Document:

Ex-10.1 Amended and Restated Credit Agreement

 

EXECUTION VERSION

AMENDED AND RESTATED CREDIT AGREEMENT

dated as of

December 1, 2006

among

GENESCO INC.

a Borrower and the Lead Borrower,

GENESCO BRANDS, INC., HAT WORLD CORPORATION,

HAT WORLD, INC., FLAGG BROS. OF PUERTO RICO, INC.

as the Other Borrowers,

The LENDERS Party Hereto,

BANK OF AMERICA, N.A. and LASALLE BANK, NATIONAL ASSOCIATION

as Issuing Banks,

BANK OF AMERICA, N.A.

as Administrative Agent, Collateral Agent, and an Issuing Bank,

LASALLE BANK, NATIONAL ASSOCIATION and WELLS FARGO FOOTHILL, LLC, as

Co-Syndication Agents,

NATIONAL CITY BUSINESS CREDIT, INC., U.S. BANK NATIONAL ASSOCIATION and

SUNTRUST BANK,

as Co-Documentation Agents,

and

BANC OF AMERICA SECURITIES LLC

as Sole Lead Arranger and Sole Bookrunner

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	1. DEFINITIONS
	 	 	2	 
	1.1 Defined Terms
	 	 	2	 
	1.2 Terms Generally
	 	 	33	 
	1.3 Accounting Terms
	 	 	33	 
	 
	 	 	 	 
	2. AMOUNT AND TERMS OF CREDIT
	 	 	34	 
	2.1 Commitments of the Lenders
	 	 	34	 
	2.2 Reserves; Changes to Reserves
	 	 	36	 
	2.3 Making of Loans
	 	 	37	 
	2.4 Overadvances
	 	 	38	 
	2.5 Swingline Loans
	 	 	38	 
	2.6 Letters of Credit
	 	 	39	 
	2.7 Settlements Among Lenders
	 	 	43	 
	2.8 Notes; Repayment of Loans
	 	 	44	 
	2.9 Interest on Loans
	 	 	45	 
	2.10 Default Interest
	 	 	45	 
	2.11 Certain Fees
	 	 	46	 
	2.12 Unused Commitment Fee
	 	 	46	 
	2.13 Letter of Credit Fees
	 	 	46	 
	2.14 Nature of Fees
	 	 	47	 
	2.15 Termination or Reduction of Commitments
	 	 	47	 
	2.16 Alternate Rate of Interest
	 	 	47	 
	2.17 Conversion and Continuation of Loans
	 	 	48	 
	2.18 Mandatory Prepayment; Cash Collateral; Commitment Termination
	 	 	49	 
	2.19 Optional Prepayment of Loans; Reimbursement of Lenders
	 	 	50	 
	2.20 Maintenance of Loan Account; Statements of Account
	 	 	51	 
	2.21 Cash Receipts
	 	 	52	 
	2.22 Application of Payments
	 	 	54	 
	2.23 Increased Costs
	 	 	55	 
	2.24 Change in Legality
	 	 	56	 
	2.25 Payments; Sharing of Setoff
	 	 	57	 
	2.26 Taxes
	 	 	58	 
	2.27 Security Interests in Collateral
	 	 	60	 
	2.28 Mitigation Obligations; Replacement of Lenders
	 	 	60	 
	 
	 	 	 	 
	3. REPRESENTATIONS AND WARRANTIES
	 	 	61	 
	3.1 Organization; Powers
	 	 	61	 
	3.2 Authorization; Enforceability
	 	 	61	 
	3.3 Governmental Approvals; No Conflicts
	 	 	62	 
	3.4 Financial Condition
	 	 	62	 
	3.5 Properties
	 	 	62	 
	3.6 Litigation and Environmental Matters
	 	 	62	 
	3.7 Compliance with Laws and Agreements
	 	 	63	 
	3.8 Investment Company or Holding Company Status
	 	 	63	 

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	3.9 Taxes
	 	 	63	 
	3.10 ERISA
	 	 	63	 
	3.11 Interdependence of Credit Parties
	 	 	64	 
	3.12 Disclosure
	 	 	64	 
	3.13 Subsidiaries
	 	 	64	 
	3.14 Insurance
	 	 	65	 
	3.15 Labor Matters
	 	 	65	 
	3.16 Certain Transactions
	 	 	65	 
	3.17 Restrictions on the Credit Parties
	 	 	65	 
	3.18 Security Documents
	 	 	66	 
	3.19 Federal Reserve Regulations
	 	 	66	 
	3.20 Solvency
	 	 	66	 
	3.21
Franchises, Patents, Copyrights, Etc.
	 	 	66	 
	3.22 Designation as “Designated Senior Indebtedness”
	 	 	66	 
	 
	 	 	 	 
	4. CONDITIONS
	 	 	67	 
	4.1 Closing Date
	 	 	67	 
	4.2 Conditions Precedent to Each Loan and Each Letter of Credit
	 	 	70	 
	 
	 	 	 	 
	5. AFFIRMATIVE COVENANTS
	 	 	71	 
	5.1 Financial Statements and Other Information
	 	 	71	 
	5.2 Notices of Material Events
	 	 	73	 
	5.3 Information Regarding Collateral
	 	 	74	 
	5.4 Existence; Conduct of Business
	 	 	74	 
	5.5 Payment of Obligations
	 	 	74	 
	5.6 Maintenance of Properties
	 	 	75	 
	5.7 Insurance
	 	 	75	 
	5.8 Casualty and Condemnation
	 	 	76	 
	5.9 Books and Records; Inspection and Audit Rights
	 	 	76	 
	5.10 Fiscal Year
	 	 	77	 
	5.11 Physical Inventories
	 	 	77	 
	5.12 Compliance with Laws
	 	 	78	 
	5.13 Use of Proceeds and Letters of Credit
	 	 	78	 
	5.14 Additional Subsidiaries
	 	 	78	 
	5.15 Further Assurances
	 	 	79	 
	 
	 	 	 	 
	6. NEGATIVE COVENANTS
	 	 	79	 
	6.1 Indebtedness
	 	 	79	 
	6.2 Liens
	 	 	81	 
	6.3 Fundamental Changes
	 	 	82	 
	6.4 Investments, Loans, Advances, Guarantees and Acquisitions
	 	 	82	 
	6.5 Asset Sales
	 	 	83	 
	6.6 Restrictive Agreements
	 	 	84	 
	6.7 Restricted Payments; Certain Payments of Indebtedness
	 	 	85	 
	6.8 Transactions with Affiliates
	 	 	85	 
	6.9 Additional Subsidiaries
	 	 	85	 
	6.10 Amendment of Material Documents
	 	 	85	 

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	6.11 Fixed Charge Coverage Ratio
	 	 	86	 
	6.12 Environmental Laws
	 	 	86	 
	6.13 Fiscal Year
	 	 	86	 
	 
	 	 	 	 
	7. EVENTS OF DEFAULT
	 	 	86	 
	7.1 Events of Default
	 	 	86	 
	7.2 When Continuing
	 	 	89	 
	7.3 Remedies on Default
	 	 	89	 
	7.4 Application of Proceeds
	 	 	90	 
	 
	 	 	 	 
	8. THE AGENTS
	 	 	90	 
	8.1 Administration by Administrative Agent
	 	 	90	 
	8.2 The Collateral Agent
	 	 	90	 
	8.3 Sharing of Excess Payments
	 	 	91	 
	8.4 Agreement of Required Lenders
	 	 	91	 
	8.5 Liability of Agents
	 	 	91	 
	8.6 Notice of Default
	 	 	93	 
	8.7 Lenders’ Credit Decisions
	 	 	93	 
	8.8 Reimbursement and Indemnification
	 	 	93	 
	8.9 Rights of Agents
	 	 	94	 
	8.10 Notice of Transfer
	 	 	94	 
	8.11 Successor Agent
	 	 	94	 
	8.12 Reports and Financial Statements
	 	 	94	 
	8.13 Delinquent Lender
	 	 	94	 
	8.14 Co-Syndication Agents and Co-Documentation Agents
	 	 	95	 
	 
	 	 	 	 
	9. MISCELLANEOUS
	 	 	95	 
	9.1 Notices
	 	 	95	 
	9.2 Waivers; Amendments
	 	 	96	 
	9.3 Expenses; Indemnity; Damage Waiver
	 	 	98	 
	9.4 Designation of Lead Borrower as Borrowers’ Agent
	 	 	100	 
	9.5 Successors and Assigns
	 	 	101	 
	9.6 Survival
	 	 	103	 
	9.7 Counterparts; Integration; Effectiveness
	 	 	103	 
	9.8 Severability
	 	 	104	 
	9.9 Right of Setoff
	 	 	104	 
	9.10 Governing Law; Jurisdiction; Consent to Service of Process
	 	 	104	 
	9.11 WAIVER OF JURY TRIAL
	 	 	105	 
	9.12 Headings
	 	 	105	 
	9.13 Interest Rate Limitation
	 	 	105	 
	9.14 Additional Waivers
	 	 	105	 
	9.15 Confidentiality
	 	 	107	 
	9.16 Release of Collateral and Guaranty Obligations
	 	 	107	 
	9.17 Amendment and Restatement
	 	 	108	 
	9.18 Commitments
	 	 	109	 
	9.19 USA Patriot Act Notice
	 	 	109	 

iii

 

EXHIBITS

	 	 	 
	A

	 	Form of Assignment and Acceptance
	B-1

	 	Form of Revolving Note
	B-2

	 	Form of Swingline Note
	C

	 	Form of Facility Guaranty
	D

	 	Form of Borrowing Base Certificate
	E

	 	Form of Compliance Certificate
	F

	 	Closing Agenda
	G.

	 	Form of DDA Notification

iv

 

SCHEDULES

	 	 	 
	1.1

	 	Lenders and Commitments
	2.6(j)

	 	Existing Letters of Credit
	2.21(b)

	 	Credit Card Arrangements
	2.21(c)

	 	Concentration Accounts and Investment Accounts
	3.5(b)

	 	Properties
	3.6

	 	Litigation and Environmental Matters
	3.9

	 	Taxes
	3.10

	 	ERISA
	3.13

	 	Subsidiaries
	3.14

	 	Insurance
	3.16

	 	Certain Transactions
	3.21

	 	Franchises, Patents, Copyrights, etc.
	5.1(i)

	 	Financial Reporting Requirements
	6.1

	 	Indebtedness
	6.2

	 	Liens
	6.4

	 	Investments, Loans, Advances, Guarantees and Acquisitions

v

 

     This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of December 1, 2006 (this
“Agreement”) among GENESCO INC., a corporation organized under the laws of the State of
Tennessee having a place of business at Genesco Park, 1415 Murfreesboro Road, P.O. Box 731,
Nashville, TN 37202-0731, as a Borrower and the Lead Borrower (as hereinafter defined); the Other
Borrowers (as defined below); the LENDERS party hereto; BANK OF AMERICA, N.A., a national banking
association having a place of business at 40 Broad Street, Boston, Massachusetts 02109,
Administrative Agent for the Lenders, Collateral Agent for the Secured Parties (as each such term
is hereinafter defined) and an Issuing Bank (as hereinafter defined); and LASALLE BANK, NATIONAL
ASSOCIATION, as Co-Syndication Agent and as an Issuing Bank; WELLS FARGO FOOTHILL, LLC, as
Co-Syndication Agent; and NATIONAL CITY BUSINESS CREDIT, INC., U.S. BANK NATIONAL ASSOCIATION and
SUNTRUST BANK, as Co-Documentation Agents.

WITNESSETH:

     WHEREAS, the Borrowers have requested that the Lenders make available to the Borrowers, as
co-borrowers, a revolving credit facility (including a letter of credit sub-facility) in an initial
maximum amount not to exceed $200,000,000, the proceeds of which, in each case, shall be used by
the Borrowers for purposes permitted under, and otherwise in accordance with and subject to the
terms of, this Agreement;

     WHEREAS, the Other Borrowers are wholly-owned Subsidiaries of the Lead Borrower, and together
with the Lead Borrower are related entities that collectively constitute an integrated business;

     WHEREAS, each Borrower is sufficiently dependent upon the others and the Borrowers are related
in such a way that any advance made hereunder to any Borrower will benefit all of the Borrowers as
a result of their related operations and identity of interests;

     WHEREAS, the Borrowers have requested that the Agent and Lenders treat them as co-borrowers
hereunder, jointly and severally responsible for the obligations of each other;

     WHEREAS, each Lender is willing to agree (severally and not jointly) to make such loans and
provide such financial accommodations to the Borrowers on a pro rata basis according to its
Commitment on the terms and conditions set forth herein, and Bank of America, N.A. is willing to
act as Administrative Agent and Collateral Agent for the Lenders on the terms and conditions set
forth herein and in the other Loan Documents;

     WHEREAS, prior to the date of this Agreement, the Lead Borrower, on the one hand, and Bank of
America, N.A., as Administrative Agent thereunder, and the Lenders on the other hand, previously
entered into the Existing Financing Agreements pursuant to which the Lenders provided the Lead
Borrower with certain financial accommodations to which the Lead Borrower and the Other Borrowers
(other than Flagg Bros. of Puerto Rico, Inc.) were jointly and severally liable to the
Administrative Agent and the Lenders for the Existing Obligations pursuant to the terms of the
Existing Credit Agreement and the other Existing Financing Agreements;

     WHEREAS, by this Agreement, each Borrower (other than Flagg Bros. of Puerto Rico, Inc.)
desires to acknowledge and reaffirm the Existing Obligations pursuant to the Existing

1

 

Financing Agreements (as modified and restated hereby) and acknowledge their continuing
liabilities to the Agents and Lenders thereunder (as modified and restated hereby) in order to
induce the Lenders to continue to make such loans, advances and financial accommodations to the
Borrowers; and

     WHEREAS, Flagg Bros. of Puerto Rico, Inc. desires to join as a co-obligor in respect of the
Existing Obligations pursuant to the Existing Financing Agreements (as modified and restated
hereby) and join in the continuing liabilities to the Agents and Lenders thereunder (as modified
and restated hereby) in order to induce the Lenders to continue to make such loans and advances and
financial accommodations to the Borrowers;

     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 Administrative Agent, the Collateral Agent, the Co-Syndication Agents, the
Co-Documentation Agents, and the Borrowers hereby agree as follows::

1. DEFINITIONS.

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

     “ACH” shall mean automated clearing house transfers.

     “Account Control Agreements” shall mean agency agreements with banks or other
institutions maintaining a checking or other demand deposit account, lockbox account or investment
account of any Borrower (excluding store — level deposit accounts), including without limitation
any DDA into which the proceeds of any other DDA are regularly swept on a daily basis, which
agreements shall be in form and substance reasonably satisfactory to the Administrative Agent.

     “Accounts” shall mean “accounts” as defined in the UCC, and also all accounts,
accounts receivable, and rights to payment (whether or not earned by performance): (i) for property
that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of; (ii) for
services rendered or to be rendered; (iii) a policy of insurance issued or to be issued; (iv) a
secondary obligation incurred or to be incurred; or (v) arising out of the use of a debit, credit
or charge card or information contained on or used with that card.

     “Account Debtor” shall mean any Person who is obligated under an Account.

     “Account Debtor List” has the meaning provided therefor in Section 2.21(m).

     “Account Reserves” means such reserves as may be established from time to time by the
Administrative Agent in the Administrative Agent’s Permitted Discretion (after consultation with
the Lead Borrower (whose consent to any Account Reserve shall not be required)) with respect to the
collectability of any Eligible Wholesale Receivable or any Eligible Credit Card and Debit Card
Receivable. Account Reserves shall be established and calculated in a manner and methodology
consistent with the Administrative Agent’s practices as of the Closing Date with other similarly
situated borrowers.

2

 

     “Act” has the meaning provided therefor in Section 9.19.

     “Additional Commitment Lender” has the meaning provided therefor in Section 2.1(c).

     “Adjusted Excess Availability” means, as of any date of determination, the excess, if
any, of (a) the lesser of (i) the Total Commitments and (ii) the Borrowing Base, over (b) the
outstanding Credit Extensions.

     “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
the LIBO Rate for such Interest Period.

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

     “Affiliate” means, with respect to a specified Person, (i) any director or officer of
that Person, (ii) any other Person Controlling, Controlled by or under direct or indirect common
Control with that Person (and if that Person is an individual, any member of the immediate family
(including parents, siblings, spouse, children, stepchildren, nephews, nieces and grandchildren) of
such individual and any trust whose principal beneficiary is such individual or one or more members
of such immediate family and any Person who is Controlled by any such member or trust), (iii) any
other Person directly or indirectly holding 10% or more of any class of the capital stock or other
equity interests (including options, warrants, convertible securities and similar rights) of that
Person, and (iv) any other Person 10% or more of any class of whose capital stock or other equity
interests (including options, warrants, convertible securities and similar rights) is held directly
or indirectly by that Person.

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

     “Agreement” means this Credit Agreement, as modified, amended, supplemented or
restated and in effect from time to time.

     “Applicable Fiscal Period” means the period of twelve (12) fiscal months ended as of
the end of the last fiscal quarter covered by the quarterly or annual financial statement most
recently required to be delivered to the Administrative Agent pursuant to Section 5.1(a) and 5.1(b)
or, following the occurrence and during the continuance of a Cash Dominion Event, the period of
twelve (12) fiscal months ended as of the end of the last fiscal month covered by the financial
statement most recently required to be delivered pursuant to Section 5.1(f).

     “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, that are
applicable to such Person or any property of such Person.

3

 

     “Applicable Margin” means the rates for Prime Rate Loans and LIBO Loans set forth
below:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Excess	 	LIBOR	 	Prime Rate	 	Commitment
	Level	 	Availability	 	Margin	 	Margin	 	Fee
	 	I	 	 	<$40,000,000
	 	 	1.50	%	 	 	0.00	%	 	 	0.25	%
	II	 	3$40,000,000 and
<$80,000,000
	 	 	1.25	%	 	 	0.00	%	 	 	0.25	%
	III	 	3$80,000,000 and
<$120,000,000
	 	 	1.00	%	 	 	0.00	%	 	 	0.25	%
	IV	 	3$120,000,0000
	 	 	0.75	%	 	 	0.00	%	 	 	0.25	%

     Initially, as of the Closing Date Level III pricing will be applicable. Thereafter, the
Applicable Margin shall be subject to adjustment each fiscal quarter commencing February 4, 2007,
based upon (A) the calculation of the average daily Excess Availability during the immediately
preceding fiscal quarter as determined by the Administrative Agent, and (B) in the case of Level IV
and in the event average daily Excess Availability during the immediately preceding fiscal quarter
equals or exceeds $120,000,000, the maintenance by the Borrowers of Consolidated EBITDA for the
most recently ended Applicable Fiscal Period that is equal to or greater than $160,000,000.
Average daily Excess Availability shall be determined based upon Borrowing Base Certificate(s)
received by the Administrative Agent pursuant to Section 5.1(e) and Consolidated EBITDA shall be
determined based upon the most recent financial statements received by the Administrative Agent
pursuant to Sections 5.1(a), 5.1(b), or 5.1(f) as applicable. In the event that the Borrowers fail
to timely deliver financial statements in accordance with Sections 5.1(a), 5.1(b), or 5.1(f), as
applicable, during a period in which the Borrowers are afforded Level IV pricing, the Applicable
Margin for such fiscal quarter shall be adjusted based solely upon the calculation of the average
daily Excess Availability and, in the event that average daily Excess Availability for such fiscal
quarter is equal to or greater $120,000,000, the Applicable Margin shall nonetheless be set at
Level III pricing.

     Notwithstanding the foregoing (A) Level IV pricing above will only be accessible to the
Borrowers (i) from and after December 1, 2007 and (ii) at such times that the Borrowers have
achieved the requisite average daily Excess Availability and have maintained Consolidated EBITDA
for the most recently ended Applicable Fiscal Period equal to or greater than $160,000,000, and (B)
upon the occurrence of an Event of Default, at the option of the Administrative Agent or at the
direction of the Required Lenders, interest shall be determined in the manner set forth in Section
2.10.

4

 

     “Appraised Value” means the net appraised orderly liquidation value of the Borrowers’
Inventory as set forth in the Borrowers’ inventory stock ledger as determined from time to time by
the Administrative Agent with the assistance of an independent appraiser satisfactory to the
Administrative Agent.

     “Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section 9.5),
and accepted by the Administrative Agent, in the form of Exhibit A or any other form
approved by the Administrative Agent.

     “Availability Reserves” means such reserves as the Administrative Agent from time to
time determines in the Administrative Agent’s Permitted Discretion (after consultation with the
Lead Borrower (whose consent to any Availability Reserve shall not be required)) as being
appropriate to reflect the impediments to the Agents’ ability to realize upon the Collateral, but
without duplication of any Account Reserves or Inventory Reserves. Without limiting the generality
of the foregoing, Availability Reserves may include (but are not limited to) reserves based on (i)
rent; (ii) Customer Credit Liabilities and (iii) outstanding taxes and other governmental charges,
including, ad valorem, real estate, personal property, and other taxes which might have priority
over the interests of the Collateral Agent in the Collateral. Availability Reserves shall be
established and calculated in a manner and methodology consistent with the Administrative Agent’s
practices as of the Closing Date with other similarly situated borrowers.

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

     “Bank of America Concentration Account” has the meaning provided therefor in Section
2.21(d).

     “Bankruptcy Code” shall mean the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
§101, et seq.), as amended and in effect from time to time, and the regulations issued from
time to time thereunder.

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

     “Borrower Consolidated Group” shall mean the Lead Borrower and its Subsidiaries.

     “Borrowers” means, individually and collectively, the Lead Borrower, the Other
Borrowers and any other Person who subsequently becomes a Borrower hereunder.

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

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

     (a) the Inventory Advance Rate multiplied by (i) the Appraised Value of Eligible Inventory,
minus (ii) Inventory Reserves; plus

5

 

     (b) eighty-five (85%) percent multiplied by (i) the then Eligible Wholesale Receivables,
minus (ii) Account Reserves related to Eligible Wholesale Receivables; plus

     (c) eighty-five (85%) percent multiplied by (i) the then Eligible Credit Card and Debit Card
Receivables, minus (ii) Account Reserves related to Eligible Credit Card and Debit Card
Receivables; minus

     (d) the then amount of all Availability Reserves.

     “Borrowing Base Certificate” has the meaning assigned to such term in Section 5.1(e).

     “Borrowing Request” means a request by the Lead Borrower on behalf of the Borrowers
for a Borrowing in accordance with Section 2.3.

     “Breakage Costs” shall have the meaning set forth in Section 2.18(c).

     “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in Charlotte, North Carolina or New York, New York 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.

     “Capital Expenditures” of any Person means, for any period, to the extent treated as a
capital expenditure in accordance with GAAP, any expenditure for fixed assets (both tangible and
intangible), including assets being constructed (whether or not completed), leasehold improvements,
installment purchases of machinery and equipment, acquisitions of real estate and other similar
expenditures including without duplication, expenditures in or from any construction-in-progress
account of any of the Credit Parties, provided, however, that expenditures for or
in respect of a Permitted Acquisition shall not constitute Capital Expenditures.

     “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.

     “Cash Collateral Account” shall mean an interest-bearing account established by the
Borrowers with the Collateral Agent under the sole and exclusive dominion and control of the
Collateral Agent designated as the “Genesco Inc. Cash Collateral Account”.

     “Cash Dominion Event” means either (i) the occurrence and continuance of any Event of
Default, or (ii) the failure of the Borrowers to maintain Adjusted Excess Availability in an amount
equal to not less than $30,000,000. For purposes of this Agreement, the occurrence of a Cash
Dominion Event shall be deemed continuing (i) so long as such Event of Default continues and has
not been waived by the Administrative Agent, or (ii) if the Cash Dominion Event arises as a result
of the Borrowers’ failure to maintain Adjusted Excess Availability in an amount equal

6

 

to $30,000,000, until such time as (x) the Borrowers maintain $30,000,000 in Adjusted Excess
Availability for twenty-five (25) consecutive Business Days, and (y) the Administrative Agent
receives a written request from the Borrowers to terminate the Cash Dominion Event, at which time
such Cash Dominion Event shall be deemed to have been cured for purposes of this Agreement;
provided that no Cash Dominion Event shall be curable after the occurrence of three (3)
Cash Dominion Events during the term of this Agreement. Notwithstanding the foregoing, in the
event that there are no Obligations outstanding, a Cash Dominion Event shall be deemed not to have
occurred and be continuing and/or shall be deemed cured for purposes of this Agreement and the
other Loan Documents.

     “Cash Receipts” has the meaning provided therefor in Section 2.21(d).

     “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 (as such term is used in 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 fifty
percent (50%) or more of the total voting power of the Voting Stock of the Lead Borrower on a fully
diluted basis, whether as a result of the issuance, sale or distribution of securities of the Lead
Borrower, any merger or consolidation to which the Lead Borrower is a party, or otherwise, (c)
except as otherwise permitted pursuant to this Agreement, the failure of the Lead Borrower to own,
directly or indirectly, at least eighty percent (80%) of the Voting Stock or ownership interest, as
applicable, of all of the Borrower Consolidated Group (other than with respect to Genesco Partners
Joint Venture, for which such percentage shall be sixty-five percent (65%)), or (d) there occurs a
“Change in Control” (or any comparable term) under and as determined in the Convertible Note
Indenture, which in accordance therewith gives each Convertible Noteholder the right to require the
Lead Borrower to repurchase the Convertible Notes held by such Person.

     “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement (or, in the case of any Person which becomes a Lender or Participant thereafter,
the date on which such Person becomes a Lender or Participant), (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, in the case of any Person which becomes a Lender or Participant
thereafter, the date on which such Person becomes a Lender or Participant) or (c) compliance by any
Lender or the Issuing Banks (or, for purposes of Section 2.23, by any lending office of such Lender
or by such Lender’s or any 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 made or issued
after the date of this Agreement (or, in the case of any Person which becomes a Lender or
Participant thereafter, the date on which such Person becomes a Lender or Participant).

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

     “Chattel Paper” has the meaning ascribed to such term in the UCC.

7

 

     “Closing Date” means the date on which the conditions specified in Section 4.1 are
satisfied (or waived by the Agents).

     “Closing Projections” shall mean a business plan for the Borrower Consolidated Group
including without limitation financial projections prepared on an annual basis for each of the
fiscal years ended February 3, 2007 through and including January 29, 2011, in each case including
a projected balance sheet, a projected statement of income and a projected statement of cash flows
and in each case in form and substance satisfactory to the Agents.

     “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.

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

     “Collateral Control Agreement” means a tri-party agreement in form and substance
satisfactory to the Collateral Agent, in its Permitted Discretion, among the Collateral Agent, a
Borrower and a customs broker, freight forwarder or other carrier, in which the customs broker,
freight forwarder or other carrier acknowledges that it has control over and holds the documents
evidencing ownership of the subject Inventory for the benefit of the Collateral Agent and agrees,
upon notice from the Collateral Agent following the occurrence and during the continuance of an
Event of Default, to hold and dispose of the subject Inventory solely as directed by the Collateral
Agent.

     “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 member of the Borrower Consolidated Group in the ordinary course of business of such
Borrower.

     “Commitment” shall mean, with respect to each Lender, the commitment of such Lender
hereunder 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 such commitments may be reduced
from time to time pursuant to Section 2.15 hereof or increased from time to time pursuant to
Section 2.1(c).

     “Commitment Fee” has the meaning provided therefor in Section 2.12.

     “Commitment Increase” has the meaning provided therefor in Section 2.1(c).

     “Commitment Increase Date” has the meaning provided therefor in Section 2.1(d).

     “Commitment Percentage” shall mean, with respect to each Lender, that percentage of
the Commitments of all Lenders hereunder 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 such

8

 

Commitments may be reduced from time to time pursuant to Section 2.15 hereof or increased from
time to time pursuant to Section 2.1(c) hereof.

     “Concentration Accounts” means the Bank of America Concentration Account together with
any and all other concentration accounts opened by any of the Credit Parties and consented to, in
writing, by the Administrative Agent.

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

     “Consolidated EBITDA” of any Person means, for any twelve fiscal month period, the
following for such Person for such period: (i) Consolidated Net Income, plus (ii) depreciation,
amortization and all other non-cash charges that were deducted in the calculation of Consolidated
Net Income for such period, plus (iii) provisions for income taxes that were deducted in the
calculation of Consolidated Net Income for such period, plus (iv) Consolidated Interest Expense for
such period, plus (v) extraordinary non-cash losses for such period to the extent such losses have
not been and are not expected to become cash losses in a later fiscal period. Each calculation of
Consolidated EBITDA under this Agreement shall be made for the twelve fiscal month period ending on
the date of such calculation.

     “Consolidated Interest Expense” means, for any Person for any period, total interest
and all amortization of debt discount and expense (including that attributable to Capital Lease
Obligations in accordance with GAAP) of such Person on a Consolidated basis with respect to all
outstanding Indebtedness of such Person calculated in accordance with GAAP.

     “Consolidated Net Income” means, for any Person for any period, the net income (or
loss) of such Person on a Consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP, provided that there shall be excluded (i) the income
(or loss) of any Person that is not a Subsidiary in which any other Person (other than the Lead
Borrower or any of its Domestic Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to the Lead Borrower or any of its
Domestic Subsidiaries by such Person during such period, and (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of the Lead Borrower or any of its
Domestic Subsidiaries or is merged into or consolidated with the Lead Borrower or any of its
Domestic Subsidiaries or that Person’s assets are acquired by the Lead Borrower or any of its
Domestic Subsidiaries.

     “Consolidated Net Worth” means, with respect to any Person, the difference between its
Consolidated total assets and its Consolidated total liabilities, all as determined in accordance
with GAAP.

     “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.

9

 

     “Controlled Account Banks” shall mean the banks or other institutions with whom the
Borrowers have entered into Account Control Agreements.

     “Controlled Accounts” shall mean each deposit account, lockbox account or investment
account of the Borrowers that is the subject of an Account Control Agreement.

     “Convertible Notes Indenture” means that Indenture dated as of June 24, 2003 by and
among the Lead Borrower and The Bank of New York, as trustee for the holders of the Convertible
Notes, as such Indenture may be amended, modified, restated or supplemented in accordance with the
Agreement.

     “Convertible Notes” means the 4.125% Convertible Subordinated Debentures due 2023
issued by the Lead Borrower pursuant to the Convertible Notes Indenture, as such Convertible Notes
may be amended, modified, restated or supplemented and in effect from time to time.

     “Credit Card Notifications” has the meaning provided therefor in Section 2.21(a).

     “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.

     “Credit Parties” shall mean, collectively, (i) the Borrowers (ii) the Facility
Guarantors, if any, and (a) each of the Material Domestic Subsidiaries of the Borrowers in
existence from time to time (each, individually, a “Credit Party”).

     “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 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, including, without limitation, discount cards, and (b) outstanding merchandise
credits and customer deposits of the Borrowers.

     “DDA” means any checking or other demand deposit account maintained by any Borrower.

     “DDA List” has the meaning provided therefor in Section 2.21(a).

     “DDA Notification” has the meaning provided therefor in Section 2.21(a).

     “Debtor Relief Law” shall mean, collectively, the Bankruptcy Code and all other
applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization or similar debtor relief laws from time to time in effect affecting the
rights of creditors generally, in each case as amended from time to time.

     “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.

10

 

     “Delinquent Lender’s Future Commitment” has the meaning given that term in Section
8.13.

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

     “Domestic Subsidiary” means any Subsidiary other than a Foreign Subsidiary.

     “Eligible Credit Card and Debit Card Receivables” means Accounts due to a Borrower on
a non-recourse basis from Visa, MasterCard, American Express Company, Discover, and other major
credit card or debit card processors, in each case acceptable to the Administrative Agent in its
reasonable discretion, as arise in the ordinary course of business, that have been earned by
performance and are deemed by the Administrative Agent in its reasonable discretion to be eligible
for inclusion in the calculation of the Borrowing Base. Without limiting the foregoing, unless the
Administrative Agent otherwise agrees, none of the following shall be deemed to be Eligible Credit
Card and Debit 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 Borrower does not have good and valid title, free and
clear of any Lien (other than Liens granted to the Collateral Agent for its own benefit and the
ratable benefit of the other Secured Parties and Permitted Encumbrances for which the
Administrative Agent, in its Permitted Discretion, has established adequate Reserves pursuant to
Section 2.2);

     (c) Accounts that are not subject to a first priority security interest in favor of the
Collateral Agent for its own benefit and the ratable benefit of the other Secured Parties (it being
the intent that chargebacks in the ordinary course by the credit card and debit card processors,
and Permitted Encumbrances for which the Administrative Agent, in its Permitted Discretion, has
established adequate Reserves pursuant to Section 2.2, shall not be deemed violative of this
clause);

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

     (e) Accounts which are acquired in a Permitted Acquisition unless and until the Administrative
Agent has completed a commercial finance examination of such Accounts, establishes an advance rate
and reserves (if applicable) therefor, and otherwise agrees that such Accounts shall be deemed
Eligible Credit Card and Debit Card Receivables; or

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

     “Eligible Hat World Inventory” shall mean, as of the date of determination thereof,
without duplication of other Eligible Inventory, Inventory which is to be sold through the Hat
World operations of the Borrowers and which would otherwise constitute Eligible Inventory.

11

 

     “Eligible Inventory” shall mean, as of the date of determination thereof (without
duplication), (a) Eligible Hat World Inventory, (b) Eligible Johnston & Murphy Inventory, (c)
Eligible Journeys Inventory, (d) Eligible Wholesale Inventory, (e) Eligible Underground Station
Inventory and (f) other items of Inventory of the Borrowers that are finished goods, merchantable
and readily saleable to the public in the ordinary course deemed by the Administrative Agent in its
reasonable discretion to be eligible for inclusion in the calculation of the Borrowing Base.
Without limiting the foregoing, unless otherwise approved in writing by the Administrative Agent,
none of the following shall be deemed to be Eligible Inventory:

     (a) Inventory that is not owned solely by a Borrower, or is leased or on consignment, or such
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 (it being understood that any
Inventory that is in transit between a warehouse facility and a store or between stores that are
owned or leased by one or more Borrowers will not be rendered “ineligible” by the application of
this clause (b));

     (c) Inventory that represents (i) goods damaged, defective or otherwise unmerchantable, or
(ii) goods returned to the vendor;

     (d) Inventory that is not located in the United States of America (including Puerto Rico, but
excluding other territories and possessions of the United States of America);

     (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 (it being the intent that Permitted
Encumbrances for which the Administrative Agent, in its Permitted Discretion, has established
adequate Reserves pursuant to Section 2.2 shall not be deemed violative of this clause);

     (f) Inventory which consists of samples, labels, bags, packaging and other similar
non-merchandise categories;

     (g) Inventory as to which insurance in compliance with the provisions of Section 5.7 hereof is
not in effect;

     (h) Inventory which has been sold but not yet delivered; or

     (i) Inventory which is acquired in a Permitted Acquisition or which is owned by a Borrower
created after the Closing Date (except to the extent that such Inventory has been acquired by such
Borrower from another Borrower and otherwise constitutes Eligible Inventory) unless and until the
Administrative Agent has completed an appraisal of such Inventory and establishes an Inventory
Advance Rate and Inventory Reserves (if applicable) therefor.

     “Eligible Johnston & Murphy Inventory” shall mean, as of the date of determination
thereof, without duplication of other Eligible Inventory, Inventory which is sold through the
Johnston & Murphy operations of the Borrowers and which would otherwise constitute Eligible
Inventory.

12

 

     “Eligible Journeys Inventory” shall mean, as of the date of determination thereof,
without duplication of other Eligible Inventory, Inventory which is sold through the Journeys
operations of the Borrowers and which would otherwise constitute Eligible Inventory.

     “Eligible Underground Station Inventory” shall mean, as of the date of determination
thereof, without duplication of other Eligible Inventory, Inventory which is to be sold through the
Underground Station operations of the Borrowers and which would otherwise constitute Eligible
Inventory.

     “Eligible Wholesale Inventory” shall mean, without duplication of other Eligible
Inventory, Inventory which is sold at wholesale through the licensed brands operations and/or the
Johnston & Murphy wholesale operations of the Borrowers and which would otherwise constitute
Eligible Inventory.

     “Eligible Wholesale Receivables” shall mean each Account arising in the ordinary
course of business of the Borrowers from the sale of finished goods inventory or rendering of
services by the Borrowers to wholesale customers unless:

     (a) it is not subject to a valid perfected first priority security interest in favor of the
Collateral Agent, for the benefit of the Agents and the Lenders, subject to no other Lien other
than Permitted Encumbrances for which the Administrative Agent, in its Permitted Discretion, has
established adequate Reserves pursuant to Section 2.2;

     (b) it is not evidenced by an invoice, statement or other documentary evidence reasonably
satisfactory to the Administrative Agent;

     (c) it arises out of services rendered or sales to, or out of any other transaction between,
among or with, one or more Affiliates of Borrowers;

     (d) it remains unpaid for longer than the earlier of (i) sixty-one (61) calendar days after
the original due date, or (ii) ninety-one (91) calendar days after the original invoice date;

     (e) it is owed by an Account Debtor and/or its Affiliates with respect to which more than 50%
of the aggregate balance of all Accounts owing from such Account Debtor and/or its Affiliates
remain unpaid for longer than the earlier of (i) sixty-one (61) calendar days after the original
due date, or (ii) ninety-one (91) calendar days after the original invoice date;

     (f) with respect to all Accounts owed by any particular Account Debtor and/or its Affiliates,
50% or more of all such Accounts are deemed not to be Eligible Wholesale Receivables by the
Administrative Agent in its Permitted Discretion (which percentage may, in the Administrative
Agent’s Permitted Discretion, be increased or decreased);

     (g) all Accounts owed by the corresponding Account Debtor and/or its Affiliates together do
not exceed twenty percent (20%) (such percentage or any higher percentage now or hereafter
established by the Administrative Agent in its Permitted Discretion for any particular Account
Debtor, a “Concentration Limit”) of the net collectible dollar value of all Accounts at any one
time (but the portion of the Accounts not in excess of the applicable percentages may be deemed
Eligible Wholesale Receivables, in the Administrative Agent’s Permitted Discretion);

13

 

     (h) any covenant, agreement, representation or warranty contained in any Loan Document with
respect to such Account has been breached and remains uncured;

     (i) the Account Debtor for such Account has commenced a voluntary case under any Debtor Relief
Law or has made an assignment for the benefit of creditors, or a decree or order for relief has
been entered by a court having jurisdiction in respect of such Account Debtor in an involuntary
case under any Debtor Relief Law, or any other petition or application for relief under any Debtor
Relief Law has been filed against such Account Debtor, or such Account Debtor has failed, suspended
business or ceased to be solvent, called a meeting of its creditors, or has consented to or
suffered a receiver, trustee, liquidator or custodian to be appointed for it or for all or a
significant portion of its assets or affairs;

     (j) it arises from the sale of property or services rendered to one or more Account Debtors
outside the continental United States or that have their principal place of business or chief
executive offices outside the continental United States;

     (k) it represents the sale of goods to an Account Debtor on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or other repurchase or return basis or is evidenced
by Chattel Paper or an Instrument of any kind not delivered to the Collateral Agent or has been
reduced to judgment;

     (l) the applicable Account Debtor for such Account is any Governmental Authority, unless
rights to payment of such Account have been assigned to Agent, for the benefit of itself and
Lenders, pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727, et
seq. and 41 U.S.C. Section 15, et seq.), or otherwise, and all applicable statutes or regulations
respecting the assignment of government Accounts have been complied with;

     (m) it is subject to an offset, credit (including any resource or other income credit or
offset), deduction, defense, discount, chargeback, freight claim, allowance, adjustment, dispute or
counterclaim, or is contingent in any respect or for any reason (but only to the extent of such
offset, credit, deduction, defense, discount, chargeback, freight claim, allowance, adjustment,
dispute or counterclaim or contingency);

     (n) there is an agreement with an Account Debtor for any deduction from such Account, except
for discounts or allowances made in the ordinary course of business for prompt payment, all of
which discounts or allowances are reflected in the calculation of the face value of each invoice
related thereto, such that only the discounted amount of such Account after giving effect to such
discounts and allowances shall be considered an Eligible Wholesale Receivable;

     (o) any return, rejection or repossession of goods or services related to it has occurred;

     (p) it is not payable to a Borrower;

     (q) the applicable Borrower has agreed to accept or has accepted any non-cash payment for such
Account;

14

 

     (r) it constitutes a re-billing of an amount previously billed or double billing (i.e.,
counted twice);

     (s) it constitutes a billing for a sample for which there is no written invoice or similar
agreement evidencing the Account Debtor’s agreement to pay such Account;

     (t) with respect to any Account arising from the sale of goods, the goods have not been
shipped to the Account Debtor or its designee;

     (u) with respect to any Account arising from the performance of services, the services have
not been actually performed or the services were undertaken in violation of any law;

     (v) the applicable Account Debtor for such Account is located in the States of New Jersey,
Minnesota, or West Virginia (or any other state that requires a creditor to file a business
activity report or similar document in order to bring suit or otherwise enforce its remedies
against such Account Debtor in the courts or through any judicial process of such state), unless
the requisite Borrower has qualified to do business in New Jersey, Minnesota, West Virginia, or
such other states, or has filed a business activities report with the applicable division of
taxation, the department of revenue, or with such other state offices, as appropriate, for the
then-current year, or is exempt from such filing requirement;

     (w) it is an Account subject to a debit memo issued by any Borrower;

     (x) such Accounts do not arise from the actual and bona fide sale and delivery
of goods by a Borrower or rendition of services by a Borrower in the ordinary course of its
business which transactions are completed in accordance with the terms and provisions contained in
any documents related thereto;

     (y) it is an Account subject to a surety bond, guaranty, indemnity or other similar
arrangement;

     (z) it is an Account owed by an Account Debtor that is subject to legal process by a Borrower
or against which a Borrower has asserted a mechanics’ or other similar lien or that is subject to
collection by a Borrower; or

     (aa) it fails to meet such other specifications and requirements which may from time to time
be established by the Administrative Agent on a prospective basis or is not otherwise satisfactory
to the Administrative Agent, as determined in the Administrative Agent’s Permitted Discretion.

     “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, preservation or
reclamation of natural resources, or handling, treatment, storage, disposal, Release or threatened
Release of any Hazardous Material.

     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, natural resource damage, costs of environmental remediation,

15

 

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 any 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) 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); (b) 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;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by a
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by a Borrower or any ERISA Affiliate from the PBGC 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 a Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan
(which is subject to Section 4063 of ERISA) or Multiemployer Plan; or (g) the receipt by a Borrower
or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from a Borrower or
any ERISA Affiliate 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.

