Document:

exv10w13

 

EXHIBIT 10.13

OFFICE LEASE

between

BOLINGBROOK INVESTORS, LLC,

an Illinois limited liability company

Landlord

and

ULTA SALON, COSMETICS & FRAGRANCE, INC.,

a Delaware corporation

Tenant

Dated as of April 17, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	1.
	 	CERTAIN PROVISIONS AND DEFINITIONS	 	 	1	 
	2.
	 	GRANT AND ACCEPTANCE OF LEASE	 	 	4	 
	3.
	 	RENT	 	 	4	 
	4.
	 	BASE RENT	 	 	4	 
	5.
	 	ADDITIONAL RENT	 	 	5	 
	6.
	 	USE OF PREMISES	 	 	9	 
	7.
	 	DELIVERY OF POSSESSION; TENANT IMPROVEMENTS	 	 	10	 
	8.
	 	SERVICES	 	 	11	 
	9.
	 	CONDITION AND CARE OF PREMISES	 	 	18	 
	10.
	 	SURRENDER OF PREMISES	 	 	24	 
	11.
	 	HOLDING OVER	 	 	25	 
	12.
	 	RULES AND REGULATIONS	 	 	26	 
	13.
	 	RIGHTS RESERVED TO LANDLORD	 	 	26	 
	14.
	 	ALTERATIONS	 	 	30	 
	15.
	 	ASSIGNMENT AND SUBLETTING	 	 	32	 
	16.
	 	WAIVER OF CERTAIN CLAIMS, INDEMNITY BY TENANT	 	 	36	 
	17.
	 	DAMAGE OR DESTRUCTION BY CASUALTY	 	 	38	 
	18.
	 	EMINENT DOMAIN	 	 	40	 
	19.
	 	DEFAULT; LANDLORD’S RIGHTS AND REMEDIES	 	 	41	 
	20.
	 	RIGHT’S OF MORTGAGEES AND GROUND LESSORS	 	 	45	 
	21.
	 	FURNITURE	 	 	48	 
	22.
	 	INSURANCE AND SUBROGATION	 	 	48	 
	23.
	 	NONWAIVER	 	 	50	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	24.
	 	ESTOPPEL CERTIFICATE	 	 	50	 
	25.
	 	TENANT CORPORATION, LIMITED LIABILITY COMPANY OR PARTNERSHIP AUTHORITY	 	 	51	 
	26.
	 	REAL ESTATE BROKERS	 	 	51	 
	27.
	 	NOTICES	 	 	52	 
	28.
	 	MISCELLANEOUS	 	 	52	 
	29.
	 	RIGHT OF FIRST REFUSAL	 	 	57	 
	30.
	 	RENEWAL OPTIONS	 	 	60	 
	31.
	 	SIGNAGE	 	 	61	 
	32.
	 	LANDLORD	 	 	63	 
	33.
	 	TITLE AND COVENANT AGAINST LIENS	 	 	63	 
	34.
	 	COVENANT OF QUIET ENJOYMENT	 	 	63	 
	35.
	 	EXCULPATORY PROVISIONS	 	 	63	 
	36.
	 	PARKING	 	 	64	 
	37.
	 	CERTAIN COMMON AREAS	 	 	64	 

EXHIBITS

	 	 	 	 	 
	 
	 	A	 	Floor Plan of Building
	 
	 	A-1	 	Site Plan of Project
	 
	 	B	 	Workletter
	 
	 	C	 	Other Definitions
	 
	 	D	 	Rules and Regulations
	 
	 	E	 	Furniture Inventory List
	 
	 	F	 	Form of Lease Estoppel Certificate
	 
	 	G	 	Form of Memorandum Confirming Term
	 
	 	H	 	HVAC Specifications
	 
	 	I	 	Cleaning Specifications
	 
	 	J	 	Form of Subordination, Non-Disturbance and Attornment Agreement
	 
	 	K	 	Form of Landlord’s Waiver and Consent
	 
	 	L	 	Tenant Exterior Building Signage
	 
	 	M	 	Tenant Lobby Signage
	 
	 	N	 	Landlord’s Work

ii

 

OFFICE LEASE

	 	 	 
	DATED AS OF:
	 	April 17, 2007
	 
	 	 
	BETWEEN:
	 	BOLINGBROOK INVESTORS, LLC
	 
	 	an Illinois limited liability company (“Landlord”)
	(Address)
	 	c/o BPG Properties, Ltd.
	 
	 	200 South Michigan Avenue, Suite 210
	 
	 	Chicago, Illinois 60604
	AND:
	 	ULTA SALON, COSMETICS & FRAGRANCE, INC.
	 
	 	a Delaware corporation (“Tenant”)
	(Address)
	 	Windham Lakes Business Park
	 
	 	1275 Windham Drive
	 
	 	Romeoville, IL 60446
	 
	 	Attn:  Sr. Vice President of Real Estate
	 
	 	Tele. No.:  (630) 226-0020
	 
	 	Taxpayer ID No.:  36-3685240

     Landlord and Tenant hereby covenant and agree as follows:

     1. CERTAIN PROVISIONS AND DEFINITIONS. The following provisions and definitions are an
integral part of this Office Lease (herein, this “Lease”):

     (a) “Abatement”: Subject to Section 4(b), Base Rent and Additional Rent shall be
abated with respect to the Phase I Premises (as defined below) for the first Lease Year of
the Initial Term; Base Rent and Additional Rent shall be abated with respect to the Phase II
Premises (as defined below) for the second Lease Year of the Initial Term; and Base Rent and
Additional Rent shall be abated with respect to the Phase III Premises (as defined below)
for the third Lease Year of the Initial Term.

     (b) “Base Rent”: The amounts payable with respect to the Premises for the time periods
indicated, including application of the Abatement, as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Annual Base
	 	 	Annual Base	 	Annual Base	 	Annual Base	 	 	 	 	 	 	 	 	 	Rent Per
	 	 	Rent for	 	Rent for	 	Rent for	 	 	 	 	 	 	 	 	 	Square Foot
	 	 	Phase I	 	Phase II	 	Phase III	 	 	 	 	 	Total	 	of Rentable
	Lease Year	 	Premises	 	Premises	 	Premises	 	Total Annual	 	Monthly	 	Area of the
	Initial Term	 	(39,355 s.f.)	 	(24,806 s.f.)	 	(18,307 s.f.)	 	Base Rent	 	Base Rent	 	Premises
	1
	 	$	0.00	 	 	$	0.00	 	 	$	0.00	 	 	$	0.00	 	 	$	0.00	 	 	$	17.50	 
	2
	 	$	708,390.00	 	 	$	0.00	 	 	$	0.00	 	 	$	708,390.00	 	 	$	59,032.50	 	 	$	18.00	 
	3
	 	$	728,067.50	 	 	$	458,911.00	 	 	$	0.00	 	 	$	1,186,978.50	 	 	$	98,914.88	 	 	$	18.50	 
	4
	 	$	747,745.00	 	 	$	471,314.00	 	 	$	347,833.00	 	 	$	1,566,892.00	 	 	$	130,574.33	 	 	$	19.00	 
	5
	 	$	767,422.50	 	 	$	483,717.00	 	 	$	356,986.50	 	 	$	1,608,126.00	 	 	$	134,010.50	 	 	$	19.50	 
	6
	 	$	787,100.00	 	 	$	496,120.00	 	 	$	366,140.00	 	 	$	1,649,360.00	 	 	$	137,446.67	 	 	$	20.00	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Annual Base
	 	 	Annual Base	 	Annual Base	 	Annual Base	 	 	 	 	 	 	 	 	 	Rent Per
	 	 	Rent for	 	Rent for	 	Rent for	 	 	 	 	 	 	 	 	 	Square Foot
	 	 	Phase I	 	Phase II	 	Phase III	 	 	 	 	 	Total	 	of Rentable
	Lease Year	 	Premises	 	Premises	 	Premises	 	Total Annual	 	Monthly	 	Area of the
	Initial Term	 	(39,355 s.f.)	 	(24,806 s.f.)	 	(18,307 s.f.)	 	Base Rent	 	Base Rent	 	Premises
	7
	 	$	806,777.50	 	 	$	508,523.00	 	 	$	375,293.50	 	 	$	1,690,594.00	 	 	$	140,882.83	 	 	$	20.50	 
	8
	 	$	826,455.00	 	 	$	520,926.00	 	 	$	384,447.00	 	 	$	1,731,828.00	 	 	$	144,319.00	 	 	$	21.00	 
	9
	 	$	846,132.50	 	 	$	533,329.00	 	 	$	393,600.50	 	 	$	1,773,062.00	 	 	$	147,755.17	 	 	$	21.50	 
	10
	 	$	865,810.00	 	 	$	545,732.00	 	 	$	402,754.00	 	 	$	1,814,296.00	 	 	$	151,191.33	 	 	$	22.00	 
	11
	 	$	885,487.50	 	 	$	558,135.00	 	 	$	411,907.50	 	 	$	1,855,530.00	 	 	$	154,627.50	 	 	$	22.50	 
	Renewal Terms. As determined pursuant to Section 30	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

     (c) “Base Year”: 2008

     (d) “Broker”: Colliers Bennett & Kahnweiler, Inc.

     (e) “Building”: The building located at 1000 Remington Boulevard, Bolingbrook,
Illinois.

     (f) “Commencement Date”: The earlier to occur of (i) the date on which Tenant occupies
the Premises for the operation of its business, and (ii) September 1, 2007, which
Commencement Date and other matters shall then be confirmed by the parties by entering into
a “Memorandum Confirming Term” in the form of Exhibit G attached to this Lease.

     (g) “Common Areas”: Those areas of the Building and Land intended for the common,
non-exclusive use of Building tenants, including, without limitation, parking areas,
driveways, sidewalks, loading areas, access roads, corridors, landscaping and planted areas,
and the following areas which are shown on the Floor Plan of Building attached as Exhibit A
to this Lease: the Building cafeteria (the “Cafeteria”), the Building auditorium (the
“Auditorium”) and the Building conference room (the “Conference Room”). The Common Areas
also include a receiving dock area with a minimum of two truck berths (the “Receiving
Dock”), to which Tenant shall at all times have access through a code compliant corridor.

     (h) “Expiration Date”: The date of the day immediately preceding the eleventh
(11th) anniversary of the Commencement Date, unless this Lease and the Term is
earlier terminated or renewed as provided in this Lease.

     (i) “Initial Term”: The period of eleven (11) Lease Years (the “Initial Term”),
beginning on the Commencement Date, and ending on the Expiration Date, (the “Initial Term”)
as provided in this lease.

     (j) “Land”: The parcel(s) of real estate on which the Building and the Project are
located.

     (k) “Lease Year”: The first Lease Year shall commence on the Commencement Date and
shall continue for a period of twelve (12) consecutive calendar months from and after the
Commencement Date, except that if the Commencement Date
shall be other than the first day of a calendar month, the first Lease Year shall
expire at the close of business on the last day of the month in which occurs the first
anniversary of

2

 

the Commencement Date. Each Lease Year after the first Lease Year shall be a
successive period of twelve (12) calendar months.

     (l) “Premises”: The area indicated on Exhibit A on the first and second floors of
Section A of the Building, deemed, for purposes of this Lease, to consist of 82,468 square
feet of Rentable Area, comprised of 39,355 square feet of Rentable Area on the first floor
of the Building (the “Phase I Premises”; 24,806 square feet of Rentable Area (the “Phase II
Premises”), comprised of 4,806 square feet of Rentable Area on the first floor of the
Building (the “First Floor Conference Areas”) and 20,000 square feet of Rentable Area on the
second floor of the Building; provided, however that the Phase II Premises shall not
constitute a part of the Premises until the date of the first (1st) day of the
second Lease Year (the “ Phase II Commencement Date”), and 18,307 square feet of Rentable
Area on the second floor of the Building (the “Phase III Premises”); provided, however that
the Phase III Premises shall not constitute a part of the Premises until the date of the
first (1st) day of the third Lease Year (the “Phase III Commencement Date”).

     (m) “Project”: The Land and the Building, together with any other improvements located
on the Land, all equipment, fixtures, machinery, systems, apparatus and personal property of
Landlord located at or used in connection with the Land or the Building from time to time.

     (n) “Tenant Alterations”: Any alteration, improvements or additions (including
decorations) to the Premises performed or to be performed by or on behalf of Tenant,
including, without limitation, the Tenant’s Work.

     (o) “Tenant’s Proportionate Share”: The percentage determined as described in Exhibit
C. Without limitation of the foregoing, as the date hereof, Tenant’s Proportionate Share is
acknowledged, initially, to be 7.18%, to be increased to 11.71% as of the Phase II
Commencement Date, and to be further increased to 15.05% as of the Phase III Commencement
Date.

     (p) “Tenant’s Work”: Any work to be performed by or on behalf of Tenant to ready the
Premises for initial occupancy by Tenant, as more particularly described in Section 7(b)
hereof and in the Workletter.

     (q) “Term”: The initial Term and any renewal of the Initial Term specifically provided
herein unless earlier terminated as provided in this Lease.

     (r) “Use”: Tenant shall have the right to use the Premises for any of the following
purposes: (i) general office use; (ii) conference and meeting room use; (iii) the giving or
receiving of any type of classes which are related to the operation of an Ulta retail store
or Ulta’s general business operation or otherwise related to training for Ulta personnel,
and which use for classes is in compliance with all Laws; (iv) the creation and/or display
of a mock ULTA retail store, provided that such mock store is not visible from the Common
Areas or the exterior of the Building; (v) the storage of any inventory
or other product of Tenant not for sale to the public; and (vi) such other uses as may
be

3

 

     necessary or incidental to any of the foregoing (including, without limitation, a
kitchenette, lunchroom and vending machines).

     (s) ”Workletter”: The Workletter attached hereto as Exhibit B.

     See Exhibit C and the Workletter for other definitions of terms used herein.

     2. GRANT AND ACCEPTANCE OF LEASE. Landlord hereby leases the Premises to Tenant, and
Tenant hereby accepts and leases the Premises from Landlord to have and to hold during the Term,
subject to the terms and conditions of this Lease, together with the non-exclusive right to use the
Common Areas in accordance with the terms of this Lease. The Premises shall initially be comprised
of the Phase I Premises. As of the Phase II Commencement Date, the Premises shall include the
Phase I Premises and the Phase II Premises. As of the Phase III Commencement Date, the Premises
shall include the Phase I Premises, the Phase II Premises and the Phase III Premises. Landlord
represents that it is the fee owner of the Project.

     3. RENT. Base Rent, Additional Rent, Additional Rent Estimate and all other amounts
becoming due from Tenant to Landlord hereunder (collectively “Rent”) shall be paid in lawful money
of the United States to Landlord at the following address: Colliers Turley Martin Tucker, Attn:
1000 Remington, 4678 World Parkway Circle, St. Louis, MO 63134, or such other address as Landlord
shall designate in writing to Tenant from time to time, without any demand and without any
reduction, abatement, counterclaim, deduction or set-off whatsoever, except as expressly provided
herein, at the times and in the manner hereinafter provided. Unpaid Rent shall bear interest at
the Default Rate from the date due until paid; provided, however, that the first time in any 12
month period that Tenant fails to pay Rent when due, no interest shall be charged unless such
failure continues for ten (10) days after written notice thereof from Landlord. The payment of
Rent hereunder is independent of each and every other covenant and agreement contained in this
lease. Rent shall be prorated for any partial months during the Term.

     4. BASE RENT.

          (a) Monthly Base Rent. Subject to the Abatement, Tenant shall pay Base Rent to
Landlord in equal monthly installments (herein called “Monthly Base Rent”) as set forth in Section
1(b), in advance on the Commencement Date, and on or before the first day of each and every
calendar month during the Term.

          (b) Rent Abatement. Notwithstanding anything herein to the contrary, Monthly Base
Rent and Tenant’s obligation to pay the Tax Adjustment (as hereinafter defined) and the Expense
Adjustment (as hereinafter defined) shall abate with respect to the Phase I Premises for the first
Lease Year of the Initial Term, shall abate with respect to the Phase II Premises for the first
twelve (12) months of the demise of the Phase II Premises beginning on the
Phase II Commencement Date, and shall abate with respect to the Phase III for the first twelve
(12) months of the demise of the Phase III Premises beginning on the Phase III Commencement Date
(the “Abatement Period”) (each full or partial month within the Abatement Period, as applicable, an
“Abatement Month”, and all of such full or partial months, the “Abatement Months”); provided,
however, (i) Tenant shall remain responsible for all other obligations of

4

 

Tenant hereunder during
each of the aforedescribed Abatement Months; (ii) such abatement shall not apply for any Abatement
Month during which Tenant, at any time, is in default under this Lease beyond any applicable cure
period; and (iii) Tenant shall be responsible for the cost of all electricity consumed in the
Premises during the Abatement Period in accordance with Section 8(b).

     5. ADDITIONAL RENT. In addition to paying the Base Rent (but subject to the Abatement),
Tenant shall also pay as additional rent the amounts (collectively “Additional Rent”) determined to
be Tax Adjustment and Expense Adjustment in accordance with this Section 5:

     (a) Computation of Additional Rent. Subject to the Abatement, Tenant shall pay
as Additional Rent for each Calculation Year (as defined in Exhibit C) the following
amounts:

     (i) Tenant’s Proportionate Share of the amount by which the Taxes (as defined
in Exhibit C) for such Calculation Year exceed the Taxes for the Base Year (the “Tax
Adjustment”); plus

     (ii) Tenant’s Proportionate Share of the amount by which Expenses (as defined
in Exhibit C) for such Calculation Year exceed the Expenses for the Base Year (the
“Expense Adjustment”).

Notwithstanding anything to the contrary contained in this Lease, in calculating the Expense
Adjustment for any Calculation Year, the “Controllable Expenses” component of Expenses for said
Calculation Year shall not exceed the “Controllable Expenses” component of Expenses for the Base
Year by more than five percent (5%), on a cumulative, compounded basis. As used herein,
“Controllable Expenses” means Expenses other than the costs of insurance, costs of utilities, union
wages and benefits, management fees and any other Expenses which are outside the reasonable control
of Landlord.

     (b) Payments of Additional Rent; Additional Rent Estimate; Projections.
Beginning on January 1, 2009, and throughout the Term thereafter, and subject to the
Abatement, Tenant shall pay Additional Rent to Landlord in the manner hereinafter provided.
The aggregate of payments required to be made by Tenant on account of Additional Rent for
any Calculation Year until actual Additional Rent is determined is herein called “Additional
Rent Estimate”.

     (i) Landlord may, at any time and from time to time prior to the first
Calculation Date and during the Term, deliver to Tenant a written notice or notices
(“Projection Notice”) setting forth:

     (A) Landlord’s reasonable estimates, forecasts or projections
(collectively, the “Projections”) of any or all of Taxes and Expenses for
such Calculation Year, and

     (B) Tenant’s Additional Rent Estimate (setting forth the Expense
Adjustment component and Tax Adjustment component

5

 

separately) based upon the
Projections, being the Tenant’s Proportionate Share of the Projections.

     (ii) On or before the first (1st) day of the next calendar month which is at
least thirty (30) days after Landlord’s service of a Projection Notice, and on or
before the first day of each month thereafter, Tenant shall pay to Landlord
one-twelfth (1/12) of the Additional Rent Estimate shown in the Projection Notice.
On or before the first (1st) day of the next calendar month which is at least thirty
(30) days after Landlord’s service of a Projection Notice, to bring Tenant’s
payments of Additional Rent Estimate current, Tenant shall also pay Landlord the
amount set forth in the Projection Notice, which shall equal the Additional Rent
Estimate shown in the Projection Notice less (A) any previous payments on account of
Additional Rent Estimate made for such Calculation Year, and (B) total monthly
installments on account of Additional Rent Estimate not yet due and payable for the
remainder of such Calculation Year. Until such time as Landlord furnishes a
Projection Notice for a Calculation Year, Tenant shall pay to Landlord a monthly
installment of Additional Rent Estimate on the first day of each month equal to the
latest monthly installment of Additional Rent Estimate.

     (c) Readjustments.

     (i) Following the end of each Calculation Year and after Landlord shall have
determined the amount of Expenses to be used in calculating the Expense Adjustment
for such Calculation Year, Landlord shall deliver to Tenant a statement in
reasonable detail setting forth the Expenses for the applicable Calculation Year and
the calculation of Tenant’s Expense Adjustment for such Calculation Year
(“Landlord’s Expense Statement”). Landlord shall endeavor to deliver Landlord’s
Expense Statement by May 1 of each year. Landlord’s Expense Statement shall also
set forth the Expenses for the Base Year. If the actual Expense Adjustment owed for
such Calculation Year exceeds the Expense Adjustment component of the Additional
Rent Estimate paid by Tenant during such Calculation Year, then Tenant shall, within
thirty (30)
days after receipt of Landlord’s Expense Statement, pay to Landlord an
amount equal to the excess of the actual Expense Adjustment over the Expense
Adjustment component of the Additional Rent Estimate paid by Tenant during such
Calculation Year. If the Expense Adjustment component of the Additional Rent
Estimate paid by Tenant during such Calculation Year exceeds the Expense Adjustment
owed for such Calculation Year, then, provided that Tenant is not then in Default
under this Lease, Landlord shall credit such excess to Additional Rent next coming
due and payable after the date of Landlord’s Expense Statement, until such excess
has been exhausted (provided further, that if Tenant is then in Default, then
Landlord
may first offset such excess against any rental or other damages due and owing
from Tenant resulting from any such existing Default of Tenant under this Lease).
If this Lease shall expire or be terminated prior to full application of such
excess, Landlord shall pay to Tenant, within thirty (30) days after expiration or
termination of this Lease (or, with respect to any such excess attributable to the
Calculation Year in which this Lease terminates or expires, then within thirty (30)

6

 

days after delivery of the Landlord’s Expense Statement applicable thereto), the
balance thereof not theretofore applied against Additional Rent and not reasonably
required for payment of Rent for the Calculation Year in which the Lease expires,
subject to Tenant’s obligations under Section 5(e) hereof, provided Tenant is not
then in Default under this Lease (and if Tenant is then in Default, then Landlord
may first offset such excess against any rental or other damages due and owing from
Tenant resulting from any such existing default of Tenant under this Lease).

     (ii) Following the end of each Calculation Year and after Landlord shall have
determined the actual amount of Taxes to be used in calculating the Tax Adjustment
for such Calculation Year, Landlord shall deliver to Tenant a statement in
reasonable detail (including copies of relevant tax bills) setting forth the Taxes
for the applicable Calculation Year and the calculation of Tenant’s Tax Adjustment
for such Calculation Year (“Landlord’s Tax Statement”). Landlord’s Tax Statement
shall also set forth the Taxes for the Base Year. If the actual Tax Adjustment owed
for such Calculation Year exceeds the Tax Adjustment component of the Additional
Rent Estimate paid by Tenant during such Calculation Year, then Tenant shall, within
thirty (30) days after the date of Landlord’s Tax Statement, pay to Landlord an
amount equal to the excess of the actual Tax Adjustment over the Tax Adjustment
component of the Additional Rent Estimate paid by Tenant during such Calculation
Year. If the Tax Adjustment component of the Additional Rent Estimate paid by
Tenant during such Calculation Year exceeds the Tax Adjustment owed for such
Calculation Year, then, provided that Tenant is not then in Default under this
Lease, Landlord shall immediately credit such excess to Additional Rent next coming
due and payable after the date of Landlord’s Tax Statement, until such excess has
been exhausted (provided further, that if Tenant is then in Default, then Landlord
may first offset such excess against any rental or other damages due and owing from
Tenant resulting from any such existing Default of Tenant under this Lease). If
this Lease shall expire or be terminated prior to full application of such excess,
Landlord shall pay to Tenant, within thirty (30) days after expiration or
termination of this Lease (or, with respect to any such excess attributable to the
Calculation Year in which this Lease terminates or expires, then within thirty (30)
days after delivery of the Landlord’s Tax Statement applicable thereto), the balance
thereof not theretofore applied against Rent and not reasonably required for payment
of Rent for the Calculation Year in which the Lease expires, subject to Tenant’s
obligations under Section 5(e) hereof, provided Tenant is not then in Default under
this Lease (and if Tenant is then in Default, then Landlord may first offset such
excess against any rental or other damages due and owing from Tenant resulting from
any such existing Default of Tenant under this Lease).

     (d) Books and Records. Landlord shall maintain books and records showing Taxes
and Expenses actually incurred by Landlord in accordance with sound accounting and
management practices (subject to adjustments thereto expressly contemplated by this lease,
such as in the case of a so-called gross-up in variable Expenses under Section 11(b) of
Exhibit C hereto, and subject to other modifications thereto adopted by Landlord at

7

 

the
Building). Landlord shall maintain such books and records as to a given Calculation Year
for at least two calendar years after said Calculation Year. Tenant and its representative
(which representative shall be an independent third party public accountant licensed to do
business in the State of Illinois and reasonably acceptable to Landlord) shall have the
right, at Tenant’s expense, to audit and/or otherwise examine such books and records
relative to Taxes and Expenses upon reasonable prior notice and during normal business
hours, at an office located within the continental United States, at any time within one
hundred eighty (180) days following Tenant’s receipt of Landlord’s Expense Statement (as it
relates to an examination of Expenses) or Landlord’s Tax Statement (as it relates to an
examination of Taxes) provided for in Section 5(c). Unless Tenant shall take written
exception to any item of Taxes or Expenses, specifying in detail the reasons for such
exception as to a particular item within one hundred eighty (180) days after Tenant’s
receipt of Landlord’s Expense Statement or Landlord’s Tax Statement (as the case may be),
Landlord’s Expense Statement and Landlord’s Tax Statement, as applicable, shall be
considered as final and accepted by Tenant. If and to the extent that Tenant engages a
representative (as described above in this Section 5(d)) to audit and/or inspect Landlord’s
records pursuant to this Section 5(d), then prior to such audit and/or inspection Tenant
shall cause such representative to execute and deliver to Landlord a commercially reasonable
form of confidentiality agreement relative to maintaining the confidentiality of all
information obtained in the course of any such audit and/or inspection. Tenant shall not
retain its representatives on a contingent fee basis. All information received and/or
reviewed by Tenant or any representative retained by Tenant to conduct such review is
confidential information of Landlord and will not be disclosed by Tenant (or its agents or
auditors) to any third parties, including other tenants in the Building, and Tenant shall
require its agents, attorneys and accountants to enter into a confidentiality agreement with
Landlord agreeing to the aforesaid confidentiality requirements. Notwithstanding anything
to the contrary contained herein, Tenant may disclose confidential information as required
by deposition, interrogatory, request for documents, subpoena or similar legal process or as
otherwise required to pursue or defend against any claims or legal proceedings. Any breach
by Tenant of such confidentiality requirements shall constitute a Default by Tenant under
this lease and shall immediately afford Landlord all rights and remedies described in
Section 19 hereof; provided, however, that if no material damage or loss has been, or is
likely to be, suffered by Landlord as a result of such breach by Tenant, and if the breach
in question could be remedied by Tenant so as to avoid any such material damage or loss,
then such breach shall not constitute a Default and Landlord shall give Tenant written
notice of such breach and a reasonable period of time under the circumstances to cure such
default before such breach is deemed a Default.

               In the event any such audit conducted by Tenant’s representatives (herein, a “Tenant Audit”)
determines that either (1) Landlord’s Expense Statement overstated Tenant’s Additional Rent
attributable to such items from the actual amount so required hereunder for any
Calculation Year by an amount in excess of four percent (4%), or (2) Landlord’s Tax Statement
overstated Tenant’s Additional Rent attributable to such items from the actual amount so required
hereunder for any Calculation Year by an amount in excess of four percent (4%), then Landlord shall
be responsible for the payment of all reasonable out-of-pocket audit fees incurred by Tenant under
this Section 5(d) relative to the audit of such Landlord’s Expense Statement or

8

 

Landlord’s Tax
Statement (as the case may be), which payment shall be due within thirty (30) days after Tenant’s
demand therefor. In the event any such Tenant Audit does not result in such a determination or
final resolution that Landlord’s Expense Statement or Landlord’s Tax Statement, as the case may be,
overstated Tenant’s Additional Rent attributable to such items for such Calculation Year by more
than four percent (4%), then Tenant shall be responsible for all fees incurred by Tenant in
connection with the Tenant Audit. Notwithstanding any exception made by Tenant and/or its
representatives, Tenant shall pay Landlord the full amount of its Additional Rent Estimate and its
Additional Rent as determined by Landlord, subject to readjustment at such time as any such
exception may be resolved in favor of Tenant (i.e., either through mutual agreement of the parties,
or based on a final court order in Tenant’s favor).

     (e) Proration and Survival. With respect to any Calculation Year which does
not fall entirely within the Term, Tenant shall be obligated to pay as Additional Rent for
such Calculation Year only a pro rata share of Additional Rent as hereinabove determined,
based upon the number of days of the Term falling within the Calculation Year. Following
expiration or termination of this lease, Tenant shall pay any Additional Rent due to
Landlord pursuant to and in accordance with Section 5(c) within thirty (30) days after
Tenant’s receipt of Landlord’s Expense Statement or Landlord’s Tax Statement (as the case
may be). Without limiting other obligations of Landlord or Tenant which survive the
expiration or termination of this Lease, the obligations of Landlord or Tenant (as the case
may be) to pay or rebate Additional Rent as provided for in this Section 5 shall survive the
expiration or earlier termination of this Lease. No interest or penalties shall accrue on
any amounts which Landlord is obligated to credit or pay to Tenant by reason of this Section
5, unless Landlord does not pay amounts which are required to be paid to Tenant under this
Section 5 (i.e., as opposed to being credited against Rent) as and when due hereunder, which
failure continues for thirty (30) days after Tenant’s demand therefor, in which case such
amounts so due Tenant shall, from and after such 30-day period and through the date of
payment thereof to Tenant, accrue interest at the annual Default Rate hereunder.

     (f) No Decrease in Base Rent. In no event shall any adjustment of Additional
Rent result in a decrease of the Base Rent payable hereunder.

     (g) No Representation or Warranty. Tenant acknowledges that neither Landlord,
nor any of its respective agents or employees, has made or does hereby make any
representation or warranty whatsoever to Tenant as to the amount of Taxes, Expenses, Tax
Adjustment or Expense Adjustment or any component thereof which may become payable during
the Term.

     6. USE OF PREMISES.

          (a) Use. Tenant shall use and occupy the Premises as set forth in Section 1(q) hereof
only and for no other use or purpose. Tenant shall comply with all rules and regulations described
in Exhibit D attached hereto, and with all reasonable modifications and additions thereto made and
adopted by Landlord from time to time for the Building as described in Section 12. The following
shall apply to Landlord’s rules and regulations described in Exhibit D and any other rules,
regulations, directives, controls, procedures, measures, orders or other

9

 

requirements promulgated
by Landlord and governing the Project and which are described in any other provision of this Lease
and the Exhibits attached to this Lease, including the Workletter (all of the foregoing, including
any modifications and additions thereto, “Rules and Regulations”): (i) Landlord shall not
discriminate against Tenant in the enforcement of Rules and Regulations, (ii) the Rules and
Regulations shall not be enforceable against Tenant until Tenant has been given reasonable prior
written notice of such Rules and Regulations; and (iii) the Rules and Regulations shall not
materially and adversely affect Tenant’s rights under this Lease.

               (b) Compliance with Requirements. Tenant shall comply with all applicable Laws
(hereinafter defined) now or hereafter in force, and with all applicable insurance underwriters
regulations and other requirements, respecting all matters of occupancy, condition or maintenance
of the Premises, whether any of the foregoing shall be directed to Tenant or Landlord and whether
imposed on the owner or occupant of the Premises. Notwithstanding the foregoing, Tenant shall have
no obligation to perform any alterations to the Premises required by applicable Laws unless such
requirement is triggered by Tenant’s particular use of the Premises or the particular nature of
Tenant’s business operation as distinguished from general office use. Tenant shall not make or
permit any use of the Premises or the Building, or do or permit to be done anything in or upon the
Premises or the Building, or bring or keep anything in the Premises or the Building, which directly
or indirectly is forbidden by any of the foregoing or which may be dangerous to persons or
property, or which may invalidate or increase the rate of insurance on the Building (and Landlord
shall give Tenant notice if Landlord becomes aware of any use within the Premises which may
invalidate or increase the rate of insurance), its appurtenances, contents or operations, or which
would tend to create or continue a nuisance or which is contrary to or prohibited by the terms and
conditions of this lease. Landlord shall comply with all applicable Laws and insurance regulations
and requirements pertaining to its ownership and operation of the Project.

     7. DELIVERY OF POSSESSION; TENANT IMPROVEMENTS.

          (a) Delivery of Possession. Landlord shall use good faith efforts to deliver
possession of the Premises to Tenant promptly following the full execution of this Lease and
Tenant’s delivery of any security deposit required under this Lease for Tenant to commence and
proceed with the Tenant’s Work (as defined in Section 7(b) below) therein. If Landlord shall be
unable, due to a fire or other casualty, or for any other reason beyond Landlord’s reasonable
control, to deliver possession of the Premises to Tenant at such time, Landlord shall not be liable
or responsible for any claims, damages, or liabilities in connection therewith or by reason
thereof, and such failure shall not affect the validity of this lease or otherwise affect the
obligations of Tenant hereunder or the expiration date of the Initial Term hereof; provided,
however, in such event, Landlord shall continue to use commercially reasonable efforts to
deliver possession of the Premises as soon thereafter as reasonably practicable. Tenant’s use
and occupancy of the Premises, and any work performed by or on behalf of Tenant prior to the
Commencement Date, shall be subject to, and in compliance with, all the terms and conditions of
this lease, except the obligation to pay Base Rent, Tax Adjustment and the Expense Adjustment.

          (b) Tenant’s Work. Tenant shall, at its sole cost and expense (subject to application
of the “Allowance”, as described in the Workletter), perform such work as may be necessary or
desired by Tenant to improve the Premises for initial occupancy, all subject to and

10

 

in accordance
with the provisions of this lease, including, without limitation, the provisions of the Workletter
attached hereto as Exhibit B. All work referred to in this subparagraph, which work is constructed
on or before the one (1) year anniversary of the Commencement Date as to the Phase I Premises, the
one (1) year anniversary of the Phase II Commencement Date as to the Phase II Premises, and the one
(1) year anniversary of the Phase III Commencement Date as to the Phase III Premises (or which work
is identified by Tenant, in the Plans submitted from time to time under the Workletter, as being
part of such Tenant’s Work, but which items are not completed as of such one (1) year
anniversaries, respectively, for reasons outside of Tenant’s reasonable control, and are instead
completed as soon thereafter as reasonably practicable), is hereinafter collectively referred to
herein (and in the Workletter) as “Tenant’s Work”. Tenant’s Work shall be performed only in
accordance with the terms and conditions hereof, including the terms and conditions set forth in
the Workletter.

          (c) Memorandum Confirming Term. Within ten (10) business days following Landlord’s
request therefor, which request shall be made by notice to Tenant given at any time following
Landlord’s determination of the actual “Commencement Date” hereunder, Landlord and Tenant shall
enter into a “Memorandum Confirming Term” in the form of Exhibit G attached hereto.

     8. SERVICES.

          (a) General Description of Services. So long as this lease is in full force and
effect and Tenant is not in Default, Landlord shall furnish the following services (the cost of
which may be included in Expenses):

          (i) Air conditioning and heat consistent with the specifications and levels set forth
in Exhibit H attached hereto, Monday through Friday from 8:00 A.M. to 6:00 P.M. and
Saturdays from 8:00 A.M. to 1:00 P.M., Sundays and Holidays excepted. The aforementioned
specifications and levels of heating and air conditioning are based upon an occupancy
density of not more than one person per one hundred square feet of floor area, and subject
to adjustments pursuant to mandatory and voluntary compliance by Landlord with Laws and
guidelines relating to energy use.

          (ii) Domestic water in common with other tenants for drinking, lavatory and toilet
purposes drawn through fixtures installed by Landlord within the core of the Building, and
cold water to the core on the floor where the Premises is located for use by Tenant in any
internal kitchen areas at the Premises, and warm water in common
with other tenants for lavatory purposes from the same regular Building supply and
fixtures.

          (iii) Janitor and cleaning service in and about the Premises and the Lobby and interior
Common Areas within the Building as set forth in Exhibit I attached hereto, five (5) days a
week, except weekends and Holidays. Tenant shall not provide or use any other janitor or
cleaning service; provided, however, that Tenant shall have the right, at Tenant’s sole cost
and expense, to contract directly with Landlord’s janitor or cleaning service for additional
cleaning services within the Premises.

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          (iv) Landlord shall initially cause to be provided an automobile patrol security
service for the Building during evening hours. Landlord shall at all times provide manned
security for the Project.

          (v) Landlord agrees that, within approximately ninety (90) days following the
Commencement Date, the exterior doors of the Building and, at Landlord’s option, the
entrance ways to other Common Areas, shall be equipped with a card key access system for
Tenant’s use, subject to the Rules and Regulations set forth on Exhibit D attached hereto.
The system is a GE secure perfect/Interlogix program and uses GE multi-card readers.
Landlord makes no representations or warranties (and hereby expressly disclaims any
representations and warranties, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE AND ANY WARRANTY OF MERCHANTABILITY) regarding the suitability of any key
card access system for Tenant’s particular purposes. In no event shall Landlord be
responsible or liable to Tenant or its employees for any unauthorized entry upon the
Premises or for any failure of the access system to prevent such entry. Until such card key
access system has been installed and available to Tenant, Tenant shall be provided with keys
for access to and from the Building and the Premises. Tenant may, at its option, install a
card key access system to the Premises which is compatible with the Building system. If
such system is not compatible with the Building system, Tenant shall provide Landlord with a
hard key override to Tenant’s system, at Tenant’s cost.

          (vi) Landlord shall cause the Building parking areas to be illuminated from dusk to
dawn on a daily basis. Landlord shall cause the interior Common Areas to be illuminated in
accordance with all applicable Laws.

          (vii) Landlord shall have no obligation to maintain the plants in the atrium within the
Premises. Tenant may, at its election, maintain said plants at its own cost or remove said
plants.

          (b) Electricity. Except as hereinafter provided, electricity shall not be furnished
by Landlord, but shall be furnished by the electric utility company serving the area. Tenant shall
receive such service direct from such utility company at Tenant’s cost, and shall permit Landlord’s
wire and conduits, to the extent available, suitable and safely capable, to be used for such
purposes. Unless the cost of electricity consumed in the Premises is at any time separately
metered as hereinbelow provided, Tenant shall pay to Landlord an annual amount for
the cost of Tenant’s consumption of electricity for overhead lighting and outlets. Such
amount shall initially equal $1.00 per square foot of the Rentable Area of the Premises, and shall
be paid in equal monthly installments on the first day of each month during the Term (so long as
the Premises are not separately metered for electricity). Landlord shall have the right from time
to time to increase such annual amount (and the monthly installments) to reflect increases in
Landlord’s cost of electricity from and after the date of this lease. Notwithstanding anything
contained in this Section 8(b) to the contrary, at Landlord’s sole discretion, Landlord, at
Landlord’s cost, may install an electrical submeter in the Premises, and, in such event, Tenant
shall make all necessary arrangements with the utility company for paying for electric current
furnished by it to Tenant, and Tenant shall pay for all charges for electric current consumed on

12

 

the Premises during Tenant’s occupancy thereof. Tenant shall make no alterations or additions to
the electric equipment or systems in the Premises or the Building without the prior written consent
of Landlord in each instance. Tenant shall not install in the Premises any equipment which
requires electrical current of more than 6 watts per square foot of Rentable Area in the Premises,
and Tenant shall ascertain from Landlord the maximum amount of load or demand for or use of
electrical current which can be accommodated or permitted in the Premises, taking into account the
capacity of the electric feeders, risers, conduits, wiring and other facilities and equipment, the
Building and Premises and the needs of other tenants (both present and future) of the Building, and
Tenant shall not in any event connect a greater load than such safe capacity. Tenant also agrees
to purchase from Landlord or its agents, as Landlord shall direct, at competitive, market rate
prices, all lamps, bulbs, ballasts and starters used in the Premises during the Term. Landlord
shall replace, as necessary, all lamps, ballasts, bulbs and starters in the Lobby, Receiving Docks
and other Common Areas. Tenant covenants and agrees that at all times its use of electric current
shall never exceed the capacity of the feeders to the Building or the risers or wiring installed
thereon. Notwithstanding anything to the contrary contained in this Lease, Landlord and Tenant
have agreed that Landlord shall separately meter the Premises for electrical use and Landlord and
Tenant shall share the cost of installing such separate metering, 50%-50%, provided, however, that
Tenant’s maximum obligation for its share of such cost shall be $37,500.00. Landlord shall
complete such separate metering by September 1, 2007. Tenant shall then pay to Landlord, as and
when Landlord receives the monthly electrical bills for the Building, the billed, separately
metered charge for Tenant’s electrical use. Notwithstanding anything to the contrary contained
herein, Tenant shall have the right (but in no event shall Tenant be obligated) to install, operate
and maintain, at Tenant’s sole cost and expense, one or two generators in a location within the
Project mutually agreeable to Landlord and Tenant. The method of installation, and plans for such
installation, shall be subject to the prior written approval of Landlord, not to be unreasonably
withheld.

               (c) Telecommunications. Telephone and telecommunications services shall not be
furnished by Landlord. Landlord shall have exclusive access to the Building telephone riser cable
and all other telephone or communications cables or wiring, junction boxes, wire conduits and
associated facilities and equipment serving the Premises and other premises in the Building, to the
point of connection to Tenant’s communications equipment and all telephone and communications
closets in the Building; provided, however, that upon reasonable prior notice thereof to Landlord,
Landlord shall provide such reasonable access to such cables or other equipment or facilities as
may be necessary for Tenant to complete its Tenant’s Work or to repair or maintain Tenant’s
telephone or telecommunications services. All telephone and other telecommunications connections
which Tenant may desire shall be first approved by Landlord in
writing (which approval shall not be unreasonably withheld), before the same are installed,
and the location of all wires and the work in connection therewith shall be performed by
contractors approved by Landlord (which approval shall not be unreasonably withheld) and shall be
subject to the direction of Landlord; provided, however, that Landlord hereby consents to Tenant’s
performance of such telephone and telecommunications work that shall form a part of Tenant’s Work,
subject to Tenant’s compliance with Exhibit B, and provided, further, that Tenant may perform
ordinary repair and maintenance of its telephone and telecommunications systems within the interior
of the Premises without Landlord’s prior consent. Tenant reserves the right to designate the
entity or entities providing telephone or other communication cable installation, operation, repair
and maintenance for the Premises subject to obtaining Landlord’s prior consent

13

 

thereto (which
consent shall not be unreasonably withheld, conditioned or delayed so long as the Tenant’s use of
such service provider would not, in Landlord’s reasonable judgment, adversely affect operations at
the Building or otherwise result in any increase in Landlord’s costs or expenses); provided that
Landlord shall have the right to impose reasonable controls and to reasonably restrict and control
access to telephone cabinets and risers at the Building and to require all such access to be
coordinated with the Building’s riser manager. Tenant agrees to abide by any and all rules and
regulations established by Landlord from time to time relative to telephone riser management at the
Building (provided that Landlord shall not discriminate in its enforcement of such rules and
regulations as and to the extent provided in Section 12 below). Tenant shall be responsible for
and shall pay all costs incurred in connection with the installation of telephone or other
telecommunications cables and related wiring in the Premises or Building, including, without
limitation, any hook-up, access and maintenance fees related to the installation of such wires and
cables in the Premises or Building and the commencement of service therein, and the maintenance
thereafter of such wire and cables; and there shall be included in Expenses for the Building all
installation, hook-up or maintenance costs incurred by Landlord in connection with telephone or
other telecommunications cables and related wiring in the Building which are not allocable to any
individual users of such service but are allocable to the Building generally. If Tenant fails to
maintain all telephone or other telecommunications cables and related wiring in the Premises and
such failure affects or interferes with the operation or maintenance of any other telephone or
other telecommunications cables or related wiring in the Building, Landlord or any vendor hired by
Landlord may, upon reasonable prior notice, enter into and upon the Premises forthwith and perform
such repairs, restorations or alterations as Landlord deems necessary in order to eliminate any
such interference (and Landlord may recover from Tenant all of Landlord’s costs in connection
therewith and Landlord shall have no liability to Tenant by reason thereof). Upon the Expiration
Date or earlier termination of this lease or Tenant’s right to possession of the Premises, Tenant
agrees, to the extent required by Laws, to remove all telephone and other telecommunications,
cables and related wiring installed by Tenant. Tenant agrees that neither Landlord nor any of its
agents or employees shall be liable to Tenant, or any of Tenant’s employees, agents customers or
invitees or anyone claiming through, by or under Tenant, for any damages, injuries, losses,
expenses, claims or causes of action because of any interruption, diminution, delay or
discontinuance at any time for any reason in the furnishing of any telephone or other
telecommunications service to the Premises and the Building (except due to the intentional, bad
faith conduct of Landlord or its agents or employees), provided that the foregoing is subject, in
any event, to the terms of Section 16(f) below). Notwithstanding anything to the contrary
contained in this Lease, Tenant shall have the right (but in no event shall Tenant be obligated) to
install, operate and maintain, at Tenant’s sole
cost and expense, a telco room (the “Telco Room”) within the Premises, for Tenant’s exclusive
use, which Telco Room shall contain Tenant’s telephone and network communications equipment.
Tenant shall install such Telco Room in a location mutually agreed upon by Landlord and Tenant.
The installation of the Telco Room shall be included in the Plans for the Tenant’s Work pursuant to
the Workletter and subject to Landlord’s prior written approval, not to be unreasonably withheld.
Landlord shall have reasonable access to the Telco Room upon reasonable prior written or oral
notice thereof to Tenant.

               (d) Extra or Additional Services. Tenant may request Landlord to provide services
which are extra or additional services to those described in Section 8(a), by delivery to Landlord
of an advance written request therefor. If Landlord shall agree to so provide any such

14

 

services
which are extra or in addition to those services described in Section 8(a), Landlord shall notify
Tenant thereof and provide Tenant with a rate quote for such additional service. If Tenant
notifies Landlord in writing of its agreement with such rate quote, then Landlord shall provide
such service to Tenant and Tenant shall pay for such service in the amount of the rate quote. If
Tenant does not promptly notify Landlord of Tenant’s agreement with such rate quote, Landlord shall
have no obligation to provide the requested additional service. All charges for any such extra or
additional services so provided by Landlord shall be deemed to be additional Rent hereunder and
shall be due and payable within thirty (30) days after Tenant receives Landlord’s bill therefor, or
in installments as may be designated by Landlord to Tenant in writing. If Tenant fails to pay when
due Landlord’s proper charges for any such extra or additional services, Landlord shall have the
right, in addition to all other rights and remedies available to Landlord, to discontinue
furnishing any such extra or additional services for which Tenant has failed to pay.
Notwithstanding anything to the contrary herein or in this Section 8, but subject to the terms of
this Lease regarding any work performed by or on behalf of Tenant, Tenant, at Tenant’s sole cost
and expense, shall have the right at any time to contract directly with a third party contractor
for any additional services not described in Section 8(a) which Tenant desires to utilize during
the Term (including, without limitation, with a third party vendor (including, without limitation,
Iron Mountain) for paper shredding services (which services shall include, without imitation, the
placement, maintenance and removal of shredding receptacle bins to be located throughout the Lobby
and Premises)). If Landlord discontinues any such extra or additional services as provided in this
Section 8(d), no such discontinuance shall be deemed an eviction or disturbance of Tenant’s use of
the Premises or render Landlord liable for damages or relieve Tenant from performance of Tenant’s
obligations under this lease. Without limiting the foregoing, if Tenant desires air conditioning
or heat during times or on days on which Landlord is not required to provide such service pursuant
to Section 8(a)(i) above, Landlord shall provide such service to Tenant provided that (i) Tenant
notifies Landlord on or before 5:00 p.m. on any business day on which Tenant desires air
conditioning or heat after hours on such business day, or before 5:00 p.m. on the business day
immediately preceding any Holiday or weekend day for which Tenant desires such service, and (ii)
Tenant shall pay Landlord, Landlord’s then after-hours HVAC charges in connection with such
after-hours service. Landlord agrees that, as of the Commencement Date, Landlord’s established
rate for after-hours HVAC is $85.00 per hour, per 40,000 square feet, which hourly rate may
increase consistent with increases in HVAC costs incurred by Landlord subsequent to the
Commencement Date.

               (e) Holidays. For purposes of this Section 8, “Holidays” means New Year’s Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and any
other day designated by Landlord customarily designated as a holiday by landlords operating
Comparable Buildings (as defined in Exhibit C).

               (f) Interruption of Services. Tenant agrees that neither Landlord, nor any of
Landlord’s constituent members, nor any of their respective beneficiaries, agents, partners or
employees, shall be liable for damage or injury to person, property or business or for loss or
interruption of business, or for any other matter, in the event there is any failure, delay,
interruption or diminution in furnishing any service. No such failure, delay, interruption or
diminution shall be deemed to constitute an eviction or disturbance of Tenant’s use or possession
of the Premises, in whole or in part, actual or constructive, nor entitle Tenant to any claim for
set-off, abatement (except as hereinafter provided in this Section 8(f)) or reduction of Rent, nor

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render Landlord liable for damages, nor relieve Tenant from the performance of or affect any of
Tenant’s obligations under this lease. Notwithstanding anything to the contrary contained in this
Section 5.E., if: (i) Landlord ceases to furnish any service in the Building for a period in
excess of five (5) consecutive business days after Tenant notifies Landlord of such cessation; (ii)
such cessation does not arise as a result of an act or omission of Tenant or its agents, employees
or invitees; (iii) such cessation is not caused by a fire or other casualty (in which case Section
17 shall control); (iv) the restoration of such service is reasonably within the control of
Landlord; and (v) as a result of such cessation, the Premises, or a material portion thereof, is
rendered untenantable and Tenant in fact ceases to use the Premises, or a material portion thereof,
then Tenant, as its sole remedy, shall be entitled to receive an abatement of Base Rent and
Additional Rent payable hereunder during the period beginning on the sixth (6th) consecutive
business day of such cessation and ending on the day when the service in question has been
restored. In the event the entire Premises has not been rendered untenantable by the cessation in
service, the amount of abatement that Tenant is entitled to receive shall be prorated based upon
the percentage of the Premises so rendered untenantable and not used by Tenant.

               (g) Tenant’s Cooperation. Tenant agrees to use commercially reasonable efforts to
cooperate fully with Landlord, at all times, in abiding by all reasonable regulations and
requirements which Landlord may prescribe for the proper functioning and protection of all
utilities and services reasonably necessary for the operation of the Premises or the Project.
Landlord and its contractors shall have reasonable free access to any and all mechanical
installations in the Premises at all reasonable times and upon reasonable prior written or oral
notice to Tenant (provided that no such notice or reasonable time requirement shall be required in
the case of an emergency so long as Landlord notifies Tenant of the entry and the work performed by
Landlord as soon as possible thereafter); provided, however, that Landlord shall use commercially
reasonable efforts not to unreasonably interfere with Tenant’s use of the Premises, and Landlord,
at its sole cost and expense (but subject to the terms of Section 16), shall repair any damage to
the Premises or any of Tenant’s personal property, furniture or trade fixtures due to such entry by
Landlord or Landlord’s contractors. Tenant agrees that there shall be no construction of
partitions or other obstructions which might interfere with the moving of the servicing equipment
of Landlord to or from the enclosures containing said installations. Tenant further agrees that
neither Tenant nor its employees, agents, licensees, invitees or contractors shall at any time
tamper with, adjust or otherwise in any manner adversely affect Landlord’s mechanical installations
in the Premises or the Project, except as may be required in order for Tenant to complete the
Tenant’s Work or any other Tenant Alteration or for Tenant to perform any of its repair obligations
set forth in Section 9(b) hereof.

               (h) Supplemental Heating or Cooling. Whenever, in Landlord’s reasonable judgment,
Tenant’s use or occupation of the Premises, including lighting, personnel, heat generating machines
or equipment, or airborne emissions of smoke or other particulates, individually or cumulatively,
causes the design loads for the system providing heat and air-cooling to be exceeded, or otherwise
affects adversely the temperature, humidity or air quality otherwise maintained by the heating,
ventilating and air handling or conditioning system in the Premises or the Building, Landlord may,
following written notice thereof to Tenant and Tenant’s failure to remedy the situation causing
such conditions within thirty (30) days following such notice (or such longer period as is
reasonably necessary if Tenant is diligently attempting to remedy the situation in question), but
shall not be obligated to, temper such excess loads by

16

 

installing supplementary heating or air
handling or conditioning units in the Premises or elsewhere where necessary. In such event, the
cost of such units and the expense of installation, including, without limitation, the cost of
preparing working drawings and specifications, plus ten percent (10%) of such cost as an overhead
and supervision fee, shall be paid by Tenant as additional Rent within ten (10) days after
Landlord’s demand therefor. Alternatively, Landlord may require Tenant to install such
supplementary heating or air handling or conditioning units at Tenant’s sole expense. Landlord may
operate and maintain any such supplementary units, but shall have no continuing obligation to do so
or liability in connection therewith. The expense resulting from the operation and maintenance of
any such supplementary heating or air handling or conditioning units, including utility charges,
charges for condenser water, repair costs, labor costs and rent for space occupied by any
supplementary heating or air handling or conditioning units installed in Rentable Area outside the
Premises, shall be paid by Tenant to Landlord as additional rent at rates fixed by Landlord.
Alternatively, Landlord may require Tenant to operate and maintain any such supplementary units,
also at Tenant’s sole expense.

