise, or the entry of an order
confirming a Plan of Reorganization or Plan of Compromise, that does not require
repayment in full in cash of all Obligations and Pre-Petition Liabilities on the
Consummation Date of such Plan of Reorganization and Plan of Compromise or such
Plan of Reorganization or Plan of Compromise is defeated by the Loan Parties’
creditors;

     

    (y) The
filing of any pleading by any Person challenging the validity, priority,
perfection, or enforceability of the Loan Documents (as defined in the
Pre-Petition Credit Agreement), the Pre-Petition Liabilities, or any Lien
granted pursuant to the Pre-Petition Loan Documents, or (b) any Lien granted
pursuant to the Pre-Petition Loan Documents is determined to be null and void,
invalid or unenforceable by the US Bankruptcy Court, the Canadian Bankruptcy
Court or another court of competent jurisdiction in any action commenced or
asserted by any other party in interest in the Cases, including, without
limitation, the Creditors’ Committee;

     

    then,
subject to the terms of the DIP Orders and Initial Order, in every such event,
and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Lead Borrower, take either or both of the following actions, at
the same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers; and (iii) require the Borrowers
to furnish cash collateral in an amount equal to 103% of the Letter of Credit
Outstandings.

     

    Without limiting the foregoing, subject to the terms of the
Initial Order, in every such event, and at any time thereafter during the
continuance of such event, the Canadian Agent may, and at the request of the
Required Lenders shall, upon five (5) days prior notice to the Canadian
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Canadian Commitments, and thereupon the Canadian
Commitments shall terminate immediately, and (ii) declare the Canadian
Liabilities then outstanding to be due and payable in whole (or in part, in
which case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Canadian
Liabilities so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Canadian Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers; and (iii) require the Canadian Borrower to furnish cash
collateral in an amount equal to 103% of the Letter of Credit Outstandings of
the Canadian Borrower.

     

    SECTION
7.02. When
Continuing.

     

    For all purposes under this Agreement, each Default and
Event of Default that has occurred shall be deemed to be continuing at all times
thereafter unless it either (a) is cured or corrected, or (b) is waived in
writing by the Lenders in accordance with Section 9.02.

     

    SECTION
7.03. Remedies on
Default.

     

    Subject
to the terms of the DIP Orders and the Initial Order, in case any one or more of
the Events of Default shall have occurred and be continuing, and whether or not
the maturity of the Loans shall have been accelerated pursuant hereto, the
Administrative Agent or the Canadian Agent, as applicable, may (and at the
direction of the Required Lenders, shall) proceed to protect and enforce its
rights and remedies under this Agreement, the Notes or any of the other Loan
Documents by suit in equity, action at law or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Agreement and the other Loan Documents or any instrument pursuant to which
the Obligations are evidenced, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of the Agents or the Lenders. No remedy herein is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any other provision
of law.

     

    SECTION
7.04. Application of
Proceeds.

     

    After
the occurrence of an Event of Default and acceleration of the Obligations, the
Agents shall apply the proceeds of any collection or sale of the Collateral, as
well as any Collateral consisting of cash, or any Collateral granted under any
other of the Security Documents as follows:

     

    (a)           As
to the Collateral of the Domestic Loan Parties:

     

    FIRST,
to the payment of all accrued and unpaid Professional Fees and Expenses up to an
aggregate amount not to exceed to Professional Fee Carve Out;

     

    SECOND,
to the payment of all Pre-Petition Liabilities;

     

    THIRD,
to the payment of reasonable costs and out-of-pocket expenses incurred by the
Agents in connection with such collection or sale or otherwise in connection
with this Agreement or any of the Obligations, including all court costs and the
reasonable fees and out-of-pocket expenses of its agents and legal counsel, the
repayment of all advances made by the Agents hereunder or under any other Loan
Document on behalf of any Loan Party and any other reasonable costs or
out-of-pocket expenses incurred in connection with the exercise of any right or
remedy hereunder, under any other Loan Document in each case to the extent
required to be reimbursed hereunder;

     

    FOURTH, to the payment of accrued and unpaid interest and
principal on the Swingline Loans;

     

    FIFTH, to the payment of accrued and unpaid interest on the
Revolving Loans;

     

    SIXTH, to the payment of outstanding principal on the
Revolving Loans;

     

    SEVENTH, to the Circuit City Cash Collateral Account and
the InterTAN Canada Cash Collateral Account as collateral for Letter of Credit
Outstandings, up to 103% thereof;

     

    EIGHTH, to the payment of all fees then due and owing to
the Agents, the Lenders  and the Issuing Bank under the Loan Documents
(other than fees, expense reimbursements and indemnification payable in
connection with Other Liabilities);

     

    NINTH, to the payment of all Obligations on account of Cash
Management Services;

     

    TENTH, to the payment of all other Obligations and all
Other Liabilities of the Borrowers then due and owing (including, without
limitation, any obligations under any Hedging Agreements) and, to the extent not
then due, the establishment of a reserve account for all Other Liabilities and
all indemnification obligations herenunder;

     

    ELEVENTH, to the Lead Borrower for distribution to the Loan
Parties, their successors or assigns, or as a court of competent jurisdiction
may otherwise direct.

     

    Notwithstanding
the foregoing, the proceeds of any collection or sale of the Collateral, as well
as any Collateral consisting of cash, or any Collateral granted under any other
of the Security Documents of the Domestic Loan Parties shall be first applied to
the Obligations (other than the Canadian Liabilities) prior to application to
the Canadian Liabilities.

     

    (b)           As
to the Collateral of the Canadian Loan Parties:

     

    FIRST, to the payment of amounts secured by the
Administration Charge, the Directors’ Charge and the KERP
Charge;

     

    SECOND,
to the payment of all Pre-Petition Liabilities of the Canadian
Borrower;

     

    THIRD,
to the payment of reasonable costs and out-of-pocket expenses incurred by the
Agents in connection with such collection or sale or otherwise in connection
with any of the Loans made to the Canadian Borrower, including all court costs
and the reasonable fees and out-of-pocket expenses of its agents and legal
counsel, the repayment of all advances made by the Agents hereunder or under any
other Loan Document on behalf of any Canadian Loan Party and any other
reasonable costs or out-of-pocket expenses incurred in connection with the
exercise of any right or remedy hereunder, under any other Loan Document in each
case to the extent required to be reimbursed hereunder;

     

    FOURTH, to the payment of accrued and unpaid interest and
principal on the Swingline Loans made to the Canadian
Borrower;

     

    FIFTH, to the payment of accrued and unpaid interest on the
Revolving Loans made to the Canadian Borrower;

     

    SIXTH, to the payment of outstanding principal on the
Revolving Loans made to the Canadian Borrower;

     

    SEVENTH, to the payment of amounts secured by the Canadian
Creditor Charge;

     

    EIGHTH, to the InterTAN Canada Cash Collateral Account as
collateral for Canadian Letter of Credit Outstandings, up to 103%
thereof;

     

    NINTH,
to the payment of accrued and unpaid interest and principal on the Swingline
Loans made to the Domestic Borrowers;

     

    TENTH,
to the payment of accrued and unpaid interest on the Revolving Loans made to the
Domestic Borrowers;

     

    ELEVENTH,
to the payment of outstanding principal on the Revolving Loans made to the
Domestic Borrowers;

     

    TWELFTH,
to the Circuit City Cash Collateral Account as collateral for Letter of Credit
Outstandings, up to 103% thereof;

     

    THIRTEENTH, to the payment of all fees then due and owing
to the Agents, the Lenders  and the Issuing Bank under the Loan
Documents (other than fees, expense reimbursements and indemnification payable
in connection with Other Liabilities);

     

    FOURTEENTH, to the payment of all Obligations on account of
Cash Management Services;

     

    FIFTEENTH, to the payment of all other Obligations and all
Other Liabilities of the Borrowers then due and owing (including, without
limitation, any obligations under any Hedging Agreements) and, to the extent not
then due, the establishment of a reserve account for all Other Liabilities and
all indemnification obligations herenunder;

     

    SIXTEENTH, to the Lead Borrower for distribution to the
Loan Parties, their successors or assigns, or as a court of competent
jurisdiction may otherwise direct.

     

     Upon any sale or other disposition of the Collateral
by the Agents (including pursuant to a power of sale granted by statute or under
a judicial proceeding), the receipt of the purchase money by the Agents or of
the officer making the sale or other disposition shall be a sufficient discharge
to the purchaser or purchasers of the Collateral so sold or otherwise disposed
of and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Agents or such
officer or be answerable in any way for the misapplication
thereof.  All amounts required to be applied to Loans hereunder (other
than Swingline Loans) shall be applied ratably in accordance with each Lender’s
Commitment Percentage.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
VIII

     

    The
Agents

     

    SECTION
8.01. Administration
by Administrative Agent.

     

    (a) Each
Lender, the Collateral Agent and the Issuing Bank hereby irrevocably designate
Bank of America as Administrative Agent under this Agreement and the other Loan
Documents.  The general administration of the Loan Documents shall be
by the Administrative Agent. The Lenders, the Collateral Agent and the Issuing
Bank each hereby irrevocably authorizes the Administrative Agent (i) to enter
into the Loan Documents to which it is a party and (ii) at its discretion, to
take or refrain from taking such actions as agent on its behalf and to exercise
or refrain from exercising such powers under the Loan Documents and the Notes as
are delegated by the terms hereof or thereof, as appropriate, together with all
powers reasonably incidental thereto. The Administrative Agent shall have no
duties or responsibilities except as set forth in this Agreement and the
remaining Loan Documents, nor shall it have any fiduciary relationship with any
Lender, and no implied covenants, responsibilities, duties, obligations, or
liabilities shall be read into the Loan Documents or otherwise exist against the
Administrative Agent.