     “Event of Default” has the meaning assigned to such term in Section 7.1. An “Event of
Default” shall be deemed to have occurred and to be continuing unless and until that Event of
Default has been duly waived by the Administrative Agent in writing or cured to the reasonable
satisfaction of the Administrative Agent.

     “Excess Availability” means, as of any date of determination, the excess, if any, of
(a) the Borrowing Base, over (b) the outstanding Credit Extensions.

     “Excluded Taxes” means, with respect to the Agents, any Lender, the Issuing Banks or
any other recipient of any payment to be made by or on account of any obligation of the Borrowers
hereunder, (a) income, franchise or similar taxes imposed on (or measured by) its gross or net
income as a result of a present of former connection between such Agent, Lender or Issuing Bank and
the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection

16

 

arising solely from such Agent, Lender or Issuing Bank having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement or any other Loan
Document), (b) any branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which any Borrower is located and (c) in the case of a Foreign
Lender 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 2.26, 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 2.26.

     “Existing Credit Agreement” shall mean the Credit Agreement dated as of April 1, 2004,
as amended, by and among Genesco Inc. and certain of its Subsidiaries, on the one hand, and Bank of
America, N.A and other lenders identified therein, on the other hand.

     “Existing Financing Agreements” shall mean the “Loan Documents”, as defined in the
Existing Credit Agreement.

     “Existing Letters of Credit” means each of the letters of credit listed on Schedule
2.6(j) hereto.

     “Existing Obligations” shall mean all Obligations, as defined in the Existing Credit
Agreement.

     “Facility Guarantors” means any Material Domestic Subsidiary that is not a Borrower.

     “Facility Guaranty” means the Guaranty executed by the Facility Guarantors, if any, in
favor of the Agents, the Issuing Banks and the Lenders substantially in the form of Exhibit
C hereto.

     “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 the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

     “Fee Letter” means the letter between the Lead Borrower and the Administrative Agent
dated as of September 21, 2006, as such letter may from time to time be amended.

     “Financial Officer” means, with respect to any Borrower, the chief financial officer,
controller, assistant controller, treasurer, or assistant treasurer of such Borrower.

     “Fixed Charge Coverage Ratio” means, as of the last day of any fiscal month, for the
Lead Borrower on a Consolidated basis for the twelve-month fiscal period then ended, the ratio of
(a) an amount equal to Consolidated EBITDA less Capital Expenditures and Taxes paid in

17

 

cash, in each case for such period, to (b) Fixed Charges for such period. Consolidated
EBITDA, Capital Expenditures and Fixed Charges shall be calculated without regard to (i) those
items attributable to any Person prior to the date it becomes a Domestic Subsidiary of the Lead
Borrower or any of its other Domestic Subsidiaries or is merged into or consolidated with the Lead
Borrower or any of its Domestic Subsidiaries or that Person’s assets are acquired by the Lead
Borrower or any of its Domestic Subsidiaries and (ii) any Subsidiaries other than Domestic
Subsidiaries.

     “Fixed Charges” means, with respect to any Person, the sum of (a) Consolidated
Interest Expense paid in cash and (b) scheduled principal payments on any Indebtedness for such
period but excluding principal payments to be made by the Lead Borrower following the Lead
Borrower’s call of the Convertible Notes pursuant to the Convertible Notes Indenture; provided
that, at all times during the period following the call to the closing of the exchange of the
Convertible Notes for the Lead Borrower’s common stock, the trading price of the Lead Borrower’s
common stock exceeds the exchange price.

     “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.

     “GAAP” means accounting principles which are (a) 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, and
(b) consistently applied with past financial statements of the Credit Parties adopting the same
principles.

     “Genesco Partners Joint Venture” means that certain Joint Venture between and among
the Lead Borrower and Hat World, Inc., on the one hand, and Corliss Stone – Littles, LLC, a
Delaware limited liability company, on the other hand, pursuant to that certain Joint Venture
Agreement dated as of October 2, 2006.

     “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, tribunal, 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 or other obligation 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 other obligation, (b) to purchase or lease property, securities
or services for the primary purpose of assuring the owner of such Indebtedness or other obligation
of the payment

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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, 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.

     “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money (including any obligations of such Person that are without recourse to
the credit of such Person), (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person upon which interest charges are
customarily paid under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase
price of property or services (excluding current accounts payable incurred in the ordinary course
of business), (e) 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,
(f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of
such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (i) all obligations, contingent or otherwise,
of such Person in respect of bankers’ acceptances, (j) to the extent not otherwise included, all
net obligations of such Person under Hedging Agreements, and (k) the principal and interest
portions of all rental obligations of such Person under any Synthetic Lease, tax retention
operating lease, off-balance sheet loan 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. The Indebtedness of any Person shall 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. To the extent that the rights and
remedies of the obligee of any Indebtedness are limited to certain property and are otherwise
non-recourse to such Person, the amount of such Indebtedness shall be limited to the value of the
Person’s interest in such property (valued at the higher of book value or market value as of such
date of determination).

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     “Indemnified Taxes” means Taxes other than Excluded Taxes.

     “Indemnitee” has the meaning provided therefor in Section 9.3(b).

     “Instrument” has the meaning ascribed to such term in the UCC.

     “Interest Payment Date” means (a) with respect to any Prime Rate Loan (including a
Swingline Loan), the first day of each calendar month, and (b) with respect to any LIBO Loan, the
last day of the Interest Period applicable to the Borrowing of which such Loan is a part, and, in
addition, if such LIBO Loan has an Interest Period of greater than 90 days, on the last day of the
third month of such Interest Period.

     “Interest Period” means, with respect to any LIBO 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, three or six 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 last calendar month
during which such Interest Period ends) shall end on the last Business Day of the calendar month
during which such Interest Period ends, (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 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 Agreement.

     “Inventory Advance Rate” means 85% or, in the case of Inventory acquired in a
Permitted Acquisition, such rate as the Administrative Agent shall establish, in its Permitted
Discretion, after completion of an appraisal on such Inventory.

     “Inventory Reserves” means such reserves as may be established from time to time by
the Administrative Agent in the Administrative Agent’s 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 the Eligible Inventory or which reflect such
other factors as affect the Appraised Value of the Eligible Inventory. Without limiting the
generality of the foregoing, Inventory Reserves may include (but are not limited to) reserves based
on (i) obsolescence; (ii) seasonality; (iii) Shrink; (iv) imbalance; (v) change in Inventory
character; (vi) change in Inventory composition; (vii) change in Inventory mix; (viii) markdowns
(both permanent and point of sale); and (ix) retail mark-ons and markups inconsistent with prior
period practice and performance; industry standards; current business plans; or advertising
calendar and planned advertising events. Inventory Reserves shall be established and calculated

20

 

in a manner and methodology consistent with the Administrative Agent’s practices as of the
Closing Date with other similarly situated borrowers.

     “Investment” has the meaning provided therefore in Section 6.4.

     “Investment Accounts” means all accounts maintained by any of the Credit Parties for
Investments as of the Closing Date and thereafter opened by any of the Credit Parties and consented
to by the Administrative Agent.

     “Issuing Bank” or “Issuing Banks” means each of LaSalle Bank, N.A., Bank of America
and any other non-defaulting Lender selected by the Lead Borrower, in the capacity of an issuer of
Letters of Credit hereunder, and who is in compliance with Section 2.6(k), and any successor to
such banks reasonably acceptable to the Administrative Agent in such capacity, provided, that,
following the occurrence and during the continuance of an Event of Default, Bank of America shall
be the sole Issuing Bank with respect to each Letter of Credit issued thereafter. Each Issuing
Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of such Issuing Bank, in which case the term “Issuing Banks” shall include any such Affiliate with
respect to Letters of Credit issued by such Affiliate.

     “Joinder Agreement” shall mean an agreement in form and substance acceptable to the
Administrative Agent in its Permitted Discretion, pursuant to which, among other things, a Person
becomes a party to, and bound by, the terms of this Agreement and/or other Loan Documents in the
same capacity and to the same extent as either a Borrower or a Facility Guarantor, as the
Administrative Agent may determine.

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

     “Lead Arranger” means Banc of America Securities LLC.

     “Lead Borrower” means Genesco Inc. and any replacement that the Borrowers appoint to
act as Lead Borrower upon the consent of the Administrative Agent, which consent shall not be
unreasonably withheld.

     “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 9.5(b).

     “Letter of Credit” shall mean a Standby Letter of Credit or Commercial Letter of
Credit that is (i) issued pursuant to this Agreement for the account of any Borrower or any
Facility Guarantor, (ii) issued in connection with the purchase of Inventory by any Borrower or any
Facility Guarantor or for any other purpose that is reasonably acceptable to the Administrative
Agent, and (iii) in form and substance reasonably satisfactory to the applicable Issuing Bank.

     “Letter of Credit Fees” shall mean the fees payable in respect of Letters of Credit
pursuant to Section 2.13.

     “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

21

 

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 applicable 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 Section 2.3.

     “LIBO Rate” means, with respect to any LIBO Borrowing for any Interest Period, a rate
per annum determined on the basis of the offered rates for deposits in Dollars, for a period of
time comparable to such Interest Period, which appears on the Telerate page 3750 as of 11:00 a.m.
(London time) on the day that is two Business Days preceding the first day of such Interest Period;
provided, however, if the rate described above does not appear on the Telerate
System on any applicable interest determination date, the LIBO Rate shall be the rate (rounded
upwards, if necessary, to the nearest one hundred thousandth of a percentage point) determined on
the basis of the offered rates for deposits in Dollars for a period of time comparable to such
Interest Period which are offered to the Administrative Agent by four major banks in the London
interbank market at approximately 11:00 a.m. (London time), on the day that is two Business Days
preceding the first day of such Interest Period as selected by the Administrative Agent. The
principal London office of each of the four major London banks will be requested to provide a
quotation of its Dollar deposit offered rate to the Administrative Agent. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of the quotations. If
fewer than two quotations are provided as requested, the rate for that date will be determined on
the basis of the rates quoted for loans in Dollars to leading European banks for a period of time
comparable to such Interest Period offered by major banks in New York, New York at approximately
11:00 a.m. (New York time), on the day that is two Business Days preceding the first day of such
Interest Period.

     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest 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.

     “Loan Account” has the meaning assigned to such term in Section 2.20(a).

     “Loan Documents” means this Agreement, the Notes, the Letters of Credit, the Fee
Letter, all Borrowing Base Certificates, the Account Control Agreements, the DDA Notifications, the
Credit Card Notifications, the Security Documents, the Perfection Certificate, the Facility
Guaranty, and any other instrument or agreement now or hereafter executed and delivered in
connection herewith or therewith, each as amended and in effect from time to time.

     “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.

22

 

     “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, condition, financial or otherwise, of the Credit Parties, taken as a
whole (b) the ability of the Credit Parties, taken as a whole, 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 Administrative Agent, the Collateral Agent or the Lenders
hereunder or thereunder.

     “Material Domestic Subsidiary” means, as of any date of determination, any Subsidiary
(a) the total tangible assets (after intercompany eliminations) of which, as determined in
accordance with GAAP, exceeds five percent (5%) of the Consolidated total tangible assets of the
Lead Borrower (after intercompany eliminations) measured as of the end of the most recently ended
fiscal quarter with respect to which the Administrative Agent has received financial statements
required to be delivered pursuant to Sections 5.1(a) and 5.1(b), as applicable, or (b) which
represents more than ten percent (10%) of Consolidated Net Income of the Lead Borrower for the
previous twelve fiscal months ending as of the last day of such fiscal quarter. “Material
Subsidiary” shall include, without limitation, any Subsidiary whose principal assets are one or
more Material Subsidiaries.

     “Material Foreign Subsidiary” means each Foreign Subsidiary which is a direct
Subsidiary of a Borrower which, as of the last day of any fiscal quarter, satisfied any one or more
of the following tests:

     (a) such Foreign Subsidiary’s total tangible assets (after intercompany eliminations), as
determined in accordance with GAAP, exceeds 10% of Consolidated total tangible assets of the Lead
Borrower; or

     (b) such Foreign Subsidiary’s Consolidated Net Income for the previous twelve months ending as
of the last day of such fiscal quarter exceeds 10% of Consolidated Net Income of the Lead Borrower
for the previous twelve months ending as of the last day of such fiscal quarter; or

     (c) such Foreign Subsidiary’s Consolidated Net Worth exceeds 10% of the Consolidated Net Worth
of the Lead Borrower.

     “Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit) of any one or more of the Borrowers in an aggregate principal amount exceeding $3,000,000.

     “Material Subsidiary” means a Material Domestic Subsidiary or a Material Foreign
Subsidiary.

     “Maturity Date” means December 1, 2011.

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

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     “Minority Lenders” has the meaning provided therefor in Section 9.2(c).

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

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

     “Noncompliance Notice” has the meaning provided therefor in Section 2.5(b).

     “Notes” shall mean (i) promissory notes of the Borrowers substantially in the form of
Exhibit B-1, payable to the order of Lenders requesting same as herein provided, evidencing
the Revolving Loans, and (ii) the promissory note of the Borrowers substantially in the form of
Exhibit B-2, payable to the Swingline Lender if requested by the Swingline Lender,
evidencing the Swingline Loans.

     “Obligations” means (a) the principal of, and interest (including all interest that
accrues after the commencement of any case or proceeding by or against any Borrower under any
federal or state bankruptcy, insolvency, receivership or similar law, whether or not allowed in
such case or proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon
one or more dates set for prepayment or otherwise, (b) the obligations of the Borrowers under this
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, (c)
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 or the
Lead Arranger under this Agreement and the other Loan Documents, (d) all covenants, agreements,
obligations and liabilities of the Borrowers under or pursuant to this Agreement and the other Loan
Documents, and (e) the payment and performance under any transaction of a Borrower with any Lender
or any of its Affiliates that arises out of (i) any cash management or depository service or letter
of credit provided by any such Person, (ii) any debt or credit card products provided by any such
Person, or (iii) any investment, Hedging Agreement or other banking or financial services provided
by any such Person.

     “Other Borrowers” means Genesco Brands, Inc., a Delaware corporation; Hat World
Corporation, a Delaware corporation; Hat World, Inc., a Minnesota corporation; Flagg Bros. of
Puerto Rico, Inc., a Delaware corporation; and any other Material Domestic Subsidiary that is not a
Facility Guarantor.

     “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 therefore in Section 9.5(e).

24

 

     “Patent Security Agreement” shall mean the Patent Security Agreement dated as of the
date hereof and executed and delivered by the Borrowers to the Collateral Agent for the benefit of
the Secured Parties.

     “Payment Conditions” means, as of the date of the making of a Restricted Payment or
consummation of an Acquisition, as applicable, that (a) no Default or Event of Default exists or
would arise after giving effect to such Restricted Payment or Acquisition, and (b) either (i) the
Borrowers have Adjusted Excess Availability equal to or greater than $50,000,000, after giving
effect to such Restricted Payment or Acquisition or (ii) (A) the Borrowers have Adjusted Excess
Availability equal to or greater than $30,000,000 but less than $50,000,000, after giving effect to
the Restricted Payment or Acquisition, and (B) the Fixed Charge Coverage Ratio shall be equal to or
greater than 1.00 to 1.00 for the Applicable Fiscal Period computed on a pro forma basis in
accordance with Section 503(d) of SEC Regulation S-K, after giving effect to such Restricted
Payment or Acquisition and (c) after giving effect to such Restricted Payment or consummation of
such Acquisition, the Borrowers are Solvent. In the event that the aggregate amount of any
Restricted Payments or consideration paid by the Borrowers in connection with an Acquisition or a
series of related Acquisitions could equal or exceed $5,000,000 during any consecutive thirty (30)
day period, then the Borrowers shall provide a certificate signed by a Financial Officer, no
earlier than ten (10) days and no later than five (5) days prior to the date of such payment or
consummation of such transaction (or the first such payment or transaction, if in connection with a
series of payments or transactions) certifying as to the satisfaction of the applicable Payment
Conditions including the relevant calculations therefor and accompanied by such information
required to be delivered to the Administrative Agent pursuant to Section 5.1(j), if applicable, and
to the extent not previously delivered.

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

     “Perfection Certificate” means a certificate of the Borrowers in the form approved by
the Collateral Agent as to certain matters regarding the Collateral.

     “Permitted Acquisition” means the acquisition of not less than eighty percent (80%) of
the capital stock of, or the acquisition of all or substantially all of the assets or properties
of, or any division or business unit of, any Person, whether or not pursuant to a transaction of
merger or consolidation (each of the foregoing an “Acquisition”) in each case which satisfies each
of the following conditions:

	 	(i)	 	The Acquisition is of a business permitted to be conducted by the Borrowers
pursuant to Section 6.3(b) hereof; and
	 
	 	(ii)	 	Prior to and after giving effect to the Acquisition, no Default or Event of
Default will exist or will arise therefrom; and
	 
	 	(iii)	 	The Person making the Acquisition must be a Borrower or a Subsidiary which
will become a Borrower or Facility Guarantor in accordance with Section 5.14 hereof and
the Borrowers (including such Person) shall take such steps as are necessary to grant
to the Collateral Agent, for the benefit of the Secured Parties, a

25

 

	 	 	 	legal, valid and enforceable first priority security interest (except as provided in
Section 6.2 hereof) in all of the assets and capital stock acquired in connection
with such acquisition; and
	 
	 	(iv)	 	If a Borrower shall merge with such other Person, such Borrower shall be the
surviving party of such merger; and
	 
	 	(v)	 	Each applicable Payment Condition shall have been satisfied; and
	 
	 	(vi)	 	In the case of the Acquisition of capital stock of another Person, the board of
directors (or other comparable governing body) of such other Person shall have duly
approved such Acquisition.

     “Permitted Discretion” means the Administrative Agent’s good faith credit judgment
based upon any factor or circumstance which it reasonably believes in good faith: (i) will or could
reasonably be expected to adversely affect the value of the Collateral, the enforceability or
priority of the Collateral Agent’s Liens thereon in favor of the Secured Parties or the amount
which the Collateral Agent and the Secured Parties would likely receive (after giving consideration
to delays in payment and costs of enforcement) in the liquidation of such Collateral; (ii) suggests
that any collateral report or financial information delivered to the Administrative Agent by or on
behalf of a Borrower is incomplete, inaccurate or misleading in any material respect; (iii) could
reasonably be expected to increase materially the likelihood of a bankruptcy, reorganization or
other insolvency proceeding involving any of the Credit Parties; or (iv) creates or reasonably
could be expected to create a Default or Event of Default. In exercising such judgment, the
Administrative Agent may consider factors or circumstances already included in or tested by the
definition of Eligible Inventory, Eligible Wholesale Receivables or Eligible Credit Card and Debit
Card Receivables, as well as any of the following: (A) changes in demand for and pricing of
Inventory; (B) changes in any concentration of risk with respect to Inventory or Accounts; (C) any
other factors or circumstances that will or could reasonably be expected to have a Material Adverse
Effect; (D) audits of books and records by third parties, history of chargebacks or other credit
adjustments, or other relevant information regarding the creditworthiness of Account Debtors; and
(E) any other factors that change or could reasonably be expected to change the credit risk of
lending to the Borrowers on the security of the Inventory or Accounts. Notwithstanding the
foregoing, it shall not be within Permitted Discretion for the Administrative Agent to establish
Reserves which are duplicative of each other whether or not such reserves fall under more than one
reserve category.

     “Permitted Encumbrances” means:

     (i) Liens imposed by law for taxes that are not yet due or are being contested in compliance
with Section 5.5;

     (ii) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing obligations that are not
overdue by more than 60 days or are being contested in compliance with Section 5.5;

26

 

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

     (iv) deposits 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;

     (v) judgment liens in respect of judgments that do not constitute an Event of Default under
Section 7.1(m);

     (vi) easements, zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected property or materially
interfere with the ordinary conduct of business of the Borrowers or any of the other Credit
Parties;

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

     (viii) Liens in favor of a financial institution encumbering deposits (including the right of
setoff) held by such financial institution in the ordinary course of its business and which are
within the general parameters customary in the banking industry;

     (ix) Landlords’ and lessors’ liens in respect of rent that is not overdue by more than thirty
(30) days or which is being contested in compliance with Section 5.5;

     (x) Liens arising in favor of The Bank of New York, as trustee (together with any successor
thereto, the “Trustee”), under Section 7.07 of the Convertible Notes Indenture; provided that such
Liens shall be limited only to property and funds held by the Trustee and such liens shall secure
only the Lead Borrower’s obligation to pay reasonable compensation to the Trustee for its services
under the Convertible Notes Indenture, reasonable costs and expenses of the Trustee in connection
with the performance of such services and indemnification of the Trustee with respect to the
performance of such services under the Convertible Notes Indenture;

     (xi) leases or subleases granted by any Credit Party to any Person other than a Credit Party,
provided that such lease or sublease does not interfere in any material respect with the business
of such Credit Party or materially impair the Collateral Agent’s interest in the Collateral;

     (xii) 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;

27

 

     (xiii) Liens deemed to exist in connection with Investments in repurchase agreements permitted
under Section 6.4; and

     (xiv) Liens of a collecting bank arising under Section 4-210 of the UCC on items in the course
of collection.

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

     “Permitted Investments” means each of the following:

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

     (ii) Investments in commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such date of acquisition, a credit rating of at least A-1 from S&P or P-1
from Moody’s;

     (iii) Investments in certificates of deposit, banker’s acceptances and time deposits maturing
within 270 days from the date of acquisition thereof issued or guaranteed by or placed with, and
demand deposit and money market deposit accounts issued or offered by, any domestic office of any
commercial bank 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 $100,000,000;

     (iv) fully collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (i) 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 (iii) above or with any primary dealer and having a market value at the time that such
repurchase agreement is entered into of not less than 100% of the repurchase obligation of such
counterparty entity with whom such repurchase agreement has been entered into;

     (v) money market mutual funds, 90% of the investments of which are in cash or investments
contemplated by clauses (i) through (iv) of this definition; and

     (vi) Investments by the Lead Borrower consistent with the Lead Borrower’s investment policy,
which investment policy is approved by the Administrative Agent from time to time, such approval
not to be unreasonably withheld;

     provided that, notwithstanding the foregoing, after the occurrence and during the continuance
of a Cash Dominion Event, (i) no such new Investments shall be permitted by a Borrower unless
either (A) no Loans are then outstanding, or (B) the Investment is a temporary Investment pending
expiration of an Interest Period for a LIBO Loan, the proceeds of which Investment will be applied
to the Obligations after the expiration of such Interest Period, and (ii) all such Investments are
pledged by the applicable Borrower to the Administrative Agent as

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additional collateral for the Obligations pursuant to such agreements as may be reasonably
required by the Administrative Agent.

     “Permitted Overadvance” means an Overadvance, as determined by the Administrative
Agent, in its Permitted 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 ten percent
(10%) of the then Borrowing Base in the aggregate outstanding at any time or (ii) remain
outstanding for more than ninety (90) consecutive Business Days, unless in case of clause (ii) the
Required Lenders otherwise agree; and provided further that the foregoing shall not (1)
modify or abrogate any of the provisions of Section 2.6(f) regarding the Lenders’ 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 (including any Overadvance or proposed Overadvance) would exceed the Total
Commitments.

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

     “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,
and in respect of which a 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.

     “Pledge Agreements” means any Pledge Agreement executed and delivered by one or more
of the Borrowers to the Collateral Agent, for the benefit of the Secured Parties, as the same may
be amended and in effect from time to time, pursuant to which, without limitation, all of the
issued and outstanding capital stock of initially, the Borrowers and thereafter, (i) all Material
Domestic Subsidiaries that are not Borrowers owned by a Borrower and (ii) sixty-five percent (65%)
(or such lesser amount as is owned by such Borrower or will not subject the Borrowers to materially
adverse tax consequences) of all of the issued and outstanding capital stock of all Foreign
Subsidiaries is pledged to the Collateral Agent (in each case, other than Subsidiaries that are not
directly or indirectly wholly owned by such Borrower) as security for the Obligations.

     “Post Closing DDA” means any DDA (other than a store-level DDA) opened after the
Closing Date.

     “Prime Rate” shall mean, for any day, 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”.
The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate being
charged to any customer. Any change in the Prime Rate due to a change in Bank of America’s prime
rate shall be effective on the effective date of such change in Bank of America’s prime rate.

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     “Prime Rate Loan” shall mean any Loan bearing interest at a rate determined by
reference to the Prime Rate in accordance with the provisions of Section 2.3.

     “Proceeds” shall have the meaning ascribed to it in the UCC, and shall include
proceeds of all Collateral.

     “Real Estate” means all land, together with the buildings, structures, parking areas,
and other improvements thereon, now or hereafter owned by any of the Credit Parties, including all
fixtures and equipment used in connection with the operation of such structures and all easements,
rights-of-way and similar rights relating thereto and all leases, tenancies, and occupancies
thereof.

     “Register” has the meaning set forth in Section 9.5(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 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.

     “Required Lenders” shall mean, at any time, Lenders having Commitments greater than
50% of the Total Commitments, or if the Commitments have been terminated, Lenders whose percentage
of the outstanding Loans and Letters of Credit aggregate greater than 50% of all such Loans and
Letters of Credit Outstanding, provided that such calculation shall exclude any Delinquent
Lenders and any such Delinquent Lender’s Commitment in the event that such Delinquent Lender’s
rights to participate shall have been suspended or terminated pursuant to Section 8.13 of this
Agreement.

     “Reserves” means the Account Reserves, the Inventory Reserves and the Availability
Reserves.

     “Restricted Payment” means (i) any dividend or other distribution, directly or
indirectly (whether in cash, securities or other property) with respect to any shares of any class
of capital stock of any of the Credit Parties, 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 such shares
of capital stock of any of the Credit Parties or any option, warrant or other right to acquire any
such shares of capital stock of any of the Credit Parties; or (ii) any payment or other
distribution, directly or indirectly (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,
an account of the purchase, redemption, retirement, acquisition, cancellation, or termination of
any Indebtedness

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(including, without limitation, any amounts due and payable in respect of the Convertible
Notes at their stated maturity or as a consequence of the exercise of any right or obligation of
the Lead Borrower to purchase or redeem the Convertible Notes pursuant to any of the provisions of
Article 3 or Article 10 of the Convertible Notes Indenture).

     “Revolving Loans” means all Loans at any time made by a Lender pursuant to Section
2.3.

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

     “SEC” means the United States Securities and Exchange Commission.

     “Secured Parties” has the meaning assigned to such term in the Security Agreement.

     “Security Agreement” means the Amended and Restated Security Agreement dated as of the
date hereof and executed and delivered by each of the Credit Parties to the Collateral Agent for
the benefit of the Secured Parties, as amended and in effect from time to time.

     “Security Documents” means the Security Agreement, the Trademark Security Agreement,
the Patent Security Agreement, the Pledge Agreement, the Facility Guaranty (if any), and each other
security agreement, mortgage (if any), guaranty or other instrument or document executed and
delivered pursuant to Section 5.15 or any other provision hereof or any other Loan Document, to
secure any of the Obligations.

     “Settlement Date” has the meaning provided in Section 2.7(b) .

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

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

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

     “Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of

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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 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 for the election of directors or other members of its
governing body (other than securities or ownership interests having such power only upon
satisfaction of a contingency) 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. Unless
otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Lead Borrower.

     “Swingline Lender” means Bank of America, in its capacity as lender of Swingline Loans
hereunder.

     “Swingline Loan” shall mean a Loan made by the Swingline Lender to the Borrowers
pursuant to Section 2.5 hereof.

     “Synthetic Lease” means any lease or other agreement for the use or possession of
property creating obligations which do 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.

     “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 7.1, or (iii) the date of the occurrence of any Event of Default pursuant
to Section 7.1(j) or 7.1(k).

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

     “Trademark Security Agreement” shall mean the Trademark Security Agreement dated as of
the date hereof and executed and delivered by the Borrowers to the Collateral Agent for the ratable
benefit of the Secured Parties.

     “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.

     “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the
State of New York.

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

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     “Voting Stock” means, with respect to any corporation, the outstanding stock of all
classes (or equivalent interests) which ordinarily, in the absence of contingencies, entitles
holders thereof to vote for the election of directors (or Persons performing similar functions) of
such corporation, even though the right so to vote has been suspended by the happening of such
contingency.

     “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.

     1.2 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, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns or, for natural persons, such
Person’s successors, heirs, executors, administrators and other legal representatives, (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 Sections, Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits
and Schedules to, this Agreement, (e) the words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights, (f) all financial statements
and other financial information provided by the Borrowers and each of the other Credit Parties to
the Administrative Agent or any Lender shall be provided with reference to Dollars, and (g) this
Agreement and the other Loan Documents are the result of negotiation among, and have been reviewed
by counsel to, among others, the Credit Parties and the Administrative Agent and are the product of
discussions and negotiations among all parties. Accordingly, this Agreement and the other Loan
Documents are not intended to be construed against the Administrative Agent or any of the Lenders
merely on account of the Administrative Agent’s or any Lender’s involvement in the preparation of
such documents.

     1.3 Accounting Terms. Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in effect on the
Closing Date, on a basis consistent with the financial statements referred to in Section 4.1(h) of
this Agreement, provided that, if the Borrowers request an amendment to any provision hereof to
reflect 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.

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     2. AMOUNT AND TERMS OF CREDIT

     2.1 Commitments of the Lenders.

     (a) Each 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 Borrowers on
a revolving basis, in the form of Revolving Loans and participations in Letters of Credit
and in an amount not to exceed the lesser of such Lender’s Commitment or such Lender’s
Commitment Percentage of the lesser of (x) the Borrowing Base or (y) the Total Commitments,
subject to the following limitations:

     (i) The aggregate outstanding amount of the Credit Extensions shall not at any
time exceed the lower of (i) (x) the Total Commitments, or (y) such lesser amount to
which the Total Commitments have then been decreased by the Borrowers pursuant to
Section 2.15 and subject to adjustment as provided in Section 2.1(c), or (ii) the
then current amount of the Borrowing Base.

     (ii) No Lender shall be obligated to issue any Letter of Credit, and Letters of
Credit shall be available from the Issuing Banks, subject to the ratable
participation of all Lenders, as set forth in Section 2.6. The aggregate Letter of
Credit Outstandings shall not at any time exceed $70,000,000.

     (iii) 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 of Revolving Loans (other than Swingline Loans) shall be made by
the Lenders pro rata in accordance with their respective Commitment
Percentages. The failure of any Lender to make any Loan shall neither relieve any other
Lender of its obligation to fund its Loan in accordance with the provisions of this
Agreement nor increase the obligation of any such other Lender.

     (c) So long as no Default or Event of Default exists or would arise therefrom, the
Lead Borrower shall have the right at any time, and from time to time, to request an
increase of the Total Commitments by an additional amount of no more than $100,000,000.
Any such request shall be first made to all existing Lenders on a pro rata basis. To the
extent that any existing Lenders decline to increase their Commitments, or decline to
increase their Commitments to the amount requested by the Lead Borrower, the Administrative
Agent will promptly notify the Lead Arranger of such facts. Thereafter, the Lead Arranger,
in consultation with the Lead Borrower, will use its reasonable efforts to arrange for
other Persons to become a Lender hereunder and to issue Commitments in an amount equal to
the amount of the increase in the Total Commitments requested by the Lead Borrower and not
accepted by the existing Lenders (each such increase by either means, a “Commitment
Increase,” and each Person issuing, or Lender increasing, its Commitment, an “Additional
Commitment Lender”), provided, however, that (i) no existing Lender shall be obligated to
provide a

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Commitment Increase as a result of any such request by the Lead Borrower, (ii) any
Lender that does not affirmatively agree to increase its Commitment shall be deemed to have
declined to increase its Commitment and (iii) any Additional Commitment Lender which is not
an existing Lender shall be subject to the approval of the Administrative Agent, the
Issuing Banks and the Lead Borrower (which approval shall not be unreasonably withheld).
Each Commitment Increase shall be in a minimum amount of $25,000,000 and integral multiples
of $5,000,000 above such amount. No Commitment Increase shall become effective unless and
until each of the following conditions have been satisfied:

     (i) The Borrowers, the Administrative Agent, and any Additional Commitment
Lender that is not an existing Lender shall have executed and delivered a joinder to
the Loan Documents in such form as the Administrative Agent shall reasonably
require;

     (ii) The Borrowers shall have paid such fees and other compensation to the
Additional Commitment Lenders as the Lead Borrower and such Additional Commitment
Lenders shall agree;

     (iii) The Borrowers shall have paid such arrangement fees in such amounts, if
any, to the Lead Arranger as the Borrowers and the Lead Arranger may agree;

     (iv) If required by the Additional Commitment Lenders, the Borrowers shall
deliver to the Administrative Agent and the Lenders an opinion or opinions, in form
and substance reasonably satisfactory to the Administrative Agent, from counsel to
the Borrowers reasonably satisfactory to the Administrative Agent and dated such
date;

     (v) A Note (to the extent requested by a Lender) will be issued at the
Borrowers’ expense, to each such Additional Commitment Lender, to be in conformity
with requirements of Section 2.8 hereof (with appropriate modification) to the
extent necessary to reflect the new Commitment of each Additional Commitment Lender;
and

     (vi) The Borrowers and the Additional Commitment Lenders shall have delivered
such other instruments, documents and agreements as the Administrative Agent may
reasonably have requested.

     (d) The Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Commitment Increase (with each date of such effectiveness being referred to herein
as a “Commitment Increase Date”), and at such time (i) the Commitments under, and for all
purposes of, this Agreement shall be increased by the aggregate amount of such Commitment
Increases, (ii) Schedule 1.1 shall be deemed modified, without further action, to
reflect the revised Commitments and Commitment Percentages of the Lenders, and (iii) this
Agreement shall be deemed amended, without further action, to the extent necessary to
reflect such increased Commitments.

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     (e) In connection with Commitment Increases hereunder, the Lenders and the Borrowers
agree that, notwithstanding anything to the contrary in this Agreement, (i) the Borrowers
shall, in coordination with the Administrative Agent, (x) repay outstanding Revolving Loans
of certain Lenders, and obtain Revolving Loans from certain other Lenders (including the
Additional Commitment Lenders), or (y) take such other actions as reasonably may be
required by the Administrative Agent, in each case to the extent necessary so that all of
the Lenders effectively participate in each of the outstanding Revolving Loans pro rata on
the basis of their Commitment Percentages (determined after giving effect to any increase
in the Commitments pursuant to this Section 2.1), and (ii) the Borrowers shall pay to the
Lenders any costs of the type referred to in Section 2.19(b) in connection with any
repayment and/or Revolving Loans required pursuant to preceding clause (i). Without
limiting the obligations of the Borrowers provided for in this Section 2.1, the
Administrative Agent and the Lenders agree that they will use their best efforts to attempt
to minimize the costs of the type referred to in Section 2.19(b) which the Borrowers would
otherwise occur in connection with the implementation of an increase in the Commitments.

     2.2 Reserves; Changes to Reserves.

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

     (i) Shrink (an Inventory Reserve): An amount equal to the one month accrual
for Shrink reflected in the Borrowers’ books and records from time to time.

     (ii) Defective Inventory (an Inventory Reserve) (without duplication for
damaged Inventory which is not deemed “eligible” for inclusion within the
calculation of the Borrowing Base): An amount equal to the amount of defective
goods reflected in the Borrowers’ books and records from time to time.

     (iii) Taxes (an Availability Reserve): An amount equal to taxes (whether
assessed or estimated) and other governmental charges, including, without
limitation, ad valorem and personal property taxes, which would have a Lien senior
to the Liens of the Collateral Agent.

     (iv) Customer Credit Liabilities (an Availability Reserve): An amount equal to
50% of the amount of gift certificates, gift cards, amounts due to customers,
merchandise credits, and “passport club” liability reflected in the Borrowers’
books and records from time to time.

     (v) Rent (an Availability Reserve): An amount equal to two month’s gross cash
rent for each location in the States of Pennsylvania, Virginia, Washington and any
other state which provides a lien for landlords which may have priority over the
Collateral Agent’s Lien (except for those locations for which the Agents have
received a landlord’s waiver satisfactory in form to the Agents).

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     (b) The Administrative Agent may hereafter, establish additional Reserves or change
any of the foregoing Reserves, in the exercise of the Permitted Discretion of the
Administrative Agent.

     2.3 Making of Loans.

     (a) Except as set forth in Sections 2.16 and 2.24, Loans (other than Swingline Loans)
by the Lenders shall be either Prime Rate Loans or LIBO Loans as the Lead Borrower on
behalf of the Borrowers may request subject to and in accordance with this Section 2.3, and
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 2.23.
Subject to the other provisions of this Section 2.3 and the provisions of Section 2.24,
Borrowings of Loans of more than one Type may be incurred at the same time, but no more
than ten (10) Borrowings of LIBO 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 and prior
telephonic notice on the same Business Day 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., New York time, on the third Business Day in the case of LIBO Loans prior to, and by
11:00 a.m. on the same 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 $100,000, but
not less than $1,000,000 in the case of LIBO 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 and, if LIBO 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, 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 40 Broad Street, Boston,
Massachusetts 02109, no later than 2:00 p.m., New York 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

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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, 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 commercially reasonable efforts to make the
funds so received from the Lenders available to the Borrowers no later than 3:00 p.m., New
York time.

     (c) The Administrative Agent, without the request of the Lead Borrower, 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 may result
thereby. The Administrative Agent shall notify the Lead Borrower of any such advance or
charge no later than one Business Day prior to the making thereof. Such action on the part
of the Administrative Agent shall not constitute a waiver of the Administrative Agent’s
rights and each Borrower’s obligations under Section 2.3(a). Any amount which is added to
the principal balance of the Loan Account as provided in this Section 2.3(c) shall bear
interest at the interest rate then and thereafter applicable to Prime Rate Loans.

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

     2.5 Swingline Loans.

     (a) The Swingline Lender is authorized by the Lenders and shall, subject to the
provisions of this Section, make Swingline Loans up to $20,000,000 in the aggregate
outstanding at any time consisting of only Prime Rate Loans, upon a notice of Borrowing
(which may be telephonic) received by the Administrative Agent and the Swingline Lender
(which notice, at the Swingline Lender’s discretion, may be submitted prior to 1:00 p.m.,
New York time, on the Business Day on which such Swingline Loan is

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requested). Swingline Loans shall be subject to periodic settlement with the Lenders
under Section 2.7 below; provided, however, that during the months of November and
December of each calendar year the Administrative Agent shall settle Swingline Loans at
such times as it shall determine, in its discretion.

     (b) The Swingline Lender shall, at the Lead Borrower’s request, make Swingline Loans
(A) in reliance upon the Borrowers’ actual or deemed representations under Section 4.2 that
the applicable conditions for borrowing are satisfied and (B) for Permitted Overadvances.
If the conditions for borrowing under Section 4.2 cannot be fulfilled, the Lead Borrower
shall give immediate notice thereof to the Administrative Agent and the Swingline Lender (a
“Noncompliance Notice”) prior to requesting further Swingline Loans, and the Administrative
Agent shall promptly provide each Lender with a copy of the Noncompliance Notice. If the
conditions for borrowing under Section 4.2 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) until such conditions can be satisfied
or are waived in accordance with Section 9.2. Unless the Required Lenders otherwise 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 aggregate Credit Extensions
would exceed the limitation set forth in Section 2.1(a)(i).

     2.6 Letters of Credit.

     (a) Upon the terms and subject to the conditions herein set forth, the Lead Borrower
on behalf of the Borrowers, may request an Issuing Bank, at any time and from time to time
after the date hereof and prior to the Termination Date, to issue, and subject to the terms
and conditions contained herein, such Issuing Bank shall issue, 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 $70,000,000, or (ii) the aggregate Credit Extensions would exceed
the limitation set forth in Section 2.1(a)(i); and provided, further, that no Letter of
Credit shall be issued if such Issuing Bank shall have received notice from the
Administrative Agent or the Required Lenders that the conditions to such issuance have not
been met.

     (b) Each Letter of Credit shall expire at or prior to the close of business on the
earlier of (i) the date one year after the date of the issuance of such Letter of Credit
(or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five (5) Business Days prior to the Maturity Date,
provided that each Letter of Credit may, upon the request of the Lead Borrower, include a
provision whereby such Letter of Credit shall be renewed automatically for additional
consecutive periods of twelve (12) months or less unless the Issuing Bank which issued such
Letter of Credit notifies the beneficiary thereof at least thirty (30) days prior to the
then-applicable expiration date that such Letter of Credit will not be renewed (but no
Letter of Credit shall expire subsequent to the date that is five (5) Business Days prior
to the

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Maturity Date unless the Borrowers shall have deposited cash into the Cash Collateral
Account in an amount equal to 102% of such Letter of Credit).

     (c) Drafts drawn under any Letter of Credit shall be reimbursed by the Borrowers in
dollars on the same Business Day of any such payment thereof by the applicable Issuing Bank
by paying to the Administrative Agent an amount equal to such drawing (together with
interest as provided in Section 2.6(e)) not later than 12:00 noon, New York time, on (i)
the date that the Lead Borrower shall have received notice of such drawing, if such notice
is received prior to 10:00 a.m., New York time, on such date, or (ii) the Business Day
immediately following the day that the Lead Borrower receives such notice, if such notice
is received after 10:00 a.m., New York time on the day of drawing, provided that
the Lead Borrower may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.3 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. Each Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit issued by such Issuing Bank. Such Issuing Bank shall
promptly notify the Administrative Agent and Borrower by telephone (confirmed by telecopy)
of such demand for payment and whether such Issuing Bank has made or will make payment
thereunder (which payment shall not be made until two (2) Business Days after such notice
from such Issuing Bank to Borrower), provided that any failure to give or delay in giving
such notice shall not relieve the Borrowers of their obligation to reimburse such Issuing
Bank and the Lenders with respect to any such payment.

     (d) If an Issuing Bank shall make any L/C Disbursement, then, unless the Borrowers
shall reimburse such 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 the Borrowers reimburse such Issuing Bank therefor,
at the rate per annum then applicable to Prime Rate Loans, provided that if the Borrowers
fail to reimburse such Issuing Bank when such reimbursement is due pursuant to paragraph
(c) of this Section, then Section 2.10 shall apply. Interest accrued pursuant to this
paragraph shall be for the account of such Issuing Bank, except that interest accrued on
and after the date of payment by any Lender pursuant to paragraph (f) of this Section to
reimburse such Issuing Bank shall be for the account of such Lender to the extent of such
payment.

     (e) Immediately upon the issuance of any Letter of Credit by an Issuing Bank (or the
amendment of a Letter of Credit increasing the amount thereof), and without any further
action on the part of such Issuing Bank, such Issuing Bank shall be deemed to have sold to
each Lender, and each such Lender shall be deemed unconditionally and irrevocably to have
purchased from such Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender’s Commitment Percentage, 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 Commitments
pursuant to Section 2.1(c), Section 2.15, and/or

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9.5, 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
Commitment Percentages of the assigning and assignee Lenders and any new Lenders. Any
action taken or omitted by an Issuing Bank under or in connection with a Letter of Credit
issued by such Issuing Bank, if taken or omitted in the absence of gross negligence, bad
faith or willful misconduct, shall not create for such Issuing Bank any resulting liability
to any Lender.