               (i) Excessive Use of Building Systems. Tenant’s use or occupation of the Premises
shall not in any manner (i) cause the design loads for the Building or the systems providing
exhaust, heating, cooling, ventilation, electrical, life safety, water or sewer services to the
Building to be exceeded or (ii) adversely affect the Building or the operation of said systems in
the Premises or the Building or cause deterioration or damage to the Building or to such systems.
If Landlord determines that Tenant’s use or occupancy of the Premises may, in Landlord’s reasonable
judgment, cause the design loads for the Building or the systems providing exhaust, heating,
cooling, ventilation, electrical, life safety, water or sewer services to the Building to be
exceeded or will adversely effect the Building or the operation of said systems in the Premises or
the Building or cause deterioration or damages to the Building or to such systems, then Landlord
shall deliver written notice thereof to Tenant, and Tenant shall temper such excess loads and
correct, repair and restore the portion of the Building so affected and such systems, in a timely
and expeditious manner by installing supplementary structural support, exhaust, heating, cooling,
ventilation, electrical, life safety, water or sewer systems in the Premises or elsewhere in the
Building where necessary at the sole cost of Tenant, including, without limitation the cost of
preparing working drawings and specifications plus fifteen percent (15%) of such cost as an
overhead and supervision fee payable to Landlord from time to time as the work progresses as
Additional Rent within ten (10) days after Landlord’s written demand therefor, from time to time.
In the event of an emergency, Landlord may, but it shall not be required to, without notice to
Tenant, correct, repair and restore the portion of the Building so effected. Any expense to
Landlord resulting from the operation, repair, maintenance and removal of any such supplementary
structural support, exhaust, heating, cooling, ventilation,
electrical, life safety, water or sewer systems, including rent for space occupied by any such
supplementary structural support, exhaust, heating, cooling, ventilation, electrical, life safety,
water or sewer systems installed outside the Premises shall be borne exclusively by Tenant and
shall be paid by Tenant to Landlord as Additional Rent at rates fixed by Landlord from time to
time.

               (j) Access. Tenant shall have access to the Building and the Premises on a 24 hour
per day, 7 days per week, 365 days per year basis, subject to Landlord’s security and admittance
requirements and procedures.

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     9. CONDITION AND CARE OF PREMISES.

          (a) Condition of Premises. Tenant’s taking possession of the Premises or any portion
thereof shall be conclusive evidence against Tenant that such portion of the Premises was then in
good order and satisfactory condition. Tenant acknowledges that the Premises shall be accepted by
Tenant in their “as-is” condition, and that no promise by or on behalf of Landlord, any of
Landlord’s constituent members, the leasing agent of the Project or any of their respective agents,
partners or employees, to alter, remodel, improve, repair, decorate or clean the Premises has been
made to or relied upon by Tenant, and that no representation respecting the condition of the
Premises or the Project by or on behalf of Landlord, its constituent members, or any of their
respective agents, partners or employees has been made to or relied upon by Tenant, except to the
extent expressly set forth in this Lease; provided, however, that the foregoing in no way relieves
Landlord from any of its repair obligations set forth in this Lease.

          (b) Tenant’s Repairs. Subject to the provisions regarding fire and other casualty
losses set forth in Section 17 hereof and to Sections 16 and 18 of this Lease, Tenant, at its
expense, shall (i) keep the Premises (including all Tenant’s Work and other Tenant Alterations, but
excluding any Building structural elements and any portion of any mechanical, plumbing, electrical
or other system located within the Premises that does not exclusively serve the Premises) in good
order, repair and condition at all times during the Term, and (ii) promptly and adequately repair
all damage to the Premises, including damage to interior windows and to any portion of the Building
air conditioning, heating, electrical and plumbing systems which run through the Premises and which
serve the Premises, caused by Tenant or its contractors, agents, employees or invitees. Tenant
shall give prompt notice to Landlord of any material repair, maintenance or replacement items
required under this Section 9(b). All work with respect to any such maintenance, repair or
replacement shall be performed within a reasonable period after the need for such action arises and
shall be subject to the provisions of Section 14 hereof. If Tenant fails to perform such work
within a period of thirty (30) days after written notice from Landlord to Tenant (or such longer
time period as may be reasonably necessary so long as Tenant commences taking action with respect
to such repair work within the first ten (10) days after receiving such notice and diligently
pursues completion thereof; provided, further, that no such notice or cure period shall be required
in the case of an emergency), Landlord may, in its sole discretion, elect to effect such repairs
whether or not Tenant would otherwise be prepared to do so, and, in such case, Tenant shall pay
Landlord the cost thereof, plus a coordination and management fee equal to ten percent (10%) of the
cost of such repair work, upon Landlord’s
written demand. Landlord shall also have the right to recover from Tenant, as Rent hereunder,
any reasonable cost incurred by Landlord for architectural, engineering or other costs and expenses
as a result of such work.

          (c) Landlord’s Repairs. Subject to the provisions regarding fire and other casualty
losses set forth in Section 17 hereof, Landlord shall (i) keep the core and shell (as defined in
Section 17(e) below), including foundations, roofs, gutters, downspouts, exterior walls, and the
structural elements of the Building, the wiring, plumbing, pipes, conduits and equipment of the
Building that serve the Premises but are not located within the Premises, and the Common Areas in
the Building, exclusive of the Premises and other tenant spaces occupied by or under the control of
tenants, in good order, repair and condition at all times during the Term, and (ii) keep in good
order, condition and repair all outside windows of the Premises and

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the electrical, plumbing,
heating, ventilating and air conditioning systems servicing the Premises (other than as set forth
in Section 9(b) above). Subject to the provisions regarding fire and other casualty losses set
forth in Section 17 hereof and to Sections 16 and 18 of this Lease, Landlord, at its sole cost and
expense and not as part of Expenses, will promptly and adequately repair all damage to the Premises
caused by Landlord or its contractors, agents or employees. Notwithstanding the foregoing, (A)
Landlord shall not be responsible for the maintenance or repair of any floor or wall coverings in
the Premises or any of such systems which are located within the Premises and are supplemental or
special to the Building’s standard systems; and (B) subject to the provisions regarding fire and
other casualty losses set forth in Section 17 hereof and to Sections 16 and 18 of this Lease, the
cost of performing any of said maintenance or repairs, whether to the Premises or to the Building,
caused by the negligence of Tenant, its employees, agents, servants, licensees, subtenants,
contractors or invitees, shall be paid by Tenant within thirty (30) days after Landlord’s demand
therefor. So long as Landlord uses good faith efforts to maintain reasonable access to the
Premises and to minimize unreasonable interference with the conduct of Tenant’s business, Landlord
may, but shall not be required to, enter the Premises at all reasonable times, upon prior written
or oral notice to Tenant (except that no such notice or reasonable time requirement shall be
required in the case of an emergency), to make repairs, alterations, improvements and additions to
the Premises or to the Building (provided that any such alterations, improvements or additions
performed within the Premises under this subclause shall only be performed with respect to Building
systems, Building structure or core and shell, or other base Building elements located therein or
any other items required by applicable Laws, and may be performed during normal Building business
hours only so long as such work will not materially and adversely affect Tenant’s business
operation or the size of the Premises) or to any equipment located in the Building as Landlord
shall reasonably desire or deem necessary or as Landlord may be required to make by governmental
authority or court order or decree. If Landlord fails to perform its obligations under this
Section 9(c) and such failure materially interferes with Tenant’s use and occupancy of the Premises
such that Tenant cannot reasonably maintain its business operation, Tenant may deliver written
notice to Landlord specifying the default in question and stating the action which Tenant believes
is required under the terms of this Lease to remedy such failure. If Landlord fails to commence to
cure such default within ten (10) business days after receipt of written notice from Tenant, Tenant
may give Landlord a second written notice (the “Self-Help Notice”) of such default, which notice
shall also state Tenant’s intention to exercise the self-help remedy set forth in this Section 9(c)
and a detailed description of the work to be performed, or actions to be taken, by Tenant to cure
Landlord’s default, together with a contractor’s estimate of the cost to perform such work or take
such action. If Landlord fails to commence to cure such default within five (5) business days
after receipt of such second notice and to thereafter diligently prosecute such cure to completion,
Tenant may engage qualified contractors to perform the work and take the actions described in the
Self-Help Notice. In such event, said contractors are hereby granted the right to enter those
portions of the Project which are reasonably necessary for the performance of such work and taking
of such action. Landlord shall reimburse Tenant for the costs reasonably expended to perform such
work and
take such actions within thirty (30) days after Tenant’s submission to Landlord of
invoices for the work performed, evidence of payment of such invoices, and final lien waivers from
any contractor which has performed lienable work.

               If and to the extent that the Premises or Lobby sustain recurring leakage due to (i)
Landlord’s activities in or above the Premises or Lobby, (ii) concealed pipes, ducts, wiring,

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conduits or appurtenances thereto in and through the Premises or Lobby in walls, below the floor or
above the suspended ceiling; or (iii) from a Building condition, and if Tenant is not reasonably
satisfied with Landlord’s repair of the leakage area or remediation of the condition causing such
leakage, then Tenant may, at Tenant’s sole cost, engage an expert to analyze the cause of such
leakage and the work required to remedy the condition. Landlord agrees to review the written
assessment of such expert, to consult in good faith with Tenant regarding the remedial work
required and to take such commercially reasonable steps as a prudent owner of Comparable Buildings
would take to remediate the leakage problem.

               (d) No Rights to Light, Air or View. This lease does not grant any rights to light,
air or view over or about the real property of Landlord or any other real property. Subject to the
conditions and requirements of Section 13(n) below, Landlord specifically excepts and reserves to
itself all rights to and the use of any roofs, the exterior portions of the Premises, the land,
improvements and air and other rights below the improved floor level of the Premises, the
improvements and air and other rights above the improved ceiling of Premises (provided that
Landlord shall be responsible, at its cost, for repairing any damage to Tenant’s personal property
caused by any leakage into the Premises resulting from above ceiling work), the improvements and
air and other rights located outside the demising walls of the Premises and such areas within the
Premises as are required for installation of utility lines and other installations required to
serve the Building or any occupants of the Building, and Landlord specifically reserves to itself
the right to use, maintain and repair same, and no rights with respect thereto are conferred upon
Tenant, unless otherwise specifically provided herein.

               (e) Hazardous Substances. Tenant shall comply, at its sole expense, with all Laws
relating to the protection of public health, safety and welfare and with all environmental Laws in
the use, occupancy and operation of the Premises. Tenant agrees that no Hazardous Substances (as
hereinafter defined) shall be used, located, stored or processed on the Premises or be brought into
the Building by Tenant, other than normal cleaning or other office supplies (and then, only to the
extent such cleaning or other office supplies are stored and used in accordance with all applicable
Laws) and no Hazardous Substances will be released or discharged from the Premises (including, but
not limited to, ground water contamination). The term “Hazardous Substances” for purposes of this
Lease shall be interpreted broadly to include, but not be limited to, any material or substance
that is defined or classified under federal, state, or local laws as: (a) a “hazardous substance”
pursuant to section 101 of the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. §9601(14), section 311 of the Federal
Water Pollution Control Act, 33 U.S.C. §1321, as now or hereafter amended; (b) a “hazardous
waste” pursuant to section 1004 or section 3001 of the Resource Conservation and Recovery Act, 42
U.S.C. §§6903, 6921, as now or hereafter amended; (c) a toxic pollutant under section 307(a)(1) of
the Federal Water Pollution Control Act, 33 U.S.C. §1317(a)(1); (d) a “hazardous air pollutant”
under section 112 of the Clean Air Act, 42 U.S.C. §7412, as now or hereafter amended; (e) a
“hazardous material” under the Hazardous Materials Transportation Uniform Safety Act of 1990, 49
U.S.C. App. § 1802(4), as now or hereafter amended; (f) toxic or hazardous pursuant to regulations
promulgated now or hereafter under the aforementioned laws; or (g) presenting a risk to human
health or the environment under other applicable federal, state or local laws, ordinances, or
regulations, as now or as may be passed or promulgated in the future. “Hazardous Substance” shall
also mean any substance that after release into the environment and upon exposure, ingestion,
inhalation, or assimilation, either directly from the

20

 

environment or directly by ingestion through
food chains, will or may reasonably be anticipated to cause death, disease, behavior abnormalities,
cancer, or genetic abnormalities. “Hazardous Substance” specifically includes, but is not limited
to, asbestos, polychlorinated biphenyls (“PCBs”), lead-based paint, storage containers (including
tanks) and their contents, petroleum and petroleum based derivatives, and urea formaldehyde. In
the event that Landlord or Tenant is notified of any investigation or alleged violation of any
environmental Law arising from Tenant’s activities at the Premises or otherwise affecting the
Project, the notified party shall immediately deliver to the other party a copy of such notice or
other information available regarding the investigation or alleged violation (including but not
limited to the nature, extent and contaminants of concern involved). In the event Landlord
reasonably believes that a violation of environmental Law was caused solely by Tenant at the
Premises in violation of this Lease, and upon seventy-two (72) hours written notice to Tenant
(except in emergency), then Landlord may conduct such reasonable and customary tests and studies
relating to compliance by Tenant with environmental Laws or the alleged presence of Hazardous
Substances upon the Premises. Tenant shall reimburse Landlord for all reasonable costs in
conducting such tests and studies within thirty (30) days after demand therefore only if a
violation of environmental Laws occurred in the Premises or was caused by Tenant’s operation within
the Project or if Hazardous Substances are in fact detected above their regulatory or background
limits. Landlord shall provide Tenant the results and reports (including drafts) of any testing or
investigation at the Premises. Landlord’s inspection and testing rights are for Landlord’s own
protection only, and Landlord has not, and shall not be deemed to have assumed any responsibility
to Tenant or any other party for compliance with environmental Laws, as a result of the exercise,
or non-exercise of such rights. Tenant shall indemnify, defend, protect and hold harmless
Landlord, its constituent members, and their respective officers, directors, members, partners,
agents, employees, successors and assigns (collectively, the “Landlord Parties”), from and against
any and all loss, claim, expense, liability and cost (including attorneys’ fees) arising out of or
in any way related to the presence of any Hazardous Substance introduced to the Project during the
Term by Tenant, its officers, directors, partners, shareholders, owners, affiliates, agents,
employees, contractors, subcontractors, invitees, sublessees or other representatives. Landlord
hereby agrees to indemnify, defend and hold Tenant and its agents and employees harmless from and
against any and all loss, claim, expense, liability and cost (including attorneys’ fees) arising
out of or in any way related to the presence of any Hazardous Substance or Biological Toxant
existing in the Premises as of the date on which possession of the Premises is delivered to Tenant
or introduced into the Project during the Term by Landlord or its agents or employees. In
addition, if and to the extent that another Building tenant introduces any Hazardous Substance
or Biological Toxant into the Project in violation of its lease, or otherwise violates
environmental Laws, Landlord shall use commercially reasonable efforts to enforce provisions of
said tenant’s lease pertaining to such environmental violations, including any provisions requiring
said tenant to remediate any environmental condition which it has caused.

     (f) Americans with Disabilities Act. Landlord and Tenant acknowledge that the
Americans With Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.) and regulations and guidelines
promulgated thereunder, as all of the same may be amended and supplemented from time to time
(collectively referred to herein as the “ADA”) establish requirements for business operations,
accessibility and barrier removal, and that such requirements may or may not apply to the Premises
and the Building depending on, among other things: (1) whether Tenant’s business is deemed a
“public accommodation” or “commercial facility”, (2) whether such

21

 

requirements are “readily
achievable”, and (3) whether a given alteration affects a primary function area or triggers “path
of travel” requirements. The parties hereby agree that: (a) Landlord shall be responsible for ADA
Title III compliance in the Common Areas of the Building, except as provided below, (b) Tenant
shall be responsible for ADA Title III compliance in the Premises, including any leasehold
improvements or other work to be performed in the Premises under or in connection with this lease,
(c) Landlord may perform, or require that Tenant perform, and Tenant shall be responsible for the
cost of, ADA Title III “path of travel” requirements triggered by alterations in the Premises, and
(d) Landlord may perform, or require Tenant to perform, and Tenant shall be responsible for the
cost ADA Title III compliance in the common areas of the Building necessitated by the Premises or
the Building being deemed to be a “public accommodation” instead of a “commercial facility” as a
result of Tenant’s particular use of the Premises. Tenant shall be solely responsible for
requirements under Title I of the ADA relating to Tenant’s employees. Landlord hereby agrees to
indemnify, defend and hold Tenant harmless from and against any and all loss, claim, expense,
liability and cost (including attorneys’ fees) arising out of or in any way related to Landlord’s
failure to maintain the Common Areas in compliance with ADA Title III, excluding non-compliance
caused by any acts or omissions of Tenant or its officers, directors, partners, shareholders,
owners, affiliates, agents, employees, contractors, subcontractors, invitees, sublessees or other
representatives.

               (g) Landlord Responsibility. Landlord agrees, as to any Hazardous Substances (as now
defined) or Biological Toxant (as defined below) existing in the Premises on the date on which
possession of the Premises is delivered to Tenant (and not introduced into the Premises by Tenant
or any of its employees, contractors, licensees, invitees, subtenants, assignees or agents), or
introduced into the Premises by Landlord or its agents or employees during the Term, to remove or
otherwise remediate such Hazardous Substances or Biological Toxant if and to the extent required by
Law (as existing on such date of discovery), at Landlord’s sole cost and expense. Tenant shall
cooperate with Landlord in allowing proper access to the Premises to perform the foregoing removal
or remediation activities, and, without limiting Landlord’s obligations under this Section 9(g),
shall use reasonable efforts not to take any action which may worsen any such environmental
condition once discovered. Landlord shall restore any damage caused to the Premises as a result of
such access by Landlord under this Section 9(g), to the extent such damage was not caused by
Tenant’s negligence or willful misconduct or Tenant’s breach of its obligations hereunder. In any
entry into the Premises under this Section
9(g), Landlord shall use commercially reasonable efforts to minimize interference with
Tenant’s business operations therefrom. Tenant shall have no claim against Landlord under this
Section 9(g), unless such Hazardous Substances materially adversely impact Tenant’s use and
enjoyment of the Premises in accordance with the terms of this lease. Landlord represents and
warrants to Tenant that, as of the date of this Lease, Landlord has not received any written notice
of any violation of any environmental Laws at the Project.

               (h) Biological Toxants. Tenant and Tenant’s contractors, licensees, invitees,
subtenants, assignees and agents shall not create or permit to exist in or about the Premises (or
any other portion of the Building for which Tenant is responsible) any condition conducive to the
growth of mold, fungus or other potentially dangerous organisms (collectively, “Biological
Toxants”). For this purpose, a condition conducive to the growth of Biological Toxants shall
include the presence of wet or damp wood, wet or damp cellulose wallboard or other wet or

22

 

damp
materials which may constitute a food supply for Biological Toxants, including, but not limited to,
waste, food and beverages. In the event that Tenant observes the presence of any Biological Toxant
in the Premises or the Building, whether by sight, smell or otherwise, Tenant shall promptly notify
Landlord in writing of such presence and the precise location thereof. If such presence is the
result of the action or omission of Tenant or of Tenant’s contractors, licensees, invitees,
subtenants, assignees or agents, Tenant shall promptly, at its sole cost and expense, conduct such
remediation work as shall be necessary to completely remove the Biological Toxant from the Premises
or the Building, as applicable. Such remediation shall include removal and replacement with new
building materials of any infected host materials (i.e., wood, wallboard, etc.), as well as any
repairs and refinishing required as the result of such removal and replacement. Any remediation by
Tenant shall be in accordance with the following:

               (i) The method of remediation shall be subject to the prior written approval of
Landlord, which approval shall not be unreasonably withheld, conditioned or delayed;

               (ii) Subject to clause (i) above, if the impacted area is less than thirty (30) square
feet and does not affect the structural integrity of the Building or the electrical,
exhaust, mechanical, plumbing, ventilation, life safety, telecommunications, security,
heating or air conditioning systems of the Building, Tenant shall be permitted to use its
own personnel to effect such remediation;

               (iii) If the impacted area is thirty (30) square feet or more or the required
remediation affects the structural integrity of the Building or the electrical, exhaust,
mechanical, plumbing, ventilation, life safety, telecommunications, security, heating or air
conditioning systems of the Building, Landlord shall have the right to require that the
remediation be effected by contractors hired by Landlord;

               (iv) All work done by Tenant in connection with the remediation shall be in accordance
with Article 10 of this lease and Tenant shall pay Landlord, whether the remediation is
performed by Landlord, Landlord’s contractors or Tenant or Tenant’s contractors, an amount
equal to fifteen percent (15%) of the cost of such remediation work;

               (v) Landlord shall determine, in its sole and absolute discretion based upon the advice
and recommendations of Landlord’s consultant, whether any wet materials can be effectively
dried out and remain in place or whether such materials must be removed and replaced. Any
materials which must be removed shall be disposed of in accordance with all applicable Laws.
In the event that Landlord employs a consultant in connection with any Biological Toxant or
apparent Biological Toxant which Tenant is responsible to remediate, Tenant shall reimburse
Landlord, as Additional Rent, the reasonable costs and fees of such consultant. Such
reimbursement shall be made within twenty (20) days after Tenant’s receipt of Landlord’s
invoice therefor.

          If Tenant is not responsible for the remediation of such Biological Toxant pursuant to this
Section, Landlord shall conduct such remediation and any repairs and refinishing required as the
result of such remediation. The cost of such remediation, repair, replacement and refinishing

23

 

shall be included in Expenses. Tenant shall cooperate with Landlord as reasonably requested in
connection with any such remediation. There shall be no abatement of Rent on account of any
remediation of a Biological Toxant for which Tenant is responsible for the remediation of pursuant
to this Section. In the event of any remediation (i) for which Landlord is responsible pursuant
hereto and (ii) which materially and adversely interferes with Tenant’s use of the Premises, Rent
shall abate for the period of such remediation to the same degree as the interference with Tenant’s
use of the Premises. Landlord’s right of entry pursuant to the terms and provisions of this lease
shall include the right to enter, inspect and test the Premises for the presence of Biological
Toxants therein. If any such inspection and/or testing reveals the presence of Biological Toxants
in the Premises, Landlord or Tenant shall promptly remediate the same pursuant to the terms and
conditions of this Section. Any violation by Tenant of the covenants set forth in this Section
shall be deemed to be a Default under this lease.

     10. SURRENDER OF PREMISES.

          (a) Surrender. Upon the termination of this Lease by lapse of time or otherwise or
upon the earlier termination of Tenant’s right of possession, Tenant shall surrender possession of
the Premises to Landlord and deliver all keys, computer cards or codes and other entry devices to
the Premises to Landlord and make known to Landlord the combinations of all locks of vaults then
remaining in the Premises, and shall, subject to the following subparagraphs, return the Premises
and all equipment and fixtures of Landlord therein to Landlord in as good condition as when Tenant
originally took possession, except for ordinary wear and tear, and except for loss or damage by
fire or other casualty or condemnation (which Tenant is not required to restore pursuant to Section
17 of this Lease), failing which Landlord may, after giving Tenant written notice of Tenant’s
breach of this Section 10(a) and Tenant’s failure to remedy such breach within thirty (30) days
after such notice, restore the Premises and such equipment and fixtures to such condition, and
Tenant shall pay the cost thereof to Landlord within thirty (30) days after demand therefor.

          (b) Ownership of Improvements. All installations, additions, partitions, hardware,
fixtures and improvements, temporary or permanent (including Tenant’s Work and other Tenant
Alterations), except movable furniture and equipment and other personal property
or trade fixtures belonging to Tenant, in or upon the Premises or Lobby, whether placed there
by Tenant or Landlord, shall, upon the termination of this Lease by lapse of time or otherwise or
upon the earlier termination of Tenant’s right of possession, become Landlord’s property and shall
remain upon the Premises, all without compensation, allowance or credit to Tenant; provided,
however, that if at the time Landlord consents to Tenant’s installation of Tenant’s Work, other
Tenant Alterations or other installations, additions, partitions, hardware, fixtures and
improvements, Landlord notifies Tenant in writing that any such items will be required to be
removed upon expiration of the Term or earlier termination of this Lease, then Tenant, at Tenant’s
sole cost and expense, upon termination of this Lease by lapse of time or otherwise or upon the
earlier termination of Tenant’s right of possession, shall promptly remove such designated items,
and Tenant shall thereafter repair any damage to the Premises or the Project caused by such
removal, failing which Landlord may remove the same and repair the Premises or the Project, as the
case may be, and Tenant shall pay the cost thereof to Landlord on written demand. Without
limitation of the foregoing, if any of the Tenant’s Work or other Tenant Alterations involved the
lowering of ceilings, raising of floors or the installation of specialized

24

 

wall or floor coverings
or lights, then Tenant, at Landlord’s request, shall also be obligated to return such surfaces to
their condition prior to the commencement of this lease. Upon being notified by Landlord that
Tenant would be required to remove any such designated items, Tenant may elect not to proceed with
installation of the items so designated. Except for items required to be removed and/or restored
by Tenant as described above (herein, the “Removal Items”), it is understood and agreed that as
part of Tenant’s request for Landlord’s consent to any Tenant Alterations (including, without
limitation, any “Tenant’s Work”), Tenant may specifically request a waiver of Landlord’s right
under this Section 10(b) to require removal of any such item or items included as part of said
Tenant Alterations. Except with respect to the Removal Items, if Tenant so requests Landlord’s
waiver, then Landlord’s failure to advise Tenant, as part of its consent process, that a given
Tenant Alteration is required to be removed upon expiration or earlier termination of the lease or
Tenant’s right to possession hereunder, shall be construed to mean that Tenant need not so remove
same and such determination shall be binding on Landlord at expiration or termination of this
Lease. Tenant’s failure to perform any work required of Tenant as described in this Section 10 on
or before the expiration or earlier termination of this Lease or Tenant’s right of possession
hereunder, shall, without limitation on other rights or remedies available to Landlord, give rise
to the right of Landlord, after thirty (30) days prior written notice thereof, to perform such
work, and Tenant shall pay the reasonable costs thereof to Landlord within thirty (30) days after
written demand therefor. In no event shall Landlord require Tenant to remove, at the end of the
Term or otherwise, any items located at the Premises as of the Commencement Date hereunder.
Further, in no event shall Tenant be required to remove any items described in this Section 10
prior to the expiration or earlier termination of the Term or of Tenant’s right to possession of
the Premises hereunder.

          (c) Removal of Personal Property. Upon the termination of this Lease by lapse of time
or otherwise or upon the earlier termination of Tenant’s right of possession, Tenant shall remove
from the Premises Tenant’s furniture, machinery, safes and other items of movable personal property
of every kind and description and Tenant’s trade fixtures (excluding any of Tenant’s Work or any
Tenant Alteration, except as required to be removed pursuant to Section 10(b) above), and Tenant
shall restore any damage to the Premises or the Project caused thereby (such removal and
restoration to be performed prior to the expiration of the Term or earlier termination of this
Lease or Tenant’s right of possession), failing which Landlord, after giving
Tenant written notice of Tenant’s breach of this Section 10(c) and Tenant’s failure to remedy
such breach within thirty (30) days after such notice, may do so and thereupon the provisions of
Section 19(b)(iv) shall apply.

          (d) Survival. Without limitation of any other obligations of Tenant which shall
survive the expiration or termination of this Lease, all obligations of Tenant under this Section
10 shall survive the expiration or earlier termination of this Lease.

     11. HOLDING OVER. If Tenant retains possession of the Premises or any part thereof after
the termination of the Lease by lapse of time or otherwise or after the earlier termination of
Tenant’s right of possession, Tenant shall pay to Landlord as Rent during such holdover period an
amount equal to one hundred fifty percent (150%) of the Rent (based on the Base Rent plus the most
current Additional Rent Estimate owed by Tenant during the most recent year for the entire
Premises), for all or any portion of such holding over period, determined on a per diem basis. In
addition to and without limiting any other rights and

25

 

remedies which Landlord may have on account
of such holding over by Tenant, Tenant shall indemnify Landlord from and against any and all
damages suffered by Landlord on account of such holding over by Tenant, including any damages and
claims by tenants entitled to future possession; provided, however, that Tenant shall not be liable
for consequential damages arising out of Tenant’s holdover unless such holdover exceeds thirty (30)
days. No occupancy by Tenant after the expiration or other termination of this Lease shall be
construed to extend the Term. The provisions of this Section 11 shall not be deemed to limit or
constitute a waiver of any rights or remedies of Landlord as provided herein or at law or equity.

     12. RULES AND REGULATIONS. Tenant agrees to observe and not to interfere with the rights
reserved to Landlord contained in Section 13 hereof and elsewhere in this Lease and agrees, for
itself, its employees, agents, invitees, licensees and contractors, to accept and comply with the
rules and regulations set forth in Exhibit D attached to this lease, and elsewhere in this lease,
and such other commercially reasonable rules and regulations as may be adopted from time to time by
Landlord pursuant to Section 13(o) or any other Section of this Lease. The rules and regulations
in Exhibit D and all other rules and regulations made in accordance with this lease are intended
and shall be construed to supplement and not limit or restrict in any way any of Landlord’s rights
or Tenant’s obligations contained in Section 13 or any other Section of this lease. Nothing
contained in this Lease shall be construed to impose upon Landlord any duty or obligation to
enforce any of said rules and regulations or the terms, covenants or conditions of any other lease
against any other tenant or any other person. The following shall apply to Landlord’s rules and
regulations described in Exhibit D and any other rules, regulations, directives, controls,
procedures, measures, orders or other requirements promulgated by Landlord and governing the
Project and which are described in any other provision of this Lease and the Exhibits attached to
this Lease, including the Workletter (all of the foregoing, including any modifications and
additions thereto, “Rules and Regulations”): (i) Landlord shall not discriminate against Tenant in
the enforcement of Rules and Regulations, (ii) the Rules and Regulations shall not be enforceable
against Tenant until Tenant has been given reasonable prior written notice of such
Rules and Regulations; and (iii) the Rules and Regulations shall not materially and adversely
affect Tenant’s rights under this Lease.

     13. RIGHTS RESERVED TO LANDLORD. Landlord reserves and shall have the following rights,
to the fullest extent permitted by applicable Laws, each of which shall, unless expressly provided
otherwise, be exercisable without notice and without liability of Landlord, its constituent
members, or any of their respective agents, partners or employees, to Tenant for damage or injury
to property, person or business or for loss or interruption of business, or for any other matter,
and without effecting an eviction or disturbance of Tenant’s use or possession, in whole or in
part, actual or constructive, or giving rise or entitling Tenant to any claim for set-off,
abatement or reduction of Rent or relieving Tenant from the performance of or affecting any of
Tenant’s obligations under this lease:

     (a) To change the name or the street address of the Building, upon not less than sixty
(60) days’ prior written notice (unless otherwise obligated to do so sooner by the U.S. post
office or other governmental or quasi-governmental body).

     (b) To install and maintain or remove signs on the exterior and interior of the
Building and the Project; provided, however, in no event shall Landlord have the right to

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(i) install, maintain or remove any signage on the interior of the Premises or Lobby
(so long as such signage has been approved by Landlord); or (ii) maintain or remove any of
Tenant’s signage on the exterior or any other portion of the Building, Premises or Lobby,
unless otherwise permitted under the terms of this Lease.

     (c) To prescribe the location and style of the suite number and identification sign or
lettering for the Premises.

     (d) To retain at all times, and to use in appropriate instances, pass keys and other
entry devices for all doors into and within the Premises.

     (e) To grant to anyone the right to conduct any business or render any service in any
part of the Building, subject to Tenant’s expressly stated rights under this Lease.

     (f) To enter the Premises for supplying janitor service or other services to be
provided to Tenant hereunder, or in the exercise of Landlord’s rights hereunder, and upon
reasonable prior notice (except for routine services to be performed by Landlord hereunder,
or where this lease otherwise permits entry without notice or in the event of an emergency,
in which case immediate entry shall be permitted) for other reasonable purposes.

     (g) To require all persons entering or leaving the Project or any part thereof during
such hours as Landlord may from time to time reasonably determine to identify themselves to
security personnel by registration or otherwise and to establish their right to enter or
leave in accordance with Landlord’s security controls. Landlord shall not be liable in
damages or otherwise for any error with respect to admission to or eviction or exclusion
from the Project or any part thereof of any person. Notwithstanding anything contained
herein to the contrary, in case of fire, casualty, invasion, insurrection, mob, riot, act of
terrorism, civil disorder, public excitement or other commotion, or threat thereof, Landlord
reserves the right to limit or prevent access to the Project or any part thereof during the
continuance of the same, halt elevator service, activate elevator emergency controls, or
otherwise take such action or preventive measures reasonably deemed necessary by Landlord
for the safety or security of the tenants or other occupants of the Project or the
protection of the Project and the property in or about the Project. Tenant agrees to
cooperate in any reasonable safety or security program developed by Landlord from time to
time; provided that (i) all other Building tenants are required to participate in such
reasonable safety or security program; (ii) such safety or security program does not
materially and adversely affect any of Tenant’s rights hereunder or the performance of the
Tenant’s Work; and (iii) Tenant receives prior written notice of such safety or security
program.

     (h) To control, restrict and prevent access to any areas of the Project, provided that
reasonable access to the Premises, Lobby, Building parking areas and Receiving Docks shall
be maintained at all times throughout the Term, and Landlord shall provide parking spaces as
required by Laws, subject to emergency conditions.

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     (i) To rearrange, relocate, enlarge, reduce or change corridors, exits, elevators,
stairs, lavatories, doors, entrances in or to the Building and to decorate and to make
repairs, alterations, additions and improvements, structural or otherwise, in or to the Land
or the Project or any part thereof, including the Premises (provided that entry into the
Premises and the performance of any such work in the Premises shall be conditioned upon (i)
Landlord using good faith efforts to maintain reasonable access to the Premises and to
minimize unreasonable interference with the conduct of Tenant’s business, (ii) Landlord
entering the Premises at reasonable times upon prior written or oral notice to Tenant
[except that no such notice or reasonable time requirement shall apply in the case of
emergency], (iii) such work being performed in the Premises during normal Building business
hours only so long as such work will not materially and adversely affect Tenant’s business
operation or the size of the Premises, and (iv) any alterations, improvements or additions
performed within the Premises under this subclause shall only be performed with respect to
Building systems, Building structure or core and shell, or other base Building elements
located therein or any other items required by applicable Laws), to the extent required to
fulfill Landlord’s duties under other provisions of this Lease or to make necessary repairs
for the benefit of other portions of the Building, and any adjacent building, land, street
or alley, including for the purpose of connection with or entrance into or use of the Land
or the Project in conjunction with any adjoining or adjacent building or buildings or
pedestrian ways, now existing or hereafter constructed, provided that, in the absence of an
emergency or as otherwise required by applicable Laws, Landlord shall (A) not take any
action under this subclause (i) which will have the affect of materially restricting
Tenant’s ability to access the Premises, Lobby, Receiving Docks, Auditorium or Building
Conference Room in a manner which is consistent with access rights to comparable office
premises at other comparable first class office buildings, and (B) use good faith efforts to
minimize unreasonable interference with the conduct of Tenant’s business or use of the
Premises, Lobby, Receiving Docks, Auditorium or Building Conference Room. In that regard,
Landlord may erect scaffolding and other structures reasonably required by the character of
the work to be performed, and during such operations to enter upon the Premises upon
reasonable prior notice and take into and upon or through any part of the Project, including
the Premises, all materials that may be required to do such work or make such decorations,
repairs, alterations, improvements or additions, and in connection with any of the
foregoing, to close public entryways, other public spaces, stairways or corridors and,
subject to Section 8(f) above, to interrupt or temporarily suspend any services or
facilities agreed to be furnished by Landlord. Landlord may at its option do any such work
and make any such decorations, repairs, alterations, improvements and additions in and about
the Project and the Premises during ordinary business hours and, if Tenant desires to have
the same done during other than ordinary business hours, Tenant shall pay all overtime and
additional expenses resulting therefrom.

     (j) To establish commercially reasonable controls for the purpose of regulating all
property and packages to be taken into or removed from the Building and Premises; provided
that Tenant shall have the right to accept deliveries during Tenant’s normal business hours.

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     (k) To regulate delivery of supplies and services in order to ensure the cleanliness
and security of the Project and to avoid congestion of the loading docks, receiving areas
and freight elevators.

     (l) To approve the weight, size and location of safes, vaults, books, files and other
heavy equipment and articles in and about the Premises and the Building so as not to exceed
the design live load per square foot designated by the structural engineers for the
Building, and to require all such items and furniture and similar items to be moved into or
out of the Building and Premises only at such times and in such manner as Landlord shall
direct in writing. Tenant shall not install or operate machinery or any mechanical devises
of a nature not directly related to Tenant’s ordinary use of the Premises and of a nature
not consistent with customary first-class office usage without the prior written consent of
Landlord (which consent shall not be unreasonably withheld).

     (m) To show the Premises to prospective tenants at reasonable hours and upon prior
written or oral notice to Tenant and accompanied by a Landlord representative or agent
during the last twelve (12) months of the Term or to prospective mortgagees, ground lessors
or purchasers of the Land or Building or both at any time upon prior written or oral notice
to Tenant, and, if Tenant’s right of possession of the Premises has been terminated, to show
the Premises to prospective tenants at any time and to demolish, alter, remodel or otherwise
prepare the Premises for re-occupancy.

     (n) Upon reasonable prior notice to Tenant, to erect, use and maintain concealed pipes,
ducts, wiring and conduits, and appurtenances thereto, in and through the Premises in walls,
below the floor and above the suspended ceiling; provided that, notwithstanding anything to
the contrary herein, (i) Landlord shall be responsible for maintaining at all times in good
order and repair all such concealed pipes, ducts, wiring and conduits, and appurtenances
thereto in and through the Premises or Lobby in walls, below the floor and above the
suspended ceiling; (ii) Subject to Section 16, Landlord shall indemnify, defend, protect and
hold harmless Tenant, the Tenant Parties, any employees, agents, contractors or other
representatives of Tenant from and against any and all loss, claim, expense, liability and
cost (including reasonable attorneys’ fees) arising out of or in any way related to
Landlord’s installation, use or maintenance of such concealed pipes, ducts, wiring and
conduits, and appurtenances thereto, in and through the Premises or Lobby in walls, below
the floor and above the suspended ceiling (and Landlord shall be responsible, at its cost,
to repair damage to Tenant’s property caused by such work); and (iii) such installation, use
and maintenance of such concealed pipes, ducts, wiring and conduits, and appurtenances
thereto in and through the Premises or Lobby in walls, below the floor and above the
suspended ceiling shall be performed in a manner so as to minimize any interference with
Tenant’s use of the Premises. Landlord shall repair any damage to the Premises or Lobby,
Tenant’s Work or any Tenant Alteration caused by Landlord’s installation, use or maintenance
of such concealed pipes, ducts, wiring and conduits, and appurtenances thereto, in and
through the Premises or Lobby in walls, below the floor and above the suspended ceiling
within a reasonable time after notice thereof to Landlord.

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     (o) Upon written notice to Tenant, and subject to Section 6(a) of this Lease, from time
to time to make and adopt such reasonable rules and regulations, in addition to or as an
amendment to rules and regulations contained in Exhibit C attached to this lease or other
Sections of this lease, or adopted pursuant to this or other Sections of this lease, for the
use, entry, operation or management of the Premises or the Project or for the protection or
welfare of the Project or its tenants or occupants, or any property therein, as Landlord may
reasonably determine, and Tenant agrees to accept, abide by and comply with all such rules
and regulations, all subject to the terms of Section 12 above.

     (p) Subject to any conditions set forth in Section 13(n) which apply to such work
because such work is within the Premises, to use any roofs, the exterior portions of the
Premises, the Land, improvements and air and other rights below the improved floor level of
the Premises or above the improved ceiling of the Premises, or outside the demising walls of
the Premises, and such areas and risers within the Premises as are used for utility lines
and other facilities or equipment required to serve the Building or any occupants of the
Building, and the right to use, maintain and repair same; no rights with respect thereto are
conferred upon Tenant, unless otherwise specifically provided herein. If any such
activities would materially affect Tenant’s business operation, Landlord will give Tenant
prior notice of such activities.

In exercising its rights under this Section 13, Landlord shall not unreasonably interfere with
Tenant’s use and occupancy of the Premises or Tenant’s use of, and access to, the Lobby, Receiving
Docks, Auditorium and Building Conference Room. Additionally, to the extent that any Landlord
requires entry into the Premises to perform any work in the Premises or is performing work outside
of the Premises which will materially affect Tenant’s business operation, Landlord will make
commercially reasonable efforts to coordinate scheduling of such work with Tenant, in good faith.

     14. ALTERATIONS. The provisions of this Section 14 pertain to Tenant Alterations
performed other than the Tenant’s Work which is covered by, and subject to, the terms of the
Workletter.

     (a) Consent; Conditions. Tenant shall not perform any Tenant Alterations without
first obtaining the prior written consent of Landlord (not to be unreasonably withheld, as provided
in Section 14(e) below). Without limitation on the foregoing, and to the extent that Landlord’s
consent is required under this Section 14, Landlord may impose such reasonable conditions with
respect to Tenant Alterations as Landlord deems reasonably appropriate, including, without
limitation, requiring Tenant to furnish to Landlord for its approval prior to commencement of any
work or entry by Tenant’s contractors into the Premises or the Building, insurance against
liabilities which may arise out of the Tenant Alterations and plans and specifications and permits
necessary for the Tenant Alterations.

          (b) Contractors. Tenant Alterations shall be done at Tenant’s expense by agents or
contractors hired by Tenant who are reasonably acceptable to Landlord and whose work will not cause
or threaten to cause disharmony or interference with Landlord or other tenants, contractors or
service providers at the Building, or at Landlord’s election, as it relates to
work affecting (1) life safety systems, (2) Building risers, (3) Building structure or core
and

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shell, or (4) any other Building systems which can affect other tenants’ operations or any
other operations at the Building, by Landlord’s employees or contractors hired by Landlord. Before
employing any such contractors, Tenant shall submit to Landlord the names and addresses of such
contractors.

          (c) Costs; Mechanic Liens. Tenant shall promptly pay the cost, when due, of all
Tenant Alterations. In addition to the cost of such Tenant Alterations, Tenant shall pay to
Landlord or to its designated agent, as Landlord shall direct, an amount equal to five percent (5%)
of all of the costs of all Tenant Alterations as a coordination and management fee allocable to the
Tenant Alterations; provided, however that no such fee shall be payable with respect to any Tenant
Alterations project which costs less than $10,000.00. Landlord shall also have the right to
recover from Tenant, any reasonable out-of-pocket cost incurred by Landlord for architectural,
engineering or other costs and expenses as a result of the Tenant Alterations. Upon completion of
any Tenant Alterations, Tenant shall deliver to Landlord, if payment is made directly to
contractors, evidence of payment, contractors’ affidavits and full and final waivers of all liens
for labor, services and materials sufficient to waive all rights to liens under the Illinois
Mechanic’s Lien law arising or from the work done. Tenant shall not permit any lien or claim for
lien of any mechanic, labor or supplier or any other lien to be filed against the Building, the
Land or the Premises or any part thereof, arising out of any Tenant Alterations or other work
performed or alleged to be performed, by or at the direction of Tenant. If any such lien or claim
for lien is filed, Tenant shall, within thirty (30) days of receiving notice of such lien or claim,
(i) have such lien or claim for lien released of record, or (ii) deliver to Landlord title
insurance or other security in form, content, and amount satisfactory to Landlord relative to such
lien or claim for lien (whereupon, in the case of this subclause (ii), Tenant shall thereafter
diligently contest such lien or claim for lien). Without limitation of the foregoing, Tenant shall
indemnify, defend and hold harmless, Landlord and the other Landlord Parties, from and against any
such lien or claim for lien, and the foreclosure or attempted foreclosure thereof, and Tenant shall
cause any such lien to be released of record or insured over, in any event, prior to final
enforcement thereof. If Tenant fails to take the actions described in subclause (i) or subclause
(ii) above, then Landlord, without investigating the validity of such lien or claim for lien, but
after giving Tenant written notice thereof and Tenant’s continued failure to take such actions
within five (5) days after such notice, may pay or discharge the same, and Tenant shall, as payment
of additional Rent hereunder, reimburse Landlord upon demand for the payment so paid by Landlord,
including Landlord’s expenses and attorneys’ fees related thereto.

          (d) General. Excepting matters for which the parties have explicitly released each
other in this Lease (including, without limitation, the releases contained in Section 16 hereof) or
matters which are included within the scope of any indemnities contained in this Lease (including,
without limitation, any environmental indemnities contained in Section 9 hereof), Tenant agrees to
indemnify, defend by counsel reasonably acceptable to Landlord and hold Landlord and the other
Landlord Parties, and the Project, harmless of, from and against any and all losses, damages,
liabilities, claims, liens, costs and expenses, including without limitation court costs and
reasonable attorneys’ fees and expenses, arising in connection with any Tenant Alterations. All
Tenant Alterations done by Tenant or its contractors, including work done pursuant to Section 9,
shall be performed in a first class workmanlike manner using only good grades of materials and
shall comply with all Laws. Within thirty (30) days after substantial
completion of any Tenant Alterations by or on behalf of Tenant, Tenant shall furnish to
Landlord

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“final construction” drawings (marked in the field to reflect all “as built” conditions)
of such Tenant Alterations. All Tenant Alterations shall be performed in accordance with
Landlord’s standard construction rules and regulations for the Building. In no event shall any
supervision or right to supervise by Landlord, nor shall any approvals given by Landlord hereunder,
constitute any warranty by Landlord to Tenant of the adequacy of the design, workmanship or quality
of the Tenant Alterations, or impose any liability upon Landlord in connection with the performance
of such work.

          (e) Reasonable Consent. With respect to any Tenant Alterations for which Landlord’s
consent is required, Landlord agrees not to unreasonably withhold or delay its consent to such
Tenant Alterations; provided, however, that Landlord shall not be deemed to have acted unreasonably
if it withholds its consent because, in Landlord’s reasonable opinion, such work would adversely
affect Building systems, the structure of the Building or the safety of its occupants; would
increase Landlord’s cost of repairs, insurance or furnishing services or otherwise adversely affect
Landlord’s ability to efficiently operate the Building or furnish services to Tenant or other
tenants; involves toxic or hazardous materials in any unlawful manner; or requires entry into
another tenant’s premises or use of public areas (other than use of public areas for prompt
movement of materials to the Premises). The foregoing reasons, however, shall not be exclusive of
the reasons for which Landlord may withhold consent, whether or not such other reasons are similar
or dissimilar to the foregoing.

          (f) Non-Structural Alterations. Notwithstanding the foregoing provisions of this
Section 14, Tenant may perform certain interior alterations (collectively, “Non-Structural
Alterations”) to the Premises such as carpeting, painting (so long as the odors from the same do
not materially or unreasonably interfere with any other tenant’s operations), hanging artwork or
wall coverings, installing furniture systems, installing non-load bearings partitions, or other
similar interior improvements, without (1) obtaining Landlord’s consent therefor, (2) obtaining
Landlord’s approval of the contractors/service providers performing the same, or (3) payment of any
supervision or other fee to Landlord or any reimbursement of Landlord’s out-of-pocket costs
relating thereto (but subject to the remaining requirements of this Section 14, but only if (i)
such items do not affect the Building structure or HVAC, electrical or other Building systems, the
public areas of the Building or any other tenant space, (ii) Tenant gives prior written notice to
Landlord of such items, including a description of the contemplated work and the types of materials
being used, (iii) the cost of such alterations do not exceed $25,000 for any one or any series of
related Alterations, and (iv) the contractors/service providers performing such work are reputable
and do not cause any labor disharmony at the Building. Approval of plans and specifications shall
not be required for the foregoing Non-Structural Alterations, where plans and specifications are
not reasonably appropriate for the work to be performed.

     15. ASSIGNMENT AND SUBLETTING.

          (a) Prohibitions. Subject to the terms of Section 15(h) below, Tenant shall not,
either prior or subsequent to the commencement of the Term, (i) assign, transfer, mortgage, pledge,
hypothecate or encumber or subject to or permit to exist upon or be subjected to any lien
or charge, this Lease or any interest under it, (ii) allow to exist or occur any transfer of
or lien upon this Lease or Tenant’s interest herein by operation of law, (iii) sublet the Premises
or any part thereof, or (iv) permit the use or occupancy of the Premises or any part thereof for
any

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purpose not provided for under Section 6 of this Lease or by anyone other than Tenant and
Tenant’s employees. Landlord has the absolute right to withhold its consent to any of such acts
without giving any reason whatsoever, except with respect to assignment and subletting as herein
expressly provided to the contrary in Section 15(d). In no event shall this Lease be assigned or
assignable by voluntary or involuntary bankruptcy proceedings or otherwise, except as provided by
law, and in no event shall this Lease or any rights or privileges hereunder be an asset of Tenant
under any bankruptcy, insolvency or reorganization proceedings, except as provided by law. Any of
the foregoing performed or attempted in violation of the provisions of this Section shall be null
and void.

          (b) Continuing Liability. No assignment, subletting, use, occupancy, transfer or
encumbrance by Tenant, including an assignment to a Tenant Affiliate (as hereafter defined), shall
operate to relieve Tenant from any covenant, liability or obligation hereunder except to the
extent, if any, expressly provided for in any such written consent of Landlord to the foregoing,
and none of the foregoing, and no consent to any of the foregoing, shall be deemed to be a consent
to or relieve Tenant from obtaining Landlord’s consent to any subsequent assignment, subletting,
use, occupancy, transfer or encumbrance. Tenant shall pay all of Landlord’s reasonable costs,
charges and expenses, including, without limitation, reasonable attorneys’ fees and expenses (which
attorneys’ fees shall not exceed $2,000.00 in any one instance), incurred in connection with any
assignment, subletting, use, occupancy, transfer or encumbrance made or requested by Tenant.

          (c) Notice of Proposed Assignment or Sublease; Recapture. Tenant shall, by notice in
writing, advise Landlord of its intention from, on and after a stated date (which shall not be less
than thirty (30) nor more than ninety (90) days after the date of the giving of Tenant’s notice to
Landlord) to assign this Lease or sublet all or any part of the Premises for the balance or any
part of the Term, and, in such event, Landlord shall have the right, to be exercised by giving
written notice to Tenant within twenty (20) days after its receipt of Tenant’s notice, (1) so long
as the proposed assignee of the Lease or the proposed subtenant, as the case may be, is not a
Tenant Affiliate (as hereinafter defined), to terminate this Lease with respect to the space
described in Tenant’s notice as of the date that is thirty (30) days after Tenant’s receipt of such
Landlord termination notice (provided, however, that in the event Tenant notifies Landlord within
such thirty (30) day period that it is revoking its notice to sublet or assign, then this Lease
shall continue in full force and effect and Landlord’s termination notice shall be deemed null and
void), or (2) to consent or refuse to consent to the proposed assignment or sublease, as described
in Section 15(d) below. Tenant’s notice shall include the name and address of the proposed
assignee or subtenant, a true and complete copy of the proposed assignment or sublease and
sufficient information, as Landlord deems reasonably necessary, to permit Landlord to determine (i)
the financial responsibility and character and the nature of the business of the proposed assignee
or subtenant, and (ii) whether Landlord has the right under this lease to withhold consent to the
proposed assignment or sublease. If Tenant’s notice covers all of the Premises and if Landlord
exercises its right to terminate this Lease as to such space (and Tenant does not revoke its notice
to assign or sublease), then the Term of this lease shall expire and end on the date stated in
Tenant’s notice for the commencement of the proposed assignment or sublease as
fully and completely as if that date had otherwise been the Expiration Date. If, however,
Tenant’s notice covers less than all of the Premises, and if Landlord exercises its right to
terminate this lease with respect to such space described in Tenant’s notice (and Tenant does not

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revoke its notice to assign or sublease), then as of the date stated in Tenant’s notice for the
commencement of the proposed sublease, the Base Rent and Tenant’s Proportionate Share shall be
adjusted on the basis of the number of square feet of Rentable Area retained by Tenant, and this
Lease as so amended, shall continue thereafter in full force and effect. Landlord shall have no
right to terminate this Lease pursuant to this Section 15(c) if the proposed assignee or the
proposed subtenant, as the case may be, is a Tenant Affiliate. Notwithstanding anything to the
contrary contained herein, if (i) Landlord fails to respond to Tenant’s request for consent to an
assignment or subleasing within twenty (20) days after Landlord’s receipt of such request
accompanied by all other information required pursuant to this Section 15 (c), (ii) Tenant sends a
second written request for such consent which request states conspicuously “YOUR FAILURE TO RESPOND
TO THIS REQUEST WILL RESULT IN A DEEMED APPROVAL”, and (iii) Landlord fails to respond to such
second request within seven (7) business days after receipt thereof, then Landlord shall be deemed
to have consented to the assignment or sublease in question.