     

    (b) Each
Lender, the Issuing Bank and each Secured Party that is owed any Canadian
Liabilities hereby irrevocably designate Bank of America, N.A. (acting through
its Canada branch) as the Canadian Agent under this Agreement and the other Loan
Documents.  The general administration of the Loan Documents with
respect to the Canadian Borrower shall be by the Canadian Agent. The Lenders,
the Issuing Bank and each Secured Party that is owed any Canadian Liabilities
each hereby irrevocably authorizes the Canadian Agent (i) to enter into the Loan
Documents to which it is a party and (ii) at its discretion, to take or refrain
from taking such actions as agent on its behalf and to exercise or refrain from
exercising such powers under the Loan Documents and the Notes as are delegated
by the terms hereof or thereof, as appropriate, together with all powers
reasonably incidental thereto. The Canadian Agent shall have no duties or
responsibilities except as set forth in this Agreement and the remaining Loan
Documents, nor shall it have any fiduciary relationship with any such Secured
Party, and no implied covenants, responsibilities, duties, obligations, or
liabilities shall be read into the Loan Documents or otherwise exist against the
Canadian Agent.

     

    SECTION
8.02. The Collateral
Agent.

     

    (a) Each
Lender, the Administrative Agent and the Issuing Bank hereby irrevocably (i)
designate Bank of America as Collateral Agent under this Agreement and the other
Loan Documents, (ii) authorize the Collateral Agent to enter into the Collateral
Documents and the other Loan Documents to which it is a party and to perform its
duties and obligations thereunder, together with all powers reasonably
incidental thereto, and (iii) agree and consent to all of the provisions of the
Security Documents. All Collateral shall be held or administered by the
Collateral Agent (or its duly-appointed agent) for its benefit and for the
ratable benefit of the other Secured Parties. Any proceeds received by the
Collateral Agent from the foreclosure, sale, lease or other disposition of any
of the Collateral and any other proceeds received pursuant to the terms of the
Security Documents or the other Loan Documents shall be paid over to the
Administrative Agent for application as provided in Section 2.20, Section 2.24
or Section 7.04, as applicable. The Collateral Agent
shall have no duties or responsibilities except as set forth in this Agreement
and the remaining Loan Documents, nor shall it have any fiduciary relationship
with any Lender, and no implied covenants, responsibilities, duties,
obligations, or liabilities shall be read into the Loan Documents or otherwise
exist against the Collateral Agent.

     

    (b) Each
Lender, the Issuing Bank and each Secured Party that is owed any Canadian
Liabilities hereby irrevocably designate Bank of America, N.A. (acting through
its Canada branch) as the Canadian Agent under this Agreement and the other Loan
Documents with respect to the Collateral hypothecated and granted as security by
the Canadian Borrower. The Lenders, the Issuing Bank and each Secured Party that
is owed any Canadian Liabilities each hereby irrevocably authorizes the Canadian
Agent (i) to enter into the Security Documents to which it is a party and to
perform its duties and obligations thereunder, together with all powers
reasonably incidental thereto, and (ii) agree and consent to all of the
provisions of the Security Documents.  All Collateral from the
Canadian Borrower shall be held or administered by the Canadian Agent (or its
duly-appointed agent) for its benefit and for the ratable benefit of the other
Secured Parties who are owed any Canadian Liabilities. Any proceeds received by
the Canadian Agent from the foreclosure, sale, lease or other disposition of any
of the Collateral from the Canadian Borrower and any other proceeds received
pursuant to the terms of the Security Documents or the other Loan Documents from
the Canadian Borrower shall be applied as provided in Section 2.20, Section 2.24
or Section 7.04, as applicable. The Canadian Agent
shall have no duties or responsibilities except as set forth in this Agreement
and the remaining Loan Documents, nor shall it have any fiduciary relationship
with any Lender, and no implied covenants, responsibilities, duties,
obligations, or liabilities shall be read into the Loan Documents or otherwise
exist against the Canadian Agent.

     

    (c) Without
limiting the generality of the foregoing, for the purposes of creating a solidarité
active in accordance with article 1541 of the Civil Code of Québec
between each Secured Party that is owed any Obligations, including the Canadian
Liabilities, taken individually, on the one hand, and the Canadian Agent, on the
other hand, each of the Canadian Loan Parties and each such Secured Party
acknowledge and agree with the Canadian Agent that such Secured Party and the
Canadian Agent are hereby conferred the legal status of solidary creditors of
the Canadian Loan Parties in respect of all Obligations and Canadian
Liabilities, present and future, owed by the Canadian Loan Parties to each such
Secured Party and the Canadian Agent (collectively, for the purposes of this
paragraph, the “solidary claim”).  Accordingly, but subject (for the
avoidance of doubt) to article 1542 of the Civil Code of Québec, the
Canadian Loan Parties are irrevocably bound towards the Canadian Agent and each
such Secured Party in respect of the entire solidary claim of the Canadian Agent
and such Secured Party.  As a result of the foregoing, the Canadian
Borrower confirms and agrees that subject to subparagraph (b) above, the rights
of the Canadian Agent and each of its Secured Parties who are owed the
Obligations, including the Canadian Liabilities, from time to time a party to
this Agreement by way of assignment or otherwise are solidary and as regards the
Obligations and the Canadian Liabilities owing from time to time to each such
Secured Party, each of the Canadian Agent and such Secured Party is entitled,
when permitted pursuant to Section 7.02 to: (i)
demand payment of all outstanding amounts from time to time in respect of the
Obligations, including the Canadian Liabilities; (ii) exact the whole
performance of such Obligations and Canadian Liabilities from the Canadian
Borrower; (iii) benefit from the Canadian Agent’s Liens and the Collateral in
respect of such Obligations and Canadian Liabilities; (iv) give a full
acquittance of such Obligations and Canadian Liabilities (each Secured Party
that is owed Obligations, including Canadian Liabilities, hereby agreeing to be
bound by any such acquittance); and (v) exercise all rights and recourses under
the Loan Documents with respect to the Obligations and the Canadian
Liabilities.  The Obligations, including the Canadian Liabilities of
the Canadian Borrower, will be secured by the Canadian Agent’s Liens and the
Collateral and the Canadian Agent and the Secured Parties who are owed
Obligations, including the Canadian Liabilities, will have a solidary interest
therein.

     

    SECTION
8.03. Sharing of
Excess Payments.

     

    Each of the Lenders, the Agents and the Issuing Bank agrees
that if it shall, through the exercise of a right of banker’s lien, setoff or
counterclaim against the Loan Parties, including, but not limited to, a secured
claim under Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim and received by such Lender, any
Agent or the Issuing Bank under any applicable bankruptcy, insolvency or other
similar law, or otherwise, obtain payment in respect of the Obligations owed it
(an “excess
payment”) as a result of which such Lender, such Agent or the Issuing
Bank has received payment of any Loans or other Obligations outstanding to it in
excess of the amount that it would have received if all payments at any time
applied to the Loans and other Obligations had been applied in the order of
priority set forth in Section 7.04, then
such Lender, Agent or the Issuing Bank shall promptly purchase at par (and shall
be deemed to have thereupon purchased) from the other Lenders, such Agent and
the Issuing Bank, as applicable, a participation in the Loans and Obligations
outstanding to such other Persons, in an amount determined by the Administrative
Agent in good faith as the amount necessary to ensure that the economic benefit
of such excess payment is reallocated in such manner as to cause such excess
payment and all other payments at any time applied to the Loans and other
Obligations to be effectively applied in the order of priority set forth in
Section
7.04 pro
rata in
proportion to its Commitment Percentages, Domestic Commitment Percentages, or
Canadian Commitment Percentages, as applicable; provided,
that if any such excess payment is thereafter recovered or otherwise set aside
such purchase of participations shall be correspondingly rescinded (without
interest). The Loan Parties expressly consent to the foregoing arrangements and
agree that any Lender, any Agent or the Issuing Bank holding (or deemed to be
holding) a participation in any Loan or other Obligation may exercise any and
all rights of banker’s lien, setoff or counterclaim with respect to any and all
moneys owing by such Loan Party to such Lender, such Agent or the Issuing Bank
as fully as if such Lender, Agent or the Issuing Bank held a Note and was the
original obligee thereon, in the amount of such
participation.

     

    SECTION
8.04. Agreement of
Required Lenders.

     

    (a) Upon
any occasion requiring or permitting an approval, consent, waiver, election or
other action on the part of only the Required Lenders, action shall be taken by
the Administrative Agent or the Canadian Agent, as applicable, for and on behalf
or for the benefit of all Lenders upon the direction of the Required Lenders,
and any such action shall be binding on all Lenders, and (ii) upon any occasion
requiring or permitting an approval, consent, waiver, election or other action
on the part of the Required Supermajority Lenders, action shall be taken by the
Administrative Agent or the Canadian Agent, as applicable, for and on behalf or
for the benefit of all Lenders upon the direction of the Required Supermajority
Lenders and any such action shall be binding on all Lenders. No amendment,
modification, consent, or waiver shall be effective except in accordance with
the provisions of Section 9.02.  Without
limiting the foregoing, upon the approval by the Required Lenders of the
provisions of the Intercreditor Agreement in accordance with the Section 5.15(c)
hereof, the Lenders hereby authorize the Administrative Agent and the Canadian
Agent to execute such Intercreditor Agreement and agree that the terms thereof
shall be binding upon all Lenders.

     

    (b) Upon
the occurrence of an Event of Default, the Administrative Agent shall (subject
to the provisions of Section 9.02) take such action
with respect thereto as may be reasonably directed by the Required Lenders;
provided
that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action as it shall deem advisable in the best interests of the Lenders. In
no event shall the Administrative Agent be required to comply with any such
directions to the extent that the Administrative Agent believes that its
compliance with such directions would be unlawful.