     (f) In the event that an Issuing Bank makes any L/C Disbursement and the Borrowers
shall not have reimbursed such amount in full to such Issuing Bank pursuant to Section
2.6(c), such Issuing Bank shall promptly notify the Administrative Agent, which shall
promptly notify each Lender of such failure, and each Lender shall promptly and
unconditionally pay to the Administrative Agent for the account of such Issuing Bank the
amount of such Lender’s Commitment Percentage of such unreimbursed payment in dollars and
in same day funds. If an Issuing Bank so notifies the Administrative Agent, and the
Administrative Agent so notifies the Lenders prior to 11:00 a.m., New York time, on any
Business Day, each such Lender shall make available to such Issuing Bank such Lender’s
Commitment Percentage of the amount of such payment on such Business Day in same day funds
(or if such notice is received by the Lenders after 11:00 a.m., New York time on the day of
receipt, payment shall be made on the immediately following Business Day). If and to the
extent any Lender shall not have so made its Commitment Percentage of the amount of such
payment available to such Issuing Bank, such Lender agrees to pay to such 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 for the account of such
Issuing Bank at the Federal Funds Effective Rate. Each Lender agrees to fund its Commitment
Percentage of such unreimbursed payment notwithstanding a failure to satisfy any applicable
lending conditions or the provisions of Sections 2.1 or 2.6, or the occurrence of the
Termination Date. The failure of any Lender to make available to an Issuing Bank its
Commitment Percentage of any payment under any Letter of Credit shall neither relieve any
Lender of its obligation hereunder to make available to such Issuing Bank its Commitment
Percentage of any payment under any Letter of Credit on the date required, as specified
above, nor increase the obligation of such other Lender. Whenever any Lender has made
payments to an Issuing Bank in respect of any reimbursement obligation in respect of any
Letter of Credit, such Lender shall be entitled to share ratably, based on its Commitment
Percentage, in all payments and collections thereafter received on account of such
reimbursement obligation.

     (g) Whenever any Borrower desires that an Issuing Bank issue a Letter of Credit (or
amend, renew or extend an outstanding Letter of Credit), the Lead Borrower shall give to
such Issuing Bank and the Administrative Agent at least two (2) Business Days’ prior
written (including telegraphic, telex, facsimile, cable or other electronic communication)
notice (or such shorter period as may be agreed upon by such Issuing Bank and Borrower)
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

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by an Issuing Bank, the applicable Borrower shall also submit a letter of credit
application on such Issuing Bank’s standard form in connection with any request for the
issuance, amendment, renewal or extension of a Letter of Credit.

     (h) The obligations of the Borrowers to reimburse an 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 any 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 any Issuing Bank of any Letter of Credit issued by such Issuing
Bank against presentation of a demand, draft or certificate or other document which appears
on its face to be in order but in fact 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 Banks 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 any Issuing
Bank, provided that the foregoing shall not be construed to excuse an 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 such 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 an Issuing Bank (as finally determined by a court of competent
jurisdiction), such 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, an Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without responsibility for
further investigation, 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.

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     (i) If any Event of Default shall occur and be continuing, on the Business Day that
the Lead Borrower receives notice from the Administrative Agent or the Required Lenders
demanding the deposit of cash collateral pursuant to this paragraph, the Borrowers shall
deposit in the Cash Collateral Account an amount in cash equal to 102% 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 of the Borrowers under this Agreement. The Collateral Agent 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 option and sole discretion of the Collateral Agent
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 an 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 of the Borrowers under
this Agreement.

     (j) The Borrowers, the Administrative Agent and the Lenders agree that the Existing
Letters of Credit shall be deemed Letters of Credit hereunder as if issued by the Issuing
Bank.

     (k) Each Issuing Bank, on a daily basis (unless otherwise agreed by the Administrative
Agent), shall provide to the Administrative Agent an accurate report that details the
activity with respect to each Letter of Credit issued by such Issuer (including an
indication of the maximum amount then in effect with respect to such Letter of Credit).
The Administrative Agent, on a quarterly basis, shall provide the Lenders with a summary of
the outstanding Letters of Credit in form and substance customarily provided by the
Administrative Agent in transactions of this nature.

     2.7 Settlements Among Lenders.

     (a) The Swingline Lender may (but shall not be obligated to), at any time, on behalf
of the Borrowers (which hereby authorize the Swingline Lender to act in their behalf in
that regard) request the Administrative Agent to cause the Lenders to make a Revolving Loan
(which shall be a Prime Rate Loan) in an amount equal to such Lender’s Commitment
Percentage of the outstanding amount of Swingline Loans made in accordance with Section
2.5, which request may be made regardless of whether the conditions set forth in Section 4
have been satisfied. Upon such request, each Lender shall make available to the
Administrative Agent the proceeds of such Revolving Loan for the account of the Swingline
Lender. If the Swingline Lender requires a Revolving Loan to be made by the Lenders and
the request therefor is received prior to 12:00 Noon, New York time, on a Business Day,
such transfers shall be made in immediately available funds no later than 3:00 p.m., New
York time, that day; and, if the request therefor is received after 12:00 Noon, New York
time, then such transfers shall be made

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no later than 3:00 p.m., New York time, on the next Business Day. The obligation of
each Lender to transfer such funds is irrevocable, unconditional and without recourse to or
warranty by the Administrative Agent or the Swingline Lender. If and to the extent any
Lender shall not have so made its transfer to the Administrative Agent, such Lender agrees
to pay to the Administrative Agent, forthwith on demand, such amount together with interest
thereon for each day from such date until the date such amount is paid to the
Administrative Agent at the Federal Funds Effective Rate.

     (b) The amount of each Lender’s Commitment Percentage of outstanding Revolving Loans
shall be computed weekly (or more frequently in the Administrative Agent’s discretion) and
shall be adjusted upward or downward as required to reflect all Revolving Loans and
repayments of Revolving Loans received by the Administrative Agent as of 3:00 p.m., New
York time, on the Business Day specified by the Administrative Agent (such date, the
“Settlement Date”).

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

     2.8 Notes; Repayment of Loans.

     (a) The Credit Extensions of each Lender shall be evidenced by one or more accounts or
records maintained by such Lender and by the Administrative Agent in the ordinary course of
business. Absent manifest error, the accounts or records maintained by the Administrative
Agent and each Lender shall be presumed to reflect correctly the amount of the Credit
Extensions made by the Lenders to the Borrowers and the interest and payments thereon. Any
failure so to record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrowers hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records maintained by
any Lender and the accounts and records of the Administrative Agent in respect of such
matters, the accounts and records of the

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Administrative Agent shall control in the absence of manifest error. Upon the request
of any Lender made through the Administrative Agent, the Loans made by such Lender
(including the Swingline Lender, with respect to Swingline Loans) shall be evidenced by a
Note duly executed on behalf of the Borrowers, dated the Closing Date, in substantially the
form attached hereto as Exhibit B-1 or Exhibit B-2, as applicable, payable
to the order of each such Lender (or the Swingline Lender, as applicable) in an aggregate
principal amount equal to such Lender’s Commitment (or, in the case of the Note evidencing
the Swingline Loans, $20,000,000).

     (b) Each Lender is hereby authorized by the Borrowers to endorse on a schedule
attached to each Note delivered to such Lender (or on a continuation of such schedule
attached to such Note and made a part thereof), or otherwise to record in such Lender’s
internal records, an appropriate notation evidencing the date and amount of each Loan from
such Lender, each payment and prepayment of principal of any such Loan, each payment of
interest on any such Loan and the other information provided for on such schedule;
provided, however, that the failure of any Lender to make such a notation or any error
therein shall not affect the obligation of the Borrowers to repay the Loans made by such
Lender in accordance with the terms of this Agreement and the applicable Notes.

     (c) Upon receipt of an affidavit of a Lender as to the loss, theft, destruction or
mutilation of such Lender’s Note and an indemnity in form and substance reasonably
satisfactory to the Lead Borrower, 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.

     2.9 Interest on Loans.

     (a) Subject to Section 2.10, 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, as the case may be)
days, at a rate per annum that shall be equal to the then Prime Rate, plus the Applicable
Margin for Prime Rate Loans.

     (b) Subject to Section 2.10, 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 for LIBO Loans.

     (c) 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) upon any repayment or prepayment thereof (on the amount
prepaid).

     2.10 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

45

 

permitted by law), and all fees payable under Sections 2.11, 2.12 and 2.13 shall accrue, at a
rate per annum equal to the applicable rate (including the Applicable Margin) otherwise in effect
from time to time plus 2.00% per annum, and such interest shall be payable on demand.

     2.11 Certain Fees. 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.

     2.12 Unused Commitment Fee. The Borrowers shall pay to the Administrative Agent for
the account of the Lenders in accordance with their respective Commitment Percentages, a commitment
fee (the “Commitment Fee”) computed at a rate per annum in accordance with the table set
forth in the definition of “Applicable Margin” (on the basis of actual days elapsed in a year of
360 days), 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.

     Upon the occurrence of an Event of Default, at the option of the Administrative Agent or at
the direction of the Required Lenders, the Commitment Fee shall be determined in the manner set
forth in Section 2.10.

     The Commitment Fee accrued in any calendar quarter shall be payable on the first day of each
calendar quarter, in arrears for the immediately preceding calendar quarter, commencing January 1,
2007, except that all Commitment Fees so accrued as of the Termination Date shall be payable on the
Termination Date. The Administrative Agent shall pay the Commitment Fee to the Lenders based upon
their Commitment Percentage.

     2.13 Letter of Credit Fees. The Borrowers shall pay the Administrative Agent, for the
account of the Lenders, on first day of each calendar quarter, in arrears for the immediately
preceding calendar quarter, a fee (each, a “Letter of Credit Fee”) equal to the following
per annum percentages of the face amount of the following categories of Letters of Credit
outstanding during the subject quarter:

     (a) Each Standby Letter of Credit: The then Applicable Margin per annum for LIBO
Loans based upon the average outstanding amount of such Standby Letter of Credit for such
period.

     (b) Each Commercial Letter of Credit: Fifty percent (50%) of the then Applicable
Margin per annum for LIBO Loans based upon the average outstanding amount of such
Commercial Letter of Credit for such period.

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

     (d) Reserved.

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     (e) The Borrowers shall pay to the applicable Issuing Bank, in addition to the Letter
of Credit Fees otherwise provided for hereunder, fees and charges in connection with the
issuance, negotiation, settlement, amendment and processing of each Letter of Credit issued
by such Issuing Bank as are customarily imposed by such Issuing Bank and agreed to by the
Lead Borrower from time to time in connection with letter of credit transactions.

     (f) All Letter of Credit Fees shall be calculated on the basis of a 360-day year and
actual days elapsed.

     2.14 Nature of Fees. All fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent, for the respective accounts of the Administrative
Agent, the Issuing Banks, and the Lenders, as provided herein. All fees shall be fully earned on
the date when due and shall not be refundable under any circumstances.

     2.15 Termination or Reduction of Commitments.

     (a) Upon at least three (3) Business Days’ prior written notice to the Administrative
Agent, the Lead Borrower may at any time or from time to time in part permanently reduce
the Commitments. Each such reduction shall be in the principal amount of $10,000,000 or any
integral multiple of $1,000,000 in excess thereof. Each such reduction shall (i) be applied
ratably to the Commitments of each Lender and (ii) be irrevocable when given. At the
effective time of each such reduction, the Borrowers shall pay to the Administrative Agent
for application as provided herein (i) all Commitment Fees accrued on the amount of the
Commitments so reduced through the date thereof, (ii) any amount by which the Credit
Extensions outstanding on such date exceed the amount to which the Commitments are to be
reduced effective on such date, in each case pro rata based on the amount prepaid, and
(iii) any Breakage Costs, if applicable.

     (b) Upon at least three (3) Business Days’ prior written notice to the Administrative
Agent, the Lead Borrower may at any time terminate the Commitments. At the effective time
of each such termination specified in such notice, the Borrowers shall repay to the
Administrative Agent for application as provided herein all Obligations.

     2.16 Alternate Rate of Interest. If prior to the commencement of any Interest Period
for a LIBO Borrowing:

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

     (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO
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;

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     then the Administrative Agent shall give notice thereof to the Lead Borrower and the Lenders
by telephone or telecopy as promptly as practicable thereafter (but in any event, within two (2)
Business Days after such determination or advice) and, until the Administrative Agent notifies the
Lead Borrower and the Lenders 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 shall be ineffective and (ii) if any Borrowing Request requests a
LIBO Borrowing, such Borrowing shall be made as a Borrowing of Prime Rate Loans.

     2.17 Conversion and Continuation of Loans. The Lead Borrower on behalf of the
Borrowers shall have the right at any time,

     (a) 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., New York 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, or (y) to continue an outstanding Borrowing of LIBO
Loans for an additional Interest Period,

     (b) on 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., New York time, on
the same Business Day of any conversion), to convert any outstanding Borrowings of LIBO
Loans to a Borrowing of Prime Rate Loans,

     subject to the following:

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

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

     (iii) the aggregate principal amount of Loans being converted into or continued
as LIBO Loans shall be in an integral of $100,000 and at least $1,000,000;

     (iv) each 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;

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

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

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

     (viii) no more than ten (10) Borrowings of LIBO 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, in each case as provided above, such Borrowing shall automatically be converted to, or
continued as, as applicable, a Borrowing of Prime Rate Loans at the expiration of the then current
Interest Period. The Administrative Agent shall, after it receives notice from the Borrower,
promptly give each Lender notice of any conversion, in whole or part, of any Loan made by such
Lender.

     2.18 Mandatory Prepayment; Cash Collateral; Commitment Termination. The outstanding
Obligations shall be subject to mandatory prepayment as follows:

     (a) If at any time the amount of the Credit Extensions exceeds the lower of (i) the
then current amount of the Total Commitments, and (ii) the then current amount of the
Borrowing Base, the Borrowers will immediately (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 Cash
Collateral Account in an amount equal to 102% of the Letters of Credit Outstanding.

     (b) To the extent required pursuant to Section 2.21, the Revolving Loans shall be
repaid daily in accordance with the provisions of said Section 2.21.

     (c) Subject to the foregoing, outstanding Prime Rate Loans shall be prepaid before
outstanding LIBO Loans are prepaid. Each partial prepayment of LIBO Loans shall be in an
integral multiple of $100,000. No prepayment of LIBO Loans shall be permitted pursuant to
this Section 2.18 other than on the last day of an Interest Period applicable thereto,
unless the Borrowers simultaneously reimburse the Lenders for all “Breakage Costs” (as
defined below) 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 shall hold all amounts required to be applied to LIBO Loans in the
Cash Collateral Account and will apply such funds to the applicable LIBO Loans at the end
of the then pending Interest Period therefor and such LIBO Loans shall continue to bear
interest at the rate set forth in Section 2.9 until the amounts in the Cash Collateral
Account have been so applied (provided that the foregoing shall in no way limit or restrict
the Agents’ rights upon the subsequent occurrence of an Event of Default). No partial
prepayment of a Borrowing of LIBO Loans shall result in the aggregate principal amount of
the LIBO Loans remaining

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outstanding pursuant to such Borrowing being less than $1,000,000 (unless all such
outstanding LIBO 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 Loans hereunder (other than Swingline Loans)
shall be applied ratably in accordance with each Lender’s Commitment Percentage.

     (e) Upon the Termination Date, the Commitments and the credit facility provided
hereunder shall be terminated in full and the Borrowers shall pay, in full and in cash, all
outstanding Loans and all other outstanding Obligations.

     2.19 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, upon at least two
Business Days’ prior written, telex or facsimile notice to the Administrative Agent prior
to 11:00 a.m., New York time, and (y) with respect to Prime Rate Loans, upon written, telex
or facsimile notice to the Administrative Agent, which notice shall be received prior to
11:00 a.m., New York time on the same Business Day of such prepayment, subject to the
following limitations:

     (i) All prepayments under this Section 2.19 shall be paid to the Administrative
Agent for application, first, to the prepayment of outstanding Swingline Loans,
second, to the prepayment of other outstanding Loans ratably in accordance with each
Lender’s Commitment Percentage, and third, to the funding of a cash collateral
deposit in the Cash Collateral Account in an amount equal to 102% of all Letter of
Credit Outstandings.

     (ii) Subject to the foregoing, outstanding Prime Rate Loans shall be prepaid
before outstanding LIBO Loans are prepaid. Each partial prepayment of LIBO Loans
shall be in an integral multiple of $100,000. No prepayment of LIBO Loans shall be
permitted pursuant to this Section 2.19 other than on the last day of an Interest
Period applicable thereto, unless the Borrowers simultaneously reimburse the 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 $1,000,000 (unless all such outstanding LIBO Loans are being prepaid in full).

     (iii) 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,
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. The Administrative Agent shall,
promptly after receiving notice from the Lead Borrower hereunder, notify each Lender
of the principal amount and Type of the

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     Loans held by such Lender which are to be prepaid, the prepayment date and the
manner of application of the prepayment.

     (b) The Borrowers shall reimburse each Lender on demand for any loss incurred or to be
incurred by it 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 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 2.3 in respect of LIBO 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 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 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 which would have commenced on the date of such failure to borrow, over
(B) 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 (collectively, “Breakage Costs”). Any Lender demanding reimbursement for
such loss shall deliver to the Lead Borrower 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 Borrowers fail to prepay any Loan on the date specified in any
prepayment notice delivered pursuant to Section 2.19(a), the Borrowers on demand by any
Lender shall pay to the Administrative Agent 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 Lender demanding such
payment shall deliver to the Lead Borrower 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, such
LIBO Loans shall be prepaid in the chronological order of their Interest Payment Dates.

     2.20 Maintenance of Loan Account; Statements of Account.

     (a) The Administrative Agent 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

51

 

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 from the Borrowers or otherwise for the Borrowers’ account, including all amounts
received in the Bank of America Concentration Account from the Controlled Account Banks,
and the amounts so credited shall be applied as set forth in Sections 2.22(a) and (b).
After the end of each month, the Administrative Agent shall send to the Lead Borrower a
statement accounting for the charges, loans, advances and other transactions occurring
among and between the Administrative Agent, the Lenders and the Borrowers during that
month. The monthly statements shall, absent manifest error, be an account stated, which is
final, conclusive and binding on the Borrowers.

     2.21 Cash Receipts.

     (a) The Borrowers shall deliver to the Administrative Agent (i) on the Closing Date
and thereafter annually (or at such times as the Administrative Agent may reasonably
request following the occurrence and during the continuance of a Cash Dominion Event), a
list of all present DDAs maintained by the Borrowers, which list includes, with respect to
each depository (A) the name and address of that depository; (B) the account number(s)
maintained with such depository; and (C) to the extent known, a contact person at such
depository (the “DDA List”), (ii) upon the occurrence of an Event of Default at the
request of the Administrative Agent, notifications executed on behalf of the Borrowers to
each depository institution identified on the DDA List in form and substance reasonably
satisfactory to the Administrative Agent, of the Administrative Agent’s interest in such
DDA as described more fully in Section 2.21(d) and substantially in the form of Exhibit
G (each, a “DDA Notification”), and (iii) on or prior to the Closing Date and
periodically thereafter notifications (the “Credit Card Notifications”) executed on
behalf of the Borrowers with each of the Borrowers’ major credit card and debit card
processors in form and substance reasonably satisfactory to the Administrative Agent.

     (b) Annexed hereto as Schedule 2.21(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 and debit card charges for sales by such Borrower.

     (c) Annexed hereto as Schedule 2.21(c) is a list describing all Concentration Accounts
and Investment Accounts maintained by the Borrowers. On or prior to the Closing Date, the
Borrowers shall enter into an Account Control Agreement with the Controlled Account Banks
for the Concentration Accounts, in each case in form and substance reasonably satisfactory
to the Administrative Agent. In the event that Adjusted Excess Availability becomes less
than $75,000,000 the Borrowers shall within thirty (30) days thereof deliver Account
Control Agreements with the Controlled Account Banks for the Investment Accounts existing
at the time of such delivery, in each case in form and substance reasonably satisfactory to
the Administrative Agent.

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     (d) The DDA Notifications and Credit Card Notifications shall require, after the
occurrence and during the continuance of an Event of Default (in the case of the DDA
Notifications) and after the occurrence and during the continuance of a Cash Dominion Event
(in the case of the Credit Card Notifications), 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 and debit card charges (all
such cash receipts and proceeds, “Cash Receipts”), to (x) a concentration account
maintained by the Collateral Agent at Bank of America (the “Bank of America
Concentration Account”), or (y) a Controlled Account, as the Administrative Agent may
direct.

     (e) The Account Control Agreements shall require, after the occurrence and during the
continuance of a Cash Dominion Event, the sweep on each Business Day of all Cash Receipts
to the Bank of America Concentration Account or to such other account as the Administrative
Agent may direct. Notwithstanding any provision of this Agreement or any other Loan
Document to the contrary, the Administrative Agent shall not send a notice of exclusive
control regarding or otherwise exercise control over any DDA subject to an Account Control
Agreement unless a Cash Dominion Event shall have occurred and be continuing and will
withdraw such notice of exclusive control and relinquish such control at such time as a
Cash Dominion Event is no longer in effect, if requested in writing, by the Lead Borrower
provided that no Event of Default is then in existence.

     (f) If at any time after the occurrence and during the continuance of a Cash Dominion
Event, any cash or cash equivalents owned by the Borrowers 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 Controlled Account that is subject to a Account Control
Agreement as required herein, then the Administrative Agent may require the Borrowers to
have all funds held in such account transferred to the Bank of America Concentration
Account or such other Controlled Account as the Administrative Agent may direct.

     (g) The Borrowers may close DDAs or Controlled Accounts and/or open new DDAs or
Controlled Accounts, subject to the execution and delivery to the Administrative Agent of
appropriate DDA Notifications or Account Control Agreements consistent with the provisions
of this Section 2.21. Unless consented to in writing by the Administrative Agent, 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.

     (h) The Bank of America Concentration Account is and shall remain under the sole
dominion and control of the Collateral Agent. Each Borrower acknowledges and agrees that,
subject to the provisions of subparagraph (i) below, (i) such Borrower has no right of
withdrawal from the Bank of America Concentration Account, (ii) the funds on deposit in the
Bank of America Concentration Account shall continue to be collateral security for all of
the Obligations and (iii) the funds on deposit in the Bank of America Concentration Account
shall be applied as provided in Section 2.22(a).

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     (i) So long as no Cash Dominion Event has occurred and is continuing, the Borrowers
may direct, and shall have sole control over, the manner of disposition of its funds in the
DDA Accounts and the Controlled Accounts.

     (j) After the occurrence and during the continuation of a Cash Dominion Event, the
Borrowers shall cause the ACH or wire transfer to, upon the Administrative Agent’s
instruction, any Controlled Account or other DDA, no less frequently than daily (unless the
Commitments have been terminated hereunder and the Obligations have been paid in full) of
the then current contents of each such DDA, each such transfer to be net of any minimum
balance, not to exceed $2,500, as may be required to be maintained in the subject DDA by
the bank at which such DDA is maintained, and, in connection with each such transfer, the
Borrowers shall also provide the Administrative Agent with an accounting of the contents of
each DDA.

     (k) After the occurrence and during the continuation of a Cash Dominion Event, whether
or not any Obligations are then outstanding, the Borrowers shall cause the ACH or wire
transfer, upon the Administrative Agent’s instruction, to the Bank of America Concentration
Account of the then current entire ledger balance of each Controlled Account, net of such
minimum balance, not to exceed $10,000, as may be required to be maintained in the subject
Controlled Account by the bank at which such Controlled Account is maintained.

     (l) In the event that, notwithstanding the provisions of this Section 2.21, after the
occurrence of a Cash Dominion Event, the Borrowers receive or otherwise have dominion and
control of any such proceeds or collections, such proceeds and collections shall be held in
trust by the Borrowers for the Administrative Agent and shall not be commingled with any of
the Borrowers’ other funds or deposited in any account of Borrower other than as instructed
by the Administrative Agent.

     (m) After the occurrence and during the continuation of a Cash Dominion Event, the
Borrowers shall deliver to the Administrative Agent annually after the Closing Date (or at
such times as the Administrative Agent may reasonably request), a list of all Account
Debtors, which list includes, with respect to each Account Debtor (i) the name, address,
and telephone number of that Account Debtor; (ii) the account/reference numbers for such
Account Debtor; and (iii) to the extent known, a contact person at such Account Debtor (the
“Account Debtor List”).

     2.22 Application of Payments.

     (a) As long as the time for payment of the Obligations has not been accelerated, all
amounts received in the Bank of America Concentration Account from any source, including
the Controlled Account Banks following the occurrence and during the continuance of a Cash
Dominion Event, and other amounts received by the Administrative Agent, shall be applied,
on the day of receipt, in the following order: first, to pay any fees and expense
reimbursements and indemnification then due and payable to the Administrative Agent, the
Issuing Banks, and the Collateral Agent; second, to pay interest then due and
payable on Credit Extensions; third, to repay any

54

 

outstanding Swingline Loans; fourth, to repay any outstanding Revolving Loans
that are Prime Rate Loans and any outstanding reimbursement obligations under Letters of
Credit; fifth, to repay any outstanding Revolving Loans that are LIBO Loans and all
Breakage Costs due in respect of such repayment pursuant to Section 2.19(b) or, at the Lead
Borrower’s option, to fund a cash collateral deposit to the 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 from such Cash Collateral Account;
sixth, if an Event of Default exists, to fund a cash collateral deposit in the Cash
Collateral Account in an amount equal to 102% of all Letter of Credit Outstandings;
seventh, to pay all other Obligations that are then outstanding and then due and
payable. If all amounts set forth in clauses first through and including seventh
above are paid, any excess amounts shall be deposited in a separate cash collateral
account, and shall be released to the Lead Borrower on the day of receipt. So long as no
Event of Default has occurred and is continuing, the Administrative Agent shall release the
funds held in the Cash Collateral Account pursuant to clause fifth above to the
Borrowers upon the Lead Borrower’s request.

     (b) All credits against the Obligations 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 Bank of America
Concentration Account and credited to the Loan Account is dishonored or returned unpaid for
any reason, whether or not such return is rightful or timely, the Administrative Agent
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 Administrative Agent, the Collateral Agent,
the Issuing Banks and the Lenders against all claims and losses resulting from such
dishonor or return.

     2.23 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 already reflected in the Adjusted LIBO Rate) or any Issuing
Bank; or

     (ii) impose on any Lender or any Issuing Bank or the London interbank market
any other condition affecting this Agreement or LIBO 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 of maintaining its obligation to make any such Loan)
or to increase the cost to such Lender or such 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 such Issuing Bank hereunder (whether of principal, interest or otherwise)
other than Taxes, which shall be governed by Section 2.26 hereof ,

55

 

then the Borrowers will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered.

     (b) If any Lender or any 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 such Issuing Bank’s capital or on the capital of such Lender’s or such 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 such Issuing Bank, to a level below that which such Lender or such Issuing Bank or such
Lender’s or such Issuing Bank’s holding company could have achieved but for such Change in
Law (taking into consideration such Lender’s or such Issuing Bank’s policies and the
policies of such Lender’s or such Issuing Bank’s holding company with respect to capital
adequacy), then from time to time the Borrowers will pay to such Lender or such Issuing
Bank, as the case may be, such additional amount or amounts as will compensate such Lender
or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any such
reduction suffered.

     (c) A certificate of a Lender or an Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or such 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 and shall be conclusive absent manifest error. The Borrowers
shall pay such Lender or such 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 any Issuing Bank to demand
compensation pursuant to this Section within ninety (90) days of the effective date of the
relevant Change in Law shall constitute a waiver of such Lender’s or such Issuing Bank’s
right to demand such compensation.

     2.24 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 to give effect to its obligations as contemplated hereby with respect to a LIBO Loan or
(y) at any time any Lender determines that the making or continuance of any of its LIBO
Loans 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 will not thereafter be made by such Lender hereunder, whereupon any
request by the Borrowers for a LIBO 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 made by it be converted to Prime Rate Loans,
in which event all such LIBO Loans shall be automatically converted to Prime Rate Loans

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as of the effective dates 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 that would have been made by such Lender or the converted LIBO 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.

     (b) For purposes of this Section 2.24, a notice to the Lead Borrower by any Lender
pursuant to paragraph (a) above shall be effective, if any LIBO Loans shall then be
outstanding, on the last day of each then-current Interest Period; and otherwise such
notice shall be effective on the date of receipt by the Lead Borrower.

     2.25 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 Sections 2.19(b), 2.23, 2.26 or 9.3,
or otherwise) prior to 2:00 p.m., New York 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, 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 40 Broad
Street, Boston, Massachusetts, except payments to be made directly to an Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant to Sections
2.19(b), 2.23, 2.26 or 9.3 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 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) 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 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 the
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 to pay fully all amounts of principal, unreimbursed drawings under
Letters of Credit, interest and fees then due hereunder, such funds shall be applied
ratably among the parties entitled thereto in accordance with the provisions of Section
2.22(a) hereof.

     (c) If any Lender 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

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participations in drawings under Letters of Credit or Swingline Loans resulting in
such 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 Lender, then the 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 Lenders to the extent necessary so that the benefit of all such payments shall be
shared by the Lenders 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 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 Lender were a direct
creditor of the Borrowers in the amount of such participation.

     (d) Unless the Administrative Agent shall have received notice from the Lead Borrower
prior to the date on which any payment is due to the Administrative Agent for the account
of the Lenders or an Issuing Bank hereunder that the Borrowers will not make such payment,
the Administrative Agent 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 Lenders
or such 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 Lenders or such Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or such 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, at the Federal Funds Effective Rate.

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

     2.26 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

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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, then (i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this
Section) the Agents, any Lender or any Issuing Bank (as the case may be) receives an amount
equal to the sum it would have received had no such deductions 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 each Issuing Bank,
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 such 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, 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 an Issuing Bank, or
by any Agent on its own behalf or on behalf of a Lender or an Issuing Bank setting forth in
reasonable detail the manner in which such amount was determined, shall be conclusive
absent manifest error.

     (d) As soon as 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.

     (e) Any Foreign Lender that is entitled to an exemption from or reduction in
withholding tax shall deliver to the Lead Borrower and the Administrative Agent two copies
of either United States Internal Revenue Service Form W-8BEN or Form W-8ECI, or any
subsequent versions thereof or successors thereto, 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-8BEN, 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 Borrowers and is not a controlled foreign
corporation related to the 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

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States federal withholding tax on payments by the Borrowers under this Agreement and
the other Loan Documents, or in the case of a Foreign Lender claiming exemption for
“portfolio interest” certifying that it is not a foreign corporation, partnership, estate
or trust. Such forms shall be delivered by each Foreign 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. Notwithstanding any other provision of this
Section 2.26(e), a Foreign Lender shall not be required to deliver any form pursuant to
this 2.26(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 United States 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.

     2.27 Security Interests in Collateral. To secure their Obligations under this
Agreement and the other Loan Documents, each Credit Party shall grant, and the Lead Borrower shall
cause each Credit Party to grant, to the Collateral Agent, for its benefit and the ratable benefit
of the other Secured Parties, a first-priority security interest in all of the Collateral pursuant
hereto and to the Security Documents.

     2.28 Mitigation Obligations; Replacement of Lenders.

     (a) If any Lender requests compensation under Section 2.23, 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 2.26, 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 Sections 2.23 or 2.26, 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 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 after the Closing Date and (ii) any relevant Change in
Law occurred prior to the date such Lender becomes a party hereto.

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          (b) If any Lender requests compensation under Section 2.23, 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 2.26, 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 9.5), 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 Banks and the Swingline 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 2.23 or payments required to be made pursuant to Section 2.26,
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.

     3. REPRESENTATIONS AND WARRANTIES

     Each Borrower represents and warrants to the Agents and the Lenders that:

     3.1 Organization; Powers. Each of the Credit Parties and each Material Foreign
Subsidiary is, duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and 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 in, every jurisdiction where such
qualification is required.

     3.2 Authorization; Enforceability. The transactions contemplated hereby and by the
other Loan Documents to be entered into by each of the Credit Parties are within such Person’s
corporate powers and have been duly authorized by all necessary corporate, and, if required,
stockholder action. This Agreement has been duly executed and delivered by each of the Borrowers
and constitutes, and each other Loan Document to which any of the Credit Parties is a party, when
executed and delivered by such Credit Party, will constitute, a legal, valid and binding obligation
of such Credit Party (as the case may be), enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.

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     3.3 Governmental Approvals; No Conflicts. The transactions to be entered into
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 a failure to obtain
same could not be reasonably be expected to have a Material Adverse Effect, and (iii) for filings
and recordings necessary to perfect 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
Borrower, any of the other Credit Parties, or any Material Foreign Subsidiary or any order of any
Governmental Authority, except for such violations as 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 binding upon any Borrower, any of the other Credit Parties, or any Material
Foreign Subsidiary, or their respective assets, except for such violations or defaults as could not
reasonably be expected to have a Material Adverse Effect, or give rise to a right thereunder to
require any material payment to be made by any Borrower, any of the other Credit Parties, or any
Material Foreign Subsidiary and (d) will not result in the creation or imposition of any Lien on
any material asset of any Borrower, any of the other Credit Parties, or any Material Foreign
Subsidiary, except Liens created under the Loan Documents or otherwise permitted hereby or thereby.

     3.4 Financial Condition. The Lead Borrower has heretofore furnished to the Lenders
the balance sheet, and statements of income, stockholders’ equity, and cash flows for the Lead
Borrower (on a Consolidated basis) for the fiscal year ended January 28, 2006 and for the fiscal
quarter ended July 29, 2006. Such financial statements present fairly, in all material respects,
the financial position, results of operations and cash flows of the Borrower Consolidated Group, in
each case, as of such dates and for such periods in accordance with GAAP, subject to year-end
adjustments and the absence of footnotes.

     3.5 Properties.

          (a) Each of the Credit Parties has good title to, or valid leasehold interests in, all
of such Person’s real and personal property material to its business, except for defects
which could not reasonably be expected to have a Material Adverse Effect.

          (b) Schedule 3.5(b)(i) sets forth the address (including county) of all Real
Estate that is owned by each of the Credit Parties as of the Closing Date, together with a
list of the holders of any mortgage or other Lien thereon. Schedule 3.5(b)(ii)
sets forth the address of all Real Estate (including retail store locations) that is leased
by each of the Credit Parties as of the Closing Date. Each of such leases is in full force
and effect and no Credit Party is in default of the terms thereof, except for such defaults
which would not reasonably be expected to have a Material Adverse Effect.

     3.6 Litigation and Environmental Matters.

          (a) There are no actions, suits, investigations, or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of any of the
Credit Parties, threatened against or affecting any such Person or any Material Foreign
Subsidiary (i) as to which there is a reasonable possibility of an adverse determination

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and that, if adversely determined, could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect (other than those set forth on
Schedule 3.6) or (ii) that involve any of the Loan Documents.

          (b) Except for the matters set forth on Schedule 3.6, and except as could not
reasonably be expected to have a Material Adverse Effect, none of the Credit Parties nor
any Material Foreign Subsidiary (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 written 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 3.6 that, individually or in the aggregate, has
resulted in, or could reasonably be expected to result in, a Material Adverse Effect.

     3.7 Compliance with Laws and Agreements. Each of the Credit Parties is in compliance
with all laws, regulations and orders of any Governmental Authority applicable to such Person or
its property and all indentures, material agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.

     3.8 Investment Company or Holding Company Status. None of the Credit Parties is an
(a) “investment company” as defined in, or subject to regulation under, the Investment Company Act
of 1940 or (b) a “holding company,” an “affiliate” of a “holding company” or a “subsidiary company”
of a “holding company,” as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 2005, as amended.

     3.9 Taxes. Except as set forth in Schedule 3.9, each of the Credit Parties
and each Material Foreign Subsidiary 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 prior to delinquency all
taxes required to have been paid by it, 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 been filed, or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.

     3.10 ERISA. Except as set forth in Schedule 3.10, none of the Credit Parties
nor any Material Foreign Subsidiary 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 in 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.
Schedule 3.10 sets forth the amount of underfunding for all Plans as of the date of the
most recent financial statements, and nothing has occurred that could materially increase the
amount

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of such underfunding and nothing is reasonably expected to occur that could increase the
amount of such underfunding to an amount that in either case could reasonably be expected to result
in a Material Adverse Effect.

     3.11 Interdependence of Credit Parties.

          (a) The business of each of the Credit Parties shall benefit from the successful
performance of the business of each of the other Credit Parties, and the Credit Parties as
a whole.

          (b) Each of the Credit Parties has cooperated to the extent necessary and shall
continue to cooperate with each of the other Credit Parties to the extent necessary in the
development and conduct of each of the other Credit Parties’ business, and shall to the
extent necessary share and participate in the formulation of methods of operation,
distribution, leasing, inventory control, and other similar business matters essential to
each of the Credit Parties’ respective businesses.

          (c) The failure of any of the Credit Parties to cooperate with all of the other Credit
Parties in the conduct of their respective businesses could have an adverse impact on the
business of each of the other Credit Parties, and the failure of any of the Credit Parties
to associate or cooperate with all of the other Credit Parties could impair the goodwill of
such other Credit Parties and the Credit Parties as a whole.

          (d) Each of the Credit Parties is undertaking joint and several liability for the
Obligations on the terms and conditions set forth herein and in the Facility Guaranty and
represents and warrants that the financial accommodations being provided hereby are for the
mutual benefit, directly and indirectly, of each of the Credit Parties.

     3.12 Disclosure. The Borrowers have disclosed to the Lenders all agreements,
instruments and corporate or other restrictions to which any of the Credit Parties or any Material
Foreign Subsidiary is subject, and all other matters known to any such Person, that, individually
or in the aggregate, in each case, could reasonably be expected to result in a Material Adverse
Effect. None of the reports, financial statements, certificates or other information furnished by
or on behalf of any of the Credit Parties or any Material Foreign Subsidiary 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 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
misleading; provided that with respect to projected financial information and other
forward-looking information, the Borrowers represent only that such information was prepared in
good faith on the basis of assumptions believed to be reasonable at the time.

     3.13 Subsidiaries. On and as of the Closing Date, the authorized capital stock or
other equity, and the number of issued and outstanding shares of capital stock or other equity of
the Borrowers and each other member of the Borrower Consolidated Group is as described in
Schedule 3.13 and, as to Subsidiaries, Schedule 3.13 indicates whether such
Subsidiary is a

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Material Subsidiary, and, if not a Material Subsidiary, whether such Subsidiary is active or
inactive. All such outstanding shares of capital stock or other equity of the Borrowers, each of
the other Credit Parties and each Material Foreign Subsidiary have been duly and validly issued in
material compliance with all legal requirements relating to the authorization and issuance of
shares of capital stock or other equity, and (except in the case of the options for shares of the
common stock of the Lead Borrower described on Schedule 3.13) are fully paid and
non-assessable. Except as set forth on Schedule 3.13, none of the Credit Parties is party
to any joint venture, general or limited partnership, or limited liability company, agreements or
any other business ventures or entities.

     3.14 Insurance. Schedule 3.14 sets forth a description of all insurance
maintained by or on behalf of the Credit Parties and each Material Foreign Subsidiary 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.

     3.15 Labor Matters. There are no strikes, lockouts or slowdowns against any of the
Credit Parties or any Material Foreign Subsidiary pending or, to the knowledge of the Borrowers,
threatened, that could reasonably be expected to result in a Material Adverse Effect. The hours
worked by and payments made to employees of the Credit Parties or any Material Foreign Subsidiary
have not been in violation of the Fair Labor Standards Act or any other applicable federal, state,
local or foreign law dealing with such matters to the extent that any such violations could
reasonably be expected to have a Material Adverse Effect. All material payments due from any of
the Credit Parties or any Material Foreign Subsidiary, or for which any material 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 Credit Party or such
Material Foreign Subsidiary. 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 of the Credit Parties or any
Material Foreign Subsidiary is bound.

     3.16 Certain Transactions. Except as set forth on Schedule 3.16, none of the
officers, partners, or directors of any of the Credit Parties is presently a party to any
transaction, and, to the knowledge of the executive officers of each of the Credit Parties, none of
the employees of any of the Credit Parties is presently a party to any material transaction, with
any of the other Credit Parties or any Affiliate (other than for services as employees, officers
and directors), including any contract, agreement or other arrangement providing for the furnishing
of services to or by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, partner, director or such employee or, to the knowledge
of the executive officers of the Borrowers, any corporation, partnership, trust or other entity in
which any officer, partner, director, or any such employee or natural person related to such
officer, partner, director or employee or other Person in which such officer, partner, director or
employee has a direct or indirect beneficial interest, has a substantial direct or indirect
beneficial interest or is an officer, director, trustee or partner.

     3.17 Restrictions on the Credit Parties. None of the Credit Parties nor any Material
Foreign Subsidiary is a party to or bound by any contract, agreement or instrument, or subject to

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any charter or other corporate restriction, that has or could reasonably be expected to have a
Material Adverse Effect.

     3.18 Security Documents. The Security Documents create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral, and the Security Documents constitute, or will upon the filing of
financing statements and the obtaining of “control”, in each case with respect to the relevant
Collateral as required under the applicable Uniform Commercial Code, the creation of a fully
perfected first priority Lien on, and security interest in, all right, title and interest of the
Borrowers and each Facility Guarantor thereunder in such Collateral, in each case prior and
superior in right to any other Person (other than Permitted Encumbrances having priority under
Applicable Law), except as permitted hereunder or under any other Loan Document.

     3.19 Federal Reserve Regulations.

          (a) None of the Credit Parties 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, 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 for any
other purpose, in any case that entails a violation of, or that is not permitted by the
provisions of the Regulations of the Board, including Regulation U or X and the Credit
Parties agree to comply with the Administrative Agent’s, and the Lenders’, requests for
information relating to any transactions involving Margin Stock to the extent relevant to
comply with such regulations.

     3.20 Solvency. The Credit Parties, taken as a whole, are Solvent. The Credit Parties
and the Material Foreign Subsidiaries, taken as a whole, are Solvent. No transfer of property is
being made by any Borrower and no obligation is being incurred by any Borrower in connection with
the transactions contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of any Borrower.