          (d) Grounds for Withholding Consent. If Landlord, upon receiving Tenant’s notice with
respect to any such space, does not exercise its right to terminate as aforesaid, Landlord will not
unreasonably withhold, condition or delay its consent to Tenant’s assignment of this Lease or
subletting the space covered by Tenant’s notice. Landlord shall not be deemed to have unreasonably
withheld its consent to a proposed assignment of this lease or to a proposed sublease of part or
all of the Premises if its consent is withheld because: (i) Tenant is then in Default hereunder;
(ii) any notice of termination of this lease or termination of Tenant’s right of possession shall
have been given under Section 19; (iii) either the portion of the Premises which Tenant proposes to
sublease, or the remaining portion of the Premises, or the means of ingress or egress to either the
portion of the Premises which Tenant proposes to sublease or the remaining portion of the Premises
is of such nature that it will violate any applicable Law, is of such accessibility, size or
irregular shape so as not to be suitable for normal renting purposes as space on a multi-tenant
floor within the Building; (iv) the proposed use of the Premises by the proposed assignee or
subtenant does not conform with the use set forth in Section 6 hereof, or will violate any
applicable Law, will impose any obligation upon Landlord or increase Landlord’s obligations under
or cost of compliance with any Laws, or will violate any exclusive right Landlord has granted or
contemplates granting in the future to any tenant of any part of the Project; (v) in the reasonable
judgment of Landlord the proposed assignee or subtenant is of a character or is engaged in a
business which would be deleterious to the reputation of the Project, Landlord or any of the
constituent members of Landlord; (vi) in the reasonable judgment of Landlord, the proposed assignee
or subtenant is not sufficiently financially responsible to perform its obligations under the
proposed assignment or sublease; (vii) the proposed assignee or subtenant is a government (or
subdivision or agency thereof); or (viii) the proposed assignee or subtenant is an occupant (or
affiliate thereof) of the Building or is a person or entity (or affiliate thereof) with whom
Landlord is then dealing, or has dealt with during the prior six (6) months with regard to leasing
of space in the Building; provided, however, that the foregoing are merely examples of reasons for
which Landlord may withhold its consent and shall not be deemed exclusive of any permitted reasons
for reasonably withholding consent, whether similar or dissimilar to the foregoing examples, and
Landlord may consider all relevant factors in
determining whether to give or withhold its consent. Tenant agrees that all advertising by
Tenant or on Tenant’s behalf with respect to the assignment of this lease or subletting of any part
of the Premises must be approved in writing by Landlord prior to publication.

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          (e) Excess Rent Payment. If Tenant (as Tenant or debtor-in-possession) shall sublet
the Premises, or any part thereof, at a rental or for other consideration in excess of the Rent or
pro rata portion thereof due and payable by Tenant under this Lease, then Tenant shall pay to
Landlord as additional Rent (i) on the later of the first day of each month during the term of any
sublease, or the day of receipt from such subtenant, one-half (1/2) of the excess of all rent and
other consideration paid by the subtenant for such month over the Rent then payable to Landlord
pursuant to the provisions of this lease for said month (or if only a portion of the Premises is
being sublet, one-half (1/2) of the excess of all rent and other consideration due from the
subtenant for such month over the portion of the Rent then payable to Landlord pursuant to the
provisions of this lease for said month which is allocable on a Rentable Area basis to the space
sublet), and (ii) immediately upon the receipt thereof, one-half (1/2) of any other consideration
realized by Tenant from such subletting. Landlord shall not be responsible for any deficiency if
Tenant shall assign this Lease or sublet the Premises or any part thereof at a rental less than
that provided for herein. Whenever reference is made to the “excess” of rent or other
consideration, such excess shall be reduced by charging (i.e., on an amortized basis over the term
of the sublease) against the rent or other consideration paid by such subtenant, reasonable
brokerage commissions and leasehold improvements and other reasonable out-of-pocket costs
(including, without limitation, construction, marketing, legal fees and other concessions) which
Tenant has paid in connection with subleasing the applicable portion of the Premises. The terms of
this subparagraph (e) shall not apply to any subletting transactions permitted under Section 15(h)
below.

          (f) Lease Assumption; Subtenant Attornment. If Tenant shall assign this Lease, the
assignee shall expressly assume all of the obligations of Tenant hereunder in a written instrument
provided by Landlord and delivered to Landlord not later than ten (10) days prior to the effective
date of the assignment. If Tenant shall sublease any part of the Premises, Tenant shall obtain and
furnish to Landlord, not later than ten (10) days prior to the effective date of such sublease and
in form reasonably satisfactory to Landlord, the written agreement of such subtenant to the effect
that the subtenant will attorn to Landlord, at Landlord’s option and written request (at Landlord’s
sole election), if this Lease terminates before the expiration of the sublease. Tenant shall, not
later than fifteen (15) days after the effective date of any such assignment or sublease, deliver
to Landlord a certified copy of the instrument of assignment or sublease.

          (g) Corporation, Partnership and Limited Liability Company Transfers. If Tenant is a
corporation, any transaction or series of transactions (including without limitation any
dissolution, merger, consolidation or other reorganization of Tenant, or any issuance, sale, gift,
transfer or redemption of any capital stock of Tenant, whether voluntary, involuntary or by
operation of law, or any combination of any of the foregoing transactions) resulting in the
transfer of control of Tenant, other than by reason of death, shall be deemed to be a voluntary
assignment of this Lease by Tenant subject to the provisions of this Section 15. If Tenant is a
partnership or limited liability company, any transaction or series of transactions (including
without limitation any withdrawal or admittance of a partner or member or any change in any
partner’s or member’s interest in Tenant, whether voluntary, involuntary or by operation of
law, or any combination of any of the foregoing transactions) resulting in the transfer of control
of Tenant, other than by reason of death, shall be deemed to be a voluntary assignment of this
Lease by Tenant subject to the provisions of this Section 15. The term “control” as used in this
lease

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means the power to directly or indirectly direct or cause the direction of the management or
policies of Tenant, through the ownership of voting or other ownership interests. Notwithstanding
any of the foregoing, the provisions of this Section 15(g) shall not apply to the original named
Tenant hereunder or any permitted assignee which is a Tenant Affiliate (as defined below).

          (h) Permitted Transfers. Notwithstanding any of the foregoing, Landlord’s consent
shall not be required for an assignment to a Tenant Affiliate, and Landlord shall not terminate
this Lease with respect to the Premises or any portion of the Premises or otherwise collect any
excess rent under subparagraph (e) above as a result of such assignment to a Tenant Affiliate;
provided, however, that (i) Tenant shall give reasonable prior notice to Landlord of the proposed
assignment, (ii) such assignor shall remain liable for the obligations of Tenant under this Lease,
as provided in Section 15(b) above, and (iii) such assignee shall expressly assume the obligations
of Tenant under this Lease. As used in this Lease, the term “Tenant Affiliate” shall mean any
entity (1) which results from a merger or consolidation with the Tenant under this Lease, or (2)
which acquires all or substantially all of the assets or ownership interests of the Tenant under
this Lease for a purpose other than to circumvent the provisions of this Article 15, or (3) which
controls, is controlled by, or is under common control with, the Tenant under this L ease (with
“control” or words of similar import meaning the power, whether directly or indirectly, by contract
or equity ownership, to control the management and policies of the entity in question).

     16. WAIVER OF CERTAIN CLAIMS, INDEMNITY BY TENANT.

          (a) General Waiver. In addition to and without limiting or being limited by any other
releases or waivers of claims in this Lease, but rather in confirmation and furtherance thereof, to
the extent not prohibited by law, Landlord and Tenant each releases and waives any and all claims
for, and rights to recover, damages against and from the other, and the other’s respective agents,
members, partners, shareholders, officers and employees (collectively, the “Released
Parties”), for loss, damage or destruction to any of its property (including the Premises, the
Building, the Common Areas and their contents), the elements of which are insured against (with
“insured against” meaning coverage over and above the amount of $50,000.00, it being the intent
that the cost of a loss, damage or destruction which is less than $50,000.00 shall be borne by the
party causing such loss, damage or destruction notwithstanding that such loss, damage or
destruction may be within the coverage of the other party’s insurance) or which would have been
insured against (with “insured against” meaning coverage over and above the amount of $50,000.00,
it being the intent that the cost of a loss, damage or destruction which is less than $50,000.00
shall be borne by the party causing such loss, damage or destruction notwithstanding that such
loss, damage or destruction may be within the coverage of the other party’s insurance) had such
party suffering such loss, damage or destruction maintained the property or physical damage
insurance policies required under Section 22 hereof. In no event
shall this clause be deemed, construed or asserted (i) to affect or limit any claims or rights
against any Released Parties other than the right to recover damages for loss, damage or
destruction to property, or (ii) to benefit any third party other than the Released Parties.

     (b) Indemnity by Tenant. Subject to the terms of Section 16(a) above, in addition to
and without limiting or being limited by any other indemnity in this Lease, but rather

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in
confirmation and furtherance thereof, to the extent not prohibited by law, and excluding matters
caused by any of the Landlord Parties, Tenant agrees to indemnify, defend by counsel reasonably
acceptable to Landlord and hold Landlord and the Landlord Parties, and the Project, harmless of,
from and against any and all losses, damages, liabilities, claims, liens, costs and expenses,
including court costs and reasonable attorneys’ fees and expenses, in connection with injury to or
death of any person or with respect to damage to or theft, loss or loss of the use of any property,
occurring in or about the Premises or the Project arising from Tenant’s occupancy of the Premises,
or the conduct of its business or from any activity, work, or thing done, permitted or suffered by
Tenant in or about the Premises or the Project, or from any breach or default on the part of Tenant
in the performance of any covenant or agreement on the part of Tenant to be performed pursuant to
the terms of this Lease, or due to any other negligent act or omission or willful misconduct of
Tenant, or any of its employees, agents, licensees, invitees or contractors.

          (c) Waiver. To the extent permitted by law, Tenant releases Landlord and the Landlord
Parties from, and waives all claims for, damage or injury to person or property sustained by the
Tenant or any occupant of the Building or the Premises resulting directly or indirectly from any
existing or future condition, defect, matter or thing in and about the Project or the Premises or
any part of either or any equipment or appurtenance therein, or resulting from any accident in or
about the Project or resulting directly or indirectly from any act or neglect of any tenant or
occupant of the Building or of any other person, including Landlord’s agents and servants, except
where resulting from the negligence or willful misconduct of Landlord or any of the Landlord
Parties. Tenant hereby waives any consequential damages, compensation or claims for inconvenience
or loss of business, rents, or profits as a result of any injury or damage occurring at or about
the Building. To the extent permitted by law, Landlord releases Tenant and the Tenant Parties
from, and waives all claims for, damage or injury to person or property sustained by the Landlord
or any occupant of the Building or the Premises resulting directly or indirectly from any existing
or future condition, defect, matter or thing in and about the Project or the Premises or any part
of either or any equipment or appurtenance therein, or resulting from any accident in or about the
Project or resulting directly or indirectly from any act or neglect of any tenant or occupant of
the Building or of any other person, including Tenant’s agents and servants, except where resulting
from the negligence or willful misconduct of Tenant or any of the Tenant Parties (as defined
below).

          (d) Indemnity by Landlord. Subject to the terms of Section 16(a) above, in addition
to and without limiting or being limited by any other indemnity in this Lease, but rather in
confirmation and furtherance thereof, to the extent not prohibited by law, and excluding matters
caused by Tenant or its employees, agents, contractors, consultants, vendors, customers,
affiliates, invitees and any other person or entity acting on behalf of Tenant or whose presence in
the Project is in connection with Tenant’s business operation at the Project (all of the foregoing,
collectively, the “Tenant Parties”), Landlord agrees to indemnify, defend by counsel reasonably
acceptable to Tenant and hold Tenant and the constituent partners of Tenant, harmless of, from
and against any and all losses, damages, liabilities, claims, liens, costs and expenses, including
court costs and reasonable attorneys’ fees and expenses, imposed on them in connection with injury
to or death of any person, occurring within the common areas of the Building or elsewhere at the
Project, or with respect to damage to or theft, loss or loss of the use of property of any person,
occurring within the common areas of the Building or elsewhere at the Project, but only

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to the
extent that the foregoing losses, damages, liabilities, claims, liens, costs and expenses arise
from or are caused by any breach or default on the part of Landlord in the performance of any
covenant or agreement on the part of Landlord to be performed pursuant to the terms of this Lease,
or from any negligent act or omission or willful misconduct of Landlord. No persons or entities
other than Tenant or its constituent partners shall be deemed third party beneficiaries of the
indemnities set forth in this Section 16(d).

     17. DAMAGE OR DESTRUCTION BY CASUALTY.

          (a) Termination of Lease; Repair by Landlord. If the Premises or the Building, or the
Lobby, Receiving Docks and Auditorium, shall be damaged by fire or other casualty and if such
damage does not render all or a material portion of the Premises or the Building untenantable, or
all or a material portion of the Lobby, Receiving Docks and Auditorium unusable for their intended
purposes, then Landlord shall proceed with reasonable promptness to repair and restore the Building
and the Premises, and the Lobby, Receiving Docks and Auditorium, so as to render the Premises
tenantable and the Lobby, Receiving Docks and Auditorium usable, subject to reasonable delays for
insurance adjustments and delays caused by matters beyond Landlord’s reasonable control, and also
subject to zoning laws and building codes then in effect. If any such damage renders all or a
material portion of the Premises or the Building untenantable, or renders the Lobby, Receiving
Docks or Auditorium unusable, Landlord shall, with reasonable promptness after the occurrence of
such damage, estimate the length of time that will be required to substantially complete the repair
and restoration of the Building and the Premises, and the Lobby, Receiving Docks and Auditorium, as
the case may be, necessitated by such damage and shall by notice given to Tenant approximately
sixty (60) days from the date such damage occurs, advise Tenant of such estimate, and advise Tenant
if Landlord has available sufficient insurance and other proceeds to complete the repair and
restoration. If it is so estimated that the amount of time required to substantially complete such
repair and restoration will exceed two hundred seventy (270) days from the date such damage
occurred, or if Landlord will not have available sufficient insurance and other proceeds to
complete the repair and restoration, then either Landlord or Tenant shall have the right to
terminate this lease as of the date of notice of such election by giving notice to the other at
anytime within twenty (20) days after Landlord gives Tenant the notice containing said estimate.
Unless this lease is terminated as provided in the preceding sentence, Landlord shall proceed with
reasonable promptness to repair and restore the Building or the Premises, and the Lobby, Receiving
Docks and Auditorium, so as to render the Premises tenantable (including restoration of reasonable
access to the Premises, if such access was destroyed as a result of the subject casualty), and the
Lobby, Receiving Docks and Auditorium usable, subject to reasonable delays for insurance
adjustments and delays caused by matters beyond Landlord’s reasonable control, and also subject to
zoning laws and building codes then in effect. Landlord shall have no
liability to Tenant, and Tenant shall not be entitled to terminate this lease (except as
hereinafter provided) if such repairs and restoration are not in fact completed within the time
period estimated by Landlord, as aforesaid, or within said two hundred seventy (270) days.
However, if such repairs and restoration are not completed by a date (“Outside Date”) which is
twelve (12) months after the date of such fire or other casualty (or ninety-five (95) days after
the expiration of the time period estimated by Landlord as aforesaid, if longer than two hundred
seventy (270) days and neither party terminated the lease as permitted), which Outside Date shall
be extended (as to Tenant’s ability to terminate only) by all periods of delay attributable to the
acts or

38

 

omissions of Tenant or Tenant’s agents, employees or contractors, for any reason
whatsoever, then either party may terminate this lease, effective as of the date of notice of such
election, by giving written notice to the other party within thirty (30) day period after said
Outside Date as extended as aforesaid, but prior to substantial completion of repair or
restoration. Notwithstanding anything to the contrary herein set forth: (i) Landlord shall have
no duty pursuant to this Section 17 to repair or restore any portion of Tenant’s Alterations or by
other improvements, additions or alterations made by or on behalf of Tenant in the Premises,
including improvements performed by Landlord pursuant to this Lease and/or the Workletter, if any;
(ii) Landlord shall not be obligated (but may, at its option, so elect) to repair or restore the
Premises or Building if the damage is due to an uninsurable casualty or if insurance proceeds are
insufficient to pay for such repair or restoration, or if any Mortgagee applies proceeds of
insurance to reduce its loan balance, and the remaining proceeds, if any, available to Landlord are
not sufficient to pay for such; or (iii) if any such damage rendering all or a material portion of
the Premises, Lobby or Building untenantable shall occur during the last year of the Term (and, for
the purpose of this clause (iii) only, “material” shall mean that it would take more than sixty
(60) to complete restoration of the affected area), either party (but as to Tenant’s right, only if
all or a substantial portion of the Premises is rendered untenantable) shall have the option to
terminate this lease by giving written notice to the other within thirty (30) days after the date
such damage occurred, and if such option is so exercised, this lease shall terminate as of the date
of such notice. Tenant acknowledges that Landlord shall be entitled to the full proceeds of any
insurance coverage, whether carried by Landlord or Tenant, for damage to those items or decorations
which Landlord is obligated to repair, it being agreed that Tenant shall be entitled to the
proceeds from any insurance for items which Landlord has no obligation to repair. In no event will
Landlord be required to repair or restore any of Tenant’s personal property.

          (b) Repair by Tenant. If this lease is not terminated pursuant to this Section 17,
Tenant shall, in accordance with Section 14, proceed with reasonable promptness to repair and
restore all Tenant’s Alterations and all other alterations, additions and improvements in the
Premises, other than any repairs or restoration required to be made by Landlord pursuant to Section
17(a) above, to as near the condition which existed prior to the fire or other casualty as is
reasonably possible; provided, however, that Tenant shall have no obligation to commence any repair
work unless Landlord is diligently performing its obligations under Section 17(a) above, and Tenant
shall not be obligated to commence its repair work until Landlord has substantially completed
repair and restoration of the Premises. Tenant agrees and acknowledges that Landlord shall be
entitled to the proceeds of any insurance coverage carried by Tenant relating to improvements and
betterments to the Premises if this lease terminates (provided that Tenant shall be entitled to all
insurance proceeds from insurance which it carries relating to its non-affixed furnishings,
non-affixed trade fixtures and other items of non-affixed personalty, irrespective of whether this
lease terminates, and Landlord shall have no claim relative thereto).

          (c) Abatement of Rent. In the event any such fire or casualty damage renders the
Premises untenantable and if this lease shall not be terminated pursuant to the foregoing
provisions of this Section 17 by reason of such damage, then Rent shall abate during the period
beginning with the date of such damage and ending on the date of the 120th day following
the date when Landlord substantially completes its repair or restoration required hereunder. Such
abatement shall be in an amount bearing the same ratio to the total amount of Rent for such period
as the portion of the Rentable Area of the Premises which is untenantable

39

 

and not used by Tenant
from time to time bears to the Rentable Area of the entire Premises; provided, however that the
Premises shall continue to be considered untenantable so long as the Lobby and Receiving Docks are
not usable in the manner in which they were used prior to the casualty. In the event of
termination of this lease pursuant to this Section 17, Rent shall be apportioned on a per diem
basis and be paid to the date of the termination.

          (d) Untenantability. As used in this lease, the term “untenantable” means reasonably
incapable of being occupied for its intended use due to damage to the Premises or Building.
Notwithstanding anything contained to the contrary in this Section 17, neither the Premises nor any
portion of the Premises shall be deemed untenantable if Landlord is not required to repair or
restore same (or if Landlord is required to repair or restore same, then 120 days after such time
as Landlord has substantially completed the repair and restoration work required to be performed by
Landlord under this Section 17), or if Tenant continues to actually occupy the subject portion of
the Premises; it being understood that the Premises shall, in any event, be deemed untenantable for
so long as portions of the Building necessary to provide access to the Premises are rendered
unusable, and to the extent Tenant is unable to conduct its customary business operations from the
Premises as a result thereof.

     18. EMINENT DOMAIN.

          (a) Substantial Taking. If the entire Project or the entire Building, or a
substantial part of either of them, or any part of the Project which includes all or a material
part (meaning more than 20% of the replacement value thereof) of the Premises or Lobby, or a
material part of the Receiving Docks, shall be taken or condemned by any competent authority for
any public or quasi-public use or purpose, and, in Tenant’s reasonable judgment, such taking
renders the Premises unsuitable for the operation of Tenant’s business therein, Tenant may, within
ninety (90) days following the date of such taking, terminate this Lease upon written notice to
Landlord. If this Lease is terminated, then all of Tenant’s obligations hereunder, including any
obligation to pay Rent or other charges, shall end upon the earlier of the date when the possession
of the part so taken shall be required for such use or purpose or the effective date of the taking
and each party shall be released from further liability hereunder (except for such liability that
expressly survives the termination of this Lease) If any condemnation proceeding shall be
instituted in which it is sought to take or damage any part of the Project, the taking or damaging
of which would, in Landlord’s opinion, prevent the economical operation of the Project, or if the
grade of any street or alley adjacent to the Land or the Building is changed or any such street or
alley is closed by any competent authority, and such taking, damage, change of grade or closing
makes it necessary or desirable to remodel the Building to conform to the taking, damage, change of
grade or closing, Landlord shall have the right to terminate this lease
upon written notice to Tenant given not less than ninety (90) days prior to the date of
termination designated in the notice. In either of the events above referred to, Rent shall be
apportioned on a per diem basis and be payable to the date of the termination.

          (b) Taking of Part. In the event a part of the Building or the Premises is taken or
condemned by any competent authority and this lease is not terminated as provided in Section 18(a)
above, the lease shall be amended to reduce or increase, as the case may be, the Monthly Base Rent
and Tenant’s Proportionate Share to reflect the Rentable Area of the Premises or Building, as the
case may be, remaining after any such taking or condemnation.

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Landlord, upon receipt and to the
extent of the award in condemnation (or proceeds of sale) shall make necessary repairs and
restorations to the Premises (exclusive of any Tenant’s Alterations, or any other improvements made
by or on behalf of Landlord or Tenant) and to the Building to the extent necessary to constitute
the portion of the Building not so taken or condemned as a complete architectural and economically
efficient unit. In the event that Landlord does not have sufficient proceeds to make the necessary
repairs and restorations to render the Premises and the Building a complete said architecturally
and economically efficient unit, Tenant may, within ninety (90) days following the date of such
taking, terminate this Lease upon written notice to Landlord.

          (c) Compensation. Landlord shall be entitled to receive the entire award (or sale
proceeds) from any such taking, condemnation or sale without any payment to Tenant, and Tenant
hereby assigns to Landlord all of Tenant’s interest, if any, in such award; provided, however,
Tenant shall have the right separately to pursue against the condemning authority a separate award
in respect of Tenant’s relocation expenses and the loss, if any, to Tenant Alterations paid for by
Tenant without any credit or allowance from Landlord, so long as there is no diminution of
Landlord’s award as a result, and subject to the rights of any ground lessor or mortgagee of
Landlord with respect thereto.

     19. DEFAULT; LANDLORD’S RIGHTS AND REMEDIES.

          (a) Default. The occurrence of any one or more of the following matters constitutes a
“Default” by Tenant under this Lease:

          (i) Failure by Tenant to pay any Rent when due, if such failure continues for ten (10)
days after written notice to Tenant of such failure;

          (ii) Failure by Tenant to pay any other money required to be paid by Tenant under this
Lease when due, if such failure continues for ten (10) business days after written notice to
Tenant of such failure;

          (iii) Failure by Tenant to observe or perform any of the material covenants in respect
of assignment and subletting set forth in Section 15;

          (iv) Failure by Tenant to commence to cure as soon as reasonably practicable under the
circumstances, after receipt of notice from Landlord, any hazardous condition which Tenant
has created or permitted in violation of law or of this Lease;

          (v) Failure by Tenant to complete, execute and deliver any estoppel certificate or
subordination agreement required to be completed, executed and delivered by Tenant pursuant
to Section 20 or Section 24 of this Lease, within the time required for such instrument or
document in accordance with such Sections;

          (vi) Failure by Tenant to observe or perform any other covenant, agreement, condition
or provision of this lease, if such failure shall continue for thirty (30) days after
written notice thereof from Landlord to Tenant; provided that such 30-day period shall be
extended for the time reasonably required to complete such cure (not to exceed, in any
event, an additional 60 day period), if such failure cannot reasonably be

41

 

cured within said
30-day period and Tenant commences to cure such failure within the first ten (10) days after
receiving said written notice and thereafter diligently and continuously proceeds to cure
such failure;

          (vii) The levy upon execution or the attachment by legal process of the leasehold
interest of Tenant, or the filing or creation of a lien in respect of such leasehold
interest, which lien shall not be released or discharged within sixty (60) days from the
date of such filing (or, in any event, such earlier date prior to final enforcement of the
same);

          (viii) Tenant becomes insolvent or bankrupt or admits in writing its inability to pay
its debts as they mature, or makes an assignment for the benefit of creditors, or applies
for or consents to the appointment of a trustee or receiver for Tenant or for the major part
of its property;

          (ix) A trustee or receiver is appointed for Tenant or for a major part of its property,
without Tenant’s application therefor or consent thereto, and is not discharged within sixty
(60) days after such appointment;

          (x) Any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding for relief under any bankruptcy law or similar law for the relief of
debtors, is instituted (A) by Tenant, or (B) against Tenant and is allowed against it or is
consented to by it or is not dismissed within sixty (60) days after such institution; or

          (b) Landlord’s Rights and Remedies. If a Default occurs, Landlord shall have the
rights and remedies hereinafter set forth, which shall be distinct, separate and cumulative and
shall not operate to exclude or deprive Landlord of any other right or remedy allowed it at law or
in equity:

          (i) By written notice to Tenant, Landlord may terminate this Lease, in which event the
Term of this Lease shall end, and all right, title and interest of Tenant hereunder shall
expire, on the date stated in such notice;

          (ii) By written notice to Tenant, Landlord may terminate the right of Tenant to
possession of the Premises without terminating this Lease, whereupon the right of Tenant to
possession of the Premises or any part thereof shall cease on the date stated in such
notice;

          (iii) Landlord may enforce the provisions of this Lease and may enforce and protect the
rights of Landlord hereunder by a suit or suits in equity or at law for the specific
performance of any covenant or agreement contained herein, and for the enforcement of any
other appropriate legal or equitable remedy, including without limitation distraint for
rent, injunctive relief, recovery of all money due or to become due from Tenant under any of
the provisions of this Lease and recovery of damages incurred by Landlord by reason of the
Default; and

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          (iv) Landlord may cure or correct such Default or take steps to perform any covenant,
agreement, condition or provisions of this lease, and all costs and expenses reasonably
incurred by Landlord in so doing (including reasonable attorneys’ fees) shall be paid by
Tenant to Landlord as additional rent upon demand plus interest at the Default Rate (defined
in Section 28(i)) from the date of expenditure. Landlord’s proceeding under the rights
reserved to Landlord under this Section 19(b)(iv) shall not in any way prejudice or waive
any rights as Landlord might otherwise have against Tenant by reason of that or any other
Default. Upon any Default of Tenant under this Section 19, to the extent Landlord is
seeking damages against Tenant as a result thereof, then Landlord shall be required to use
reasonable efforts to mitigate its damages generally, as and to the extent required by
applicable Law; provided, however, Landlord shall not be deemed to have failed to mitigate
if Landlord leases any other premises in the Project before reletting all or any portion of
the Premises. Any failure by Landlord to mitigate with respect to any period of time shall
only reduce Rent and any other amount to which Landlord is entitled under this Lease by the
reasonable value of the Premises during such period.

          (c) Surrender. If Landlord exercises any of the remedies provided for in
subparagraphs (i) and (ii) of Section 19(b), Tenant shall surrender possession of and vacate the
Premises and immediately deliver possession thereof to Landlord, and Landlord may re-enter and take
complete and peaceful possession of the Premises, with process of law, full and complete license so
to do being hereby granted to Landlord, and Landlord may remove all occupants and property
therefrom, using such force as may be necessary and legally permissible, without being deemed in
any manner guilty of trespass, eviction or forcible entry and detainer, and without relinquishing
Landlord’s right to Rent or any other right given to Landlord hereunder or by law or in equity.

          (d) Termination of Right of Possession. If Landlord terminates the right of Tenant to
possession of the Premises without terminating this Lease, as provided for by subparagraph (ii) of
Section 19(b), then Landlord shall be entitled to recover from Tenant all the fixed dollar amounts
of Rent accrued and unpaid for the period up to and including such termination date, as well as all
other additional sums payable by Tenant as of such termination date, or for which Tenant is liable
or in respect of which Tenant has agreed to indemnify Landlord under any of the provisions of this
Lease, which may be then owing and unpaid as of the termination date, and all costs and expenses,
including without limitation court costs and reasonable attorneys’ fees and expenses incurred by
Landlord in the enforcement of its rights and remedies hereunder, and in addition, Landlord shall
be entitled to recover from Tenant from time to time, and Tenant shall remain liable for, all Rent
and all other additional sums thereafter accruing as they become due under this Lease during the
period from the date of such notice of
termination of possession to the stated end of the then current Term. In any such case,
Landlord shall use reasonable efforts as required by applicable law to relet the Premises for the
account of Tenant for such rent, for such time (which may be for a term extending beyond the Term
of this Lease), in such portions and upon such terms as Landlord in Landlord’s sole discretion (but
subject to Landlord’s reasonable mitigation obligations as may be required by applicable law) shall
determine, and Landlord shall not be required to accept any tenant offered by Tenant or to observe
any instructions given by Tenant relative to such reletting. Landlord may give priority over
leasing the Premises to any other space Landlord desires to lease in the Building and shall

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not be
required in any case to offer rent, length of terms or other terms for the Premises which are or
would be less favorable to Landlord than being offered for comparable space of Landlord in the
Building. Also, in any such case, Landlord may make repairs, alterations and additions in or to
the Premises and redecorate the same to the extent deemed by Landlord necessary or desirable, and
in connection therewith Landlord may change the locks to the Premises, and Tenant shall upon
written demand pay the cost thereof together with Landlord’s expenses of reletting. Landlord may
collect the rents from any such reletting and shall apply the same first to the payment of the
expenses of reentry, redecoration, repair, alterations and reletting and second to the payment of
Rent herein provided to be paid by Tenant, and any excess or residue shall operate only as an
offsetting credit against the amount of Rent, if any, due and owing or as the same thereafter
becomes due and payable hereunder, but the use of such offsetting credit to reduce the amount of
Rent due Landlord, if any, shall not be deemed to give Tenant any right, title or interest in or to
such excess or residue, and any such excess or residue shall belong to Landlord solely; provided
that in no event shall Tenant be entitled to such a credit against Rent in excess of the aggregate
sum (including Base Rent and Additional Rent) which would have been paid by Tenant for the period
for which the credit to Tenant is being determined had no Default occurred. No such re-entry,
repossession, repairs, alterations, additions or reletting shall be construed as an eviction or
ouster of Tenant or as an election on Landlord’s part to terminate this Lease, unless a written
notice of such intention is given to Tenant, or shall operate to release Tenant in whole or in part
from any of Tenant’s obligations hereunder, and Landlord may, at any time and from time to time,
sue and recover judgment for any deficiencies from time to time remaining after the application
from time to time of the proceeds of any such reletting.

          (e) Termination of Lease. In the event of the termination of this Lease by Landlord
as provided for by subparagraph (i) of Section 19(b), Landlord shall be entitled to recover from
Tenant all the fixed dollar amounts of Rent accrued and unpaid for the period up to and including
such termination date, as well as all other additional sums payable by Tenant, or for which Tenant
is liable or in respect of which Tenant has agreed to indemnify Landlord under any of the
provisions of this lease, which may be then owing and unpaid, and all costs and expenses, including
without limitation court costs and reasonable attorneys’ fees and expenses incurred by Landlord in
the enforcement of its rights and remedies hereunder, and in addition, Landlord shall be entitled
to recover an amount equal to the present value (calculated using a discount rate equal to eight
percent (8%) per annum) of the aggregate Base Rent and Additional Rent payable for the period from
the termination date stated in Landlord’s notice terminating this lease until the date which would
have been the Expiration Date but for such termination, less the present value (calculated using a
discount rate equal to eight percent (8%) per annum) of the fair rental value of the Premises for
the same period (which fair rental value shall be calculated so as to include a reasonable vacancy
period for reletting the Premises and deductions for reasonable expenses and inducements incurred
by Landlord to achieve such reletting, including without
limitation attorneys’ fees and expenses, brokerage fees, advertising costs, rent abatements,
tenant improvement allowances and the like). The rights and remedies of Landlord pursuant to this
Section 19 shall survive the termination of this lease.

          (f) Tenant’s Property. All property of Tenant removed from the Premises by Landlord
or which becomes Landlord’s property pursuant to any provisions of this Lease or by law may be
handled, removed or stored by Landlord at the cost and expense of Tenant, and Landlord shall in no
event be responsible for the value, preservation or safekeeping thereof.

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Tenant shall pay Landlord
for all expenses incurred by Landlord in such removal and for storage charges for such property so
long as the same shall be in Landlord’s possession or under Landlord’s control. All property not
removed from the Premises or retaken from storage by Tenant on or before the end of the Term,
however terminated, or the termination of Tenant’s right of possession, shall, at Landlord’s
option, be conclusively deemed to have been conveyed by Tenant to Landlord as by bill of sale,
without further payment or credit by Landlord to Tenant.

          (g) Waiver of Notices Not Provided for in this Lease. Tenant expressly waives the
service of any notice of intention to terminate this Lease or to reenter the Premises (except for
any notice expressly provided for in this Lease) and waives the service of any demand for payment
of rent or for possession and waives the service of any and every other notice or demand prescribed
by any ordinance, statute or other law (except as expressly otherwise provided in this lease or as
required by applicable law) and agrees that the breach of any covenants or agreements provided in
this lease shall, in and of itself, without the service of any notice or demand whatever (except as
expressly otherwise provided in this Lease or as required by applicable law), constitute a forcible
detainer by Tenant of the Premises.

          (h) Waiver of Trial by Jury. Landlord and Tenant hereby do waive trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto against the other on any
matter whatsoever arising out of or in any way connected with this lease, the relationship of
Landlord and Tenant, Tenant’s use of or occupancy of the Premises or any claim of injury or damage
and any emergency statutory or any other statutory remedy. If Landlord commences any summary
proceeding for non-payment of rent, Tenant will not interpose any counterclaim of whatever nature
or description in any such proceeding.

          (i) Landlord Default. If Landlord shall fail to perform any obligation under this
Lease required to be performed by Landlord, Landlord shall not be deemed to be in default hereunder
nor subject to any claims for damages of any kind, unless such failure shall have continued for a
period of thirty (30) days after written notice thereof is received by Landlord from Tenant
(provided, if the nature of Landlord’s failure is such that more time is reasonably required in
order to cure, Landlord shall not be in default if Landlord commences to cure within such period
and thereafter diligently seeks to cure such failure to completion). If Landlord shall default and
fail to cure as provided herein following receipt of such notice, Tenant shall have such rights and
remedies as may be available to Tenant at law or equity, subject to the other provisions of this
Lease; provided, Tenant shall have no right of self-help to perform repairs or any other obligation
of Landlord, and shall have no right to withhold, set-off, or abate Rent, or terminate this Lease,
except as expressly provided in this Lease.

     20. RIGHT’S OF MORTGAGEES AND GROUND LESSORS.

          (a) Subordination of Lease. Landlord represents and warrants that as of the date
hereof, (1) there is no Mortgage (as defined herein) encumbering the Land, Building or Project
other than that certain Mortgage, Security Agreement and Fixture Filing (the “Existing Mortgage”)
dated as of August 10, 2004 by and between Landlord and Wilmington Trust of Pennsylvania (the
“Existing Mortgagee”); (ii) Landlord is the fee simple owner of the entire Project; and (iii) there
is no Ground Lease (as defined herein) encumbering the Land, Building or

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Project. Landlord shall
deliver to Tenant an SNDA (as defined herein) in the form of Exhibit J attached hereto executed on
behalf of the Existing Mortgagee. Landlord may have heretofore or may hereafter encumber with a
mortgage or trust deed the Building, the Land, the Project, any part thereof or any interest
therein, may sell and lease back the Land, or any part of the Project, and may encumber the
leasehold estate under such a sale and leaseback arrangement with a mortgage or trust deed. (Any
such mortgage or trust deed is herein called a “Mortgage” and the holder of any such mortgage or
the beneficiary under any such trust deed is herein called a “Mortgagee.” Any such lease of the
Land or other part of the Project is herein called a “Ground Lease” and the lessor under any such
lease is herein called a “Ground Lessor.”) Provided that the Mortgagee or Ground Lessor in
question furnishes a non-disturbance agreement for the benefit of Tenant in commercially reasonable
form, this Lease and the rights of Tenant hereunder shall be and are hereby expressly made subject
to and subordinate at all times to any Mortgage and to any Ground Lease now or hereafter existing,
and to all amendments, modifications, renewals, extensions, consolidations and replacements
thereof, and to all advances made or hereafter to be made upon the security thereof. Conditioned
upon receipt of such non-disturbance agreement, Tenant agrees to execute and deliver to Landlord
such further instruments consenting to or confirming the subordination of this lease to any
Mortgage and to any Ground Lease and containing such other provisions which may be requested in
writing by Landlord within ten (10) business days after Tenant’s receipt of such written request.

          (b) Notice of and Opportunity to Cure Defaults. Tenant agrees that if Landlord
defaults in the performance or observance of any covenant or condition of this lease required to be
performed or observed by Landlord hereunder, Tenant will give written notice specifying such
default by certified or registered mail, postage prepaid, to any Mortgagee or Ground Lessor of
which Tenant has been notified in writing, and before Tenant exercises any right to terminate this
lease which Tenant may have on account of any such default of Landlord, such Mortgagee or Ground
Lessor shall have an additional thirty (30) days after receipt of notice thereof within which to
cure such default (or if such default is non-in nature and cannot be cured within that time, then
such additional time as may be reasonably necessary, if, within such thirty (30) days, any
Mortgagee or Ground Lessor has commenced and is diligently pursuing the remedies necessary to cure
such default, including but not limited to commencement of foreclosure proceedings or other
proceedings to acquire possession of the mortgaged or leased estate, if necessary to effect such
cure). Such period of time shall be extended by any period within which such Mortgagee or Ground
Lessor is prevented from commencing or pursuing such foreclosure proceedings or other proceedings
to acquire possession of the mortgaged or leased estate by reason of Landlord’s bankruptcy.
Nothing in this Section 20(b) is intended to impair or delay Tenant’s right of self-help as
expressly set forth in Section 9(c) of this Lease.

          (c) Rights of Successors. If any Mortgage is foreclosed, or Landlord’s interest under
this lease is conveyed or transferred in lieu of foreclosure, or if any Ground Lease is terminated:

            (i) So long as no Default then exists, (x) the possession and use by Tenant of the
Premises shall not be disturbed by any suit or proceeding for the foreclosure of the
Mortgage or any deed in lieu of foreclosure, or by any termination of the Ground Lease (as
the case may be); (y) the Mortgagee, Ground Lessor or such other entity that succeeds to the
interest of Landlord hereunder shall recognize any and all of

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Tenant’s rights and privileges
under this Lease and under any renewals or modifications thereof; and (z) Tenant shall not
be joined as a party to any lawsuit or other proceeding for the foreclosure of the Mortgage
or any deed in lieu of foreclosure or any other proceeding related to the Mortgage or Ground
Lease.

          (ii) No person or entity which as the result of any of the foregoing has succeeded to
the interest of Landlord in this Lease (any such person or entity being hereafter called a
“Successor”) shall be liable for any default by Landlord or any other matter which occurred
prior to the date such Successor succeeded to Landlord’s interest in this Lease (subject to
the terms of the then applicable SNDA), nor shall such Successor be bound by or subject to
any offsets or defenses which Tenant may have against Landlord or any other predecessor in
interest to such Successor.

          (iii) Upon request of any Successor, Tenant will attorn to such Successor, as Landlord
under this Lease, subject to the provisions of this Section 20(c) and Section 20(e), and
will execute and deliver such instruments as may be necessary or appropriate to evidence
such attornment within twenty (20) days after receipt of a written request to do so;
provided that Tenant receives written notice that such Successor has succeeded to the
interest of Landlord.

          (iv) No Successor shall be bound to recognize any prepayment by more than thirty (30)
days of Base Rent or Additional Rent.

          (v) No Successor shall be bound to recognize any material amendment or material
modification of this Lease made without the written consent of the Mortgagee or Ground
Lessor (as the case may be).

          (d) Subordination of Mortgage. Notwithstanding anything to the contrary contained
herein, any Mortgagee may subordinate, in whole or in part, its Mortgage to this Lease by sending
Tenant notice in writing subordinating all or any part of such Mortgage to this Lease, and Tenant
agrees to execute and deliver to such Mortgagee such further instruments consenting to or
confirming the subordination of all or any portion of its Mortgage to this lease and containing
such other provisions which may be reasonably requested in writing by such Mortgagee within ten
(10) business days after Tenant’s receipt of such written request.

          (e) Liability of Mortgagee and Ground Lessor. Whether or not any Mortgage is
foreclosed or any Ground Lease is terminated, or any Mortgagee or Ground Lessor succeeds to any
interest of Landlord under this lease, no Mortgagee or Ground Lessor shall have
any liability to Tenant for any security deposit paid to Landlord by Tenant hereunder, unless
such security deposit has actually been received by such Mortgagee or Ground Lessor.

          (f) Requests by Mortgagee or Ground Lessor. Should any prospective Mortgagee or
Ground Lessor require execution of a short form of this lease for recording (containing, among
other customary provisions, the names of the parties, a description of the Premises and the Term of
this lease), Tenant agrees to execute such short form of lease and deliver the same to Landlord
within ten (10) business days following the request therefor.

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          (g) Immediate Default. If Tenant fails within ten (10) business days after initial
written demand therefor to execute and deliver any instruments as may be necessary or proper to
effectuate any of the covenants of Tenant set forth above in this Section 20, and such failure
continues for an additional five (5) business days after a second written demand therefor, then
such failure shall be deemed an immediate “Default” hereunder, without further notice or cure
periods, subject to all rights and remedies of Landlord described in Section 19 hereof or otherwise
available at Law or in equity.

     21. FURNITURE. For no additional charge, Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord those items of furniture (the “Furniture”) described on the inventory
list attached hereto as Exhibit E (the “Inventory List”), which, on the date hereof, is located
within the Premises. Landlord and Tenant acknowledge that, prior to Commencement Date the parties
will conduct a “walk-through” inspection of the Premises in order to confirm the completeness and
accuracy of the furniture shown on the Inventory List. Tenant accepts the Furniture in its “as-is”
condition and configuration, without any representation or warranty by Landlord. Landlord shall
have no obligation to replace or repair, or to pay for the cost to replace or repair, any item of
Furniture. LANDLORD SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS AND/OR WARRANTIES, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO THE FURNITURE. During the Term, Tenant shall maintain and repair the Furniture as
reasonably necessary, and shall insure the same along with its other personal property pursuant to
Section 22 hereof. Upon the expiration or earlier termination of this lease or contraction by
Tenant of any portion of the Premises in accordance with this lease, Tenant shall surrender the
Furniture to Landlord in the same condition and repair as on the Commencement Date, reasonable wear
and tear and damage by casualty excepted.

     22. INSURANCE AND SUBROGATION

          (a) Tenant’s Insurance. Tenant shall carry insurance during the entire Term hereof
(and any earlier period during which Tenant is entitled to possession of the Premises or any
portion thereof or conducting any business or construction related activities at the Project)
insuring Tenant, and with respect to the commercial general liability insurance referenced in
clause (i) of this Section 22(a), listing as additional insureds, Landlord, Landlord’s constituent
members and agents (so long as Tenant receives prior written notice of such parties), any
property management company engaged by Landlord (so long as Tenant receives prior written
notice of such parties), and all Mortgagees and Ground Lessors (so long as Tenant receives prior
written notice of such parties), and their respective agents, partners and employees. Such
insurance shall be with terms and coverages, and be in companies in good standing and licensed to
do business in the State of Illinois and otherwise reasonably satisfactory to Landlord having
Best’s (or equivalent) ratings of “A-/VIII” or higher, and with such changes in insured parties,
coverages and increase in limits as Landlord may from time to time reasonably request, which
request shall be consistent with factors such as claims history, actual changes in risk pertaining
to the Project, and the practices of prudent landlords of Comparable Buildings. Initially Tenant
shall maintain the following coverages in the following amounts:

          (i) Commercial general liability insurance with the broad form commercial liability
endorsement, including contractual liability insurance covering

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Tenant’s indemnity
obligations hereunder, insuring against claims for death, bodily injury, personal injury and
property damage occurring upon, in or about the Premises in an amount not less than
$1,000,000.00 per occurrence and having a general aggregate amount on a per location basis
of not less than $2,000,000.00, with umbrella liability coverage of $4,000,000.00 per
occurrence, $4,000,000.00 aggregate, dedicated for the 1000 Remington Boulevard,
Bolingbrook, Illinois location. Landlord, and any such property management company (so long
as Tenant receives prior written notice of such parties) and all Mortgagees and Ground
Lessors (so long as Tenant receives prior written notice of such parties) shall be named as
additional insureds on such policy.

          (ii) “Special form” full replacement cost property damage insurance including fire,
sprinkler leakage, vandalism and extended coverage for the full replacement cost of all
Tenant’s Work, other Tenant’s Alterations, and all other additions, improvements and
alterations to the Premises (providing that Landlord is an additional named insured as its
interest may appear) and of all office furniture, inclusive of the Furniture, trade
fixtures, office equipment, inventory, merchandise and all other items of Tenant’s property
on or about the Premises, on a per location basis.

          (iii) Workers’ Compensation in such limits as are required by applicable Laws and
Employers’ Liability insurance in an amount of not less than $1,000,000.00.

          (iv) Such other insurance or coverage as Landlord reasonably requests; provided that
such insurance is requested by prudent landlords of Comparable Buildings.

     Tenant shall, prior to the Commencement Date or such earlier date as Tenant or anyone acting
on behalf of Tenant is conducting any activity at the Project, and from time to time during the
Term (and, in any event, not less than ten days prior to the expiration of any such policy),
furnish to Landlord certificates of insurance evidencing the foregoing insurance coverage.
Tenant’s policies shall state that such insurance coverage may not be cancelled or not renewed
without at least thirty (30) days’ prior written notice to Landlord and Tenant, and shall further
provide that the policy shall not be invalidated should the insured party have waived in writing
prior to a loss, any and all rights of the insured party against any other party for losses covered
by such policy. Tenant shall have the right to provide the foregoing insurance under a master or
blanket policy of insurance covering other properties of Tenant or its affiliates provided
that an endorsement insuring segregated amounts sufficient to satisfy said insurance requirements
hereunder is provided.

     So long as the net worth of Tenant is in excess of $25,000,000.00, Tenant shall have the
option to maintain self insurance for the insurance required under subsections 22(a)(ii) above so
long as such self-insurance at all times provides the coverage and limits described above and is in
compliance with all Laws pertaining to self-insurance programs. Any self-insurance shall contain
all of the terms and conditions applicable to such insurance as set forth in this Section 22. If
Tenant elects to self-insure, then with respect to any claims which may result from incidents
occurring during the Term, such self-insurance obligation shall survive the expiration of the Term
or earlier termination of this Lease to the same extent as the insurance required above would so
survive. In order to prove satisfaction of the net worth requirement set forth above,

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Tenant shall
be required to provide audited or certified financial statements (or other evidence of net worth
reasonably satisfactory to Landlord) reasonably prior to any time at which Tenant desires to
self-insure and annually within ten (10) days after written request therefor by Landlord during the
period when Tenant is maintaining self-insurance. The right to self-insure described herein is
personal to the original named Tenant and may not be assigned or transferred to any future tenant
under this Lease. All net worth or other financial information received or reviewed by Landlord or
any representative retained by Landlord is confidential information of Tenant and will not be
disclosed by Landlord (or its agents or auditors) to any third parties, and Landlord shall require
its agents, attorneys and accountants to enter into a confidentiality agreement with Tenant
agreeing to the aforesaid confidentiality requirements. Notwithstanding anything to the contrary
contained herein, Landlord may disclose confidential information as required by deposition,
interrogatory, request for documents, subpoena or similar legal process or as otherwise required to
pursue or defend against any claims or legal proceedings.

          (b) Waiver of Subrogation. Landlord and Tenant each agree to have all property or
physical damage insurance which it may carry endorsed with a clause providing that any release from
liability of or waiver of claim for recovery from the other party or any of the parties named in
Section 22(a) above or Released Parties described in Section 16(a) entered into in writing by the
insured thereunder prior to any loss or damage shall not affect the validity of said policy or the
right of the insured to recover thereunder. Each of Landlord’s and Tenant’s policies shall provide
further that the insurer waives all rights of subrogation which such insurer might have against
either Landlord and the Landlord Parties, or Tenant and the Tenant Parties, as applicable.
Landlord and Tenant each further agrees to first seek recovery under any applicable property or
physical insurance policy maintained by such party before proceeding against the other.

          (c) Landlord’s Insurance. Landlord shall maintain: (1) commercial general liability
insurance in an amount not less than $1,000,000 per occurrence and $5,000,000 in the aggregate
covering the Building (including the Common Areas) and (2) fire and extended coverage special form
insurance covering the Building on a full replacement cost basis.

     23. NONWAIVER. No waiver of any condition expressed in this Lease shall be implied by any
neglect of Landlord or Tenant to enforce any remedy on account of the violation of such condition,
whether or not such violation be continued or repeated subsequently, and no express waiver shall
affect any condition other than the one specified in such waiver and that one only for the time and
in the manner specifically stated. Without limiting Landlord’s rights under the provisions of
Section 11, it is agreed that no receipt of money by Landlord from Tenant after the termination in
any way of the Term or of Tenant’s right of possession hereunder or after the giving any notice
shall reinstate, continue or extend the Term or affect any notice given to Tenant prior to the
receipt of such money. It is also agreed that after the service of notice or the commencement of a
suit or after final judgment for possession of the Premises, Landlord may receive and collect any
money due, and Landlord’s receipt and collection of said money shall not waive or affect any said
notice, suit or judgment.

     24. ESTOPPEL CERTIFICATE. Tenant agrees that from time to time (but no more than three
times in any twelve (12) month period), upon not less than fifteen (15) business days’ prior
request by Landlord, or any existing or prospective Mortgagee or Ground Lessor,

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Tenant will, and
Tenant will cause any subtenant, licensee, concessionaire or other occupant of the Premises
claiming by, through or under Tenant, to complete, execute and deliver to Landlord or Landlord’s
designee or to any existing or prospective Mortgagee or Ground Lessor, a written estoppel
certificate certifying (a) that this Lease is unmodified and is in full force and effect (or if
there have been modifications, that this lease, as modified, is in full force and effect and
setting forth the modifications); (b) the amounts of the monthly installments of Base Rent and
Additional Rent Estimate then required to be paid under this Lease; (c) the date to which Rent has
been paid; (d) that to the best of Tenant’s knowledge, Landlord is not in default under any of the
provisions of this Lease, or if in default, the nature thereof in detail and what is required to
cure same; and (e) such other information concerning the status of this Lease or the parties’
performance hereunder reasonably requested by Landlord or the party to whom such estoppel
certificate is to be addressed. Tenant’s failure to complete, execute and deliver such estoppel
certificate within the aforesaid 15 business day period, which failure continues for an additional
five (5) business days after a second written request from Landlord, shall be deemed to be a
Default under Section 19 of this Lease, without further notice or cure periods, giving rise to all
rights and remedies available to Landlord under said Section 19 or otherwise available at law or in
equity. Without limitation of the foregoing, Tenant hereby agrees to execute and deliver to
Landlord, concurrent with Tenant’s execution and delivery of this Lease to Landlord, three (3)
originals of that certain Lease Estoppel Certificate in the form of Exhibit F attached hereto.

     25. TENANT CORPORATION, LIMITED LIABILITY COMPANY OR PARTNERSHIP AUTHORITY. In case
Tenant is a corporation or a limited liability company, Tenant represents and warrants that this
Lease has been duly authorized, executed and delivered by and on behalf of Tenant and constitutes
the valid and binding agreement of Tenant in accordance with the terms hereof. Landlord represents
and warrants that this Lease has been duly authorized, executed and
delivered by and on behalf of Landlord and constitutes the valid and binding agreement of
Landlord in accordance with the terms hereof. Also, it is agreed that each and every present and
future individual general partner, if Tenant is a partnership, in Tenant shall be and remain at all
times jointly and severally liable hereunder, to the extent permitted by law, and that the death,
resignation or withdrawal of any such partner shall not release the liability of such partner under
the terms of this Lease unless and until Landlord shall have consented in writing to such release.

     26. REAL ESTATE BROKERS. Tenant represents and warrants to Landlord that Tenant did not
deal with any broker in connection with this lease other than the Broker identified in Section
1(d). Landlord represents and warrants to Tenant that Landlord did not deal with any broker in
connection with this lease other than the Broker identified in Section 1(d). Landlord hereby
agrees to pay the brokerage commission payable to said Broker in accordance with a written
agreement between Landlord and such Broker. Landlord and Tenant each hereby agree to indemnify,
defend and hold the other, the other’s agents and their respective partners and employees, and the
Project, harmless of, from and against any and all losses, damages, liabilities, claims, liens,
costs and expenses, including without limitation court costs and reasonable attorneys’ fees and
expenses, arising from any claims or demands of any other broker or brokers or finders for any
commission alleged to be due such other broker or brokers or finders claiming to have dealt with
the party making such indemnification in connection with this lease or with whom the party making
such indemnification hereafter deals or whom the party making such indemnification employs.