     

    SECTION
8.05. Liability of
Agents.

     

    (a) Each
of the Agents, when acting on behalf of the Lenders and the Issuing Bank, may
execute any of its respective duties under this Agreement by or through any of
its respective officers, agents and employees, and none of the Agents nor their
respective directors, officers, agents or employees shall be liable to the
Lenders or the Issuing Bank or any of them for any action taken or omitted to be
taken in good faith, or be responsible to the Lenders or the Issuing Bank or to
any of them for the consequences of any oversight or error of judgment, or for
any loss, except to the extent of any liability imposed by law by reason of such
Agent’s own gross negligence or willful misconduct. The Agents and their
respective directors, officers, agents and employees shall in no event be liable
to the Lenders or the Issuing Bank or to any of them for any action taken or
omitted to be taken by them pursuant to instructions received by them from the
Required Lenders, or Required Supermajority Lenders, as applicable, or in
reliance upon the advice of counsel selected by it. Without limiting the
foregoing, none of the Agents, nor any of their respective directors, officers,
employees, or agents (A) shall be responsible to any Lender or the Issuing Bank
for the due execution, validity, genuineness, effectiveness, sufficiency,
opposability or enforceability of, or for any recital, statement, warranty or
representation in, this Agreement, any Loan Document or any related agreement,
document or order, or (B) shall be required to ascertain or to make any inquiry
concerning the performance or observance by any Loan Party of any of the terms,
conditions, covenants, or agreements of this Agreement or any of the Loan
Documents, or (C) shall be responsible to any Lender or the Issuing Bank for the
state or condition of any properties of the Loan Parties or any other obligor
hereunder constituting Collateral for the Obligations of the Loan Parties
hereunder or with respect to the Other Liabilities, or any information contained
in the books or records of the Loan Parties; or (D) shall be responsible to any
Lender or the Issuing Bank for the validity, enforceability, collectibility,
effectiveness or genuineness of this Agreement or any other Loan Document or any
other certificate, document or instrument furnished in connection therewith; or
(E) shall be responsible to any Lender or the Issuing Bank for the validity,
priority, opposability or perfection of any Lien securing or purporting to
secure the Obligations or the Other Liabilities or the value or sufficiency of
any of the Collateral.

     

    (b) The
Agents may execute any of their duties under this Agreement or any other Loan
Document by or through any of their Affiliates, branches or their agents or
attorneys-in-fact, and shall be entitled to the advice of counsel concerning all
matters pertaining to its rights and duties hereunder or under the Loan
Documents.  The Agents shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by them with reasonable
care.

     

    (c) None
of the Agents nor any of their respective directors, officers, employees, or
agents shall have any responsibility to the Loan Parties on account of the
failure or delay in performance or breach by any Lender (other than by the Agent
in its capacity as a Lender) or the Issuing Bank of any of their respective
obligations under this Agreement or the Notes or any of the Loan Documents or in
connection herewith or therewith.

     

    (d) The
Agents shall be entitled to rely, and shall be fully protected in relying, upon
any notice, consent, certificate, affidavit, or other document or writing
believed by it in good faith to be genuine and correct and to have been signed,
sent or made by the proper person or persons, and upon the advice and statements
of legal counsel (including, without, limitation, counsel to the Borrowers),
independent accountants and other experts selected by the Administrative
Agent.  The Agents shall be fully justified in failing or refusing to
take any action under this Agreement or any other Loan Document unless they
shall first receive such advice or concurrence of the Required Lenders as they
deem appropriate or they shall first be indemnified to their satisfaction by the
Lenders against any and all liability and expense which may be incurred by them
by reason of the taking or failing to take any such action.

     

    SECTION
8.06. Notice of
Default.  The
Agents shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default unless the Agents have actual knowledge of the same
or have received notice from a Lender or the Borrowers referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a “notice of default”.  In the event that the Agents obtain
such actual knowledge or receives such a notice, the Agents shall give prompt
notice thereof to each of the Lenders.  The Administrative Agent and
the Canadian Agent shall take such action with respect to such Default or Event
of Default as shall be reasonably directed by the Required
Lenders.  Unless and until the Administrative Agent or the Canadian
Agent shall have received such direction, the Administrative Agent and the
Canadian Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to any such Default or Event of Default as
they shall deem advisable in the best interest of the
Lenders.

     

    SECTION
8.07. Lenders’
Credit Decisions.  Each
Lender acknowledges that it has, independently and without reliance upon the
Agents or any other Lender, and based on the financial statements prepared by
the Borrowers and such other documents and information as it has deemed
appropriate, made its own credit analysis and investigation into the business,
assets, operations, property, and financial and other condition of the Loan
Parties and has made its own decision to enter into this Agreement and the other
Loan Documents.  Each Lender also acknowledges that it will,
independently and without reliance upon the Agents or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in determining whether or not
conditions precedent to closing any Loan hereunder have been satisfied and in
taking or not taking any action under this Agreement and the other Loan
Documents.

     

    SECTION
8.08. Reimbursement
and Indemnification.

     

    Each Lender agrees (i) to reimburse (x) each Agent for such
Lender’s Commitment Percentage of any expenses and fees incurred by each such
Agent for the benefit of the Lenders or the Issuing Bank under this Agreement,
the Notes and any of the Loan Documents, including, without limitation, counsel
fees and compensation of agents and employees paid for services rendered on
behalf of the Lenders or the Issuing Bank, and any other expense incurred in
connection with the operations or enforcement thereof not reimbursed by the
Borrowers and (y) each Agent for such Lender’s Commitment Percentage of any
expenses of such Agent incurred for the benefit of the Lenders or the Issuing
Bank that the Borrowers have agreed to reimburse pursuant to Section 9.03 and has failed to so reimburse and (ii) to indemnify
and hold harmless the Agents, the Co-Collateral Agent, and any of their
directors, officers, employees, or agents, on demand, in the amount of such
Lender’s Commitment Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against it or any of them in their capacity as such
agent and in any way relating to or arising out of this Agreement, the Notes or
any of the Loan Documents or any action taken or omitted by it or any of them
under this Agreement, the Notes or any of the Loan Documents to the extent not
reimbursed by the Borrowers (except such as shall result from their respective
gross negligence or willful misconduct).  The provisions of this
Section
8.08 shall survive the repayment of
the Obligations and the Other Liabilities and the termination of the
Commitments.

     

    SECTION
8.09. Rights of
Agents.

     

    It
is understood and agreed that Bank of America, Bank of America, N.A. (acting
through its Canada branch) and the Co-Collateral Agent shall have the same
rights and powers hereunder (including the right to give such instructions) as
the other Lenders and may exercise such rights and powers, as well as their
rights and powers under other agreements and instruments to which they are or
may be party, and engage in other transactions with the Loan Parties, as though
they were not an agent of the Lenders under this Agreement.  Without
limiting the foregoing, the Agents, and the Co-Collateral Agent and their
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of commercial or investment banking, trust, advisory or other business with
the Loan Parties and their Subsidiaries and Affiliates as if they were not an
agent hereunder.

     

    SECTION
8.10. Notice of
Transfer.

     

    The Agents may deem and treat a Lender party to this
Agreement as the owner of such Lender’s portion of the Loans for all purposes,
unless and until, and except to the extent, an Assignment and Assumption shall
have become effective as set forth in Section 9.05(b).

     

    SECTION
8.11. Successor
Agent.

     

    Any
Agent may resign at any time by giving fifteen (15) Business Days’ written
notice thereof to the Lenders, the Issuing Bank, the other Agents and the Lead
Borrower. Upon any such resignation of any Agent, the Required Lenders shall
have the right to appoint a successor Agent, which so long as there is no Event
of Default shall be reasonably satisfactory to the Lead Borrower (whose consent
shall not be unreasonably withheld or delayed). If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment, within 30 days after the retiring Agent’s giving of notice of
resignation, the retiring Agent may, on behalf of the Lenders, the other Agents
and the Issuing Bank, appoint a successor Agent which shall be (i) with respect
to the Administrative Agent or the Collateral Agent, any Lender hereunder (or
Affiliate thereof) or a commercial bank (or Affiliate thereof) organized under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of a least $100,000,000, (ii) with respect to the
Canadian Agent, any Lender hereunder (or Affiliate thereof) or a commercial bank
or institutional lender (or branch or Affiliate thereof) resident in Canada (for
purposes of the Income Tax Act (Canada) or otherwise not subject to withholding
taxes on any interest paid by a resident of Canada) and having a combined
capital and surplus of at least $100,000,000 or (iii) in either case, a Person
capable of complying with all of the duties of such Agent (and the Issuing
Bank), hereunder (in the opinion of the retiring Agent and as certified to the
Lenders in writing by such successor Agent) which, in the case of (i), (ii) or
(iii) above, so long as there is no Event of Default shall be reasonably
satisfactory to the Lead Borrower (whose consent shall not be unreasonably
withheld or delayed). Upon the acceptance of any appointment as Agent by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Agent’s resignation hereunder as such Agent,
the provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was such Agent under this
Agreement.

     

    SECTION
8.12. Reports and
Financial Statements.

     

    (a) Promptly
after receipt thereof from the Borrowers, the Administrative Agent shall remit
to each Lender copies of all financial statements and Borrowing Base
Certificates required to be delivered by the Borrowers hereunder and all
commercial finance examinations and appraisals of the Collateral received by the
Administrative Agent.