     3.21 Franchises, Patents, Copyrights, Etc. Except as otherwise set forth on
Schedule 3.21 hereto, each of the Credit Parties owns, or is licensed to use, all
franchises, patents, copyrights, trademarks, tradenames, service marks, licenses and permits, and
rights in respect of the foregoing, adequate for the conduct of its business as substantially now
conducted without conflict with any rights of any other Person (and, in each case, free of any Lien
that is not a Permitted Encumbrance), except to the extent that a failure to do so would not
reasonably be expected to have a Material Adverse Effect.

     3.22 Designation as “Designated Senior Indebtedness”. All Obligations owing hereunder
shall constitute “Designated Senior Indebtedness” and/or “Senior Indebtedness” (or such other
comparable terms) for purposes of the Convertible Notes Indenture or any other

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subordinated indebtedness to which such terms are applicable and the subordination provisions
set forth in all such agreements are legally valid and enforceable against the parties thereto.

     4. CONDITIONS.

     4.1 Closing Date. The obligation of the Lenders to make the initial Loans and of the
Issuing Banks to issue the initial Letters of Credit is subject to the following conditions
precedent:

          (a) The Agents (or their counsel) shall have received from each party hereto either
(i) a counterpart of this Agreement and all other Loan Documents (including, without
limitation, the Security Documents) to be delivered on the Closing Date, signed on behalf
of such party or (ii) written evidence satisfactory to the Agents and the Lead Arranger
(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 to be
delivered on the Closing Date.

          (b) The Agents shall have received a favorable written opinion (addressed to each
Agent and the Lenders on the Closing Date and dated the Closing Date) of (i) Bass Berry &
Sims PLC, counsel for the Credit Parties, (ii) Hodgson Russ LLP and (iii) Larkin Hoffman
Daly & Lindgren Ltd., each in form satisfactory to the Administrative Agent, covering such
matters relating to the Credit Parties, the Loan Documents or the transactions contemplated
thereby as the Required Lenders shall reasonably request. The Borrowers hereby request such
counsel to deliver such opinion.

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

          (d) The Agents shall have received a Borrowing Base Certificate dated the Closing
Date, relating to the fiscal month ended on October 28, 2006, and executed by a Financial
Officer of the Lead Borrower.

          (e) The Agents shall have received a certificate from a Financial Officer of the Lead
Borrower, together with such other evidence reasonably requested by the Agents, in each
case reasonably satisfactory in form and substance to the Agents, certifying that as of the
Closing Date (i) the Credit Parties, on a Consolidated basis, are Solvent, and (ii) the
representations and warranties made by the Borrowers in the Loan Documents are true and
correct 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.

          (f) All necessary consents and approvals to the transactions contemplated hereby shall
have been obtained and shall be reasonably satisfactory to the Agents, including, without
limitation, consents from all requisite material Governmental

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Authorities and, except as would not reasonably be expected to have or result in a
Material Adverse Effect, all third parties shall have approved or consented to the
transactions contemplated hereby, to the extent required, all applicable waiting periods
shall have expired and there shall be no material governmental or judicial action, actual
or threatened, that could reasonably be expected to materially restrain, prevent or impose
burdensome conditions on the transactions contemplated hereby.

          (g) The absence of any change, effect, event, occurrence or state of facts that is
materially adverse to the business, financial condition, or results of operations of the
Credit Parties taken as a whole, other than any changes, effects, events, occurrences or
state of facts relating to (i) the economy or financial markets in general, and (ii) the
transactions contemplated hereby; provided, that with respect to clause (i) such changes,
effects, events, occurrences or state of facts do not disproportionately affect such
Persons relative to the other participants in the industries in which such Persons operate.

          (h) The Administrative Agent shall have received and be satisfied with (a), (x)
audited Consolidated balance sheets and related Consolidated statements of income,
stockholders’ equity and cash flows of the Lead Borrower for the three fiscal years ended
January 28, 2006 and (y) unaudited Consolidated balance sheets and related Consolidated
statements of income, stockholders’ equity and cash flows of the Lead Borrower for the
fiscal quarter ended July 29, 2006 (which audited and unaudited financial statements shall
be prepared in accordance with, or reconciled to, GAAP, except with respect to the
unaudited financial statements, for absence of footnotes and subject to year-end
adjustments), and (b) such other information (financial or otherwise) reasonably requested
by the Administrative Agent in form and substance reasonably satisfactory to the
Administrative Agent. The Agents shall be reasonably satisfied that any financial
statements delivered to them fairly present the business and financial condition of the
Borrower Consolidated Group subject, in the case of interim financial statements, to
year-end adjustments and the absence of footnotes.

          (i) Except as set forth on Schedule 3.6, there shall not be pending any
litigation or other proceeding, the result of which could reasonably be expected to have a
Material Adverse Effect.

          (j) There shall not have occurred any event of default, nor shall any event exist
which is, or solely with the passage of time, the giving of notice or both, would be an
event of default under any Material Indebtedness.

          (k) The Collateral Agent shall have received results of searches from such
jurisdictions as may be reasonably required by the Collateral Agent or other evidence
reasonably satisfactory to the Collateral Agent (in each case dated as of a date reasonably
satisfactory to the Collateral Agent) indicating the absence of Liens on the Collateral,
including, without limitation, receivables from credit card processors, except for
Permitted Encumbrances and Liens for which termination statements and releases reasonably
satisfactory to the Collateral Agent are being tendered concurrently with such extension of
credit.

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          (l) The Collateral Agent shall have received all documents and instruments, including
Uniform Commercial Code financing statements, required by law or reasonably requested by
the Collateral Agent to be filed, registered or recorded to create or perfect the first
priority Liens intended to be created under the Loan Documents and, to the extent required
by the Collateral Agent, all such documents and instruments shall have been so filed,
registered or recorded to the satisfaction of the Collateral Agent.

          (m) The Collateral Agent shall have received Account Control Agreements, the Credit
Card Notifications, Collateral Control Agreements, and other similar third party agreements
required to be delivered hereunder on or before the Closing Date.

          (n) The Agents shall have received the results of a commercial financial examination
and inventory appraisal, which results shall be satisfactory to the Agents.

          (o) All fees due at or immediately after the Closing Date and all reasonable costs and
expenses incurred by the Agents in connection with the establishment of the credit facility
contemplated hereby (including the reasonable fees and expenses of counsel to the Agents)
shall have been paid in full.

          (p) The consummation of the transactions contemplated hereby shall not (a) violate any
Applicable Law, or (b) conflict with, or result in a default or event of default under, any
material agreement of Borrowers or any other Credit Party, taken as a whole (and the Agents
and the Lenders shall receive a satisfactory opinion of Borrowers’ counsel to that effect).
No event shall exist which is, or solely with the passage of time, the giving of notice or
both, would be an event of default under any agreement of any of the Credit Parties if such
event of default could reasonably be expected to have a Material Adverse Effect.

          (q) No material changes in governmental regulations or policies affecting the
Borrowers, the Agents, 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
affect the transaction contemplated by this Agreement.

          (r) There shall be no Default or Event of Default on the Closing Date.

          (s) The Collateral Agent shall have received, and be satisfied with, evidence of the
Borrowers’ insurance, together with such endorsements as are required by the Loan
Documents.

          (t) Reserved.

          (u) The Agents shall have received all of the items set forth on the Closing Agenda
attached hereto as Exhibit F.

          (v) The Agents shall have received the Closing Projections.

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          (w) The Borrowers shall have Adjusted Excess Availability on the Closing Date, after
giving effect to any Credit Extensions made on the Closing Date, of not less than
$50,000,000.

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

     The Administrative Agent shall notify the Lead Borrower and the Lenders of the Closing Date,
and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of
the Lenders to make Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 9.2) at or prior to 5:00 p.m., New York time, on December 1, 2006 (and, in the event such
conditions are not so satisfied or waived, this Agreement shall terminate at such time).

     4.2 Conditions Precedent to Each Loan and Each Letter of Credit. In addition to those
conditions described in Section 4.1, the obligation of the Lenders to make each Loan and of the
applicable Issuing Bank to issue each Letter of Credit subsequent to the Closing Date 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 Section 2.3.

          (b) Representations and Warranties. All representations and warranties
contained in this Agreement and the other Loan Documents or otherwise made in writing in
connection herewith or therewith 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) No Default. On the date of each Borrowing hereunder and the issuance of
each Letter of Credit, no Default or Event of Default shall have occurred and be
continuing.

          (d) 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 the Administrative Agent.

     The request by the Borrowers for, and the acceptance by the Borrowers of, each extension of
credit hereunder shall be deemed to be a representation and warranty by the Borrowers that the
conditions specified in this Section 4.2 have been satisfied at that time and that after giving
effect to such extension of credit the Borrowers shall continue to be in compliance with
Section 2.1(a). The conditions set forth in this Section 4.2 are for the sole benefit of
the Administrative Agent and the Lenders and may be waived by the Administrative Agent in whole or
in part without prejudice to the Administrative Agent or any Lender.

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     5. AFFIRMATIVE COVENANTS.

     Until the Commitments have expired or have been terminated and the principal of and interest
on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit
shall have expired or terminated and all L/C Disbursements shall have been reimbursed, each of the
Credit Parties covenants and agrees with the Agents and the Lenders that:

     5.1 Financial Statements and Other Information. The Borrowers will furnish to the
Administrative Agent:

          (a) within ninety (90) days after the end of each fiscal year of the Lead Borrower, a
Consolidated balance sheet and the related Consolidated statements of income, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all audited and reported on by
Ernst & Young or another independent public accountant of recognized national standing
(without a “going concern” or like qualification or exception and without a qualification
or exception as to the scope of such audit) to the effect that as of the date(s) thereof
and for the period(s) covered thereby, such Consolidated financial statements present
fairly in all material respects the financial condition and results of operations of the
Lead Borrower on a Consolidated basis in accordance with GAAP consistently applied;

          (b) within forty-five (45) days after the end of each fiscal quarter of the Lead
Borrower, a Consolidated balance sheet and the related Consolidated statements of income,
stockholders’ equity and cash flows, as of the end of and for such fiscal quarter and the
elapsed portion of the fiscal year, with comparative results to the same fiscal periods of
the prior fiscal year, all certified by a Financial Officer of the Lead Borrower as
presenting in all material respects the financial condition and results of operations of
the Lead Borrower on a Consolidated basis in accordance with GAAP consistently applied,
subject to normal year end audit adjustments and the absence of footnotes,

          (c) concurrently with any delivery of financial statements under clause (a) or (b)
above, a certificate of a Financial Officer of the Lead Borrower in the form of Exhibit
E hereto (i) certifying 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) if a Cash Dominion Event shall then be in existence, setting
forth reasonably detailed calculations with respect to the Fixed Charge Coverage Ratio for
such period, and (iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the Lead Borrower’s financial statements referred to in Section
3.4 and, if any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;

          (d) within sixty (60) days after the commencement of each fiscal year of the Lead
Borrower, a detailed Consolidated budget by quarter for such fiscal year (including a
projected Consolidated balance sheet and related statements of projected Consolidated
operations and cash flow as of the end of and for such fiscal year), provided that
such

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Consolidated budget shall be prepared on a month-by-month basis for any budget
submitted after a Cash Dominion Event has occurred and while such Cash Dominion Event
continues;

          (e) within ten (10) Business Days after the end of each fiscal month, a certificate in
the form of Exhibit D (a “Borrowing Base Certificate”) showing the Borrowing Base
as of the close of business on the last day of the immediately preceding month, each such
Borrowing Base Certificate to be certified as true and correct on behalf of the Borrowers
by a Financial Officer of the Lead Borrower, provided, however, if and so long as
an Event of Default exists or Adjusted Excess Availability is less than the lesser of (i)
$30,000,000 and (ii) ten (10%) percent of the then current Borrowing Base, the
Administrative Agent may require that Borrowers furnish such Borrowing Base Certificate
(showing the Borrowing Base as of the close of business on the last day of the immediately
preceding week) weekly on Wednesday of each week;

          (f) after the occurrence and during the continuance of a Cash Dominion Event, within
fifteen (15) days after the end of each fiscal month, a Consolidated balance sheet and
related Consolidated statements of income, stockholders’ equity and cash flows for the Lead
Borrower as of the end of and for such fiscal month and the elapsed portion of the fiscal
year, with comparative results to the same fiscal periods of the prior fiscal year, all
certified by a Financial Officer of the Lead Borrower as presenting in all material
respects the financial condition and results of operations of the Lead Borrower on a
Consolidated basis in accordance with GAAP consistently applied, subject to normal year end
audit adjustments and the absence of footnotes;

          (g) within thirty (30) days of the end of each fiscal quarter, the Lead Borrower will
notify the Administrative Agent of the opening or closing of any of Borrower’s stores in
Pennsylvania, Virginia or Washington;

          (h) promptly after the same become publicly available, copies of all periodic reports
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;

          (i) the financial and collateral reports described on Schedule 5.1(i) hereto,
at the times set forth in such Schedule;

          (j) No later than fifteen (15) days prior the consummation of a Permitted Acquisition,
(A) copies of the purchase and sale agreements or other material acquisition documents to
be executed in connection with the Permitted Acquisition, and (B) with respect to any
Permitted Acquisition for aggregate consideration of equal to or greater than $25,000,000
(excluding consideration consisting of capital stock of the Borrower), (i) copies of the
most recent audited (if any), and if later, unaudited financial statements of the Person
which is the subject of the Permitted Acquisition, and (ii) an unaudited pro forma
Consolidated balance sheet and income statement of the Lead Borrower as of the end of the
most recently completed fiscal quarter but prepared as though the Permitted

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Acquisition had occurred on such date and related pro forma calculations of average
Excess Availability for the subsequent four fiscal quarters period;

          (k) notice of any (i) sale or other disposition of assets of any Borrower permitted
under Section 6.5(e) hereof promptly following the date of consummation such sale or
disposition or (ii) incurrence of any Indebtedness permitted under Section 6.1(e) promptly
following the incurrence of such Indebtedness;

          (l) promptly upon receipt thereof, copies of all reports submitted to the Lead
Borrower or any of the other Credit Parties by independent certified public accountants in
connection with each annual, interim or special audit of the books of the Credit Parties
made by such accountants, including any management letter commenting on the Borrowers’
internal controls submitted by such accountants to management in connection with their
annual audit; and

          (m) promptly following any request therefor, such other information regarding the
operations, business affairs and financial condition of the Lead Borrower or any of the
other Credit Parties, or compliance with the terms of any Loan Document, as the Agents or
any Lender, acting through the Administrative Agent, may reasonably request.

     5.2 Notices of Material Events. The Borrowers will, and the Lead Borrower will cause
each of the other Credit Parties to, furnish to the Administrative Agent (which in turn shall
furnish to the Issuing Banks and the Collateral Agent) prompt written notice of the following:

          (a) the occurrence of any Default;

          (b) the filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting any of the Credit Parties that,
if adversely determined, could reasonably be expected to result in a Material Adverse
Effect;

          (c) 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) any other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect;

          (e) any change in the Lead Borrower’s chief executive officer or chief financial
officer;

          (f) any collective bargaining agreement or other material labor contract to which any
of the Credit Parties becomes a party, or the application for the certification of a
collective bargaining agent;

          (g) the filing of any Lien for unpaid taxes in an aggregate amount in excess of
$1,000,000 against any of the Credit Parties; and

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          (h) the discharge by any of the Credit Parties of its present independent accountants
or any withdrawal or resignation by such independent accountants.

     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.

     5.3 Information Regarding Collateral.

          (a) The Lead Borrower will furnish to the Agents, unless indicated otherwise herein,
thirty (30) days’ prior written notice of any change (i) in any Credit Party’s corporate or
legal name or in any trade name used to identify it in the conduct of its business or in
the ownership of its properties, (ii) within the time period specified in Section 5.1(b)
hereof for the delivery of financial statements, in the location of any Credit Party’s
chief executive office, its principal place of business or any office in which it maintains
books or records relating to Accounts, (iii) in any Credit Party’s organizational structure
or (iv) in any Credit Party’s jurisdiction of incorporation or formation, Federal Taxpayer
Identification Number or organizational identification number assigned to it by its state
of organization.

          (b) Prior to opening any DDA (other than a store-level DDA) into which any amount is
deposited that would result in the aggregate balance in all Post Closing DDAs exceeding
$500,000, the Borrowers will give written notice of the opening of such account to the
Administrative Agent. At the option of the Administrative Agent, the applicable Borrower
shall enter into a Account Control Agreement with the financial institution at which such
DDA is opened, which Account Control Agreement shall be in form and substance reasonably
satisfactory to the Administrative Agent.

     5.4 Existence; Conduct of Business. Except to the extent that a failure to do so
could not reasonably be expected to have a Material Adverse Effect, the Lead Borrower will, and
will cause each of the other Credit Parties and each Material Foreign Subsidiary to, do or cause to
be done all things necessary to comply with its respective charter, certificate of incorporation,
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 material to the conduct of its business, provided that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section
6.3 or any sale, lease, transfer or other disposition permitted by Section 6.5.

     5.5 Payment of Obligations. Each Borrower will, and the Lead Borrower will cause each
other Credit Party and each Material Foreign Subsidiary to, pay its Indebtedness and other
obligations, including tax liabilities, before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith by appropriate
actions, (b) such Borrower, such other Credit Party, or such Material Foreign Subsidiary has set
aside on its books adequate reserves with respect thereto to the extent required by and in
accordance with GAAP, (c) such contest effectively suspends collection of the contested

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obligation, (d) no Lien (other than an inchoate Lien) secures such obligation and (e) the
failure to make payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect. Nothing contained herein shall be deemed to limit the rights of the
Administrative Agent under Section 2.2(b).

     5.6 Maintenance of Properties. The Lead Borrower will, and will cause each of the
other Credit Parties and each Material Foreign Subsidiary to, keep and maintain all property
material to the conduct of its business in good working order and condition, ordinary wear and tear
excepted and with the exception of asset dispositions permitted hereunder.

     5.7 Insurance.

          (a) The Lead Borrower will, and will cause each of the Credit Parties and each
Material Foreign Subsidiary to, (i) maintain insurance with financially sound and
reputable insurers reasonably acceptable to the Agents (or, to the extent consistent with
prudent business practice, a program of self-insurance consistent with current practices)
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 public 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; and (iii) furnish to the
Agents, upon written request, full information as to the insurance carried. The Agents
shall not, by the fact of approving, disapproving, accepting, obtaining or failing to
obtain any such insurance, incur liability for the form or legal sufficiency of insurance
contracts, solvency of insurance companies or payment of lawsuits, and each Borrower hereby
expressly assumes full responsibility therefor and liability, if any, thereunder. The Lead
Borrower shall, and shall cause each of the other Credit Parties and each Material Foreign
Subsidiary to, furnish to the Agents certificates or other evidence satisfactory to the
Agents of compliance with the foregoing insurance provisions.

          (b) Fire and extended coverage or “all-risk” 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 Lead Borrower and the Agents,
which endorsements or amendments shall provide that the insurer shall pay all proceeds
otherwise payable to the Borrowers under the policies directly to the Agents, (ii) a
provision to the effect that none of the Borrowers, the Administrative Agent, the
Collateral Agent, or any other party shall be a coinsurer and (iii) such other provisions
as the Agents may reasonably require from time to time to protect the interests of the
Lenders. Commercial general liability policies shall be endorsed to name the Agents as
additional insureds. Business interruption policies shall name the Agents as an additional
loss payee and shall be endorsed or amended to include (i) a provision that, from and after
the Closing Date, the insurer shall pay all proceeds in excess of $5,000,000 otherwise
payable to the Borrowers under the policies directly to the Administrative Agent or the
Collateral Agent, provided, however, that the Agents hereby agree that prior to the
occurrence and during the continuance of an Event of Default or a Cash Dominion

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Event, the Agents shall remit all proceeds received by Agents under the policies to
Borrowers, provided further that after the occurrence of an Event of Default or a Cash
Dominion Event, the Agents shall apply any proceeds received in accordance with Section
2.22 hereof, (ii) a provision to the effect that none of the Borrowers, the Agents or any
other party shall be a co-insurer and (iii) such other provisions as the Agents may
reasonably require from time to time to protect the interests of the Lenders. 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 Agents (giving the Agents the right to cure defaults in the payment of
premiums). The Borrowers shall, and the Lead Borrower shall cause each Material Foreign
Subsidiary to, deliver to the Agents, prior to the cancellation, modification or nonrenewal
of any such policy of insurance, a copy of a renewal or replacement policy (or other
evidence of renewal of a policy previously delivered to the Agents) together with evidence
satisfactory to the Agents of payment of the premium therefor.

     5.8 Casualty and Condemnation. Each Borrower will furnish to the Agents and the
Lenders prompt written notice of any casualty or other insured damage to any material portion of
the Collateral or the commencement of any action or proceeding for the taking of any material
portion of the Collateral or any material part thereof or material interest therein under power of
eminent domain or by condemnation or similar proceeding.

     5.9 Books and Records; Inspection and Audit Rights.

          (a) Each Borrower will, and the Lead Borrower will cause each of the other Credit
Parties and each Material Foreign Subsidiary to, keep proper books of record and account in
which full, true and correct entries in all material respects are made of all dealings and
transactions in relation to its business and activities. Each Borrower will permit any
representatives designated by any Agent on its own behalf or on behalf of the Lenders, upon
reasonable prior notice, to visit and inspect its properties, to examine and make extracts
from its books and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often as
reasonably requested.

          (b) Each Borrower will, and the Lead Borrower will cause each of the other Credit
Parties and each Material Foreign Subsidiary to, from time to time upon the reasonable
request and reasonable prior notice of the Collateral Agent or the Required Lenders through
the Administrative Agent, permit any Agent or professionals (including consultants,
accountants, lawyers and appraisers) retained by the Agents to conduct appraisals,
commercial finance examinations and other evaluations as they deem necessary or
appropriate, including, without limitation, of (i) the Borrowers’ 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 expenses of the Agents or such
professionals with respect to such evaluations and appraisals, provided
that (w) so long as Excess Availability, at any time tested, is greater than
$75,000,000, no more than one such appraisal and one commercial finance examination shall
be required during any twelve month period following the Closing Date, and (x) so long as
Excess

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Availability, at any time tested, is less than $75,000,000 but greater than or equal
to $30,000,000, no more than two such appraisals and two commercial finance examinations
shall be required during any twelve month period following the Closing Date, and (y) so
long as Excess Availability, at any time tested, is less than $30,000,000, no more than
three such appraisals and three commercial finance examinations shall be required during
any twelve month period following the Closing Date, all at the expense of the Borrowers and
(z) following the occurrence and during the continuance of any Event of Default, the
Administrative Agent may undertake such additional appraisals and commercial finance
examinations as it deems appropriate, each at Borrowers’ expense. Notwithstanding the
foregoing, after the occurrence and during the continuance of a Cash Dominion Event, the
Administrative Agent may undertake such additional appraisals and commercial finance audits
as it deems appropriate, each at the expense of the Lenders.

          (c) The Borrowers and each Material Foreign Subsidiary shall, at all times, retain
Ernst & Young or other independent certified public accountants of national standing, and
instruct such accountants to cooperate with, and be available to, the Administrative Agent
or its representatives to discuss the Borrowers’ and each Material Foreign Subsidiary’s
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.

     5.10 Fiscal Year. Each of the Borrowers, each of the other Credit Parties and each
Material Foreign Subsidiary shall have a fiscal year ending on the Saturday closest to January 31
of each year and shall notify the Administrative Agent of any change in such fiscal year.

     5.11 Physical Inventories.

          (a) The Collateral Agent, at the expense of the Borrowers, may participate in and/or
observe each physical count and/or inventory of so much of the Collateral as consists of
Inventory which is undertaken on behalf of the Borrowers so long as such participation does
not disrupt the normal inventory schedule or process, provided that such
participation shall be limited to once in any twelve month period after the Closing Date
(unless a Cash Dominion Event shall have occurred and be continuing).

          (b) The Borrowers, at their own expense, shall cause not less than one physical
inventory of the Borrowers’ inventory to be undertaken in each twelve (12) month period
during which this Agreement is in effect, conducted by the Borrowers and using practices
consistent with practices in effect on the date hereof.

          (c) At the Administrative Agent’s request, the Borrowers, within forty-five (45) days
following the completion of such inventory, shall provide the Collateral Agent with a
reconciliation of the results of each such inventory (as well as of any other physical
inventory undertaken by the Borrowers) and shall post such results to the Borrowers’ stock
ledger and general ledger, as applicable.

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          (d) If and so long as there are any Loans outstanding, the Collateral Agent, in its
discretion, if any Event of Default exists, may cause such additional inventories to be
taken as the Collateral Agent determines (each, at the expense of the Borrowers). The
Collateral Agent shall use its best efforts to schedule any such inventories so as to not
unreasonably disrupt the operation of the Borrowers’ business.

     5.12 Compliance with Laws. Each Borrower will, and the Lead Borrower will cause each
other Credit Party and each Material Foreign Subsidiary to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.

     5.13 Use of Proceeds and Letters of Credit. The proceeds of Loans made hereunder and
Letters of Credit issued hereunder will be used only (a) for Restricted Payments and Permitted
Acquisitions, (b) to finance the acquisition of working capital assets of the Borrowers and the
Subsidiaries, including the purchase of inventory and equipment, in each case in the ordinary
course of business, (c) to finance Capital Expenditures of the Borrowers and the Subsidiaries, (d)
for refinancing of the Existing Indebtedness, (e) to pay transaction costs in connection with this
Agreement and the other Loan Documents, and (f) for general corporate purposes, including without
limitation the issuance of Letters of Credit, all to the extent permitted herein. 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.

     5.14 Additional Subsidiaries.

          (a) If any additional Material Domestic Subsidiary of any Borrower is formed or
acquired after the Closing Date, the Lead Borrower will promptly notify the Agents and the
Lenders thereof and (i) if a Material Domestic Subsidiary of which a Borrower owns directly
or indirectly, at least 80% of the Voting Stock or ownership interest, as applicable, the
Borrowers will cause such Material Domestic Subsidiary to become a Borrower or Facility
Guarantor hereunder, as the Administrative Agent may request, and under each applicable
Security Document in the manner provided therein, within thirty (30) days after such
Material Domestic Subsidiary is formed or acquired, and (A) execute and deliver to the
Administrative Agent a Joinder Agreement, (B) deliver to the Administrative Agent documents
of the types referred to in clauses (b), (c), (k), (l), (m), (n) and (s) of Section 4.1,
together with such other documents as the Administrative Agent may request in its Permitted
Discretion and (C) promptly take such actions to create and perfect Liens on such Material
Domestic Subsidiary’s assets to secure the Obligations as the Administrative Agent shall
reasonably request and (ii) if any shares of capital stock or Indebtedness of such Material
Domestic Subsidiary (whether or not wholly-owned) are owned by or on behalf of any
Borrower, the Borrowers will cause such shares and any promissory notes evidencing such
Indebtedness to be pledged within thirty (30) Days after such Material Domestic Subsidiary
is formed or acquired.

          (b) If any additional Material Foreign Subsidiary of any Borrower is formed or
acquired after the Closing Date or if a Foreign Subsidiary becomes a Material Foreign

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Subsidiary, the Lead Borrower will notify the Agents and the Lenders thereof and the
Borrowers shall cause 65% of the outstanding shares of Voting Stock of such Material
Foreign Subsidiary (or such lesser percentage as is owned by any such Borrower or as may be
necessary to avoid any adverse tax consequences) to be pledged within sixty (60) days after
such Material Foreign Subsidiary is formed or acquired or such Subsidiary becomes a
Material Foreign Subsidiary.

     5.15 Further Assurances. Each Borrower will, and the Lead Borrower will cause each of
the other Credit Parties and each Material Foreign Subsidiary to 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 Borrowers, provided however, that
a Material Foreign Subsidiary will not be required to take any of the foregoing actions if and to
the extent such action would cause an adverse tax consequence. The Borrowers also agree to provide
to the Agents, from time to time upon request, evidence reasonably satisfactory to the Agents as to
the perfection and priority of the Liens created or intended to be created by the Security
Documents.

6. 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 and all Letters of Credit have expired
or terminated and all L/C Disbursements shall have been reimbursed, each Borrower covenants and
agrees with the Agents and the Lenders that:

     6.1 Indebtedness. The Borrowers will not, nor will the Lead Borrower permit any of
the other Credit Parties to, create, incur, assume or permit to exist any Indebtedness, except:

          (a) Indebtedness created under the Loan Documents;

          (b) RESERVED;

          (c) Indebtedness set forth in Schedule 6.1 and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding principal amount
thereof or result in an earlier maturity date or decreased weighted average life thereof
and, in the case of the Convertible Notes Indenture and the Convertible Notes are not
materially more burdensome to the Lead Borrower as determined by the Administrative Agent
in its Permitted Discretion;

          (d) Indebtedness of any Borrower or Subsidiary to any other Borrower or Subsidiary,
provided, however, that the aggregate amount of Indebtedness incurred
pursuant to this paragraph (d) that is owed to any Borrower by Subsidiaries that are not
Borrowers or Facility Guarantors, when combined with the amount of Investments in such
Subsidiaries set forth in Section 6.4(e), shall not at any time exceed $5,000,000 in the
aggregate from and after the Closing Date, and further provided that with respect to

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each incurrence of Indebtedness pursuant to this paragraph (d), (A) no Default or
Event of Default has occurred and is continuing or would result from the incurrence of such
Indebtedness, and (B) immediately after giving effect to the incurrence of such
Indebtedness and on a pro forma basis for a period of ninety (90) days thereafter, Excess
Availability shall be not less than $30,000,000;

          (e) Indebtedness of the Credit Parties to finance the acquisition of any fixed or
capital assets, including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof or result in an
earlier maturity date or decreased weighted average life thereof, provided that the
aggregate principal amount of Indebtedness permitted by this clause (e) shall not exceed
$10,000,000 at any time outstanding;

          (f) Indebtedness incurred to finance any Real Estate owned by any of the Credit
Parties or incurred in connection with any sale-leaseback transaction, provided
that if any Inventory of any Credit Party is or is to be located at or on such Real Estate,
the Collateral Agent shall have received a mortgagee waiver from the lender of any such
Indebtedness relating to such Real Estate so financed in form and substance reasonably
satisfactory to the Collateral Agent;

          (g) Indebtedness under Hedging Agreements, other than those entered into for
speculative purposes, entered into in the ordinary course of business;

          (h) Contingent liabilities under surety bonds or similar instruments incurred in the
ordinary course of business in connection with the construction or improvement of stores;

          (i) Guarantees by any of the Credit Parties of Indebtedness of any of the other Credit
Parties, provided that such Indebtedness is otherwise permitted by this Section 6.1;

          (j) Indebtedness of any Person that becomes a Subsidiary after the Closing Date,
provided that (i) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such Person
becoming a Subsidiary and (ii) the aggregate outstanding principal amount of Indebtedness
permitted by this subsection (k) shall not, without duplication, exceed $25,000,000 at any
time;

          (k) Indebtedness arising under the Convertible Notes Indenture and the Convertible
Notes in an aggregate principal amount not to exceed $86,250,000 at any time outstanding;

          (l) financed insurance premiums not past due; and

          (m) other unsecured Indebtedness in an aggregate principal amount not exceeding
$50,000,000 at any time outstanding.

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     6.2 Liens. The Borrowers will not, nor will the Lead Borrower permit any of the other
Credit Parties to, create, incur, assume or permit to exist 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 Borrower or any of the other Credit
Parties set forth in Schedule 6.2, provided that (i) such Lien shall not
apply to any other property or asset of such Person 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;

          (d) Liens on fixed or capital assets acquired by any Borrower or by any of the other
Credit Parties, provided that (i) such Liens secure Indebtedness permitted by
Section 6.1(e), (ii) such Liens and the Indebtedness secured thereby are incurred on or
prior to or within 45 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of
acquiring such fixed or capital assets, (iv) such Liens shall not apply to any other
property or assets of the Borrowers or of any of the other Credit Parties, and (v) at the
Collateral Agent’s option with respect to material Liens which arise after the Closing
Date, the Credit Parties shall have used commercially reasonable efforts to ensure that the
Collateral Agent shall have entered into an intercreditor agreement with the holder of such
Lien on terms reasonably satisfactory to the Collateral Agent to allow, among other things,
the Collateral Agent to exercise rights and remedies as a secured party with respect to the
Collateral;

          (e) Liens to secure Indebtedness permitted by Section 6.1(f), provided that
such Liens shall not apply to any property or assets of the Borrowers other than the Real
Estate so financed or which is the subject of a sale-leaseback transaction,
provided that if any Inventory of any Credit Party is or is to be located at or on
such Real Estate, the Collateral Agent shall have received a mortgagee waiver from the
lender of any such Indebtedness relating to such Real Estate so financed in form and
substance reasonably satisfactory to the Collateral Agent; and

          (f) Security interests existing on any property or assets (other than Inventory,
Accounts, and the Proceeds thereof) prior to the acquisition thereof by any of the Credit
Parties or existing on any property or assets (other than Inventory, Accounts, and the
Proceeds thereof) of any Person that becomes a Subsidiary after the Closing Date prior to
the time such Person becomes a Subsidiary, provided that (i) such security
interests secure Indebtedness permitted by Section 6.1(j), (ii) such security interests are
not created in contemplation of or in connection with such acquisition or such Person
becoming a Subsidiary, as applicable, (iii) such security interests shall not apply to any
other property or assets of any Borrower or any Subsidiary and (iv) such security interests
shall secure only the Indebtedness that such security interests secure on the date

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of such acquisition or the date such Person becomes a Subsidiary, as applicable, and
any extensions, renewals and replacements thereof that do not increase the outstanding
principal amount thereof; and

          (g) Liens on assets other than Inventory, Accounts and cash Proceeds thereof securing
Indebtedness permitted pursuant to Section 6.1 up to an aggregate amount not to exceed
$5,000,000 that are not otherwise contemplated by this Section 6.2.

     6.3 Fundamental Changes. (a) The Borrowers shall not, nor shall the Lead Borrower
permit any of the other Credit Parties or any Material Foreign Subsidiary to, liquidate, merge or
consolidate into or with any other Person or enter into or undertake any plan or agreement of
liquidation, merger or consolidation with any other Person, provided that (i) a Borrower
may merge with another company in connection with a Permitted Acquisition if such Borrower is the
surviving company, (ii) any wholly-owned Subsidiary may merge or consolidate into or with a
Borrower or any other wholly-owned Subsidiary of a Borrower if no Default or Event of Default has
occurred and is continuing or would result from such merger and if a Borrower is the surviving
company in any merger or consolidation to which it is a party, (iii) a Subsidiary may merge or
consolidate into or with another entity in connection with a Permitted Acquisition if, upon
consummation of such merger or consolidation, the surviving entity shall be a direct or indirect
wholly-owned Subsidiary and, if the surviving entity is a Material Domestic Subsidiary, such
Material Domestic Subsidiary becomes a party to the Security Documents, (iv) any Domestic
Subsidiary may merge or consolidate into or with any other Domestic Subsidiary, and, if the
surviving entity is a Material Domestic Subsidiary, such Material Domestic Subsidiary becomes a
party to the Security Documents (v) any Foreign Subsidiary may merge into any other Foreign
Subsidiary and (vi) any Subsidiary (other than a Borrower) may liquidate or dissolve if the Lead
Borrower determines in good faith that such liquidation is in the best interests of the Borrowers
and would not have a Material Adverse Effect.

          (a) The Lead Borrower shall not, and shall not permit any of the other Credit Parties to,
engage to any material extent in any business other than businesses of the type conducted by the
Credit Parties on the date of execution of this Agreement, reasonable extensions thereof and
businesses reasonably related or complementary thereto, except that the Borrowers or any of the
other Credit Parties may withdraw from any business activity which such Person’s board of directors
reasonably deems unprofitable or unsound, provided that promptly after such withdrawal, the
Lead Borrower shall provide the Administrative Agent with written notice thereof.

     6.4 Investments, Loans, Advances, Guarantees and Acquisitions. The Borrowers shall
not, nor shall the Lead Borrower permit any of the other Credit Parties to, 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:

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          (a) Permitted Acquisitions;

          (b) Permitted Investments;

          (c) Investments existing on the Closing Date and set forth on Schedule 6.4;

          (d) 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;

          (e) Investments in Subsidiaries, provided, however, that the aggregate amount
of Investments pursuant to this paragraph (e) in Subsidiaries that are not Borrowers or
Facility Guarantors, including the amount of Indebtedness due from such Subsidiaries set
forth in Section 6.1(d), may not at any time exceed $5,000,000 in the aggregate from and
after the Closing Date, and further provided that no Default or Event of Default has
occurred and is continuing or would result from such Investment;

          (f) loans or advances to employees for the purpose of travel, entertainment or
relocation in the ordinary course of business and consistent with past practices, not
exceeding $1,000,000 in the aggregate at any time outstanding; provided, that no
such advances to any single employee shall exceed $500,000 in the aggregate;

          (g) Investments by a Foreign Subsidiary in another Foreign Subsidiary;

          (h) Investments consisting of amounts potentially due from a seller of assets in a
Permitted Acquisition that (i) relate to customary post-closing adjustments with respect to
accounts receivable, accounts payable and similar items typically subject to post-closing
adjustments in similar transactions, and (ii) are outstanding for a period of one hundred
eighty (180) days or less following the closing of such Permitted Acquisition;

          (i) the Borrowers and their respective Subsidiaries may make and own loans or
advances to the trustee of various employee incentive and stock purchase plans of the
Credit Parties, not to exceed $500,000 in the aggregate at any one time outstanding;

          (j) the Borrowers and their respective Subsidiaries may engage in transactions
permitted by Section 6.3;

          (k) except while a Cash Dominion Event is in existence, the Borrowers and their
respective Subsidiaries may make and own other Investments (including acquisitions of stock
or assets of another Person other than Acquisitions) not to exceed in the aggregate
$10,000,000 during the term of this Agreement.

     6.5 Asset Sales. The Borrowers will not, nor will the Lead Borrower permit any of the
other Credit Parties to, sell, transfer, lease or otherwise dispose of any asset, including any
capital stock except:

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          (a) (i) sales of Inventory in each case in the ordinary course of business, or (ii)
used or surplus equipment, or (iii) Permitted Investments;

          (b) sales, transfers and dispositions among the Credit Parties;

          (c) RESERVED;

          (d) sales or other transfers of assets pursuant to store closures provided
that in any fiscal year, Borrowers shall not close more than ten percent (10%) of the total
number of Borrowers’ stores open at the beginning of such fiscal year;

          (e) other sales, transfers, or dispositions of assets not in the ordinary course of
business and not pursuant to store closures; provided that (y) no Default or Event
of Default then exists or would arise therefrom, and (z) in the event that the aggregate
amount of any such sale, transfer or disposition exceeds $10,000,000, Excess Availability
shall not have been less than $30,000,000 at any time during the ninety (90) day period
immediately preceding such sale, transfer or disposition and would not be less than
$30,000,000 after giving effect to such sale, transfer or disposition.

          (f) sales or issuances by the Lead Borrower of any of its capital stock that does not
result in a Change of Control; and

          (g) sales or issuances of capital stock to any Borrower.

     provided that all sales, transfers, leases and other dispositions of Inventory and the
proceeds thereof shall be made for cash consideration or on customary terms, and further
provided that that all sales, transfers, leases and other dispositions permitted by
clauses (a)(i), (a)(ii), (d) and (e) above shall be made at arm’s length and for fair value; and
further provided that the authority granted hereunder may be terminated in whole or
in part by the Agents upon the occurrence and during the continuance of any Event of Default.

     6.6 Restrictive Agreements. The Borrowers will not, nor will the Lead Borrower permit
any of the other Credit Parties to, directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of any of the Credit Parties to create, incur or permit to exist any Lien upon any of its
property or assets or (b) the ability of any of the Credit Parties to pay dividends or other
distributions with respect to any shares of its capital stock or to make or repay loans or advances
to the Borrowers or any of the other Credit Parties or to guarantee Indebtedness of the Borrowers
or any of the other Credit Parties, provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document, (ii) the foregoing restrictions
shall not apply to customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided that such restrictions and conditions
apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iii) clause
(a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness (iv) clause (a) of the foregoing
shall not apply to customary provisions in leases restricting the assignment or subleasing thereof
and (v) clause (b) of the foregoing in respect to the payment of dividends or other distributions
with respect to any

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shares of its capital stock shall not apply to provisions in the Convertible Note Indenture
and the Convertible Notes, in each case in effect as of the Closing Date.

     6.7 Restricted Payments; Certain Payments of Indebtedness. The Borrowers will not,
nor will the Lead Borrower permit any of the other Credit Parties to declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment unless after giving effect thereto the
Payment Conditions are then satisfied, except that the Borrowers shall be permitted to

          (a) pay regularly scheduled interest and principal payments as and when due on a
non-accelerated basis and prior to maturity in respect of any Indebtedness permitted under
Section 6.1 at such times as no Event of Default is in existence or would arise as a result
of such payment;

          (b) refinance Indebtedness, to the extent permitted by Section 6.1, including without
limitation, any refinancing as a result of any rollover loans or any publicly issued or
privately placed notes or exchange notes issued in exchange for such Indebtedness provided
that any such refinancing of the Convertible Notes is not on terms materially more
burdensome to the Borrowers as determined by the Administrative Agent in its Permitted
Discretion; and

          (c) make payment of the Convertible Notes in the form of an exchange of the
Convertible Notes for shares of the Lead Borrower’s common stock.

     6.8 Transactions with Affiliates. The Borrowers will not, nor will the Lead Borrower
permit any other Credit Party to 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
Borrowers than could be obtained on an arm’s-length basis from unrelated third parties, and (b)
transactions between or among the Borrowers and one or more Subsidiaries, not involving any other
Affiliate, that would not otherwise violate the provisions of the Loan Documents.

     6.9 Additional Subsidiaries. The Borrowers will not, nor will the Lead Borrower
permit any of the other Credit Parties to, create any additional Subsidiary unless no Default or
Event of Default would arise therefrom and the requirements of Section 5.14 are satisfied to the
extent applicable.

     6.10 Amendment of Material Documents. The Borrowers will not, nor will the Lead
Borrower permit any other Credit Party or any Material Foreign Subsidiary to, amend, modify or
waive any of its rights under (a) its certificate of incorporation, by-laws or other organizational
documents to the extent that such amendment, modification or waiver would result in a Material
Adverse Effect, (b) the Convertible Notes Indenture to the extent such amendment, modification, or
waiver would be materially more burdensome to the Credit Parties as determined by the
Administrative Agent in its Permitted Discretion, or (c) any other instruments, documents or
agreements, in each case to the extent that such amendment, modification or waiver would result in
a Material Adverse Effect.

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     6.11 Fixed Charge Coverage Ratio. If, and during such time as, Adjusted Excess
Availability is less than 10% of the Total Commitments, the Borrowers shall not permit the Fixed
Charge Coverage Ratio to be less than 1.0:1.0 tested at the end of each Applicable Fiscal Period.