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     27. NOTICES. All notices, waivers, demands, requests or other communications required or
permitted hereunder shall, unless otherwise expressly provided, be in writing and be deemed to have
been properly given, served and received (a) if delivered personally or by same-day courier
messenger, when delivered, (b) if sent by nationally required overnight courier, on the first (1st)
business day after deposit with said courier, and (c) if mailed, on the third (3rd) business day
after deposit in the United States Mail, certified or registered, postage prepaid, return receipt
requested.

	 	 	 	 	 
	 

	 	If to Landlord:
	 	Bolingbrook Investors, LLC
	 

	 	 	 	c/o BPG Properties, Ltd.
	 

	 	 	 	200 South Michigan Avenue
	 

	 	 	 	Suite 210
	 

	 	 	 	Chicago, Illinois 60604
	 

	 	 	 	Attention: Asset Manager
	 
	 	 	 	 
	 

	 	With an additional copy to:
	 	BPG Properties, Ltd.
	 

	 	 	 	1500 Market Street
	 

	 	 	 	3000 Centre Square West
	 

	 	 	 	Philadelphia, Pennsylvania 19102
	 

	 	 	 	Attention: Loretta M. Kelly, General Counsel
	 
	 

	 	If to Tenant:
	 	Ulta Salon, Cosmetics & Fragrance, Inc.
	 

	 	 	 	Windham Lakes Business Park
	 

	 	 	 	1275 Windham Drive
	 

	 	 	 	Romeoville, IL 60446
	 
	 	 	 	 
	 

	 	With a copy of any notice
	 	Wachovia Capital Finance Corporation (Central)
	 

	 	to terminate this Lease to:
	 	150 South Wacker Drive
	 

	 	 	 	Chicago, Illinois 60606-4401
	 

	 	 	 	Attention: Portfolio Manager

or to such other address(es) or addressee(s) as any party entitled to receive notice hereunder
shall designate to the others in the manner provided herein for the service of notices. Rejection
or refusal to accept or inability to deliver because of changed address or because no notice of
changed address was given, shall be deemed receipt.

     28. MISCELLANEOUS.

          (a) Successors and Assigns. Each provision of this Lease shall extend to and shall
bind and inure to the benefit not only of Landlord and Tenant, but also their respective heirs,
legal representatives, successors and assigns, but this provision shall not operate to permit any
assignment, subletting, mortgage, lien, charge, or other transfer or encumbrance contrary to the
provisions of this Lease.

          (b) Amendment. No modification, waiver or amendment of this Lease or of any of its
conditions or provisions shall be binding upon Landlord unless the same shall be in writing and
signed by Landlord.

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          (c) Offer. Submission of this instrument for examination shall not constitute a
reservation of or option for the Premises or in any manner bind Landlord, and no lease or
obligation on Landlord shall arise until this instrument is signed and delivered by Landlord and
Tenant; provided, however, the execution and delivery by Tenant of this lease to Landlord, or its
agents, shall constitute an irrevocable offer by Tenant to lease the Premises on the terms and
conditions herein contained, which offer may not be revoked for ten (10) days after such delivery.

          (d) Tenant. The word “Tenant” whenever used herein shall be construed to mean Tenants
or any one or more of them in all cases where there is more than one Tenant; and the necessary
grammatical changes required to make the provisions hereof apply either to corporations or other
organizations, partnerships or other entities, or individuals, shall in all cases be assumed as
though in each case fully expressed. In all cases where there is more than one Tenant, (a) the
liability of each shall be joint and several and (b) any one person or entity comprising Tenant may
give any notice or approval required or permitted to be given by Tenant under this lease and such
notice or approval shall be deemed binding upon all persons or entities comprising Tenant and may
be relied upon by Landlord as if such notice or approval had been given by all persons or entities
comprising Tenant. Notwithstanding anything to the contrary in
this Lease, Landlord shall have no recourse personally against any member or officer of Tenant
with respect to any liability of Tenant under this Lease.

          (e) Expenses of Enforcement. The non-prevailing party shall pay within thirty (30)
days after demand all of the reasonable costs, charges and expenses (including the court costs and
fees and out-of-pocket expenses of counsel, agents and others retained by the prevailing party)
incurred by the prevailing party in enforcing the terms of this lease, and a party shall also pay
such costs and expenses incurred by the other party in any claim, action or litigation in which
said party causes the other party without the other party’s fault to become involved or concerned.
Any amount due from Tenant to Landlord pursuant to this Section shall be deemed to be additional
Rent due under this lease. A party shall be considered the prevailing party if: (i) it initiated
the litigation and substantially obtains the relief it sought, either through a judgment or the
other party’s voluntary action before trial or judgment; (ii) it did not initiate the litigation,
and the other party withdraws its action without substantially obtaining the relief it sought; or
(iii) it did not, initiate the litigation, and judgment was entered for either party, but without
substantially granting the relief sought.

          (f) Exhibits and Riders. Exhibits and riders, if any, referred to in or affixed to
this Lease are made an integral part hereof.

          (g) Approval of Plans and Specifications. Neither review nor approval by or on behalf
of Landlord of any plans and specifications for any Tenant Alterations or any other work shall
constitute a representation or warranty by Landlord, any of Landlord’s constituent members, or any
of their respective agents, partners or employees, that such plans and specifications either (i)
are complete or suitable for their intended purpose, or (ii) comply with applicable Laws, it being
expressly agreed by Tenant that neither Landlord, nor any of Landlord’s constituent members, nor
any of their respective agents, partners or employees, assume any responsibility or liability
whatsoever to Tenant or to any other person or entity for such completeness, suitability or
compliance.

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          (h) Time of Essence. Time is of the essence of this lease and of each and all
provisions hereof.

          (i) Due Date; Interest. If any installment of Monthly Base Rent or any other sum due
from Tenant pursuant to any provision of this Lease shall not be received by Landlord or Landlord’s
designee within five (5) business days following the due date for such installment of Monthly Base
Rent or Additional Rent, or within five (5) business days following written notice that such amount
was not paid when due for any other sums which may become due under this Lease, then Tenant shall
pay to Landlord a late charge equal to five percent (5%) of the overdue amount. The late charge
shall be deemed additional rent and the right to require it shall be in addition to all of
Landlord’s other rights and remedies hereunder or at law and shall not be construed as liquidated
damages or as limiting Landlord’s remedies in any manner. In addition to the late charge described
above, any Monthly Base Rent or Additional Rent owing hereunder which are not paid within five (5)
business days following the due date for Base Rent, or within five (5) business days following
written notice that such amount was not paid when due for any other sums which may become due under
this lease shall bear interest from the date when due until paid at the Default Rate. The term
“Default Rate” means the rate of interest announced
from time to time, by Bank One, Chicago, Illinois (or any successor), as its “prime rate” or
“corporate base rate,” changing as and when such rate changes, or if such rate is no longer in
existence, then such other “prime rate” as may be designated by Landlord (herein, the “Prime Rate”)
plus three (3) percentage points. The provisions of this subparagraph shall in no way relieve
Tenant of the obligation to pay Rent or any other sums due hereunder on or before the date on which
payment is due, nor shall the collection by Landlord of any amount under this subparagraph impair
the ability of Landlord to collect any amount under Section 19 of this Lease. Notwithstanding
anything to the contrary set forth in this Section 28(i), the first time in any 12 month period
that Tenant fails to pay Rent when due, no late charge or interest shall be charged unless such
failure continues for ten (10) days after written notice thereof from Landlord.

          (j) Interpretation. The invalidity of any provision of this Lease shall not, to the
extent commercially reasonable, impair or affect in any manner the validity, enforceability or
effect of the rest of this Lease.

          (k) Force Majeure. Without limiting or being limited by the provisions of Section 8
or Section 13, or any of the other provisions of this Lease, if either party fails to perform
timely any of the terms, covenants or conditions of this Lease on its part to be performed, and
such failure is due in whole or in part to any strike, lockout, labor trouble, civil disorder,
riot, insurrection, act of terrorism, war, accident, fire or other casualty, adverse weather
condition, act of God, governmental inaction, restrictive governmental law or regulation, inability
to procure materials, electricity, gas, other fuel or water or other utilities at the Building
after reasonable effort to do so, act or event caused directly or indirectly by or by default of
the other party or any of the other party’s employees, agents, licensees, invitees or contractors,
concealed subsurface condition not reasonably anticipated from test results obtained prior to
commencement of work or any cause beyond the reasonable control of the first party, then the time
to perform the term, covenant or condition in question shall be extended on a day-for-day basis for
the period of the delay caused by such event; provided, however, that the party claiming the
benefit of this Section 28(k) shall, as a condition thereto, give notice to the other party in

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writing within ten (10) business days of the incident specifying with particularity the nature
thereof, the reason therefor, the date and time such incident occurred and a reasonable estimate of
the period that such incident will delay the fulfillment of said term, covenant or condition.
Failure to give such notice within the specified time shall render such delay invalid in extending
the time for performing the subject term, covenant or condition. This Section shall not apply to
(i) the inability to pay any sum of money due hereunder or the failure to perform any other
obligation due to the lack of money or inability to raise capital or borrow for any purpose, or
(ii) extend the Commencement Date, except and to the extent that the force majeure event is a fire
or other casualty not caused by any of the Tenant Parties.

          (l) Cumulative Remedies; Illinois Law. The rights and remedies of Landlord and Tenant
under this Lease are cumulative and none shall exclude any other rights or remedies allowed by law
or equity. This Lease is for the lease of space in a building located in the State of Illinois and
is declared to be an Illinois contract, and all of its terms shall be construed according to the
laws of the State of Illinois.

          (m) Counterparts. This Lease may be simultaneously executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same
instrument.

          (n) Relationship. Landlord and Tenant disclaim any intention to create a joint
venture, partnership or agency relationship.

          (o) Action on Behalf of Landlord or Tenant. Any service which may be provided by
Landlord under this Lease may be provided by Landlord, j any of its constituent members, or any
agent or contractor of any of them, and the cost to Landlord of any such agent or contractor shall
be included in any charge to Tenant for such service. Except as provided in the following
sentence, any right reserved to Landlord under this Lease may be exercised by Landlord, any of its
constituent members, or any agent, contractor or designee of any of them (provided that, except for
certain indemnities in favor of such parties as expressly described in this Lease, no such party,
other than Landlord, shall be deemed a third party beneficiary of the Lease for purposes of
bringing an enforcement action against Tenant). Any notice, demand, consent or approval which may
be given by Landlord under this Lease may be given only by Landlord, any constituent owner of
Landlord, or any agent or attorney of any of them. Any notice, demand, consent or approval which
may be given by Tenant under this Lease may be given only by Tenant, any constituent owner of
Tenant, or any agent or attorney of any of them.

     (p) Entire Agreement. This Lease contains the entire agreement between Landlord, and
Tenant with respect to its subject matter, and all negotiations, considerations, representations,
understandings and agreements, oral or written, which may have been previously made between any of
the foregoing parties are incorporated and merged into this Lease. In executing and delivering
this Lease, Tenant has not relied on any representation, warranty or statement by Landlord, any of
Landlord’s constituent members, or any of their respective agents, partners or employees, which is
not set forth in this Lease, including without limitation any representation as to the amount of
any Additional Rent, or any component thereof, or any representation that Landlord is furnishing
the same services to other tenants, at all, on the same level or on the same basis.

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     (q) Financial Statements. At Landlord’s request given at any time that (i) Tenant is
in Default, (ii) Tenant is seeking to assign this Lease or sublease the Premises, (iii) Tenant is
expanding the Premises, or (iv) Landlord is selling or refinancing the Project, Tenant shall
deliver to Landlord, within ten (10) days after written request by Landlord, Tenant’s most recent
then available quarterly financial statements and any more recent financial statements then
available, including balance sheets and income statements. All such financial statements shall be
certified by the chief financial officer of Tenant as being true, accurate and complete in all
material respects. Landlord shall not disclose such financial information to any third party other
than its lenders, partners, members, agents, consultants, advisors, attorneys and accountants
(provided that, in any such case, any such persons and entities are advised of the obligation not
to disclose such information and agree not to so disclose such information) or as may be otherwise
required by a government or governmental agency or pursuant to court order or to enforce Landlord’s
rights hereunder.

     (r) Landlord Right to Perform Tenant’s Duties. If Tenant fails to timely perform any
of its duties under this Lease, then Landlord shall have the right (but not the obligation), upon
reasonable prior written notice to Tenant (except that no such notice shall be required in the case
of an emergency) and Tenant’s failure to promptly take action to remedy such failure within a
reasonable time under the circumstances, and without limiting any other rights or remedies
available to Landlord, to perform such duty on behalf and at the expense of Tenant without further
notice to Tenant, and all sums expended or expenses incurred by Landlord in performing such duty,
together with interest thereon at the Default Rate accruing from and after the time so expended or
incurred by Landlord until repaid by Tenant, shall be deemed to be additional Rent under this lease
and shall be due and payable upon demand by Landlord. Any specific notice and cure period set
forth elsewhere in this Lease shall govern and control over the “reasonable time under the
circumstances” language set forth in this Section 28(r).

     (s) Public Safety. Notwithstanding anything contained in this Lease to the contrary,
Tenant and all persons within the Premises or within or under Tenant’s control shall comply with
any and all orders and directives that may be given by Landlord (or its agents, including for these
purposes only, building management and lobby attendants) to Tenant in connection with Landlord’s
reasonable, good faith belief that there exists an emergency or other safety concerns which affect
the Building and/or the Premises. Such orders and directives may require, among other things, for
Tenant and its agents, employees, contractors and those under Tenant’s control, to vacate the
Premises and/or the Building, and/or not enter or re-enter the Premises and/or the Building.
Without limiting the foregoing: (a) Tenant shall designate, in writing, a person or persons who
shall serve as its emergency contact for purposes of this Section; (b) notices and directives under
this Section may be given orally or in writing or by any other reasonable means (including, if
applicable, the public address system of the Building); (c) if so directed by Landlord or its
agents, all persons within the Premises and persons outside the Premises and within Tenant’s
control shall immediately vacate the Building and/or not enter or re-enter the Premises and/or the
Building in accordance with Landlord’s direction; (d) Landlord shall have the right with or without
advance notice to Tenant to conduct a reasonable number of “fire drills” in any calendar year, and
Tenant shall comply with the direction given by Landlord or its agents in connection with such
“fire drills” as if a real emergency existed; (e) Tenant’s failure to comply with the provisions of
this Section shall

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constitute a default under this lease; and (f) without limiting Landlord’s rights and remedies
in connection with Tenant’s obligations under this Section, (i) Tenant shall indemnify, defend
(with counsel reasonably acceptable to Landlord) and hold harmless Landlord and Landlord’s agents,
employees, contractors, officers, directors and partners from and against any and all loss, claim,
expense, suit, damage, injury and/or liability (including reasonable attorneys’ fees and court
costs) which arise out of or in connection with any failure by Tenant or any person within the
Premises or within Tenant’s control to comply with the provisions of this Section, and (ii) Tenant
on its behalf and on behalf of its employees, officers, directors and partners waives and releases
Landlord and Landlord’s agents, employees, contractors, officers, directors and partners from and
against any and all claims expenses, suits, damages, injuries and/or liabilities (including,
without limitation, reasonable attorneys’ fees and court costs) that arise out of any actions by
Landlord in connection with enforcement of this Section or the failure by Tenant to comply with
this Section.

          (t) Notice to Tenant. Wherever under this Lease oral notice is permitted to be given
by Landlord to Tenant, said notice shall be given by means of a personal visit or a telephone call
to Director of Loss Prevention (initially Dominick K. Archer) (Telephone no.: {Tenant shall
provide such number to Landlord as soon as it is available}, which person and number may be changed
by Tenant at any time during the Term upon prior written notice to Landlord and the property
manager for the Project.

     29.RIGHT OF FIRST REFUSAL. Landlord hereby grants to Tenant a one-time option to lease,
upon the terms and conditions hereinafter set forth, leasable space in the High Bay area shown on
the Floor Plan of Building attached hereto as Exhibit A (the “Refusal Space”) which becomes
“available for leasing” (as determined in accordance with subsection (i) below) and which may be
first floor or second floor space or a combination thereof.

          (i) A portion of the Refusal Space shall be deemed to be “available for leasing” upon
the occurrence of all of the following events:

                    (A) such portion of the Refusal Space is not the subject of an Existing Lease (as hereinafter
defined);

                    (B) one (1) year prior to the expiration of an Existing Lease of such portion of the Refusal
Space, if such portion of the Refusal Space is not then subject to a right or option to lease such
space granted in another Existing Lease;

                    (C) if such portion of the Refusal Space is subject to a right or option granted in an
Existing Lease (whether to extend/renew or to expand), all of which rights or options are not
exercised, the expiration of the last of such unexercised right or option; and

                    (D) if such portion of the Refusal Space is subject to a right or option granted in an
Existing Lease, which right or option is exercised, the expiration of the term of such Existing
Lease or any later date upon which the term of the demise of such portion of the Refusal Space
created by the exercise of such right or option expires (including any renewals or extensions
thereof granted in such Existing Lease).

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          (ii) At such time as Landlord has submitted a lease proposal to a third party
prospective tenant or received a lease proposal from a third party prospective tenant, in
either case, which proposal sets forth the basic material terms of a lease for any portion
of the Refusal Space which is or will be available for leasing, Landlord shall give Tenant a
written notice (the “Refusal Notice”) setting forth (i) the location, (ii) the net rentable
area, (iii) the availability date (the “Refusal Space Commencement Date”), (iv) the rental
rate, and (v) the other agreed upon economic terms with respect to such Refusal Space. The
Refusal Space Commencement Date shall not be less than thirty (30) business days after the
date such notice is given by Landlord.

          (iii) Tenant’s right to lease such portion of the Refusal Space on the terms described
in the applicable Offer Notice shall be exercisable by ;written notice (the “Acceptance
Notice”) from Tenant to Landlord given not later than ten (10) business days after the Offer
Notice is delivered, time being of the essence. If such right is not so exercised, Tenant’s
right of first refusal shall thereupon terminate as to such portion of the Refusal Space
described in the Refusal Notice, and Landlord may thereafter rent all or any part of such
portion of the Refusal Space described in the Refusal Notice without further notice to
Tenant and free of any right of Tenant. Tenant may not elect to lease less than the entire
area of the Refusal Space described in the Refusal Notice.

          (iv) Tenant may only exercise its right to lease a portion of the Refusal Space, and an
exercise thereof shall only be effective, if at the time of Tenant’s exercise of said right
and on the applicable Refusal Space Commencement Date, this ;Lease is in full force and
effect and no uncured Default by Tenant, and, inasmuch as this right of first offer is
intended only for the benefit of the original Tenant named in this Lease, the entire
Premises are then occupied by Ulta Salon, Cosmetics & Fragrance, Inc. or a Tenant Affiliate,
and Ulta Salon, Cosmetics & Fragrance, Inc. has not assigned this Lease or sublet any
portion of the Premises, other than to a Tenant Affiliate pursuant to one or more
assignments and/or subleases in effect as of the time Tenant gives an Acceptance Notice or
on the Refusal Space Commencement Date, as the case may be. Notwithstanding anything herein
to the contrary, Landlord shall have the right, at its election, to waive any of the
conditions precedent to Tenant’s valid exercise of its rights under this Section 29, as such
conditions are described in this Section 29, whereupon Tenant’s prior exercise of such
renewal rights shall be valid and in full force and effect in all respects. Any such waiver
by Landlord must be in writing in order to be effective for purposes of the preceding
sentence. Without limitation of the foregoing, no sublessee or assignee, other than a
Tenant Affiliate, shall be entitled to exercise any right hereunder and no exercise of any
right hereunder, by Ulta Salon, Cosmetics & Fragrance, Inc. shall be effective in the event
said Tenant assigns this lease or subleases all or part of the Premises prior to the
applicable Refusal Space Commencement Date, other than to a Tenant Affiliate.

          (v) If Tenant has validly exercised its right to lease the Refusal Space in question,
then, effective as of the applicable Refusal Space Commencement Date, such Refusal Space
shall be included in the Premises, subject to all of the terms, conditions and provisions of
this lease except that:

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                    (A) the rent per square foot of net rentable area for such Refusal Space shall be equal to the
rental rate quoted by Landlord to Tenant in the Refusal Notice;

                    (B) the net rentable area of the Premises shall be increased by the net rentable area of such
portion of the Refusal Space and such rentable area of the Premises as increased shall be utilized
in calculating the increases in Tenant’s Proportionate Share;

                    (C) the term of the demise covering such portion of the Refusal Space shall commence on the
applicable Refusal Space Commencement Date and shall expire simultaneously with the expiration or
earlier termination of the Term (subject to any rights which Tenant has to extend the Term); and

                    (D) the Refusal Space shall be rented in its “as is” condition as of the applicable Refusal
Space Commencement Date.

          (vi) If Tenant has validly exercised its right to lease all or any portion of the
Refusal Space in accordance with the terms hereof, Landlord and Tenant shall enter into a
written amendment to this Lease confirming the terms, conditions and provisions applicable
to such portion of the Refusal Space as determined in accordance herewith.

          (vii) In the event Landlord is unable to deliver to Tenant possession of any portion of
the Refusal Space on or before the applicable Refusal Space Commencement Date for any reason
whatsoever, Landlord shall not be subject to any liability for such failure to deliver
possession. Such failure to deliver possession shall not affect either the validity of this
Lease or the obligations of either Landlord or Tenant hereunder or be construed to extend
the expiration of the Term of this Lease either as to such portion of the Refusal Space or
the balance of the Premises; provided, however, that under such circumstances, rent shall
not commence as to such portion of the Refusal Space until Landlord does so deliver
possession to Tenant.

          (viii) In the event any portion of the Refusal Space is leased to Tenant other than
pursuant to the right of first offer described herein, such portion of the Refusal Space
shall thereupon be deleted from the Refusal Space.

          (ix) As used herein, the following terms shall have the following meanings:

The term “Existing Lease” shall mean a lease (other than this Lease) of any space in the Building
in effect as of the date hereof (including extensions and renewals thereof pursuant to options
granted therein), whether or not the term of such lease has yet commenced. In the event two leases
are in effect for any portion of the Refusal Space (for example, the term of a lease which is now
in effect for a portion of the Refusal Space will soon expire, and another lease covering part or
all of such space has already been executed with a new tenant for a term commencing after the
expiration of the term of the former lease), only one of such leases shall be an Existing Lease.
In such case, the Existing Lease shall be determined by comparing the dates

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upon which the respective terms of such two leases end, and the lease with the later expiration
date shall be deemed to be the Existing Lease and the other lease shall be disregarded;

     30. RENEWAL OPTION. Subject to the terms and conditions set forth in this Section 30,
Landlord grants to Tenant the right and option to renew this Lease (the “Renewal Option”) for one
(1) option period of five (5) years (the “Renewal Period”). The Renewal Period shall commence on
the day immediately following the Initial Term (the “Renewal Period Commencement Date”), and end
five (5) Lease Years thereafter, unless this lease is earlier terminated or further renewed as
provided in this lease.

          (a) Right to Renew. The Renewal Option shall be exercisable by written notice (a
“Renewal Notice”) from Tenant to Landlord of Tenant’s election to exercise said Renewal Option
given by Tenant to Landlord not later than two hundred seventy (270) days prior to the Renewal
Period Commencement Date, time being of the essence. If such Renewal Option is not so exercised,
said Renewal Option shall expire.

          (b) Conditions to Exercise. Tenant may only exercise the Renewal Option, and an
exercise thereof shall only be effective, if, at the time Tenant gives a Renewal Notice, and on the
Renewal Period Commencement Date, this Lease is in full force and effect, and Tenant is not in
Default under this Lease, and (inasmuch as said option is intended only for the benefit of the
original Tenant named in this Lease or a Tenant Affiliate), as of the time of Tenant’s exercise of
said right and as of the Renewal Period Commencement Date, the Premises are occupied by Ulta Salon,
Cosmetics & Fragrance, Inc. or a Tenant Affiliate, and Ulta Salon, Cosmetics & Fragrance, Inc. or
Tenant Affiliate has not assigned this Lease (other than to a Tenant Affiliate) or sublet the
Premises (other than to a Tenant Affiliate) pursuant to one or more assignments and/or subleases in
effect as of either such dates. Without limitation of the foregoing, no sublessee or assignee
(other than a Tenant Affiliate) shall be entitled to exercise the Renewal Option under this Section
30, and no exercise of said option by Ulta Salon, Cosmetics & Fragrance, Inc. or by a Tenant
Affiliate shall be effective, in the event Ulta Salon, Cosmetics & Fragrance, Inc. or Tenant
Affiliate has assigned this lease (other than to a Tenant Affiliate), or subleased the Premises
(other than to a Tenant Affiliate) pursuant to one or more assignments and/or subleases in effect
as of the time Tenant gives a Renewal Notice or as of the subject Renewal Period Commencement Date.
Notwithstanding anything herein to the contrary, Landlord shall have the right, at its election,
to waive any of the conditions precedent to Tenant’s valid exercise of its renewal rights under
this Section 30, as such conditions are described in this Section 30(b), whereupon Tenant’s prior
exercise of such renewal rights shall be valid and in full force and effect in all respects. Any
such waiver by Landlord must be in writing in order to be effective for purposes of the preceding
sentence.

          (c) Base Rent During Renewal Period. Base Rent per square foot of Rentable Area of
the Premises payable during the first Lease Year of the Renewal Period shall be $28.00 per square
foot with respect to all space included in the Premises as of the Renewal Period Commencement Date,
and shall escalate annually at the rate of $0.50 per Lease Year. The Base Year for the Renewal
Period shall be the calendar year in which the Renewal Period commences.

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          (d) Written Amendment. If Tenant has validly exercised said option, within thirty
(30) days after determination of the Market Rate of Base Rent, Landlord and Tenant shall enter into
a written amendment to this Lease confirming the terms, conditions and provisions applicable to the
Renewal Period as determined in accordance herewith, with such revisions to the rental provisions
of this lease as may be necessary to conform such provisions to the Market Rate of Base Rent.

          (e) No Further Revisions. Tenant shall have no right to renew or extend the Term of
this lease beyond the expiration of the Renewal Period.

     31.SIGNAGE. Tenant shall have the signage rights described below for so long as Tenant
is not in Default under the terms of this Lease and, with respect to the Tenant Exterior Building
Signage (as defined below), for so long as Ulta Salon, Cosmetics & Fragrance, Inc. leases and
occupies no less than 80,000 rentable square feet and has not assigned this Lease or sublet any
portion of the Premises (provided that Tenant shall have the right to install the Tenant Exterior
Building Signage for the period between the Commencement Date and the Phase III Commencement Date
notwithstanding that Tenant will not be leasing and occupying at least 80,000 square feet during
that period). The rights set forth in this Section 31 are personal to Ulta Salon, Cosmetics &
Fragrance, Inc. and may not be assigned to any other party.

          (a) Exterior Building Signage. Tenant shall have the non-exclusive right to install
its corporate identity signage on the exterior of the Building in the location set forth on Exhibit
L (the “Tenant Exterior Building Signage”). The size, type, color, material composition and
location of the Tenant Exterior Building Signage shall comply with all applicable governmental
signage requirements and shall be subject to Landlord’s prior written approval, not to be
unreasonably withheld or delayed; provided, however, that Landlord hereby approves the Tenant
Exterior Building Signage in substantially the form attached hereto and made a part hereof as
Exhibit L to the extent of the actual detail shown on Exhibit L. It shall be Tenant’s
responsibility to obtain all required governmental approvals for the Tenant Exterior Building
Signage. Tenant shall, at its own expense, have the right to change or replace the Tenant Exterior
Building Signage at any time or from time to time during the Term so long as such change in its
signage is in compliance with all applicable Laws, and subject to Landlord’s prior written
approval, not to be unreasonably withheld or delayed. Tenant shall be solely responsible, at
Tenant’s sole cost, for installing, maintaining and repairing the Tenant Exterior Building Signage
and, upon expiration of the Term or earlier termination of this Lease, or at such time occurring
after the Phase III Commencement Date as Ulta Salon, Cosmetics & Fragrance, Inc. is not leasing and
occupying 80,000 rentable square feet in the Building, Tenant shall, at Tenant’s cost, remove all
Tenant Exterior Building Signage from the Building and restore the exterior of the Building to
substantially the same condition as existed prior to the installation of the Tenant Exterior
Building Signage. If Tenant fails to remove such Tenant Exterior Building Signage at any of such
times, then Landlord may do so upon thirty (30) days prior written notice thereof and charge Tenant
for the reasonable costs thereof which shall be due and payable within thirty (30) days after
request therefor.

          (b) Lobby Signage. Tenant, at Tenant’s sole cost and expense, shall have the
exclusive right from time to time during the Term to install, change and replace such signage as
Tenant shall desire in the Lobby (collectively, the “Tenant Lobby Signage”) so long as such

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Tenant Lobby Signage complies with all applicable Laws and subject to Landlord’s prior written approval,
not to be unreasonably withheld or delayed; provided, however, that notwithstanding the foregoing,
Landlord hereby approves of and agrees that Tenant shall have the right to install the following
signage in the Lobby: (i) the signage in substantially the form attached hereto and made a part
hereof as Exhibit M to the extent of the actual detail shown on Exhibit M (the “North Wall
Signage”), which North Wall Signage shall contain “pinned” letters and have a height of no more
than two feet (2’) and a length of no more than five feet (5’) and shall be located on the north
wall of the lobby in a location mutually acceptable to both Landlord and Tenant (which location the
parties agree shall either be in the center of the north wall or to one side of the North Wall
Glass Doors (as defined herein) (in the event Tenant elects to install such North Wall Glass
Doors); and (ii) silk screen letters on the South Wall Glass Door (as defined herein) identifying
Tenant’s name and its conference room entrance, in such location, font and size as reasonably
acceptable to the parties. Tenant shall be solely responsible, at Tenant’s sole cost, for
installing, maintaining and repairing the Tenant Lobby Signage and, upon expiration of the Term or
earlier termination of this Lease, or at such time as Ulta Salon, Cosmetics & Fragrance, Inc. is
not leasing and fully occupying the Phase I Premises, Tenant shall, at Tenant’s cost, remove all
Tenant Lobby Signage from the Lobby and restore the Lobby to substantially the same condition as
existed prior to the installation of the Tenant Lobby Signage. If Tenant fails to remove such
Tenant Lobby Signage at any of such times, then Landlord may do so upon thirty (30) days prior
written notice thereof and charge Tenant for the reasonable costs thereof which shall be due and
payable within thirty (30) days after request therefor.

          (c) Interior Premises Signage. Tenant, at Tenant’s sole cost and expense, shall have
the exclusive right from time to time during the Term of this Lease to install, change and replace
such signage as Tenant shall desire in the interior of the Premises (including, without limitation,
any suite number or other tenant signage on the interior and exterior of the vestibule doors
leading to the Premises) (collectively, the “Tenant Interior Signage”) so long as such Tenant
Interior Signage complies with all applicable Laws and, with respect to any signage visible from
the exterior of the Premises, such signage has been approved in writing by Landlord, such approval
not to be unreasonably withheld or delayed. Tenant shall be solely responsible, at Tenant’s sole
cost, for installing, maintaining and repairing the Tenant Interior Signage and, upon expiration of
the Term or earlier termination of this Lease, Tenant shall, at Tenant’s cost, remove all Tenant
Interior Signage from the Premises and restore the Premises to substantially the same condition as
existed prior to the installation of the Tenant Interior Signage. If Tenant fails to remove such
Tenant Interior Signage as of the expiration of the Term, then Landlord may do so upon thirty (30)
days prior written notice thereof and charge Tenant for the reasonable costs thereof which shall be
due and payable within thirty (30) days after request therefor.

          (d) Monument Signage. Tenant shall have the right to be identified with a sign panel
(“Tenant Sign Panel”) on the existing monument sign located within the Project (the “Monument
Sign”). The Tenant Sign Panel shall be in the Building standard size, color and font. Landlord
shall cause the Tenant Sign Panel to be fabricated and installed at Tenant’s cost,
provided that Tenant shall approve such cost in advance. If Tenant approves said cost, the
Tenant Sign Panel shall be installed on the Monument Sign prior to September 1, 2007.

62

 

For purposes of Lease interpretation, this Section 31 governs and controls over any other signage
provisions in this Lease which may be inconsistent with the specific provisions of this Section 31.

     32. LANDLORD. The term “Landlord” as used in this Lease means only the owner of
Landlord’s interest in the Project from time to time. In the event of any assignment, conveyance
or sale, once or successively, of Landlord’s interest in the Project or any assignment of this
Lease by Landlord, said Landlord making such assignment, conveyance or sale shall be and hereby is
entirely freed and relieved of all covenants and obligations of Landlord hereunder accruing after
such assignment, conveyance or sale, and Tenant agrees to look solely to such assignee, grantee or
purchaser with respect thereto provided that Tenant is given written notice of said assignment,
conveyance or sale. The holder of a Mortgage (or assignment in connection with a Mortgage) shall
not be deemed such an assignee, grantee or purchaser under this Section 31 unless and until the
foreclosure of the Mortgage or the conveyance or transfer of Landlord’s interest under this lease
in lieu of foreclosure, and then subject to the provisions of Section 20. This Lease shall not be
affected by any such assignment, conveyance or sale, and Tenant agrees to attorn to the assignee,
grantee or purchaser provided that Tenant is given written notice of said assignment, conveyance or
sale.

     33. TITLE AND COVENANT AGAINST LIENS. Landlord’s title is and always shall be paramount
to the title of Tenant, and nothing in this lease contained shall empower Tenant to do any act
which can, shall or may encumber the title of Landlord. Tenant has no authority or power to cause
or permit any lien or encumbrance of any kind whatsoever, whether created by act of Tenant,
operation of law or otherwise, to attach to or be placed upon Landlord’s title or interest in the
Premises or any part of the Project, and any and all liens and encumbrances created by Tenant shall
attach to Tenant’s interest only.

     34. COVENANT OF QUIET ENJOYMENT. Landlord agrees that so long as Tenant is not in default
beyond any applicable notice and cure periods, that Tenant shall peaceably and quietly have, hold
and enjoy the Premises (including, without limitation, the non-exclusive right to use the Common
Areas and the rights set forth in this Lease to use the Lobby, Receiving Docks, Cafeteria, Building
Conference Room and Auditorium), subject to the terms, covenants, conditions, provisions and
agreements of this Lease, free from hindrance by Landlord or any person claiming by, through or
under Landlord.

     35. EXCULPATORY PROVISIONS. The liability of any Landlord under this Lease or any
amendment to this lease, or any instrument or document executed in connection with this Lease,
shall be limited to and enforceable solely against the assets of such Landlord constituting an
interest in the Land or Building and not other assets of such Landlord. Assets of a Landlord which
is a partnership or limited liability company do not include the assets of the partners or members of such
Landlord, and any negative capital account of a partner or member in a partnership or limited
liability company which is a Landlord, and any obligation of a partner or member to contribute
capital to the partnership or limited liability company which is Landlord, shall not be deemed to
be assets of the partnership or limited liability company which is the Landlord. No directors,
officers, employees, managers, members, or shareholders of any corporation or limited liability
company which is Landlord shall have any personal liability arising from or in connection with this
Lease. At any time during which Landlord is trustee of a

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land trust, all of the representations, warranties, covenants and conditions to be performed by it under this Lease or any documents or
instruments executed in connection with this Lease are undertaken solely as trustee, as aforesaid,
and not individually, and no personal liability shall be asserted or be enforceable against it or
any of the beneficiaries under said trust agreement by reason of any of the representations,
warranties, covenants or conditions contained in this lease or any documents or instruments
executed in connection with this Lease.

     36. PARKING. Landlord agrees that, throughout the Term, there shall be available to
Tenant parking spaces in the Building parking areas in number corresponding to the ratio of four
(4) spaces for each 1,000 square feet of Rentable Area leased by Tenant, which spaces shall be
available to Tenant in accordance with Landlord’s direction on a non-exclusive, unreserved,
first-come, first-served basis, without any separate rent or other fees for such spaces. Landlord
agrees that, as of the Commencement Date, such Building parking areas contain at least 1,726
parking spaces, including 40 parking spaces designated as handicapped accessible. Landlord
specifically reserves the right to make reasonable changes to the size, configuration, design,
layout and all other aspects of the Project parking areas and improvements at any time, and Tenant
acknowledges and agrees that Landlord may, without incurring any liability to Tenant and without
any abatement of Rent under this lease, from time to time, temporarily close-off or restrict access
to portions of the Project parking areas for purposes of permitting or facilitating any such
construction, alteration or improvements. Landlord may delegate its responsibilities hereunder to
a parking operator in which case such parking operator shall have all the rights of parking area
control attributed hereby to the Landlord. Notwithstanding anything contained herein, Tenant and
Tenant’s employees use of such parking spaces shall not exceed the number corresponding to the
ratio of four (4) spaces for each 1,000 square feet of Rentable Area leased by Tenant at any given
time during the Term.

     37. CERTAIN COMMON AREAS. Tenant has been granted certain rights under this Lease with
respect to certain Common Areas within the Project, including the Lobby, the Receiving Docks, the
Cafeteria, the Auditorium and the Building Conference Room, all of which areas (other than the
Receiving Dock) are shown on Exhibit A attached to this Lease. Tenant shall be entitled to shared
exclusive use of the Lobby, together with one other tenant of the Building; provided, however, that
Tenant shall have the exclusive right to use the reception desk located in the Lobby and to have
Tenant’s personnel occupy said reception desk; provided, however, that Landlord shall at all times
retain the right to have Building personnel (e.g., security guard, property management employee)
stationed at the reception desk. Tenant acknowledges that it has been advised by
Landlord that it is Landlord’s intention to relocate the Receiving Docks within approximately
twelve to eighteen months after the date of this Lease. Tenant will at all times have access from
the Premises to the Receiving Docks internally through the Building. Landlord is responsible for
the maintenance of the Receiving Docks. With respect to the Auditorium and the Building Conference
Room, such areas are for the non-exclusive use of all Building tenants and may be reserved on a
first come-first served basis in the Building management office for no more than one day per
reservation. The charge for use of the Auditorium, as of the date of this Lease, is $125 per use.
The charge for use of the Building Conference Room, as of the date of this Lease, is $50 per use.
Such charges are subject to change from time to time during the Term. Notwithstanding the
foregoing, Tenant shall not be charged for the use of the Building Conference Room for the first
Lease Year. The Cafeteria will be open and operational by January 1, 2008. The hours for the
Cafeteria will be 7:30 A.M.

64

 

to 2:30 P.M. Monday through Friday. The Cafeteria will have a separate
exhaust system and Landlord will use reasonable efforts to prevent Cafeteria odors from entering
the Lobby or the Premises. Landlord shall have the right to relocate all or any of the Receiving
Docks, the Cafeteria, the Auditorium and the Building Conference Room to other areas in the
Building provided that any such new Common Area shall be substantially comparable to the
substituted area and Tenant’s rights of access and use of such Common Areas as described in this
Lease shall not be materially modified or impaired.

     In addition to the Building Conference Room, there are small conference rooms located on the
second floor of the Building. Tenant shall be entitled to the nonexclusive use of these conference
rooms, for the Building standard charge in effect from time to time, but which charge shall be
abated as to Tenant during the first and second Lease Years. With respect to any use of such
second floor conference rooms, Tenant shall be responsible for cleaning each such room after its
use by Tenant. As of the Phase III Commencement Date, all of said second floor conference rooms
located within the Premises shall be deemed part of the Premises and shall be for Tenant’s
exclusive use.

     Tenant shall have the right, at Tenant’s sole cost and expense, to install a wireless network
system in the Auditorium and Cafeteria. Any such system shall be installed only in accordance with
plans and specifications previously approved in writing by Landlord, such approval not to be
unreasonably withheld. All installation, operation, maintenance and repair of such system shall be
performed by Tenant in compliance with all applicable Laws. Tenant shall pay all taxes and other
fees or charges that may be payable with respect to the installation and operation of such system
(exclusive of any charges imposed on individual users of such system).

     Tenant shall at all times have access to the Receiving Dock by means of a corridor which
satisfied the requirements of all applicable codes with respect to height and width and which, in
any event, will be of reasonable height and width.

[Signature Page Follows]

65

 

     IN WITNESS WHEREOF, the parties have caused this Lease to be executed as of the date first
written above.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 
	BOLINGBROOK INVESTORS, LLC,

an Illinois limited liability company
 	 	 	 	ULTA SALON, COSMETIC & FRAGRANCE, INC., a Delaware

corporation	 	 
	 
	 	 	 	 	 	 	 	 
	By: /s/ Joseph I. Neverauskas

	 	 	 	By:
	 	/s/ Alex J. Lelli, Jr.
	 	 
	 
	 	 	 	 	 	 	 	 
	Name: Joseph I. Neverauskas

	 	 	 	 	 	Alex J. Lelli, Jr.	 	 
	 

	 	 	 	 	 	Senior Vice President,	 	 
	Its: Senior Vice President

	 	 	 	 	 	Growth & Development	 	 

 

 

EXHIBIT A

FLOOR PLAN OF BUILDING

 

 

 

 

EXHIBIT A-1

SITE PLAN OF PROJECT

 

 

EXHIBIT B

WORKLETTER

     THIS WORKLETTER AGREEMENT (“Workletter”) is hereby incorporated as part of that certain Office
Lease (“Lease”) made and entered into by and between BOLINGBROOK INVESTORS, LLC, an Illinois
limited liability company (“Landlord”), and ULTA SALON, COSMETICS & FRAGRANCE, INC, a Delaware
corporation (“Tenant”), for certain leased premises at the Building described below.

WITNESSETH:

     WHEREAS, Landlord and Tenant are hereby entering into the above-described Lease to which this
Workletter is being attached, which lease demises certain Premises (as defined in the Lease; all
capitalized terms used but not otherwise defined herein shall have the meaning as set forth in the
Lease) in the office building known as 1000 Remington Boulevard, Bolingbrook, Illinois (the
“Building”); and

     WHEREAS, certain tenant improvement work is to be completed on the Premises and Tenant is
initially leasing the Phase I Premises and Tenant is leasing the Phase II Premises and the Phase
III Premises at later dates;

     NOW, THEREFORE, for and in consideration of the agreement to lease the Premises and pay rent
and the mutual covenants contained herein, the parties agree as follows:

     1. TURNOVER DATE AND LANDLORD’S WORK. Landlord shall deliver the Phase I Premises to
Tenant for the construction of Tenant’s Work (as hereinafter defined) promptly following full
execution of the Lease provided that Tenant has delivered any security deposit required under the
Lease, as described in the Lease. Landlord shall deliver the Phase II Premises to Tenant for
construction of Tenant’s Work upon the first day of the second Lease Year. Landlord shall deliver
the Phase III Premises to Tenant for the construction of Tenant’s Work upon the first day of the
third Lease Year. It is the parties’ intention that Tenant’s Work, as used in this Workletter and
in the Lease, shall refer only to the construction of improvements to the Phase I Premises
initially and, subsequently, to the construction of improvements to the Phase II Premises and the
Phase III Premises at such times as Tenant undertakes such portion of Tenant’s Work.

     Landlord shall, at Landlord’s sole expense, perform the following work (“Landlord’s Work”),
which shall be completed in accordance with all applicable laws and with building standard finishes
similar to other portions of the Building at least ninety (90) days prior to the Phase II
Commencement Date: (i) construct a demising partition approximately 50 to 60 lineal feet near the
southwest corner of the Premises on the first floor to create a public corridor; and (ii) construct
a new demising partition approximately 30 to 40 feet near the north end of the Premises on the
second floor which will provide Tenant with access to the stairwell and washrooms. The Landlord’s
Work is depicted on Exhibit N attached hereto and incorporated by this reference and is shown as
the items numbered “1” on Exhibit N.

B-1

 

     2. TENANT’S WORK. Tenant, at its sole cost and expense, but subject to payment of the
Allowance (as hereinafter defined) as provided under Paragraph 9 below, shall perform, or cause to
be performed, all work described in the lease as the “Tenant’s Work” and desired by Tenant for its
initial occupancy of the Premises (herein also referred to as the “Tenant’s Work”), all in
accordance with the Plans (as hereafter defined) submitted to and approved by Landlord (which
approval shall not be unreasonably withheld or delayed as described in Paragraph 3(b) below). The
Tenant’s Work shall be constructed in a good and workmanlike fashion, in accordance with the
requirements set forth herein and in compliance with all applicable statutes, laws, ordinances,
orders, codes, rules, regulations, building and fire codes and other governmental requirements,
including, without limitation, the ADA and all Building-related construction rules and regulations.
Landlord’s review and approval of the Plans or any other submission of Tenant shall create no
responsibility or liability on the part of Landlord for such compliance or for their completeness
or design sufficiency. Tenant shall commence the construction of the Tenant’s Work promptly
following completion of the pre-construction activities provided for in Paragraph 3 below. Tenant
shall coordinate the Tenant’s Work so as avoid material or unreasonable interference with any
activities being conducted by or on behalf of Landlord and/or other tenants at the Building from
time to time.

     Notwithstanding anything to the contrary herein, as part of Tenant’s Work, Landlord hereby
agrees that Tenant shall have the right, at Tenant’s sole election, to install the following in the
Lobby: (a) double glass doors with building standard glass located on the north wall of the Lobby
(the “North Wall Glass Doors”) and (b) a single glass door located on the south wall of the Lobby
(the “South Wall Glass Door”). Landlord and Tenant hereby agree that each of Landlord and Tenant
shall be responsible for one-half (1/2) of the reasonable costs incurred by Tenant in manufacturing
and installing the North Wall Glass Doors. Landlord shall reimburse Tenant for its one-half of
such reasonable costs within thirty (30) days after demand therefore, along with copies of paid
invoices.

     3. PRE-CONSTRUCTION ACTIVITIES.

          (a) Prior to commencing any of the Tenant’s Work, Tenant shall submit the following
information and items to Landlord for Landlord’s review and approval (which approval shall not be
unreasonably withheld or delayed as described in Paragraph 3(b) below):

               (i) The names and addresses of Tenant’s contractors (and the contractor’s
subcontractors and vendors) to be engaged by Tenant for the Tenant’s Work and of any
construction manager proposed to be engaged by Tenant for the Tenant’s Work (collectively,
“Tenant’s Contractors”).

               (ii) Certificates of insurance policies as hereinafter described. Tenant shall not
permit Tenant’s Contractors to commence work until the required insurance has been obtained
and certified copies of policies or certificates have been delivered to Landlord.

               (iii) The Plans for the Tenant’s Work, which Plans shall be subject to Landlord’s
approval in accordance with Paragraph 3(b) below.

B-2

 

               (iv) Tenant will update such information and items by notice to Landlord of any
material changes. Landlord shall promptly (or as otherwise required by this Workletter)
review all submissions made by Tenant.

          (b) As used herein the term “Plans” shall mean full and detailed architectural and engineering
plans and specifications covering the Tenant’s Work (including, without limitation, architectural,
mechanical, electrical, and plumbing working drawings for the Tenant’s Work). The Plans shall
include drawings and specifications relating to the telecommunications and related equipment and
HVAC facilities and requirements to be installed to or to service Tenant’s
computer/telecommunications room(s). The Plans shall include the minimum information shown on
Attachment 1 attached hereto and incorporated herein. Subject to Landlord’s payment of the
Allowance, Tenant shall pay all costs and expenses of preparing the Plans. The Plans shall be
subject to Landlord’s approval (not to be unreasonably withheld or delayed, as hereinafter
described) and the approval of all local governmental authorities requiring approval, if any.
Landlord shall give its approval or disapproval of the Plans within seven (7) business days after
their delivery to Landlord. Landlord agrees not to unreasonably withhold its approval of said
Plans; provided, however, that Landlord shall not be deemed to have acted unreasonably if it
withholds its consent because, in Landlord’s reasonable opinion: (i) the Tenant’s Work is likely
to adversely affect Building systems, the structure of the Building or the safety of the Building
and its occupants; (ii) the Tenant’s Work would adversely affect Landlord’s ability to furnish
services to Tenant or other tenants; (iii) the Tenant’s Work would increase the cost of operating
the Building; (iv) the Tenant’s Work would violate any governmental laws, rules or ordinances; (v)
the Tenant’s Work contains or would require the use of hazardous or toxic material in any unlawful
manner; (vi) the Tenant’s Work would adversely affect the appearance of the Building; or (vii) the
Tenant’s Work would adversely affect another tenant’s premises. The foregoing reasons, however,
shall not be exclusive of the reasons for which Landlord may withhold consent, whether or not such
other reasons are similar or dissimilar to the foregoing. If Landlord fails to give its approval
or disapproval within said seven (7) business day period, and if Tenant sends a second written
request for approval of Plans which states conspicuously, “YOUR FAILURE TO RESPOND TO THIS REQUEST
WILL RESULT IN A DEEMED APPROVAL OF THE SUBMITTED PLANS,” and if Landlord fails to respond to said
second request within five (5) business days after receipt thereof, then Landlord shall be deemed
to have approved the Plans which were submitted with the initial request. Landlord shall cooperate
with Tenant by discussing or reviewing preliminary plans and specifications at Tenant’s request
prior to completion of the full, final detailed Plans in order to expedite the preparation of and
the subsequent approval process concerning the final Plans. If Landlord notifies Tenant that
changes are required to the final Plans submitted by Tenant, Tenant shall submit to Landlord, for
its approval, the Plans amended in accordance with the changes so required. Such submission of
revised Plans shall be accompanied by a written point by point response from Tenant specifically
responding to any disapprovals or other responses delivered by Landlord to Tenant. Landlord shall
give its approval or disapproval (giving reasons in case of disapproval) of any such revised Plans
within five (5) business days after their delivery to Landlord. The Plans shall also be revised,
and the Tenant’s Work shall be changed, to incorporate any work required in the Premises by any
local governmental field inspector. The Plans shall be prepared at Tenant’s sole cost and expense,
and Tenant shall pay all fees and costs for the Plans; provided, however, Landlord shall reimburse
Tenant an amount equal to $.08 per square foot of the Rentable Area of the Phase I Premises
initially, and subsequently, the Phase II

B-3

 

Premises, and subsequently thereafter, the Phase III Premises, towards Tenant’s cost for the
Plans. Such reimbursement shall be paid within thirty (30) days after Landlord’s receipt of
Tenant’s request therefor accompanied by documentation evidencing Tenant’s payment of such costs.

     Tenant shall use reasonable efforts to utilize MEP and structural engineering drawing
consultants recommended by Landlord for all design and engineering services necessary for
preparation of the Plans. Landlord shall provide to Tenant CAD base sheets of all “as built”
drawing (to the extent such CAD base sheets are in Landlord’s possession).

     Landlord’s approval of the Plans, or any revisions thereto, shall in no way constitute a
representation or warranty by Landlord as to the adequacy or sufficiency of such Plans, or any
revisions thereto or the improvements to which they relate for any use, purpose or condition, or be
deemed to be acceptance or approval of any element therein contained which is in violation of any
applicable statutes, laws, ordinances, orders, codes, rules, regulations, building or fire codes or
other governmental requirements. Tenant shall have no authority to deviate from the Plans in
performance of the Work, except as authorized by Landlord and its designated representative in
writing.

     Tenant shall reimburse Landlord, as additional rent under the lease: (i) for Landlord’s
architectural and engineering costs with respect to Tenant’s pre-construction activities and
Landlord’s review and approval of the Plans, or any revisions thereto, and as may otherwise arise
out of or be in connection with, Tenant’s performance of Tenant’s Work (which costs shall not
exceed $10,000.00 in the aggregate); (ii) for Landlord’s cost to pay overtime to Landlord’s
employees and contractors; and (iii) keying charges.

          (c) No Tenant’s Work shall be undertaken or commenced by Tenant in the Premises until:

          (i) The Plans for the Premises have been submitted to and approved by Landlord (which
approval shall not be unreasonably withheld or delayed as provided in Paragraph 3(b)
hereinabove).

          (ii) All necessary building permits have been obtained by Tenant (or, in the
alternative, until Tenant has filed for all necessary building permits and has documented
proof thereof from Will County, Illinois, so long as Tenant is using all reasonable efforts
to obtain the same as soon as reasonably practicable; provided that such Tenant’s Work may
only so proceed on the basis of filings for applicable permits, as opposed to actual
issuance of the same, if fully lawful to do so and if consistent with the practices at
Comparable Buildings, and Tenant shall remain fully and solely responsible for compliance
with all laws relating to Tenant’s Work and the performance of Tenant’s Work throughout the
entire performance of Tenant’s Work hereunder and shall cease performance of Tenant’s Work
if Will County or other applicable governmental authority at any time does not allow
construction to proceed without full building permit issuance).

          (iii) All required insurance coverages have been obtained by Tenant, it being
understood that failure of Landlord to receive evidence of such coverage upon

B-4

 

commencement of the Tenant’s Work shall not waive Tenant’s obligations to obtain such
coverages.

               (iv) Items required to be submitted to Landlord prior to commencement of construction
of the Tenant’s Work have been so submitted and have been approved, where required (which
approval shall not be unreasonably withheld or delayed, as provided herein).

     4. DELAYS. In the event Tenant fails to complete the Tenant’s Work on or before the
Commencement Date, Tenant shall be responsible for Rent and all other obligations as set forth in
the Lease from the Commencement Date, subject to any abatement of Rent as expressly set forth in
the Lease, regardless of the degree of completion of the Tenant’s Work on such date, and no such
delay in completion of the Tenant’s Work shall affect the Commencement Date, or relieve Tenant of
any of its obligations under the lease.