     

    (b) By
signing this Agreement, each Lender:

     

    (i) agrees
to furnish the Administrative Agent at such frequency as the Administrative
Agent may reasonably request with a summary of all Other Liabilities due or to
become due to such Lender.  In connection with any distributions to be
made hereunder, the Administrative Agent shall be entitled to assume that no
amounts are due to any Lender on account of Other Liabilities unless the
Administrative Agent has received written notice thereof from such
Lender;

     

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

     

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

     

    (iv) expressly
agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that the Agents, the Co-Collateral Agent or any other party
performing any audit or examination will inspect only specific information
regarding the Loan Parties and will rely significantly upon the Loan Parties'
books and records, as well as on representations of the Loan Parties'
personnel;

     

    (v) agrees
to keep all Reports confidential in accordance with the provisions of Section
9.15 hereof; and

     

    (vi) without
limiting the generality of any other indemnification provision contained in this
Agreement, agrees: (i) to hold the Agents, the Co-Collateral Agent and any such
other Lender preparing a Report harmless from any action the indemnifying Lender
may take or conclusion the indemnifying Lender may reach or draw from any Report
in connection with any Credit Extensions that the indemnifying Lender has made
or may make to the Borrowers, or the indemnifying Lender's participation in, or
the indemnifying Lender's purchase of, a Loan or Loans; and (ii) to pay and
protect, and indemnify, defend, and hold the Agents, the Co-Collateral Agent and
any such other Lender preparing a Report harmless from and against, the claims,
actions, proceedings, damages, costs, expenses, and other amounts (including
attorney costs) incurred by the Agents, the Co-Collateral Agent and any such
other Lender preparing a Report as the direct or indirect result of any third
parties who might obtain all or part of any Report through the indemnifying
Lender.

     

    SECTION
8.13. Delinquent
Lender.  If
for any reason any Lender shall fail or refuse to abide by its obligations under
this Agreement, including without limitation its obligation to make available to
Administrative Agent or the Canadian Agent its pro rata share of any Revolving
Loans, expenses or setoff or purchase its pro rata share of a participation
interest in the Swingline Loans (a “Delinquent Lender”) and such failure is not
cured within two (2) Business Days of receipt from the Administrative Agent or
the Canadian Agent of written notice thereof, then, in addition to the rights
and remedies that may be available to Agents, other Lenders, the Borrowers or
any other party at law or in equity, and not at limitation thereof, (i) such
Delinquent Lender’s right to participate in the administration of, or
decision-making rights related to, the Loans, this Agreement or the other Loan
Documents shall be suspended during the pendency of such failure or refusal, and
(ii) a Delinquent Lender shall be deemed to have assigned any and all payments
due to it from the Borrowers, whether on account of outstanding Loans, interest,
fees or otherwise, to the remaining non-delinquent Lenders for application to,
and reduction of, their proportionate shares of all outstanding Loans until, as
a result of application of such assigned payments the Lenders’ respective pro
rata shares of all outstanding Loans shall have returned to those in effect
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.  The Delinquent Lender’s
decision-making and participation rights and rights to payments as set forth in
clauses (i) and (ii) hereinabove shall be restored only upon the payment by the
Delinquent Lender of its pro rata share of any Loans, any participation
obligation, or expenses as to which it is delinquent, together with interest
thereon at the rate set forth in Section 2.12 hereof
from the date when originally due until the date upon which any such amounts are
actually paid.

     

    The
non-delinquent Lenders shall also have the right, but not the obligation, in
their respective, sole and absolute discretion, to acquire for no cash
consideration, (pro rata,
based on the respective Commitments of those Lenders electing to exercise such
right) the Delinquent Lender’s Commitment to fund future Loans (the “Delinquent
Lender’s Future Commitment”).  Upon any such purchase of the
pro
rata
share of any Delinquent Lender’s Future Commitment, the Delinquent Lender’s
share in future Loans and its rights under the Loan Documents with respect
thereto shall terminate on the date of purchase, and the Delinquent Lender shall
promptly execute all documents reasonably requested to surrender and transfer
such interest, including, if so requested, an Assignment and
Assumption.  Each Delinquent Lender shall indemnify the Agents and
each non-delinquent Lender from and against any and all loss, damage or
expenses, including but not limited to reasonable attorneys’ fees and funds
advanced by any Agent or by any non-delinquent Lender, on account of a
Delinquent Lender’s failure to timely fund its pro
rata
share of a Loan or to otherwise perform its obligations under the Loan
Documents.

     

    SECTION
8.14. Collateral and
Guaranty Matters.  The
Lenders irrevocably authorize the Administrative Agent and the Canadian Agent,
at their option and in their discretion,

     

    (a) to
release and discharge any Lien on any property granted to or held by the
Collateral Agent or the Canadian Agent, as applicable, under any Loan Document
(i) upon termination of the Commitments and payment in full of all Obligations
(other than contingent indemnification obligations for which no claim has been
asserted) and the expiration or termination of all Letters of Credit, (ii) that
is sold or to be sold as part of or in connection with any sale permitted
hereunder or under any other Loan Document, or (iii) if approved, authorized or
ratified in writing by the Required Lenders in accordance with Section
9.02;

     

    (b) to
subordinate any Obligations or any Lien on any property granted to or held by
the Collateral Agent or the Canadian Agent, as applicable, under any Loan
Document to the holder of any Lien on such property to the extent otherwise
permitted hereunder; and

     

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

     

    Upon request by any Agent at any time, the Required Lenders
will confirm in writing such Agent’s authority to release, discharge or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Facility Guaranty pursuant to this
Section
8.14.  In each case as specified in this Section
8.14, the Collateral Agent will, at the Loan Parties’ expense, execute
and deliver to the applicable Loan Party such documents as such Loan Party may
reasonably request to evidence the release and discharge of such item of
Collateral from the assignment, security interest or other Lien granted under
the Security Documents or to subordinate its interest in such item, or to
release such Guarantor from its obligations under the Facility Guaranty, in each
case in accordance with the terms of the Loan Documents and this Section
8.14.

     

    SECTION
8.15. Agency for
Perfection.

     

    Each Lender hereby appoints each other Lender as agent for
the purpose of perfecting Liens for the benefit of the Agents and the Lenders,
in assets which, in accordance with Article 9 of the UCC, the PPSA or any other
Applicable Law of the United States or Canada (or its provinces or territories)
can be perfected only by possession.  Should any Lender (other than
the Agents) obtain possession of any such Collateral, such Lender shall notify
the Administrative Agent thereof, and, promptly upon the Administrative Agent’s
or Canadian Agent’s request therefor shall deliver such Collateral to the
Collateral Agent or the Canadian Agent, as applicable, or otherwise deal with
such Collateral in accordance with the Collateral Agent’s or the Canadian
Agent’s, as applicable, instructions.

     

    SECTION
8.16. Intentionally
Omitted.

     

    SECTION
8.17. Syndication
Agent, Documentation Agents, and Arranger.  Notwithstanding
the provisions of this Agreement or any of the other Loan Documents, except as
expressly provided in this Agreement, the Syndication Agent, the Documentation
Agents, and  the Arranger shall have no powers, rights, duties,
responsibilities or liabilities with respect to this Agreement and the other
Loan Documents.

     

    SECTION
8.18. Co-Collateral
Agent Rights.

     

    Notwithstanding
anything to the contrary contained in this Agreement or any other Loan
Documents:

     

    (a) In
the event that the Administrative Agent and the Co-Collateral Agent do not agree
on the establishment or amount of Reserves to be imposed in the Borrowing Base,
the Administrative Agent shall nevertheless undertake such action with respect
thereto as the Co-Collateral Agent may request (as long as such action is
permitted under this Agreement); provided that the amount of Reserves
established or increased by the Co-Collateral Agent may not exceed $35,000,000
in the aggregate at any time outstanding.  Except as set forth in the
proviso hereto, in no event shall the Co-Collateral Agent have any right to
approve the exercise of or limit the discretion of the Administrative Agent to
establish, change or reduce Reserves as the Administrative Agent determines;
provided
that Administrative Agent may not, without the prior consent of the
Co-Collateral Agent, change the methodology employed by the Administrative Agent
as of the Closing Date in establishing or calculating the amount of Reserves if
such change would increase the amount of credit available as Revolving Loans or
Letters of Credit hereunder.

     

    (b) The
Administrative Agent agrees that (a) all commercial finance examinations shall
be undertaken by Spain, Price, Reader & Thompson, P.C. and (b) all inventory
appraisals shall be undertaken by Gordon Brothers or Hilco Merchant Resources,
LLC or any of their Affiliates.  In the event that the Administrative
Agent determines to engage any other Person for those purposes, such Person
shall be subject to the approval of the Co-Collateral Agent, which approval
shall not be unreasonably withheld.

     

    (c) The
Administrative Agent agrees that if the Co-Collateral Agent so requests, the
Administrative Agent shall cause inventory appraisals and/or commercial finance
examinations to be undertaken at the Loan Parties’ expense to the extent
permitted in Section 5.09(b).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
IX

     

    Miscellaneous

     

    SECTION
9.01. Notices.

     

    (a) Except
in the case of notices and other communications expressly permitted to be given
by telephone, all notices and other communications provided for herein shall be
in writing and shall be delivered by hand or overnight courier service, mailed
by certified or registered mail or sent by telecopy, as
follows:

     

    (i) if
to any Loan Party, to it at Circuit City Stores, Inc., 9954 Mayland Drive,
Richmond, Virginia 23233, Attention: Treasurer and General Counsel,
(Telecopy  No. (804) 527-4113), with a copy to Kirkland & Ellis
LLP, 200 East Randolph Drive, Chicago, Illinois 60601-6636, Attention: Linda K.
Myers, P.C. (Telecopy No. (312) 861-2200);

     

    (ii) if
to any Agent, or the Swingline Lender, to Bank of America, N.A., 100 Federal
Street, Boston, Massachusetts 02110, Attention: Kathleen Dimock (Telecopy No.
(617) 434-4312), with a copy to Riemer & Braunstein LLP, Three Center Plaza,
Boston, Massachusetts 02108, Attention: David S. Berman, Esquire (Telecopy No.
(617) 880-3456); and

     

    (iii) if
to any other Lender, to it at its address (or telecopy number) set forth on the
signature pages hereto or on any Assignment and Assumption for such
Lender.