     6.12 Environmental Laws. The Borrowers shall not, nor will the Lead Borrower permit
any other Credit Party or any Material Foreign Subsidiary to (a) fail to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, or (b) become subject to any Environmental Liability, in each
case which is reasonably likely to have a Material Adverse Effect.

     6.13 Fiscal Year. The Borrowers shall not change their fiscal year without the prior
written consent of the Administrative Agent, which consent shall not be unreasonably withheld.

     7. EVENTS OF DEFAULT.

     7.1 Events of Default. If any of the following events (each, an “Event of
Default”) shall occur:

          (a) the Borrowers 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 Borrowers 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 Section) payable under this
Agreement or any other Loan Document, within three (3) Business Days after the same shall
become due and payable;

          (c) any representation or warranty made or deemed made by or on behalf of any Borrower
or any other Credit Party in or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any certificate or financial statement
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) the Borrowers shall fail to observe or perform any covenant, condition or
agreement contained in Sections 2.21, 5.1(e), 5.2(a), 5.3(b), 5.4, 5.7, 5.13, or in Section
6 (other than Section 6.12;

          (e) the Borrowers shall fail to observe or perform any covenant, condition or
agreement contained in Sections 5.1(a), 5.1(b), 5.1(c), 5.1(d), 5.1(i), 5.2, 5.9, or 5.14
within three (3) Business Days after notice from the Administrative Agent to the Lead
Borrower that the Borrowers have failed to observe or perform such covenant, condition or
agreement;

          (f) any Borrower or any of the other Credit Parties shall fail to observe or perform
any covenant, condition or agreement contained in any Loan Document (other

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than those specified in clause (a), (b), (c), (d) or (e) of this Section), and such
failure shall continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Lead Borrower;

          (g) any Borrower or any of the other Credit Parties 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);

          (h) (i) any Borrower, any of the other Credit Parties, or any Material Foreign
Subsidiary shall fail to perform any covenant or condition contained in any contract or
agreement to which it is party as and when such performance is required (after giving
effect to the expiration of any grace or cure period set forth therein) if such failure
could reasonably be expected to have a Material Adverse Effect;

          (i) any event or condition occurs that results in any Material Indebtedness becoming
due prior to its scheduled maturity or that enables or permits 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;

          (j) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of any Borrower,
any of the other Credit Parties or any Material Foreign Subsidiary or its debts, or of a
substantial part of its assets, under any federal or state bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for any
Borrower, any of the other Credit Parties or any Material Foreign Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect for 60 days;

          (k) any Borrower, any of the other Credit Parties or any Material Foreign Subsidiary
shall (i) voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any federal or state bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or petition described
in clause (j) of this Section, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any Borrower, any of
the other Credit Parties or any Material Foreign Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of the foregoing;

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          (l) any Borrower, any of the other Credit Parties or any Material Foreign Subsidiary
shall become unable, or admit in writing its inability or fail generally to pay its debts
as they become due;

          (m) one or more uninsured final judgments for the payment of money in an aggregate
amount in excess of $3,000,000 shall be rendered against any Borrower, any of the other
Credit Parties or any Material Foreign Subsidiary 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 successfully legally taken by a judgment
creditor to attach or levy upon any material assets of any Borrower, any of the other
Credit Parties or any Material Foreign Subsidiary to enforce any such judgment;

          (n) any challenge is asserted by or on behalf of any Borrower 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;

          (o) any challenge is asserted 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.

          (p) any Lien purported to be created under any Security Document shall be asserted by
any Borrower or any of the other Credit Parties not to be a valid and perfected Lien on any
Collateral, with the priority required by the applicable Security Document, except as a
result of the sale or other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents;

          (q) a Change in Control shall occur;

          (r) an ERISA Event shall have occurred that when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result in liability of the
Borrowers in an aggregate amount exceeding $3,000,000;

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

          (t) the indictment of any Borrower, any of the other Credit Parties or any Material
Foreign Subsidiary under any federal, state, 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 assets of
any Borrower, any of the other Credit Parties or any Material Foreign Subsidiary having a
fair market value in excess of $3,000,000;

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          (u) the imposition of any stay or other order against any Borrower, any of the other
Credit Parties or any Material Foreign Subsidiary, the effect of which (i) is to restrain
in any material way the conduct by the Credit Parties, taken as a whole, and the Credit
Parties and the Material Foreign Subsidiaries, taken as a whole, of their business in the
ordinary course and (ii) would have a Material Adverse Effect; or

          (v) except as otherwise permitted hereunder, the determination by any Borrower, any of
the other Credit Parties or any Material Foreign Subsidiary, whether by vote of such
Person’s board of directors or otherwise to: suspend the operation of such Person’s
business in the ordinary course, liquidate all or a material portion of such Person’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.

     then, and in every such event (other than an event with respect to each Borrower, any of the
other Credit Parties or any Material Foreign Subsidiary described in clause (j) or (k) of this
Section), 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 no Lender shall thereafter be
obligated to make any Loans, 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 102% of the Letter of Credit
Outstandings, and in case of any event with respect to any Borrower described in clause (j) or (k)
of this Section, the Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other obligations of the
Borrowers accrued hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers.

     7.2 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 to the reasonable written satisfaction of the Lenders in accordance with
Section 9.2, or (b) is waived in writing by the Lenders in accordance with Section 9.2.

     7.3 Remedies on Default. 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 may 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

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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.

     7.4 Application of Proceeds. After the occurrence of an Event of Default and
acceleration of the Obligations, all proceeds realized from any Borrower or on account of any
Collateral shall be applied in the manner set forth in Section 2.22(a) hereof. 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.

     8. THE AGENTS.

     8.1 Administration by Administrative Agent. Each Lender, the Collateral Agent and the
Issuing Banks 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 Banks each hereby
irrevocably authorize 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.

     8.2 The Collateral Agent. Each Lender, the Administrative Agent and the Issuing Banks
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 Security 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, (iii) agree and consent to all
of the provisions of the Security Documents and (iv) acknowledge and agree that, notwithstanding
any provisions of the Loan Documents to the contrary, the Collateral Agent will not obtain a
perfected security interest in the Borrowers’ intellectual property registered in jurisdictions
outside of the United States as of the Closing Date. 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 Sections 2.18, 2.22, or 7.4, 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.

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     8.3 Sharing of Excess Payments. Each of the Lenders, the Agents and the Issuing Banks
agrees that if it shall, through the exercise of a right of banker’s lien, setoff or counterclaim
against the Borrowers, 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 any 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 such 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 7.4, then such Lender, Agent or Issuing Bank
shall promptly purchase at par (and shall be deemed to have thereupon purchased) from the other
Lenders, such Agent and such 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 7.4 pro rata in proportion to the respective Commitment Percentages; 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 Borrowers expressly
consent to the foregoing arrangements and agree that any Lender, any Agent or any 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 Borrower to such Lender, such Agent or such Issuing Bank as fully as if such Lender, Agent or
such Issuing Bank held a Note and was the original obligee thereon, in the amount of such
participation.

     8.4 Agreement of Required Lenders. 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 Agents 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. No
amendment, modification, consent, or waiver shall be effective except in accordance with the
provisions of Section 9.2.

     Upon the occurrence of an Event of Default, the Agents shall (subject to the provisions of
Section 9.2) take such action with respect thereto as may be reasonably directed by the Required
Lenders; provided that unless and until the Agents shall have received such directions, the Agents
may (but shall not be obligated to) take such action as they shall deem advisable in the best
interests of the Lenders. In no event shall the Agents be required to comply with any such
directions to the extent that the Agents believe that the Agents’ compliance with such directions
would be unlawful.

     8.5 Liability of Agents.

          (a) Each of the Agents, when acting on behalf of the Lenders and the Issuing Banks,
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

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Issuing Banks 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 Banks 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 Banks 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 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 any Issuing Bank for the due
execution, validity, genuineness, effectiveness, sufficiency, 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 Borrower 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 any Issuing Bank for the state or condition of any
properties of the Borrowers or any other obligor hereunder constituting Collateral for the
Obligations of the Borrowers hereunder, or any information contained in the books or
records of the Borrowers; or (D) shall be responsible to any Lender or any 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 any Issuing
Bank for the validity, priority or perfection of any lien securing or purporting to secure
the Obligations 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 their agents or attorneys-in-fact, and shall be entitled to the
advice of counsel concerning all matters pertaining to their 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 Borrowers on account of the failure or delay in
performance or breach by any Lender (other than by any Agent in its capacity as a Lender)
or any 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
them 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 Agents. 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

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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.

     8.6 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 has received notice from a Lender or the Lead Borrower 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 Agents shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by the Required
Lenders. Unless and until the Agents shall have received such direction, the Agents may (but shall
not be obligated to) take such action, or refrain from taking such action, with respect to any such
Default or Event of Default as they shall deem advisable in the best interest of the Lenders.

     8.7 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 Borrowers 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.

     8.8 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 such Agent for
the benefit of the Lenders or the Issuing Banks 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 Banks, 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 Banks that the Borrowers have agreed to reimburse
pursuant to Section 9.3 and has failed to so reimburse and (ii) to indemnify and hold harmless the
Agents 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
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 8.8 shall
survive the repayment of the Obligations and the termination of the Commitments.

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     8.9 Rights of Agents. It is understood and agreed that Bank of America 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 its rights and powers under other
agreements and instruments to which it is or may be party, and engage in other transactions with
the Borrowers, as though it were not the Administrative Agent or the Collateral Agent,
respectively, of the Lenders under this Agreement. Without limiting the foregoing, the Agents 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 Borrowers and their
Subsidiaries and Affiliates as if it were not the Agent hereunder.

     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 Acceptance shall have become effective as set forth in
Section 9.5(b).

     8.11 Successor Agent. Any Agent may resign at any time by giving five (5) Business
Days’ written notice thereof to the Lenders, the Issuing Banks, 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 Default or Event of Default then in
existence 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 Banks, appoint a successor Agent which shall be 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 $500,000,000 which, so long as there is no
Default or 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 Section 8 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.

     8.12 Reports and Financial Statements. Promptly after receipt thereof from the
Borrowers, the Administrative Agent shall remit to each Lender and the Collateral Agent copies of
all financial statements required to be delivered by the Borrowers hereunder (or by making such
financial statements available to the Lenders and the Collateral Agent electronically) and all
commercial finance examinations and appraisals of the Collateral received by the Administrative
Agent.

     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 its Commitment Percentage 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 ten (10) days of receipt from the

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Administrative Agent of written notice thereof, then, in addition to the rights and remedies
that may be available to the Agents, the other Lenders, the Borrowers or any other party at law or
in equity, and not in 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 Commitment Percentages 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 Commitment Percentage 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 2.10 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 Commitment Percentage 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 Acceptance. 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.

     8.14 Co-Syndication Agents and Co-Documentation Agents. Neither the Co-Syndication
Agents, Co-Documentation Agents, nor in their capacity as such, shall have any obligation,
responsibility or required performance hereunder and shall not become liable in any manner to any
party hereto. No party shall have any obligation or liability, or owe any performance, hereunder,
to the Co-Syndication Agents or Co-Documentation Agents, each in their capacity as such.

     9. MISCELLANEOUS.

     9.1 Notices. 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:

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     (a) if to any Borrower, to it at Genesco Inc. Genesco Park, Suite 488, 1415
Murfreesboro Road, P.O. Box 731, Nashville, TN 37202-0731 Attention Jim Gulmi, Chief
Financial Officer (Telecopy No. (615) 367-7421), with a copy to Bass, Berry & Sims PLC,
315 Deaderick Street, Suite 2700, Nashville, TN 37238, Attention: Jennifer H. Noonan
(Telecopy No. (615) 742-2765);

     (b) if to the Administrative Agent or the Collateral Agent, to Bank of America, N.A.,
40 Broad Street, Boston, Massachusetts 02109, Attention of Alexis MacElhiney (Telecopy No.
(617) 434-3817), with a copy to Proskauer Rose LLP, One International Place, Boston,
Massachusetts 02108, Attention: Peter J. Antoszyk, Esquire (Telecopy No. (617) 526-9899);

     (c) 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 Acceptance 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.

     Notices and other communications to the Agents, the Lenders and the Issuing Banks hereunder
may be delivered or furnished by electronic communication (including e-mail and Internet or
intranet websites). Without limiting the foregoing, such notices and other communications shall be
deemed to have been delivered when the Lead Borrower provides notice to the Administrative Agent by
e-mail that such materials are posted on the website of the Securities and Exchange Commission at
www.sec.gov or on another website accessible to the Administrative Agent. The Borrowers agree that
the Administrative Agent may make such materials, as well as any other written information,
documents, instruments and other material relating to the Borrowers or any of their Subsidiaries or
any other materials or matters relating to this Agreement or any of the transactions contemplated
hereby, available to the Lenders by posting such notices on Intralinks or a substantially similar
electronic system. The foregoing shall not apply to notices to any Lender or Issuing Bank pursuant
to Section 2 if such Lender or Issuing Bank, as applicable, has notified the Administrative Agent
that it is incapable of receiving notices under such Article by electronic communication.

     9.2 Waivers; Amendments.

     (a) No failure or delay by the Agents, any 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 Banks 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 Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then

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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 any 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 Agents and the Borrowers that are parties thereto, in each
case with the consent of the Required Lenders, provided that no such agreement
shall (i) increase the Commitment of any Lender or the Total Commitments (other than as
provided in Section 2.1(c)) without the written consent of each Lender affected thereby,
(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, (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 Sections 2.18, 2.21, 2.22, 7.4 or
Section 5.4 of the Security Agreement, without the written consent of each Lender, (v)
change any of the provisions of this Section 9.2 or the definition of the term “Required
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) release
any Borrower or any Facility Guarantor 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 6.5 or as permitted in the Security
Documents, release any material portion of the Collateral from the Liens of the Security
Documents, without the written consent of each Lender, (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 the Administrative Agent to change, establish or eliminate any Reserves, (ix) increase
the Permitted Overadvance, without the written consent of each Lender, (x) subordinate the
Obligations hereunder, or the Liens granted hereunder or under the other Loan Documents, to
any other Indebtedness or Lien, as the case may be without the prior written consent of
each Lender, or (xi) change Section 5.9(b) to reduce the number of appraisals and
commercial finance examinations permitted thereby, without the written consent of each
Lender, and provided further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Agents or the Issuing Banks without the prior
written consent of the affected Agent or Issuing Bank, as the case may be.

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     (c) Notwithstanding anything to the contrary contained in this Section 9.2, 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 9.2(b) 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 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 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 of one or more of
the Required Lenders, so that the aggregate Commitments after giving effect to such
amendment shall be in the same amount as the aggregate 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.

     (d) No notice to or demand on any Borrower shall entitle any Borrower 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.

     9.3 Expenses; Indemnity; Damage Waiver.

     (a) Except as otherwise limited herein, the Borrowers shall jointly and severally pay
(i) all reasonable out-of-pocket expenses incurred by the Agents, as well as the
Co-Syndication Agents and the Co-Documentation Agents (each in such capacity) and their
Affiliates, including the reasonable fees, charges and disbursements of counsel for the
Agents, and the Co-Syndication Agents and the Co-Documentation Agents (each in such
capacity), outside consultants for each of them, 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 any Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder, and (iii) all
reasonable out-of-pocket expenses incurred by the Agents, any Issuing Bank or any Lender,
including the reasonable fees, charges and disbursements of any counsel and any outside
consultants for the Agents, any Issuing Bank or any Lender, for appraisers, commercial
finance examinations, and environmental site assessments, in

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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 Agents or the Issuing
Banks shall be entitled to reimbursement for no more than one counsel representing all such
Lenders (absent a conflict of interest in which case the Lenders may engage and be
reimbursed for such additional counsel as are required in connection with such conflict).

     (b) The Borrowers shall jointly and severally indemnify the Agents, the Issuing Banks
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
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 an 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 Borrower or any other Credit
Party, or any Environmental Liability related in any way to Borrower or any other Credit
Party, or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether brought by any Credit Party or any other Person,
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 willful misconduct 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). In connection
with any indemnified claim hereunder, the Indemnitee shall be entitled to select its own
counsel and the Borrowers shall promptly pay the reasonable fees and expenses of such
counsel.

     (c) To the extent that any Borrower fails to pay any amount required to be paid by it
to the Agents or any Issuing Bank under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Agents or such 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 the Agents or such Issuing Bank.

     (d) To the extent permitted by Applicable Law, no party hereto shall assert, and each
party hereby waives, any claim against any Borrower or Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed to

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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
therefor.

     9.4 Designation of Lead Borrower as Borrowers’ Agent.

     (a) Each Borrower hereby irrevocably designates and appoints the Lead Borrower as that
Borrower’s agent to obtain Loans and Letters of Credit hereunder, the proceeds of which
shall be available to each Borrower for those uses as those set forth herein. As the
disclosed principal for its agent, each 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 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
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 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 Borrower (including itself, as a
“Borrower”) on whose behalf the Lead Borrower has requested a Loan. The Lead Borrower shall
cause the transfer of the proceeds of each Loan to the (those) 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.

     (d) Each of the Borrowers shall remain jointly and severally liable to the Agents and
the Lenders for the payment and performance of all Obligations (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 to cease making
Loans or causing Letters of Credit to be issued to or for the benefit of any Borrower.

     (e) The authority of the Lead Borrower to request Loans on behalf of, and to bind, the
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 Borrower (other than the President of the Lead
Borrower being replaced) then eligible for borrowing under this Agreement; and

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     (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 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.

     9.5 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 of an 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 of an 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 Banks 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 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 of a Lender, each of the Lead Borrower (but only if
no Event of Default then exists), the Agents and the Issuing Banks 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 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 Acceptance 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 Acceptance, 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 Acceptance the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto

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but shall continue to be entitled to the benefits of Section 9.3). 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
Acceptance delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the 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 conclusive absent manifest error
and the Borrowers, the Administrative Agent, the Issuing Banks 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 Banks 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 Acceptance 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
Acceptance 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
Banks, 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 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 Banks 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, 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 9.2(b) that
affects such Participant. Subject to paragraph (f) of this Section and Section 2.28, the
Borrowers agree that each Participant shall be entitled to the benefits (and subject to the
obligations) of Sections 2.23, 2.25, and 2.26 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

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be entitled to the benefits of Section 9.9 as though it were a Lender,
provided such Participant agrees to be subject to Section 2.25(c) as though it were
a Lender.

     (f) A Participant shall not be entitled to receive any greater payment under Section
2.23 or 2.26 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 2.26 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 2.26(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
2.26(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.

     9.6 Survival. All covenants, agreements, representations and warranties made by the
Borrowers 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, any 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. The provisions of
Sections 2.23, 2.26, and 9.3 and Section 8 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.

     9.7 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 Agents 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 4.1, 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

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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 shall be effective as
delivery of a manually executed counterpart of this Agreement.

     9.8 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.

     9.9 Right of Setoff. If an Event of Default shall have occurred and be continuing,
each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) 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 and regardless of the adequacy of the Collateral.
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.

     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 INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

     (b) The Borrowers agree that any suit for the enforcement of this Agreement or any
other Loan Document may be brought in any court of the State of New York sitting in the
Borough of Manhattan or any federal court sitting therein as the Administrative Agent may
elect in its sole discretion and consent to the non-exclusive jurisdiction of such courts.
The Borrowers hereby waive any objection which they 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.
The Borrowers agree that any action commenced by any Borrower asserting any claim or
counterclaim arising under or in connection with this Agreement or any other Loan Document
shall be brought solely in a court of the State of New York sitting in the Borough of
Manhattan or any federal court sitting therein as the Administrative Agent may elect in its
sole discretion and consent to the exclusive jurisdiction of such courts with respect to
any such action.

     (c) Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 9.1. 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.

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     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.

     9.12 Headings. 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.

     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 or otherwise regulated 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.

     9.14 Additional Waivers.

     (a) The Obligations are joint and several obligations of each Borrower. To the
fullest extent permitted by Applicable Law, the obligations of Borrower 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 Borrower 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, with
respect to any other Borrower of the Obligations under this 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 or any other Secured Party.

     (b) To the fullest extent permitted by Applicable Law, the obligations of each
Borrower hereunder shall not be subject to any reduction, limitation, impairment or

105

 

termination for any reason (other than the payment in full in cash of the
Obligations), 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 the Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Borrower 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 Borrower or that would otherwise operate as a discharge of any Borrower as a matter
of law or equity (other than the payment in full in cash of all the Obligations).

     (c) To the fullest extent permitted by Applicable Law, each Borrower waives any
defense based on or arising out of any defense of any other Borrower 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 Borrower, other than the payment in full in
cash of all the Obligations. 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 nonjudicial 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 Borrower, or exercise any other right or remedy available to them against
any other Borrower, without affecting or impairing in any way the liability of any Borrower
hereunder except to the extent that all the Obligations have been paid in full in cash.
Pursuant to Applicable Law, each Borrower 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
Borrower against any other Borrower, as the case may be, or any security.

     (d) Upon payment by any Borrower of any Obligations, all rights of such Borrower
against any other Borrower 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 addition, any indebtedness of any Borrower now or hereafter held by any other Borrower
is hereby subordinated in right of payment to the prior payment in full of the Obligations.
Until the Obligations are paid in full, none of the Borrowers will demand, sue for, or
otherwise attempt to collect any such indebtedness. If any amount shall erroneously be paid
to any Borrower on account of (a) such subrogation, contribution, reimbursement, indemnity
or similar right or (b) any such indebtedness of any Borrower, such amount shall be held in
trust for the benefit of the Secured Parties and shall forthwith be paid to the Collateral
Agent to be credited against the payment of the Obligations, whether matured or unmatured,
in accordance with the terms of the Loan Documents.

106

 

     9.15 Confidentiality. Each of the Lenders agrees that it will use its best efforts
not to disclose without the prior consent of the Borrowers (other than to its employees, auditors,
counsel or other professional advisors, to Affiliates 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, which party shall be informed of the confidential nature thereof)
any information with respect to any Borrower 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 required or appropriate in any report, statement or testimony submitted to
any municipal, state 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 or appropriate in response to any summons or subpoena or in connection with any
litigation, provided that if the Lender is able to do so prior to complying with the summons or
subpoena, such Lender shall provide the Borrowers with prompt notice of such requested disclosure
so that the Borrowers may seek a protective order or other appropriate remedy (nothing contained
herein however shall result in such Lender’s non-compliance with Applicable Law), (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, and (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. The Borrowers hereby agree that the failure of a Lender to comply
with the provisions of this Section 9.15 shall not relieve the Borrowers of any of their
obligations to such Lender under this Agreement and the other Loan Documents.

     9.16 Release of Collateral and Guaranty Obligations.

     (a) Notwithstanding anything to the contrary contained herein or in any other Loan
Document, upon request of the Lead Borrower in connection with any disposition of property
permitted by the Loan Documents, the Collateral Agent shall (without notice to or vote or
consent of any Lender, or any Affiliate of any Lender that may be a party to any Hedging
Agreement) take such actions as shall be required to release its security interest in any
Collateral being disposed of in such disposition, and to release any guarantee obligations
of a Person being disposed of in such disposition, to the extent necessary to permit
consummation of such disposition in accordance with this Agreement and the other Loan
Documents; provided that the Lead Borrower shall have delivered to the
Administrative Agent, at least five (5) Business Days prior to the date of the proposed
release, a written request for release identifying the relevant Collateral being disposed
of in such disposition and the terms of such disposition in reasonable detail, together
with a certification, in form and substance reasonably acceptable to the Collateral Agent,
by the Lead Borrower stating that such transaction is in compliance with this Agreement and
the other Loan Documents, together with copies of such supporting documentation as the
Collateral Agent may reasonably request, and the Collateral Agent otherwise has determined,
in its Permitted Discretion, that such transaction is in compliance with this Agreement and
the other Loan Documents.

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     (b) Notwithstanding anything to the contrary contained herein or any other Loan
Document, when all Obligations (excluding Obligations in respect of Hedging Agreements but
including any contingent or indemnity obligations that the Administrative Agent reasonably
believes are likely to arise or be asserted) have been indefeasibly paid in full in cash,
all Commitments have irrevocably terminated or expired and no Letter of Credit shall be
outstanding (or cash collateralized as provided herein), upon request of the Lead Borrower,
the Collateral Agent shall (without notice to or vote or consent of any Lender, or any
Affiliate of any Lender that is a party to any Hedging Agreement) take such actions as
shall be required to release its security interest in all Collateral, and to release all
guarantee obligations provided for in any Loan Document.

     9.17 Amendment and Restatement. Effective as of the date hereof, each Borrower hereby
agrees to become a borrower, debtor and obligor under, and to bind itself to, the Existing
Financing Agreements to which Borrowers are bound generally (in each case, as modified and restated
hereby), and, in such capacity, to assume and bind itself to all Obligations of Borrowers
thereunder (as modified and restated hereby). The terms, conditions, agreements, covenants,
representations and warranties set forth in and relating to the Existing Credit Agreement are
hereby amended, restated, replaced and superseded in their entirety by the terms, conditions,
agreements, covenants, representations and warranties set forth in this Agreement. This Agreement
does not extinguish the obligations, including, without limitation, obligations for the payment of
money, outstanding under the Existing Credit Agreement or discharge or release the obligations or
the liens or priority of any mortgage, pledge, security agreement or any other security therefor,
which shall continue, as modified and restated hereby, without interruption and in full force and
effect. Nothing herein contained shall be construed as a substitution or novation of the
obligations outstanding under the Existing Credit Agreement or instruments securing the same, which
shall remain in full force and effect, except in each case as amended, restated, replaced and
superseded hereby or by instruments executed in connection herewith. Nothing expressed or implied
in this Agreement shall be construed as a release or other discharge of any Borrower or guarantor
from any of their obligations or liabilities under the Existing Financing Agreements or any of the
security agreements, pledge agreements, mortgages, guaranties or other loan documents executed in
connection therewith, except in each case as amended, restated, replaced and superseded hereby or
by instruments executed in connection herewith. Each Borrower hereby confirms and agrees that (i)
the Existing Agreement and each Existing Financing Agreement (excluding any deed of trust, mortgage
or similar instrument encumbering Real Estate) to which it is a party is, and shall continue to be,
in full force and effect and is hereby ratified and confirmed in all respects, in each case as
amended, restated, replaced and superseded hereby or by instruments executed in connection
herewith, except that on and after the Closing Date all references in any such Existing Financing
Agreement to “the Agreement”, “thereto”, “thereof” “thereunder” or
words of like import referring to the Existing Credit Agreement shall mean the Existing Credit
Agreement as amended, restated, replaced and superseded by this Agreement; and (ii) to the extent
that any such Existing Financing Agreement purports to assign or pledge to the Administrative Agent
for the benefit of the Lenders a security interest in or lien on, any collateral as security for
the Obligations of any Borrower from time to time existing in respect of the Existing Credit
Agreement, such pledge, assignment or grant of the security interest or lien is hereby ratified and
confirmed in all respects in favor of Collateral

108

 

Agent for the benefit of Lenders, which shall remain in full force and effect, except as
amended, restated, replaced and superseded hereby or by instruments executed in connection
herewith.

     9.18 Commitments. Effective as of the date hereof, the Administrative Agent shall
reallocate the Commitments and Loans of the Lenders hereunder and shall notify the Lenders of any
payment required to be made so that the Commitments and Loans of the Lenders are in accordance with
Schedule 1.1. Upon receipt of such notice, each Lender shall make the payments specified
therein, if any.

     9.19 USA Patriot Act Notice. Each Lender and the Administrative Agent (for itself and
not on behalf of any Lender) hereby notifies the Credit 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 the Credit Parties, which
information includes the name and address of each Credit Party and other information that will
allow such Lender or the Administrative Agent, as applicable, to identify such Credit Party in
accordance with the Act.

[balance of page left intentionally blank; signature pages follow]

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     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.

	 	 	 	 	 	 	 
	 	 	GENESCO INC.	 	 
	 	 	as Lead Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	GENESCO BRANDS, INC.	 	 
	 	 	as a Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HAT WORLD CORPORATION	 	 
	 	 	as a Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	HAT WORLD, INC.	 	 
	 	 	as a Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	FLAGG BROS. OF PUERTO RICO, INC.	 	 
	 	 	as a Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

1

 

[SIGNATURE PAGES TO FOLLOW]

2

 

	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,	 	 
	 	 	as Administrative Agent, Collateral Agent, an Issuing
Bank and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Alexis MacElhiney	 	 
	 

	 	Title:
	 	Director	 	 
	 

	 	Address:
	 	40 Broad Street, 10th Floor	 	 
	 

	 	 	 	Boston, Massachusetts 02109	 	 
	 	 	Attn:	 	Ms. Alexis MacElhiney	 	 
	 	 	Telephone: (617) 434-3817	 	 
	 	 	Telecopy: (617) 434-2615	 	 

[SIGNATURE PAGES TO FOLLOW]

3

 

	 	 	 	 	 	 	 
	 	 	LASALLE BANK, NATIONAL ASSOCIATION	 	 
	 	 	as a Co-Syndication Agent, an Issuing Bank and a
Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	W. Pat Fischer	 	 
	 

	 	Title:
	 	Senior Vice President & Senior Banker	 	 
	 

	 	Address:
	 	3343 Peachtree Rd, NE., Suite 500	 	 
	 

	 	 	 	Atlanta, GA 30326	 	 
	 

	 	Attn:
	 	W. Pat Fischer	 	 
	 	 	Telephone: (404) 732-1230	 	 
	 	 	Telecopy: (404) 732-1234	 	 

[SIGNATURE PAGES TO FOLLOW]

4

 

	 	 	 	 	 	 	 
	 	 	WELLS FARGO FOOTHILL, LLC	 	 
	 	 	as a Co-Syndication Agent and a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Rina Shinoda	 	 
	 

	 	Title:
	 	Vice President	 	 
	 

	 	Address:
	 	2450 Colorado Avenue	 	 
	 

	 	 	 	Suite 3000 West	 	 
	 

	 	 	 	Santa Monica, CA 90404	 	 
	 

	 	Attn:
	 	Rina Shinoda	 	 
	 	 	Telephone: (310) 453-7300	 	 
	 	 	Telecopy: (310) 453-7446	 	 

[SIGNATURE PAGES TO FOLLOW]

5

 

	 	 	 	 	 	 	 
	 	 	NATIONAL CITY BUSINESS CREDIT, INC.,
  
as a Lender and a Co-Documentation Agent
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Joseph Kwasny	 	 
	 

	 	Title:
	 	Director	 	 
	 

	 	Address:
	 	1965 E.6th Street, 4th Floor

Locator: 01-3049

Cleveland, OH 44114
	 	 
	 

	 	Attn:
	 	Joseph Kwasny	 	 
	 

	 	Telephone:
	 	(216) 222-2508
	 	 
	 

	 	Telecopy:
	 	(216) 222-9555	 	 

[SIGNATURE PAGES TO FOLLOW]

6

 

	 	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION

as a Lender and a Co-Documentation Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Matthew Kasper	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 
	 

	 	Address:
	 	425 Walnut Street, 14th Floor

Cincinnati, Ohio 45202	 	 
	 

	 	Attn:
	 	Matthew Kasper	 	 
	 

	 	Telephone:
	 	(513) 632-4226
	 	 
	 

	 	Telecopy:
	 	(513) 632-2040	 	 

[SIGNATURE PAGES TO FOLLOW]

7

 

	 	 	 	 	 	 	 
	 	 	SUNTRUST BANK,

as a Lender and a Co-Documentation Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Patrick Wiggins	 	 
	 

	 	Title:
	 	Vice President	 	 
	 

	 	Address:
	 	303 Peachtree Street, 2nd Floor

Atlanta, Georgia 30308
	 	 
	 

	 	Attn:
	 	Patrick Wiggins	 	 
	 

	 	Telecopy:
	 	(404) 588-7061	 	 

[SIGNATURE PAGES TO FOLLOW]

8

 

	 	 	 	 	 	 	 
	 	 	FIFTH THIRD BANK,

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	John K. Perez	 	 
	 

	 	Title:
	 	Vice President – Large Corporate Banking	 	 
	 

	 	Address:
	 	424 Church Street, Suite 600

Nashville, TN 37219	 	 
	 

	 	Attn:
	 	John K. Perez	 	 
	 

	 	Telephone:
	 	(615) 687-3043
	 	 
	 

	 	Telecopy:
	 	(615) 687-3089	 	 

[SIGNATURE PAGES TO FOLLOW]

9

 

	 	 	 	 	 	 	 
	 	 	BRANCH BANKING & TRUST CO.

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Natalie Ruggiero	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 
	 

	 	Address:
	 	4400 Harding Rd., Suite 204

Nashville, TN 37205	 	 
	 

	 	Attn:
	 	Natalie Ruggiero	 	 
	 

	 	Telephone:
	 	(615) 279-4283	 	 

[SIGNATURE PAGES TO FOLLOW]

10

 

	 	 	 	 	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION

as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	David Weaver	 	 
	 

	 	Title:
	 	Vice President	 	 
	 

	 	Address:
	 	201 South Tryon Street, Suite 900

Charlotte, NC 28202	 	 
	 

	 	Attn:
	 	David Weaver	 	 
	 

	 	Telephone:
	 	(704) 342-8420	 	 
	 

	 	Telecopy:
	 	(704) 342-8450	 	 

[SIGNATURE PAGES TO FOLLOW]

11Exhibit 4.1

     

    Exhibit
      4.1

     

    
      

      

    

     

    
 

     

    ANADIGICS,
      INC.

    Issuer

     

    AND

     

    U.S.
      BANK TRUST NATIONAL ASSOCIATION

    Trustee

     

    INDENTURE

     

    Dated
      as of [                 ],
      200[ ]

     

    Senior
      Debt Securities

     

     

     

     

    
 

    
      

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CROSS-REFERENCE
      TABLE*

     

    
      	
              Section
                of Trust 
Indenture
                Act

               

            	 	
              Section
                of 
Indenture

               

            
	
              310(a)

            	 	
              7.09

            
	
              310(b)

            	 	
              7.08

            
	 	 	
              7.10

            
	
              310(c)

            	 	
              Inapplicable

            
	
              311(a)

            	 	
              7.13

            
	
              311(b)

            	 	
              7.13

            
	
              311(c)

            	 	
              Inapplicable

            
	
              312(a)

            	 	
              5.01

            
	 	 	
              5.02(a)

            
	
              312(b)

            	 	
              5.02(c)

            
	
              312(c)

            	 	
              5.02(c)

            
	
              313(a)

            	 	
              5.04(a)

            
	
              313(b)

            	 	
              5.04(b)

            
	
              313(c)

            	 	
              5.04(a)

            
	 	 	
              5.04(b)

            
	
              313(d)

            	 	
              5.04(c)

            
	
              314(a)

            	 	
              5.03;
                4.05

            
	
              314(b)

            	 	
              Inapplicable

            
	
              314(c)

            	 	
              13.07

            
	
              314(d)

            	 	
              Inapplicable

            
	
              314(e)

            	 	
              13.07

            
	
              314(f)

            	 	
              Inapplicable

            
	
              315(a)

            	 	
              7.01

            
	
              315(b)

            	 	
              7.14

            
	
              315(c)

            	 	
              7.01(a)

            
	
              315(d)

            	 	
              7.01(b)

            
	
              315(e)

            	 	
              6.07

            
	
              316(a)

            	 	
              6.06

            
	 	 	
              8.04

            
	
              316(b)

            	 	
              6.04

            
	
              316(c)

            	 	
              8.01

            
	
              317(a)

            	 	
              6.02

            
	
              317(b)

            	 	
              4.03

            
	
              318(c)

               

            	 	
              13.09

               

            

    

    * This
      Cross-Reference Table does not constitute part of the Indenture and shall not
      have any bearing on the interpretation of any of its terms or
      provisions.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    
      	
               

            	
               

            	
              Page

            

       

    

    ARTICLE
      I

     

    DEFINITIONS

     

    
      	
              SECTION
                1.01.

            	
              DEFINITIONS
                OF TERMS.

            	
              1

            

    

     

    ARTICLE
      II

     

    ISSUE,
      DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND 
EXCHANGE OF
      SECURITIES

     

    
      	
              SECTION
                2.01.

            	
              DESIGNATION
                AND TERMS OF SECURITIES.

            	
              4

            
	
              SECTION
                2.02.

            	
              FORM
                OF SECURITIES AND TRUSTEE’S CERTIFICATE.

            	
              6

            
	
              SECTION
                2.03.

            	
              DENOMINATIONS:
                PROVISIONS FOR PAYMENT.

            	
              6

            
	
              SECTION
                2.04.

            	
              EXECUTION
                AND AUTHENTICATION.

            	
              8

            
	
              SECTION
                2.05.

            	
              REGISTRATION
                OF TRANSFER AND EXCHANGE.

            	
              8

            
	
              SECTION
                2.06.

            	
              TEMPORARY
                SECURITIES.

            	
              9

            
	
              SECTION
                2.07.

            	
              MUTILATED,
                DESTROYED, LOST OR STOLEN SECURITIES.

            	
              9

            
	
              SECTION
                2.08.

            	
              CANCELLATION.

            	
              10

            
	
              SECTION
                2.09.

            	
              BENEFITS
                OF INDENTURE.

            	
              10

            
	
              SECTION
                2.10.

            	
              AUTHENTICATING
                AGENT.

            	
              10

            
	
              SECTION
                2.11.

            	
              GLOBAL
                SECURITIES.

            	
              11

            

    

     

    ARTICLE
      III

     

    REDEMPTION
      OF SECURITIES AND SINKING FUND PROVISIONS

     

    
      	
              SECTION
                3.01.

            	
              REDEMPTION.

            	
              12

            
	
              SECTION
                3.02.

            	
              NOTICE
                OF REDEMPTION.

            	
              12

            
	
              SECTION
                3.03.

            	
              PAYMENT
                UPON REDEMPTION.

            	
              13

            
	
              SECTION
                3.04.

            	
              SINKING
                FUND.

            	
              13

            
	
              SECTION
                3.05.

            	
              SATISFACTION
                OF SINKING FUND PAYMENTS WITH SECURITIES.

            	
              13

            
	
              SECTION
                3.06.

            	
              REDEMPTION
                OF SECURITIES FOR SINKING FUND.

            	
              14

            

    

     

    ARTICLE
      IV

     

    CERTAIN
      COVENANTS

     

    
      	
              SECTION
                4.01.

            	
              PAYMENT
                OF PRINCIPAL, PREMIUM AND INTEREST.

            	
              14

            
	
              SECTION
                4.02.

            	
              MAINTENANCE
                OF OFFICE OR AGENCY.

            	
              14

            
	
              SECTION
                4.03.

            	
              PAYING
                AGENTS.

            	
              14

            
	
              SECTION
                4.04.

            	
              APPOINTMENT
                TO FILL VACANCY IN OFFICE OF TRUSTEE.

            	
              15

            
	
              SECTION
                4.05.

            	
              STATEMENT
                BY OFFICERS AS TO DEFAULT.

            	
              15

            

    

     

     

    
      
        
        

      

      
        -i-

        
          

        

      

      
        
        

      

    

    ARTICLE
      V

     

    SECURITYHOLDERS’
      LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

     

    
      	
              SECTION
                5.01.

            	
              COMPANY
                TO FURNISH TRUSTEE NAMES AND ADDRESSES OF SECURITYHOLDERS.

            	
              16

            
	
              SECTION
                5.02.

            	
              PRESERVATION
                OF INFORMATION; COMMUNICATIONS WITH SECURITYHOLDERS.

            	
              16

            
	
              SECTION
                5.03.

            	
              REPORTS
                BY THE COMPANY.

            	
              16

            
	
              SECTION
                5.04.

            	
              REPORTS
                BY THE TRUSTEE.

            	
              17

            

    

     

    ARTICLE
      VI

     

    REMEDIES
      OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT

     

    
      	
              SECTION
                6.01.

            	
              EVENTS
                OF DEFAULT.

            	
              17

            
	
              SECTION
                6.02.

            	
              COLLECTION
                OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

            	
              18

            
	
              SECTION
                6.03.

            	
              APPLICATION
                OF MONEYS COLLECTED.

            	
              20

            
	
              SECTION
                6.04.

            	
              LIMITATION
                ON SUITS.

            	
              20

            
	
              SECTION
                6.05.

            	
              RIGHTS
                AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER.

            	
              20

            
	
              SECTION
                6.06.

            	
              CONTROL
                BY SECURITYHOLDERS.

            	
              21

            
	
              SECTION
                6.07.

            	
              UNDERTAKING
                TO PAY COSTS.

            	
              21

            

    

     

    ARTICLE
      VII

     

    CONCERNING
      THE TRUSTEE

     

    
      	
              SECTION
                7.01.

            	
              CERTAIN
                DUTIES AND RESPONSIBILITIES OF TRUSTEE.

            	
              22

            
	
              SECTION
                7.02.

            	
              CERTAIN
                RIGHTS OF TRUSTEE.

            	
              23

            
	
              SECTION
                7.03.

            	
              TRUSTEE
                NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OR SECURITIES.

            	
              24

            
	
              SECTION
                7.04.

            	
              MAY
                HOLD SECURITIES.

            	
              24

            
	
              SECTION
                7.05.

            	
              MONEYS
                HELD IN TRUST.

            	
              24

            
	
              SECTION
                7.06.

            	
              COMPENSATION
                AND REIMBURSEMENT.

            	
              24

            
	
              SECTION
                7.07.

            	
              RELIANCE
                ON OFFICERS’ CERTIFICATE.

            	
              25

            
	
              SECTION
                7.08.

            	
              DISQUALIFICATION;
                CONFLICTING INTERESTS.

            	
              25

            
	
              SECTION
                7.09.

            	
              CORPORATE
                TRUSTEE REQUIRED; ELIGIBILITY.

            	
              25

            
	
              SECTION
                7.10.

            	
              RESIGNATION
                AND REMOVAL; APPOINTMENT OF SUCCESSOR.

            	
              26

            
	
              SECTION
                7.11.

            	
              ACCEPTANCE
                OF APPOINTMENT BY SUCCESSOR.

            	
              27

            
	
              SECTION
                7.12.

            	
              MERGER,
                CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

            	
              28

            
	
              SECTION
                7.13.

            	
              PREFERENTIAL
                COLLECTION OF CLAIMS AGAINST THE COMPANY.

            	
              28

            
	
              SECTION
                7.14.

            	
              NOTICE
                OF DEFAULTS.

            	
              28

            

    

     

    ARTICLE
      VIII

     

    CONCERNING
      THE SECURITYHOLDERS

     

    
      
        
        

      

      
        -ii-

        
          

        

      

      
        
        

      

    

     

    
      	
              SECTION
                8.01.

            	
              EVIDENCE
                OF ACTION BY SECURITYHOLDERS.