     5. CHARGES AND FEES. Subject to Paragraph 3(b) above and Paragraph 9 below and except
as otherwise expressly provided in this Workletter, Tenant shall be responsible for all costs and
expenses attributable to the Tenant’s Work, including any and all fees payable to Landlord
hereunder.

     6. CHANGE ORDERS. All changes to the final Plans requested by Tenant must be approved
by Landlord in advance of the implementation of such changes as part of the Tenant’s Work, which
approval shall not be unreasonably withheld, in accordance with the same standards as described in
Paragraph 3(b) above. Landlord shall give its approval or disapproval (giving reasons in case of
disapproval) of any proposed changes to the Plans within three (3) business days after their
delivery to Landlord. Subject to Paragraph 9 below, Tenant shall be responsible for all costs and
expenses attributable to any changes (including, without limitation payment to Landlord of
out-of-pocket costs for review of the changes. All delays caused by Tenant initiated change
orders, including, without limitation, any stoppage of work during the change order review process,
are solely the responsibility of Tenant and shall cause no delay in the Commencement Date, or
payment of Rent and performance of other obligations set forth in the lease.

     7. STANDARDS OF DESIGN AND CONSTRUCTION AND CONDITIONS OF TENANT’S PERFORMANCE. All
work done in or upon the Premises by Tenant shall be done according to the standards set forth in
this Paragraph 7, except as the same may be expressly modified in the lease or in the Plans
approved by both Landlord and Tenant.

          (a) Tenant’s Plans and all design and construction of the Tenant’s Work shall comply with all
applicable statutes, ordinances, regulations, laws, codes and industry standards, including, but
not limited to, requirements of Landlord’s fire insurance underwriters and the requirements of the
ADA, and with all Building-related construction rules and regulations in effect from time to time.
Approval by Landlord of the Plans shall not constitute a waiver of this requirement or assumption
by Landlord of responsibility for compliance. Where several sets of the foregoing laws, codes and
standards must be met, the strictest shall apply where not prohibited by another law, code or
standard.

B-5

 

          (b) Tenant shall, at its own cost and expense, but subject to payment by Landlord of the
Allowance under Paragraph 9 below, obtain all required building permits and, when construction has
been completed, shall, at its own cost and expense, to the extent legally required for occupancy of
the Premises, obtain an occupancy permit for the Premises, a copy of which shall be delivered to
Landlord. Tenant’s failure to obtain such permits shall not cause a delay in the payment of Rent
and performance of other obligations under the lease.

          (c) Tenant’s Contractors shall be licensed contractors, possessing good labor relations,
capable of performing quality workmanship and working in harmony with Landlord’s contractors and
subcontractors and with other contractors, subcontractors and service providers in the Building.
All work shall be coordinated with any other construction or other work in the Building in order
not to materially adversely affect construction work being performed by or for Landlord or its
tenants, provided, however, Landlord shall not unreasonably inhibit Tenant’s Contractors from
performing their work and Landlord shall cooperate with Tenant and Tenant’s Contractors in all
reasonable respects relative to work coordination matters.

          (d) Landlord shall have the right, but not the obligation, and after reasonable prior notice
to Tenant (which, in the case of clauses (iii) and (iv) below shall mean at least 24 hours notice),
to perform, on behalf of and for the account of Tenant, subject to reimbursement by Tenant (but
subject to application of the Allowance to the extent thereof), any work (i) which Landlord deems
necessary to be done on an emergency basis, (ii) which pertains to structural components, building
systems, the general utility systems for the Building or connecting the Tenant’s Work with any
other work in the Building, (iii) which pertains to the erection of temporary safety barricades or
signs during construction, or (iv) which pertains to patching of Tenant’s Work and other work in
the Building.

          (e) Tenant shall use only new, quality materials in the Tenant’s Work, except where explicitly
shown in the Plans approved by Landlord and Tenant. Tenant shall obtain, promptly after completion
of the Tenant’s Work, warranties of at least one (1) year duration from the completion of the
Tenant’s Work against defects in workmanship and materials on all work performed and equipment
installed in the Premises as part of the Tenant’s Work, a copy of which warranties shall be
delivered to Landlord upon Tenant’s receipt of the same. Tenant shall furnish to Landlord
“as-built” drawings of the Work within ninety (90) days after completion of Tenant’s Work.

          (f) Tenant and Tenant’s Contractors, in performing work, shall do so in conformance with the
construction rules and regulations in effect for the Building from time to time. Tenant and
Tenant’s Contractors shall make all reasonable efforts and take all reasonable steps appropriate to
the level of professional standards in the industry so as not to interfere with the operation of
the Building and the Project and of other tenants in the Building or the Project, and shall, in any
event, comply with all other reasonable rules and regulations existing from time to time at the
Building. Tenant and Tenant’s Contractors shall take all reasonable precautionary steps to
minimize dust, noise and construction traffic, and to protect their facilities and the facilities
of others affected by the Tenant’s Work and to properly police same. Tenant shall not permit noise
from construction of Tenant’s Work to disturb other tenants in the Building. Tenant’s Work which
does so disturb other tenants shall be performed after regular working hours. Construction
equipment and materials are to be kept within the Premises and delivery and

B-6

 

loading of equipment and materials shall be done at such locations and at such time as
Landlord shall reasonably direct so as not to burden the construction or operation of the Building.
All work shall be coordinated with any other construction or other work in the Building in order
not to affect adversely construction work being performed by or for Landlord or its tenants, it
being understood that, in the event of any conflict, Landlord and its contractors and
subcontractors shall have priority over Tenant and Tenant’s Contractors. Electrical service will
be made available for the performance of the Tenant Work.

          (g) Upon not less than twenty-four (24) hours’ written or oral notice to Tenant and Tenant’s
failure to cure such matter within such 24-hour period, Landlord shall have the right to order
Tenant or any of Tenant’s Contractors who violate the requirements imposed on Tenant or Tenant’s
Contractors in performing work to cease work and remove its equipment and employees from the
Building, to the extent Landlord determines that such violation is likely to have an adverse affect
on the Building systems, structure or operations, the safety of the Building’s occupants, or to
otherwise create any other type of hazardous condition. A violation will be curable unless the
particular violation by the particular Tenant’s Contractor has previously been the basis for a
notice to cease work. The foregoing cure period shall not limit the Landlord’s right to require
that violations cease immediately. No such action by Landlord shall delay the lease Commencement
Date, or the payment of Rent and performance of other obligations under the lease.

          (h) Tenant shall not be required to pay for utility costs or charges for electricity for that
portion of the duration of Tenant’s Work occurring prior to the lease Commencement Date; provided,
however, Tenant acknowledges that no air-conditioning services will be available for the Premises
during such period. Tenant’s use of the freight elevators and the passenger elevators during the
construction of Tenant’s Work shall be free of charge for both the normal business hours and
overtime hours of the Building, subject to Landlord’s reasonable scheduling requirements. Tenant
shall not use the passenger elevators in connection with the moving of construction material or
personnel or the performance of the Tenant’s Work, or for Tenant’s initial move into the Premises.
Landlord shall provide Tenant, at no cost, with an exclusive area near the Building loading dock
for Tenant’s Contractor’s placement of a rubbish dumpster during the duration of Tenant’s Work,
initial installation of Tenant’s furniture, fixtures and equipment and move to the Premises.
Tenant shall arrange and pay for the cost of the dumpster and for removal of construction debris at
Tenant’s sole cost. Tenant shall not place debris in the Building’s waste containers.

          (i) Tenant shall permit Landlord access to the Premises, and the Tenant’s Work shall be
subject to inspection, by Landlord and Landlord’s architects, engineers, contractors and other
representatives, at all times during the period in which the Tenant’s Work are being constructed
and installed and within a reasonable period following completion of the Tenant’s Work.

          (j) Tenant shall proceed with its work expeditiously, continuously and efficiently, from the
date Landlord tenders possession of the Premises to Tenant for the construction of the Tenant’s
Work. Tenant shall notify Landlord upon completion of the Tenant’s Work and shall furnish Landlord
and Landlord’s title insurance company with such further documentation as may be reasonably
necessary under Paragraph 9 below.

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          (k) Except as otherwise expressly provided herein, Tenant shall have no authority to deviate
from the Plans in performance of the Tenant’s Work, except as authorized by Landlord and its
designated representative in writing (which authorization shall not be unreasonably withheld or
delayed in accordance with the same standards for approval as described in Paragraph 3(b) above).
Tenant shall furnish (or cause Tenant’s general contractor to furnish) to Landlord “as-built”
drawings of any components of the Tenant’s Work affecting Building systems or for any electrical,
plumbing or other system components of the Tenant’s Work, consisting of record drawings of the
installed condition of each such component of the Tenant’s Work completed from the Plans marked up
daily in the field by the various trades. Such record drawings shall be submitted in a final
package by Tenant’s general contractor to Landlord within ninety (90) days after completion of the
Tenant’s Work. Final disbursement of any remaining amounts of the Allowance will not occur until
such record drawings have been received by Landlord.

          (l) Landlord shall have the right to require Tenant to install and maintain proper access
panels to utility lines, pipes, conduits, duct work and component parts of mechanical and
electrical systems existing or installed in the Premises to the extent required by applicable laws
or otherwise identified by Landlord as part of its approval of the Plans.

          (m) Tenant shall impose on and enforce all applicable terms of this Workletter against
Tenant’s Architect, Tenant’s Engineer (as hereinafter defined) and the other Tenant’s Contractors.

          (n) Landlord shall provide coordination and access by Tenant after normal business hours, at
Tenant’s cost (including the cost of security and monthly clean-up) to other tenant spaces on the
floor in which the Premises are located as may be necessary for the proper design and construction
of the construction of Tenant’s Work.

          (o) Landlord shall allow Tenant to engage non-union movers for Tenant’s physical move, so long
as use of such non-union movers does not cause any labor unrest in the Building or the Project.

     8. INSURANCE AND INDEMNIFICATION.

          (a) In addition to any insurance which may be required under the lease, Tenant shall secure,
pay for and maintain or cause Tenant’s Contractors to secure, pay for and maintain during the
continuance of construction and fixturing work within the Building or Premises, insurance in the
following minimum coverages and limits of liability:

               (i) Worker’s Compensation in accordance with applicable Laws and Employer’s Liability
Insurance with limits of not less than $1,000,000.00, or such other amounts as may be
required from time to time by any employee benefit acts or other statutes applicable where
the work is to be performed.

               (ii) Commercial General Liability Insurance including Broad Form Contractual, Broad
Form Property Damage, Personal Injury, Completed Operations and Products coverages (such
Completed Operations and Products shall be provided for a period of three (3) years after
the date of final acceptance of the Tenant’s Work), and

B-8

 

deletion of any exclusion pertaining to explosion, collapse and underground property
damage hazards, with limits of not less than $1,000,000.00 per occurrence and having a
general aggregate amount on a per location basis of not less than $2,000,000.00, with
umbrella coverage of $4,000,000.00 per occurrence, $4,000,000.00 aggregate.

               (iii) Comprehensive Automobile Liability Insurance including Owned (if applicable),
Non-Owned and Hired Car coverages, with limits of not less than $1,000,000.00 combined
single limit for both bodily injury and property damage, with $1,000,000.00 umbrella
coverage.

               (iv) “All-risk installation floater” builder’s risk insurance upon the entire Tenant’s
Work to the full insurable value thereof. This insurance shall include the interests of
Landlord and Tenant (and their respective contractors and subcontractors of any tier to the
extent of any insurable interest therein) in the Tenant’s Work and shall insure against the
perils of fire and extended coverage and shall include “all-risk” builder’s risk insurance
for physical loss or damage including, without duplication of coverage, theft, vandalism and
malicious mischief. If portions of the Tenant’s Work are stored off the site of the
Building or in transit to said site and are not covered under said “all-risk” builder’s risk
insurance, then Tenant shall secure and maintain similar property insurance on such portions
of the Tenant’s Work. Any loss insured under said “all-risk” builder’s risk insurance for
the Tenant Work is to be made payable jointly to Landlord and Tenant, as their interests may
appear.

     All policies (except the worker’s compensation policy) shall be endorsed to include as
additional insured parties Landlord and its agents, Landlord’s contractors, Landlord’s architects,
Landlord’s mortgagee, and such additional persons as Landlord may designate. The waiver of
subrogation provisions contained in the lease shall apply to all insurance policies (except the
worker’s compensation policy) to be obtained by Tenant pursuant to this paragraph. The insurance
policy endorsements shall also provide that all additional insured parties shall be given thirty
(30) days’ prior written notice of any reduction, cancellation or non-renewal of coverage (except
that ten (10) days’ notice shall be sufficient in the case of cancellation for non-payment of
premium) and shall provide that the insurance coverage afforded to the additional insured parties
thereunder shall be primary to any insurance carried independently by said additional insured
parties. Additionally, where applicable, each policy shall contain a cross-liability and
severability of interest clause.

          (b) Without limitation of the indemnification provisions contained in the Lease, to the
fullest extent permitted by law, but subject to matters relating to property damage for which the
parties released each other under Section 16 of the Lease, Tenant agrees to indemnify, protect,
defend and hold harmless Landlord, Landlord’s contractors and Landlord’s architects and their
partners, directors, officers, employees and agents, from and against all claims, liabilities,
losses, damages and expenses of whatever nature arising out of or in connection with the Tenant’s
Work or the entry of Tenant or Tenant’s Contractors into the Building and the Premises, including,
without limitation, mechanic’s liens or the cost of any repairs to the Premises or Building
necessitated by activities of Tenant or Tenant’s Contractors and bodily injury to persons or damage
to the property of Tenant, its employees, agents, invitees, licensees or others, except and to the
extent that such claims, liabilities, losses, damages and

B-9

 

expenses arise out of the willful misconduct or negligent act or omission of Landlord, or from
Landlord’s breach of its obligations hereunder or under the lease. It is understood and agreed
that the foregoing indemnity shall be in addition to the insurance requirements set forth above and
shall not be in discharge of or in substitution for same or any other indemnity or insurance
provision of the lease.

     9. ALLOWANCE; PERIODIC PAYMENTS.

          (a) Landlord shall make a contribution (the “Allowance”) towards the cost of Tenant’s Work
(including, the costs of construction, design, engineering, and other professional/consultant fees,
furniture, reconfiguration and installation and wiring of phone and data processing equipment) and
towards moving costs, in an amount equal to the product of the Rentable Area of the portion of the
Premises as to which Tenant’s Work is then being performed (i.e. 39,355 square feet with respect to
the initial build-out of the Phase I Premises) multiplied by $10.00 (with the remaining Allowance
as to the Phase II Premises and the Phase III Premises to be contributed by Landlord at such times
as Tenant builds out the Phase II Premises and the Phase III Premises, respectively) on the terms
and conditions hereinafter set forth. If the cost of the Tenant’s Work exceeds the Allowance
required to be disbursed hereunder, Tenant shall have sole responsibility for the payment of such
excess cost, and Tenant shall pay any such excess when due from time to time (i.e., based upon the
most recent estimates of the cost of the Tenant’s Work delivered by Tenant under Paragraph 3 above
or otherwise furnished by Tenant, in certified form, upon Landlord’s request from time to time
therefor) prior to disbursement or further disbursement of the Allowance, and in such event,
Landlord shall have no obligation to disburse or further disburse any portion of the Allowance
until all such excess costs have been paid by Tenant, and Tenant shall have delivered to Landlord
the documentation described in Paragraph 9(b) below evidencing the payment of such excess costs by
Tenant. Landlord shall not be obligated to disburse any portion of the Allowance which is to be
disbursed to or as directed by Tenant in response to any request for disbursement which is
submitted by Tenant more than one hundred twenty (120) days following the Commencement Date, except
as otherwise provided in Paragraph 9(f) below. If the cost of Tenant’s Work and such other items
for which the Allowance may be applied should for any reason be less than the full Allowance,
Tenant shall not be entitled to the unapplied portion of the Allowance or any credit against Rent
in the amount any such unapplied portion, except as otherwise provided in Paragraph 9(f) below.

          (b) Periodically, but not more frequently than once per month, commencing at any time
following the date of the lease, Tenant may submit to Landlord a payment request for costs of the
Tenant’s Work incurred and not previously paid naming the parties to be paid and the respective
amounts of such payments, which payment request shall be accompanied by:

               (i) A customary “owner’s sworn statement” in writing signed by Tenant stating the
various contracts entered into by Tenant for the Tenant’s Work and with respect to each:
the total contract price of all labor, work, services and materials; the amounts theretofore
paid thereon; the amount requested for the current disbursement; and the balance due for
such labor, work, services and materials, after payment of the current disbursement, to
complete the Tenant’s Work in accordance with the Plans;

B-10

 

               (ii) A written application for payment from each of Tenant’s Contractors disclosed in
the aforesaid sworn Tenant’s statement wherein each of Tenant’s Contractors certifies
completion and the cost of that portion of the Tenant’s Work for which payment is requested
and further certifies that the cost to complete the Tenant’s Work remaining to be done under
said contract will not exceed the balance due thereunder (without including in such balance
any required retainages) and a customary “contractor’s sworn statement” in writing signed by
each of Tenant’s Contractors stating: the names of all persons, firms, associations,
corporations or other parties by whom labor, materials, services or work will be rendered or
furnished pursuant to the contract with Tenant’s Contractor; the nature of labor, work,
services and materials to be rendered or furnished by each of the foregoing; the amounts (in
the case of firm subcontracts) and estimated amounts (in other cases) to be paid for such
labor, work, services and materials; the amounts theretofore paid thereon; the amount
requested for the current involved in each of those three phases of construction,
respectively, shall be made in three corresponding phases so that there will be, in effect,
three “final” distributions of the Allowance, one for each phase of the construction of the
Tenant’s Work.

     10. MISCELLANEOUS.

          (a) Except as herein expressly set forth herein, in the lease, Landlord has no agreement with
Tenant and has no obligation to do any work with respect to the Premises.

          (b) Time is of the essence under this Workletter.

          (c) If Tenant fails to make any payment relating to the Tenant’s Work as required hereunder,
Landlord, at its option, may complete the Tenant’s Work pursuant to the approved Plans and continue
to hold Tenant liable for the costs thereof.

          (d) Notices under this Workletter shall be given in the same manner as under the lease.

          (e) The liability of Landlord hereunder or under any amendment hereto shall be limited as
provided in Section 29.12 of the lease.

          (f) The headings set forth herein are for convenience only.

          (g) This Workletter, together with the lease, sets forth the entire agreement of Tenant and
Landlord regarding the Tenant’s Work. This Workletter may only be amended if in writing, duly
executed by both Landlord and Tenant. All capitalized terms used in this Workletter shall have the
respective meanings ascribed to them in the lease, unless this Workletter otherwise provides.

          (h) Tenant has designated the following entities as Tenant’s architects for purposes of
preparing the architectural portions of the Plans for the Tenant’s Work (collectively, the
“Tenant’s Architect”): (i) with respect to general construction, VOA, located at 224 South
Michigan Avenue, Suite 1400, Chicago, Illinois 60604 Attention: Don Dorsh, telephone 312.554.1400
and (ii) with respect to Tenant’s IT Data Center and network/telephone cables,

B-11

 

Technology Management, Inc., located at 1911 Rohlwing Road, Suite E, Rolling Meadows, IL
60008, Attention: Daniel J. McGrath, telephone 847-394-8900 x222.

          (i) This Agreement shall not be deemed applicable to any additional space added to the
original Premises at any time or from time to time, whether by any options under the lease or
otherwise, or to any portion of the original Premises or any additions thereto in the event of a
renewal or extension of the original term of the lease, whether by any options under the lease or
otherwise, except as expressly provided in the lease or in any amendment or supplement to the
lease.

     11. DESIGNATED REPRESENTATIVES; COOPERATION.

          (a) Landlord and Tenant shall each appoint one or two qualified and readily available
representatives with the authority to give and receive notices, other materials and information
relating to the Tenant’s Work, and approvals under this Agreement. Initially, Landlord’s
representative shall be Jeff Venable, whose address is 1000 Remington Boulevard, Bolingbrook,
Illinois 60440, and whose telephone number is 630-679-1241, and Tenant’s representatives shall be
(a) with respect to general construction, Rick Myers, whose address is Ulta Salon, Cosmetics &
Fragrance, Inc., Windham Lakes Business Park, 1275 Windham Drive, Romeoville, Illinois, and whose
telephone number is (630) 226-8214; and (b) with respect to construction of Tenant’s IT Data Center
and installation of Tenant’s network/telephone cables, Jeff Pillers, whose address is Ulta Salon,
Cosmetics & Fragrance, Inc., Windham Lakes Business Park, 1135 Arbor Drive, Romeoville, Illinois,
and whose telephone number is (630) 771-4837.

          (b) Tenant and Landlord agree to make their respective architects and engineers available to
the other to answer questions and provide clarifications and additional information as is
reasonable for the timely progress and completion of the Tenant’s Work.

[END OF WORKLETTER PROVISIONS –

ATTACHMENT TO WORKLETTER FOLLOWS]

B-12

 

ATTACHMENT 1 TO WORKLETTER

MINIMUM INFORMATION FOR PLANS

Plans and specifications (including architectural, engineering and structural, as applicable,
working drawings) required for the supply, installation and finishing of the Tenant’s Work and
including, without limitation: finish schedule; material submittals; graphics and signage;
interior and demising partitions; doors, frames and hardware; ceilings; wiring; lights and
switches; telephone and electrical outlets; floor coverings; wall coverings; all millwork and
built-ins; appliances; plumbing fixtures; HVAC systems and equipment; refrigeration equipment;
reflected ceiling plans; and other equipment, equipment connections and facilities attached to and
forming a part of the Building.

Tenant shall pay its costs associated with the installation of Tenant’s network and other cabling,
telecommunications infrastructure, and all of its moving costs incurred in connection with Tenant’s
occupancy of the Premises.

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EXHIBIT C 

OTHER DEFINITIONS 

     1. “ADA” shall have the meaning described in Section 9(f).

     2. “Additional Rent” shall have the meaning described in Section 5.

     3. “Additional Rent Estimate” shall have the meaning described in Section 5(b).

     4. “Allowance” shall have the meaning described in the Workletter.

     5. “Calculation Date” means January 1, 2009 and each January 1 thereafter falling within the
Term.

     6. “Calculation Year” means each calendar year during which a Calculation Date falls.

     7. “Comparable Buildings” means office buildings which are comparable to the Building in terms
of age, quality of construction, level of service and amenities, size and appearance and are
located within the Chicago Suburban East-West Corridor.

     8. “Default” shall have the meaning described in Section 19.

     9. “Default Rate” shall have the meaning described in Section 28(i).

     10. “Expense Adjustment” shall have the meaning described in Section 5(a).

     11. “Expenses” shall mean all costs, expenses and disbursements of every kind and nature paid
or incurred by or on behalf of Landlord for or in connection with owning, managing, operating,
maintaining, replacing and/or repairing the Building, the Common Areas, the Land and the personal
property used in conjunction therewith, including without limitation: the cost of maintaining
adjoining pedestrian tunnels and walkways and related lighting, the cost of security and security
devices and systems, snow and ice and trash removal, cleaning and sweeping, planting and replacing
decorations, flowers and landscaping; the cost of all utilities for the Building, such as water,
sewer, power, fuel and heating (or hot water for heating), lighting, air-conditioning (or chilled
water for cooling) and ventilating, to the extent not specifically directly allocated to or paid by
Tenant; maintenance, repair and replacement of utility systems, telephone building riser cable,
elevators and escalators; electricity, gas, steam, water, sewers, fuel, heating, lighting, air
conditioning; window cleaning; janitorial service; insurance (including but not limited to, fire,
extended coverage, all risk, liability, worker’s compensation, elevator, or any other insurance
carried by the Landlord and applicable to the Project); painting; management fees; supplies;
sundries; sales or use taxes on supplies or services; rent, telephone service, postage, office
supplies, maintenance and repair of office equipment and similar costs related to operation of the
building manager’s office; licenses, permits and similar fees and charges related to ownership,
management, operation, repair, replacement and/or maintenance of the Project; the share of costs
and expenses allocated to the Building and the Land relating to the management, maintenance,
operation and repair of any common lobby or other facilities connecting the

C-1

 

Building or any of its facilities to any other adjoining building, facilities or land; cost of
wages and salaries of all persons engaged in the operation, management, maintenance and repair of
the Project, and so-called fringe benefits (including social security taxes, unemployment insurance
taxes, cost for providing coverage for disability benefits, cost of any pensions, hospitalization,
welfare or retirement plans, or any other similar or like expenses incurred under the provisions of
any collective bargaining agreement, or any other cost or expense which Landlord pays or incurs to
provide benefits for employees so engaged in the operation, management, maintenance and repair of
the Project); the charges of any independent contractor who, under contract with the Landlord or
its representatives, does any of the work of operating, managing, maintaining, replacing and/or
repairing of the Project; legal and accounting expenses (including, but not limited to, such
expenses as relate to preparation of statements of Expenses and Taxes and seeking or obtaining
reductions in and refunds of real estate taxes); sales and excise taxes; expenses allocated to the
Project under any easements, conditions, covenants or restrictions from time to time affecting the
Project, or any other expense or charge which would be considered as an expense of owning,
managing, operating, maintaining, replacing and/or repairing the Project.

     Expenses shall not include: costs or other items included within the meaning of the term
“Taxes” (as hereinafter defined); costs of alterations and relocations of the premises of tenants
of the Building; costs of capital improvements to the Building or Common Areas other than those
specifically included in Expenses as set forth below; depreciation charges; interest and principal
payments on mortgages and other financing costs and charges; ground rental payments; legal fees in
connection with negotiating leases with other tenants in the Building or in connection with
enforcing lease obligations of other tenants in the Building; fines and penalties on late payments;
real estate brokerage and leasing commissions; any expenditures for which Landlord has been
reimbursed by tenants (other than pursuant to rent escalation or tax and operating expense
reimbursement provisions in leases); salaries, wages or other benefits paid to any executive
employee above the grade of regional building manager and regional building engineer (which are
includable only to the extent that such regional building manager and regional building engineer,
as the case may be, is engaged in servicing the Building); legal fees, space planners’ fees,
leasing commissions and advertising expenses incurred in connection with leasing space in the
Building; expenses for repairs, maintenance or replacements for which Landlord is reimbursed from
or pursuant to insurance or condemnation proceeds or construction warranties; appraisal and
accounting fees, disbursements and charges incurred in connection with disputes with tenants or
other occupants of the Building; costs for which Landlord has received the direct actual
reimbursement from any source (other than reimbursement through payment by tenants of operating
expenses and taxes, such as Expenses and Taxes); rental costs relating to leasing Building systems,
elevators or other equipment ordinarily considered to be of a capital nature, except to the extent
such amounts would otherwise have been included as Expenses under Paragraph (a) below had such
systems, elevators or other equipment been purchased by Landlord; marketing or advertising costs
for the Project; market study fees; costs of sculptures, paintings or other artwork in the Common
Areas; management fees in excess of the market rate management fee charged at Comparable Buildings;
costs incurred by Landlord by reason of its default under any lease or other agreement; the cost of
containing, removing or otherwise remediating any contamination of the Land or other portions of
the Project or other environmental liability (including any expenses of removal or remediation of
any underground storage tank on the Premises or the Project); costs of Landlord’s general overhead
and costs incurred in connection with Landlord’s “home” or “branch” office costs incurred in
connection

C-2

 

with any sale or transfer of the Project or any interest therein by Landlord; any amount the
Landlord pays a contractor or vendor because of a special relationship in excess of the amount
which would have been paid in the absence of said special relationship; and fines or penalties
incurred as a result of any violation by Landlord of any Law, provided the same is not caused by or
the result of any acts or failures to act on the part of Tenant.

     Notwithstanding anything contained in the above definition of Expenses to the contrary:

     (a) The cost of any capital improvements to the Building (i) which are intended to
reduce Expenses, or (ii) which are required under changes in the ADA effective subsequent to
the Commencement Date, or (iii) which are required under any other governmental laws,
regulations or ordinances (collectively, the “Governmental Laws”), or (iv) which are
intended to enhance the safety of the Building or its occupants, shall be included in
Expenses in the year of installation and subsequent Calculation Years as hereinafter set
forth; provided that if the Building is in violation of the ADA or any such Governmental
Laws (as existing on the Commencement Date (i.e., meaning that the Building was obligated to
take action to comply with such Governmental Laws on or before the Commencement Date, and
has failed to do so)), then the costs of any capital improvements made to the Building after
the date of this lease in order to cure such violations of the ADA or Governmental Laws
shall not be so included in Expenses. In any Calculation Year, the portion includable in
Expenses shall be the annual amortization of such cost using as the amortization period such
reasonable period as Landlord shall determine, together with interest on the unamortized
cost of any such improvements (at an annual rate equal to the greater of (i) 11%, or (ii) 2%
over the “Prime Rate” described in Section 28(i) of the lease calculated as of the date the
cost of such improvements was incurred) (or if applicable, such other interest rate as may
actually be charged to Landlord for acquisition financing or leasing of such capital
improvement). In the case of loss or damage to the Project due to fire or other casualty,
the costs of repairing, restoring or replacing any portion of the Project which constitute
capital improvements shall be included in Expenses to the extent of deductible amounts under
insurance policies.

     (b) If the office area of the Building is not fully (at least 95% for the purposes of
this paragraph) occupied by tenants during all or a portion of the Base Year or any
Calculation Year, or if during all or a portion of any Calculation Year, Landlord is not
furnishing to any tenant or tenants any particular service, the cost of which, if furnished
by Landlord, would be included in Expenses, then Landlord shall (in the case of the Base
Year) and may (in the case of any Calculation Year), elect to make an appropriate adjustment
in Expenses for the year, by adjusting those components of Expenses which vary with the
occupancy level of the Building, to reflect the Expenses that would have been paid or
incurred by Landlord for such year had the office area of the Building been 95% occupied by
tenants and services been furnished to all such tenants during such entire Calculation Year.
Any such adjustments shall be deemed costs and expenses paid or incurred by Landlord and
included in Expenses for such year. The parties intend that Tenant pay Tenant’s
Proportionate Share of increase in Expenses for any Calculation Year over Expenses for the
Base Year on the basis that the Building was at least 95% occupied during the Base Year.

C-3

 

     (c) If any item of Expenses, though paid or incurred in one calendar year, relates to
more than one calendar year, at the option of Landlord, such item may be proportionately
allocated among such related calendar years.

     12. “Ground Lease” and “Ground Lessor” shall have the meanings described in Section 20.

     13. “Hazardous Substances” shall have the meaning described in Section 9(e).

     14. “Holidays” shall have the meaning described in Section 8(e).

     15. “Landlord Parties” shall have the meaning described in Section 9(e).

     16. “Landlord’s Expense Statement” shall have the meaning described in Section 5(c)(i).

     17. “Landlord’s Tax Statement” shall have the meaning described in Section 5(c)(ii).

     18. “Laws” shall mean all statutes, laws, ordinances, codes, rules and regulations, orders and
directions of public officials or other acts having the force or effect of law, of all federal,
state, county, municipal and other agencies, authorities or bodies having jurisdiction over the
Premises.

     19. “Monthly Base Rent” shall have the meaning described in Section 4(a).

     20. “Mortgage” and “Mortgagee” shall have the meanings described in Section 20(a).

     21. Intentionally Omitted.

     22. “Outside Date” shall have the meaning described in Section 17(a).

     23. “Projection Notice” shall have the meaning described in Section 5(b)(i).

     24. “Projections” shall have the meaning described in Section 5(b)(i)(A).

     25. “Released Parties” shall have the meaning described in Section 16(a).

     26. “Rent” shall have the meaning described in Section 3(a).

     27. “Rentable Area” with respect to the Building means the rentable area of office space at
the Building, on a rentable square footage basis, measured generally in accordance with the
Building Owners and Managers Association International method of measurement (“BOMA”) existing as
of the date of this lease (with certain deviations therefore as deemed appropriate by Landlord and
with such changes to said measurement standards as may be adopted by BOMA from time to time and as
may be utilized, at Landlord’s election, for measurement calculations at the Building).

C-4

 

     28. “Rentable Area” with respect to any tenant space at the Building means rentable area of
the applicable tenant space, on a rentable square footage basis, measured generally in accordance
with the BOMA method of measurement existing as of the date of this lease (with certain deviations
therefore as deemed appropriate by Landlord and with such changes to such measurement standards as
may be adopted by BOMA from time to time and as may be utilized, at Landlord’s election, for
measurement calculations at the Building). The Rentable Area of the Premises as of the date hereof
shall be deemed to be the number of square feet set forth in Section 1(i) of this lease.

     29. “Successor” shall have the meaning described in Section 20(c).

     30. “Tax Adjustment” shall have the meaning described in Section 5(a)(i).

     31. “Taxes” shall mean real estate taxes, assessments (whether they be general or special),
sewer rents, rates and charges (to the extent not included as Expenses), transit taxes, taxes based
upon leases or the receipt of rent, and any other federal, state or local governmental charge,
general, special, ordinary or extraordinary (but not including (i) income or franchise taxes or any
other taxes imposed upon or measured by the Landlord’s income or profits, except as provided
herein, or (ii) any correction of or supplement to any tax or assessment which accrues or is for
any period prior to the Commencement Date), which may now or hereafter be levied, assessed or
imposed against the Land or the Building or Landlord as a result of its ownership of the Project.
Taxes “for” any calendar year or partial calendar year occurring within the Term shall mean Taxes
levied, assessed or imposed during such calendar year, regardless of when such Taxes are due and
payable.

     Notwithstanding anything contained in the above definition of Taxes to the contrary:

     (a) If at any time the method of taxation then prevailing shall be altered so that any
new or additional tax, assessment, levy, imposition or charge or any part thereof shall be
imposed upon Landlord in place or partly in place of any Taxes or contemplated increase
therein, or in addition to Taxes, and shall be measured by or be based in whole or in part
upon the Project, the rents or other income therefrom or any leases of any part thereof,
then all such new taxes, assessments, levies, impositions or charges or part thereof, to the
extent that they are so measured or based, shall be included in Taxes levied, assessed or
imposed against the Project to the extent that such items would be payable if the Project
were the only property of Landlord subject thereto and the income received by Landlord from
the Project were the only income of Landlord.

     (b) Notwithstanding the year for which any such taxes or assessments are levied, (i) in
the case of special taxes or assessments which may be payable in installments, the amount of
each installment, plus any interest payable thereon, paid during a Calculation Year shall be
included in Taxes for that year and (ii) if any taxes or assessments payable during any
Calculation Year shall be computed with respect to a period in excess of twelve (12)
calendar months, then taxes or assessments applicable to the excess period shall be included
in Taxes for the Calculation Year when payable. Except as provided in the preceding
sentence, all references to Taxes “for” a particular

C-5

 

Calculation Year shall be deemed to refer to Taxes levied, assessed or otherwise
imposed during such Calculation Year without regard to when such Taxes are payable.

     (c) Taxes shall also include any personal property taxes (attributable to the
Calculation Year in which paid) imposed upon the furniture, fixtures, machinery, equipment,
apparatus, systems or appurtenances used in connection with the Building or the operation
thereof.

     32. “Tenant’s Proportionate Share” shall mean a fraction, the numerator of which is the
Rentable Area of the Premises from time to time, and the denominator of which is the Rentable Area
of the Building. Landlord and Tenant hereby acknowledge that, for purposes of this lease, the
Rentable Area of the Building, as of the Commencement Date is 548,130. If changes are made by the
parties to this Lease, changing the Rentable Area of the Premises, Landlord may make an appropriate
adjustment to Tenant’s Proportionate Share (i.e., based upon the formula used in calculating
Tenant’s Proportionate Share as described in the preceding sentence). Notwithstanding anything
contained herein to the contrary, if at any time and from time to time, the Project and/or the
Building or any development of which either is a part, contains non-office uses (i.e., warehouse
uses) or shall be subdivided or condominiumized, Landlord shall have the right to determine and
recompute, in accordance with sound management principles, Tenant’s Proportionate Share for only
the office portion of the Project and/or the Building or of such development, in which event
Tenant’s Proportionate Share shall be based on the ratio of the rentable square footage of the
Premises to the rentable square footage of such office portion. In the event that the Project
and/or the Building shall, from time to time, contain tenants, owners or other parties, as the case
may be, who do not participate in all or certain categories of Expenses or Taxes, Landlord may
include or exclude, in accordance with sound accounting and management principles, the amount of
Expenses or Taxes, or such categories of the same, as the case may be, attributable to such
tenants, owners or other parties, as the case may be, and exclude the rentable square footage of
their premises in computing Tenant’s Proportionate Share. In the alternative, Landlord shall have
the right, from time to time, to determine and re-compute, in accordance with sound management
principles, Tenant’s Proportionate Share of Expenses and Taxes based upon the totals of each of the
same for all such buildings and structures, the land on which the same are located, and all related
facilities, including common areas and easements, corridors, lobbies, sidewalks, elevators, loading
areas, parking facilities and driveways and other appurtenances and public areas, in which event
Tenant’s Proportionate Share shall be based on the ratio of the rentable square footage of the
Premises to the rentable square footage of all such buildings. Except as provided expressly to the
contrary herein, “rentable square footage” shall include all rentable area of all office space
leased or available for lease at the Project and the Building, which Landlord may reasonably
re-determine from time to time, to reflect re-configuration, additions or modifications to the
Project and/or the Building.

C-6

 

EXHIBIT D

RULES AND REGULATIONS

     (1) Except with respect to the signage rights expressly granted to Tenant under the terms of
the Lease, no sign, lettering, picture, notice or advertisement shall be placed on any outside
window or in a position to be visible from outside the Premises and if visible from the outside or
public corridors within the Building shall be installed in such manner and be of such character and
style as Landlord shall approve in writing.

     (2) Tenant shall not use the name of the Building for any purpose other than Tenant’s business
address; Tenant shall not use the name of the Building for Tenant’s business address after Tenant
vacates the Premises; nor shall Tenant use any picture or likeness of the Building in any
circulars, notices, advertisements or correspondence.

     (3) No article which is explosive or inherently dangerous is allowed in the Building.

     (4) Tenant shall not represent itself as being associated with any company or corporation by
which the Building may be known or named.

     (5) Sidewalks, entrances, passages, courts, corridors, halls, elevators and stairways in and
about the Premises shall not be obstructed.

     (6) No animals (except for dogs in the company of a blind person), pets, bicycles or other
vehicles shall be brought or permitted to be in the Building or the Premises.

     (7) Room-to-room canvasses to solicit business from other tenants of the Building are not
permitted; Tenant shall not advertise the business, profession or activities of Tenant conducted in
the Building in any manner which violates any code of ethics by any recognized association or
organization pertaining to such business, profession or activities.

     (8) Tenant shall use commercially reasonable efforts not waste electricity, water or
air-conditioning and shall cooperate fully with Landlord to assure the most effective and efficient
operation of the Building’s heating and air-conditioning systems.

     (9) No locks or similar devices shall be attached to any door except by Landlord and Landlord
shall have the right to retain a key to all such locks. Tenant may not install any locks without
Landlord’s prior approval.

     (10) Tenant shall not make any use of the Premises which may be dangerous to person or
property or which shall increase the cost of insurance or require additional insurance coverage;
provided, however, that Tenant shall have the right to use the Premises for all of the uses
permitted hereunder and exercise all of Tenant’s rights hereunder.

     (11) Tenant shall comply with all safety, fire protection and evacuation procedures and
regulations established by Landlord or any governmental agency.

D-1

 

     (12) Tenant shall cooperate and participate in all reasonable security programs affecting the
Building.

     (13) Tenant assumes full responsibility of protecting the Premises from theft, robbery and
pilferage; the Indemnitees shall not be liable for damage thereto or theft or misappropriation
thereof. Except during Tenant’s normal business hours, Tenant shall keep all doors to the Premises
locked and other means of entry to the Premises closed and secured. All corridor doors shall
remain closed at all times. If Tenant desires telegraphic, telephones, burglar alarms or other
electronic mechanical devices, then Landlord will, upon request, direct where and how connections
and all wiring for such services shall be installed and no boring, cutting or installing of wires
or cables is permitted without Landlord’s approval.

     (14) Except with the prior approval of Landlord, all cleaning, repairing, janitorial,
decorating, painting or other services and work in and about the Premises shall be done only by
authorized Building personnel.

     (15) Furniture, equipment, machines and other large or bulky articles shall be brought to the
Building and into and out of the Premises at such times and in such manner as the Landlord shall
reasonably direct and at Tenant’s sole risk and cost. Prior to Tenant’s removal of any of such
articles from the Building, Tenant shall obtain written authorization of the Office of the Building
and shall present such authorization to a designated employee of Landlord.

     (16) Tenant shall not overload the safe capacity of the electrical wiring of the Building and
the Premises or exceed the capacity of the feeders to the Building or risers.

     (17) To the extent permitted by law, Tenant shall not cause or permit picketing or other
activity which would interfere with the business of Landlord or any other tenant or occupant of the
Building, or distribution of written materials involving its employees in or about the Building,
except in those locations and subject to time and other limitations as to which Landlord may give
prior written consent.

     (18) Tenant shall not cook, otherwise prepare or sell any food or beverages in or from the
Premises or use the Premises for housing accommodations or lodging or sleeping purposes except that
Tenant may install and maintain vending machines, coffee/beverage stations and food warming
equipment and eating facilities for the benefit of its employees or guests, provided the same are
maintained in compliance with applicable laws and regulations and do not disturb other tenants in
the Building with odor, refuse or pests.

     (19) Tenant shall not permit the use of any apparatus for sound production or transmission in
such manner that the sound so transmitted or produced shall be audible or vibrations therefrom
shall be detectable beyond the Premises; nor permit objectionable odors or vapors to emanate from
the Premises

     (20) No floor covering shall be affixed to any floor in the Premises by means of glue or other
adhesive without Landlord’s prior written consent.

     (21) Tenant shall at all time maintain the window blinds in the lowered position, though
Tenant may keep the louvers open.

D-2

 

     (22) Tenant shall only use the freight elevator for mail carts, dollies and other similar
devices for delivering material between floors that Tenant may occupy.

     (23) No smoking, eating, drinking, loitering or laying is permitted in the common areas of the
Building except in designated areas.

     (24) Landlord may require that all persons who enter or leave the Building identify themselves
to security guards, by registration or otherwise. Landlord, however, shall have no responsibility
or liability for any theft, robbery or other crime in the Building. Tenant shall assume full
responsibility for protecting the Premises, including keeping all doors to the Premises locked
after the close of business.

     (25) Tenant shall comply with all safety, fire protection and evacuation procedures and
regulations established by Landlord or any governmental agency and shall cooperate and participate
in all reasonable security and safety programs affecting the Building.

     (26) Tenant shall cooperate and participate in all recycling programs established for the
Building by Landlord or any governmental agency.

D-3

 

EXHIBIT E

INVENTORY LIST

	 	 	 	 	 
	PANELS
	 	 	 	 
	42x24
	 	 	2	 
	42x30
	 	 	2	 
	42x36
	 	 	 	 
	42x48
	 	 	 	 
	64x18
	 	 	9	 
	64x24
	 	 	88	 
	64x30
	 	 	4	 
	63x36
	 	 	117	 
	64x48
	 	 	23	 
	WORKSURFACES
	 	 	 	 
	36x18
	 	 	2	 
	48x18
	 	 	5	 
	54x18
	 	 	1	 
	66X18
	 	 	2	 
	72X18
	 	 	8	 
	24X24
	 	 	15	 
	36X24
	 	 	13	 
	42x24
	 	 	1	 
	48X24
	 	 	22	 
	54x24
	 	 	4	 
	58x24
	 	 	1	 
	60x24
	 	 	12	 
	72x24
	 	 	9	 
	84x24
	 	 	8	 
	42x30
	 	 	1	 
	24/36/36/24
	 	 	32	 
	30/48/72/24
	 	 	1	 
	63x30 round end
	 	 	11	 
	OVERHEADS
	 	 	 	 
	24
	 	 	1	 
	30
	 	 	1	 
	36
	 	 	29	 
	48
	 	 	34	 
	60
	 	 	1	 
	BBF
	 	 	32	 
	FF
	 	 	10	 
	LF 30
	 	 	53	 
	LF 36
	 	 	1	 
	CABINETS
	 	 	 	 

E-1

 

	 	 	 	 	 
	LF - (3F) 30”
	 	 	2	 
	LF - (3F) 36”
	 	 	4	 
	LF - 48”
	 	 	1	 
	LF - (5F) 30”
	 	 	1	 
	LF - (5F) 36
	 	 	6	 
	Hinged (5C) 36”
	 	 	5	 
	Hinged (W/CS)
	 	 	1	 
	DDC 30
	 	 	8	 
	CHAIRS
	 	 	 	 
	Task
	 	 	33	 
	Side
	 	 	23	 
	Lobby
	 	 	6	 

               B2

	 	 	 	 	 
	PANELS
	 	 	 	 
	42x24
	 	 	5	 
	42x30
	 	 	 	 
	42x36
	 	 	7	 
	42x48
	 	 	 	 
	64x18
	 	 	38	 
	64x24
	 	 	445	 
	64x30
	 	 	1	 
	63x36
	 	 	507	 
	64x48
	 	 	163	 
	WORKSURFACES
	 	 	 	 
	36x18
	 	 	 	 
	48x18
	 	 	24	 
	60X18
	 	 	48	 
	72X18
	 	 	24	 
	24X24
	 	 	128	 
	36X24
	 	 	48	 
	48X24
	 	 	165	 
	60x24
	 	 	 	 
	72X24
	 	 	91	 
	84X24
	 	 	48	 
	24X36X36X24
	 	 	176	 
	30/48/72/24
	 	 	 	 
	63X30 round end
	 	 	48	 
	OVERHEADS
	 	 	 	 
	24
	 	 	 	 
	36
	 	 	176	 
	48
	 	 	176	 
	60
	 	 	 	 
	BBF
	 	 	176	 

E-2

 

	 	 	 	 	 
	FF
	 	 	48	 
	LF
	 	 	352	 
	 
	 	 	 	 
	TABLES
	 	 	 	 
	72” x 30”
	 	 	4	 
	144” x 48”
	 	 	 	 
	120” x48”
	 	 	1	 
	 
	 	 	 	 
	CABINETS
	 	 	 	 
	LF - (3F) 36”
	 	 	42	 
	(5F) - 36”
	 	 	23	 
	Hinged (5C)
	 	 	40	 
	Hinged (W/CS)
	 	 	10	 
	Hinged (CC/36/24)
	 	 	 	 
	CHAIRS
	 	 	 	 
	Task
	 	 	176	 
	Side
	 	 	159	 
	Conference
	 	 	15	 

               A2

	 	 	 	 	 
	PANELS
	 	 	 	 
	42x24
	 	 	13	 
	42x30
	 	 	 	 
	42x36
	 	 	7	 
	42x48
	 	 	3	 
	64x18
	 	 	35	 
	64x24
	 	 	402	 
	64x30
	 	 	4	 
	63x36
	 	 	465	 
	64x48
	 	 	154	 
	WORKSURFACES
	 	 	 	 
	36x18
	 	 	 	 
	48x18
	 	 	12	 
	60X18
	 	 	24	 
	72X18
	 	 	12	 
	24X24
	 	 	104	 
	36X24
	 	 	24	 
	48X24
	 	 	188	 
	60x24
	 	 	24	 
	72X24
	 	 	116	 
	84X24
	 	 	24	 
	24X36X36X24
	 	 	164	 
	30/48/72/24
	 	 	 	 
	63X30 round end
	 	 	24	 

E-3

 

	 	 	 	 	 
	OVERHEADS
	 	 	 	 
	24
	 	 	 	 
	36
	 	 	164	 
	48
	 	 	164	 
	60
	 	 	 	 
	BBF
	 	 	164	 
	FF
	 	 	24	 
	LF
	 	 	328	 
	 
	 	 	 	 
	TABLES
	 	 	 	 
	72” x 30”
	 	 	3	 
	144” x 48”
	 	 	1	 
	120” x48”
	 	 	1	 
	 
	 	 	 	 
	CABINETS
	 	 	 	 
	LF - (3F) 36”
	 	 	36	 
	(5F) -  36”
	 	 	 	 
	Hinged (5C)
	 	 	27	 
	Hinged (W/CS)
	 	 	18	 
	Hinged (CC/36/24)
	 	 	 	 
	CHAIRS
	 	 	 	 
	Task
	 	 	164	 
	Side
	 	 	118	 
	Conference
	 	 	45	 

E-4

 

EXHIBIT F

FORM OF LEASE ESTOPPEL CERTIFICATE

Landlord: BOLINGBROOK INVESTORS, LLC

Tenant: ULTA SALON, COSMETICS & FRAGRANCE, INC.

Lender: WILMINGTON TRUST OF PENNSYLVANIA

Premises: Suite #                                        

Area: 82,468 Sq. Ft.

Lease Date:                                                            

The undersigned Landlord and Tenant of the above-referenced lease (the “Lease”) hereby ratify the
Lease and certify to Lender as mortgagee of the Real Property of which the premises demised under
the Lease (the “Premises”) is a part, as follows:

	1.	 	All initial capitalized terms not otherwise defined herein shall have the meaning ascribed to
them in the Lease.
	 
	2.	 	That the term of the Lease shall commence on (the “Commencement Date”) the earlier of either
(a) the date on which Tenant occupies the Premises for the operation of its business or (b)
September 1, 2007.
	 
	3.	 	That as of the Commencement Date, the Lease calls for monthly base rent installments in the
amount of $57,392.71, subject to the Abatement (as defined in the Lease).
	 
	4.	 	That no rental has been made more than one month in advance and there is no “free rent” or
other concession under the remaining term of the Lease, except as set forth in the Lease.
	 
	5.	 	That a security deposit in the amount $0.00 is being held by Landlord, which amount is not
subject to any set-off or reduction or to any increase for interest or other credit due to
Tenant.
	 
	6.	 	That the Lease is a valid lease and in full force and effect and represents the entire
agreement between the parties; that as of the date hereof, there is no existing default beyond
applicable notice and cure periods on the part of the Landlord or the Tenant in any of the
terms and conditions thereof and as of the date hereof, no event has occurred which, with the
passing of time or giving of notice or both, would constitute an event of default beyond
applicable notice and cure periods; and that said Lease has: (initial one)

			
	      þ	 	not been amended, modified, supplemented, extended, renewed or assigned.

			
	      o	 	been amended, modified, supplemented, extended, renewed or assigned as
follows by the following described agreements:

F-1

 

	 	 	 

	 
	 	 	 

	 
	 	 	 

	 
	 	 	 

	 
	7.	 	That the Lease provides for a primary term of 11 Lease Years; and that: (initial all
applicable subparagraphs)

			
	     o	 	neither the Lease nor any of the documents listed above in Paragraph 6,
(if any), contain an option for any additional term or terms or an option to terminate
the Lease prior to the expiration date set forth above.

			
	     þ	 	the Lease and/or the documents listed above in Paragraph 6 contain an
option for one (1) additional term(s) of five (5) year(s) at a rent to be determined as
follows:

			
		 	Base Rent per square foot of Rentable Area of the Premises payable during the first
Lease Year of the Renewal Period shall be $28.00 per square foot with respect to all
space included in the Premises as of the Renewal Period Commencement Date, and shall
escalate annually at the rate of $0.50 per Lease Year.

			
	     o	 	the Lease and/or the documents listed above in Paragraph 6 contain an
option to terminate the Lease prior to the date set forth as follows:

	 	 	 

	 
	 	 	 

	 
	 	 	 

	 
	 	 	 

	 
	8.	 	As of the date hereof, the Landlord has not rebated, reduced or waived any amounts due from
Tenant under the Lease, either orally or in writing, nor has Landlord provided financing for,
made loans or advances to, or invested in the business of Tenant.

	9.	 	As of the date hereof, there are no actions, voluntary or involuntary, pending against the
Tenant under the bankruptcy laws of the United States or any state thereof.

F-2

 

	10.	 	That this certification is made knowing that Lender is relying upon the representations
herein made.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 
	BOLINGBROOK INVESTORS, LLC	 	ULTA SALON, COSMETIC & FRAGRANCE, INC., a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Its:

	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	Name: Alex J. Lelli, Jr.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Its: Senior Vice President, Growth &
Development	 	 

F-3

 

EXHIBIT G

FORM OF MEMORANDUM CONFIRMING TERM

     THIS MEMORANDUM (“Memorandum”) is made as of                                         , between
                                         a                      limited liability company (“Landlord”), and
                                        , a                      (“Tenant”), pursuant to that certain Office
Lease between Landlord and Tenant dated as of ___, 200___(as amended from time to time, the
"Lease”) for certain leased premises (the “Premises”) located at the building (the “Building”)
known as                     , Illinois and more particularly described in the Lease. All
initial-capitalized terms used in this Memorandum have the meaning ascribed to them in the Lease.

	 	1.	 	Landlord and Tenant hereby confirm that:

     (a) The Commencement Date of the term is ___, 200___;

     (b) The Expiration Date of the Initial Term is ___, 200___;

	 	2.	 	Tenant hereby confirms that:

     (a) The Premises and all improvements and other work to be performed by Landlord
therein or elsewhere at the Building have been completed and furnished in accordance with
the provisions            of            the            Lease,
except            as follows:                                         ; and

     (b) Tenant has accepted and is in full possession of the Premises.

     3. This Memorandum has been entered into for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties hereto, and this Memorandum may be
relied upon by both Landlord and Tenant in accordance with its terms, and shall be binding upon and
inure to the benefit of the parties and their permitted successors and assigns.