     

    Any
party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of
receipt.

     

    (b) Notices
and other communications to the Lenders and the Issuing Banks hereunder may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender or the Issuing Bank
pursuant to Article II
if such Lender or the Issuing Bank, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication.  The Administrative Agent or the
Lead Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.

     

    (c) THE
PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES
(AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER
MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In
no event shall the Agents or any of their Related Parties (collectively, the
“Agent
Parties”) have any liability to any Loan Party, any Lender, the Issuing
Bank or any other Person for losses, claims, damages, liabilities or expenses of
any kind (whether in tort, contract or otherwise) arising out of the Loan
Parties’ or any Agent’s transmission of Borrower Materials through the Internet,
except to the extent that such losses, claims, damages, liabilities or expenses
are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence, bad faith, or willful
misconduct or breach of the contractual obligations of such Agent Party; provided,
however,
that in no event shall any Agent Party have any liability to any Loan Party, any
Lender, the Issuing Bank or any other Person for indirect, special, incidental,
consequential or punitive damages (as opposed to direct or actual
damages).

     

    SECTION
9.02. Waivers;
Amendments.

     

    (a) No
failure or delay by the Agents, the Issuing Bank or any Lender in exercising any
right or power hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Agents, the Issuing Bank
and the Lenders hereunder and under the other Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Agents, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time.

     

    (b) Neither
this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended or modified except, in the case of this Agreement,
pursuant to an agreement or agreements in writing entered into by the Borrowers
and the Required Lenders or, in the case of any other Loan Document, pursuant to
an agreement or agreements in writing entered into by the Administrative Agent
and the Loan Parties that are parties thereto, in each case with the consent of
the Required Lenders, provided
that, any amendment relating solely to the Canadian Liabilities may be made with
the consent of the Canadian Agent and the requisite Canadian Lenders only, and
further provided
that no such agreement shall (i) increase the Total Commitments without the
written consent of each Lender or increase the Commitment, Domestic Commitment
or Canadian Commitment of any Lender without the written consent of such Lender,
(ii) reduce the principal amount of any Loan or L/C Disbursement or reduce the
rate of interest thereon, or reduce any fees payable hereunder, without the
written consent of each Lender affected thereby (other than waiver of the
accrual of interest at the default rate or the waiver of any Default or Event of
Default hereunder), (iii) postpone the scheduled date of payment of the
principal amount of any Loan or L/C Disbursement, or any interest thereon, or
any fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of the Commitments or the
Maturity Date, without the written consent of each Lender affected thereby, (iv)
change Section
2.23, or Section 2.24 or
Section 7.04, without the written consent of each Lender, (v) change any of the
provisions of this Section 9.02 or the definition of
the term “Required Lenders” or “Required Supermajority Lenders” or any other
provision of any Loan Document specifying the number or percentage of Lenders
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender, (vi) except as otherwise permitted hereunder, release any Loan
Party from its obligations under any Loan Document, or limit its liability in
respect of such Loan Document, without the written consent of each Lender, (vii)
except for sales described in Section 6.05, release
any material portion of the Collateral from the Liens of the Security Documents,
without the written consent of each Lender, provided
however that the release of a material portion of the Collateral granted
by the Canadian Borrower shall require the consent of all of the Lenders having
Canadian Commitments, (viii) change the definition of the term “Borrowing Base”
or any component definition thereof if as a result thereof the amounts available
to be borrowed by the Borrowers would be increased, without the written consent
of each Lender, provided that
the foregoing shall not limit the discretion of each Agent, or, to the extent
permitted in this Agreement, the Co-Collateral Agent, to change, establish or
eliminate any Reserves, (ix) modify the definition of Permitted Overadvance so
as to increase the amount thereof or, except as provided in such definition, the
time period for a Permitted Overadvance, without the written consent of each
Lender, (x) subordinate the Obligations hereunder, the Other Liabilities, or the
Liens granted hereunder or under the other Loan Documents, to any other
Indebtedness or Lien (other than as contemplated in the Intercreditor Agreement
with respect to the Term Loan and the Lien securing the Term Loan, which may be
subordinated with consent of the Required Lenders), as the case may be without
the prior written consent of each Lender, (xi) change the definition of the term
“Canadian Availability” or any component definition thereof if as a result
thereof the amounts available to be borrowed by the Canadian Borrower would be
increased, without the consent of each Canadian Lender, and provided
further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Agents or the Issuing Bank without the prior written
consent of the Agents or the Issuing Bank, as the case may
be.

     

    (c) Notwithstanding
anything to the contrary contained herein, no modification, amendment or waiver
which increases the maximum amount of the Swingline Loans to the Domestic
Borrowers to an amount in excess of $60,000,000 or increases the maximum amount
of the Swingline Loans to the Canadian Borrower to an amount in excess of
$10,000,000 (or, in each case, such greater amount to which such limit has been
previously increased in accordance with the provisions of this Section 9.02(c)) shall be made without the written
consent of the Required Supermajority Lenders.

     

    (d) Notwithstanding
anything to the contrary contained in this Section 9.02, in the event that the
Borrowers request that this Agreement or any other Loan Document be modified,
amended or waived in a manner which would require the consent of the Lenders
pursuant to Section 9.02(b) or Section 9.02(c) and such amendment is approved by the
Required Lenders, but not by the requisite percentage of the Lenders, the
Borrowers, and the Required Lenders shall be permitted, within ninety (90) days
thereafter, to amend this Agreement without the consent of the Lender or Lenders
which did not agree to the modification or amendment requested by the Borrowers
(such Lender or Lenders, collectively the “Minority
Lenders”) to provide for (w) the termination of the Commitment, Domestic
Commitment and Canadian Commitment of each of the Minority Lenders, (x) the
addition to this Agreement of one or more other financial institutions, or an
increase in the Commitment, Domestic Commitment and Canadian Commitment of one
or more of the Required Lenders, so that the aggregate Commitments, Domestic
Commitments and Canadian Commitments, after giving effect to such amendment
shall be in the same amount as the aggregate Commitments, Domestic Commitments
and Canadian Commitments immediately before giving effect to such amendment, (y)
if any Loans are outstanding at the time of such amendment, the making of such
additional Loans by such new or increasing Lender or Lenders, as the case may
be, as may be necessary to repay in full the outstanding Loans (including
principal, interest, and fees) of the Minority Lenders immediately before giving
effect to such amendment and (z) such other modifications to this Agreement or
the Loan Documents as may be appropriate and incidental to the
foregoing.

     

    (e) No
notice to or demand on any Loan Party shall entitle any Loan Party to any other
or further notice or demand in the same, similar or other circumstances. Each
holder of a Note shall be bound by any amendment, modification, waiver or
consent authorized as provided herein, whether or not a Note shall have been
marked to indicate such amendment, modification, waiver or consent and any
consent by a Lender, or any holder of a Note, shall bind any Person subsequently
acquiring a Note, whether or not a Note is so marked. No amendment to this
Agreement shall be effective against the Borrowers unless signed by the
Borrowers.

     

    SECTION
9.03. Expenses;
Indemnity; Damage Waiver.

     

    (a) The
Loan Parties shall jointly and severally pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Collateral Agent, the
Canadian Agent, the Co-Collateral Agent and their Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent, the Canadian Agent and the Co-Collateral Agent, outside consultants for
the Administrative Agent and the Canadian Agent, appraisers, and for commercial
finance examinations, in connection with the arrangement of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder, and (iii) subject to the
limitations set forth in Section 5.09(b), all
reasonable out-of-pocket expenses incurred by the Administrative Agent, the
Collateral Agent, the Canadian Agent, the Co-Collateral Agent, the Issuing Bank
or any Lender, including the reasonable fees, charges and disbursements of any
counsel and any outside consultants for the Administrative Agent, the Canadian
Agent, the Issuing Bank or any Lender, for appraisers, commercial finance
examinations, and environmental site assessments, in connection with the
enforcement or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit; provided that
the Lenders who are not the Administrative Agent, the Canadian Agent, the
Co-Collateral Agent or the Issuing Bank shall be entitled to reimbursement for
no more than one counsel representing all such Lenders.

     

    (b) The
Loan Parties shall, jointly and severally, indemnify the Administrative Agent,
the Co-Collateral Agent, the Canadian Agent, the Arranger, the Issuing Bank and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable and
documented fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
parties to the Loan Documents of their respective obligations thereunder or the
consummation of the transactions contemplated by the Loan Documents or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property currently or formerly owned or operated by any
Loan Party or any of the Subsidiaries, or any Environmental Liability related in
any way to any Loan Party or any of the Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses resulted from
the gross negligence, bad faith, or breach of the contractual obligations of
such Indemnitee or any Affiliate of such Indemnitee (or of any officer,
director, employee, advisor or agent of such Indemnitee or any such Indemnitee’s
Affiliates), or with respect to a claim by one Indemnitee against another
Indemnitee.

     

    (c) To
the extent that any Loan Party fails to pay any amount required to be paid by it
to the Administrative Agent, the Collateral Agent, the Canadian Agent or the
Issuing Bank under paragraph (a) or (b) of this Section, each Lender severally
agrees to pay to such Agents or the Issuing Bank, as the case may be, such
Lender’s Commitment Percentage of such unpaid amount, provided
that the unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against such
Agents or the Issuing Bank.