            	
              28

            
	
              SECTION
                8.02.

            	
              PROOF
                OF EXECUTION BY SECURITYHOLDERS.

            	
              29

            
	
              SECTION
                8.03.

            	
              WHO
                MAY BE DEEMED OWNERS.

            	
              29

            
	
              SECTION
                8.04.

            	
              CERTAIN
                SECURITIES OWNED BY COMPANY DISREGARDED.

            	
              29

            
	
              SECTION
                8.05.

            	
              ACTIONS
                BINDING ON FUTURE SECURITYHOLDERS.

            	
              29

            

    

     

    ARTICLE
      IX

     

    SUPPLEMENTAL
      INDENTURES

     

    
      	
              SECTION
                9.01.

            	
              SUPPLEMENTAL
                INDENTURES WITHOUT THE CONSENT OF SECURITYHOLDERS.

            	
              30

            
	
              SECTION
                9.02.

            	
              SUPPLEMENTAL
                INDENTURES WITH CONSENT OF SECURITYHOLDERS.

            	
              30

            
	
              SECTION
                9.03.

            	
              EFFECT
                OF SUPPLEMENTAL INDENTURES.

            	
              31

            
	
              SECTION
                9.04.

            	
              SECURITIES
                AFFECTED BY SUPPLEMENTAL INDENTURES.

            	
              31

            
	
              SECTION
                9.05.

            	
              EXECUTION
                OF SUPPLEMENTAL INDENTURES.

            	
              31

            
	
              SECTION
                9.06.

            	
              CONFORMITY
                WITH TRUST INDENTURE ACT.

            	
              32

            

    

     

    ARTICLE
      X

     

    SUCCESSOR
      CORPORATION

     

    
      	
              SECTION
                10.01.

            	
              COMPANY
                MAY CONSOLIDATE, ETC.

            	
              32

            
	
              SECTION
                10.02.

            	
              SUCCESSOR
                SUBSTITUTED.

            	
              32

            

    

     

    ARTICLE
      XI

     

    SATISFACTION
      AND DISCHARGE

     

    
      	
              SECTION
                11.01.

            	
              SATISFACTION
                AND DISCHARGE OF INDENTURE.

            	
              33

            
	
              SECTION
                11.02.

            	
              DEPOSITED
                MONEYS TO BE HELD IN TRUST.

            	
              33

            
	
              SECTION
                11.03.

            	
              PAYMENT
                OF MONEYS HELD BY PAYING AGENTS.

            	
              33

            
	
              SECTION
                11.04.

            	
              REPAYMENT
                TO COMPANY.

            	
              33

            
	
              SECTION
                11.05.

            	
              REINSTATEMENT.

            	
              34

            

    

     

    ARTICLE
      XII

     

    IMMUNITY
      OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

     

    
      	
              SECTION
                12.01.

            	
              NO
                RECOURSE.

            	
              34

            

    

     

    ARTICLE
      XIII

     

    MISCELLANEOUS
      PROVISIONS

     

    
      	
              SECTION
                13.01.

            	
              EFFECT
                ON SUCCESSORS AND ASSIGNS.

            	
              34

            
	
              SECTION
                13.02.

            	
              ACTIONS
                BY SUCCESSOR.

            	
              34

            
	
              SECTION
                13.03.

            	
              NOTICES.

            	
              35

            
	
              SECTION
                13.04.

            	
              NOTICE
                TO HOLDERS OF SECURITIES; WAIVER.

            	
              35

            
	
              SECTION
                13.05.

            	
              GOVERNING
                LAW.

            	
              35

            
	
              SECTION
                13.06.

            	
              EFFECT
                OF HEADINGS AND TABLE OF CONTENTS.

            	
              35

            
	
              SECTION
                13.07.

            	
              COMPLIANCE
                CERTIFICATES AND OPINIONS.

            	
              36

            
	
              SECTION
                13.08.

            	
              PAYMENTS
                ON BUSINESS DAYS.

            	
              36

            
	
              SECTION
                13.09.

            	
              CONFLICT
                WITH TRUST INDENTURE ACT.

            	
              36

            
	
              SECTION
                13.10.

            	
              COUNTERPARTS.

            	
              36

            
	
              SECTION
                13.11.

            	
              SEPARABILITY.

            	
              36

            

    

    

    * This
      Table
      of Contents does not constitute part of the Indenture and shall not have any
      bearing upon the interpretation of any of its terms or provisions. 

     

    

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

    INDENTURE,
      dated as of [          ],
      200[ ], between ANADIGICS, Inc., a Delaware corporation (the “Company”),
      and U.S. Bank Trust National Association, as trustee (the
“Trustee”):

     

    WHEREAS,
      for its lawful corporate purposes, the Company has duly authorized the execution
      and delivery of this Indenture to provide for the issuance of debt securities
      (hereinafter referred to as the “Securities”), in an unlimited aggregate
      principal amount to be issued from time to time in one or more series as in
      this
      Indenture provided, as registered Securities without coupons, to be
      authenticated by the certificate of the Trustee;

     

    WHEREAS,
      to provide the terms and conditions upon which the Securities are to be
      authenticated, issued and delivered, the Company has duly authorized the
      execution of this Indenture; and

     

    WHEREAS,
      all things necessary to make this Indenture a valid agreement of the Company,
      in
      accordance with its terms, have been done.

     

    NOW,
      THEREFORE, in consideration of the premises and the purchase of the Securities
      by the holders thereof, it is mutually covenanted and agreed as follows for
      the
      equal and ratable benefit of the holders of Securities:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    
      	SECTION
              1.01.  	
              DEFINITIONS
                OF TERMS.

            

    

     

    The
      terms
      defined in this Section (except as in this Indenture otherwise expressly
      provided or unless the context otherwise requires) for all purposes of this
      Indenture and of any Board Resolution or indenture supplemental hereto shall
      have the respective meanings specified in this Section and shall include the
      plural as well as the singular. All other terms used in this Indenture that
      are
      defined in the Trust Indenture Act or that are by reference in the Trust
      Indenture Act defined in the Securities Act (except as herein otherwise
      expressly provided or unless the context otherwise requires), shall have the
      meanings assigned to such terms in said Trust Indenture Act and in said
      Securities Act as in force at the date of the execution of this
      instrument.

     

    “Affiliate”
means,
      as to any Person, any other Person which, directly or indirectly, is in control
      of, is controlled by, or is under common control with, such Person. A Person
      shall be deemed to control another Person if the controlling Person possesses,
      directly or indirectly, the power to direct or cause the direction of the
      management and policies of such other Person, whether through the ownership
      of
      voting securities or membership interests, by contract, or otherwise. Without
      limiting the foregoing, any Person which is an officer, director or 10% or
      greater shareholder of the Company, or a member of the immediate family of
      any
      such officer, director or 10% or greater shareholder, shall be deemed to be
      an
      Affiliate of the Company.

     

    “Authenticating
      Agent”
means
      an
      authenticating agent with respect to all or any of the series of Securities
      appointed with respect to all or any series of the Securities by the Trustee
      pursuant to Section 2.10.

     

    “Bankruptcy
      Law”
means
      Title 11, U.S. Code, or any similar Federal or State law for the relief of
      debtors.

     

    “Board
      of Directors”
means
      the Board of Directors of the Company or any duly authorized committee of such
      Board.

     

    “Board
      Resolution”
means
      a
      copy of a resolution certified by the Secretary or an Assistant Secretary of
      the
      Company to have been duly adopted by the Board of Directors and to be in full
      force and effect on the date of such certification.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    “Business
      Day”
means,
      unless otherwise specified in a Board Resolution or supplemental indenture
      with
      respect to any series of Securities, any day other than a day on which Federal
      or State banking institutions in the State of New York, are authorized or
      obligated by law, executive order or regulation to close.

     

    “Certificate”
means
      a
      certificate signed by the principal executive officer, the principal financial
      officer, the Treasurer or the principal accounting officer of the Company.
      The
      Certificate need not comply with the provisions of Section 13.07.

     

    “Commission”
means
      the United States Securities and Exchange Commission.

     

    “Company”
means
      ANADIGICS, Inc., a corporation duly organized and existing under the laws of
      the
      State of Delaware, and, subject to the provisions of Article X, shall also
      include its successors and assigns.

     

    “Corporate
      Trust Office”
means
      the office of the Trustee at which, at any particular time, its corporate trust
      business shall be principally administered, which office at the date hereof
      is
      located at 100 Wall Street, Suite 1600, New York, NY 10005.

     

    “Custodian”
means
      any receiver, trustee, assignee, liquidator, or similar official under any
      Bankruptcy Law.

     

    “Default”
means
      any event, act or condition that with notice or lapse of time, or both, would
      constitute an Event of Default.

     

    “Defaulted
      Interest”
has
      the
      meaning set forth in Section 2.03.

     

    “Depositary”
means,
      with respect to Securities of any series, for which the Company shall determine
      that such Securities will be issued as a Global Security, The Depository Trust
      Company, New York, New York, another clearing agency, or any successor
      registered as a clearing agency under the Exchange Act or other applicable
      statute or regulation, which, in each case, shall be designated by the Company
      pursuant to either Section 2.01 or 2.11.

     

    “Event
      of Default”
means,
      with respect to Securities of a particular series any event specified in Section
      6.01, continued for the period of time, if any, therein designated.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    “Global
      Security”
means,
      with respect to any series of Securities, one or more Securities executed by
      the
      Company and delivered by the Trustee to the Depositary or pursuant to the
      Depositary’s instruction, all in accordance with the Indenture, which shall be
      registered in the name of the Depositary or its nominee.

     

    “Governmental
      Obligations”
means
      securities that are (i) direct obligations of the United States of America
      for
      the payment of which its full faith and credit is pledged or (ii) obligations
      of
      a Person controlled or supervised by and acting as an agency or instrumentality
      of the United States of America, the payment of which is unconditionally
      guaranteed as a full faith and credit obligation by the United States of America
      that, in either case, are not callable or redeemable at the option of the issuer
      thereof, and shall also include a depositary receipt issued by a bank (as
      defined in Section 3(a)(2) of the Securities Act) as custodian with respect
      to
      any such Governmental Obligation or a specific payment of principal of or
      interest on any such Governmental Obligation held by such custodian for the
      account of the holder of such depositary receipt; provided, however, that
      (except as required by law) such custodian is not authorized to make any
      deduction from the amount payable to the holder of such depositary receipt
      from
      any amount received by the custodian in respect of the Governmental Obligation
      or the specific payment of principal of or interest on the Governmental
      Obligation evidenced by such depositary receipt.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    

     

    “herein,”
      “hereof”
and
      “hereunder,”
and
      other words of similar import, refer to this Indenture as a whole and not to
      any
      particular Article, Section or other subdivision.

     

    “Indenture”
means
      this instrument as originally executed or as it may from time to time be
      supplemented or amended by one or more Board Resolutions or indentures
      supplemental hereto entered into in accordance with the terms
      hereof.

     

    “Interest
      Payment Date”,
      when
      used with respect to any installment of interest on a Security of a particular
      series, means the date specified in such Security or in a Board Resolution
      or in
      an indenture supplemental hereto with respect to such series as the fixed date
      on which an installment of interest with respect to Securities of that series
      is
      due and payable.

     

    “Officers’
      Certificate”
means
      a
      certificate signed by the Chief Executive Officer or the President and by the
      Chief Financial Officer or any Vice President or the Treasurer or an Assistant
      Treasurer or the Controller or an Assistant Controller or the Secretary or
      an
      Assistant Secretary of the Company that is delivered to the Trustee in
      accordance with the terms hereof. Each such certificate shall include the
      statements provided for in Section 13.07, if and to the extent required by
      the
      provisions thereof.

     

    “Opinion
      of Counsel”
means
      an
      opinion in writing of legal counsel, who may be an employee of or counsel for
      the Company, that is delivered to the Trustee in accordance with the terms
      hereof. Each such opinion shall include the statements provided for in Section
      13.07, if and to the extent required by the provisions thereof.

     

    “Outstanding”,
      when
      used with reference to Securities of any series, means, subject to the
      provisions of Section 8.04, as of any particular time, all Securities of that
      series theretofore authenticated and delivered by the Trustee under this
      Indenture, except (a) Securities theretofore canceled by the Trustee or any
      paying agent, or delivered to the Trustee or any paying agent for cancellation
      or that have previously been canceled; (b) Securities or portions thereof for
      the payment or redemption of which moneys or Governmental Obligations in the
      necessary amount shall have been deposited in trust with the Trustee or with
      any
      paying agent (other than the Company) or shall have been set aside and
      segregated in trust by the Company (if the Company shall act as its own paying
      agent); provided, however, that if such Securities or portions of such
      Securities are to be redeemed prior to the maturity thereof, notice of such
      redemption shall have been given as in Article III provided, or provision
      satisfactory to the Trustee shall have been made for giving such notice; and
      (c)
      Securities in lieu of or in substitution for which other Securities shall have
      been authenticated and delivered pursuant to the terms of Section
      2.07.

     

    “Person”
means
      any individual, corporation, limited liability company, partnership, trust,
      joint-venture, joint-stock company, unincorporated organization, government
      (or
      any agency or political subdivision thereof) or other entity of any
      kind.

     

    “Predecessor
      Security”
of
      any
      particular Security means every previous Security evidencing all or a portion
      of
      the same debt as that evidenced by such particular Security; and, for the
      purposes of this definition, any Security authenticated and delivered under
      Section 2.07 in lieu of a lost, destroyed or stolen Security shall be deemed
      to
      evidence the same debt as the lost, destroyed or stolen Security.

     

    “Responsible
      Officer”
when
      used with respect to the Trustee means any Vice President, any assistant
      treasurer, any trust officer, any corporate trust officer or any other officer
      or assistant officer of the Trustee customarily performing functions similar
      to
      those performed by the Persons who at the time shall be such officers,
      respectively, or to whom any corporate trust matter is referred because of
      his
      or her knowledge of and familiarity with the particular subject.

     

    “Securities”
means
      the debt securities authenticated and delivered under this
      Indenture.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, as in effect at the date of execution
      of
      this instrument.

     

    “Security
      Register”
has
      the
      meaning set forth in Section 2.05(b).

     

    “Securityholder,”
      “holder
      of Securities,”
      “registered
      holder,”
or
      other similar term, means the Person or Persons in whose name or names a
      particular Security shall be registered on the books of the Company kept for
      that purpose in accordance with the terms of this Indenture.

     

    “Subsidiary”
means,
      with respect to any Person, (i) any corporation at least a majority of whose
      outstanding Voting Stock shall at the time be owned, directly or indirectly,
      by
      such Person or by one or more of its Subsidiaries or by such Person and one
      or
      more of its Subsidiaries, (ii) any general partnership, limited partnership,
      limited liability company, joint venture or similar entity, at least a majority
      of whose outstanding partnership or similar interests shall at the time be
      owned
      by such Person, or by one or more of its Subsidiaries, or by such Person and
      one
      or more of its Subsidiaries and (iii) any limited partnership of which such
      Person or any of its Subsidiaries is a general partner.

     

    “Trustee”
with
      respect to a particular series of the Securities shall mean the trustee with
      respect to that series, and, subject to the provisions of Article VII,
      shall also include its successors and assigns, and, if at any time there is
      more
      than one Person acting in such capacity hereunder, “Trustee” shall mean each
      such Person.

     

    “Trust
      Indenture Act”
means
      the Trust Indenture Act of 1939, as amended, subject to the provisions of
      Sections 9.01, 9.02, and 10.01, as in effect at the date of execution of this
      instrument.

     

    “Voting
      Stock”,
      as
      applied to the stock, units or similar interests of any Person, means shares,
      units, interests, participations or other equivalents in the equity interest
      (however designated) in such Person having ordinary voting power for the
      election of a majority of the directors (or the equivalent) of such Person,
      other than shares, units, interests, participations or other equivalents having
      such power only by reason of the occurrence of a contingency.

     

    ARTICLE
      II

     

    ISSUE,
      DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND 
EXCHANGE OF
      SECURITIES

     

    
      	SECTION
              2.01.  	
              DESIGNATION
                AND TERMS OF SECURITIES.

            

    

     

    (a)  The
      aggregate principal amount of Securities that may be authenticated and delivered
      under this Indenture is unlimited. The Securities may be issued in one or more
      series up to the aggregate principal amount of Securities of that series from
      time to time authorized by or pursuant to a Board Resolution of the Company
      or
      pursuant to one or more indentures supplemental hereto. Prior to the initial
      issuance of Securities of any series, there shall be established in or pursuant
      to a Board Resolution of the Company, and set forth in an Officers’ Certificate
      of the Company, or established in one or more indentures supplemental
      hereto:

     

    (1)  the
      title
      of the Security of the series (which shall distinguish the Securities of the
      series from all other Securities);

     

    (2)  any
      limit
      upon the aggregate principal amount of the Securities of that series that may
      be
      authenticated and delivered under this Indenture (except for Securities
      authenticated and delivered upon registration of transfer of, or in exchange
      for, or in lieu of, other Securities of that series);

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    

     

    (3)  the
      date
      or dates on which the principal of the Securities of the series is
      payable;

     

    (4)  the
      rate
      or rates at which the Securities of the series shall bear interest or the manner
      of calculation of such rate or rates, if any;

     

    (5)  the
      place
      or places where payments with respect to the Securities of the series shall
      be
      payable;

     

    (6)  the
      date
      or dates from which such interest shall accrue, the Interest Payment Dates
      on
      which such interest will be payable or the manner of determination of such
      Interest Payment Dates and the record date for the determination of holders
      to
      whom interest is payable on any such Interest Payment Dates;

     

    (7)  the
      right,
      if any, to extend the interest payment periods and the duration of such
      extension;

     

    (8)  the
      period
      or periods within which, the price or prices at which and the terms and
      conditions upon which, Securities of the series may be redeemed, in whole or
      in
      part, at the option of the Company;

     

    (9)  the
      obligation, if any, of the Company to redeem or purchase Securities of the
      series pursuant to any sinking fund or analogous provisions (including payments
      made in cash in participation of future sinking fund obligations) or at the
      option of a holder thereof and the period or periods within which, the price
      or
      prices at which, and the terms and conditions upon which, Securities of the
      series shall be redeemed or purchased, in whole or in part, pursuant to such
      obligation;

     

    (10)  the
      form
      of the Securities of the series including the form of the certificate of
      authentication for such series;

     

    (11)  if
      other
      than denominations of one thousand U.S. dollars ($1,000) or any integral
      multiple thereof, the denominations in which the Securities of the series shall
      be issuable;

     

    (12)  the
      currency or currency units in which payment of the principal of and any premium
      and interest on the Securities of the series shall be payable;

     

    (13)  the
      terms
      pursuant to which the Securities of the series are subject to
      defeasance;

     

    (14)  the
      terms
      and conditions, if any, pursuant to which the Securities of the series are
      secured;

     

    (15)  whether
      any of the Securities of the series will be issuable in whole or in part in
      temporary or permanent global form or in the form of book-entry securities
      and,
      in such case, the identity of the Depositary for such series;

     

    (16)  whether
      the Securities of the series will be convertible into shares of common stock
      or
      other securities of the Company and, if so, the terms and conditions upon which
      such Securities will be so convertible, including the conversion price, the
      conversion period and any provisions pursuant to which the number of shares
      of
      common stock or other securities of the Company to be received by the holders
      of
      such series of Securities would be subject to adjustment;

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    

     

    (17)  if
      the
      amount of payments of principal of and any premium or interest on the Securities
      of the series may be determined with reference to an index, the manner in which
      such amounts shall be determined;

     

    (18)  if
      other
      than the principal amount thereof, the portion of the principal amount of
      Securities of the series which shall be payable upon declaration of acceleration
      of the maturity thereof pursuant to Section 6.01;

     

    (19)  any
      additional or different Events of Default or restrictive covenants provided
      for
      with respect to the Securities of the series;

     

    (20)  any
      provisions granting special rights to holders when a specified event
      occurs;

     

    (21)  any
      special tax implications of the Securities of the series, if offered;
      and

     

    (22)  any
      and
      all other terms with respect to such series (which terms may be inconsistent
      with the terms of this Indenture, but, in any case, shall not violate the Trust
      Indenture Act), including any terms which may be required by or advisable under
      United States laws or regulations or advisable in connection with the marketing
      of Securities of that series.

     

    (b)  All
      Securities of any one series shall be substantially identical except as to
      denomination and except as may otherwise be provided in or pursuant to any
      applicable Board Resolution or in any indenture supplemental
      hereto.

     

    (c)  If
      any of
      the terms of the series are established by action taken pursuant to a Board
      Resolution of the Company, a copy of an appropriate record of such action shall
      be certified by any Vice President or the Secretary or an Assistant Secretary
      of
      the Company and delivered to the Trustee at or prior to the delivery of the
      Officers’ Certificate of the Company setting forth the terms of the
      series.

     

    (d)  Securities
      of any particular series may be issued at various times, with different dates
      on
      which the principal or any installment of principal is payable, with different
      rates of interest, if any, or different methods by which rates of interest
      may
      be determined, with different dates on which such interest may be payable and
      with different redemption dates. Unless otherwise provided, a series may be
      reopened for issuances of additional Securities of such series.

     

    
      	SECTION
              2.02.  	
              FORM
                OF SECURITIES AND TRUSTEE’S CERTIFICATE.

            

    

     

    The
      Securities of any series and the Trustee’s certificate of authentication to be
      borne by such Securities shall be substantially of the tenor and purpose as
      set
      forth in one or more indentures supplemental hereto or as provided in a Board
      Resolution of the Company and as set forth in an Officers’ Certificate of the
      Company, and may have such letters, numbers or other marks of identification
      or
      designation and such legends or endorsements printed, lithographed or engraved
      thereon as the Company may deem appropriate and as are not inconsistent with
      the
      provisions of this Indenture, or as may be required to comply with any law
      or
      with any rule or regulation made pursuant thereto or with any rule or regulation
      of any stock exchange on which Securities of that series may be listed, or
      to
      conform to usage.

     

    
      	SECTION
              2.03.  	
              DENOMINATIONS:
                PROVISIONS FOR PAYMENT.

            

    

     

    The
      Securities shall be issuable as registered Securities and in the denominations
      of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject
      to Section 2.01(a)(11). The Securities of a particular series shall bear
      interest payable on the dates and at the rate specified with respect to that
      series. Unless otherwise pro-

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    vided
      pursuant to Section 2.01, the principal of and the interest on the Securities
      of
      any series, as well as any premium thereon in case of redemption thereof prior
      to maturity, shall be payable in the coin or currency of the United States
      of
      America that at the time is legal tender for public and private debt, at the
      office or agency of the Company maintained for that purpose with respect to
      such
      series. Each Security shall be dated the date of its authentication. Unless
      otherwise provided pursuant to Section 2.01, interest on the Securities shall
      be
      computed on the basis of a 360-day year composed of twelve 30-day
      months.

     

    The
      interest installment on any Security that is payable, and is punctually paid
      or
      duly provided for, on any Interest Payment Date for Securities of that series
      shall be paid to the Person in whose name said Security (or one or more
      Predecessor Securities) is registered at the close of business on the regular
      record date for such interest installment. In the event that any Security of
      a
      particular series or portion thereof is called for redemption and the redemption
      date is subsequent to a regular record date with respect to any Interest Payment
      Date and prior to such Interest Payment Date, interest on such Security will
      be
      paid upon presentation and surrender of such Security as provided in Section
      3.03.

     

    Any
      interest on any Security that is payable, but is not punctually paid or duly
      provided for, on any Interest Payment Date for Securities of the same series
      (herein called “Defaulted Interest”) shall forthwith cease to be payable to the
      registered holder on the relevant regular record date by virtue of having been
      such holder; and such Defaulted Interest shall be paid by the Company, at its
      election, as provided in clause (1) or clause (2) below:

     

    (1)  The
      Company may make payment of any Defaulted Interest on Securities to the Persons
      in whose names such Securities (or their respective Predecessor Securities)
      are
      registered at the close of business on a special record date for the payment
      of
      such Defaulted Interest, which shall be fixed in the following manner: the
      Company shall notify the Trustee in writing of the amount of Defaulted Interest
      proposed to be paid on each such Security and the date of the proposed payment,
      and at the same time the Company shall deposit with the Trustee an amount of
      money equal to the aggregate amount proposed to be paid in respect of such
      Defaulted Interest or shall make arrangements satisfactory to the Trustee for
      such deposit prior to the date of the proposed payment, such money when
      deposited to be held in trust for the benefit of the Persons entitled to such
      Defaulted Interest as in this clause provided. Thereupon the Trustee shall
      fix a
      special record date for the payment of such Defaulted Interest which shall
      not
      be more than 15 nor less than 10 days prior to the date of the proposed payment
      and not less than 10 days after the receipt by the Trustee of the notice of
      the
      proposed payment. The Trustee shall promptly notify the Company of such special
      record date and, in the name and at the expense of the Company, shall cause
      notice of the proposed payment of such Defaulted Interest and the special record
      date therefor to be mailed, first class postage prepaid, to each Securityholder
      at his or her address as it appears in the Security Register (as hereinafter
      defined), not less than 10 days prior to such special record date. Notice of
      the
      proposed payment of such Defaulted Interest and the special record date therefor
      having been mailed as aforesaid, such Defaulted Interest shall be paid to the
      Persons in whose names such Securities (or their respective Predecessor
      Securities) are registered on such special record date and shall be no longer
      payable pursuant to the following clause (2).

     

    (2)  The
      Company may make payment of any Defaulted Interest on any Securities in any
      other lawful manner not inconsistent with the requirements of any securities
      exchange on which such Securities may be listed, and upon such notice as may
      be
      required by such exchange, if, after notice given by the Company to the Trustee
      of the proposed payment pursuant to this clause, such manner of payment shall
      be
      deemed practicable by the Trustee.

     

    Unless
      otherwise set forth in a Board Resolution or one or more indentures supplemental
      hereto establishing the terms of any series of Securities pursuant to Section
      2.01 hereof, the term “regular record date” as used in this Section with respect
      to a series of Securities with respect to any Interest Payment Date for such
      series shall mean either the fifteenth day of the month immediately preceding
      the month in which an Interest Payment Date es-

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    tablished
      for such series pursuant to Section 2.01 hereof shall occur, if such Interest
      Payment Date is the first day of a month, or the first day of the month in
      which
      an Interest Payment Date established for such series pursuant to Section 2.01
      hereof shall occur, if such Interest Payment Date is the fifteenth day of a
      month, whether or not such date is a Business Day.

     

    Subject
      to
      the foregoing provisions of this Section, each Security of a series delivered
      under this Indenture upon transfer of or in exchange for or in lieu of any
      other
      Security of such series shall carry the rights to interest accrued and unpaid,
      and to accrue, that were carried by such other Security.

     

    
      	SECTION
              2.04.  	
              EXECUTION
                AND AUTHENTICATION.

            

    

     

    The
      Securities shall be signed on behalf of the Company by its Chief Executive
      Officer or President, together with its Chief Financial Officer or any Vice
      President, or its Treasurer, or one of its Assistant Treasurers, or its
      Secretary, or one of its Assistant Secretaries. Signatures may be in the form
      of
      a manual or facsimile signature. Securities bearing the manual or facsimile
      signatures of individuals who were at any time the proper officers of the
      Company shall bind the Company, notwithstanding that such individuals or any
      of
      them have ceased to hold such offices prior to the authentication and delivery
      of such Securities or did not hold such offices at the date of such Securities.
      The Securities may contain such notations, legends or endorsements required
      by
      law, stock exchange rule or usage. Each Security shall be dated the date of
      its
      authentication by the Trustee.

     

    A
      Security
      shall not be valid until authenticated manually by an authorized signatory
      of
      the Trustee, or by an Authenticating Agent. Such signature shall be conclusive
      evidence that the Security so authenticated has been duly authenticated and
      delivered hereunder and that the holder is entitled to the benefits of this
      Indenture.

     

    At
      any
      time and from time to time after the execution and delivery of this Indenture,
      the Company may deliver Securities of any series executed by the Company to
      the
      Trustee for authentication, together with a written order of the Company for
      the
      authentication and delivery of such Securities, signed by its Chief Executive
      Officer or President, together with its Chief Financial Officer or any Vice
      President, or its Treasurer, or one of its Assistant Treasurers, or its
      Secretary, or one of its Assistant Secretaries, and the Trustee in accordance
      with such written order shall authenticate and deliver such
      Securities.

     

    In
      authenticating such Securities and accepting the additional responsibilities
      under this Indenture in relation to such Securities, the Trustee shall be
      entitled to receive, and (subject to Section 7.01) shall be fully protected
      in
      relying upon, an Opinion of Counsel stating that the form and terms thereof
      have
      been established in conformity with the provisions of this
      Indenture.

     

    The
      Trustee shall not be required to authenticate such Securities if the issue
      of
      such Securities pursuant to this Indenture will affect the Trustee’s own rights,
      duties or immunities under the Securities and this Indenture or otherwise in
      a
      manner that is not reasonably acceptable to the Trustee.

     

    
      	SECTION
              2.05.  	
              REGISTRATION
                OF TRANSFER AND EXCHANGE.

            

    

     

    (a)  Securities
      of any series may be exchanged upon presentation thereof at the office or agency
      of the Company designated for such purpose in the Board Resolution or
      supplemental indenture with respect to such series, for other Securities of
      such
      series of authorized denominations, and for a like aggregate principal amount,
      upon payment of a sum sufficient to cover any tax or other governmental charge
      in relation thereto, all as provided in this Section. In respect of any
      Securities so surrendered for exchange, the Company shall execute, the Trustee
      shall authenticate and such office or agency shall deliver in exchange therefor
      the Security or Securities of the same series that the Securityholder making
      the
      exchange shall be entitled to receive, bearing numbers not contemporaneously
      outstanding.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    

     

    (b)  The
      Company shall keep, or cause to be kept, at its office or agency designated
      for
      such purpose a register or registers (herein referred to as the “Security
      Register”) in which, subject to such reasonable regulations as it may prescribe,
      the Company shall register the Securities and the transfers of Securities as
      in
      this Article provided and which at all reasonable times shall be open for
      inspection by the Trustee. Unless otherwise specified in a supplemental
      indenture, the Trustee is hereby appointed as “Security Registrar” for the
      purpose of registering Securities and transfer of Securities of each
      series.

     

    Upon
      surrender for transfer of any Security at the office or agency of the Company
      designated for such purpose, the Company shall execute, the Trustee shall
      authenticate and such office or agency shall deliver in the name of the
      transferee or transferees a new Security or Securities of the same series as
      the
      Security presented for a like aggregate principal amount.

     

    All
      Securities presented or surrendered for exchange or registration of transfer,
      as
      provided in this Section, shall be accompanied (if so required by the Company
      or
      the Security Registrar) by a written instrument or instruments of transfer,
      in
      form satisfactory to the Company or the Security Registrar, duly executed by
      the
      registered holder or by such holder’s duly authorized attorney in
      writing.

     

    (c)  No
      service
      charge shall be made for any exchange or registration of transfer of Securities,
      or issue of new Securities in case of partial redemption of any series, but
      the
      Company may require payment of a sum sufficient to cover any tax or other
      governmental charge in relation thereto, other than exchanges pursuant to
      Section 2.06, the second paragraph of Section 3.03 and Section 9.04 not
      involving any transfer.

     

    (d)  The
      Company shall not be required (i) to issue, exchange or register the transfer
      of
      any Securities during a period beginning at the opening of business 15 days
      before the day of the mailing of a notice of redemption of less than all the
      Outstanding Securities of the same series and ending at the close of business
      on
      the day of such mailing, nor (ii) to register the transfer of or exchange any
      Securities of any series or portions thereof called for redemption except the
      unredeemed portion of any Securities of any series being redeemed in part.
      The
      provisions of this Section 2.05 are, with respect to any Global Security,
      subject to Section 2.11 hereof.

     

    
      	SECTION
              2.06.  	
              TEMPORARY
                SECURITIES.

            

    

     

    Pending
      the preparation of definitive Securities of any series, the Company may execute,
      and the Trustee shall authenticate and deliver, temporary Securities (printed,
      lithographed or typewritten) of any authorized denomination. Such temporary
      Securities shall be substantially in the form of the definitive Securities
      in
      lieu of which they are issued, but with such omissions, insertions and
      variations as may be appropriate for temporary Securities, all as may be
      determined by the Company. Every temporary Security of any series shall be
      executed by the Company and be authenticated by the Trustee upon the same
      conditions and in substantially the same manner, and with like effect, as the
      definitive Securities of such series. Without unnecessary delay, the Company
      will execute and will furnish definitive Securities of such series and thereupon
      any or all temporary Securities of such series may be surrendered in exchange
      therefor (without charge to the holders), at the office or agency of the Company
      designated for such purpose, and the Trustee shall authenticate, and such office
      or agency shall deliver in exchange for such temporary Securities, an equal
      aggregate principal amount of definitive Securities of such series, unless
      the
      Company advises the Trustee to the effect that definitive Securities need not
      be
      executed and furnished until further notice from the Company. Until so
      exchanged, the temporary Securities of such series shall be entitled to the
      same
      benefits under this Indenture as definitive Securities of such series
      authenticated and delivered hereunder.

     

    
      	SECTION
              2.07.  	
              MUTILATED,
                DESTROYED, LOST OR STOLEN SECURITIES.

            

    

     

    In
      case
      any temporary or definitive Security shall become mutilated or be destroyed,
      lost or stolen, the Company (subject to the next succeeding sentence) shall
      execute, and upon the Company’s request the Trustee (subject as aforesaid) shall
      authenticate and deliver, a new Security of the same series, bearing a number
      not contempo-

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    raneously
      outstanding, in exchange and substitution for the mutilated Security, or in
      lieu
      of and in substitution for the Security so destroyed, lost or stolen. In every
      case, the applicant for a substituted Security shall furnish to the Company
      and
      the Trustee such security or indemnity as may be required by them to save each
      of them harmless, and, in every case of destruction, loss or theft, the
      applicant shall also furnish to the Company and the Trustee evidence to their
      satisfaction of the destruction, loss or theft of the applicant’s Security and
      of the ownership thereof. The Trustee may authenticate any such substituted
      Security and deliver the same upon the written request or authorization of
      any
      officer of the Company. Upon the issuance of any substituted Security, the
      Company may require the payment of a sum sufficient to cover any tax or other
      governmental charge that may be imposed in relation thereto and any other
      expenses (including the fees and expenses of the Trustee) connected therewith.
      In case any Security that has matured or is about to mature shall become
      mutilated or be destroyed, lost or stolen, the Company may, instead of issuing
      a
      substitute Security, pay or authorize the payment of the same (without surrender
      thereof except in the case of a mutilated Security) if the applicant for such
      payment shall furnish to the Company and the Trustee such security or indemnity
      as they may require to save them harmless, and, in case of destruction, loss
      or
      theft, evidence to the satisfaction of the Company and the Trustee of the
      destruction, loss or theft of such Security and of the ownership
      thereof.

     

    Every
      replacement Security issued pursuant to the provisions of this Section shall
      constitute an additional contractual obligation of the Company whether or not
      the mutilated, destroyed, lost or stolen Security shall be found at any time,
      or
      be enforceable by anyone, and shall be entitled to all the benefits of this
      Indenture equally and proportionately with any and all other Securities of
      the
      same series duly issued hereunder. All Securities shall be held and owned upon
      the express condition that the foregoing provisions are exclusive with respect
      to the replacement or payment of mutilated, destroyed, lost or stolen
      Securities, and shall preclude (to the extent lawful) any and all other rights
      or remedies, notwithstanding any law or statute existing or hereafter enacted
      to
      the contrary with respect to the replacement or payment of negotiable
      instruments or other securities without their surrender.

     

    
      	SECTION
              2.08.  	
              CANCELLATION.

            

    

     

    All
      Securities surrendered for the purpose of payment, redemption, exchange or
      registration of transfer shall, if surrendered to the Company or any paying
      agent, be delivered to the Trustee for cancellation, or if surrendered to the
      Trustee, shall be cancelled by it, and no Securities shall be issued in lieu
      thereof except as expressly required or permitted by any of the provisions
      of
      this Indenture. On request of the Company at the time of such surrender, the
      Trustee shall deliver to the Company canceled Securities in accordance with
      its
      standard procedures. If the Company shall otherwise acquire any of the
      Securities, however, such acquisition shall not operate as a redemption or
      satisfaction of the indebtedness represented by such Securities unless and
      until
      the same are delivered to the Trustee for cancellation.

     

    
      	SECTION
              2.09.  	
              BENEFITS
                OF INDENTURE.

            

    

     

    Nothing
      in
      this Indenture or in the Securities or in any supplemental indenture, express
      or
      implied, shall give or be construed to give to any Person, other than the
      parties hereto and the holders of the Securities any legal or equitable right,
      remedy or claim under or in respect of this Indenture, or under any covenant,
      condition or provision herein contained; all such covenants, conditions and
      provisions being for the sole benefit of the parties hereto and of the holders
      of the Securities.

     

    
      	SECTION
              2.10.  	
              AUTHENTICATING
                AGENT.

            

    

     

    So
      long as
      any of the Securities of any series remain Outstanding, there may be an
      Authenticating Agent for any or all such series of Securities which the Trustee,
      with the consent of the Company, shall have the right to appoint. Said
      Authenticating Agent shall be authorized to act on behalf of the Trustee to
      authenticate Securities of such series issued upon exchange, transfer or partial
      redemption thereof, and Securities so authenticated shall be entitled to the
      benefits of this Indenture and shall be valid and obligatory for all purposes
      as
      if authenticated by the 

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    Trustee
      hereunder. All references in this Indenture to the authentication of Securities
      by the Trustee shall be deemed to include authentication by an Authenticating
      Agent for such series. Each Authenticating Agent shall be a corporation that
      has
      a combined capital and surplus, as most recently reported or determined by
      it,
      sufficient under the laws of any jurisdiction under which it is organized or
      in
      which it is doing business to conduct a trust business, and that is otherwise
      authorized under such laws to conduct such business and is subject to
      supervision or examination by Federal or State authorities. If at any time
      any
      Authenticating Agent shall cease to be eligible in accordance with these
      provisions, it shall resign immediately.

     

    Any
      Authenticating Agent may at any time resign by giving written notice of
      resignation to the Trustee and to the Company. The Trustee may at any time
      (and
      upon request by the Company shall) terminate the agency of any Authenticating
      Agent by giving written notice of termination to such Authenticating Agent
      and
      to the Company. Upon resignation, termination or cessation of eligibility of
      any
      Authenticating Agent, the Trustee may appoint an eligible successor
      Authenticating Agent acceptable to the Company. Any successor Authenticating
      Agent, upon acceptance of its appointment hereunder, shall become vested with
      all the rights, powers and duties of its predecessor hereunder as if originally
      named as an Authenticating Agent pursuant hereto.

     

    
      	SECTION
              2.11.  	
              GLOBAL
                SECURITIES.

            

    

     

    (a)  If
      the
      Company shall establish pursuant to Section 2.01 that the Securities of a
      particular series are issuable as one or more Global Securities, then the
      Company shall execute and the Trustee shall, in accordance with Section 2.04,
      authenticate and deliver, one or more Global Securities that (i) shall
      represent, and shall be denominated in an amount equal to the aggregate
      principal amount of, such of the Outstanding Securities of such series as shall
      be specified therein and that the aggregate amount of Outstanding Securities
      represented thereby may from time to time be increased or reduced to reflect
      exchanges, (ii) shall be registered in the name of the Depositary or its
      nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant
      to the Depositary’s instruction and (iv) shall bear a legend substantially to
      the following effect: “Except as otherwise provided in Section 2.11 of the
      Indenture, this Security may be transferred, in whole but not in part, only
      to
      another nominee of the Depositary or to a successor Depositary or to a nominee
      of such successor Depositary.” Any endorsement of a Security in global form to
      reflect the amount, or any increase or decrease in the amount, of Outstanding
      Securities represented thereby shall be made by the Trustee in such manner
      and
      upon instructions given by such Person or Persons as shall be specified therein
      or in the written request signed in the name of the Company, by the Chief
      Executive Officer or the President, and by the Chief Financial Officer or any
      Vice President or the Secretary or an Assistant Secretary or the Treasurer
      or an
      Assistant Treasurer thereof to be delivered to the Trustee pursuant to Section
      2.04 or Section 2.06.

     

    (b)  Notwithstanding
      the provisions of Section 2.05, the Global Securities of a series may be
      transferred, in whole but not in part and in the manner provided in Section
      2.05, only to another nominee of the Depositary for such series, or to a
      successor Depositary for such series selected or approved by the Company or
      to a
      nominee of such successor Depositary.

     

    (c)  If
      at any
      time the Depositary for a series of the Securities notifies the Company that
      it
      is unwilling or unable to continue as Depositary for such series, or if at
      any
      time the Depositary for such series shall no longer be registered or in good
      standing under the Exchange Act, or other applicable statute or regulation,
      and
      a successor Depositary for such series is not appointed by the Company within
      90
      days after the Company receives such notice or becomes aware of such condition,
      as the case may be, this Section 2.11 shall no longer be applicable to the
      Securities of such series and the Company will execute, and subject to Section
      2.05, the Trustee will authenticate and deliver the Securities of such series
      in
      definitive registered form without coupons, in authorized denominations, and
      in
      an aggregate principal amount equal to the principal amount of the Global
      Securities of such series in exchange for such Global Securities. In addition,
      the Company may at any time determine that the Securities of any series shall
      no
      longer be represented by Global Securities and that the provisions of this
      Section 2.11 shall no longer apply to the Securities of such series. In such
      event the Company will execute and subject to Section 2.05, the Trustee, upon
      receipt of an Officers’ Certificate evidencing such determination by the
      Company, will authenticate and de-

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    liver
      the
      Securities of such series in definitive registered form without coupons, in
      authorized denominations, and in an aggregate principal amount equal to the
      principal amount of the Global Securities of such series in exchange for such
      Global Securities. Upon the exchange of the Global Securities for such
      Securities in definitive registered form without coupons, in authorized
      denominations, the Global Securities shall be canceled by the Trustee. Such
      Securities in definitive registered form issued in exchange for the Global
      Securities pursuant to this Section 2.11(c) shall be registered in such names
      and in such authorized denominations as the Depositary, pursuant to instructions
      from its direct or indirect participants or otherwise, shall instruct the
      Trustee. The Trustee shall deliver such Securities to the Depositary for
      delivery to the Persons in whose names such Securities are so
      registered.

     

    ARTICLE
      III

     

    REDEMPTION
      OF SECURITIES AND SINKING FUND PROVISIONS

     

    
      	SECTION
              3.01.  	
              REDEMPTION.

            

    

     

    The
      Company may redeem the Securities of any series issued hereunder on and after
      the dates and in accordance with the terms established for such series pursuant
      to Section 2.01 hereof.