     IN WITNESS WHEREOF, the parties have executed this Memorandum as of the date first set forth
above.

[Signature Page Follows]

G-1

 

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Its:

	 	 	 	Its:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

G-2

 

EXHIBIT H

HVAC SPECIFICATIONS 

	 	 	 
	Heating, Ventilating and Air Conditioning:
	 	 
	 
	 	 
	     Summer Design Conditions

	 	     Winter Design Conditions
	 
	 	 
	Outdoor Temperature: 95°F. Dry Bulb

	 	Outdoor Temperature: -6°F. Dry Bulb
	 
	 	 
	Outdoor Temperature: 75°F. Wet Bulb

	 	Indoor Temperature: 70°F. ± 2°F
	 
	 	 
	Indoor Temperature: 75°F. ± 2°F
	 	 

     All occupied spaces will be air-conditioned with the exception of toilet rooms, storage rooms,
and the mechanical room.

     Air-conditioning systems will be designed on the basis of occupancy of one (1) person per one
hundred (100) square feet in the rentable area of the Premises and maximum electrical lighting and
receptacle load of five (5) watts per square foot of the rentable area of the Premises.

     All special HVAC requirements shall be subject to Landlord’s approval.

H-1

 

EXHIBIT I

CLEANING SPECIFICATIONS

	 	 	 
	 Frequency
	 	 Task

	Daily

	 	Police litter
	 
	 	 
	Daily

	 	Empty trash baskets & carry to collection areas, replace liners as needed
	 
	 	 
	Daily

	 	Spot clean carpet to remove stains
	 
	 	 
	Daily

	 	Spot vacuum to remove visible soil.
	 
	 	 
	Weekly

	 	Fully vacuum all carpet corners, edges, and hidden areas.
	 
	 	 
	Daily

	 	Dust mop all hard surface floors.
	 
	 	 
	Daily

	 	Mop all stains and spills.
	 
	 	 
	Daily

	 	Spot clean all partitions, glass
	 
	 	 
	Daily

	 	Spot clean and dust all horizontal & vertical areas removing
fingerprints, stains and smudges (below 6ft).
	 
	 	 
	Daily

	 	Pick up desk-side recycled paper
	 
	 	 
	Daily

	 	Vacuum all carpet areas
	 
	 	 
	Bi-weekly

	 	Buff all hard surface floors
	 
	 	 
	Weekly

	 	Pick up aluminum cans
	 
	 	 
	Weekly

	 	Clean telephones
	 
	 	 
	Monthly

	 	Clean or dust all surfaces above normal reach
	 
	 	 
	Monthly

	 	Detail clean baseboards
	 
	 	 
	Monthly

	 	Vacuum all fabric furniture.
	 
	 	 
	Quarterly

	 	Dust all HVAC louvers
	 
	 	 
	Quarterly

	 	Clean office partition glass
	 
	 	 
	Quarterly

	 	For vinyl and terrazzo floor surfaces- machine scrub & topcoat.
	 
	 	 
	Daily

	 	Cleaning of restrooms in Common Areas

I-1

 

EXHIBIT J

FORM OF SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT 

Prepared by and

return after recording to:

Ulta Salon Cosmetics & Fragrance, Inc.

Windham Lakes Business Park

1275 Windham Drive

Romeoville, IL 60446

Attn: Alison M. Richter, Esq.

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

THIS AGREEMENT made the ___day of ___, 2007 by and among BOLINGBROOK INVESTORS, LLC, an
Illinois limited liability company (“Landlord”), ULTA SALON, COSMETICS & FRAGRANCE, INC., a
Delaware corporation (“Lessee”), and WILMINGTON TRUST OF PENNSYLVANIA, a Pennsylvania bank and
trust company (“Lender”).

WITNESSETH:

     A. Landlord is the owner of certain premises (“Premises”) described in Exhibit “A” attached
hereto and made a part hereof which is encumbered by a certain Mortgage, Security Agreement and
Fixture Filing dated August 5, 2004 given by Landlord to Lender and recorded August 10, 2004 as
Document R20044148156 with the Recorder of Deeds in and for Will County, Illinois (“Mortgage”).
The Mortgage secures Landlord’s indebtedness to Lender evidenced by Landlord’s $17,025,000 Mortgage
Note dated August 5, 2004 (“Note”). The Mortgage and Note, together with all other documents
evidencing and/or securing the same, as they have been or may be modified from time to time, are
hereinafter collectively referred to as “Loan Documents”.

     B. Landlord entered into a lease for a portion of the Premises (“Leased Premises”) with Lessee
dated ___, 2007 (together with all amendments, renewals and extensions thereof
collectively referred to as the “Lease”).

     C. The parties desire to set out their understanding as to certain of their respective rights
and obligations in the transactions above described.

     NOW, THEREFORE, the parties hereto, in consideration of the premises and their mutual covenants
herein contained and intending to be legally bound hereby agree as follows:

     1. Warranties and Representations.

     (a) Landlord and Lessee warrant and represent that as of the date hereof (i) neither
Landlord nor Lessee is in default under the terms of the Lease beyond applicable

 Ulta Tallgrass Office Lease

 

 

notice and cure periods, (ii) the Lease is in full force and effect, (iii) no payments
under the Lease have been collected, anticipated, waived, released, discounted or otherwise
discharged or compromised, except as pursuant to the terms of the Lease, (iv) Landlord has
not received any funds or deposits from Lessee other than security deposits under the Lease,
if any, and (v) Lessee has no setoff or counterclaim against Landlord under the Lease, (vi)
Landlord and Lessee have made no agreements concerning, and Lessee is not entitled to, any
free rent, partial rent, rebate of rental payments or any other type of rental concession,
except as set forth in the Lease, (vii) the fixed minimum rent payable under the Lease as of
the Commencement Date (as defined in the Lease) will be $57,392.71 per month, except as may
be abated in accordance with Section 4(b) of the Lease and (viii) no actions, whether
voluntary or involuntary, are pending against Lessee under the bankruptcy laws of the United
States or any state thereof.

     2. Assignment. Lessee acknowledges that all of the interest of Landlord in and to the
Lease, including the rents and other sums payable thereunder, have been assigned to Lender and that
pursuant to the terms of such Assignment, until the Mortgage is satisfied of record, all rents and
other payments now or hereafter due Landlord under the Lease shall be paid to or at the direction
of Lender. Until further notice from Lender, Lessee is directed by Lender to pay all such sums to
Landlord. Landlord hereby agrees that upon receipt of a written notice from Lender (and without
any duty of inquiry and despite any knowledge or notice to the contrary of the validity of any such
notice), (i) all rents and other payments due from Lessee to Landlord under the Lease shall be paid
by Lessee to Lender and (ii) Lessee shall have no liability to Landlord for any such sums paid
directly to Lender.

     3. Lease not to be Modified, etc. Landlord and Lessee agree that, without the prior
written consent of Lender, no material modification affecting term, Leased Premises, rent or any
provision increasing Landlord’s obligations or decreasing Tenant’s obligations may be made to the
Lease.

     4. Nonlimitation of Lender’s Rights under Loan Documents. Except as set forth in
Paragraph 7 of this Agreement, nothing in this Agreement contained shall prejudice or be construed
to prejudice the right of Lender to commence and prosecute, or to prevent Lender from commencing
and prosecuting any action which it may deem advisable, or which it may be entitled to commence and
prosecute under the terms of the Loan Documents; nor shall this Agreement be construed to waive any
defaults now existing or which may occur under said Loan Documents; nor shall this Agreement be
construed as granting a forbearance or extension of time for payment.

     5. Nonassumption of Liability by Lender Prior to Foreclosure of Mortgage. Except to
the extent Lender succeeds to the interest of Landlord under the Lease, Lender does not by
execution and acceptance of this Agreement or making demand on or collecting monies under the Lease
assume any liability or become liable in any manner whatsoever for the performance of any of the
terms and conditions thereof.

     6. Subordination. Subject to Paragraph 7 hereof, Lessee acknowledges, covenants and
agrees that the Lease, including any and all options to purchase, rights of first refusal or other
rights to purchase the Leased Premises, the Premises or any portion thereof, now is and

 Ulta Tallgrass Office Lease

J-2

 

shall at all times continue to be subject and subordinate in each and every respect to the
Mortgage and to all renewals, modifications, consolidations, replacements and extensions thereof,
to the full extent of the principal, interest and other sums secured thereby. Lessee, upon
request, shall execute and deliver any certificate or other instrument reasonably acceptable to
Lessee whether or not in recordable form which Lender may reasonably request to confirm said
subordination. The foregoing notwithstanding, in no event shall any of Lessee’s trade fixtures,
inventory, equipment, furniture and furnishings, accounts, books or records or other assets be or
become subject or subordinate to the lien in favor of Lender.

     7. Non-Disturbance. As long as no event of default has occurred and is continuing
under the Lease beyond applicable notice and cure periods, Lender shall not name Lessee as a party
defendant to any action for foreclosure or other enforcement of the Mortgage (unless required by
law), nor shall the Lease be terminated by Lender in connection with, or by reason of, foreclosure
or other proceedings for the enforcement of the Mortgage, or by reason of a transfer of Landlord’s
interest under the Lease pursuant to the taking of a deed or assignment in lieu of foreclosure (or
similar device), nor shall Lessee’s use or possession of the Leased Premises, Lobby (as defined in
the Lease), Receiving Docks (as defined in the Lease) or the Common Areas (as defined in the Lease)
be interfered with by Lender and all rights and privileges of Tenant under the Lease, or any
renewals, modifications, or extensions thereof, shall be recognized by Lender and any Successor (as
defined herein).

     8. Non-liability of Lender and Successors. Neither Lender nor any other person
acquiring or succeeding to the interests of Landlord as a result of any foreclosure or other
proceeding for the enforcement of the Mortgage, or by reason of a transfer of Landlord’s interest
under the Lease, pursuant to the taking of a deed in lieu of foreclosure (or similar device), nor
such person’s successors and assigns (all of the foregoing, including Lender, being hereinafter
referred to as the “Successor”), shall be:

     (a) subject to any credits, offsets, defenses or claims which Lessee might have against
any prior landlord with respect to the payment of rent or other performance under the Lease
except for credits, offsets or claims arising under the Lease with respect to costs and
expenses (but not damages) incurred by Lessee after Lessee has notified Lender and given
Lender an opportunity to cure as provided in this Agreement; or

     (b) bound by any prepayment of rent more than one month in advance and not actually
delivered to the Successor; or

     (c) liable for any act or omission of any prior landlord; or

     (d) required to account or be liable for any security deposits, or any other monies
owing by or on deposit with any prior landlord to the credit of Lessee, which are not
actually delivered to the Successor; or

     (e) bound by any material amendment or modification of the Lease affecting the term,
Leased Premises, rent or any provision increasing Landlord’s obligations or decreasing
Tenant’s obligations made without Lender’s consent; or

 Ulta Tallgrass Office Lease

J-3

 

     (f) bound by any covenant to undertake or complete, or to make any contribution toward,
any improvement to or expansion or rehabilitation of the Leased Premises, the Premises or
any portion thereof, except that such Successor shall be liable for the following: (i) all
of Landlord’s obligations with respect to maintenance, repairs, casualty and condemnation of
the Leased Premises, Lobby, Receiving Docks, Common Allowance; (iii) the payment of the
design allowance set forth in Exhibit B, Paragraph 3(b) of the Lease; (iv) the completion of
Landlord’s obligations with respect to the separation of the electricity metering as
provided in Section 8(b) of the Lease; (v) the completion of Landlord’s obligations with
respect to the demising of Tenant’s space as provided in Exhibit B, Paragraph 1; and (vi)
the payment of Landlord’s portion of the costs with respect to the North Wall Glass Doors as
set forth in Exhibit B, Paragraph 2. Lender’s obligations under this subparagraph 8(f) are
expressly conditioned in each instance on Tenant having given Lender written notice of
Landlord’s default within fifteen (15) days following notice of such default to Landlord.

     Notwithstanding the foregoing Subparagraphs 8(a) through (f), nothing herein shall excuse
Lender or any Successor Landlord from liability or responsibility for, or limit any right or remedy
of Lessee with respect to, any breach or default that continues from and after the date when Lender
or such Successor Landlord obtains title to or takes possession or control of the Premises.

     9. Further Subordination. Except as otherwise may be required pursuant to the terms
of the Lease, so long as the Mortgage is in effect, Lessee covenants and agrees not to subordinate
or permit the subordination of the Lease to any mortgage or other lien encumbering the Premises at
any time, other than the Mortgage and any replacement, renewal, consolidation, substitution,
extension, modification, spreader and splitter thereof. Notwithstanding anything to the contrary
herein, Tenant shall have the right to place a lien on its personal property, trade fixtures,
inventory, equipment, furniture and furnishings, accounts, books or records and other assets.

     10. Notice of Default. Lessee covenants and agrees that Lessee will notify Lender in
writing of any default of Landlord under the Lease and agrees that notwithstanding any provisions
of the Lease, no notice by Lessee of any cancellation shall be effective unless Lender has received
notice as aforesaid, and has failed to cure the default within the applicable time periods set
forth in the Lease for the cure of any Landlord default.

     11. Attornment. If the interest of Landlord under the Lease shall be transferred by
reason of foreclosure or other proceedings for enforcement of the Mortgage, pursuant to the taking
of a deed in lieu of foreclosure (or similar device) or as a result of the exercise of any power of
sale under the Mortgage, Lessee shall be bound to the Successor, and, except as provided herein,
the Successor shall be bound to Lessee, under all of the terms, covenants and conditions of the
Lease for the balance of the term thereof remaining, with the same force and effect as if the
Successor were the landlord, and Lessee does hereby (i) agree to attorn to the Successor, including
Lender if it be the Successor, as its landlord, (ii) affirm its obligation under the Lease, and
(iii) agree to make payments when due of all sums due under the Lease to the Successor, said
attornment, affirmation and agreement to be effective and self-operative, without the execution of
any further instruments, upon Lessee and the Successor succeeding to the

 Ulta Tallgrass Office Lease

J-4

 

interest of Landlord. Lessee shall, at the request of Successor, execute, acknowledge and
deliver such further instruments reasonably acceptable to Lessee evidencing such attornment as are
desired by the Successor. Lessee waives the provisions of any statute or rule of law now or
hereafter in effect that may give or purport to give it any right or election to terminate or
otherwise adversely affect the Lease or the obligations of Lessee thereunder by reason of any
foreclosure or similar proceeding. Anything in the Lease to the contrary notwithstanding, in the
event that a Successor shall succeed to the interests of Landlord under the Lease, the Successor
shall have no obligation, nor incur any liability, beyond its then interest, if any, in the
Premises and Lessee shall look exclusively to such interest of the Successor, if any, in the
Premises for the payment and discharge of any obligations imposed upon the Successor hereunder or
under the Lease. Lessee agrees that with respect to any judgment which may be obtained or secured
by Lessee against the Successor, Lessee shall look solely to the estate or interest owned by the
Successor in the Premises and Lessee will not collect or attempt to collect any such judgment out
of any other assets of the Successor.

     12. Lease Requirements. Lessee agrees that this Agreement satisfies any condition or
requirement in the Lease relating to the granting of a Non-Disturbance agreement with respect to
the Mortgage.

     13. Modification. This Agreement may not be modified orally or in any other manner
than by an agreement in writing signed by the parties hereto or their respective successors in
interest.

     14. Notices. Any notice given pursuant to this Agreement shall be valid only if given
in writing, and shall be deemed sufficiently given if sent by hand-delivery, recognized overnight
courier service (i.e., Federal Express) or postpaid, registered or certified mail, return receipt
requested. Notice to the parties to this Agreement shall be addressed as follows:

	 	 	 	 	 
	 

	 	Landlord:
	 	Bolingbrook Investors, LLC
	 

	 	 	 	770 Township Line Road
	 

	 	 	 	Suite 150
	 

	 	 	 	Yardley, PA 19067
	 

	 	 	 	Attention:                                         
	 
	 	 	 	 
	 

	 	Lessee:
	 	Ulta Salon, Cosmetics & Fragrance, Inc.
	 

	 	 	 	Windham Lakes Business Park
	 

	 	 	 	1275 Windham Parkway
	 

	 	 	 	Romeoville, Illinois 60446
	 

	 	 	 	Attention: Senior Vice President, Growth &
	 

	 	 	 	Development
	 
	 	 	 	 
	 

	 	Lender:
	 	Wilmington Trust of Pennsylvania
	 

	 	 	 	One Liberty Place – Suite 3150
	 

	 	 	 	Philadelphia, PA 19103
	 

	 	 	 	Attention: Commercial Real Estate Lending Department

Notices shall be effective upon receipt.

 Ulta Tallgrass Office Lease

J-5

 

     15. Captions. It is agreed that the captions of this Agreement are for convenience
only and are not a part of this Agreement and do not in any way limit or amplify the terms and
provisions of this Agreement.

     16. Benefit and Binding Effect; Governing Law. This Agreement shall bind and inure to
the benefit of the successors and assigns of the parties hereto. This Agreement shall be governed
by and construed in accordance with the laws of the State of Illinois.

     17. Counterparts. This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signature thereto and hereto were on the
same instrument.

 Ulta Tallgrass Office Lease

J-6

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first
above written.

	 	 	 	 	 	 	 
	WITNESS:	 	BOLINGBROOK INVESTORS, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Scott A. Williams	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	WITNESS/ATTEST:	 	ULTA SALON, COSMETICS & FRAGRANCE, INC.,	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Alex J. Lelli, Jr.	 	 
	 

	 	Title:
	 	Senior Vice President, Growth &

Development	 	 
	 
	 	 	 	 	 	 
	ATTEST:	 	WILMINGTON TRUST OF PENNSYLVANIA	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

J-7

 

	 	 	 	 	 
	STATE OF ILLINOIS

	 	:	 	 
	COUNTY OF DUPAGE

	 	:

:
	 	SS.

On this ___day of ___, 200___, before me, a Notary Public, personally appeared Alex J.
Lelli, Jr. who acknowledged himself/herself to the Senior Vice President, Growth & Development of
Ulta Salon, Cosmetics & Fragrance, Inc., and that he/she as such Senior Vice President, Growth &
Development, being authorized to do so, executed the foregoing Subordination, Non-Disturbance, and
Attornment Agreement for the purposes therein contained by signing the name of the corporation by
himself/herself as such Senior Vice President, Growth & Development.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

	 	 	 	 	 
	 	—————————————————

Notary Public

 	 
	 	 	 
	 	 	 
	 	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	COMMONWEALTH OF PENNSYLVANIA

	 	:	 	 
	 
	COUNTY OF PHILADELPHIA

	 	:
	 	SS.

On this ___day of ___, 200___, before me, a Notary Public, personally
appeared Scott A. Williams, who acknowledged himself to be a Senior Vice President of BOLINGBROOK
INVESTORS, LLC, an Illinois limited liability company, and that he as such Officer, who I am
satisfied is the person who executed the foregoing instrument, being authorized to do so by virtue
of the resolution of the sole Member of the limited liability company acknowledged that he executed
the foregoing instrument on behalf of the limited liability company, and delivered same, as the
voluntary authorized act and deed of the limited liability company, for the purpose therein
contained by signing the name of the limited liability company by himself as such officer.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

	 	 	 	 	 
	 	————————————————

Notary Public

Commission expires:                    

 	 
	 	 	 
	 	 	 
	 	 	 
	 

 

 

	 	 	 	 	 
	COMMONWEALTH OF PENNSYLVANIA

	 	:	 	 
	COUNTY OF PHILADELPHIA

	 	:

:
	 	SS.

On this ___day of ___, 200___, before me, ___, a Notary Public,
personally appeared ___, ___of WILMINGTON TRUST OF PENNSYLVANIA,
who I am satisfied is the person who executed the foregoing instrument, being authorized to do so,
acknowledged that he executed the foregoing instrument on behalf of the ___, and delivered
same, as the voluntary authorized act and deed of the ___, for the purpose herein contained
by signing the name of the ___by himself as such officer.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

	 	 	 	 	 
	 	 ——————————————

Notary Public

Commission expires:                     

 	 
	 	 	 
	 	 	 
	 	 	 
	 

 

 

EXHIBIT K

FORM OF LANDLORD’S WAIVER AND CONSENT

     THIS LANDLORD’S WAIVER AND CONSENT (“Waiver and Consent”) is made and entered into as of this
___day of ___2007, by and between Bolingbrook Investors, LLC, an Illinois limited
liability company (“Landlord”), and Wachovia Capital Finance Corporation (Central), an Illinois
corporation (“Lender”), in its capacity as Collateral Agent (“Agent”) for various lenders
(“Lenders”).

     A. Landlord is the owner of the real property commonly known as 1000 Remington boulevard,
Bolingbrook, Illinois (the “Premises”).

     B. Landlord has entered into a certain Lease Agreement (together with all amendments and
modifications thereto and waivers thereof, the “Lease”) with Ulta Salon, Cosmetics & Fragrance,
Inc. (“Company”), with respect to the Premises.

     C. Agent and the Lenders have entered into a certain Second Amended and Restated Loan and
Security Agreement with Company (as amended from time to time, the “Credit Agreement”), and to
secure the obligations arising under such Credit Agreement, Company has granted to Agent for its
benefit and the benefit of the Lenders a security interest in and lien upon certain assets of
Company which assets may from time to time be located at the Premises, including, without
limitation, all of Company’s goods, inventory, machinery, equipment, and furniture and trade
fixtures (such as equipment bolted to floors), together with all additions, substitutions,
replacements and improvements to, and proceeds of, the foregoing, but excluding building
fixtures (such as plumbing, lighting and HVAC systems and other fixtures not constituting trade
fixtures) (collectively, the “Collateral”).

     NOW, THEREFORE, in consideration of any financial accommodations extended by Agent and the
Lenders to Company at any time, and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

     1. Landlord acknowledges that (a) the Lease is in full force and effect and (b) Landlord is
not aware of any existing default under the Lease.

     2. Landlord will use commercially reasonable efforts to provide Lender with written notice of
any default by Company under the Lease resulting in termination of the Lease (a “Default Notice”).
No action by Agent pursuant to this Waiver and Consent shall be deemed to be an assumption by Agent
or any Lender of any obligation under the Lease, and, except as provided in paragraphs 5, 6, 7 and
8 below, neither Agent nor any Lender shall have any obligation to Landlord hereunder.

     3. Landlord acknowledges the validity of Lender’s lien on the Collateral and, until such time
as the obligations of Company to Agent and the Lenders are indefeasibly paid in full, Landlord
waives any interest in the Collateral and agrees not to distrain or levy upon any Collateral or to
assert any landlord lien, right of distraint or other claim against the Collateral for any reason,
provided that the foregoing provision shall not prevent Landlord from suing the Company for rent or
other charges owing under the Lease.

K-1

 

     4. Landlord agrees that the Collateral consisting of trade fixtures such as equipment bolted
to the floor, which can be removed without material damage (unless company or Agent promptly
repairs such damage) shall not be deemed a fixture or part of the real estate but shall at all
times be considered personal property.

     5. Prior to a termination of the Lease, Agent or its representatives or invitees may enter
upon the Premises at any time without any interference by Landlord to inspect or remove any or all
of the Collateral. Lender will use commercially reasonable efforts to provide Landlord with prior
written notice of its intention to enter onto the Premises to remove any of the Collateral.

     6. Upon a termination of the Lease, Landlord will permit Agent and its representatives and
invitees to access the Premises; provided, that such access period (the “Access Period”)
shall not exceed up to 30 days following receipt by Agent of a Default Notice or, if the Lease has
expired by its own terms (absent a default thereunder) and the Company has failed to remove all of
the Collateral from the Premises, up to 30 days following Agent’s receipt of written notice from
Landlord of such failure.

     7. During any Access Period, (a) Agent and its representatives and invitees may inspect,
repossess and remove the Collateral, in each case without interference by Landlord or liability of
Agent to Landlord, and (b) Agent shall make the Premises available for inspection by Landlord and
prospective tenants and shall cooperate in Landlord’s reasonable efforts to re-lease the Premises.
In no event shall Agent disturb or interfere with other tenants’ rights of quiet enjoyment of their
leased space and no auction or other sale shall be held by Agent at the Premises. Upon request by
the Landlord, Agent shall promptly provide Landlord with evidence that commercially reasonable
insurance is in force throughout Agent’s period of possession.

     8. Agent shall promptly repair, at Agent’s expense, or reimburse Landlord for any physical
damage to the Premises actually caused by the conduct or activities of Agent or any of its
representatives or invitees with respect to the removal or other disposition of Collateral by or
through Agent (ordinary wear and tear excluded). Agent shall not be liable for any diminution in
value of the Premises caused by the absence of Collateral removed, and Agent shall not have any
duty or obligation to remove or dispose of any Collateral or any other property left on the
Premises by Company. Agent shall indemnify, defend and hold harmless Landlord and its employees
and agents from and against any loss, damage, claim, liability and expense incurred or sustained by
said indemnified parties and arising out of the conduct or activities of Agent or any of its
representatives or invitees with respect to the removal or other disposition of the Collateral.

     9. All notices hereunder shall be in writing, sent by overnight courier to the respective
parties and the addresses set forth on the signature page or at such other address as the receiving
party shall designate in writing.

     10. This Waiver and Consent may be executed in any number of several counterparts, shall be
governed and controlled by, and interpreted under, the laws of the state in which the Premises are
located and shall inure to the benefit of Agent and its successors and assigns and shall be binding
upon Landlord and its successors and assigns (including any transferees of the

K-2

 

Premises); provided that this Waiver and Consent shall be rendered null and void if Landlord
does not receive a fully executed original thereof within ten (10) business days after Landlord’s
execution and delivery of this Waiver and Consent to Tenant.

K-3

 

     IN WITNESS WHEREOF, this Landlord’s Waiver and Consent is entered into as of the date first
set forth above.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	“LANDLORD”	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Bolingbrook Investors, LLC, an Illinois limited

liability company	 	 
	 
	 	 	 	 	 	 	 	 
	Attention:

	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	Telephone:

	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Landlord’s Notice Address:

c/o BPG Properties, Ltd.

200 South Michigan Avenue, Suite 210

Chicago, Illinois 60604	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	“AGENT”	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Wachovia Capital Finance Corporation (Central), an

Illinois corporation	 	 
	 
	 	 	 	 	 	 	 	 
	Attention:

	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	Telephone:

	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Lender’s Notice Address:

Wachovia Capital Finance

Corporation (Central), as agent

150 South Wacker Drive

Chicago, IL 60606-4401

Attn: Portfolio Manager	 	 

K-4

 

EXHIBIT L

TENANT BUILDING SIGNAGE

{Details and location}

L-1

 

 

 

 

 

EXHIBIT M

TENANT LOBBY SIGNAGE

M-1

 

 

 

EXHIBIT N

LANDLORD’S WORK

N-1exv10w15

 

EXHIBIT 10.15

THIRD AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

by and among

LASALLE BANK NATIONAL ASSOCIATION,

as Administrative Agent, Syndication Agent, Co-Arranger,

Lead Manager and LC Issuer,

WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL),

as Collateral Agent and Co-Arranger,

JPMORGAN CHASE BANK, N.A.,

as Documentation Agent,

THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,

as Lenders,

and

ULTA SALON, COSMETICS & FRAGRANCE, INC.

as Borrower

Dated: as of June 29, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	SECTION 1. DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	SECTION 2. CREDIT FACILITIES
	 	 	19	 
	 
	 	 	 	 
	2.1. Revolving Loans
	 	 	19	 
	2.2. Letter of Credit Accommodations
	 	 	21	 
	2.3. Availability Reserves
	 	 	25	 
	2.4. Commitments
	 	 	26	 
	2.5. Swing Line Facility
	 	 	27	 
	 
	 	 	 	 
	SECTION 3. INTEREST AND FEES
	 	 	28	 
	 
	 	 	 	 
	3.1. Interest
	 	 	28	 
	3.2. Other Fees
	 	 	30	 
	3.3. Changes in Laws and Increased Costs of Loans
	 	 	30	 
	 
	 	 	 	 
	SECTION 4. CONDITIONS PRECEDENT
	 	 	32	 
	 
	 	 	 	 
	4.1. Conditions Precedent to Initial Loans and Letter of Credit Accommodations
	 	 	32	 
	4.2. Conditions Precedent to All Loans and Letter of Credit Accommodations
	 	 	33	 
	 
	 	 	 	 
	SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST
	 	 	33	 
	 
	 	 	 	 
	5.1. Grant of Security Interest
	 	 	33	 
	5.2. Exception from Security Interest
	 	 	35	 
	5.3. Perfection of Security Interest
	 	 	35	 
	 
	 	 	 	 
	SECTION 6. COLLECTION AND ADMINISTRATION
	 	 	39	 
	 
	 	 	 	 
	6.1. Borrower’s Loan Account
	 	 	39	 
	6.2. Statements
	 	 	39	 
	6.3. Collection of Accounts
	 	 	40	 
	6.4. Payments
	 	 	42	 
	6.5. Authorization to Make Loans
	 	 	43	 
	6.6. Use of Proceeds
	 	 	44	 
	6.7. Pro Rata Treatment
	 	 	44	 
	6.8. Sharing
of Payments, Etc.
	 	 	45	 
	6.9. Settlement Procedures
	 	 	46	 
	 
	 	 	 	 
	SECTION 7. COLLATERAL REPORTING AND COLLATERAL COVENANTS
	 	 	46	 
	 
	 	 	 	 
	7.1. Collateral Reporting
	 	 	46	 
	7.2. Accounts Covenants
	 	 	46	 
	7.3. Inventory Covenants
	 	 	48	 
	7.4. Power of Attorney
	 	 	49	 
	7.5. Right to Cure
	 	 	50	 

i

 

	 	 	 	 	 
	 	 	Page
	7.6. Access to Premises
	 	 	50	 
	 
	 	 	 	 
	SECTION 8. REPRESENTATIONS AND WARRANTIES
	 	 	51	 
	 
	 	 	 	 
	8.1. Corporate Existence; Power and Authority
	 	 	51	 
	8.2. Name; State of Organization; Chief Executive Office; Collateral Locations
	 	 	51	 
	8.3. Financial Statements; No Material Adverse Change
	 	 	52	 
	8.4. Priority of Liens; Title to Properties
	 	 	52	 
	8.5. Tax Returns
	 	 	52	 
	8.6. Litigation
	 	 	53	 
	8.7. Compliance with Other Agreements and Applicable Laws
	 	 	53	 
	8.8. Environmental Compliance
	 	 	54	 
	8.9. Credit Card Agreements
	 	 	54	 
	8.10. Employee Benefits
	 	 	55	 
	8.11. Bank Accounts
	 	 	55	 
	8.12. Regulation U
	 	 	56	 
	8.13. Investment Company Act
	 	 	56	 
	8.14. OFAC
	 	 	56	 
	8.15. Accuracy and Completeness of Information
	 	 	56	 
	8.16. Survival of Warranties; Cumulative
	 	 	56	 
	 
	 	 	 	 
	SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
	 	 	57	 
	 
	 	 	 	 
	9.1. Maintenance of Existence
	 	 	57	 
	9.2. New Collateral Locations
	 	 	57	 
	9.3. Compliance with Laws, Regulations, Etc
	 	 	57	 
	9.4. Payment of Taxes and Claims
	 	 	58	 
	9.5. Insurance
	 	 	59	 
	9.6. Financial Statements and Other Information
	 	 	59	 
	9.7. Sale of Assets, Consolidation, Merger, Dissolution, Etc
	 	 	60	 
	9.8. Encumbrances
	 	 	62	 
	9.9. Indebtedness
	 	 	63	 
	9.10. Loans, Investments, Etc
	 	 	66	 
	9.11. Dividends and Redemptions
	 	 	67	 
	9.12. Transactions with Affiliates
	 	 	69	 
	9.13. Credit Card Agreements
	 	 	69	 
	9.14. Adjusted Tangible Net Worth
	 	 	69	 
	9.15. Compliance with ERISA
	 	 	69	 
	9.16. Costs and Expenses
	 	 	70	 
	9.17. Further Assurances
	 	 	71	 
	 
	 	 	 	 
	SECTION 10. EVENTS OF DEFAULT AND REMEDIES
	 	 	71	 
	 
	 	 	 	 
	10.1. Events of Default
	 	 	71	 
	10.2. Remedies
	 	 	73	 
	 
	 	 	 	 
	SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
	 	 	75	 

-ii-

 

	 	 	 	 	 
	 	 	Page
	11.1. Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver
	 	 	75	 
	11.2. Waiver of Notices
	 	 	76	 
	11.3. Amendments and Waivers
	 	 	77	 
	11.4. Waiver of Counterclaims
	 	 	78	 
	11.5. Indemnification
	 	 	78	 
	 
	 	 	 	 
	SECTION 12. THE AGENTS
	 	 	79	 
	 
	 	 	 	 
	12.1. Appointment, Powers and Immunities
	 	 	79	 
	12.2. Reliance by Agents
	 	 	79	 
	12.3. Events of Default
	 	 	80	 
	12.4. LaSalle/Wachovia in its Individual Capacity
	 	 	80	 
	12.5. Indemnification
	 	 	80	 
	12.6. Non-Reliance on Agents and Other Lenders
	 	 	81	 
	12.7. Failure to Act
	 	 	81	 
	12.8. Additional Loans
	 	 	82	 
	12.9. Concerning the Collateral and the Related Financing Agreements
	 	 	82	 
	12.10. Field Audit, Examination Reports and other Information; Disclaimer by Lenders
	 	 	82	 
	12.11. Collateral Matters
	 	 	83	 
	12.12. Agency for Perfection
	 	 	85	 
	12.13. Successor Agent
	 	 	85	 
	12.14. Hedging Agreements
	 	 	86	 
	12.15. Other Agents; Arrangers and Managers
	 	 	86	 
	 
	 	 	 	 
	SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS
	 	 	86	 
	 
	 	 	 	 
	13.1. Term
	 	 	86	 
	13.2. Interpretative Provisions
	 	 	88	 
	13.3. Notices
	 	 	89	 
	13.4. Partial Invalidity
	 	 	90	 
	13.5. Successors
	 	 	90	 
	13.6. Assignments; Participations
	 	 	90	 
	13.7. Confidentiality
	 	 	94	 
	13.8. Entire Agreement
	 	 	95	 
	13.9. Counterparts, Etc
	 	 	95	 
	13.10. Customer Identification — USA Patriot Act Notice
	 	 	95	 
	 
	SECTION 14. ACKNOWLEDGMENT AND RESTATEMENT
	 	 	95	 
	 
	14.1. Existing Obligations
	 	 	95	 
	14.2. Acknowledgment of Security Interests
	 	 	96	 
	14.3. Existing Agreement
	 	 	96	 
	14.4. Restatement
	 	 	96	 

-iii-

 

INDEX TO

EXHIBITS AND SCHEDULES

	 	 	 
	Exhibit A

	 	Assignment and Acceptance
	 
	 	 
	Exhibit B

	 	Information Certificate
	 
	 	 
	Exhibit C

	 	Form of Swap Acknowledgment Agreement
	 
	 	 
	Exhibit D

	 	Notice of Conversion/Continuation
	 
	 	 
	Exhibit E

	 	Closing Checklist
	 
	 	 
	Exhibit F

	 	Notice of Borrowing
	 
	 	 
	Exhibit G

	 	Existing Landlord Agreements
	 
	 	 
	Exhibit H

	 	Form of Landlord Agreement
	 
	 	 
	Schedule I

	 	Loan Commitments

-iv-

 

THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

          This Third Amended and Restated Loan and Security Agreement (as amended, restated or otherwise
modified from time to time, the “Agreement”) dated as of June 29, 2007 is entered into by
and among ULTA SALON, COSMETICS & FRAGRANCE, INC., a Delaware corporation (“Borrower”), the
financial institutions from time to time parties hereto as lenders (“Lenders”), LASALLE
BANK NATIONAL ASSOCIATION, in its capacity as administrative agent for Lenders (in such capacity,
“Administrative Agent”; in its individual capacity, “LaSalle”) and LC Issuer,
WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL) (f/k/a Congress Financial Corporation (Central)), an
Illinois corporation, in its capacity as collateral agent for Lenders (in such capacity,
“Collateral Agent,” in its individual capacity, “Wachovia”) and JPMORGAN CHASE
BANK, N.A., in its capacity as documentation agent for Lenders (in such capacity,
“Documentation Agent”).

W I T N E S S E T H:

          WHEREAS, Borrower, Wachovia, as agent, (“Original Agent”) and each of Wachovia and
LaSalle, individually (Wachovia and LaSalle being the “Original Lenders”) are each party to
that certain Loan and Security Agreement dated as of May 29, 1997 (the “1997 Loan
Agreement”) which was amended and restated by that certain Amended and Restated Loan and
Security Agreement dated as of December 20, 2001 (as amended or otherwise modified prior to May 31,
2005, the “2001 Loan Agreement”), and further amended by the Second Amended and Restated
Loan Agreement dated as of May 31, 2005 (as amended or otherwise modified prior to the Closing
Date, but without giving effect to this Agreement the “2005 Loan Agreement”) pursuant to
which, among other things, the Lenders made available to Borrower “Revolving Loans” (as
such term is defined in the 2005 Loan Agreement, and with such loans outstanding immediately prior
to the effectiveness of this Agreement being referred to as the “Original Revolving
Loans”);

          WHEREAS, Borrower, Agents and Lenders desire to amend and restate the 2005 Loan Agreement,
subject to the terms and conditions set forth herein, to, among other things, (i) restructure the
terms of the credit facilities provided for under the 2005 Loan Agreement, (ii) provide that
LaSalle shall continue serving as Administrative Agent for the Lenders, and Wachovia shall continue
to serve as Collateral Agent for the Lenders and (iii) continue to provide loans and other
financial accommodations to Borrower for its working capital requirements and general corporate
purposes; and

          WHEREAS, Agents and Lenders are willing to amend and restate the 2005 Loan Agreement and
Agents and Lenders are willing to make loans and provide other financial accommodations to
Borrower, in each case on the terms and conditions set forth herein;

          NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

 

 

SECTION 1. DEFINITIONS

          For purposes of this Agreement, the following terms shall have the respective meanings given
to them below:

          1.1 “Accounts” shall mean all present and future rights of Borrower to payment of a
monetary obligation, whether or not earned by performance, which is not evidenced by chattel paper
or an instrument, (a) for property that has been or is to be sold, leased, licensed, assigned, or
otherwise disposed of, (b) for services rendered or to be rendered, (c) for a secondary obligation
incurred or to be incurred, or (d) arising out of the use of a credit or charge card or information
contained on or for use with the card.

          1.2 “Adjusted Cash Flow” shall mean, as to any Person, for any period, the amount
equal to: (a) the Net Income of such Person for such period, plus (b) depreciation, and
other non-cash charges for such period (to the extent deducted in the computation of Net Income),
all in accordance with GAAP, minus (c) debt service and capital expenditures made during
such period, (to the extent not otherwise deducted in the computation of Net Income), minus
(d) payments made in respect of dividends for such period on any shares of Capital Stock of such
Person or the redemption or repurchase of any shares of Capital Stock of such Person or in respect
of management or consulting fees during such period (to the extent not otherwise deducted in the
computation of Net Income), minus (e) payments (to the extent not otherwise subtracted
under clause (c) above) made in respect of (i) principal owing on any indebtedness for borrowed
money (excluding as to Borrower, the Loans), (ii) reimbursement and all other obligations with
respect to surety bonds, letters of credit and banker’s acceptances, whether or not matured or
(iii) capitalized lease obligations (to the extent not already deducted as a capital expenditure)
and for the deferred purchase price of property or services (excluding trade payables incurred by
such person in the ordinary course of business).

          1.3 “Adjusted Eurodollar Rate” shall mean, with respect to each Interest Period for
any Eurodollar Rate Loan, the rate per annum determined by dividing (a) the Eurodollar Rate for
such Interest Period by (b) a percentage equal to: (i) one (1) minus (ii) the Reserve Percentage.
For purposes hereof, “Reserve Percentage” shall mean the reserve percentage, expressed as a
decimal, prescribed by any United States or foreign banking authority for determining the reserve
requirement which is or would be applicable to deposits of United States dollars in a non-United
States or an international banking office of Administrative Agent used to fund a Eurodollar Rate
Loan or any Eurodollar Rate Loan made with the proceeds of such deposit, whether or not the
Administrative Agent actually holds or has made any such deposits or loans. The Adjusted
Eurodollar Rate shall be adjusted on and as of the effective day of any change in the Reserve
Percentage.

          1.4 “Adjusted Tangible Net Worth” shall mean as to any Person, at any time, in
accordance with GAAP (except as otherwise specifically set forth below), on a consolidated basis
for such Person and its subsidiaries (if any), the amount equal to the sum of (a) the difference
between: (i) the aggregate net book value of all assets of such Person and its subsidiaries
(excluding the book value of goodwill, non-competition agreements, patents, trademarks, copyrights,
licenses and other intangible assets), calculating the book value of inventory for this purpose
principally on an average cost basis, after deducting from such book

-2-

 

values all appropriate reserves in accordance with GAAP (including all reserves for doubtful
receivables, obsolescence, depreciation and amortization) and (ii) the aggregate amount of the
indebtedness and other liabilities of such Person and its subsidiaries (including tax and other
proper accruals) included on the balance sheet of such person in accordance with GAAP, plus (b)
indebtedness of such Person and its subsidiaries which is subordinated in right of payment to the
full and final payment of all of the Obligations on terms and conditions acceptable to
Administrative Agent.

          1.5 “Affiliate” shall mean, with respect to a specified Person, any other Person which
directly or indirectly, through one or more intermediaries, controls or is controlled by or is
under common control with such Person, and without limiting the generality of the foregoing,
includes (a) any Person which beneficially owns or holds ten (10%) percent or more of any class of
Voting Stock of such Person or other equity interests in such Person, (b) any Person of which such
Person beneficially owns or holds ten (10%) percent or more of any class of Voting Stock or in
which such Person beneficially owns or holds ten (10%) percent or more of the equity interests and
(c) any director or executive officer of such Person. For the purposes of this definition, the
term “control” (including with correlative meanings, the terms “controlled by” and
“under common control with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock, by agreement or otherwise.

          1.6 “Agents” shall mean each of Administrative Agent and Collateral Agent, or each
such entity as the context so provides and any successor agents hereunder.

          1.7 “Armored Car Companies” shall mean, collectively, Brink’s Incorporated, AT
Systems; Safe and Sound Armed Courier, Inc.; Dunbar Armored Inc.; Loomis, Fargo & Co.; and PFI
Armored, Inc. and their respective successors and assigns or any other armored car service selected
by Borrower after the date hereof which is reasonably acceptable to Administrative Agent.

          1.8 “Assignment and Acceptance” shall mean an Assignment and Acceptance substantially
in the form of Exhibit A attached hereto (with blanks appropriately completed) delivered to the
Administrative Agent in connection with an assignment described under Section 13.6 hereof to the
extent such assignment is not otherwise prohibited as between or among the Lenders.

          1.9 “Availability Reserves” shall have the meaning set forth in Section 2.3 hereof.

          1.10 “Blocked Accounts” shall have the meaning set forth in Section 6.3 hereof.

          1.11 “Business Day” shall mean any day other than a Saturday, Sunday, or other day on
which commercial banks are authorized or required to close under the laws of the State of New York,
Illinois or the State of North Carolina, and a day on which Administrative Agent is open for the
transaction of business, except that if a determination of a Business Day

-3-

 

shall relate to any Eurodollar Rate Loans, the term Business Day shall also exclude any day on
which banks are closed for dealings in dollar deposits in the London interbank market or other
applicable Eurodollar Rate market.

          1.12 “Capital Stock” shall mean, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such Person’s capital stock
or partnership, limited liability company or other equity interests at any time outstanding, and
any and all rights, warrants or options exchangeable for or convertible into such capital stock or
other interests (but excluding any debt security that is exchangeable for or convertible into such
capital stock).

          1.13 “Cash Equivalents” shall mean, at any time, (a) any evidence of indebtedness with
a maturity date of one (1) year or less issued or directly and fully guaranteed or insured by the
United States of America of any agency or instrumentality thereof; provided, that,
the full faith and credit of the United States of America is pledged in support thereof, (b)
certificates of deposit or bankers’ acceptances with a maturity of one (1) year or less of any
financial institution that is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $250,000,000; (c) commercial paper (including
variable rate demand notes) with a maturity of one hundred eighty (180) days or less issued by a
corporation (except an Affiliate of Borrower) organized under the laws of any State of the United
States of America or the District of Columbia and rated at least A-1 by Standard & Poor’s Ratings
Service, a division of The McGraw-Hill Companies, Inc. or at least P-1 by Moody’s Investors
Service, Inc, (d) repurchase obligations with a term of not more than thirty (30) days for
underlying securities of the types described in clause (a) above entered into with any bank meeting
the qualifications specified in clause (b) above; (e) repurchase agreements and reverse repurchase
agreements relating to marketable direct obligations issued or unconditionally guaranteed by the
United States of America or issued by any governmental agency thereof and backed by the full faith
and credit to the United States of America, in each case maturing within one hundred eighty (180)
days or less from the date of acquisition; provided, that, the terms of such
agreements comply with the guidelines set forth in the Federal Financial Agreements of Depository
Institutions with Securities Dealers and Others, as adopted by the Comptroller of the Currency on
October 31, 1985; and (f) investments in money market funds and mutual funds which invest
substantially all of their assets in securities of the types described in clauses (a) through (e)
above.

          1.14 “Change of Control” shall be deemed to have occurred if (A) prior to a Qualified
Public Offering, (a) all or substantially all of Borrower’s assets shall have been sold, in one or
in a series of transactions to any “Person” or “Group” (as such term is used in
Sections 14(d)(2) and 13(d)(3), respectively, of the Securities Exchange Act) other than to
Permitted Holders; (b) an event or series of events (whether a stock purchase, amalgamation,
merger, consolidation or other business combination or otherwise) shall have occurred by which any
Person or Group (other than a Permitted Holder) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Securities Exchange Act) directly or indirectly of fifty (50%)
percent or more of the combined voting power of the then outstanding securities of Borrower
ordinarily (and apart from rights accruing under certain circumstances) having the right to vote in
election of directors or (c) after the date of this Agreement, a majority of the Board of Directors
of Borrower over a two (2) year period commencing from the date hereof shall have replaced the

-4-

 

directors who constituted the Board of Directors at the beginning of such period other than
directors whose nominations for election by the stockholders of Borrower was approved by such Board
of Directors and (B) following the completion of a Qualified Public Offering, (a) an event or
series of events (whether a stock purchase, amalgamation, merger, consolidation or other business
combination or otherwise) shall have occurred by which any Person or Group (as such term is used in
Sections 14(d)(2) and 13(d)(3), respectively, of the Securities Exchange Act) (other than a
Permitted Holder) other than any of the Permitted Holders is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act) directly or indirectly of
[thirty-five percent (35%)] or more of the combined voting power of the then outstanding securities
of Borrower ordinarily (and apart from rights accruing under certain circumstances) having the
right to vote in election of directors or (b) a majority of the Board of Directors of Borrower over
a one (1) year period commencing from the date the completion of a Qualified Public Offering shall
have replaced the directors who constituted the Board of Directors at the beginning of such period
other than directors whose nominations for election by the stockholders of Borrower was approved by
such Board of Directors).

          1.15 “Closing Date” shall mean June 29, 2007.

          1.16 “Code” shall mean the Internal Revenue Code of 1986, as the same now exists or
may from time to time hereafter be amended, modified, recodified or supplemented, together with all
rules, regulations and interpretations thereunder or related thereto.

          1.17 “Collateral” shall have the meaning set forth in Section 5 hereof.

          1.18 “Collateral Access Agreement” shall mean an agreement in writing, in form and
substance satisfactory to Collateral Agent, from any lessor of premises to Borrower, or any other
person to whom any Collateral (including Inventory, Equipment, bills of lading or other documents
of title) is consigned or who has custody, control or possession of any such Collateral or is
otherwise the owner or operator of any premises on which any of such Collateral is located,
pursuant to which such lessor, consignee or other person, inter alia, acknowledges
the first priority security interest of Collateral Agent in such Collateral, agrees to waive any
and all claims such lessor, consignee or other person may, at any time, have against such
Collateral, whether for processing, storage or otherwise, and agrees to permit Collateral Agent
access to, and the right to remain on, the premises of such lessor, consignee or other person so as
to exercise Collateral Agent’s rights and remedies and otherwise deal with such Collateral and, in
the case of any consignee or other person who at any time has custody, control or possession of any
Collateral, acknowledges that it holds and will hold possession of the Collateral for the benefit
of Collateral Agent and agrees to follow all instructions of Collateral Agent with respect thereto.

          1.19 “Commitments” shall mean, as to any Lender, the aggregate commitment of such
Lender to make Loans or to incur Letter of Credit Obligations in the maximum principal amounts set
forth on Schedule I hereto next to such Lender’s name or on the Assignment and Acceptance Agreement
pursuant to which such Lender became a Lender hereunder in accordance with the provisions of
Section 13.6 hereof, as such amount may be adjusted, if at all, in accordance with this Agreement.

-5-

 

          1.20 “Cost” shall mean, as to the Inventory as of any date, the cost of such Inventory
as of such date, determined principally on the average cost basis in accordance with GAAP and on a
first-in-first-out basis in accordance with GAAP.

          1.21 “Credit Card Acknowledgments” shall mean, individually and collectively, the
agreements by Credit Card Issuers or Credit Card Processors in favor of Collateral Agent
acknowledging Collateral Agent’s first priority security interest in the monies due and to become
due Borrower (including, without limitation, credits and reserves) under the Credit Card
Agreements, and agreeing to transfer all such amounts to the Blocked Accounts, as the same now
exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

          1.22 “Credit Card Agreements” shall mean all agreements (other than Credit Card
Acknowledgements) now or hereafter entered into by Borrower any Credit Card Issuer or any Credit
Card Processor, as the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced, including, but not limited to, the agreements listed and
schedules of terms listed on Schedule 8.9 to the Information Certificate.

          1.23 “Credit Card Issuer” shall mean any person (other than Borrower) who issues or
whose members issue credit cards, including, without limitation, MasterCard or VISA bank credit or
debit cards or other bank credit or debit cards issued through MasterCard International, Inc.,
Visa, U.S.A., Inc. or Visa International and American Express, Discover, Diners Club, Carte Blanche
and other non-bank credit or debit cards, including, without limitation, including credit cards
issued by or through American Express Travel Related Services Company, Inc. and Novus Services,
Inc.

          1.24 “Credit Card Processor” shall mean any servicing or processing agent or any
factor or financial intermediary who facilitates, services, processes or manages the credit
authorization, billing transfer and/or payment procedures with respect to any of Borrower’s sales
transactions involving credit card or debit card purchases by customers using credit cards or debit
cards issued by any Credit Card Issuer (including, but not limited to, First Data Merchant Services
Corporation).

          1.25 “Credit Facilities” shall mean the Loans and Letter of Credit Accommodations
provided to or for the benefit of Borrower pursuant to Sections 2.1 and 2.2.

          1.26 “Default” shall mean an act, condition or event which with notice or passage of
time or both would constitute an Event of Default.

          1.27 “Defaulting Lender” shall have the meaning set forth in Section 6.9 hereof.

          1.28 “Deposit Account Control Agreement” shall mean an agreement in writing, in form
and substance satisfactory to Collateral Agent, by and among Collateral Agent, Borrower and any
bank at which any deposit account of Borrower is at any time maintained which provides that such
bank will comply with instructions originated by Collateral Agent directing disposition of the
funds in the deposit account without further consent by Borrower and such other terms and
conditions as Collateral Agent may require, including as to any such

-6-

 

agreement with respect to any Blocked Account, providing that all items received or deposited
in the Blocked Accounts are the property of Collateral Agent, that the bank has no lien upon, or
right to setoff against, the Blocked Accounts, the items received for deposit therein, or the funds
from time to time on deposit therein and that the bank will wire, or otherwise transfer, in
immediately available funds, on a daily basis to the Payment Account all funds received or
deposited into the Blocked Accounts.