     

    (d) To
the extent permitted by Applicable Law, no Loan Party shall assert, and each
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the transactions
contemplated by the Loan Documents, any Loan or Letter of Credit or the use of
the proceeds thereof.

     

    (e) All
amounts due under this Section shall be payable promptly after written demand
(including documentation reasonably supporting such request)
therefor.

     

    SECTION
9.04. Designation of
Lead Borrower as Borrowers’ Agent.

     

    (a) Each
Domestic Borrower hereby irrevocably designates and appoints the Lead Borrower
as that Domestic Borrower’s agent to obtain Loans and Letters of Credit
hereunder, the proceeds of which shall be available to each Domestic Borrower
for those uses as those set forth herein. As the disclosed principal for its
agent, each Domestic Borrower shall be obligated to the Agents and each Lender
on account of Loans so made and Letters of Credit so issued hereunder as if made
directly by the Lenders to that Domestic Borrower, notwithstanding the manner by
which such Loans and Letters of Credit are recorded on the books and records of
the Lead Borrower and of any Domestic Borrower.

     

    (b) Each
Borrower recognizes that credit available to it hereunder is in excess of and on
better terms than it otherwise could obtain on and for its own account and that
one of the reasons therefor is its joining in the credit facility contemplated
herein with all other Borrowers. Consequently, each Borrower hereby assumes,
guarantees, and agrees to discharge all Obligations and Other Liabilities and
the Canadian Liabilities of all other Borrowers as if the Borrower so assuming
and guarantying were each other Borrower.

     

    (c) The
Lead Borrower shall act as a conduit for each Domestic Borrower (including
itself, as a “Domestic Borrower”) on whose behalf the Lead Borrower has
requested a Loan.

     

    (i) The
Lead Borrower shall cause the transfer of the proceeds of each Loan to the
(those) Domestic Borrower(s) on whose behalf such Loan was obtained. Neither the
Agents nor any Lender shall have any obligation to see to the application of
such proceeds.

     

    (ii) If,
for any reason, and at any time during the term of this
Agreement,

     

    (A) any
Domestic Borrower, including the Lead Borrower, as agent for the Domestic
Borrowers, shall be unable to, or prohibited from carrying out the terms and
conditions of this Agreement (as determined by the Administrative Agent in its
reasonable judgment); or

     

    (B) the
Administrative Agent, in its reasonable judgment, deems it inexpedient to
continue making Loans and cause Letters of Credit to be issued to or for the
account of any particular Domestic Borrower, or to channel such Loans and
Letters of Credit through the Lead Borrower,

     

    then the Lenders may make Loans directly to, and cause the
issuance of Letters of Credit directly for the account of such of the Domestic
Borrowers as the Administrative Agent determines to be expedient, which Loans
may be made without regard to the procedures otherwise included in this
Section
9.04.

     

    (d) In
the event that the Administrative Agent determines under Section 9.04(c)(ii) to forgo the procedures included
herein pursuant to which Loans and Letters of Credit are to be channeled through
the Lead Borrower, then the Administrative Agent may designate one or more of
the Domestic Borrowers to fulfill the financial and other reporting requirements
otherwise imposed herein upon the Lead Borrower.

     

    (e) Each
of the Borrowers shall remain jointly and severally liable to the Agents and the
Lenders for the payment and performance of all Obligations and all Other
Liabilities (which payment and performance shall continue to be secured by all
Collateral granted by each of the Borrowers) notwithstanding any determination
by the Administrative Agent under Section
9.04(c)(ii) to cease making Loans or causing Letters of Credit to be issued
to or for the benefit of any Borrower.

     

    (f) The
authority of the Lead Borrower to request Loans on behalf of, and to bind, the
Domestic Borrowers, shall continue unless and until the Administrative Agent
acts as provided in subparagraph (c), above, or the Administrative Agent
actually receives

     

    (i) written
notice of: (i) the termination of such authority, and (ii) the subsequent
appointment of a successor Lead Borrower, which notice is signed by the
respective Presidents of each Domestic Borrower (other than the President of the
Lead Borrower being replaced) then eligible for borrowing under this Agreement;
and

     

    (ii) written
notice from such successive Lead Borrower (i) accepting such appointment; (ii)
acknowledging that such removal and appointment has been effected by the
respective Presidents of such Domestic Borrowers eligible for borrowing under
this Agreement; and (iii) acknowledging that from and after the date of such
appointment, the newly appointed Lead Borrower shall be bound by the terms
hereof, and that as used herein, the term “Lead Borrower” shall mean and include
the newly appointed Lead Borrower.

     

    SECTION
9.05. Successors and
Assigns.

     

    (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate or branch of the Issuing Bank that issues any Letter of
Credit), except that no Borrower may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any such attempted assignment or transfer without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate or
branch of the Issuing Bank that issues any Letter of Credit) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Agents, the
Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

     

    (b) Any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment,
Domestic Commitment or Canadian Commitment and the Loans at the time owing to
it), provided
that (i) except in the case of an assignment to a Lender or an Affiliate, a
Related Fund, or branch of a Lender, each of the Lead Borrower (but only if no
Event of Default then exists), the Administrative Agent and the Issuing Bank
must give their prior written consent to such assignment (which consent shall
not be unreasonably withheld or delayed), (ii) except in the case of an
assignment to a Lender or an Affiliate, a Related Fund, or branch of a Lender or
an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless the
Administrative Agent otherwise consents, (iii) each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender’s
rights and obligations, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, and, after
completion of the syndication of the Loans, together with a processing and
recordation fee of $3,500.  Subject to acceptance and recording
thereof pursuant to paragraph (d) of this Section, from and after the effective
date specified in each Assignment and Assumption the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Section 9.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this
Section.

     

    (c) The
Administrative Agent, acting for this purpose as an agent of the Borrowers,
shall maintain at one of its offices in Boston, Massachusetts a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment, Domestic Commitment
and Canadian Commitment of, and principal amount of the Loans and L/C
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”).
The entries in the Register shall be presumptively correct absent manifest error
and the Borrowers, the Administrative Agent, the Canadian Agent, the Issuing
Bank and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Lead Borrower, the Issuing Bank and any Lender,
at any reasonable time and from time to time upon reasonable prior
notice.

     

    (d) Upon
its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

     

    (e) Any
Lender may, without the consent of the Borrowers, the Agents, and the Issuing
Bank, sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment, Domestic Commitment and Canadian
Commitment, and the Loans owing to it), provided
that (i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) the Borrowers, the Agents, the
Issuing Bank and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation in the Commitments, Domestic Commitments and Canadian
Commitments, the Loans and the Letters of Credit Outstandings shall provide that
such Lender shall retain the sole right to enforce the Loan Documents and to
approve any amendment, modification or waiver of any provision of the Loan
Documents, provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b)
that affects such Participant. Subject to paragraph (f) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of Section 2.25, Section 2.27
and Section 2.28 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.09 as though
it were a Lender, provided
such Participant agrees to be subject to Section
2.27(c) as though it were a Lender.

     

    (f) A
Participant shall not be entitled to receive any greater payment under Section 2.25 or Section
2.28 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Lead Borrower’s prior written
consent. A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 2.28
unless (i) the Lead Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrowers, to
comply with Section 2.28(e) as though it were a
Lender and (ii) such Participant is eligible for exemption from the withholding
tax referred to therein, following compliance with Section 2.28(e).

     

    (g) Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section shall not apply to any such pledge or assignment of a
security interest, provided
that no such pledge or assignment of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto.

     

    (h) Notwithstanding
any provision to the contrary, any Lender may assign to one or more special
purpose funding vehicles (each, an “SPV”)
all or any portion of its funded Loans (without the corresponding Commitment),
without the consent of any Person or the payment of a fee, by execution of a
written assignment agreement in a form agreed to by such Lender and such SPV,
and may grant any such SPV the option, in such SPV’s sole discretion, to provide
the Borrowers all or any part of any Loans that such Lender would otherwise be
obligated to make pursuant to this Agreement.  Such SPVs shall have
all the rights which a Lender making or holding such Loans would have under this
Agreement, but no obligations.  The Lender making such assignment
shall remain liable for all its original obligations under this Agreement,
including its Commitment (although the unused portion thereof shall be reduced
by the principal amount of any Loans held by an SPV).  Notwithstanding
such assignment, the Agents and Borrowers may deliver notices to the Lender
making such assignment (as agent for the SPV) and not separately to the SPV
unless the Agents and Borrowers are requested in writing by the SPV (or its
agent) to deliver such notices separately to it.   The Borrowers
shall, at the request of any such Lender, execute and deliver to such Person as
such Lender may designate, a Note in the amount of such Lender's original Note
to evidence the Loans of such Lender and related SPV.

     

    (i) The
words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any Applicable Law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

     

    SECTION
9.06. Survival.
All covenants, agreements, representations and warranties made by the Loan
Parties in the Loan Documents and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Agents, the Issuing Bank or any Lender may have had notice or knowledge
of any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated,
except as otherwise provided in the Security Agreement. The provisions of Section 2.25, Section 2.28
and Section 9.03 and Article VIII shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.  In connection with the
termination of this Agreement and the release, discharge and termination of the
security interests in and Liens on the Collateral, the Administrative Agent may
require from the Loan Parties such indemnities and collateral security as they
shall reasonably deem necessary to protect the Secured Parties against (x) loss
on account of credits previously applied to the Obligations that may
subsequently be reversed or revoked, and (y) any obligations that may thereafter
arise with respect to the Other Liabilities.

     

    SECTION
9.07. Counterparts;
Integration; Effectiveness.  This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the Agents
and the Lenders and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy or electronic delivery shall be effective as delivery of a manually
executed counterpart of this Agreement.