     

    
      	SECTION
              3.02.  	
              NOTICE
                OF REDEMPTION.

            

    

     

    (a)  In
      case
      the Company shall desire to exercise such right to redeem all or, as the case
      may be, a portion of the Securities of any series in accordance with the right
      reserved so to do, the Company shall, or shall cause the Trustee to, give notice
      of such redemption to holders of the Securities of such series to be redeemed
      by
      mailing, first class postage prepaid, a notice of such redemption not less
      than
      30 days and not more than 60 days before the date fixed for redemption of that
      series to such holders at their last addresses as they shall appear upon the
      Security Register unless a shorter period is specified in the Securities to
      be
      redeemed. Any notice that is mailed in the manner herein provided shall be
      conclusively presumed to have been duly given, whether or not the registered
      holder receives the notice. In any case, failure duly to give such notice to
      the
      holder of any Security of any series designated for redemption in whole or
      in
      part, or any defect in the notice, shall not affect the validity of the
      proceedings for the redemption of any other Securities of such series or any
      other series.

     

    Each
      such
      notice of redemption shall specify the date fixed for redemption and the
      redemption price (or the manner of calculation thereof) at which Securities
      of
      that series are to be redeemed, and shall state that payment of the redemption
      price of such Securities to be redeemed will be made at the office or agency
      of
      the Company specified for such purpose, upon presentation and surrender of
      such
      Securities, that interest accrued to the date fixed for redemption will be
      paid
      as specified in said notice, that from and after said date interest will cease
      to accrue and that the redemption is for a sinking fund, if such is the case.
      If
      less than all the Securities of a series are to be redeemed, the notice to
      the
      holders of Securities of that series to be redeemed in whole or in part shall
      specify the particular Securities to be so redeemed. In case any Security is
      to
      be redeemed in part only, the notice that relates to such Security shall state
      the portion of the principal amount thereof to be redeemed, and shall state
      that
      on and after the redemption date, upon surrender of such Security, a new
      Security or Securities of such series in principal amount equal to the
      unredeemed portion thereof will be issued.

     

    (b)  If
      less
      than all the Securities of a series are to be redeemed, the Company shall give
      the Trustee at least 45 days’ (or such lesser time as may be acceptable to the
      Trustee) notice in advance of the date fixed for redemption as to the aggregate
      principal amount of Securities of the series to be redeemed, and thereupon
      the
      Trustee shall select, on a pro rata basis, by lot or in such other manner as
      it
      shall deem appropriate and fair in its discretion and that may provide for
      the
      selection of a portion or portions (equal to one thousand U.S. dollars ($1,000)
      or any integral multiple thereof) of the principal amount of such Securities
      of
      a denomination larger than $1,000, the Securities to be redeemed and shall
      thereafter promptly notify the Company in writing of the numbers of the
      Securities to be redeemed.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    

     

    The
      Company may, if and whenever it shall so elect, by delivery of instructions
      signed on its behalf by its Chief Executive Officer, President, Chief Financial
      Officer or any Vice President, instruct the Trustee or any paying agent to
      call
      all or any part of the Securities of a particular series for redemption and
      to
      give notice of redemption in the manner set forth in this Section, such notice
      to be in the name of the Company or its own name as the Trustee or such paying
      agent may deem advisable. In any case in which notice of redemption is to be
      given by the Trustee or any such paying agent, the Company shall deliver or
      cause to be delivered to, or permit to remain with, the Trustee or such paying
      agent, as the case may be, such Security Register, transfer books or other
      records, or suitable copies or extracts there from, sufficient to enable the
      Trustee or such paying agent to give any notice by mail that may be required
      under the provisions of this Section.

     

    
      	SECTION
              3.03.  	
              PAYMENT
                UPON REDEMPTION.

            

    

     

    (a)  If
      the
      giving of notice of redemption shall have been completed as above provided,
      the
      Securities or portions of Securities of the series to be redeemed specified
      in
      such notice shall become due and payable on the date and at the place stated
      in
      such notice at the applicable redemption price, together with interest accrued
      to the date fixed for redemption and interest on such Securities or portions
      of
      Securities shall cease to accrue on and after the date fixed for redemption,
      unless the Company shall default in the payment of such redemption price and
      accrued interest with respect to any such Security or portion thereof. On
      presentation and surrender of such Securities on or after the date fixed for
      redemption at the place of payment specified in the notice, said Securities
      shall be paid and redeemed at the applicable redemption price for such series,
      together with interest accrued thereon to the date fixed for redemption (but
      if
      the date fixed for redemption is an interest payment date, the interest
      installment payable on such date shall be payable to the registered holder
      at
      the close of business on the applicable record date pursuant to Section
      2.03).

     

    (b)  Upon
      presentation of any Security of such series that is to be redeemed in part
      only,
      the Company shall execute and the Trustee shall authenticate and the office
      or
      agency where the Security is presented shall deliver to the holder thereof,
      at
      the expense of the Company, a new Security of the same series of authorized
      denominations in principal amount equal to the unredeemed portion of the
      Security so presented.

     

    
      	SECTION
              3.04.  	
              SINKING
                FUND.

            

    

     

    The
      provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking
      fund for the retirement of Securities of a series, except as otherwise specified
      as contemplated by Section 2.01 for Securities of such series.

     

    The
      minimum amount of any sinking fund payment provided for by the terms of
      Securities of any series is herein referred to as a “mandatory sinking fund
      payment,” and any payment in excess of such minimum amount provided for by the
      terms of Securities of any series is herein referred to as an “optional sinking
      fund payment.” If provided for by the terms of Securities of any series, the
      cash amount of any sinking fund payment may be subject to reduction as provided
      in Section 3.05. Each sinking fund payment shall be applied to the redemption
      of
      Securities of any series as provided for by the terms of Securities of such
      series.

     

    
      	SECTION
              3.05.  	
              SATISFACTION
                OF SINKING FUND PAYMENTS WITH SECURITIES.

            

    

     

    The
      Company (i) may deliver Outstanding Securities of a series (other than any
      Securities previously called for redemption) and (ii) may apply as a credit
      Securities of a series that have been redeemed either at the election of the
      Company pursuant to the terms of such Securities or through the application
      of
      permitted optional sinking fund payments pursuant to the terms of such
      Securities, in each case in satisfaction of all or any part of any sinking
      fund
      payment with respect to the Securities of such series required to be made
      pursuant to the terms of such Securities as provided for by the terms of such
      series, provided that such Securities have not been previously so credited.
      Such
      Securities shall be received and credited for such purpose by the Trustee at
      the
      redemption price specified in such 

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    Securities
      for redemption through operation of the sinking fund and the amount of such
      sinking fund payment shall be reduced accordingly.

     

    
      	SECTION
              3.06.  	
              REDEMPTION
                OF SECURITIES FOR SINKING FUND.

            

    

     

    Not
      less
      than 45 days (or such lesser time as may be acceptable to the Trustee) prior
      to
      each sinking fund payment date for any series of Securities, the Company will
      deliver to the Trustee an Officers’ Certificate specifying the amount of the
      next ensuing sinking fund payment for that series pursuant to the terms of
      the
      series, the portion thereof, if any, that is to be satisfied by delivering
      and
      crediting Securities of that series pursuant to Section 3.05 and the basis
      for
      such credit and will, together with such Officers’ Certificate, deliver to the
      Trustee any Securities to be so delivered. Not less than 30 days before each
      such sinking fund payment date, the Trustee shall select the Securities to
      be
      redeemed upon such sinking fund payment date in the manner specified in Section
      3.02 and cause notice of the redemption thereof to be given in the name of
      and
      at the expense of the Company in the manner provided in Section 3.02. Such
      notice having been duly given, the redemption of such Securities shall be made
      upon the terms and in the manner stated in Section 3.03.

     

    ARTICLE
      IV

     

    CERTAIN
      COVENANTS

     

    
      	SECTION
              4.01.  	
              PAYMENT
                OF PRINCIPAL, PREMIUM AND INTEREST.

            

    

     

    The
      Company will duly and punctually pay or cause to be paid the principal of and
      any premium, if any, and interest on the Securities of that series at the time
      and place and in the manner provided herein and established with respect to
      such
      Securities.

     

    
      	SECTION
              4.02.  	
              MAINTENANCE
                OF OFFICE OR AGENCY.

            

    

     

    So
      long as
      any series of the Securities remains Outstanding, the Company will maintain
      for
      such series an office or agency at one or more locations where Securities of
      that series may be presented or surrendered for payment, where Securities of
      that series may be surrendered for registration of transfer or exchange and
      where notices and demands to or upon the Company in respect of the Securities
      of
      that series and this Indenture may be served. The Company will give prompt
      notice to the Trustee and to the holders of Securities as provided in Sections
      13.03 and 13.04, respectively, of the location and any change in the location,
      of any such office or agency. If at any time the Company shall fail to maintain
      any such required office or agency in respect of any series of Securities or
      shall fail to furnish the Trustee with the address thereof, such presentations
      and surrenders of Securities of that series may be made and notices and demands
      may be made or served at the Corporate Trust Office of the Trustee, and the
      Company hereby appoints the Trustee as its agent to receive all such
      presentations, surrenders, notices and demands.

     

    
      	SECTION
              4.03.  	
              PAYING
                AGENTS.

            

    

     

    (a)  If
      the
      Company shall appoint one or more paying agents for all or any series of the
      Securities, other than the Trustee, the Company will cause each such paying
      agent to execute and deliver to the Trustee an instrument in which such agent
      shall agree with the Trustee, subject to the provisions of this
      Section:

     

    (1)  that
      it
      will hold all sums held by it as such agent for the payment of the principal
      of
      and any premium or interest on the Securities of that series (whether such
      sums
      have been paid to it by the Company or by any other obligor of such Securities)
      in trust for the benefit of the Persons entitled thereto;

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    

     

    (2)  that
      it
      will give the Trustee notice of any failure by the Company (or by any other
      obligor of such Securities) to make any payment of the principal of and any
      premium or interest on the Securities of that series when the same shall be
      due
      and payable;

     

    (3)  that
      it
      will, at any time during the continuance of any failure referred to in the
      preceding paragraph (a)(2) above, upon the written request of the Trustee,
      forthwith pay to the Trustee all sums so held in trust by such paying agent;
      and

     

    (4)  that
      it
      will perform all other duties of paying agent as set forth in this
      Indenture.

     

    (b)  If
      the
      Company shall act as its own paying agent with respect to any series of the
      Securities, it will on or before each due date of the principal of and any
      premium or interest on Securities of that series, set aside, segregate and
      hold
      in trust for the benefit of the Persons entitled thereto a sum sufficient to
      pay
      such principal and any premium or interest so becoming due on Securities of
      that
      series until such sums shall be paid to such Persons or otherwise disposed
      of as
      herein provided and will promptly notify the Trustee of such action, or any
      failure (by it or any other obligor on such Securities) to take such action.
      Whenever the Company shall have one or more paying agents for any series of
      Securities, it will, prior to each due date of the principal of and any premium
      or interest on any Securities of that series, deposit with the paying agent
      a
      sum sufficient to pay the principal and any premium or interest so becoming
      due,
      such sum to be held in trust for the benefit of the Persons entitled to such
      principal, premium or interest, and (unless such paying agent is the Trustee)
      the Company will promptly notify the Trustee of this action or failure so to
      act.

     

    (c)  Notwithstanding
      anything in this Section to the contrary, (i) the agreement to hold sums in
      trust as provided in this Section is subject to the provisions of Section 11.04,
      and (ii) the Company may at any time, for the purpose of obtaining the
      satisfaction and discharge of this Indenture or for any other purpose, pay,
      or
      direct any paying agent to pay, to the Trustee all sums held in trust by the
      Company or such paying agent, such sums to be held by the Trustee upon the
      same
      terms and conditions as those upon which such sums were held by the Company
      or
      such paying agent; and, upon such payment by any paying agent to the Trustee,
      such paying agent shall be released from all further liability with respect
      to
      such money.

     

    
      	SECTION
              4.04.  	
              APPOINTMENT
                TO FILL VACANCY IN OFFICE OF TRUSTEE.

            

    

     

    The
      Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
      will appoint, in the manner provided in Section 7.10, a Trustee, so that there
      shall at all times be a Trustee hereunder.

     

    
      	SECTION
              4.05.  	
              STATEMENT
                BY OFFICERS AS TO DEFAULT.

            

    

     

    The
      Company will deliver to the Trustee, within 120 days after the end of each
      fiscal year of the Company ending after the date hereof, an Officers’
Certificate signed by its Chief Executive Officer, President, Chief Financial
      Officer, any Vice President, Treasurer or Controller stating whether or not
      to
      the knowledge of such officer the Company is in default in the performance
      and
      observance of any of the terms, provisions and conditions of this Indenture,
      and
      if the Company shall be in default, specifying all such defaults and the nature
      and status thereof of which they may have knowledge.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      V

     

    SECURITYHOLDERS’
      LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE

     

    
      	SECTION
              5.01.  	
              COMPANY
                TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
                SECURITYHOLDERS.

            

    

     

    The
      Company will furnish or cause to be furnished to the Trustee (a) on each record
      date, a list, in such form as the Trustee may reasonably require, of the names
      and addresses of the holders of each series of Securities as of such regular
      record date, provided that the Company shall not be obligated to furnish or
      cause to furnish such list at any time that the list shall not differ in any
      respect from the most recent list furnished to the Trustee by the Company and
      (b) at such other times as the Trustee may request in writing within 30 days
      after the receipt by the Company of any such request, a list of similar form
      and
      content as of a date not more than 15 days prior to the time such list is
      furnished; provided, however, that, in either case, no such list need be
      furnished for any series for which the Trustee shall be the Security
      Registrar.

     

    
      	SECTION
              5.02.  	
              PRESERVATION
                OF INFORMATION; COMMUNICATIONS WITH
                SECURITYHOLDERS.

            

    

     

    (a)  The
      Trustee shall preserve, in as current a form as is reasonably practicable,
      all
      information as to the names and addresses of the holders of Securities contained
      in the most recent list furnished to it as provided in Section 5.01 and as
      to
      the names and addresses of holders of Securities received by the Trustee in
      its
      capacity as Security Registrar (if acting in such capacity).

     

    (b)  The
      Trustee may destroy any list furnished to it as provided in Section 5.01 upon
      receipt of a new list so furnished.

     

    (c)  Securityholders
      may communicate as provided in Section 312(b) of the Trust Indenture Act with
      other Securityholders with respect to their rights under this Indenture or
      under
      the Securities. The Company, the Trustee, the Security Registrar and anyone
      else
      shall have the protection of Section 312(c) of the Trust Indenture
      Act.

     

    
      	SECTION
              5.03.  	
              REPORTS
                BY THE COMPANY.

            

    

     

    (a)  Notwithstanding
      that the Company may not at any time be subject to the reporting requirements
      of
      Section 13 or 15(d) of the Exchange Act, the Company shall file with the
      Commission (to the extent the Commission will accept such filing) and provide
      the Trustee and Securityholders with such annual reports and such information,
      documents and other reports are specified in Sections 13 and 15(d) of the
      Exchange Act and applicable to a U.S. Person subject to such Sections (but
      without exhibits in the case of Securityholders), such information, documents
      and other reports to be so filed and provided at the times specified for the
      filing of such information, documents and reports under such Sections. Delivery
      of such reports, information and documents to the Trustee pursuant to this
      Section 5.03 is for informational purposes only and the Trustee’s receipt
      of such shall not constitute constructive notice of any information contained
      therein or determinable from information contained therein, including the
      Company’s compliance with any of its covenants hereunder (as to which the
      Trustee is entitled to rely exclusively on Officers’ Certificates).

     

    (b)  In
      addition, the Company shall furnish to the Securityholders and to prospective
      investors, upon the request of such Securityholders, any information required
      to
      be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long
      as any Securities are not freely transferable under the Securities
      Act.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    

     

    (c)  The
      Company also shall comply with the other provisions of TIA
      Section 314(a).

     

    
      	SECTION
              5.04.  	
              REPORTS
                BY THE TRUSTEE.

            

    

     

    (a)  On
      or
      before July 15 in each year in which any of the Securities are Outstanding,
      the
      Trustee shall transmit by mail, first class postage prepaid, to the
      Securityholders, as their names and addresses appear upon the Security Register,
      a brief report dated as of the preceding May 15, if and to the extent required
      under Section 313(a) of the Trust Indenture Act.

     

    (b)  The
      Trustee shall comply with Sections 313(b) and 313(c) of the Trust Indenture
      Act.

     

    (c)  A
      copy of
      each such report shall, at the time of such transmission to Securityholders,
      be
      filed by the Trustee with the Company, with each stock exchange upon which
      any
      Securities are listed (if so listed) and also with the Commission. The Company
      agrees to notify the Trustee when any Securities become listed on any stock
      exchange.

     

    ARTICLE
      VI

     

    REMEDIES
      OF THE TRUSTEE AND SECURITYHOLDERS ON 
EVENT OF DEFAULT

     

    
      	SECTION
              6.01.  	
              EVENTS
                OF DEFAULT.

            

    

     

    (a)  Whenever
      used herein with respect to Securities of a particular series, “Event of
      Default” means any one or more of the following events that has occurred and is
      continuing:

     

    (1)  the
      Company defaults in the payment of any installment of interest upon any of
      the
      Securities of that series, as and when the same shall become due and payable,
      and continuance of such default for a period of 30 days; provided, however,
      that
      a valid extension of an interest payment period by the Company in accordance
      with the terms of any Board Resolution or indenture supplemental hereto, shall
      not constitute a default in the payment of interest for this
      purpose;

     

    (2)  the
      Company defaults in the payment of the principal of (or premium, if any, on)
      any
      of the Securities of that series as and when the same shall become due and
      payable whether at maturity, upon redemption, by declaration or otherwise,
      or in
      any payment required by any sinking or analogous fund established with respect
      to that series;

     

    (3)  the
      Company fails to observe or perform any other of its covenants or agreements
      with respect to that series contained in this Indenture or otherwise established
      with respect to that series of Securities pursuant to Section 2.01 hereof (other
      than a covenant or agreement that has been expressly included in this Indenture
      solely for the benefit of one or more series of Securities other than such
      series) for a period of 60 days after the date on which written notice of such
      failure, requiring the same to be remedied and stating that such notice is
      a
“Notice of Default” hereunder, shall have been given to the Company by the
      Trustee, by registered or certified mail, or to the Company and the Trustee
      by
      the holders of at least 25% in principal amount of the Securities of that series
      at the time Outstanding;

     

    (4)  if
      the
      Securities of the series are convertible into shares of common stock, failure
      by
      the Company to deliver common stock when the holder or holders of such
      Securities elect to convert such Securities into shares of common
      stock;

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    

     

    (5)  the
      Company pursuant to or within the meaning of any Bankruptcy Law (i) commences
      a
      voluntary case, (ii) consents to the entry of an order for relief against it
      in
      an involuntary case, (iii) consents to the appointment of a Custodian of it
      or
      for all or substantially all of its property or (iv) makes a general assignment
      for the benefit of its creditors;

     

    (6)  a
      court of
      competent jurisdiction enters an order under any Bankruptcy Law that (i) is
      for
      relief against the Company in an involuntary case, (ii) appoints a Custodian
      of
      the Company for all or substantially all of its respective property, or (iii)
      orders the liquidation of the Company, and the order or decree remains unstayed
      and in effect for 60 days; or

     

    (7)  any
      other
      Event of Default provided with respect to Securities of that series in any
      Board
      Resolution or indenture supplemental hereto.

     

    (b)  In
      each
      and every such case, unless the principal of all the Securities of that series
      shall have already become due and payable, either the Trustee or the holders
      of
      not less than 25% in aggregate principal amount of the Securities of that series
      then Outstanding hereunder, by notice in writing to the Company (and to the
      Trustee if given by such Securityholders), may declare the principal (or, if
      the
      Securities of such series are issued at a discount, such portion of the
      principal amount as may be specified in the terms of such series) of all the
      Securities of that series to be due and payable immediately, and upon any such
      declaration the same shall become and shall be immediately due and payable,
      notwithstanding anything contained in this Indenture or in the Securities of
      that series or established with respect to that series pursuant to Section
      2.01
      to the contrary.

     

    (c)  At
      any
      time after the principal of the Securities of that series shall have been so
      declared due and payable, and before any judgment or decree for the payment
      of
      the moneys due shall have been obtained or entered as hereinafter provided,
      the
      holders of a majority in aggregate principal amount of the Securities of that
      series then Outstanding hereunder, by written notice to the Company and the
      Trustee, may rescind and annul such declaration and its consequences if: (i)
      the
      Company has paid or deposited with the Trustee a sum sufficient to pay all
      matured installments of interest upon all the Securities of that series and
      the
      principal of (and premium, if any, on) any and all Securities of that series
      that shall have become due otherwise than by acceleration (with interest upon
      such principal and premium, if any, and, to the extent that such payment is
      enforceable under applicable law, upon overdue installments of interest, at
      the
      rate per annum expressed in the Securities of that series (or at the respective
      rates of interest of all the Securities) to the date of such payment or deposit)
      and the amount payable to the Trustee under Section 7.06, and (ii) any and
      all
      Events of Default under the Indenture with respect to such series, other than
      the non-payment of principal on Securities of that series that shall not have
      become due by their terms, shall have been remedied or waived as provided in
      Section 6.06.

     

    No
      such
      rescission and annulment shall extend to or shall affect any subsequent default
      or impair any right consequent thereon.

     

    (d)  In
      case
      the Trustee shall have proceeded to enforce any right with respect to Securities
      of that series under this Indenture and such proceedings shall have been
      discontinued or abandoned because of such rescission or annulment or for any
      other reason or shall have been determined adversely to the Trustee, then and
      in
      every such case, the Company and the Trustee shall be restored respectively
      to
      their former positions and rights hereunder, and all rights, remedies and powers
      of the Company and the Trustee shall continue as though no such proceedings
      had
      been taken.

     

    
      	SECTION
              6.02.  	
              COLLECTION
                OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
                BY TRUSTEE.

            

    

     

    (a)  The
      Company covenants that (1) in case it shall default in the payment of any
      installment of interest on any of the Securities of a series, or any payment
      required by any sinking or analogous fund established with 

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    respect
      to
      that series as and when the same shall have become due and payable, and such
      default shall have continued for a period of 30 days, or (2) in case it shall
      default in the payment of the principal of (or premium, if any, on) any of
      the
      Securities of a series when the same shall have become due and payable, whether
      upon maturity of the Securities of a series or upon redemption or upon
      declaration or otherwise, then, upon demand of the Trustee, the Company will
      pay
      to the Trustee, for the benefit of the holders of the Securities of that series,
      the whole amount that then shall have become due and payable on all such
      Securities for principal (and premium, if any) or interest, or both, as the
      case
      may be, with interest upon the overdue principal (and premium, if any) and
      (to
      the extent that payment of such interest is enforceable under applicable law)
      upon overdue installments of interest at the rate per annum expressed in the
      Securities of that series.

     

    (b)  If
      the
      Company shall fail to pay such amounts forthwith upon such demand, the Trustee,
      in its own name and as trustee of an express trust, shall be entitled and
      empowered to institute any action or proceedings at law or in equity for the
      collection of the sums so due and unpaid, and may prosecute any such action
      or
      proceeding to judgment or final decree, and may enforce any such judgment or
      final decree against the Company or other obligor upon the Securities of that
      series and collect the moneys adjudged or decreed to be payable in the manner
      provided by law out of the property of the Company or other obligor upon the
      Securities of that series, wherever situated.

     

    (c)  In
      case of
      any receivership, insolvency, liquidation, bankruptcy, reorganization,
      readjustment, arrangement, composition or judicial proceedings affecting the
      Company, or its creditors or property, the Trustee shall have power to intervene
      in such proceedings and take any action therein that may be permitted by the
      court and shall (except as may be otherwise provided by law) be entitled to
      file
      such proofs of claim and other papers and documents as may be necessary or
      advisable in order to have the claims of the Trustee and of the holders of
      Securities of such series allowed for the entire amount due and payable by
      the
      Company under the Indenture at the date of institution of such proceedings
      and
      for any additional amount that may become due and payable by the Company after
      such date, and to collect and receive any moneys or other property payable
      or
      deliverable on any such claim, and to distribute the same after the deduction
      of
      the amount payable to the Trustee under Section 7.06; and any receiver, assignee
      or trustee in bankruptcy or reorganization is hereby authorized by each of
      the
      holders of Securities of such series to make such payments to the Trustee,
      and,
      in the event that the Trustee shall consent to the making of such payments
      directly to such Securityholders, to pay to the Trustee any amount due it under
      Section 7.06.

     

    (d)  All
      rights
      of action and of asserting claims under this Indenture, or under any of the
      terms established with respect to Securities of that series, may be enforced
      by
      the Trustee without the possession of any of such Securities, or the production
      thereof at any trial or other proceeding relative thereto, and any such suit
      or
      proceeding instituted by the Trustee shall be brought in its own name as trustee
      of an express trust, and any recovery of judgment shall, after provision for
      payment to the Trustee of any amounts due under Section 7.06, be for the ratable
      benefit of the holders of the Securities of such series.

     

    In
      case of
      an Event of Default hereunder, the Trustee may in its discretion proceed to
      protect and enforce the rights vested in it by this Indenture by such
      appropriate judicial proceedings as the Trustee shall deem most effectual to
      protect and enforce any of such rights, either at law or in equity or in
      bankruptcy or otherwise, whether for the specific enforcement of any covenant
      or
      agreement contained in the Indenture or in aid of the exercise of any power
      granted in this Indenture, or to enforce any other legal or equitable right
      vested in the Trustee by this Indenture or by law.

     

    Nothing
      contained herein shall be deemed to authorize the Trustee to authorize or
      consent to or accept or adopt on behalf of any Securityholder any plan of
      reorganization, arrangement, adjustment or composition affecting the Securities
      of that series or the rights of any holder thereof or to authorize the Trustee
      to vote in respect of the claim of any Securityholder in any such
      proceeding.

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    

     

    
      	SECTION
              6.03.  	
              APPLICATION
                OF MONEYS COLLECTED.

            

    

     

    Any
      moneys
      collected by the Trustee pursuant to this Article with respect to a particular
      series of Securities shall be applied in the following order, at the date or
      dates fixed by the Trustee and, in case of the distribution of such moneys
      on
      account of principal (or premium, if any) or interest, upon presentation of
      the
      Securities of that series, and notation thereon the payment, if only partially
      paid, and upon surrender thereof if fully paid:

     

    FIRST:
      To
      the payment of costs and expenses of collection and of all amounts payable
      to
      the Trustee under Section 7.06; and

     

    SECOND:
      To
      the payment of the amounts then due and unpaid upon Securities of such series
      for principal and any premium and interest, in respect of which or for the
      benefit of which such money has been collected, ratably, without preference
      or
      priority of any kind, according to the amounts due and payable on such
      Securities for principal and any premium and interest,
      respectively.

     

    
      	SECTION
              6.04.  	
              LIMITATION
                ON SUITS.

            

    

     

    No
      holder
      of any Security of any series shall have any right by virtue or by availing
      of
      any provision of this Indenture to institute any suit, action or proceeding
      in
      equity or at law upon or under or with respect to this Indenture or for the
      appointment of a receiver or trustee, or for any other remedy hereunder, unless
      (i) such holder previously shall have given to the Trustee written notice of
      an
      Event of Default and of the continuance thereof with respect to the Securities
      of such series specifying such Event of Default, as hereinbefore provided;
      (ii)
      the holders of not less than 25% in aggregate principal amount of the Securities
      of such series then Outstanding shall have made written request upon the Trustee
      to institute such action, suit or proceeding in its own name as trustee
      hereunder; (iii) such holder or holders shall have offered to the Trustee
      reasonable indemnity against the costs, expenses and liabilities to be incurred
      therein or thereby; and (iv) the Trustee for 60 days after its receipt of such
      notice, request and offer of indemnity, shall have failed to institute any
      such
      action, suit or proceeding and (v) during such 60 day period, the holders of
      a
      majority in principal amount of the Securities of that series do not give the
      Trustee a direction inconsistent with the request.

     

    Notwithstanding
      anything contained herein to the contrary, any other provisions of this
      Indenture, the right of any holder of any Security to receive payment of the
      principal of and any premium and (subject to Section 2.03) interest on such
      Security, as therein provided, on or after the respective due dates expressed
      in
      such Security (or in the case of redemption, on the redemption date), or to
      institute suit for the enforcement of any such payment on or after such
      respective dates or redemption date, shall not be impaired or affected without
      the consent of such holder and by accepting a Security hereunder it is expressly
      understood, intended and covenanted by the taker and holder of every Security
      of
      such series with every other such taker and holder and the Trustee, that no
      one
      or more holders of Securities of such series shall have any right in any manner
      whatsoever by virtue or by availing of any provision of this Indenture to
      affect, disturb or prejudice the rights of the holders of any other of such
      Securities, or to obtain or seek to obtain priority over or preference to any
      other such holder, or to enforce any right under this Indenture, except in
      the
      manner herein provided and for the equal, ratable and common benefit of all
      holders of Securities of such series. For the protection and enforcement of
      the
      provisions of this Section, each and every Securityholder and the Trustee shall
      be entitled to such relief as can be given either at law or in
      equity.

     

    
      	SECTION
              6.05.  	
              RIGHTS
                AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
                WAIVER.

            

    

     

    (a)  Except
      as
      otherwise provided in Section 2.01, all powers and remedies given by this
      Article to the Trustee or to the Securityholders shall, to the extent permitted
      by law, be deemed cumulative and not exclusive of any other powers and remedies
      available to the Trustee or the holders of the Securities, by judicial
      proceedings or 

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    otherwise,
      to enforce the performance or observance of the covenants and agreements
      contained in this Indenture or otherwise established with respect to such
      Securities.

     

    (b)  No
      delay
      or omission of the Trustee or of any holder of any of the Securities to exercise
      any right or power accruing upon any Event of Default occurring and continuing
      as aforesaid shall impair any such right or power, or shall be construed to
      be a
      waiver of any such default or on acquiescence therein; and, subject to the
      provisions of Section 6.04, every power and remedy given by this Article or
      by
      law to the Trustee or the Securityholders may be exercised from time to time,
      and as often as shall be deemed expedient, by the Trustee or by the
      Securityholders.

     

    
      	SECTION
              6.06.  	
              CONTROL
                BY SECURITYHOLDERS.

            

    

     

    The
      holders of a majority in aggregate principal amount of the Securities of any
      series at the time Outstanding, determined in accordance with Section 8.04,
      shall have the right to direct the time, method and place of conducting any
      proceeding for any remedy available to the Trustee, or exercising any trust
      or
      power conferred on the Trustee with respect to such series; provided, however,
      that such direction shall not be in conflict with any rule of law or with this
      Indenture or be unduly prejudicial to the rights of holders of Securities of
      such series not consenting; and provided, further, that the Trustee may take
      any
      other action deemed proper by the Trustee which is not inconsistent with such
      direction. Prior to the taking of any action hereunder, the Trustee shall be
      entitled to reasonable indemnification satisfactory to the Trustee against
      all
      losses and expenses caused by taking or not taking such action.

     

    Subject
      to
      the provisions of Section 7.01, the Trustee shall have the right to decline
      to
      follow any such direction if the Trustee in good faith shall, by a Responsible
      Officer or Officers of the Trustee, determine that the proceeding so directed
      would involve the Trustee in personal liability. The holders of a majority
      in
      aggregate principal amount of the Securities of any series at the time
      Outstanding affected thereby, determined in accordance with Section 8.04, may
      on
      behalf of the holders of all of the Securities of such series waive any past
      default in the performance of any of the covenants contained herein or
      established pursuant to Section 2.01 with respect to such series and its
      consequences, except a default in the payment of the principal of or any premium
      or interest on, any of the Securities of that series as and when the same shall
      become due by the terms of such Securities otherwise than by acceleration
      (unless such default has been cured and a sum sufficient to pay all matured
      installments of interest and principal and any premium has been deposited with
      the Trustee in accordance with Section 6.01(c)). Upon any such waiver, the
      default covered thereby shall be deemed to be cured for all purposes of this
      Indenture and the Company, the Trustee and the holders of the Securities of
      such
      series shall be restored to their former positions and rights hereunder,
      respectively; but no such waiver shall extend to any subsequent or other default
      or impair any right consequent thereon.

     

    
      	SECTION
              6.07.  	
              UNDERTAKING
                TO PAY COSTS.

            

    

     

    All
      parties to this Indenture agree, and each holder of any Securities by such
      holder’s acceptance thereof shall be deemed to have agreed, that any court may
      in its discretion require, in any suit for the enforcement of any right or
      remedy under this Indenture, or in any suit against the Trustee for any action
      taken or omitted by it as Trustee, the filing by any party litigant in such
      suit
      of an undertaking to pay the costs of such suit, and that such court may in
      its
      discretion assess reasonable costs, including reasonable attorneys’ fees,
      against any party litigant in such suit, having due regard to the merits and
      good faith of the claims or defenses made by such party litigant; but the
      provisions of this Section shall not apply to any suit instituted by the
      Trustee, to any suit instituted by any Securityholder, or group of
      Securityholders, holding more than 10% in aggregate principal amount of the
      Outstanding Securities of any series, or to any suit instituted by any
      Securityholder for the enforcement of the payment of the principal of (or
      premium, if any) or interest on any Security of such series, on or after the
      respective due dates expressed in such Security or established pursuant to
      this
      Indenture.

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      VII

     

    CONCERNING
      THE TRUSTEE

     

    
      	SECTION
              7.01.  	
              CERTAIN
                DUTIES AND RESPONSIBILITIES OF TRUSTEE.

            

    

     

    (a)  The
      Trustee, prior to the occurrence of an Event of Default with respect to the
      Securities of a series and after the curing of all Events of Default with
      respect to the Securities of that series that may have occurred, shall undertake
      to perform with respect to the Securities of such series such duties and only
      such duties as are specifically set forth in this Indenture, and no implied
      covenants shall be read into this Indenture against the Trustee. In case an
      Event of Default with respect to the Securities of a series has occurred (that
      has not been cured or waived), the Trustee shall exercise with respect to
      Securities of that series such of the rights and powers vested in it by this
      Indenture, and use the same degree of care and skill in their exercise, as
      a
      prudent person would exercise or use under the circumstances in the conduct
      of
      such person’s own affairs.

     

    (b)  No
      provision of this Indenture shall be construed to relieve the Trustee from
      liability for its own negligent action, its own negligent failure to act, or
      its
      own willful misconduct, except that:

     

    (1)  prior
      to
      the occurrence of an Event of Default with respect to the Securities of a series
      and after the curing or waiving of all such Events of Default with respect
      to
      that series that may have occurred:

     

    (i)  the
      duties
      and obligations of the Trustee shall, with respect to the Securities of such
      series, be determined solely by the express provisions of this Indenture, and
      the Trustee shall not be liable with respect to the Securities of such series
      except for the performance of such duties and obligations as are specifically
      set forth in this Indenture, and no implied covenants or obligations shall
      be
      read into this Indenture against the Trustee; and

     

    (ii)  in
      the
      absence of bad faith on the part of the Trustee, the Trustee may, with respect
      to the Securities of such series, conclusively rely as to the truth of the
      statements and the correctness of the opinions expressed therein, upon any
      certificates or opinions furnished to the Trustee and conforming to the
      requirements of this Indenture; but in the case of any such certificates or
      opinions that by any provision hereof are specifically required to be furnished
      to the Trustee, the Trustee shall be under a duty to examine the same to
      determine whether or not they conform to the requirements of this
      Indenture;

     

    (2)  the
      Trustee shall not be liable for any error of judgment made in good faith by
      a
      Responsible Officer or Responsible Officers of the Trustee, unless it shall
      be
      proved that the Trustee was negligent in ascertaining the pertinent
      facts;

     

    (3)  the
      Trustee shall not be liable with respect to any action taken or omitted to
      be
      taken by it in good faith in accordance with the direction of the holders of
      not
      less than a majority in principal amount of the Securities of any series at
      the
      time Outstanding (determined as provided in Section 8.04) relating to the time,
      method and place of conducting any proceeding for any remedy available to the
      Trustee, or exercising any trust or power conferred upon the Trustee under
      this
      Indenture with respect to the Securities of that series; and

     

    (4)  None
      of
      the provisions contained in this Indenture shall require the Trustee to expend
      or risk its own funds or otherwise incur personal financial liability in the
      performance of any of its duties or in the exercise of any of its rights or
      powers, if there is reasonable ground for believing that the repayment of

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    such
      funds
      or liability is not reasonably assured to it under the terms of this Indenture
      or adequate indemnity against such risk is not reasonably assured to
      it.

     

    
      	SECTION
              7.02.  	
              CERTAIN
                RIGHTS OF TRUSTEE.

            

    

     

    Except
      as
      otherwise provided in Section 7.01:

     

    (a)  The
      Trustee may rely conclusively and shall be protected in acting or refraining
      from acting upon any resolution, certificate, statement, instrument, opinion,
      report, notice, request, consent, order, approval, bond, security or other
      paper
      or document believed by it to be genuine and to have been signed or presented
      by
      the proper party or parties;

     

    (b)  Any
      request, direction, order or demand of the Company mentioned herein shall be
      sufficiently evidenced by a Board Resolution or an instrument signed in the
      name
      of the Company, by the Chief Executive Officer or the President and by the
      Chief
      Financial Officer or any Vice President or the Secretary or an Assistant
      Secretary or the Treasurer or an Assistant Treasurer thereof (unless other
      evidence in respect thereof is specifically prescribed herein);

     

    (c)  The
      Trustee may consult with counsel of its selection and the written advice of
      such
      counsel or any Opinion of Counsel shall be full and complete authorization
      and
      protection in respect of any action taken or suffered or omitted hereunder
      in
      good faith and in reliance thereon;

     

    (d)  The
      Trustee shall be under no obligation to exercise any of the rights or powers
      vested in it by this Indenture at the request, order or direction of any of
      the
      Securityholders, pursuant to the provisions of this Indenture, unless such
      Securityholders shall have offered to the Trustee reasonable security or
      indemnity against the costs, expenses and liabilities that may be incurred
      therein or thereby; nothing contained herein shall, however, relieve the Trustee
      of the obligation, upon the occurrence of an Event of Default with respect
      to a
      series of the Securities (that has not been cured or waived) to exercise with
      respect to Securities of that series such of the rights and powers vested in
      it
      by this Indenture, and to use the same degree of care and skill in their
      exercise, as a prudent person would exercise or use under the circumstances
      in
      the conduct of such person’s own affairs;

     

    (e)  The
      Trustee shall not be liable for any action taken or omitted to be taken by
      it in
      good faith and believed by it to be authorized or within the discretion or
      rights or powers conferred upon it by this Indenture;

     

    (f)  The
      Trustee shall not be bound to make any investigation into the facts or matters
      stated in any resolution, certificate, statement, instrument, opinion, report,
      notice, request, consent, order, approval, bond, security, or other papers
      or
      documents, unless so requested in writing to do so by the holders of not less
      than a majority in principal amount of the Outstanding Securities of the
      particular series affected thereby (determined as provided in Section 8.04);
      provided, however, that if the payment within a reasonable time to the Trustee
      of the costs, expenses or liabilities likely to be incurred by it in the making
      of such investigation is, in the opinion of the Trustee, not reasonably assured
      to the Trustee by the security afforded to it by the terms of this Indenture,
      the Trustee may require reasonable indemnity against such costs, expenses or
      liabilities as a condition to so proceeding. The reasonable expense of every
      such examination shall be paid by the Company or, if paid by the Trustee, shall
      be repaid by the Company upon demand;

     

    (g)  The
      Trustee may execute any of the trusts or powers hereunder or perform any duties
      hereunder either directly or by or through agents or attorneys and the Trustee
      shall not be responsible for any misconduct or negligence on the part of any
      agent or attorney appointed with due care by it hereunder;

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    

     

    (h)  the
      Trustee shall not be deemed to have notice of any Default or Event of Default
      unless a Responsible Officer of the Trustee has actual knowledge thereof or
      unless written notice of any event which is in fact such a Default or Event
      of
      Default is received by the Trustee at the Corporate Trust Office of the Trustee,
      and such notice references the Securities and this Indenture;

     

    (i)  the
      rights, privileges, protections, immunities and benefits given to the Trustee,
      including, without limitation, its right to be indemnified, are extended to,
      and
      shall be enforceable by, the Trustee in each of its capacities hereunder, and
      each agent, custodian and other Person employed to act hereunder;
      and

     

    (j)  the
      Trustee may request that the Company deliver an Officers’ Certificate setting
      forth the names of individuals and/or titles of officers authorized at such
      time
      to take specified actions pursuant to this Indenture, which Officers’
Certificate may be signed by any person authorized to sign an Officers’
Certificate, including any person specified as so authorized in any such
      certificate previously delivered and not superseded.

     

    
      	SECTION
              7.03.  	
              TRUSTEE
                NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OR
                SECURITIES.

            

    

     

    (a)  The
      recitals contained herein and in the Securities shall be taken as the statements
      of the Company, and the Trustee assumes no responsibility for the correctness
      of
      the same.

     

    (b)  The
      Trustee makes no representations as to the validity or sufficiency of this
      Indenture or of the Securities.

     

    (c)  The
      Trustee shall not be accountable for the use or application by the Company
      of
      any of the Securities or of the proceeds of such Securities, or for the use
      or
      application of any moneys paid over by the Trustee in accordance with any
      provision of this Indenture or established pursuant to Section 2.01, or for
      the
      use or application of any moneys received by any paying agent other than the
      Trustee.

     

    
      	SECTION
              7.04.  	
              MAY
                HOLD SECURITIES.

            

    

     

    The
      Trustee or any paying agent or Security Registrar, in its individual or any
      other capacity, may become the owner or pledgee of Securities with the same
      rights it would have if it were not Trustee, paying agent or Security
      Registrar.

     

    
      	SECTION
              7.05.  	
              MONEYS
                HELD IN TRUST.

            

    

     

    Subject
      to
      the provisions of Section 11.04, all moneys received by the Trustee shall,
      until
      used or applied as herein provided, be held in trust for the purposes for which
      they were received, but need not be segregated from other funds except to the
      extent required by law. The Trustee shall be under no liability for interest
      on
      any moneys received by it hereunder except such as it may agree with the Company
      to pay thereon.

     

    
      	SECTION
              7.06.  	
              COMPENSATION
                AND REIMBURSEMENT.