          1.29 “Eligible Inventory” shall mean Inventory consisting of finished goods held for
resale in the ordinary course of the business of Borrower that are acceptable to Collateral Agent
based on the criteria set forth below. In general, Eligible Inventory shall not include (a)
packaging and shipping materials; (b) supplies used or consumed in Borrower’s business; (c)
Inventory at premises other than those owned and controlled by Borrower, except for
Inventory at locations of Borrower which are leased by it if either (A) Collateral Agent shall have
received a Landlord Agreement duly authorized, executed and delivered by the owner and lessor of
such premises or (B) if Collateral Agent has not received such Landlord Agreement, then Collateral
Agent shall have established an Availability Reserve in respect of amounts due or to become due to
the owner and lessor of such retail store location (without limiting any other rights and remedies
of Collateral Agent under this Agreement or under the other Financing Agreements with respect to
the establishment of Availability Reserves or otherwise) and after giving effect to such
Availability Reserves, there is Excess Availability; provided, that, (1) Borrower
shall use its best efforts to obtain the Landlord Agreement with respect to each location in
respect of which Borrower enters into a lease after the date hereof and (2) the Availability
Reserves established pursuant to this Section shall not exceed at any time one (1.0) times
the basic monthly rent payable to such owners and lessors of such leased locations and including
amounts, if any, then outstanding and unpaid owed by Borrower to such owners and lessors (such
Availability Reserve being $389,685.49 as of the date hereof), provided, that, such
limitation on the amount of the Availability Reserves pursuant to this Section shall only apply so
long as: (aa) no Default or Event of Default shall exist or have occurred, (bb) Borrower or Agents
shall not have received notice of any default or event of default under the lease with respect to
such retail store location and (cc) Collateral Agent shall have received evidence, in form and
substance satisfactory to Collateral Agent, that Borrower has not granted to the owner and lessor a
security interest in or lien upon any assets of Borrower;(d) Inventory subject to a security
interest or lien in favor of any person other than Collateral Agent except those permitted in this
Agreement; (e) bill and hold goods; (f) unserviceable, obsolete or slow moving Inventory; (g)
Inventory which is not subject to the first priority, valid and perfected security interest of
Collateral Agent. (h) damaged and/or defective Inventory (i) returned Inventory that is not held
for resale; (j) Inventory to be returned to vendors; (k) Inventory subject to deposits made by
customers for sales of Inventory that has not been delivered; (1) Inventory held after the
applicable expiration date thereof; (m) samples (except to the extent approved from time to time by
Collateral Agent) and (n) Inventory purchased or sold on consignment. General criteria for Eligible
Inventory may be established and revised from time to time by Collateral Agent in good faith based
on an event, condition or other circumstance arising after the date hereof, or existing on the date
hereof to the extent neither Agent has any notice thereof in writing from either Borrower or any
inventory appraiser, which adversely affects or could reasonably be expected to adversely affect
the Inventory in any material respect in the good faith determination of Collateral Agent. Any
Inventory which is not Eligible Inventory shall nevertheless be part of the Collateral.

-7-

 

          1.30 “Eligible Transferee” shall mean (a) any Lender; (b) any Affiliate of a Lender
and (c) any other commercial bank, financial institution or “accredited investor” (as
defined in Regulation D under the Securities Act of 1933) approved by Administrative Agent;
provided, that, neither the Borrower nor any of its Affiliates shall qualify as an Eligible
Transferee.

          1.31 “Environmental Laws” shall mean all foreign, Federal, State and local laws (including
common law), legislation, rules, codes, licenses, permits (including any conditions imposed
therein), authorizations, judicial or administrative decisions, injunctions or agreements between
Borrower and any Governmental Authority, (a) relating to pollution and the protection, preservation
or restoration of the environment (including air, water vapor, surface water, ground water,
drinking water, drinking water supply, surface land, subsurface land, plant and animal life or any
other natural resource), or to human health or safety, (b) relating to the exposure to, or the use,
storage, recycling, treatment, generation, manufacture, processing, distribution, transportation,
handling, labeling, production, release or disposal, or threatened release, of Hazardous Materials,
or (c) relating to all laws with regard to recordkeeping, notification, disclosure and reporting
requirements respecting Hazardous Materials. The term “Environmental Laws” includes (i)
the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, the
Federal Superfund Amendments and Reauthorization Act, the Federal Water Pollution Control Act of
1972, the Federal Clean Water Act, the Federal Clean Air Act, the Federal Resource Conservation and
Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal
Solid Waste Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide,
Fungicide and Rodenticide Act, and the Federal Safe Drinking Water Act of 1974, (ii) applicable
state counterparts to such laws, and (iii) any common law or equitable doctrine that may impose
liability or obligations for injuries or damages due to, or threatened as a result of, the presence
of or exposure to any Hazardous Materials.

          1.32 “Equipment” shall mean all of Borrower’s now owned and hereafter acquired
equipment and fixtures, wherever located, including machinery, data processing and computer
equipment and computer hardware and software, whether owned or licensed, and including embedded
software, vehicles, tools, furniture, all attachments, accessions and property now or hereafter
affixed thereto or used in connection therewith, and substitutions and replacements thereof,
wherever located.

          1.33 “ERISA” shall mean the United States Employee Retirement Income Security Act of
1974, together with all rules, regulations and interpretations thereunder or related thereto.

          1.34 “ERISA Affiliate” shall mean any person required to be aggregated with Borrower
or any of its Subsidiaries under Sections 414(b), 414(c), 414(m) or 414(o) of the Code.

          1.35 “Eurodollar Rate” shall mean with respect to the Interest Period for a Eurodollar
Rate Loan, the interest rate per annum equal to the per annum rate of interest at which United
States dollar deposits in an amount comparable to the amount of the relevant Eurodollar Rate Loan
and for a period equal to the relevant Interest Period are offered in the London Interbank
Eurodollar market at 11:00 A.M. (London time) two (2) Business Days prior to the

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commencement of such Interest Period (or two (2) Business Days prior to the commencement of
such Interest Period if banks in London, England were not open and dealing in offshore United
States dollars on such second preceding Business Day), as displayed in the Bloomberg Financial
Markets system (or other authoritative source selected by the Administrative Agent in its sole
discretion) or, if the Bloomberg Financial Markets system or another authoritative source is not
available, as the Eurodollar Rate is otherwise determined by the Administrative Agent in its sole
and absolute discretion, such rate to remain fixed for such Interest Period. The Administrative
Agent’s determination of the Eurodollar Rate shall be conclusive, absent manifest error.

          1.36 “Eurodollar Rate Loans” shall mean any Loans or portion thereof on which interest
is payable based on the Adjusted Eurodollar Rate in accordance with the terms hereof.

          1.37 “Event of Default” shall mean the occurrence or existence of any event or
condition described in Section 10.1 hereof.

          1.38 “Excess Availability” shall mean the amount, as determined by Collateral Agent,
calculated at any time, equal to: (a) the lesser of (i) the amount of the Loans available to
Borrower as of such time based on the applicable percentage set forth in Section 2.1(a) hereof
multiplied by the Value of Eligible Inventory, as determined by Collateral Agent, and subject to
the sublimits and Availability Reserves from time to time established by Collateral Agent hereunder
and (ii) the Maximum Credit, minus (b) the sum of: (i) the amount of all then outstanding
and unpaid principal amount of the Loans, plus (ii) at the option of either Agent, the
aggregate amount of all trade payables of Borrower which are more than sixty (60) days past due as
of such time (and for which checks included in clause (iii) below have not been issued)
plus (iii) the amount of checks issued by Borrower to pay trade payables, but not yet sent
and the book overdraft of Borrower.

          1.39 “Federal Funds Rate” means, for any day, a fluctuating interest rate equal for
each day during such period to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing selected by the
Administrative Agent. The Administrative Agent’s determination of such rate shall be binding and
conclusive absent manifest error.

          1.40 “Fee Letter” shall mean the letter agreement, dated on or about the date hereof,
by and between Borrower and Administrative Agent, as the same exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.

          1.41 “Financing Agreements” shall mean, collectively, this Agreement and all notes,
guarantees, security agreements and other agreements, documents and instruments at any time
executed and/or delivered by Borrower or any Obligor in connection with the 1997 Loan Agreement,
the 2001 Loan Agreement, the 2005 Loan Agreement or this Agreement (to the

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extent not superseded or replaced by any other Financing Agreement), as the same now exist or
may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

          1.42 “GAAP” shall mean generally accepted accounting principles in the United States
of America as in effect from time to time as set forth in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting Standards Board which are applicable to
the circumstances as of the date of determination consistently applied, except that, for purposes
of Section 9.14 hereof, GAAP shall be determined on the basis of such principles in effect on the
date hereof and consistent with those used in the preparation of the most recent audited financial
statements delivered to Administrative Agent prior to the date hereof.

          1.43 “Governmental Authority” shall mean any nation or government, any state,
province, or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

          1.44 “Hazardous Materials” shall mean any hazardous, toxic or dangerous substances,
materials and wastes, including hydrocarbons (including naturally occurring or man-made petroleum
and hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation, radioactive
materials, biological substances, polychlorinated biphenyls, pesticides, herbicides and any other
kind and/or type of pollutants or contaminants (including materials which include hazardous
constituents), sewage, sludge, industrial slag, solvents and/or any other similar substances,
materials, or wastes and including any other substances, materials or wastes that are or become
regulated under any Environmental Law (including any that are or become classified as hazardous or
toxic under any Environmental Law).

          1.45 “Hedging Agreements” shall mean any and all transactions, agreements or
documents, now existing or hereafter entered into with a Lender or an Affiliate of a Lender subject
to Section 9.9(g) hereof and on terms and conditions reasonably satisfactory (in light of standard
ISDA documentation practices) to Administrative Agent and Borrower, which (a) provides for an
interest rate swap, cap, floor or collar or similar transaction for the purpose of hedging
Borrower’s exposure to fluctuations in interest rates in respect of the Obligations, (b) are not
entered into for speculative purposes, (c) are with a financial institution having combined capital
and surplus and undivided profits of not less than $250,000,000, (d) are unsecured except to the
extent any indebtedness of Borrower thereunder constitutes Obligations secured hereby or to the
extent secured by pledges or deposits permitted under Section 9.8(i) hereof and (e) and for which
the counterparty to the Hedging Agreement and the Borrower have executed a Swap Acknowledgement
Agreement.

          1.46 “Hedging Balance” shall mean with respect to any Hedging Agreements as of any
date of determination, an amount equal to (a) the aggregate amount owing by the counterparties
under the Hedging Agreements to the Borrower less (b) the aggregate amount owing by the
Borrower to such counterparties under such Hedging Agreements plus (c) the aggregate
amount, if any, of all cash, Cash Equivalents and investment securities pledged or

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deposited to secure the obligations of Borrower under such Hedging Agreements pursuant to
Section 9.8(i) hereof.

          1.47 “Information Certificate” shall mean the Information Certificate of Borrower
constituting Exhibit B hereto containing material information with respect to Borrower, its
business and assets provided by or on behalf of Borrower to Administrative Agent in connection with
the preparation of this Agreement and the other Financing Agreements and the financing arrangements
provided for herein.

          1.48 “Intellectual Property” shall mean Borrower’s now owned and hereafter arising or
acquired: patents, patent rights, patent applications, copyrights, works which are the subject
matter of copyrights, copyright registrations, trademarks, trade names, trade styles, trademark and
service mark applications, and licenses and rights to use any of the foregoing; all extensions,
renewals, reissues, divisions, continuations, and continuations-in-part of any of the foregoing;
all rights to sue for past, present and future infringement of any of the foregoing; inventions,
trade secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys, reports,
manuals, and operating standards; goodwill (including any goodwill associated with any trademark or
the license of any trademark); customer and other lists in whatever form maintained; and trade
secret rights, copyright rights, rights in works of authorship, domain names and domain name
registrations; software and contract rights relating to software, in whatever form created or
maintained.

          1.49 “Interest Period” shall mean for any Eurodollar Rate Loan, a period of
approximately one (1), two (2), three (3) or six (6) months duration as Borrower may elect, the
exact duration to be determined in accordance with the customary practice in the applicable
Eurodollar Rate market; provided, that, Borrower may not elect an Interest Period
which will end after the Termination Date.

          1.50 “Interest Rate” shall mean, as to Prime Rate Loans, a rate equal to the Prime
Rate and, as to Eurodollar Rate Loans, (x) in the event that the outstanding Loans are equal to or
less than $100,000,000, a rate of one percent (1.00%) per annum in excess of the Adjusted
Eurodollar Rate and (y) in the event that the outstanding Loans are greater than $100,000,000, for
the portion of the Loans that are equal to $100,000,000, the rate referenced in clause (x) above,
and for the portion of the Loans that exceed $100,000,000, a rate of one and one-quarter percent
(1.25%) per annum in excess of the Adjusted Eurodollar Rate (in each case based on the Eurodollar
Rate applicable for the Interest Period selected by Borrower as in effect three (3) Business Days
after the date of receipt by Administrative Agent of the request of Borrower for such Eurodollar
Rate Loans in accordance with the terms hereof, whether such rate is higher or lower than any rate
previously quoted to Borrower); provided, that, notwithstanding anything to the
contrary contained herein, the Interest Rate shall mean the rate of two (2%) percent per annum in
excess of the rates otherwise provided in this definition (i) without notice, at any time an Event
of Default exists pursuant to any of Sections 10.1(f), 10.1(g) and/or 10.1(h) and/or (ii) upon the
written request of Required Lenders, and otherwise without notice, for the period from and after
the date of the occurrence of any Event of Default, other than an Event of Default described in the
immediately preceding clause (i), and for so long as such Event of Default is continuing as
reasonably determined by Administrative Agent.

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          1.51 “Inventory” shall mean all of Borrower’s now owned and hereafter existing or
acquired goods, wherever located, which (a) are leased by Borrower as lessor; (b) are held by
Borrower for sale or lease or to be furnished under a contract of service; (c) are furnished by
Borrower under a contract of service; or (d) consist of raw materials, work in process, finished
goods or materials used or consumed in its business.

          1.52 “Investment Property Control Agreement” shall mean an agreement in writing, in
form and substance satisfactory to Collateral Agent, by and among Collateral Agent, Borrower and
any securities intermediary, commodity intermediary or other person who has custody, control or
possession of any investment property of Borrower acknowledging that such securities intermediary,
commodity intermediary or other person has custody, control or possession of such investment
property on behalf of Collateral Agent, that it will comply with entitlement orders originated by
Collateral Agent with respect to such investment property, or other instructions of Collateral
Agent, or (as the case may be) apply any value distributed on account of any commodity contract as
directed by Collateral Agent, in each case, without the further consent of Borrower and including
such other terms and conditions as Collateral Agent may require.

          1.53 “Landlord Agreement” shall mean an agreement in writing from the owner and lessor
of premises leased by Borrower (a) executed and delivered prior to the date hereof with respect to
a location listed on Exhibit G hereto (each, an “Existing Landlord Agreement” and
collectively, the “Existing Landlord Agreements”), (b) if executed and delivered following
the Closing Date, (i) substantially in the form attached as Exhibit H hereto, or as otherwise
approved as satisfactory by Collateral Agent or (ii) in the form of an Existing Landlord Agreement
provided that the lessor executing such Landlord Agreement is the same entity (or
successor or assign) that executed such Existing Landlord Agreement and the property subject to
such Landlord Agreement is of reasonably similar size to, or smaller than, the premises which is
the subject of such Existing Landlord Agreement, or (c) otherwise in form and substance reasonably
satisfactory to Collateral Agent (it being understood and agreed that if Borrower does not receive
from the Collateral Agent a written response listing objections to the proposed form of landlord
waiver within thirty (30) days of the delivery by the Borrower of a proposed form of a landlord
agreement to the Collateral Agent, Borrower shall be deemed to have satisfied all of the
requirements of delivering a Landlord Agreement, set forth in the definition of the term
“Eligible Inventory” herein, and the Collateral Agent shall have been deemed to have
received a Landlord Agreement for all purposes of that definition, when Borrower delivers such a
proposed form of the landlord agreement duly authorized, executed and delivered by the owner and
lessor of leased premises, whether or not Collateral Agent executes and delivers the same).

          1.54 “LC Application” shall mean, with respect to any request for the issuance of a
Letter of Credit Accommodation, a letter of credit application in the form being used by the LC
Issuer at the time of such request for the type of letter of credit being requested.

          1.55 “LC Issuer” shall mean LaSalle, in its capacity as the issuer of Letter of Credit
Accommodations under the 2005 Loan Agreement or hereunder or any Affiliate of LaSalle that may from
time to time issue Letter of Credit Accommodations, and their successors and assigns in such
capacity.

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          1.56 “Lenders” shall mean the financial institutions who are signatories hereto as
Lenders and other persons made a party to this Agreement as a Lender in accordance with Section
13.6 hereof, and their respective successors and assigns; each sometimes being referred to herein
individually as a “Lender”.

          1.57 “Letter of Credit Accommodations” shall mean, collectively, the letters of
credit, merchandise purchase or other guaranties which are from time to time either (a) issued or
opened by Administrative Agent, any Lender or any Affiliate of Lender for the account of Borrower
or any Obligor or (b) with respect to which Administrative Agent, any Lender or any Affiliate of
Lender has agreed to indemnify the LC Issuer or guaranteed to the LC Issuer the performance by
Borrower of its obligations to such LC Issuer, in each case in accordance with the terms of this
Agreement: sometimes being referred to herein individually as a “Letter of Credit
Accommodation”.

          1.58 “Loans” shall mean the Revolving Loans and the Swing Line Loans.

          1.59 “Material Adverse Effect” shall mean a material adverse effect on (a) the
condition (financial or otherwise), business, performance, operations or properties of Borrower,
(b) the legality, validity or enforceability of this Agreement or any of the other Financing
Agreements; (c) the legality, validity, enforceability, perfection or priority of the security
interest or liens of Collateral Agent on a material portion of the Collateral or any other material
property which is security for the Obligations; (d) a material portion of the Collateral or any
other material property which is security for the Obligations, or the value of a material portion
of the Collateral or such other material property, or (e) the ability of Borrower to repay the
Obligations or of Borrower or any Obligor to perform its obligations under this Agreement or any of
the other Financing Agreements.

          1.60 “Margin Stock” shall mean any “margin stock” as defined in Regulation U
of the Board of Governors of the Federal Reserve System.

          1.61 “Master Letter of Credit Agreement” shall mean that certain Master Letter of
Credit Agreement, dated as of the date hereof, between Borrower and LaSalle, as the same may be
amended, supplemented or otherwise modified from time to time.

          1.62 “Maximum Credit” shall mean, as of any date of determination, the aggregate
amount of the Commitments of all Lenders on such date of determination.

          1.63 “Net Income” shall mean, with respect to any Person, for any period, the
aggregate of the net income (loss) of such Person and its Subsidiaries, on a consolidated basis,
for such period (excluding to the extent included therein any extraordinary gains) after deducting
all charges which should be deducted before arriving at the net income (loss) for such period and
after deducting the Provision for Taxes for such period, all as determined in accordance with GAAP,
provided, that, (a) the net income of any Person that is not a wholly-owned
Subsidiary or that is accounted for by the equity method of accounting shall be included only to
the extent of the amount of dividends or distributions paid or payable to Borrower or a
wholly-owned Subsidiary of such person; (b) the effect of any change in accounting principles
adopted by such Person or its subsidiaries after the date hereof shall be excluded; and (c) the net
income (if

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positive) of any wholly-owned Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such wholly-owned Subsidiary to Borrower or to any other
wholly-owned Subsidiary of Borrower is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule of government
regulation applicable to such wholly-owned Subsidiary shall be excluded. For the purpose of this
definition, net income excludes any gain (but not loss), together with any related Provision of
Taxes for such gain (but not loss) realized upon the sale or other disposition of any assets that
are not sold in the ordinary course of business (including, without limitation, dispositions
pursuant to sale and leaseback transactions), or of any Capital Stock of such Person or a
Subsidiary of such Person and any net income realized as a result of changes in accounting
principles or the application thereof to such Person.

          1.64 “Net Recovery Cost Percentage” shall mean the fraction, expressed as a
percentage, (a) the numerator of which is the amount equal to the recovery on the aggregate amount
of the Inventory at such time on a “going out of business sale” basis as set forth in the
most recent acceptable appraisal of Inventory received by Collateral Agent in accordance with
Section 7.3, net of operating expenses, liquidation expenses and commissions, and (b) the
denominator of which is the original Cost of the aggregate amount of the Inventory subject to such
appraisal.

          1.65 “Obligations” shall mean (a) any and all Loans, Letter of Credit Accommodations
and all other obligations, liabilities and indebtedness of every kind, nature and description
(except those described in clause (b) of this definition) owing by Borrower to any Agent or any
Lender and/or their Affiliates, including principal, interest, charges, fees, costs and expenses,
however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether arising
under this Agreement or otherwise, whether now existing or hereafter arising, whether arising
before, during or after the initial or any renewal term of this Agreement or after the commencement
of any case with respect to Borrower under the United States Bankruptcy Code or any similar statute
(including the payment of interest and other amounts which would accrue and become due but for the
commencement of such case, whether or not such amounts are allowed or allowable in whole or in part
in such case), whether direct or indirect, absolute or contingent, joint or several, due or not
due, primary or secondary, liquidated or unliquidated, secured or unsecured, and however acquired
by any Agent or any Lender and (b) for purposes only of Section 5.1 hereof and subject to priority
and right of payment under Section 6.4(a) hereof, any and all obligations, liabilities and
indebtedness of any kind, nature and description owing by Borrower arising under or in connection
with Hedging Agreements; provided, that, (i) in no event shall the amount of such
obligations, liabilities and indebtedness secured by the Collateral pursuant hereto or any of the
other Financing Agreements at any time exceed the amount of the Hedging Balance (to the extent
below $0) with respect thereto as in effect at such time and (ii) Administrative Agent or
Collateral Agent shall have entered into an agreement substantially in the form of Exhibit C hereto
with the counterparty to such Hedging Agreement, as acknowledged and agreed to by Borrower (the
“Swap Acknowledgment Agreement”).

          1.66 “Obligor” shall mean any guarantor, endorser, acceptor, surety or other person
liable on or with respect to the Obligations or who is the owner of any property which is security
for the Obligations, other than Borrower.

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          1.67 “OFAC” shall mean the Office of Foreign Assets Control.

          1.68 “Other Hedging Agreements” shall mean any and all transactions, agreements or
documents now existing or hereafter entered into with a Person other than a Lender or an Affiliate
of a Lender subject to Section 9.9(g)(B) hereof which (a) provides for an interest rate swap, cap,
floor or collar or similar transaction for the purpose of hedging Borrower’s exposure to
fluctuations in interest rates in respect of the Obligations, (b) are not entered into for
speculative purposes, (c) are with a financial institution having combined capital and surplus and
undivided profits of not less than $250,000,000, and (d) are unsecured.

          1.69 “Participant” shall mean any financial institution that acquires and holds a
participation in the interest of any Lender in any of the Loans and Letter of Credit Accommodations
in conformity with the provision of Section 13.6 of this Agreement governing participations and its
successors and assigns.

          1.70 “Payment Account” shall have the meaning set forth in Section 6.3 hereof.

          1.71 “Permits” shall have the meaning set forth in Section 8.7 hereto.

          1.72 “Permitted Holders” shall mean the persons listed on Exhibit C to the Information
Certificate, and their respective successors and assigns and any Strategic Purchaser.

          1.73 “Person” or “person” shall mean any individual, sole proprietorship,
partnership, corporation (including any corporation which elects subchapter S status under the
Code), limited liability company, limited liability partnership, business trust, unincorporated
association, joint stock corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.

          1.74 “Prime Rate” shall mean, for any day, the greater of (i) the rate of interest in
effect for such day as publicly announced from time to time by the Administrative Agent as its
prime rate (whether or not such rate is actually charged by the Administrative Agent), which is not
intended to be the Administrative Agent’s lowest or most favorable rate of interest at any one time
and (ii) the Federal Funds Rate plus one-half of one percent (0.50%) per annum. Any change in the
Prime Rate announced by the Administrative Agent shall take effect at the opening of business on
the day specified in the public announcement of such change; provided that the
Administrative Agent shall not be obligated to give notice of any change in the Prime Rate.

          1.75 “Prime Rate Loans” shall mean any Loans or portion thereof on which interest is
payable based on the Prime Rate in accordance with the terms thereof.

          1.76 “Pro Rata Share” shall mean with respect to all matters relating to any Lender,
(a) with respect to all Loans and Letter of Credit Accommodations prior to the date on which the
Commitments have been terminated, the percentage obtained by dividing (i) the Commitments of that
Lender (after settlement and repayment of all Swing Line Loans by the Lenders) by (ii) the
Commitments of all Lenders, and (b) with respect to all Loans and Letter of Credit Accommodations
on and after the date on which the Commitments have been terminated, the percentage obtained by
dividing (i) the aggregate outstanding principal balance of the Loans and Letter of Credit
Accommodations held by that Lender (after settlement and repayment of all

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Swing Line Loans by the Lenders), by (ii) the outstanding principal balance of the Loans and
Letter of Credit Accommodations held by all Lenders.

          1.77 “Provision for Taxes” shall mean, with respect to a fiscal year of any Person and
its Subsidiaries, an amount equal to all taxes imposed on or measured by net income, whether
Federal, State or local, and whether foreign or domestic, that are paid or payable by such Person
and its Subsidiaries in respect of such fiscal year on a consolidated basis in accordance with
GAAP.

          1.78 “Qualified Public Offering” shall mean (i) any initial bona fide, firm
underwritten offering by Borrower of shares of its Capital Stock consisting of common stock to the
public pursuant to an effective registration statement under the Securities Act, as then in effect,
or any comparable statement under any similar federal statute then in force; (ii) an acquisition of
shares of the Borrower in one or a series of related transactions by a Strategic Purchaser, in each
case, as long as the aggregate cash proceeds received by the Borrower for the shares sold in such
offering or acquisition, as the case may, is at least $15,000,000; or (iii) any subsequent public
offering by Borrower of its Capital Stock.

          1.79 “Receivables” shall mean all of the following now owned or hereafter arising or
acquired property of Borrower: (a) all Accounts; (b) all interest, fees, late charges, penalties,
collection fees and other amounts due or to become due or otherwise payable in connection with any
Account; (c) all payment intangibles of Borrower and other contract rights, chattel paper,
instruments, notes, and other forms of obligations owing to Borrower, whether from the sale and
lease of goods or other property, licensing of any property (including Intellectual Property or
other general intangibles), rendition of services or from loans or advances by Borrower or to or
for the benefit of any third person (including loans or advances to any Affiliates or Subsidiaries
of Borrower) or otherwise associated with any Accounts, Inventory or general intangibles of
Borrower (including, without limitation, choses in action, causes of action, tax refunds, tax
refund claims, any funds which may become payable to Borrower in connection with the termination of
any employee benefit plan and any other amounts payable to Borrower from any employee benefit plan,
rights and claims against carriers and shippers, rights to indemnification, business interruption
insurance and proceeds thereof, casualty or any similar types of insurance and any proceeds thereof
and proceeds of insurance covering the lives of employees on which Borrower is a beneficiary).

          1.80 “Records” shall mean all of Borrower’s present and future books of account of
every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of lading and
other shipping evidence, statements, correspondence, memoranda, credit files and other data
relating to the Collateral or any account debtor, together with the tapes, disks, diskettes and
other data and software storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of Borrower with respect to the foregoing maintained
with or by any other person).

          1.81 “Refunded Swing Line Loan” shall have the meaning set forth in Section 2.5(c)
hereof.

          1.82 “Register” shall have the meaning set forth in Section 13.6(b) hereof.

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          1.83 “Required Lenders” shall mean Lenders having (i) more than 50% of the Commitments
of all Lenders or (ii) if the Commitments have been terminated, more than 50% of the aggregate
outstanding amount of all Loans and Letter of Credit Accommodations; provided,
however, that in the event that there are three (3) or fewer Lenders party hereto, Required
Lenders must consist of at least two (2) Lenders.

          1.84 “Revolving Loans” shall mean the loans now or hereafter made by or on behalf of
any Lender or by Administrative Agent to or for the benefit of Borrower on a revolving basis
(involving advances, repayments and readvances) pursuant to Section 2.1 hereof.

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

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

          1.87 “Seasonal Advance Period” shall mean the period from and including September 1 of
each year to and including January 31 of the immediately following year.

          1.88 “Securities Act” shall mean the Securities Act of 1933, as the same now exists or
may hereafter be amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.

          1.89 “Securities Exchange Act” shall mean the Securities Exchange Act of 1934, as the
same now exists or may hereafter from time to time be amended, modified, recodified or
supplemented, together with all rules, regulations and interpretations thereunder or related
thereto.

          1.90 “Special Agent Advances” shall have the meaning set forth in Section 12.11.

          1.91 “Standard Advance Period” shall mean the period from and including February 1 of
each year to and including August 31 of such year.

          1.92 “Stated Amount” shall mean (i) in the case of termination of the Agreement, the
Maximum Credit on such date of determination and (ii) in the case of a Commitment reduction
pursuant to Section 2.4(b), the amount of such Commitment reduction.

          1.93 “Store Bank Accounts” shall have the meaning set forth in Section 6.3(a) hereof.

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          1.94 “Strategic Purchaser” shall mean a Person (i) which has its shares listed on the
American Stock Exchange or the New York Stock Exchange or quoted on the NASDAQ Global Select
Markets, (ii) which has a short term unsecured debt ratings currently assigned to them of A-1 or
better by Standard and Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc. or
P-1 by Moody’s Investors Service, Inc. (or in the absence thereof, the equivalent long term
unsecured senior debt ratings) and (iii) which either (A) owns, operates or manages a business
similar to the Existing Business or (B) owns, operates or manages a retail business, or is a
supplier to the Existing Business, and has made its investment in the share of the Borrower as a
part of the strategy to enter the Existing Business through the Borrower or develop or
strategically integrate the Existing Business in conjunction with its own existing business. As
used herein, “Existing Business” shall mean the business of providing hairdressing, beauty
salon and other spa services and selling perfume, fragrances, cosmetics, salon products, beauty
aids and related goods and services at retail (including sales of such goods over the World Wide
Web/Internet), or any combination of any of the foregoing.

          1.95 “Subsidiary” or “subsidiary” shall mean, with respect to any Person, any
corporation, limited liability company, limited liability partnership or other limited or general
partnership, trust, association or other business entity of which an aggregate of at least a
majority of the outstanding Capital Stock or other interests entitled to vote in the election of
the board of directors of such corporation (irrespective of whether, at the time, Capital Stock of
any other class or classes of such corporation shall have or might have voting power by reason of
the happening of any contingency), managers, trustees or other controlling persons, or an
equivalent controlling interest therein, of such Person is, at the time, directly or indirectly,
owned by such Person and/or one or more subsidiaries of such Person.

          1.96 “Swap Acknowledgment Agreement” shall have the meaning set forth in the
definition of “Obligations”.

          1.97 “Swing Line Availability” shall mean, as of any date of determination, the lesser
of (a) the Swing Line Commitment Amount on such date and (b) Excess Availability on such date.

          1.98 “Swing Line Commitment Amount” means $10,000,000, or if less, the Maximum Credit
on such date, which commitment constitutes a subfacility of the Commitment of the Swing Line
Lender.

          1.99 “Swing Line Lender” shall mean LaSalle.

          1.100 “Swing Line Loan” shall have the meaning set forth in Section 2.5(a) hereof.

          1.101 “Termination Date” shall the meaning set forth in Section 13.1 hereof.

          1.102 “UCC” shall mean the Uniform Commercial Code as in effect in the State of
Illinois, and any successor statute, as in effect from time to time (except that terms used herein
which are defined in the Uniform Commercial Code as in effect in the State of Illinois on the date
hereof shall continue to have the same meaning notwithstanding any replacement or amendment of such
statute except as Administrative Agent may otherwise determine).

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          1.103 “Value” shall mean, as determined by Collateral Agent in good faith, with
respect to Inventory, the lower of (a) Cost or (b) market value.

          1.104 “Voting Stock” shall mean with respect to any Person, (a) one (1) or more
classes of Capital Stock of such Person having general voting powers to elect at least a majority
of the board of directors, managers or trustees of such Person, irrespective of whether at the time
Capital Stock of any other class or classes have or might have voting power by reason of the
happening of any contingency, and (b) any Capital Stock of such Person convertible or exchangeable
without restriction at the option of the holder thereof into Capital Stock of such Person described
in clause (a) of this definition.

SECTION 2. CREDIT FACILITIES

          2.1. Revolving Loans.

          (a) Subject to and upon the terms and conditions contained herein, each Lender severally
(and not jointly) agrees to fund its Pro Rata Share of Revolving Loans to Borrower from time to
time in amounts requested by Borrower up to the amount equal to (i) during the Standard Advance
Period, the lesser of (A) eighty percent (80%) of the Value of Eligible Inventory and (B) ninety
percent (90%) of the Net Recovery Cost Percentage multiplied by the Cost of Eligible Inventory or
(ii) during the Seasonal Advance Period, the lesser of (A) eighty-five percent (85%) of the Value
of Eligible Inventory and (B) ninety percent (90%) of the Net Recovery Cost Percentage multiplied
by the Cost of Eligible Inventory less, in each case in clauses (i) and (ii) above, the
amount of any Availability Reserves.

          (b) Collateral Agent may from time to time, and in each case upon not less than ten (10) days
prior notice to Borrower, subject to the prior written approval of Administrative Agent, reduce the
lending formula with respect to Eligible Inventory to the extent that Collateral Agent determines
that: (i) the number of days of the turnover of the Inventory for any period has changed in any
material respect or (ii) the nature, quality or mix of the Inventory has deteriorated in any
material respect. In determining whether to reduce the lending formula(s), Collateral Agent may
consider events, conditions, contingencies or risks which are also considered in determining
Eligible Inventory or in establishing Availability Reserves. To the extent Collateral Agent shall
have established an Availability Reserve which is sufficient to address any event, condition or
matter in a manner satisfactory to Collateral Agent in good faith, Collateral Agent shall not
exercise its rights under this Section 2.1(b) to reduce the lending formulas, to address such
event, condition or matter. The amount of any reduction in the lending formula by Collateral Agent
pursuant to this Section 2.1(b) shall have a reasonable relationship to the matter which is the
basis for such a reduction.

          (c) Except in Administrative Agent’s discretion, with the consent of all Lenders, the
aggregate amount of the Loans and the Letter of Credit Accommodations outstanding at any time shall
not exceed the Maximum Credit. In the event that the outstanding amount of any component of the
Loans, or the aggregate amount of the outstanding Loans and Letter of Credit Accommodations, exceed
the amounts available under the lending formulas, the sublimits for Letter of Credit Accommodations
set forth in Section 2.2(d) or the Maximum Credit, as applicable, such event shall not limit, waive
or otherwise affect any rights of Agents or

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Lenders in that circumstance or on any future occasions and Borrower shall, upon demand by
Administrative Agent, which may be made at any time or from time to time, immediately repay to
Administrative Agent the entire amount of any such excess(es) for which payment is demanded.

          (d) Borrower may, at its option any time before the Termination Date, seek to increase the
Maximum Credit by up to an aggregate amount not exceeding $50,000,000 (resulting in a Maximum
Credit of up to $200,000,000) upon written notice to Administrative Agent (which shall promptly
distribute such notice to each Lender), which notice shall specify the amount of any such
incremental increase (which shall not be less than $10,000,000) sought by the Borrower and shall be
delivered at a time when no Default or Event of Default has occurred and is continuing. Each Lender
shall have the right, but no obligation, to accept to commit to up to a ratable portion of the
incremental increase in the Maximum Credit, provided that no later than fourteen (14) days
after receipt of such notice, each Lender shall advise Administrative Agent and Borrower whether
such Lender intends to participate in the incremental increase in the Maximum Credit and the amount
of such Lender’s commitment (the “First Offer Requirement”). Any Lender that has not
responded within such period shall be deemed to have declined to participate in the requested
incremental increase in the Maximum Credit. After satisfying the First Offer Requirement and if the
Lenders do not consent to commit to the full amount of the requested incremental increase in the
Maximum Credit, Administrative Agent, subject to the consent of Borrower (which shall not be
unreasonably withheld), shall allocate within seven (7) days of the satisfaction of the First Offer
Requirement the uncommitted portion of the requested incremental increase in the Maximum Credit
(which may be declined by any Lender in its sole discretion) on a non pro-rata basis to one or more
Lenders which have not declined participation therein and shall provide a written offer to one or
more such Lenders to participate up to such allocated amount. Each Lender who has received such
offer shall have the right, but no obligation, to accept to commit to up to the offered non-ratable
portion of the requested incremental increase in the Maximum Credit, provided that no later
than seven (7) days after receipt of such notice, each such Lender shall advise Administrative
Agent and Borrower whether such Lender intends to so participate and the amount of its commitment
(the “Second Offer Requirement”). Any Lender that has not responded within such period
shall be deemed to have declined to participate in the offered allocated amount of the requested
incremental increase in the Maximum Credit pursuant to the Second Offer Requirement. After
satisfying the Second Offer Requirement and if the Lenders do not consent to commit to the full
amount of the requested increase in the Maximum Credit, Administrative Agent, subject to the
consent of Borrower (which shall not be unreasonably withheld), shall allocate within seven (7)
days of the satisfaction of the Second Offer Requirement the uncommitted portion of the incremental
increase Maximum Credit and shall provide a written offer to any other banks or entities
reasonably acceptable to Administrative Agent and Borrower which have expressed a desire to accept
the increase in the Maximum Credit and thereby become a Lender hereunder to participate up to such
allocated amount, provided that no later than seven (7) days after receipt of such notice,
each such bank or entity shall advise the Administrative Agent and the Borrower whether it intends
to so participate in the increase in the Maximum Credit and the amount of its commitment. Any bank
or entity that has not responded within such period shall be deemed to have declined to participate
in the requested incremental increase in the Maximum Credit. If Maximum Credit is increased in
accordance with this Section 2.1(d), Administrative Agent and Borrower shall determine the
effective date and the final allocation of such increase, and

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Administrative Agent shall promptly notify each of the Lenders and any other banks or entities
of such increase, the allocations of such increase and the effective date thereof. No increase in
the Maximum Credit shall become effective until each of the existing or new Lenders extending such
incremental Commitment and Borrower shall have delivered to Administrative Agent a document in form
and substance reasonably satisfactory to Administrative Agent (the approval of which shall not be
unreasonably withheld or delayed) pursuant to which any such existing Lender states the amount of
its Commitment increase, any such new Lender states its Commitment amount and agrees to assume and
accept the obligations and rights of a Lender hereunder, and Borrower accepts such new Commitments.
After giving effect to such increase in the Maximum Credit, all Loans and all such other credit
exposure shall be held ratably by the Lenders in proportion to their respective Commitments, as
revised to reflect the increase in the Maximum Credit. Upon any increase in the Maximum Credit
pursuant to this Section 2.1(d), Borrower shall pay Administrative Agent, for the ratable benefit
of only the Lenders (including any new Lender) whose Revolving Commitments are increased, an
upfront fee in an amount mutually agreed to among Borrower and the Lenders whose Commitments are
increased. Administrative Agent shall use its commercially reasonable efforts to arrange any
requested increase in the Maximum Credit sought by Borrower pursuant to this Section 2.1(d), but
shall have no obligation to consummate any such increase. Borrower hereby agrees to cooperate with
Administrative Agent in such efforts.

          2.2. Letter of Credit Accommodations.

          (a) Borrower shall execute and deliver to the LC Issuer the Master Letter of Credit Agreement.
Borrower shall give notice to Administrative Agent and the LC Issuer of the proposed issuance of
each Letter of Credit Accommodation on a Business Day which is at least three (3) Business Days (or
such lesser number of days as Administrative Agent and the LC Issuer shall agree in any particular
instance in their sole discretion) prior to the proposed date of issuance of such Letter of Credit
Accommodation Each such notice shall be accompanied by an LC Application, duly executed by
Borrower and in all respects satisfactory to Administrative Agent and the LC Issuer, together with
such other documentation as Administrative Agent or the LC Issuer may request in support thereof,
it being understood that each LC Application shall specify, among other things, the date on which
the proposed Letter of Credit Accommodation is to be issued, the expiration date of such Letter of
Credit Accommodation (which shall not be later than the Termination Date (unless such Letter of
Credit Accommodation is cash collateralized pursuant to Section 10.2(b)) and whether such Letter of
Credit Accommodation is to be transferable in whole or in part. Any Letter of Credit Accommodation
outstanding after the Termination Date which is cash collateralized for the benefit of the LC
Issuer shall be the sole responsibility of the LC Issuer. So long as the LC Issuer has not received
written notice that the conditions precedent set forth in Section 4 with respect to the issuance of
such Letter of Credit Accommodation have not been satisfied, the LC Issuer shall issue such Letter
of Credit Accommodation and of any amendment thereto, extension thereof or event or circumstance
changing the amount available for drawing thereunder. In the event of any inconsistency between
the terms of the Master Letter of Credit Agreement, any application for a Letter of Credit
Accommodation and the terms of this Agreement, the terms of this Agreement shall control.

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          (b) The LC Issuer hereby agrees, upon request of Administrative Agent or any Lender, to
deliver to Administrative Agent or such Lender a list of all outstanding Letter of Credit
Accommodations issued by the LC Issuer, together with such information related thereto as
Administrative Agent or such Lender may reasonably request.

          (c) The LC Issuer shall notify Borrower and Administrative Agent whenever any demand for
payment is made under any Letter of Credit Accommodation by the beneficiary thereunder;
provided that the failure of the LC Issuer to so notify Borrower or Administrative Agent
shall not affect the rights of the LC Issuer or the Lenders in any manner whatsoever. Borrower
hereby unconditionally and irrevocably agrees to reimburse the LC Issuer for each payment or
disbursement made by the LC Issuer under any Letter of Credit Accommodation honoring any demand for
payment made by the beneficiary thereunder, in each case on the date that such payment or
disbursement is made. If Borrower does not pay any reimbursement obligation when due, Borrower
shall be deemed to have immediately requested that the Lenders make a Revolving Loan which is a
Prime Rate Loan in a principal amount equal to such reimbursement obligations (such Revolving Loan
shall be referred to herein as an “LC Reimbursement Loan”). Administrative Agent shall
promptly notify such Lenders of such deemed request and, without the necessity of compliance with
the requirements of Section 4, Section 6.5 or otherwise such Lender shall make available to
Administrative Agent its Pro Rata Share of such Loan. The proceeds of such Loan shall be paid over
by Administrative Agent to the LC Issuer for the account of Borrower in satisfaction of such
reimbursement obligations.

          (d) Borrower’s reimbursement obligations hereunder shall be irrevocable and unconditional
under all circumstances, including (i) any lack of validity or enforceability of any Letter of
Credit Accommodation, this Agreement or any other Financing Agreement, (ii) the existence of any
claim, set-off, defense or other right which Borrower may have at any time against a beneficiary
named in a Letter of Credit Accommodation, any transferee of any Letter of Credit Accommodation (or
any Person for whom any such transferee may be acting), Administrative Agent, the LC Issuer, any
Lender or any other Person, whether in connection with any Letter of Credit Accommodation, this
Agreement, any other Financing Agreement, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between Borrower and the beneficiary named in
any Letter of Credit Accommodation), (iii) the validity, sufficiency or genuineness of any document
which the LC Issuer has determined complies on its face with the terms of the applicable Letter of
Credit Accommodation, even if such document should later prove to have been forged, fraudulent,
invalid or insufficient in any respect or any statement therein shall have been untrue or
inaccurate in any respect, or (iv) the surrender or impairment of any security for the performance
or observance of any of the terms hereof. Without limiting the foregoing, no action or omission
whatsoever by Administrative Agent or any Lender (excluding any Lender in its capacity as the LC
Issuer) under or in connection with any Letter of Credit Accommodation or any related matters shall
result in any liability of the Administrative Agent or any Lender to Borrower, or relieve Borrower
of any of its obligations hereunder to any such Person.

          (e) Concurrently with the issuance of each Letter of Credit Accommodation, the LC Issuer shall
be deemed to have sold and transferred to each Lender with a Commitment, and each such Lender shall
be deemed irrevocably and unconditionally to have purchased and received from the Issuing Lender,
without recourse or warranty, an undivided interest and

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participation, to the extent of such Lender’s Pro Rata Share, in such Letter of Credit
Accommodation and Borrower’s reimbursement obligations with respect thereto. If the LC Issuer makes
any payment or disbursement under any Letter of Credit Accommodation and (a) (x) Borrower has not
reimbursed the LC Issuer in full for such payment or disbursement by 11:00 A.M., Chicago time, on
the date of such payment or disbursement and (y) an LC Reimbursement Loan may not be made in
accordance with Section 2.1 or (b) any reimbursement received by the LC Issuer from Borrower is or
must be returned or rescinded upon or during any bankruptcy or reorganization of Borrower or
otherwise, each other Lender shall be obligated to pay to Administrative Agent for the account of
the LC Issuer, in full or partial payment of the purchase price of its participation in such Letter
of Credit Accommodation, its Pro Rata Share of such payment or disbursement (but no such payment
shall diminish the obligations of Borrower under Section 2.2 (c) and (d)), and, upon notice from
the LC Issuer, Administrative Agent shall promptly notify each other Lender thereof. Each other
Lender irrevocably and unconditionally agrees to so pay to Administrative Agent in immediately
available funds for the LC Issuer’s account the amount of such other Lender’s Pro Rata Share of
such payment or disbursement. If and to the extent any Lender shall not have made such amount
available to Administrative Agent by 2:00 P.M., Chicago time, on the Business Day on which such
Lender receives notice from Administrative Agent of such payment or disbursement (it being
understood that any such notice received after 12:00 noon, Chicago time, on any Business Day shall
be deemed to have been received on the next following Business Day), such Lender agrees to pay
interest on such amount to Administrative Agent for the LC Issuer’s account forthwith on demand,
for each day from the date such amount was to have been delivered to Administrative Agent to the
date such amount is paid, at a rate per annum equal to (a) for the first three days after demand,
the Federal Funds Rate from time to time in effect and (b) thereafter, the Prime Rate from time to
time in effect. Any Lender’s failure to make available to Administrative Agent its Pro Rata Share
of any such payment or disbursement shall not relieve any other Lender of its obligation hereunder
to make available to Administrative Agent such other Lender’s Pro Rata Share of such payment, but
no Lender shall be responsible for the failure of any other Lender to make available to
Administrative Agent such other Lender’s Pro Rata Share of any such payment or disbursement.

          (f) Except as otherwise provided in Sections 2.5 and 2.2(e), no Lender shall have an
obligation to make any Loan, or to permit the continuation of or any conversion into any Eurodollar
Rate Loan, and the LC Issuer shall not have any obligation to issue any Letter of Credit
Accommodation, if a Default or Event of Default exists.

          (g) In addition to any charges, fees or expenses charged by any bank or LC Issuer in
connection with the Letter of Credit Accommodations, Borrower shall pay to Administrative Agent,
for the benefit of Lenders, a letter of credit fee at a rate equal to 1.125% per annum on the daily
outstanding balance of the Letter of Credit Accommodations for the immediately preceding month (or
part thereof), payable in arrears as of the first day of each succeeding month, except that
Borrower shall pay to Administrative Agent for the ratable benefit of Lenders, such letter of
credit fee, at Administrative Agent’s option, without notice, at a rate equal to two percent (2%)
per annum in excess of the rate otherwise provided in this Section 2.2(h) on such daily outstanding
balance (i) without notice, at any time an Event of Default pursuant to any of Sections 10.1(f),
10.1(g) and/or 10.1(h) and/or (ii) upon the written request of Required Lenders, and otherwise
without notice, for the period from and after the date of the occurrence of any Event of Default,
other than an Event of Default described in the immediately

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preceding clause (i), and for so long as such Event of Default is continuing as determined by
Administrative Agent. Such letter of credit fee shall be calculated on the basis of a three
hundred sixty (360) day year and actual days elapsed and the obligation of Borrower to pay such fee
shall survive the termination of this Agreement.

          (h) No Letter of Credit Accommodations shall be available unless on the date of the proposed
issuance of any Letter of Credit Accommodations, the Loans available to Borrower (subject to the
Maximum Credit and any Availability Reserves) are equal to or greater than: (i) if the proposed
Letter of Credit Accommodation is for the purpose of purchasing Eligible Inventory, the sum of (A)
the percentage equal to one hundred (100%) percent minus the then applicable percentage set forth
in Section 2.1(a) above multiplied by the Value of such Eligible Inventory, plus (B) freight,
taxes, duty and other amounts which Collateral Agent estimates must be paid in connection with such
Inventory upon arrival and for delivery to one of Borrower’s locations for Eligible Inventory and
(ii) if the proposed Letter of Credit Accommodation is for any other purpose, an amount equal to
one hundred (100%) percent of the face amount thereof and all other commitments and obligations
made or incurred by Administrative Agent with respect thereto. Effective on the issuance of each
Letter of Credit Accommodation, a Reserve shall be established in the applicable amount set forth
in Section 2.2(i)(i) or Section 2.2(i)(ii).

          (i) Except in Administrative Agent’s discretion, with the consent of all Lenders, the amount
of all outstanding Letter of Credit Accommodations and all other commitments and obligations made
or incurred by either Agent or any Lender in connection therewith shall not at any time exceed
$10,000,000. At any time an Event of Default exists or has occurred and is continuing, upon
Administrative Agent’s request, Borrower will either furnish cash collateral to secure the
reimbursement obligations to the LC Issuer in connection with any Letter of Credit Accommodations
or furnish cash collateral to Administrative Agent for the Letter of Credit Accommodations, and in
either case, the Loans otherwise available to Borrower shall not be reduced as provided in Section
to 2.2(i) the extent of such cash collateral.

          (j) Borrower shall indemnify and hold Agents and Lenders harmless from and against any and all
losses, claims, damages, liabilities, costs and expenses which either Agent or any Lender may
suffer or incur in connection with any Letter of Credit Accommodations and any documents, drafts or
acceptances relating thereto, including any losses, claims, damages, liabilities, costs and
expenses due to any action taken by any LC Issuer or correspondent with respect to any Letter of
Credit Accommodation. Borrower assumes all risks with respect to the acts or omissions of the
drawer under or beneficiary of any Letter of Credit Accommodation and for such purposes the drawer
or beneficiary shall be deemed Borrower’s agent. Borrower assumes all risks for, and agrees to
pay, all foreign, Federal, State and local taxes, duties and levies relating to any goods subject
to any Letter of Credit Accommodations or any documents, drafts or acceptances thereunder.
Borrower hereby releases and holds Agents and Lenders harmless from and against any acts, waivers,
errors, delays or omissions, whether caused by Borrower, by any LC Issuer or correspondent or
otherwise with respect to or relating to any Letter of Credit Accommodation, except for the gross
negligence or willful misconduct of either Agent or any Lender as determined pursuant to a final,
non-appealable order of a court of competent jurisdiction. The provisions of this Section 2.2(k)
shall survive the payment of Obligations and the termination of this Agreement.

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          (k) Nothing contained herein shall be deemed or construed to grant Borrower any right or
authority to pledge the credit of either Agent or any Lender in any manner. Agents and Lenders
shall have no liability of any kind with respect to any Letter of Credit Accommodation provided by
an LC Issuer other than either Agent or any Lender unless Administrative Agent has duly executed
and delivered to such LC Issuer the application or a guarantee or indemnification in writing with
respect to such Letter of Credit Accommodation. Borrower shall be bound by any interpretation made
in good faith by Administrative Agent, or any other LC Issuer or correspondent under or in
connection with any Letter of Credit Accommodation or any documents, drafts or acceptances
thereunder, notwithstanding that such interpretation may be inconsistent with any instructions of
Borrower. At any time an Event of Default exists or has occurred and is continuing, Administrative
Agent shall have the sole and exclusive right and authority to, and Borrower shall not: (i) approve
or resolve any questions of non-compliance of documents, (ii) give any instructions as to
acceptance or rejection of any documents or goods, (iii) execute any and all applications for
steamship or airway guaranties, indemnities or delivery orders, (iv) grant any extensions of the
maturity of, time of payment for, or time of presentation of, any drafts, acceptances, or
documents, or (v) agree to any amendments, renewals, extensions, modifications, changes or
cancellations of any of the terms or conditions of any of the applications, Letter of Credit
Accommodations, or documents, drafts or acceptances thereunder or any letters of credit included in
the Collateral; provided, that, Borrower shall not, at any time prior to an Event
of Default, take any of the actions specified in clauses (iv) and (v) above except after prior
written notice to Administrative Agent and with the prior written consent of Administrative Agent,
if Administrative Agent shall determine in good faith that any such action shall increase the risk
of Agents or Lenders with respect to such Letter of Credit Accommodations. Administrative Agent
may take such actions either in its own name or in Borrower’s name.

          (l) Any rights, remedies, duties or obligations granted or undertaken by Borrower to any LC
Issuer or correspondent in any application for any Letter of Credit Accommodation, or any other
agreement in favor of any LC Issuer or correspondent relating to any Letter of Credit
Accommodation, shall be deemed to have been granted or undertaken by Borrower to Administrative
Agent for the ratable benefit of Lenders. Any duties or obligations undertaken by Administrative
Agent to any LC Issuer or correspondent in any application for any Letter of Credit Accommodation,
or any other agreement by Administrative Agent in favor of any LC Issuer or correspondent relating
to any Letter of Credit Accommodation, shall be deemed to have been undertaken by Borrower to
Administrative Agent for the ratable benefit of Lenders and to apply in all respects to Borrower.