     

    SECTION
9.08. Severability.  Any
provision of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

     

    SECTION
9.09. Right of
Setoff.  If
an Event of Default shall have occurred and be continuing, each Lender and each
of its Affiliates and branches are hereby authorized at any time and from time
to time, to the fullest extent permitted by Applicable Law and subject to the
terms of the DIP Orders and the Initial Order, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, but
excluding deposits in trust, payroll and other escrow accounts) at any time held
and other obligations at any time owing by such Lender or Affiliate to or for
the credit or the account of the Borrowers against any of and all the
obligations of the Borrowers now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender may
have.

     

    SECTION
9.10. Governing Law;
Jurisdiction; Consent to Service of Process.

     

    (a) THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES), THE
BANKRUPTCY CODE AND THE CCAA.

     

    (b) Each
Loan Party agrees that any suit for the enforcement of this Agreement or any
other Loan Document may be brought in the US Bankruptcy Court for the Eastern
District of Virginia or in the courts of the State of New York or any federal
court sitting therein (or with respect to the Canadian Loan Parties, the Ontario
Superior Court of Justice (Commercial List)) and consent to the non-exclusive
jurisdiction of such courts.  Each Loan Party hereby waives any
objection which it may now or hereafter have to the venue of any such suit or
any such court or that such suit is brought in an inconvenient
forum.

     

    (c) To
the extent permitted by Applicable Law, each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement or any other
Loan Document will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

     

    (d) Each
Loan Party agrees that any action commenced by any Loan Party asserting any
claim or counterclaim arising under or in connection with this Agreement or any
other Loan Document shall be brought solely in the US Bankruptcy Court for the
Eastern District of Virginia or in a court of the State of New York sitting in
New York City or any federal court sitting therein (or with respect to the
Canadian Loan Parties, the Ontario Superior Court of Justice (Commercial List))
as the Administrative Agent may elect in its sole discretion and consents to the
exclusive jurisdiction of such courts with respect to any such
action.

     

    SECTION
9.11. WAIVER OF JURY
TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

     

    SECTION
9.12. Headings.
Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.

     

    SECTION
9.13. Interest Rate
Limitation.  Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts that are treated as
interest on such Loan under Applicable Law (collectively the “Charges”), shall
exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with Applicable Law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.

     

    SECTION
9.14. Joint and
Several Obligations of the Loan Parties.

     

    (a) The
Obligations are the joint and several obligations of each Loan Party. To the
fullest extent permitted by Applicable Law, the obligations of each Loan Party
hereunder shall not be affected by (i) the failure of any Agent or any other
Secured Party to assert any claim or demand or to enforce or exercise any right
or remedy against any other Loan Party under the provisions of this Agreement,
any other Loan Document or otherwise, (ii) any rescission, waiver, amendment or
modification of, or any release from any of the terms or provisions of, this
Agreement, any other Loan Document, or any other agreement, or (iii) the failure
to perfect any security interest in, or the release of, any of the security held
by or on behalf of the Collateral Agent, the Canadian Agent or any other Secured
Party.

     

    (b) The
obligations of each Loan Party to pay the Obligations in full in cash hereunder
shall not be subject to any reduction, limitation, impairment or termination for
any reason (other than the termination of the Commitments and the payment in
full in cash of the Obligations, other than contingent indemnification
Obligations for which a claim has not been asserted), including any claim of
waiver, release, surrender, alteration or compromise of any of the Obligations
and shall not be subject to any defense or set-off, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of any of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Loan Party hereunder shall
not be discharged or impaired or otherwise affected by the failure of any Agent
or any other Secured Party to assert any claim or demand or to enforce any
remedy under this Agreement, any other Loan Document or any other agreement, by
any waiver or modification of any provision of any thereof, by any default,
failure or delay, willful or otherwise, in the performance of the Obligations,
or by any other act or omission that may or might in any manner or to any extent
vary the risk of any Loan Party or that would otherwise operate as a discharge
of any Loan Party as a matter of law or equity (other than the termination of
the Commitments and the payment in full in cash of all the Obligations, other
than contingent indemnification Obligations for which a claim has not been
asserted).

     

    (c) To
the fullest extent permitted by Applicable Law, each Loan Party waives any
defense based on or arising out of any defense of any other Loan Party or the
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any other Loan Party, other than
the termination of the Commitments and the payment in full in cash of all the
Obligations, other than contingent indemnification Obligations for which a claim
has not been asserted. The Collateral Agent and the other Secured Parties may,
at their election, foreclose on any security held by one or more of them by one
or more judicial or non-judicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with any other Loan Party, or exercise
any other right or remedy available to them against any other Loan Party,
without affecting or impairing in any way the liability of any Loan Party
hereunder except to the extent that all the Obligations have been paid in full
in cash, other than contingent indemnification Obligations for which a claim has
not been asserted.  Pursuant to Applicable Law, each Loan Party waives
any defense arising out of any such election even though such election operates,
pursuant to Applicable Law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Loan Party against
any other Loan Party, as the case may be, or any security.

     

    (d) Upon
payment by any Loan Party of any Obligations, all rights of such Loan Party
against any other Loan Party arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subordinate and junior in right of payment to the termination of the
Commitments and the prior payment in full in cash of all the Obligations, other
than contingent indemnification Obligations for which a claim has not been
asserted. In addition, any indebtedness of any Loan Party now or hereafter held
by any other Loan Party is hereby subordinated in right of payment to the
termination of the Commitments and the prior payment in full of the Obligations,
other than contingent indemnification Obligations for which a claim has not been
asserted. None of the Loan Parties will demand, sue for, or otherwise attempt to
collect any such indebtedness other than the collection of any payment to be
made in the ordinary course of business on account of intercompany loans. If any
amount shall erroneously be paid to any Loan Party on account of (a) such
subrogation, contribution, reimbursement, indemnity or similar right or
(b) any such indebtedness of any Loan Party, such amount shall be held in
trust for the benefit of the Secured Parties and shall forthwith be paid to the
Administrative Agent or the Canadian Agent, as applicable, to be credited
against the payment of the Obligations, other than contingent indemnification
Obligations for which a claim has not been asserted, whether matured or
unmatured, in accordance with the terms of the Loan
Documents.

     

    (e) Each
Loan Party is obligated to repay the Obligations as joint and several obligors
under this Agreement.  Upon payment by any Loan Party of any
Obligations, all rights of such Loan Party against any other Loan Party arising
as a result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and junior in right
of payment to the prior payment in full in cash of all the Obligations in each
case other than contingent indemnification Obligations for which a claim has not
been asserted and the date that the Commitments have been terminated. In
addition, any indebtedness of any Loan Party now or hereafter held by any other
Loan Party is hereby subordinated in right of payment to the prior payment in
full in cash of the Obligations and no Loan Party will demand, sue for or
otherwise attempt to collect any such indebtedness.  If any amount
shall erroneously be paid to any Loan Party on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or (ii) any such
indebtedness of any Loan Party, such amount shall be held in trust for the
benefit of the Secured Parties and shall forthwith be paid to the Administrative
Agent to be credited against the payment of the Obligations, whether matured or
unmatured, in accordance with the terms of this Agreement and the other Loan
Documents.  

     

    (f) Without
limiting the generality of the foregoing, or of any other waiver or other
provision set forth in this Agreement, each Loan Party hereby absolutely,
knowingly, unconditionally, and expressly waives any and all claim, defense or
benefit arising directly or indirectly under any one or more of Sections 2787 to
2855 inclusive of the California Civil Code or any similar law of
California.

     

    SECTION
9.15. Confidentiality.

     

    Each of the Lenders agrees that it will use its best
efforts not to disclose without the prior consent of the Lead Borrower (other
than to its employees, auditors, counsel, funding sources, or other professional
advisors involved in the transactions contemplated herein (and also, with
respect to any SPV, to the trustee or servicer of such SPV), to Affiliates,
branches or to another Lender if the Lender or such Lender’s holding or parent
company in its sole discretion determines that any such party should have access
to such information, provided that such party is bound by the confidentiality
provisions of this Section 9.15) any
information with respect to Lead Borrower or any of its Subsidiaries which is
furnished pursuant to this Agreement provided that any Lender may disclose any
such information (a) as has become generally available to the public, (b) as may
be requested or required in any report, statement or testimony submitted to any
municipal, state, provincial or federal regulatory body having or claiming to
have jurisdiction over such Lender or to the Federal Reserve Board or the
Federal Deposit Insurance Corporation or similar organizations (whether in the
United States or elsewhere) or their successors, (c) as may be required in
response to any summons or subpoena or in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to such
Lender, (e) in connection with the enforcement of remedies under this Agreement
and the other Loan Documents, (f) to any prospective transferee in connection
with any contemplated transfer of any of the Loans or Notes or any interest
therein by such Lender provided that such prospective transferee agrees to be
bound by the provisions of this Section and (g) to a SPV owned by a Lender in
connection with the securitization of such Lender’s obligations or rights
hereunder. The Loan Parties hereby agree that the failure of a Lender to comply
with the provisions of this Section 9.15 shall not relieve the Loan Parties of any of their
obligations to such Lender under this Agreement and the other Loan
Documents.

     

    SECTION
9.16. Judgment
Currency.

     

    (a) If
for the purpose of obtaining or enforcing judgment against the Canadian Borrower
in any court in any jurisdiction, it becomes necessary to convert into any other
currency (such other currency being hereinafter in this Section 9.16 referred to as the "Judgment Currency")
an amount due in Canadian dollars or United States dollars under this Agreement,
the conversion will be made at the rate of exchange prevailing on the Business
Day immediately preceding:

     

    (i) the
date of actual payment of the amount due, in the case of any proceeding in the
courts of the Province of Ontario or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date;
or

     

    (ii) the
date on which the judgment is given, in the case of any proceeding in the courts
of any other jurisdiction (the date as of which such conversion is made pursuant
to this Section 9.16 being hereinafter in this Section 9.16 referred to as the "Judgment Conversion
Date").