            

    

     

    (a)  The
      Company covenants and agrees to pay to the Trustee, and the Trustee shall be
      entitled to, such reasonable compensation (which shall not be limited by any
      provision of law in regard to the compensation of a trustee of an express
      trust), as the Company, and the Trustee may from time to time agree in writing,
      for all services rendered by it in the execution of the trusts hereby created
      and in the exercise and performance of any of the powers and duties hereunder
      of
      the Trustee, and, except as otherwise expressly provided herein, the Company
      will pay or reimburse the Trustee upon its request for all reasonable expenses,
      disbursements and advances incurred or made by the Trustee in accordance with
      any of the provisions of this Indenture (including the reasonable compensation
      and 

     

    
      
        
        

      

      
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    the
      expenses and disbursements of its counsel and of all Persons not regularly
      in
      its employ) except any such expense, disbursement or advance as may arise from
      its negligence, bad faith or willful misconduct. The Company also covenants
      to
      indemnify the Trustee (and its officers, agents, directors and employees) for,
      and to hold it harmless against, any loss, liability, damage, claim or expense,
      including taxes (other than taxes based on the income of the Trustee) incurred
      without negligence, bad faith or willful misconduct on the part of the Trustee
      and arising out of or in connection with the acceptance or administration of
      this trust, including the reasonable costs and expenses of defending itself
      against any claim of liability in the premises. Promptly after receipt by the
      Trustee of notice of any claim or the commencement of any action for which
      it
      may seek indemnity from the Company hereunder, the Trustee shall notify the
      company in writing of such claim or the commencement of such action. The Company
      shall have the right to assume the defense thereof and the Trustee shall
      cooperate in the defense.

     

    (b)  The
      obligations of the Company under this Section to compensate and indemnify the
      Trustee and to pay or reimburse the Trustee for reasonable expenses,
      disbursements and advances shall constitute additional indebtedness hereunder.
      Such additional indebtedness shall be secured by a lien prior to that of the
      Securities upon all property and funds held or collected by the Trustee as
      such,
      except funds held in trust for the benefit of the holders of particular
      Securities.

     

    This
      Section 7.06 shall survive the termination of the Indenture and resignation
      or
      removal of the Trustee.

     

    
      	SECTION
              7.07.  	
              RELIANCE
                ON OFFICERS’ CERTIFICATE.

            

    

     

    Except
      as
      otherwise provided in Section 7.01, whenever in the administration of the
      provisions of this Indenture the Trustee shall deem it necessary or desirable
      that a matter be proved or established prior to taking or suffering or omitting
      to take any action hereunder, such matter (unless other evidence in respect
      thereof be herein specifically prescribed) may, in the absence of negligence,
      bad faith or willful misconduct on the part of the Trustee, be deemed to be
      conclusively proved and established by an Officers’ Certificate delivered to the
      Trustee and such certificate, in the absence of negligence, bad faith or willful
      misconduct on the part of the Trustee, shall be full warrant to the Trustee
      for
      any action taken, suffered or omitted to be taken by it under the provisions
      of
      this Indenture upon the faith thereof.

     

    
      	SECTION
              7.08.  	
              DISQUALIFICATION;
                CONFLICTING INTERESTS.

            

    

     

    If
      the
      Trustee has or shall acquire any “conflicting interest” within the meaning of
      Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall
      in
      all respects comply with the provisions of Section 310(b) of the Trust Indenture
      Act.

     

    
      	SECTION
              7.09.  	
              CORPORATE
                TRUSTEE REQUIRED; ELIGIBILITY.

            

    

     

    There
      shall at all times be a Trustee with respect to the Securities issued hereunder
      which shall at all times be a corporation organized and doing business under
      the
      laws of the United States of America or any State or Territory thereof or of
      the
      District of Columbia, or a corporation or other Person permitted to act as
      trustee by the Commission, authorized under such laws to exercise corporate
      trust powers, having a combined capital and surplus of at least 50 million
      U.S.
      dollars ($50,000,000), and subject to supervision or examination by Federal,
      State, Territorial, or District of Columbia authority. If such corporation
      publishes reports of condition at least annually, pursuant to law or to the
      requirements of the aforesaid supervising or examining authority, then for
      the
      purposes of this Section, the combined capital and surplus of such corporation
      shall be deemed to be its combined capital and surplus as set forth in its
      most
      recent report of condition so published. The Company may not, nor may any Person
      directly or indirectly controlling, controlled by, or under common control
      with
      the Company, serve as Trustee. In case at any time the Trustee shall cease
      to be
      eligible in accordance with the provisions of this Section, the Trustee shall
      resign immediately in the manner and with the effect specified in Section
      7.10.

     

    
      
        
        

      

      
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      	SECTION
              7.10.  	
              RESIGNATION
                AND REMOVAL; APPOINTMENT OF SUCCESSOR.

            

    

     

    (a)  The
      Trustee or any successor hereafter appointed, may at any time resign with
      respect to the Securities of one or more series by giving written notice thereof
      to the Company and by transmitting notice of resignation by mail, first class
      postage prepaid, to the Securityholders of such series, as their names and
      addresses appear upon the Security Register. Upon receiving such notice of
      resignation, the Company shall promptly appoint a successor trustee with respect
      to Securities of such series by or pursuant to a Board Resolution. If no
      successor trustee shall have been so appointed and have accepted appointment
      within 30 days after the mailing of such notice of resignation, the resigning
      Trustee may petition any court of competent jurisdiction at the expense of
      the
      Company for the appointment of a successor trustee with respect to Securities
      of
      such series, or any Securityholder of that series who has been a bona fide
      holder of a Security or Securities for at least six months may on behalf of
      himself and all others similarly situated, petition any such court for the
      appointment of a successor trustee. Such court may thereupon after such notice,
      if any, as it may deem proper and prescribe, appoint a successor
      trustee.

     

    (b)  In
      case at
      any time any one of the following shall occur:

     

    (1)  the
      Trustee shall fail to comply with the provisions of Section 7.08 after written
      request therefor by the Company or by any Securityholder who has been a bona
      fide holder of a Security or Securities for at least six months; or

     

    (2)  the
      Trustee shall cease to be eligible in accordance with the provisions of Section
      7.09 and shall fail to resign after written request therefor by the Company
      or
      by any such Securityholder; or

     

    (3)  the
      Trustee shall become incapable of acting, or shall be adjudged a bankrupt or
      insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of
      the
      Trustee or of its property shall be appointed or consented to, or any public
      officer shall take charge or control of the Trustee or of its property or
      affairs for the purpose of rehabilitation, conservation or liquidation,

     

    then,
      in
      any such case, the Company may remove the Trustee with respect to all Securities
      and appoint a successor trustee by or pursuant to a Board Resolution, or, unless
      the Trustee’s duty to resign is stayed as provided herein, any Securityholder
      who has been a bona fide holder of a Security or Securities for at least six
      months may, on behalf of that holder and all others similarly situated, petition
      any court of competent jurisdiction for the removal of the Trustee and the
      appointment of a successor trustee. Such court may thereupon after such notice,
      if any, as it may deem proper and prescribe, remove the Trustee and appoint
      a
      successor trustee.

     

    (c)  The
      holders of a majority in aggregate principal amount of the Securities of any
      series at the time Outstanding may at any time remove the Trustee with respect
      to such series by so notifying the Trustee and the Company in writing and may
      appoint a successor Trustee for such series with the consent of the
      Company.

     

    (d)  Any
      resignation or removal of the Trustee and appointment of a successor trustee
      with respect to the Securities of a series pursuant to any of the provisions
      of
      this Section shall become effective upon acceptance of appointment by the
      successor trustee as provided in Section 7.11.

     

    (e)  Any
      successor trustee appointed pursuant to this Section may be appointed with
      respect to the Securities of one or more series or all of such series, and
      at
      any time there shall be only one Trustee with respect to the Securities of
      any
      particular series.

     

    (f)  Upon
      any
      removal of the Trustee, if an instrument of acceptance by a successor Trustee
      shall not have been delivered to the Trustee within 60 days after the giving
      of
      such notice of removal, the Trustee being re

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    moved
      may
      petition, at the expense of the Company, any court of competent jurisdiction
      for
      the appointment of a successor Trustee with respect to the Securities of such
      series.

     

    
      	SECTION
              7.11.  	
              ACCEPTANCE
                OF APPOINTMENT BY SUCCESSOR.

            

    

     

    (a)  In
      case of
      the appointment hereunder of a successor trustee with respect to all Securities,
      every such successor trustee so appointed shall execute, acknowledge and deliver
      to the Company and to the retiring Trustee an instrument accepting such
      appointment, and thereupon the resignation or removal of the retiring Trustee
      shall become effective and such successor trustee, without any further act,
      deed
      or conveyance, shall become vested with all the rights, powers, trusts and
      duties of the retiring Trustee; but, on the request of the Company or the
      successor trustee, such retiring Trustee shall, upon payment of its charges,
      execute and deliver an instrument transferring to such successor trustee all
      the
      rights, powers, and trusts of the retiring Trustee and shall duly assign,
      transfer and deliver to such successor trustee all property and money held
      by
      such retiring Trustee hereunder.

     

    (b)  In
      case of
      the appointment hereunder of a successor trustee with respect to the Securities
      of one or more (but not all) series, the Company, the retiring Trustee and
      each
      successor trustee with respect to the Securities of one or more series shall
      execute and deliver an indenture supplemental hereto wherein each successor
      trustee shall accept such appointment and which (1) shall contain such
      provisions as shall be necessary or desirable to transfer and confirm to, and
      to
      vest in, each successor trustee all the rights, powers, trusts and duties of
      the
      retiring Trustee with respect to the Securities of that or those series to
      which
      the appointment of such successor trustee relates, (2) shall contain such
      provisions as shall be deemed necessary or desirable to confirm that all the
      rights, powers, trusts and duties of the retiring Trustee with respect to the
      Securities of that or those series as to which the retiring Trustee is not
      retiring shall continue to be vested in the retiring Trustee, and (3) shall
      add
      to or change any of the provisions of this Indenture as shall be necessary
      to
      provide for or facilitate the administration of the trusts hereunder by more
      than one Trustee, it being understood that nothing herein or in such
      supplemental indenture shall constitute such Trustees co-trustees of the same
      trust, that each such Trustee shall be trustee of a trust or trusts hereunder
      separate and apart from any trust or trusts hereunder administered by any other
      such Trustee and that no Trustee shall be responsible for any act or failure
      to
      act on the part of any other Trustee hereunder; and upon the execution and
      delivery of such supplemental indenture the resignation or removal of the
      retiring Trustee shall become effective to the extent provided therein, such
      retiring Trustee shall, with respect to the Securities of that or those series
      to which the appointment of such successor trustee relates, have no further
      responsibility for the exercise of rights and powers or for the performance
      of
      the duties and obligations vested in the Trustee under this Indenture, and
      each
      such successor trustee, without any further act, deed or conveyance, shall
      become vested with all the rights, powers, trusts and duties of the retiring
      Trustee with respect to the Securities of that or those series to which the
      appointment of such successor trustee relates; but, on request of the Company
      or
      any successor trustee, such retiring Trustee shall duly assign, transfer and
      deliver to such successor trustee, to the extent contemplated by such
      supplemental indenture, the property and money held by such retiring Trustee
      hereunder with respect to the Securities of that or those series to which the
      appointment of such successor trustee relates.

     

    (c)  Upon
      request of any such successor trustee, the Company shall execute any and all
      instruments for more fully and certainly vesting in and confirming to such
      successor trustee all such rights, powers and trusts referred to in paragraph
      (a) or (b) of this Section, as the case may be.

     

    (d)  No
      successor trustee shall accept its appointment unless at the time of such
      acceptance such successor trustee shall be qualified and eligible under this
      Article.

     

    (e)  Upon
      acceptance of appointment by a successor trustee as provided in this Section,
      the Company shall transmit notice of the succession of such trustee hereunder
      by
      mail, first class postage prepaid, to the Securityholders, as their names and
      addresses appear upon the Security Register. If the Company fails to transmit
      such notice within ten days after acceptance of appointment by the successor
      trustee, the successor trustee shall cause such notice to be transmitted at
      the
      expense of the Company.

     

    
      
        
        

      

      
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      	SECTION
              7.12.  	
              MERGER,
                CONVERSION, CONSOLIDATION OR SUCCESSION TO
                BUSINESS.

            

    

     

    Any
      corporation into which the Trustee may be merged or converted or with which
      it
      may be consolidated, or any corporation resulting from any merger, conversion
      or
      consolidation to which the Trustee shall be a party, or any corporation
      succeeding to all or substantially all of the corporate trust business of the
      Trustee, shall be the successor of the Trustee hereunder, provided that such
      corporation shall be qualified under the provisions of Section 7.08 and eligible
      under the provisions of Section 7.09, without the execution or filing of any
      paper or any further act on the part of any of the parties hereto, anything
      herein to the contrary notwithstanding. In case any Securities shall have been
      authenticated, but not delivered, by the Trustee then in office, any successor
      by merger, conversion or consolidation to such authenticating Trustee may adopt
      such authentication and deliver the Securities so authenticated with the same
      effect as if such successor Trustee had itself authenticated such
      Securities.

     

    
      	SECTION
              7.13.  	
              PREFERENTIAL
                COLLECTION OF CLAIMS AGAINST THE COMPANY.

            

    

     

    The
      Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
      any creditor relationship described in Section 311(b) of the Trust Indenture
      Act. A Trustee who has resigned or been removed shall be subject to Section
      311(a) of the Trust Indenture Act to the extent included therein.

     

    
      	SECTION
              7.14.  	
              NOTICE
                OF DEFAULTS.

            

    

     

    If
      a
      default occurs hereunder with respect to Securities of any series, the Trustee
      shall give the holders of Securities of such series notice of such default
      as
      and to the extent provided by the Trust Indenture Act; provided, however, that
      in the case of any default of the character specified in Section 6.01(3) with
      respect to Securities of such series, the Trustee may withhold the notice if
      and
      so long as the board of directors, the executive committee or a trust committee
      of directors and/or responsible officers, of the Trustee in good faith
      determines that the withholding of such notice is in the interests of the
      holders of the Securities. For the purpose of this Section, the term “default”
means any event which is, or after notice or lapse of time or both would become,
      an Event of Default with respect to Securities of such series.

     

    ARTICLE
      VIII

     

    CONCERNING
      THE SECURITYHOLDERS

     

    
      	SECTION
              8.01.  	
              EVIDENCE
                OF ACTION BY SECURITYHOLDERS.

            

    

     

    Whenever
      in this Indenture it is provided that the holders of a majority or specified
      percentage in aggregate principal amount of the Securities of a particular
      series may take any action (including the making of any demand or request,
      the
      giving of any notice, consent or waiver or the taking of any other action),
      the
      fact that at the time of taking any such action the holders of such majority
      or
      specified percentage of that series have joined therein may be evidenced by
      any
      instrument or any number of instruments of similar tenor executed by such
      holders of Securities of that series in person or by agent or proxy appointed
      in
      writing.

     

    If
      the
      Company shall solicit from the Securityholders of any series any request,
      demand, authorization, direction, notice, consent, waiver or other action,
      the
      Company may, at its option, as evidenced by an Officers’ Certificate, fix in
      advance a record date for such series for the determination of Securityholders
      entitled to give such request, demand, authorization, direction, notice,
      consent, waiver or other action, but the Company shall have no obligation to
      do
      so. If such a record date is fixed, such request, demand, authorization,
      direction, notice, consent, waiver or other action may be given before or after
      the record date, but only the Securityholders of record at the close of business
      on the record date shall be deemed to be Securityholders for the purposes of
      determining whether 

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    Securityholders
      of the requisite proportion of Outstanding Securities of that series have
      authorized or agreed or consented to such request, demand, authorization,
      direction, notice, consent, waiver or other action, and for that purpose the
      Outstanding Securities of that series shall be computed as of the record date;
      provided, however, that no such authorization, agreement or consent by such
      Securityholders on the record date shall be deemed effective unless it shall
      become effective pursuant to the provisions of this Indenture not later than
      six
      months after the record date.

     

    
      	SECTION
              8.02.  	
              PROOF
                OF EXECUTION BY SECURITYHOLDERS.

            

    

     

    Subject
      to
      the provisions of Section 8.01, proof of the execution of any instrument by
      a
      Securityholder (such proof will not require notarization) or his agent or proxy
      and proof of the holding by any Person of any of the Securities shall be
      sufficient if made in the following manner:

     

    (a)  The
      fact
      and date of the execution by any such Person of any instrument may be proved
      in
      any reasonable manner acceptable to the Trustee.

     

    (b)  The
      ownership of Securities shall be proved by the Security Register of such
      Securities or by a certificate of the Security Registrar thereof.

     

    (c)  The
      Trustee may require such additional proof of any matter referred to in this
      Section as it shall deem necessary.

     

    
      	SECTION
              8.03.  	
              WHO
                MAY BE DEEMED OWNERS.

            

    

     

    Prior
      to
      the due presentment for registration of transfer of any Security, the Company,
      the Trustee, any paying agent and any Security Registrar may deem and treat
      the
      Person in whose name such Security shall be registered upon the books of the
      Company as the absolute owner of such Security (whether or not such Security
      shall be overdue and notwithstanding any notice of ownership or writing thereon
      made by anyone other than the Security Registrar) for the purpose of receiving
      payment of or on account of the principal of, premium, if any, and (subject
      to
      Section 2.03) interest on such Security and for all other purposes; and neither
      the Company nor the Trustee nor any paying agent nor any Security Registrar
      shall be affected by any notice to the contrary.

     

    
      	SECTION
              8.04.  	
              CERTAIN
                SECURITIES OWNED BY COMPANY DISREGARDED.

            

    

     

    In
      determining whether the holders of the requisite aggregate principal amount
      of
      Securities of a particular series have concurred in any direction, consent
      or
      waiver under this Indenture, the Securities of that series that are owned by
      the
      Company or any other obligor on the Securities of that series or by any Person
      directly or indirectly controlling or controlled by or under common control
      with
      the Company or any other obligor on the Securities of that series shall be
      disregarded and deemed not to be Outstanding for the purpose of any such
      determination, except that for the purpose of determining whether the Trustee
      shall be protected in relying on any such direction, consent or waiver, only
      Securities of such series that the Trustee actually knows are so owned shall
      be
      so disregarded. The Securities so owned that have been pledged in good faith
      may
      be regarded as Outstanding for the purposes of this Section, if the pledgee
      shall establish to the satisfaction of the Trustee the pledgee’s right so to act
      with respect to such Securities and that the pledgee is not a Person directly
      or
      indirectly controlling or controlled by or under direct or indirect common
      control with the Company or any such other obligor. In case of a dispute as
      to
      such right, any decision by the Trustee taken upon the advice of counsel shall
      be full protection to the Trustee.

     

    
      	SECTION
              8.05.  	
              ACTIONS
                BINDING ON FUTURE SECURITYHOLDERS.

            

    

     

    At
      any
      time prior to (but not after) the evidencing to the Trustee, as provided in
      Section 8.01, of the taking of any action by the holders of the majority or
      percentage in aggregate principal amount of the Securities of a particular
      series specified in this Indenture in connection with such action, any holder
      of
      a Security of that series that is 

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    shown
      by
      the evidence to be included in the Securities the holders of which have
      consented to such action may, by filing written notice with the Trustee, and
      upon proof of holding as provided in Section 8.02, revoke such action so far
      as
      concerns such Security. Except as aforesaid any such action taken by the holder
      of any Security shall be conclusive and binding upon such holder and upon all
      future holders and owners of such Security, and of any Security issued in
      exchange therefor, on registration of transfer thereof or in place thereof,
      irrespective of whether or not any notation in regard thereto is made upon
      such
      Security. Any action taken by the holders of the majority or percentage in
      aggregate principal amount of the Securities of a particular series specified
      in
      this Indenture in connection with such action shall be conclusively binding
      upon
      the Company, the Trustee and the holders of all the Securities of that
      series.

     

    ARTICLE
      IX

     

    SUPPLEMENTAL
      INDENTURES

     

    
      	SECTION
              9.01.  	
              SUPPLEMENTAL
                INDENTURES WITHOUT THE CONSENT OF SECURITYHOLDERS.

            

    

     

    In
      addition to any supplemental indenture otherwise authorized by this Indenture,
      the Company and the Trustee may from time to time and at any time enter into
      an
      indenture or indentures supplemental hereto (which shall conform to the
      provisions of the Trust Indenture Act as then in effect), without the consent
      of
      the Securityholders, for one or more of the following purposes:

     

    (a)  to
      cure
      any ambiguity, defect, or inconsistency herein or in the Securities of any
      series;

     

    (b)  to
      comply
      with Article X;

     

    (c)  to
      make
      any change that does not materially adversely affect the interests of any
      Securityholder;

     

    (d)  to
      evidence and provide for successor trustees;

     

    (e)  to
      add,
      change or eliminate any provision of this Indenture affecting only Securities
      not yet issued; or

     

    (f)  to
      comply
      with any requirement of the Commission in connection with qualification of
      this
      Indenture or any supplement hereto under the Trust Indenture Act.

     

    The
      Trustee is hereby authorized to join with the Company in the execution of any
      such supplemental indenture, and to make any further appropriate agreements
      and
      stipulations that may be therein contained, but the Trustee shall not be
      obligated to enter into any such supplemental indenture that affects the
      Trustee’s own rights, duties or immunities under this Indenture or
      otherwise.

     

    Any
      supplemental indenture authorized by the provisions of this Section may be
      executed by the Company and the Trustee without the consent of the holders
      of
      any of the Securities at the time Outstanding, notwithstanding any of the
      provisions of Section 9.02.

     

    
      	SECTION
              9.02.  	
              SUPPLEMENTAL
                INDENTURES WITH CONSENT OF SECURITYHOLDERS.

            

    

     

    With
      the
      consent (evidenced as provided in Section 8.01) of the holders of not less
      than
      a majority in aggregate principal amount of the Securities of each series
      affected by such supplemental indenture or indentures at the 

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    time
      Outstanding, the Company and the Trustee may from time to time and at any time
      enter into an indenture or indentures supplemental hereto (which shall conform
      to the provisions of the Trust Indenture Act as then in effect) for the purpose
      of adding any provisions to or changing in any manner or eliminating any of
      the
      provisions of this Indenture or of any supplemental indenture or of modifying
      in
      any manner not covered by Section 9.01 the rights of the holders of the
      Securities of such series under this Indenture; provided, however, that no
      such
      supplemental indenture shall, without the consent of the holders of each
      Security then Outstanding affected thereby, (i) extend the fixed maturity of
      any
      Securities of any series, or reduce the principal amount thereof, or reduce
      the
      rate or extend the time of payment of interest thereon, or reduce any premium
      payable upon the redemption thereof; (ii) change any obligation of the Company
      to pay additional amounts with respect to the Securities; (iii) reduce the
      amount of principal of any Security payable upon acceleration of the maturity
      thereof; (iv) change the currency in which any Security or any premium or
      interest is payable; (v) impair the right to enforce any payment on or with
      respect to any Security; (vi) adversely change the right to convert or exchange,
      including decreasing the conversion rate or increasing the conversion price
      of,
      such Security (if applicable); (vii) reduce the percentage in principal amount
      of outstanding Securities of any series, the consent of whose holders is
      required for modification or amendment of this Indenture or for waiver of
      compliance with certain provisions of this Indenture or for waiver of certain
      defaults; or (viii) modify any of the above provisions.

     

    It
      shall
      not be necessary for the consent of the Securityholders of any series affected
      thereby under this Section to approve the particular form of any proposed
      supplemental indenture, but it shall be sufficient if such consent shall approve
      the substance thereof.

     

    
      	SECTION
              9.03.  	
              EFFECT
                OF SUPPLEMENTAL INDENTURES.

            

    

     

    Upon
      the
      execution of any supplemental indenture pursuant to the provisions of this
      Article or of Section 10.01, this Indenture shall, with respect to such series,
      be deemed to be modified and amended in accordance therewith and the respective
      rights, limitations of rights, obligations, duties and immunities under this
      Indenture of the Trustee, the Company and the holders of Securities of the
      series affected thereby shall thereafter be determined, exercised and enforced
      hereunder subject in all respects to such modifications and amendments, and
      all
      the terms and conditions of any such supplemental indenture shall be and be
      deemed to be part of the terms and conditions of this Indenture for any and
      all
      purposes.

     

    
      	SECTION
              9.04.  	
              SECURITIES
                AFFECTED BY SUPPLEMENTAL INDENTURES.

            

    

     

    Securities
      of any series, affected by a supplemental indenture, authenticated and delivered
      after the execution of such supplemental indenture pursuant to the provisions
      of
      this Article or of Section 10.01, may bear a notation in form approved by the
      Company, provided such form meets the requirements of any exchange upon which
      such series may be listed, as to any matter provided for in such supplemental
      indenture. If the Company shall so determine, new Securities of that series
      so
      modified as to conform, in the opinion of the Trustee and the Company, to any
      modification of this Indenture contained in any such supplemental indenture
      may
      be prepared and executed by the Company, authenticated by the Trustee and
      delivered in exchange for the Securities of that series then
      Outstanding.

     

    
      	SECTION
              9.05.  	
              EXECUTION
                OF SUPPLEMENTAL INDENTURES.

            

    

     

    Upon
      the
      request of the Company, and upon the filing with the Trustee of evidence of
      the
      consent of Securityholders required to consent thereto as aforesaid, the Trustee
      shall join with the Company in the execution of such supplemental indenture
      unless such supplemental indenture affects the Trustee’s own rights, duties or
      immunities under this Indenture or otherwise, in which case the Trustee may
      in
      its discretion, but shall not be obligated to, enter into such supplemental
      indenture. The Trustee, subject to the provisions of Section 7.01, may receive
      an Opinion of Counsel and an Officers’ Certificate as conclusive evidence that
      any supplemental indenture executed pursuant to this Article is authorized
      or
      permitted by, and conforms to the terms of, this Article and that it is proper
      for the Trus

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    tee
      under
      the provisions of this Article to join in the execution thereof; provided,
      however, that such Opinion of Counsel need not be provided in connection with
      the execution of a supplemental indenture that establishes the terms of a series
      of Securities pursuant to Section 2.01 hereof.

     

    
      	SECTION
              9.06.  	
              CONFORMITY
                WITH TRUST INDENTURE ACT.

            

    

     

    Every
      supplemental indenture executed pursuant to this Article shall conform to the
      requirements of the Trust Indenture Act in effect on such date.

     

    ARTICLE
      X

     

    SUCCESSOR
      CORPORATION

     

    
      	SECTION
              10.01.  	
              COMPANY
                MAY CONSOLIDATE, ETC.

            

    

     

    Subject
      to
      the terms of a Board Resolution or supplemental indenture with respect to any
      series of the Securities, nothing contained in this Indenture or in any of
      the
      Securities shall prevent any consolidation or merger of the Company with or
      into
      any other Person (whether or not affiliated with the Company) or successive
      consolidations or mergers in which the Company or its successor or successors
      shall be a party or parties, or shall prevent any sale, conveyance, transfer
      or
      other disposition of the property of the Company or its successor or successors
      as an entirety, or substantially as an entirety, to any other Person (whether
      or
      not affiliated with the Company or its successor or successors) authorized
      to
      acquire and operate the same; provided, however, the Company hereby covenants
      and agrees that, upon any such consolidation, merger, sale, conveyance, transfer
      or other disposition, the due and punctual payment of the principal of and
      any
      premium and interest on all of the Securities of all series in accordance with
      the terms of each series, according to their tenor and the due and punctual
      performance and observance of all the covenants and conditions of this Indenture
      with respect to each series or established with respect to such series pursuant
      to Section 2.01 to be kept or performed by the Company shall be expressly
      assumed, by supplemental indenture reasonably satisfactory in form to the
      Trustee executed and delivered to the Trustee by the entity formed by such
      consolidation, or into which the Company shall have been merged, or by the
      entity which shall have acquired such property.

     

    
      	SECTION
              10.02.  	
              SUCCESSOR
                SUBSTITUTED.

            

    

     

    (a)  In
      case of
      any such consolidation, merger, sale, conveyance, transfer or other disposition
      and upon the assumption by the successor Person, by supplemental indenture,
      executed and delivered to the Trustee and reasonably satisfactory in form to
      the
      Trustee, of the due and punctual payment of the principal of and any premium
      and
      interest on all of the Securities of all series Outstanding and the due and
      punctual performance of all of the covenants and conditions of this Indenture
      or
      established with respect to each series of the Securities pursuant to Section
      2.01 to be performed by the Company with respect to each series, such successor
      Person shall succeed to and be substituted for the Company with the same effect
      as if it had been named as the Company herein, and thereupon the predecessor
      Person shall be relieved of all obligations and covenants under this Indenture
      and the Securities.

     

    (b)  In
      case of
      any such consolidation, merger, sale, conveyance, transfer or other disposition
      such changes in phraseology and form (but not in substance) may be made in
      the
      Securities thereafter to be issued as may be appropriate.

     

    (c)  Nothing
      contained in this Indenture or in any of the Securities shall prevent the
      Company from merging into itself or acquiring by purchase or otherwise all
      or
      any part of the property of any other Person (whether or not affiliated with
      the
      Company).

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      XI

     

    SATISFACTION
      AND DISCHARGE

     

    
      	SECTION
              11.01.  	
              SATISFACTION
                AND DISCHARGE OF INDENTURE.

            

    

     

    If
      at any
      time: (a) the Company shall have delivered to the Trustee for cancellation
      all
      Securities of a series theretofore authenticated (other than any Securities
      that
      shall have been destroyed, lost or stolen and that shall have been replaced
      or
      paid as provided in Section 2.07 and Securities for whose payment money or
      Governmental Obligations have theretofore been deposited in trust or segregated
      and held in trust by the Company and thereafter repaid to the Company or
      discharged from such trust, as provided in Section 11.04); or (b) all such
      Securities of a particular series not theretofore delivered to the Trustee
      for
      cancellation (i) shall have become due and payable, or (ii) are by
      their terms to become due and payable within one year or are to be called for
      redemption within one year under arrangements reasonably satisfactory to the
      Trustee for the giving of notice of redemption by the Trustee, in the name,
      and
      at the expense of the Company, and the Company shall deposit or cause to be
      deposited with the Trustee as trust funds an amount of money in U.S. dollars
      sufficient, or non-callable Governmental Obligations, the principal of and
      interest on which when due, will be sufficient or a combination thereof,
      sufficient in the opinion of a nationally recognized firm of independent public
      accountants expressed in a written certification thereof delivered to the
      Trustee, to pay at maturity or upon redemption all Securities of that series
      not
      theretofore delivered to the Trustee for cancellation, including principal
      and
      any premium and interest due or to become due to such date of maturity or date
      fixed for redemption, as the case may be, and if the Company shall also pay
      or
      cause to be paid all other sums payable hereunder with respect to such series
      by
      the Company then this Indenture shall thereupon cease to be of further effect
      with respect to such series except for the provisions of Sections 2.03, 2.05,
      2.07, 4.01, 4.02, 4.03 and 7.10, that shall survive until the date of maturity
      or redemption date, as the case may be, and Sections 7.06 and 11.04, that shall
      survive to such date and thereafter, and the Trustee, on demand of the Company
      and at the cost and expense of the Company shall execute proper instruments
      acknowledging satisfaction of and discharging this Indenture with respect to
      such series.

     

    
      	SECTION
              11.02.  	
              DEPOSITED
                MONEYS TO BE HELD IN TRUST.

            

    

     

    All
      moneys
      or Governmental Obligations deposited with the Trustee pursuant to Section
      11.01
      shall be held in trust and shall be available for payment as due, either
      directly or through any paying agent (including the Company acting as its own
      paying agent), to the holders of the particular series of Securities for the
      payment or redemption of which such moneys or Governmental Obligations have
      been
      deposited with the Trustee.

     

    
      	SECTION
              11.03.  	
              PAYMENT
                OF MONEYS HELD BY PAYING AGENTS.

            

    

     

    In
      connection with the satisfaction and discharge of this Indenture all moneys
      or
      Governmental Obligations then held by any paying agent under the provisions
      of
      this Indenture shall, upon demand of the Company, be paid to the Trustee and
      thereupon such paying agent shall be released from all further liability with
      respect to such moneys or Governmental Obligations.

     

    
      	SECTION
              11.04.  	
              REPAYMENT
                TO COMPANY.

            

    

     

    Any
      moneys
      or Governmental Obligations deposited with any paying agent or the Trustee,
      or
      then held by the Company, in trust for payment of principal of or premium or
      interest on the Securities of a particular series that are not applied but
      remain unclaimed by the holders of such Securities for at least two years after
      the date upon which the principal of and any premium or interest on such
      Securities shall have respectively become due and payable, shall be repaid
      to
      the Company upon its written request or (if then held by the Company) shall
      be
      discharged from such trust; and thereupon the paying agent and the Trustee
      shall
      be released from all further liability with re-

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

    spect
      to
      such moneys or Governmental Obligations, and the holder of any of the Securities
      entitled to receive such payment shall thereafter, as an unsecured general
      creditor, look only to the Company for the payment thereof.

     

    
      	SECTION
              11.05.  	
              REINSTATEMENT.

            

    

     

    If
      the
      Trustee or any paying agent is unable to apply any U.S. dollars or Governmental
      Obligations in accordance with Section 11.01 hereof by reason of any order
      of judgment of any court or governmental authority enjoining, restraining or
      otherwise prohibiting such application, then the obligations of the Company
      under this Indenture, and the Securities of that particular series shall be
      revived and reinstated as though no deposit had occurred pursuant to
      Section 11.01 hereof until such time as the Trustee or any paying agent is
      permitted to apply all such money in accordance with Section 11.01 hereof;
      provided, however, that, if the Company makes any payment with respect to any
      Securities of that series following the reinstatement of its obligations, the
      Company shall be subrogated to the rights of the holders of the Securities
      of
      that series to receive such payment from the money held by the Trustee or any
      paying agent.

     

    ARTICLE
      XII

     

    IMMUNITY
      OF INCORPORATORS, STOCKHOLDERS, OFFICERS 
AND DIRECTORS

     

    
      	SECTION
              12.01.  	
              NO
                RECOURSE.

            

    

     

    No
      recourse under or upon any obligation, covenant or agreement of this Indenture,
      or of any Security, or for any claim based thereon or otherwise in respect
      thereof, shall be had against any incorporator, stockholder, officer or
      director, past, present or future as such, of the Company or of any predecessor
      or successor corporation, either directly or through the Company or any such
      predecessor or successor corporation, whether by virtue of any constitution,
      statute or rule of law, or by the enforcement of any assessment or penalty
      or
      otherwise; it being expressly understood that this Indenture and the obligations
      issued hereunder are solely corporate obligations, and that no such personal
      liability whatever shall attach to, or is or shall be incurred by, the
      incorporators, stockholders, officers or directors as such, of the Company
      or of
      any predecessor or successor corporation, or any of them, because of the
      creation of the indebtedness hereby authorized, or under or by reason of the
      obligations, covenants or agreements contained in this Indenture or in any
      of
      the Securities or implied therefrom; and that any and all such personal
      liability of every name and nature, either at common law or in equity or by
      constitution or statute, of, and any and all such rights and claims against,
      every such incorporator, stockholder, officer or director as such, because
      of
      the creation of the indebtedness hereby authorized, or under or by reason of
      the
      obligations, covenants or agreements contained in this Indenture or in any
      of
      the Securities or implied therefrom, are hereby expressly waived and released
      as
      a condition of, and as a consideration for, the execution of this Indenture
      and
      the issuance of such Securities.

     

    ARTICLE
      XIII

     

    MISCELLANEOUS
      PROVISIONS

     

    
      	SECTION
              13.01.  	
              EFFECT
                ON SUCCESSORS AND ASSIGNS.

            

    

     

    All
      the
      covenants, stipulations, promises and agreements in this Indenture contained
      by
      or on behalf of the Company shall bind its successors and assigns, whether
      so
      expressed or not.

     

    
      	SECTION
              13.02.  	
              ACTIONS
                BY SUCCESSOR.

            

    

     

    Any
      act or
      proceeding by any provision of this Indenture authorized or required to be
      done
      or performed by any board, committee or officer of the Company shall and may
      be
      done and performed with like force and effect by 

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    the
      corresponding board, committee or officer of any Person that shall at the time
      be the lawful sole successor of the Company.

     

    
      	SECTION
              13.03.  	
              NOTICES.

            

    

     

    Except
      as
      otherwise expressly provided herein any notice or demand that by any provision
      of this Indenture is required or permitted to be given or served by the Trustee
      or by the holders of Securities to or on the Company may be given or served
      by
      hand delivery, by telecopier or registered or certified mail, postage prepaid,
      return receipt requested addressed (until another address is filed in writing
      by
      the Company with the Trustee), as follows: ANADIGICS, Inc.,
      141 Mt. Bethel Road, Warren, New Jersey 07059, Facsimile No. (908)
      668-5068, Attention: Chief Financial Officer, with copies of any notice of
      an
      Event of Default to Cahill Gordon & Reindel llp,
      80 Pine Street, New York, New York 10005, Facsimile No. (212) 269-5420,
      Attention: Stephen A. Greene, Esq. Any notice, election, request or demand
      by the Company or any Securityholder to or upon the Trustee shall be deemed
      to
      have been sufficiently given or made, for all purposes, if given or made in
      writing by hand delivery, by telecopier or registered or certified mail, postage
      prepaid, return receipt requested, addressed as follows: U.S. Bank Trust
      National Association, 100 Wall Street, Suite 1600, New York, NY 10005, Facsimile
      No. (212) 361-6153, Attention: Corporate Trust Services.

     

    
      	SECTION
              13.04.  	
              NOTICE
                TO HOLDERS OF SECURITIES; WAIVER.

            

    

     

    Except
      as
      otherwise expressly provided herein, where this Indenture provides for notice
      to
      holders of Securities of any event, such notice shall be sufficiently given
      to
      holders of Securities if in writing and mailed, first-class postage prepaid,
      to
      each holder of a Security affected by such event, at the address of such holder
      as it appears in the Security Register, not earlier than the earliest date,
      and
      not later than the latest date, prescribed for the giving of such
      notice.

     

    In
      case by
      reason of the suspension of regular mail service or by reason of any other
      cause
      it shall be impracticable to give such notice to holders of Securities by mail,
      then such notification as shall be made with the approval of the Trustee shall
      constitute sufficient notice to such holder for every purpose hereunder. In
      any
      case where notice to holders of Securities is given by mail, neither the failure
      to mail such notice, nor any defect in any notice mailed to any particular
      holder of a Security shall affect the sufficiency of such notice with respect
      to
      other holders of Securities given as provided herein.

     

    Where
      this
      Indenture provides for notice in any manner, such notice may be waived in
      writing by the Person entitled to receive such notice, either before or after
      the event, and such waiver shall be the equivalent of such notice. Waivers
      of
      notice by holders of Securities shall be filed with the Trustee, but such filing
      shall not be a condition precedent to the validity of any action taken in
      reliance upon such waiver.

     

    
      	SECTION
              13.05.  	
              GOVERNING
                LAW.

            

    

     

    This
      Indenture and each Security shall be deemed to be a contract made under the
      internal laws of the State of New York, and for all purposes shall be construed
      in accordance with the laws of said State, but without giving effect to
      applicable principles of conflicts of law to the extent that the application
      of
      the law of another jurisdiction would be required thereby.

     

    
      	SECTION
              13.06.  	
              EFFECT
                OF HEADINGS AND TABLE OF CONTENTS.

            

    

     

    The
      Article and Section headings herein and the Table of Contents are for
      convenience only and shall not affect the construction hereof.

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

    

     

    
      	SECTION
              13.07.  	
              COMPLIANCE
                CERTIFICATES AND OPINIONS.

            

    

     

    (a)  Upon
      any
      application or demand by the Company to the Trustee to take any action under
      any
      of the provisions of this Indenture, the Company shall furnish to the Trustee
      an
      Officers’ Certificate stating that all conditions precedent provided for in this
      Indenture relating to the proposed action have been complied with and an Opinion
      of Counsel stating that in the opinion of such counsel all such conditions
      precedent have been complied with, except that in the case of any such
      application or demand as to which the furnishing of such documents is
      specifically required by any provision of this Indenture relating to such
      particular application or demand, no additional certificate or opinion need
      be
      furnished.

     

    (b)  Each
      certificate or opinion provided for in this Indenture and delivered to the
      Trustee with respect to compliance with a condition or covenant in this
      Indenture shall include (1) a statement that the Person making such certificate
      or opinion has read such covenant or condition; (2) a brief statement as to
      the
      nature and scope of the examination or investigation upon which the statements
      or opinions contained in such certificate or opinion are based; (3) a statement
      that, in the opinion of such Person, he has made such examination or
      investigation as is necessary to enable him to express an informed opinion
      as to
      whether or not such covenant or condition has been complied with; and (4) a
      statement as to whether or not, in the opinion of such Person, such condition
      or
      covenant has been complied with.

     

    
      	SECTION
              13.08.  	
              PAYMENTS
                ON BUSINESS DAYS.

            

    

     

    Except
      as
      provided pursuant to Section 2.01 pursuant to a Board Resolution, and as set
      forth in an Officers’ Certificate, or established in one or more indentures
      supplemental to this Indenture, in any case where the date of maturity of
      interest or principal of any Security or the date of redemption of any Security
      shall not be a Business Day, then payment of interest or principal (and premium,
      if any) may be made on the next succeeding Business Day with the same force
      and
      effect as if made on the nominal date of maturity or redemption, and no interest
      shall accrue for the period after such nominal date.

     

    
      	SECTION
              13.09.  	
              CONFLICT
                WITH TRUST INDENTURE ACT.

            

    

     

    If
      and to
      the extent that any provision of this Indenture limits, qualifies or conflicts
      with the duties imposed by Section 318(c) of the Trust Indenture Act, such
      imposed duties shall control.

     

    
      	SECTION
              13.10.  	
              COUNTERPARTS.

            

    

     

    This
      Indenture may be executed in any number of counterparts, each of which shall
      be
      an original, but such counterparts shall together constitute but one and the
      same instrument.

     

    
      	SECTION
              13.11.  	
              SEPARABILITY.

            

    

     

    In
      case
      any one or more of the provisions contained in this Indenture or in the
      Securities of any series shall for any reason be held to be invalid, illegal
      or
      unenforceable in any respect, such invalidity, illegality or unenforceability
      shall not affect any other provisions of this Indenture or of such Securities,
      but this Indenture and such Securities shall be construed as if such invalid
      or
      illegal or unenforceable provision had never been contained herein or
      therein.

     

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS
      WHEREOF, the parties hereto have caused this indenture to be duly executed,
      all
      as of the date first written above.

     

     

    ANADIGICS,
      INC.

     

    By:         
      _____________________________________________

               
      Name: 

    Title: 

     

     

    U.S.
      BANK
      TRUST NATIONAL ASSOCIATION,
      as
      Trustee

     

     

    
      By:         
        _____________________________________________

                 
        Name: 

      Title: 

    

    
 

     

     

    -37-

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