     

    (b) If,
in the case of any proceeding in the court of any jurisdiction referred to in Section 9.16(a)(ii), there is a change in the rate of
exchange prevailing between the Judgment Conversion Date and the date of actual
payment of the amount due, the Canadian Borrower will pay such additional amount
(if any, but in any event not a lesser amount) as may be necessary to ensure
that the amount paid in the Judgment Currency, when converted at the rate of
exchange prevailing on the date of payment, will produce the amount of Canadian
dollars or United States dollars, as the case may be, which could have been
purchased with the amount of Judgment Currency stipulated in the judgment or
judicial order at the rate of exchange prevailing on the Judgment Conversion
Date.

     

    (c) Any
amount due from the Canadian Borrower under the provisions of Section 9.16 will be due as a separate debt and will
not be affected by judgment being obtained for any other amounts due under or in
respect of this Agreement.

     

    (d) The
term "rate of exchange" in this Section 9.16
means:

     

    (i) for
a conversion of CD$ to the Judgment Currency, the reciprocal of the official
noon rate of exchange published by the Bank of Canada for the date in question
for the conversion of the Judgment Currency to Canadian
dollars;

     

    (ii) for
a conversion of United States Dollars to the Judgment Currency when the Judgment
Currency is Canadian dollars, the official noon rate of exchange published by
the Bank of Canada for the date in question for the conversion of United States
dollars to Canadian dollars;

     

    (iii) for
a conversion of US dollars to the Judgment Currency when the Judgment Currency
is not Canadian dollars, the effective rate obtained when a given amount of
United States dollars is converted to Canadian dollars at the rate determined
pursuant to Section 9.16 and the result thereof is
then converted to the Judgment Currency pursuant to Section 9.16; or

     

    (iv) if
a required rate is not so published by the Bank of Canada for any such date, the
spot rate quoted by the Canadian Agent at Toronto, Canada at approximately noon
(Toronto time) on that date in accordance with its normal practice for the
applicable currency conversion in the wholesale market.

     

    SECTION
9.17. No Advisory or
Fiduciary Responsibility.

     

     In connection with all aspects of each transaction
contemplated hereby, the Loan Parties each acknowledge and agree that: (i) the
credit facility provided for hereunder and any related arranging or other
services in connection therewith (including in connection with any amendment,
waiver or other modification hereof or of any other Loan Document) are an
arm’s-length commercial transaction between the Loan Parties, on the one hand,
and the Agents and the Lenders, on the other hand, and each of the Loan Parties
is capable of evaluating and understanding and understands and accepts the
terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents (including any amendment, waiver or other modification
hereof or thereof); (ii) in connection with the process leading to such
transaction, each Agent and Lender is and has been acting solely as a principal
and is not the financial advisor, agent or fiduciary, for the Loan Parties or
any of their respective Affiliates, stockholders, creditors or employees or any
other Person; (iii) none of the Agents or the Lenders has assumed or will assume
an advisory, agency or fiduciary responsibility in favor of the Loan Parties
with respect to any of the transactions contemplated hereby or the process
leading thereto, including with respect to any amendment, waiver or other
modification hereof or of any other Loan Document (irrespective of whether any
of the Agents or Lenders has advised or is currently advising any Loan Party or
any of its Affiliates on other matters) and none of the Agents or Lenders has
any obligation to any Loan Party or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; (iv) the Agents and the Lenders and
their respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Loan Parties and their
respective Affiliates, and none of the Agents or Lenders has any obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Agents and the Lenders have not provided and will not
provide any legal, accounting, regulatory or tax advice with respect to any of
the transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Loan Document) and each of the Loan Parties
has consulted its own legal, accounting, regulatory and tax advisors to the
extent it has deemed appropriate.  Each of the Loan Parties hereby
waives and releases, to the fullest extent permitted by law, any claims that it
may have against each of the Agents and Lenders with respect to any breach or
alleged breach of agency or fiduciary duty.

     

    SECTION
9.18. USA PATRIOT
Act Notice. Each
Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Loan Parties that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Act”), it is required to obtain, verify and record information that identifies
each Loan Party, which information includes the name and address of each Loan
Party and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify each Loan Party in accordance with the Act.
Each Loan Party is in compliance, in all material respects, with the Patriot
Act.  No part of the proceeds of the Loans will be used by the Loan
Parties, directly or indirectly, for any payments to any governmental official
or employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as
amended.

     

    SECTION
9.19. Press
Releases.

     

    Each Loan Party executing this Agreement agrees that
neither it nor its Affiliates will in the future issue any press releases or
other public disclosure using the name of the Administrative Agent or its
branches or Affiliates or referring to this Agreement or the other Loan
Documents without at least two Business Days’ prior notice to the Administrative
Agent (or such lesser notice as the Administrative Agent may agree) and without
the prior written consent of the Administrative Agent unless (and only to the
extent) such Loan Party or Affiliate is required to do so under Applicable Law
and then, in any event, such Loan Party or Affiliate will consult with the
Administrative Agent before issuing such press release or other public
disclosure.  Each Loan Party consents to the publication by the
Administrative Agent or any Lender of advertising material relating to the
financing transactions contemplated  by this Agreement using any Loan
Party’s name, product photographs, logo or trademark.  The
Administrative Agent or such Lender shall provide a draft reasonably in advance
of any advertising material to the Lead Borrower for review and comment prior to
the publication thereof. The Administrative Agent reserves the right to provide
to industry trade organizations information necessary and customary for
inclusion in league table measurements.

     

    SECTION
9.20. No Strict
Construction.

     

               The
parties hereto have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

     

    SECTION
9.21. Relationship
with DIP Orders and Initial Order.

     

    In
the event of any inconsistency between the terms of the DIP Orders, the Initial
Order and the Loan Documents, the terms of the DIP Orders and the Initial Order,
as applicable, shall control and the representations, warranties, covenants,
agreements or events of default made herein and in the other Loan Documents
shall be subject to the terms of the DIP Orders and the Initial
Orders.

     

    SECTION
9.22. Language.

     

    The
parties herein have expressly requested that this Agreement and all related
documents be drawn up in the English language.  À la demande expresse
des parties aux présentes, cette convention et tout document y afférent ont été
rédigés en langue anglaise.

     

    [balance
of page left intentionally blank; signature pages follow]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    CIRCUIT
CITY STORES, INC.

    as
Lead Borrower and Borrower

     

    By:           ________________________

    Name:

    Title:

     

     

    CIRCUIT
CITY STORES WEST COAST, INC.

    as
Borrower

     

     

    By:           ________________________

    Name:

    Title:

     

     

    CIRCUIT
CITY STORES PR, LLC, as Borrower

     

     

    By:           ________________________

    Name:

    Title:

     

     

    INTERTAN
CANADA LTD., as Canadian Borrower

     

    By:           ____________________________

    Name:

    Title:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    BANK
OF AMERICA, N.A.,

    as
Administrative Agent, as Collateral Agent, as Issuing Bank, as Swingline Lender
to the Domestic Borrowers, and as Domestic Lender

     

     

    By:________________________

    Name: Kathleen Dimock

    Title:   Managing
Director

    Address:

    100 Federal Street, 9th Floor

    Boston, Massachusetts 02110

    Attn: Ms. Kathleen Dimock

    Telephone: (617) 434-3830

    Telecopy: (617) 434-6685

     

    BANK
OF AMERICA, N.A., (acting through its Canada branch), as Canadian Lender, as
Swingline Lender and Issuing Bank to the Canadian Borrower, and as Canadian
Administrative Agent and Canadian Collateral Agent

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    GENERAL
ELECTRIC CAPITAL CORPORATION,

    as
Co-Documentation Agent, as Co-Collateral Agent and as Domestic
Lender

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    WELLS
FARGO RETAIL FINANCE, LLC, as Syndication Agent, Joint Bookrunner and Domestic
Lender

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    JPMORGAN
CHASE BANK, N.A.

    as
co-Documentation Agent and as Domestic Lender

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    120
South LaSalle St.

     Mail
Code IL1-1458

    Chicago,
Illinois 60603

    Attn:  Andrew
D. Hall

    Telephone:
(312) 661-5630

    Telecopy:
(312) 661-6929

     

    WACHOVIA
CAPITAL FINANCE CORPORATION (CENTRAL), as Domestic Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    GMAC
COMMERCIAL FINANCE LLC, as

    Domestic
Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    THE
CIT GROUP/BUSINESS CREDIT, INC., as

    Domestic
Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NATIONAL
CITY BUSINESS CREDIT, INC., as Domestic Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    BURDALE
FINANCIAL LTD., as

    Domestic
Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    UBS
LOAN FINANCE LLC, as

    Domestic
Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    UPS
CAPITAL CORPORATION, as

    Domestic
Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    FIFTH
THIRD BANK, as Domestic Lender

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

    
      
      

      
        

      

    

    
      
      

    

    SUNTRUST
BANK, as

    Domestic
Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    TEXTRON
FINANCIAL CORPORATION, as

    Domestic
Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    MERRILL
LYNCH CAPITAL, a Division of Merrill Lynch Business Financial Services Inc.,
as

    Domestic
Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    PNC
BANK, N.A., as

    Domestic
Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    WEBSTER
BUSINESS CREDIT CORPORATION, as

    Domestic
Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________

     

    CAPITAL
ONE LEVERAGE FINANCE CORP., as

    Domestic
Lender

     

    By:________________________

    Name:______________________

    Title:_______________________

    Address:

    _______________________

    _______________________

    Attn:
__________________

    Telephone:
_____________

    Telecopy:
_______________