          2.3. Availability Reserves.

          Without limiting any other rights and remedies of Agents or Lenders hereunder or under the
other Financing Agreements, all Loans and Letter of Credit Accommodations otherwise available to
Borrower shall be subject to the right of Collateral Agent from time to time, in each case subject
to the prior written approval of Administrative Agent, to establish and revise in good faith
reserves reducing the amount of Loans and Letter of Credit Accommodations that would otherwise be
available to Borrower (“Availability Reserves”): (a) to reflect events, conditions or
contingencies that, as determined by Collateral Agent in good faith, adversely affect or have a
reasonable likelihood of adversely affecting either (i) the Collateral or any other

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property which is security for the Obligations, its value or the amount which may be
realized by Collateral Agent from the sale or other disposition thereof, or (ii) the assets or
financial condition of Borrower or any Obligor, or (iii) the security interests and other rights of
Collateral Agent in the Collateral (including the enforceability, perfection and priority thereof),
or (b) to reflect either Agent’s good faith belief that any collateral report or financial
information furnished by or on behalf of Borrower or any Obligor to Agents is or may have been
incomplete, inaccurate or misleading in any material respect, or (c) in respect of any state of
facts which either Agent determines in good faith constitutes an Event of Default or may, with
notice or passage of time or both, constitute an Event of Default, or (d) to reflect inventory
shrinkage (as reflected on the most recent financial statements delivered pursuant to Section
9.6(a)(i)), or (e) to reflect the aggregate amount of deposits, if any, received by Borrower from
its retail customers in respect of unfilled orders, or (f) to reflect amounts due or to become due
in respect of sales, use and/or withholding taxes, provided, that, an Availability
Reserve pursuant to this Section 2.3(f) will only be established if (i) Excess Availability
(without giving effect to any reserve for such amounts) shall be less than $1,000,000, or (ii) an
Event of Default or act, condition or event which with notice or passage of time or both would
constitute an Event of Default, shall exist or have occurred and be continuing, or (g) to reflect
any rental payments, service charges or other amounts due to lessors of real or personal property
(other than amounts due to lessors who have executed and delivered Landlord Agreements) to the
extent Inventory or Records are located in or on such property or such Records are needed to
monitor or otherwise deal with the Collateral, or (h) to reflect net amounts owing by Borrower to
Credit Card Issuers or Credit Card Processors in connection with the Credit Card Agreements. To the
extent Collateral Agent may revise the lending formula set forth in Section 2.1 hereof or establish
new criteria or revise existing criteria for Eligible Inventory so as to address any circumstance,
condition, event or contingency in a manner satisfactory to Collateral Agent, Collateral Agent
shall not establish an Availability Reserve for the same purpose. The amount of any Availability
Reserve established by Collateral Agent shall have a reasonable relationship to the event,
condition or other matter which, is the basis for such reserve as determined by Collateral Agent in
good faith.

          2.4. Commitments.

          (a) The aggregate amount of each Lender’s Pro Rata Share of the Loans and Letter of Credit
Accommodations shall not exceed the amount of such Lender’s Commitments, as the same may from time
to time be amended in accordance with the provisions hereof.

          (b) Borrower may at any time upon at least five (5) days’ prior written notice to the
Administrative Agent permanently reduce the Commitments hereunder; provided that (A) prior
to a Qualified Public Offering, and in the event that the Commitments have been increased pursuant
to Section 2.1(d) prior to such reduction, no more than three (3) Lenders are party to the
Agreement at the time of such reduction, (B) the Commitments may not be reduced to less than fifty
percent (50%) of the Maximum Credit in effect immediately prior to such reduction, (C) any such
reduction shall be in a minimum amount of $5,000,000 and integral multiples of $250,000 in excess
of such amount, and (D) such reduction must be accompanied by payment of an early termination fee
in respect of the amount of the Commitments reduced as required by Section 13.1(c), if any,
plus the payment of any funding breakage costs in accordance with Section 3.1(c).

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          2.5. Swing Line Facility.

          (a) The Administrative Agent shall notify the Swing Line Lender upon the Administrative
Agent’s receipt of any Notice of Borrowing (as defined in Section 6.5) that requests a Swing Line
Loan. Subject to the terms and conditions hereof, upon the Borrower’s request for a Swing Line
Loan as set forth in the applicable Notice of Borrowing, the Swing Line Lender may, in its sole
discretion, make available from time to time until the Termination Date advances (each, a
“Swing Line Loan”) in accordance with any such notice, notwithstanding that after making a
requested Swing Line Loan, the sum of the Swing Line Lender’s Pro Rata Share of the Revolving Loans
outstanding and all outstanding Swing Line Loans may exceed the Swing Line Lender’s Pro Rata Share
of the Commitment. The provisions of this Section 2.5 shall not relieve Lenders of their
obligations to make Revolving Loans under Section 2.1; provided that if the Swing Line
Lender makes a Swing Line Loan pursuant to any such notice, such Swing Line Loan shall be in lieu
of any Revolving Loan that otherwise may be made by the Lenders pursuant to such notice. The
aggregate amount of Swing Line Loans outstanding shall not exceed at any time Swing Line
Availability. Until the Termination Date, the Borrower may from time to time borrow, repay and
reborrow under this Section 2.5. Each Swing Line Loan shall be made pursuant to a Notice of
Borrowing delivered by the Borrower to the Administrative Agent in accordance with Section 6.5(a).
Any such notice must be given no later than 2:00 P.M., Chicago time, on the Business Day of the
proposed Swing Line Loan. Unless the Swing Line Lender has received at least one Business Day’s
prior written notice from the Required Lenders instructing it not to make a Swing Line Loan, the
Swing Line Lender shall, notwithstanding the failure of any condition precedent set forth in
Section 4.2, be entitled to fund that Swing Line Loan, and to have the Lenders make Revolving Loans
in accordance with Section 2.5(c) or purchase participating interests therein in accordance with
Section 2.5(d). Notwithstanding any other provision of this Agreement or the other Loan
Documents, each Swing Line Loan shall constitute a Prime Rate Loan. The Borrower shall repay the
aggregate outstanding principal amount of each Swing Line Loan upon demand therefor by the
Administrative Agent.

          (b) The entire unpaid balance of each Swing Line Loan and all other noncontingent Obligations
shall be immediately due and payable in full in immediately available funds on the Termination Date
if not sooner paid in full.

          (c) The Swing Line Lender, at any time and from time to time no less frequently than once
weekly, shall on behalf of the Borrower (and the Borrower hereby irrevocably authorizes the Swing
Line Lender to so act on its behalf) request each Lender with a Commitment (including the Swing
Line Lender) to make a Revolving Loan to the Borrower (which shall be a Prime Rate Loan) in an
amount equal to that Lender’s Pro Rata Share of the principal amount of all Swing Line Loans (the
“Refunded Swing Line Loan”) outstanding on the date such notice is given. Unless any of
the events described in any of Sections 10.1(f), 10.1(g) or 10.1(h) has occurred (in which event
the procedures of Section 2.5(d) shall apply) and regardless of whether the conditions precedent
set forth in this Agreement to the making of a Revolving Loan are then satisfied, each Lender shall
disburse directly to the Administrative Agent, its Pro Rata Share on behalf of the Swing Line
Lender, prior to 2:00 P.M., Chicago time, in immediately available funds on the date that notice is
given (provided that such notice is given by 12:00 noon, Chicago time, on such date, which
shall be a Business Day). The proceeds of

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those Revolving Loans shall be immediately paid to the Swing Line Lender and applied to repay
the Refunded Swing Line Loan.

          (d) If, prior to refunding a Swing Line Loan with a Revolving Loan pursuant to Section 2.5(c),
one of the events described in any of Sections 10.1(f), 10.1(g) or 10.1(h) has occurred, then,
subject to the provisions of Section 2.5(e) below, each Lender shall, on the date such Revolving
Loan was to have been made for the benefit of the Borrower, purchase from the Swing Line Lender an
undivided participation interest in the Swing Line Loan in an amount equal to its Pro Rata Share of
such Swing Line Loan. Upon request, each Lender shall promptly transfer to the Swing Line Lender,
in immediately available funds, the amount of its participation interest.

          (e) Each Lender’s obligation to make Revolving Loans in accordance with Section 2.5(c) and to
purchase participation interests in accordance with Section 2.5(d) shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any setoff,
counterclaim, recoupment, defense or other right that such Lender may have against the Swing Line
Lender, the Borrower or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of any Default or Event of Default; (iii) any inability of the Borrower to satisfy the
conditions precedent to borrowing set forth in this Agreement at any time or (iv) any other
circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. If
and to the extent any Lender shall not have made such amount available to the Administrative Agent
or the Swing Line Lender, as applicable, by 2:00 P.M., Chicago time, the amount required pursuant
to Sections 2.5(c) or 2.5(d), as the case may be, on the Business Day on which such Lender receives
notice from the Administrative Agent of such payment or disbursement (it being understood that any
such notice received after noon, Chicago time, on any Business Day shall be deemed to have been
received on the next following Business Day), such Lender agrees to pay interest on such amount to
the Administrative Agent for the Swing Line Lender’s account forthwith on demand, for each day from
the date such amount was to have been delivered to the Administrative Agent to the date such amount
is paid, at a rate per annum equal to (a) for the first three days after demand, the Federal Funds
Rate from time to time in effect and (b) thereafter, the Prime Rate from time to time in effect.

SECTION 3.  INTEREST AND FEES 

          3.1. Interest.

          (a) Borrower shall pay to Administrative Agent, for the benefit of Lenders, interest on the
outstanding principal amount of the Loans at the Interest Rate. All interest accruing hereunder on
and after the date of any Event of Default or termination hereof shall be payable on demand.

          (b) Borrower may from time to time request that Prime Rate Loans be converted to Eurodollar
Rate Loans or that any existing Eurodollar Rate Loans continue for an additional Interest Period.
Borrower shall give written notice (each such written notice, a “Notice of
Conversion/Continuation”) substantially in the form of Exhibit D or telephonic notice
(followed immediately by a Notice of Conversion/Continuation) to the Administrative Agent of each
proposed conversion or continuation not later than (i) in the case of conversion into Prime

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Rate Loans, 12:00 noon, Chicago time, on the proposed date of such conversion and (ii) in the
case of conversion into or continuation of Eurodollar Rate Loans, 12:00 noon, Chicago time, at
least three (3) Business Days prior to the proposed date of such conversion or continuation,
specifying in each case: (A) the proposed date of conversion or continuation, (B) the aggregate
amount of Loans to be converted or continued, (C) the type of Loans resulting from the proposed
conversion or continuation, and (D) in the case of conversion into, or continuation of, Eurodollar
Loans, the duration of the requested Interest Period therefor. Subject to the terms and conditions
contained herein, three (3) Business Days after receipt by Administrative Agent of such a request
from Borrower, such Prime Rate Loans shall be converted to Eurodollar Rate Loans or such Eurodollar
Rate Loans shall continue, as the case may be, provided, that, (i) no Default or
Event of Default shall exist or have occurred and be continuing, (ii) no party hereto shall have
sent any notice of termination of this Agreement, (iii) Borrower shall have complied with such
customary procedures as are established by Administrative Agent and specified by Administrative
Agent to Borrower from time to time for requests by Borrower for Eurodollar Rate Loans, (iv) no
more than ten (10) Interest Periods may be in effect at any one time, (v) the aggregate amount of
the Eurodollar Rate Loans must be in an amount not less than $2,000,000 or an integral multiple of
$100,000 in excess thereof and (vi) Administrative Agent and each Lender shall have determined that
the Interest Period or Adjusted Eurodollar Rate is available to Administrative Agent and such
Lender and can be readily determined as of the date of the request for such Eurodollar Rate Loan by
Borrower. Any request by Borrower to convert Prime Rate Loans to Eurodollar Rate Loans or to
continue any existing Eurodollar Rate Loans shall be irrevocable. Notwithstanding anything to the
contrary contained herein, Agents and Lenders shall not be required to purchase United States
Dollar deposits in the London interbank market or other applicable Eurodollar Rate market to fund
any Eurodollar Rate Loans, but the provisions hereof shall be deemed to apply as if Agents and
Lenders had purchased such deposits to fund the Eurodollar Rate Loans. Administrative Agent will
promptly notify each Lender of its receipt of a Notice of Conversion/Continuation pursuant to this
Section 3.1(b) or, if no timely notice is provided by the Borrower, of the details of any
automatic conversion.

          (c) Any Eurodollar Rate Loans shall automatically convert to Prime Rate Loans upon the last
day of the applicable Interest Period, unless Administrative Agent has received and approved a
request to continue such Eurodollar Rate Loan at least three (3) Business Days prior to such last
day in accordance with the terms hereof. Any Eurodollar Rate Loans shall, at Administrative Agent’s
option, upon notice by Administrative Agent to Borrower, convert to Prime Rate Loans in the event
that (i) a Default or an Event of Default shall exist, (ii) this Agreement shall terminate or not
be renewed, or (iii) the aggregate principal amount of the Prime Rate Loans which have previously
been converted to Eurodollar Rate Loans or existing Eurodollar Rate Loans continued, as the case
may be, at the beginning of an Interest Period shall at any time during such Interest Period exceed
either (A) the aggregate principal amount of the Loans then outstanding, or (B) the Loans then
available to Borrower under Section 2 hereof. Borrower shall pay to Administrative Agent, for the
benefit of Lenders, upon demand by Administrative Agent (or Administrative Agent may, at its
option, charge any loan account of Borrower) any amounts required to compensate any Lender, the
Administrative Agent or any Participant for any loss (other than the loss of anticipated profits),
cost or expense reasonably incurred by such person, as a result of the conversion of Eurodollar
Rate Loans to Prime Rate Loans pursuant to any of the foregoing.

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          (d) Interest accruing in respect of Prime Rate Loans shall be payable by Borrower to
Administrative Agent, for the benefit of Lenders, quarterly in arrears not later than the last day
of each calendar quarter and shall be calculated on the basis of a three hundred sixty (360) day
year and actual days elapsed. Interest accruing in respect of Eurodollar Rate Loans shall be
payable on the last day of each applicable Interest Period, unless the Interest Period is greater
than three (3) months, in which case interest shall be payable on the last day of each three (3)
month interval commencing with the first day of such Interest Period. The interest rate on
non-contingent Obligations (other than Eurodollar Rate Loans) shall increase or decrease by an
amount equal to each increase or decrease in the Prime Rate effective on the first day of the month
after any change in such Prime Rate is announced based on the Prime Rate in effect on the last day
of the month in which any such change occurs. In no event shall charges constituting interest
payable by Borrower to Agents and Lenders exceed the maximum amount or the rate permitted under any
applicable law or regulation, and if any such part or provision of this Agreement is in
contravention of any such law or regulation, such part or provision shall be deemed amended to
conform thereto.

          3.2. Other Fees.

          (a) Borrower shall pay to Administrative Agent, for the account of Lenders, monthly as billed,
an unused line fee at a rate equal to 0.1875% per annum calculated upon the amount by which the
Maximum Credit (or in the event that the Maximum Credit has changed during a measuring period, the
average daily Maximum Credit during such period) exceeds the average daily principal balance of the
outstanding Revolving Loans and Letter of Credit Accommodations during the immediately preceding
calendar quarter (or part thereof), which fee shall be payable on the last day of each calendar
quarter in arrears.

          (b) Borrower agrees to pay to Administrative Agent the other fees and amounts set forth in the
Fee Letter in the amounts and at the times specified therein.

          3.3. Changes in Laws and Increased Costs of Loans.

          (a) Notwithstanding anything to the contrary contained herein, all Eurodollar Rate Loans of
any Lender shall, upon notice by Administrative Agent to Borrower, convert to Prime Rate Loans in
the event that (i) any change in applicable law or regulation (or the interpretation or
administration thereof) shall either (A) make it unlawful for such Lender to make or maintain
Eurodollar Rate Loans or to comply with the terms hereof in connection with the Eurodollar Rate
Loans, or (B) shall result in the increase in the costs to such Lender of making or maintaining any
Eurodollar Rate Loans by an amount deemed by Administrative Agent to be material, or (C) reduce the
amounts received or receivable by such Lender in respect thereof, by an amount deemed by
Administrative Agent to be material or (ii) the cost to such Lender of making or maintaining any
Eurodollar Rate Loans shall otherwise increase by an amount deemed by Administrative Agent to be
material. Borrower shall pay to Administrative Agent, for the ratable benefit of Lenders, upon
demand by Administrative Agent (or Administrative Agent may, at its option, charge any loan account
of Borrower) any amounts required to compensate any Lender for any loss (including loss of
anticipated profits), cost or expense incurred by such person as a result of the foregoing,
including, without limitation, any such loss, cost or expense incurred by reason of the liquidation
or reemployment of deposits or

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other funds acquired by such person to make or maintain the Eurodollar Rate Loans or any
portion thereof. A certificate of Administrative Agent or the applicable Lender setting forth the
basis for the determination of such amount necessary to compensate such Lender as aforesaid shall
be delivered to Borrower and shall be presumptive evidence of such amount.

          (b) If any payments or prepayments in respect of the Eurodollar Rate Loans are received by
either Agent or any Lender other than on the last day of the applicable Interest Period (whether
pursuant to acceleration, upon maturity or otherwise), including any payments pursuant to the
application of collections under Section 6.3 or any other payments made with the proceeds of
Collateral, Borrower shall pay to Administrative Agent, upon demand by Administrative Agent (or
Administrative Agent may, at its option, charge any loan account of Borrower) any amounts required
to compensate any Lender or any Participant for any additional loss (including loss of anticipated
profits), cost or expense incurred by such person as a result of such prepayment or payment,
including, without limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such person to make or maintain such Eurodollar
Rate Loans or any portion thereof. A certificate of Administrative Agent or the applicable Lender
setting forth the basis for the determination of such amount necessary to compensate such Lender
shall be delivered to Borrower and shall be presumptive evidence of such amount.

          (c) If any Lender delivers notice pursuant to Sections 3.3(a) and 3.3(b) above in which such
Lender asserts a claim for compensation which claim is not being asserted by the other Lenders,
Borrower may require within 90 days of receiving such notice, at its expense, that such Lender
assign, at par, without recourse (in accordance with Section 13.6(a) hereof) all of its interests,
rights and obligations hereunder and under the other Financing Agreements (including all of its
Commitments and the Loans at the time owing to it and any participations in Loans held by it) to an
Eligible Transferee proposed by Borrower (a “Substitute Lender”), provided, that
(i) no Event of Default shall exist at the time of such assignment, (ii) such assignment shall not
conflict with or violate any law, rule or regulation or order of any court or other governmental
authority, (iii) Borrower shall have received the written consent of Administrative Agent to such
assignment (which consent shall not be unreasonably withheld or delayed) and (iv) Borrower shall
have paid to the assigning Lender all monies accrued and owing hereunder to it (including pursuant
to Sections 3.3(a) and 3.3(b) above.

          (d) Promptly after any Lender becomes aware of any circumstance that will, in its sole
judgment, result in a request for increased compensation pursuant to Sections 3.3(a) and 3.3(b)
above, such Lender shall notify the Borrower thereof. Each Lender will use reasonable efforts to
designate a lending office (or a different lending office), so long as such designation is not
adverse to such Lender in such Lender’s sole judgment, if such designation would avoid the need to,
or reduce the amount which would be required to, compensate such Lender for any additional costs
incurred or reductions suffered. Failure on the part of any Lender to so notify Borrower or to
demand compensation for any increased costs in amounts received or receivable with respect to any
period shall not constitute a waiver of such Lender’s right to demand compensation with respect to
such period or any other period.

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SECTION 4. CONDITIONS PRECEDENT

          4.1. Conditions Precedent to Initial Loans and Letter of Credit Accommodations.

          Each of the following is a condition precedent to Agents and Lenders making the initial Loans
and providing the initial Letter of Credit Accommodations hereunder:

          (a) all requisite corporate action and proceedings in connection with this Agreement and the
other Financing Agreements shall be satisfactory in form and substance to Administrative Agent, and
Administrative Agent shall have received all information and copies of all documents, including
records of requisite corporate action and proceedings which Administrative Agent may have requested
in connection therewith, such documents where requested by Administrative Agent or its counsel to
be certified by appropriate corporate officers or Governmental Authority (and including a copy of
the certificate of incorporation of Borrower certified by the Secretary of State (or equivalent
Governmental Authority) which shall set forth the same complete corporate name of Borrower as is
set forth herein and such document as shall set forth the organizational identification number of
Borrower, if one is issued in its jurisdiction of incorporation);

          (b) Agents shall have received evidence, in form and substance satisfactory to Agents, that
Collateral Agent continues to have a valid perfected first priority security interest in all of the
Collateral; and any other property which is intended to be security for the Obligation or the
liability of any Obligor in respect thereof, subject only to the security interests and liens
permitted herein or in the other Financing Agreement;

          (c) Agents shall have received and reviewed lien and judgment search results for the
jurisdiction of incorporation of Borrower and the jurisdiction of the chief executive office of
Borrower, which search results shall be in form and substance satisfactory to Agents;

          (d) Agents shall have received, in form and substance satisfactory to Agents, such opinion
letters of counsel to Borrower with respect to the Financing Agreements and such other matters as
Agents may reasonably request;

          (e) Administrative Agent shall have received evidence of payment by Borrower of all accrued
and unpaid fees, costs and expenses to the extent then due and payable on the Closing Date,
together with all reasonable legal expenses and reasonable attorneys’ fees incurred by the Agents,
plus such additional amounts as shall constitute the Agents’ reasonable estimate of reasonable
legal expenses and reasonable attorneys’ fees incurred or to be incurred by the Agents through the
closing proceedings (provided that such estimate shall not thereafter preclude final settling of
accounts between Borrower and the Agents);

          (f) Administrative Agent shall have received evidence of the existence of insurance required
to be maintained pursuant to Section 9.5, together with evidence that the Collateral Agent
continues to be named as a lender’s loss payee under Borrower’s property insurance policy and each
Agent has been named as an additional insured under Borrower’s liability insurance policy;

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          (g) the other Financing Agreements and all instruments and documents hereunder and thereunder
required by Administrative Agent shall have been duly executed and delivered to Administrative
Agent, in form and substance satisfactory to Administrative Agent, including, without limitation,
the agreements, instruments and documents set forth on the closing checklist attached as
Exhibit E hereto.

          4.2. Conditions Precedent to All Loans and Letter of Credit Accommodations.

          Each of the following is an additional condition precedent to Agents and Lenders making Loans
and/or providing Letter of Credit Accommodations to Borrower, including the initial Loans and
Letter of Credit Accommodations and any future Loans and Letter of Credit Accommodations:

          (a) all representations and warranties contained herein and in the other Financing Agreements
shall be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of the making of each such Loan
or providing each such Letter of Credit Accommodation and after giving effect thereto, except to
the extent that such representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and accurate on and as of such
earlier date);

          (b) no law, regulation, order, judgment or decree of any Governmental Authority shall exist,
and no action, suit, investigation, litigation or proceeding shall be pending or threatened in any
court or before any arbitrator or Governmental Authority, which (i) purports to enjoin, prohibit,
restrain or otherwise affect (A) the making of the Loans or providing the Letter of Credit
Accommodations, or (B) the consummation of the transactions contemplated pursuant to the terms
hereof or the other Financing Agreements or (ii) has or could reasonably be expected to have a
material adverse effect on the assets, business or prospects of Borrower or would impair the
ability of Borrower to perform its obligations hereunder or under any of the other Financing
Agreements or of either Agent or any Lender to enforce any Obligations or realize upon any of the
Collateral; and

          (c) no Default or Event of Default shall exist or have occurred and be continuing on and as of
the date of the making of such Loan or providing each such Letter of Credit Accommodation and after
giving effect thereto.

SECTION 5.  GRANT AND PERFECTION OF SECURITY INTEREST 

          5.1. Grant of Security Interest.

          To secure payment and performance of all Obligations, Borrower hereby grants to Collateral
Agent, for itself and the ratable benefit of Lenders, a continuing security interest in, a lien
upon, and a right of set off against, and hereby assigns to Collateral Agent, for itself and the
ratable benefit of Lenders, as security, all personal and real property and fixtures and interests
in property and fixtures of Borrower, whether now owned or hereafter acquired or existing, and
wherever located (together with all other collateral security for the Obligations at any time
granted to or held or acquired by either Agent or any Lender, collectively, the
“Collateral”), including:

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          (a) all Accounts;

          (b) all general intangibles, including, without limitation, all Intellectual Property;

          (c) all goods, including, without limitation, Inventory and Equipment;

          (d) all chattel paper (including all tangible and electronic chattel paper);

          (e) all instruments (including all promissory notes);

          (f) all documents;

          (g) all deposit accounts;

          (h) all letters of credit, banker’s acceptances and similar instruments and including all
letter-of-credit rights;

          (i) all supporting obligations and all present and future liens, security interests, rights,
remedies, title and interest in, to and in respect of Receivables and other Collateral, including
(i) rights and remedies under or relating to guaranties, contracts of suretyship, letters of credit
and credit and other insurance related to the Collateral, (ii) rights of stoppage in transit,
replevin, repossession, reclamation and other rights and remedies of an unpaid vendor, lienor or
secured party, (iii) goods described in invoices, documents, credit card sales drafts, credit card
sales slips or charge slips or receipts and other forms of store receipts, contracts or instruments
with respect to, or otherwise representing or evidencing, Receivables or other Collateral,
including returned, repossessed and reclaimed goods, and (iv) deposits by and property of account
debtors or other persons securing the obligations of account debtors;

          (j) all (i) investment property (including securities, whether certificated or uncertificated,
securities accounts, security entitlements, commodity contracts or commodity accounts) and (ii)
monies, credit balances, deposits and other property of Borrower now or hereafter held or received
by or in transit to either Agent, any Lender or their Affiliates or at any other depository or
other institution from or for the account of Borrower, whether for safekeeping, pledge, custody,
transmission, collection or otherwise;

          (k) all commercial tort claims, including, without limitation, those identified in the
Information Certificate;

          (l) to the extent not otherwise described above, all Receivables;

          (m) all Records; and

          (n) all products and proceeds of the foregoing, in any form, including insurance proceeds and
all claims against third parties for loss or damage to or destruction of or other involuntary
conversion of any kind or nature of any or all of the other Collateral.

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          5.2. Exception from Security Interest.

          (a) Notwithstanding anything to the contrary set forth in Section 5.1 above, the types or
items of Collateral described in such Section shall not include any rights or interests in any
contract, lease, permit, license, charter or license agreement covering real or personal property,
as such, if under the terms of such contract, lease, permit, license, charter or license agreement,
or applicable law with respect thereto, the valid grant of a security interest or lien therein to
Collateral Agent is prohibited and such prohibition has not been or is not waived or the consent of
the other party to such contract, lease, permit, license, charter or license agreement has not been
or is not otherwise obtained or under applicable law such prohibition cannot be waived;
provided, that, the foregoing exclusion shall in no way be construed (a) to apply
if any such prohibition is unenforceable under the UCC or other applicable law or (b) so as to
limit, impair or otherwise affect Collateral Agent’s unconditional continuing security interests in
and liens upon any rights or interests of Borrower in or to monies due or to become due under any
such contract, lease, permit, license, charter or license agreement (including any Accounts).

          (b) Notwithstanding anything to the contrary contained in Section 5.1 above, the Collateral
shall not include the trademark “Studio Gear” to the extent such trademark is licensed to
Studio Gear Cosmetics, Inc. pursuant to the License and Distribution Agreement, dated May, 1996,
between Borrower and Studio Gear Cosmetics, Inc.

          (c) Notwithstanding anything to the contrary contained in Section 5.1 above, the types or
items of Collateral described in such Section shall not include any Equipment which is, or at the
time of Borrower’s acquisition thereof shall be, subject to a purchase money mortgage or other
purchase money lien or security interest (including capitalized or finance leases) permitted under
Section 9.8 hereof if: (a) the valid grant of a security interest or lien to Collateral Agent in
such item of Equipment is prohibited by the terms of the agreement between Borrower and the holder
of such purchase money mortgage or other purchase money lien or security interest or under
applicable law and such prohibition has not been or is not waived, or the consent of the holder of
the purchase money mortgage or other purchase money lien or security interest has not been or is
not otherwise obtained, or under applicable law such prohibition cannot be waived and (b) the
purchase money mortgage or other purchase money lien or security interest on such item of Equipment
is or shall become valid and perfected.

          5.3. Perfection of Security Interest

          (a) Borrower irrevocably and unconditionally authorizes Collateral Agent (or its agent) to
file at any time and from time to time such financing statements with respect to the Collateral
naming Collateral Agent or its designee as the secured party and Borrower as debtor, as Collateral
Agent may require, and including any other information with respect to Borrower or otherwise
required by part 5 of Article 9 of the Uniform Commercial Code of such jurisdiction as Collateral
Agent may determine, together with any amendment and continuations with respect thereto, which
authorization shall apply to all financing statements filed on, prior to or after the date hereof.
Borrower hereby ratifies and approves all financing statements naming Collateral Agent or its
designee as secured party and Borrower as debtor with respect to the Collateral (and any amendments
with respect to such financing statements) filed by or on behalf of Collateral Agent prior to the
date hereof and ratifies and confirms the authorization of Collateral Agent to

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file such financing statements (and amendments, if any). Borrower hereby authorizes
Collateral Agent to adopt on behalf of Borrower any symbol required for authenticating any
electronic filing. In the event that the description of the collateral in any financing statement
naming Collateral Agent or its designee as the secured party and Borrower as debtor includes assets
and properties of Borrower that do not at any time constitute Collateral, whether hereunder, under
any of the other Financing Agreements or otherwise, the filing of such financing statement shall
nonetheless be deemed authorized by Borrower to the extent of the Collateral included in such
description and it shall not render the financing statement ineffective as to any of the Collateral
or otherwise affect the financing statement as it applies to any of the Collateral. In no event
shall Borrower at any time file, or permit or cause to be filed, any correction statement or
termination statement with respect to any financing statement (or amendment or continuation with
respect thereto) naming Collateral Agent or its designee as secured party and Borrower as debtor.

          (b) Borrower does not have any chattel paper (whether tangible or electronic) or instruments
as of the date hereof, except as set forth in the Information Certificate. In the event that
Borrower shall be entitled to or shall receive any chattel paper or instrument after the date
hereof, Borrower shall promptly notify Collateral Agent thereof in writing. Promptly upon the
receipt thereof by or on behalf of Borrower (including by any agent or representative), Borrower
shall deliver, or cause to be delivered to Collateral Agent, all tangible chattel paper and
instruments that Borrower or may at any time acquire, accompanied by such instruments of transfer
or assignment duly executed in blank as Collateral Agent may from time to time specify, in each
case except as Collateral Agent may otherwise agree. At Collateral Agent’s option, Borrower shall,
or Collateral Agent may at any time on behalf of Borrower, cause the original of any such
instrument or chattel paper to be conspicuously marked in a form and manner acceptable to
Collateral Agent with the following legend referring to chattel paper or instruments as applicable:
“This [chattel paper][instrument] is subject to the security interest of Wachovia Capital Finance
Corporation (Central), as Collateral Agent, and any sale, transfer, assignment or encumbrance of
this [chattel paper][instrument] violates the rights of such secured party.”

          (c) In the event that Borrower shall at any time hold or acquire an interest in any electronic
chattel paper or any “transferable record” (as such term is defined in Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction), Borrower shall promptly
notify Collateral Agent thereof in writing. Promptly upon Collateral Agent’s request, Borrower
shall take, or cause to be taken, such actions as Collateral Agent may reasonably request to give
Collateral Agent control of such electronic chattel paper under Section 9-105 of the UCC and
control of such transferable record under Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as in effect in such jurisdiction.

          (d) Borrower does not have any deposit accounts as of the date hereof, except as set forth on
Schedule 6.3 to the Information Certificate. Borrower shall not, directly or indirectly, after the
date hereof open, establish or maintain any deposit account unless each of the following conditions
is satisfied: (i) Collateral Agent shall have received not less than five (5) Business Days prior
written notice of the intention of Borrower to open or establish such account which notice shall
specify in reasonable detail and specificity acceptable to Collateral Agent the name of the
account, the owner of the account, the name and address of the bank at which such

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account is to be opened or established, the individual at such bank with whom Borrower is
dealing and the purpose of the account, (ii) the bank where such account is opened or maintained
shall be acceptable to Collateral Agent, and (iii) on or before the opening of such deposit
account, Borrower shall as Collateral Agent may specify either (A) deliver to Collateral Agent a
Deposit Account Control Agreement with respect to such deposit account duly authorized, executed
and delivered by Borrower and the bank at which such deposit account is opened and maintained or
(B) arrange for Collateral Agent to become the customer of the bank with respect to the deposit
account on terms and conditions acceptable to Collateral Agent. The terms of this subsection (d)
shall not apply to deposit accounts specifically and exclusively used for payroll, taxes, other
obligations to third parties or other employee wage and benefit payments to or for the benefit of
Borrower’s salaried employees.

          (e) Borrower does not own or hold, directly or indirectly, beneficially or as record owner or
both, any investment property, as of the date hereof, or have any investment account, securities
account, commodity account or other similar account with any bank or other financial institution or
other securities intermediary or commodity intermediary as of the date hereof, in each case except
as set forth in the Information Certificate.

     (i) In the event that Borrower shall be entitled to or shall at any time after
the date hereof hold or acquire any certificated securities, Borrower shall promptly
endorse, assign and deliver the same to Collateral Agent, for itself and the ratable
benefit of Lenders. accompanied by such instruments of transfer or assignment duly
executed in blank as Collateral Agent may from time to time specify. If any
securities, now or hereafter acquired by Borrower are uncertificated and are issued
to Borrower or its nominee directly by the issuer thereof, Borrower shall
immediately notify Collateral Agent thereof and shall as Collateral Agent may
specify, either (A) cause the issuer to agree to comply with instructions from
Collateral Agent as to such securities, without further consent of Borrower or such
nominee, or (B) arrange for Collateral Agent, for itself and the ratable benefit of
Lenders, to become the registered owner of the securities.

     (ii) Borrower shall not, directly or indirectly, after the date hereof open,
establish or maintain any investment account, securities account, commodity account
or any other similar account (other than a deposit account) with any securities
intermediary or commodity intermediary unless each of the following conditions is
satisfied: (A) Collateral Agent shall have received not less than five (5)
Business Days prior written notice of the intention of Borrower to open or establish
such account which notice shall specify in reasonable detail and specificity
acceptable to Collateral Agent the name of the account, the owner of the account,
the name and address of the securities intermediary or commodity intermediary at
which such account is to be opened or established, the individual at such
intermediary with whom Borrower is dealing and the purpose of the account, (B) the
securities intermediary or commodity intermediary (as the case may be) where such
account is opened or maintained shall be acceptable to Collateral Agent, and (C) on
or before the opening of such investment account, securities account or other
similar account with a securities intermediary or commodity intermediary, Borrower
shall as Collateral Agent may specify either

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(1) execute and deliver, and cause to be executed and delivered to Collateral
Agent, an Investment Property Control Agreement with respect thereto duly
authorized, executed and delivered by Borrower and such securities intermediary or
commodity intermediary or (2) arrange for Collateral Agent, for itself and for the
ratable benefit of Lenders, to become the entitlement holder with respect to such
investment property on terms and conditions acceptable to Collateral Agent.

          (f) Borrower is not the beneficiary or otherwise entitled to any right to payment under any
letter of credit, banker’s acceptance or similar instrument as of the date hereof, except as set
forth in the Information Certificate. In the event that Borrower shall be entitled to or shall
receive any right to payment under any letter of credit, banker’s acceptance or any similar
instrument, whether as beneficiary thereof or otherwise after the date hereof, Borrower shall
promptly notify Collateral Agent thereof in writing. Borrower shall immediately, as Collateral
Agent may specify, either (i) deliver, or cause to be delivered to Collateral Agent, with respect
to any such letter of credit, banker’s acceptance or similar instrument, the written agreement of
the issuer and any other nominated person obligated to make any payment in respect thereof
(including any confirming or negotiating bank), in form and substance satisfactory to Collateral
Agent, consenting to the assignment of the proceeds of the letter of credit to Collateral Agent,
for itself and for the ratable benefit of Lenders, by Borrower and agreeing to make all payments
thereon directly to Collateral Agent, for itself and for the ratable benefit of Lenders, or as
Collateral Agent may otherwise direct or (ii) cause Collateral Agent, for itself and for the
ratable benefit of Lenders, to become, at Borrower’s expense, the transferee beneficiary of the
letter of credit, banker’s acceptance or similar instrument (as the case may be).

          (g) Borrower has no commercial tort claims as of the date hereof, except as set forth in the
Information Certificate. In the event that Borrower shall at any time after the date hereof assert
any commercial tort claims in respect of which the expected net recovery exceeds $250,000, Borrower
shall promptly notify Collateral Agent thereof in writing, which notice shall (i) set forth in
reasonable detail the basis for and nature of such commercial tort claim and (ii) if requested by
any Agent, include the express grant by Borrower to Collateral Agent, for itself and the ratable
benefit of Lenders, of a security interest in such commercial tort claim (and the proceeds
thereof). In the event that such notice does not include such grant of a security interest, the
sending thereof by Borrower to Collateral Agent shall be deemed to constitute such grant to
Collateral Agent, for itself and for the ratable benefit of Lenders. Upon the sending of such
notice, any commercial tort claim described therein shall constitute part of the Collateral and
shall be deemed included therein. Without limiting the authorization of Collateral Agent provided
in Section 5.3(a) hereof or otherwise arising by the execution by Borrower of this Agreement or any
of the other Financing Agreements, Collateral Agent is hereby irrevocably authorized from time to
time and at any time to file such financing statements naming Collateral Agent or its designee as
secured party and Borrower as debtor, or any amendments to any financing statements, covering any
such commercial tort claim as Collateral. In addition, Borrower shall promptly upon Collateral
Agent’s request, execute and deliver, or cause to be executed and delivered, to Collateral Agent
such other agreements, documents and instruments as Collateral Agent may require in connection with
such commercial tort claim.

          (h) Borrower does not have any goods, documents of title or other Collateral in the custody,
control or possession of a third party as of the date hereof, except as set forth in

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the Information Certificate and except for goods located in the United States in transit to a
location of Borrower permitted herein in the ordinary course of business of Borrower in the
possession of the carrier transporting such goods. In the event that any goods, documents of the
title or other Collateral are at any time after the date hereof in the custody, control or
possession of any other person not referred to in the Information Certificate or such carriers,
Borrower shall promptly notify Collateral Agent thereof in writing. Promptly upon Collateral
Agent’s request, Borrower shall deliver to Collateral Agent a Collateral Access Agreement duly
authorized, executed and delivered by such person and Borrower.

          (i) Borrower shall take any other actions reasonably requested by Collateral Agent from time
to time to cause the attachment, perfection and first priority of, and the ability of Collateral
Agent to enforce, the security interest of Collateral Agent in any and all of the Collateral
located in the United States, Canada or Puerto Rico, including, without limitation, (i) executing,
delivering and, where appropriate, filing financing statements and amendments relating thereto
under the UCC or other applicable law, to the extent, if any, that Borrower’s signature thereon is
required therefor, (ii) causing Collateral Agent’s name to be noted as secured party on any
certificate of title for a titled good if such notation is a condition to attachment, perfection or
priority of, or ability of Collateral Agent to enforce, the security interest of Collateral Agent
in such Collateral, (iii) complying with any provision of any statute, regulation or treaty of the
United States, Canada or Puerto Rico as to any Collateral if compliance with such provision is a
condition to attachment, perfection or priority of, or ability of Collateral Agent to enforce, the
security interest of Collateral Agent in such Collateral, (iv) obtaining the consents and approvals
of any Governmental Authority or third party, including, without limitation, any consent of any
licensor, lessor or other person obligated on Collateral, and taking all actions required by any
earlier versions of the UCC or by other law, as applicable in any relevant jurisdiction.

SECTION 6.  COLLECTION AND ADMINISTRATION

          6.1.  Borrower’s Loan Account.

          Administrative Agent shall maintain one or more loan account(s) on its books in which shall be
recorded (a) all Loans, Letter of Credit Accommodations and other Obligations, (b) all payments
made by or on behalf of Borrower and (c) all other appropriate debits and credits as provided in
this Agreement, including fees, charges, costs, expenses and interest. All entries in the loan
account(s) shall be made in accordance with Administrative Agent’s customary practices as in effect
from time to time. The Revolving Loans shall be evidenced by the loan accounts maintained by
Administrative Agent; provided that if any Lender so requests, the Borrower will execute a
promissory note in favor of such Lender further evidencing such Lender’s Commitment.
Administrative Agent is authorized by all the parties hereto to make all revisions and
modifications to Schedule I hereto at any time to reflect the then current Commitments of
each Lender.

          6.2. Statements.

          Administrative Agent shall render to Borrower each month a statement setting forth the balance
in the Borrower’s loan account(s) maintained by Administrative Agent for

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Borrower pursuant to the provisions of this Agreement, including principal, interest, fees,
costs and expenses. Each such statement shall be subject to subsequent adjustment by
Administrative Agent but shall, absent manifest errors or omissions, be considered correct and
deemed accepted by Borrower and conclusively binding upon Borrower as an account stated except to
the extent that Administrative Agent receives a written notice from Borrower of any specific
exceptions of Borrower thereto within forty-five (45) days after the date such statement has been
mailed by Administrative Agent. Until such time as Administrative Agent shall have rendered to
Borrower a written statement as provided above, the balance in Borrower’s loan account(s) shall be
presumptive evidence of the amounts due and owing to Administrative Agent and Lenders by Borrower.

          6.3. Collection of Accounts.

          (a) Borrower shall establish and maintain, at its expense, deposit account arrangements and
merchant payment arrangements with the banks set forth on Schedule 6.3 to the Information
Certificate and after prior written notice to Administrative Agent, and subject to Section 5.3(d),
such other banks as Borrower may hereafter select as are acceptable to Administrative Agent. The
banks set forth on Schedule 6.3 to the Information Certificate constitute all of the banks with
whom Borrower has deposit account arrangements and merchant payment arrangements as of the date
hereof and such Schedule identifies each of the deposit accounts at such banks to a retail store
location of Borrower or otherwise describes the nature of the use of such deposit account by
Borrower.

          (i) Borrower shall deposit all proceeds from sales of Inventory in every form,
including, without limitation, cash, checks, credit card sales drafts, credit card
sales or charge slips or receipts and other forms of store receipts, from each
retail store location of Borrower on each Business Day into the deposit accounts of
Borrower used solely for such purpose and identified to each retail store location
as set forth on Schedule 6.3 to the Information Certificate (together with any other
deposit accounts at any time established or used by Borrower for receiving such
store receipts from any retail store location, collectively, the “Store Bank
Accounts”) or as otherwise provided in Section 6.3(a)(iii) below. Borrower shall
irrevocably authorize and direct, and shall use its best efforts to cause, all
available funds deposited into the Store Bank Accounts to be sent by wire transfer
or by transfer using the automated clearinghouse network (“ACH transfer”) on
a daily basis, and all other proceeds of Collateral to be sent by wire transfer or
by ACH transfer, to the Blocked Account as provided in Section 6.3(a)(ii) below
(except nominal amounts which are required to be maintained in such Store Bank
Accounts under the terms of Borrower’s arrangements with the bank at which such
Store Bank Accounts are maintained as in effect on the date hereof, not to exceed
$250,000 in the aggregate in all such deposit accounts at any time). Borrower shall
irrevocably authorize and direct in writing, in form and substance satisfactory to
Administrative Agent, each of the banks into which proceeds from sales of Inventory
from each retail store location of Borrower are at any time deposited as provided
above to send all available funds deposited in such account (other than the nominal
amounts referred to above) by wire transfer or ACH transfer on a daily basis to the
Blocked Account. Such authorization and direction

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shall not be rescinded, revoked or modified without the prior written consent
of Administrative Agent. In the event any of such banks fails to send such funds to
the Blocked Account as provided herein, Borrower shall pursue all of its rights and
remedies as a result of such failure. Notwithstanding the foregoing, for those Store
Bank Accounts that transfer funds daily by ACH transfer initiated by Borrower’s
store management notifying a third party processor, Borrower shall irrevocably
authorize and direct in writing, in form and substance satisfactory to
Administrative Agent, the third party processor that establishes the routing and
executes the ACH transfer to send funds only to the Blocked Accounts and to agree to
do so at any time upon Administrative Agent’s request and Administrative Agent shall
receive an agreement from such third party processor confirming its agreement to do
so. Such authorization and direction shall not be rescinded, revoked or modified
without the prior written consent of Administrative Agent.

          (ii) Borrower shall establish and maintain, at its expense, a deposit account
with such bank as is acceptable to Administrative Agent (the “Blocked
Account”) into which Borrower shall promptly either cause all amounts on deposit
in the Store Bank Accounts to be sent as provided in Section 6.3(a)(i) above or
shall itself deposit or cause to be deposited all proceeds from sales of Inventory,
all amounts payable to Borrower from Credit Card Issuers and Credit Card Processors
and all other proceeds of Collateral. The banks at which the Blocked Account is
established shall enter into an agreement, in form and substance satisfactory to
Administrative Agent, providing that all items received or deposited in the Blocked
Account are the property of Borrower subject to the lien and security interest of
Collateral Agent, for the benefit of Agents and Lenders, that the depository bank
has no lien upon, or right of setoff against, the Blocked Account, the items
received for deposit therein, or the funds from time to time on deposit therein and
that the depository bank will wire, or otherwise transfer, immediately available
funds, on a daily basis, all funds received or deposited into the Blocked Account to
such bank account of Administrative Agent as Administrative Agent may from time to
time designate for such purpose (“Payment Account”). Borrower agrees that
all amounts deposited in such Blocked Account or in the Store Bank Accounts or other
funds received and collected by either Agent, whether as proceeds of inventory or
other Collateral or otherwise shall be the property of Collateral Agent, for the
benefit of Agents and Lenders.

          (iii) To the extent Borrower may elect, at Borrower’s option, to use the
Armored Car Companies to pick up and collect cash or other proceeds of sales of
Inventory from a retail store location, Borrower shall deliver to the Armored Car
Companies all proceeds from sales of Inventory and other Collateral from such retail
store location of Borrower. Borrower shall irrevocably authorize and direct the
Armored Car Companies in writing, in form and substance reasonably satisfactory to
Administrative Agent, to remit all such proceeds at any time received by the Armored
Car Companies only to the deposit account identified on Schedule 6.3 to the
Information Certificate for such purpose and thereafter to the

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Blocked Accounts. Such authorization and direction to the Armored Car Companies
shall not be rescinded, revoked or modified without the prior written consent of
Administrative Agent unless Borrower shall cease to do business with such Armored
Car Company, provided that upon any such termination the Armored Car Company shall
not be released from its obligation to make payments for amounts previously
delivered to such Armored Car Company. As of the date hereof, the only Armored Car
Companies used by Borrower are those identified in Section 1.7 hereof. Borrower
shall not use any other Armored Car Companies for any purpose unless the aforesaid
arrangements are in place with such other Armored Car Company. Upon request of the
Administrative Agent, Borrower will promptly either obtain and provide an agreement
in writing from such other Armored Car Companies, in form and substance satisfactory
to Administrative Agent, duly authorized, executed and delivered by such other
Armored Car Company, or cease doing business with such Armored Car Company.

          (b) For purposes of calculating interest on the Obligations and the amount of Loans available
to Borrower, payments or other funds received in the Payment Account shall be applied to the
Obligations (conditional upon final collection) promptly and in accordance with its customary
depository practice as such amounts become available.

          (c) Borrower and all of its subsidiaries, shareholders, directors, employees, agents or other
Affiliates shall, acting as trustee for Collateral Agent, receive, as the property of Borrower
subject to the lien and security interest of Collateral Agent, for the benefit of Agents and
Lenders, any cash, checks, credit card sales drafts, credit card sales or charge slips or receipts,
notes, drafts and all forms of store receipts or any other payment relating to and/or proceeds of
Accounts or other Collateral which come into their possession or under their control and
immediately upon receipt thereof, shall deposit or cause the same to be deposited in the Blocked
Accounts, or remit the same or cause the same to be remitted, in kind, to Administrative Agent.
Borrower agrees to reimburse Administrative Agent on demand for any amounts owed or paid to any
bank at which a Blocked Account is established or any other bank or person involved in the transfer
of funds to or from the Blocked Accounts arising out of Administrative Agent’s payments to or
indemnification of such bank or person. The obligation of Borrower to reimburse Administrative
Agent for such amounts pursuant to this Section 6.3 shall survive the termination of this
Agreement.

          6.4. Payments.

          (a) All Obligations shall be payable to the Payment Account as provided in Section 6.3 or such
other place as Administrative Agent may designate from time to time. The Agents shall apply
payments received or collected from Borrower or for the account of Borrower (including the monetary
proceeds of collections or of realization upon any Collateral) as follows: first, to pay
any fees, indemnities or expense reimbursements then due to any Agent, any Lender or their
representatives from Borrower (other than in connection with any Hedging Agreements);
second, to pay interest due in respect of any Loans; third, to pay principal due in
respect of the Swing Line Loans; fourth, to pay principal due in respect of the Revolving
Loans; fifth, to pay any other Obligations (other than in connection with any Hedging
Agreements) then due and

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owing, in such order and manner as Administrative Agent determines; sixth, to pay any
Obligations then due and owing relating to Hedging Agreements (including fees, indemnities,
expenses and other amounts arising from any Hedging Agreements) on a pro rata basis and
seventh, to the extent of any balance remaining, such balance shall be delivered to
Borrower or as a court of competent jurisdiction may direct. Notwithstanding anything to the
contrary contained in this Agreement, (i) unless so directed by Borrower, or unless a Default or an
Event of Default shall exist or have occurred and be continuing, no Agent shall apply any payments
which it receives to any Eurodollar Rate Loans, except on the expiration date of the Interest
Period applicable to any such Eurodollar Rate Loans and (ii) to the extent Borrower uses any
proceeds of the Loans or Letter of Credit Accommodations to acquire rights in or the use of any
Collateral or to repay any Indebtedness used to acquire rights in or the use of any Collateral,
payments in respect of the obligations shall be deemed applied first to the Obligations arising
from Loans and Letter of Credit Accommodations that were not used for such purposes and second to
the Obligations arising from Loans and Letter of Credit Accommodations the proceeds of which were
used to acquire rights in or the use of any Collateral in the chronological order in which Borrower
acquired such rights or use. Each payment on any of the Loans to or for the account of one or more
Lender’s entitled to such payments pursuant to the this Section 6.4(a) shall be allocated among
such Lenders based on their respective Pro Rata Shares of such Loans.

          (b) At Administrative Agent’s option, all principal, interest, fees, costs, expenses and other
charges provided for in this Agreement or the other Financing Agreements may be charged directly to
the loan account(s) of Borrower. Borrower shall make all payments to Agents and Lenders on the
Obligations free and clear of, and without deduction or withholding for or on account of, any
setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions, withholding,
restrictions or conditions of any kind. If after receipt of any payment of, or proceeds of
Collateral applied to the payment of, any of the Obligations, any Agent or any Lender is required
to surrender or return such payment or proceeds to any Person for any reason, then the Obligations
intended to be satisfied by such payment or proceeds shall be reinstated and continue and this
Agreement shall continue in full force and effect as if such payment or proceeds had not been
received by such Agent or such Lender. Borrower shall be liable to pay to each Agent, and does
hereby indemnify and hold Agents and Lenders harmless for the amount of any payments or proceeds
surrendered or returned. This Section 6.4 shall remain effective notwithstanding any contrary
action which may be taken by any Agent or any Lender in reliance upon such payment or proceeds.
This Section 6.4 shall survive the payment of the Obligations and the termination of this
Agreement.

          (c) If any payment of principal or interest with respect to any of the Loans, or of any fees,
falls due on a day which is not a Business Day, then such due date shall be extended to the
immediately following Business Day (unless, in the case of a Eurodollar Rate Loan, such immediately
following Business Day is the first Business Day of a calendar month, in which case such due date
shall be the immediately preceding Business Day) and, in the case of principal, additional interest
shall accrue and be payable for the period of any such extension.

          6.5. Authorization to Make Loans.

          Agents and Lenders are authorized to make the Loans upon the receipt by Administrative Agent
of a written notice (each such written notice, a “Notice of Borrowing”)

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substantially in the form attached hereto as Exhibit F or telephonic notice (followed
immediately by a Notice of Borrowing) of each proposed borrowing not later than (a) in the case of
a Prime Rate borrowing, 12:00 noon, Chicago time, on the proposed date of such borrowing, and (b)
in the case of a Eurodollar Rate borrowing, 12:00 noon, Chicago time, at least three (3) Business
Days prior to the proposed date of such borrowing. Each such notice shall be effective upon
receipt by the Administrative Agent, shall be irrevocable, and shall specify the date, amount and
type of borrowing and, in the case of a Eurodollar Rate borrowing, the initial Interest Period
therefor. Promptly upon receipt of such notice, the Administrative Agent shall advise each Lender
thereof. Not later than 3:00 P.M., Chicago time, on the date of a proposed borrowing, each Lender
shall provide the Administrative Agent at the office specified by the Administrative Agent with
immediately available funds covering such Lender’s Pro Rata Share of such borrowing and, so long as
the Administrative Agent has not received written notice that the conditions precedent set forth in
Section 4 with respect to such borrowing have not been satisfied, the Administrative Agent
shall pay over the funds received by the Administrative Agent to Borrower on the requested
borrowing date. Each borrowing shall be on a Business Day. Each Eurodollar Rate borrowing shall be
in an aggregate amount of at least $2,000,000 and an integral multiple of at least $100,000. All
Loans and Letter of Credit Accommodations under this Agreement shall be conclusively presumed to
have been made to, and at the request of and for the benefit of, Borrower when deposited to the
credit of Borrower or otherwise disbursed or established in accordance with the instructions of
Borrower or in accordance with the terms and conditions of this Agreement.

          6.6. Use of Proceeds.

          All Loans made or Letter of Credit Accommodations provided to Borrower pursuant to the
provisions hereof shall be used by Borrower only for general operating, working capital and other
proper corporate purposes of Borrower not otherwise prohibited by the terms hereof, including
without limitation the payment of all costs, expenses and fees in connection with the preparation,
negotiation, execution and delivery of this Agreement and the other Financing Agreements. None of
the proceeds will be used, directly or indirectly, for the purpose of purchasing or carrying any
margin security or for the purposes of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which might cause any of
the Loans to be considered a “purpose credit” within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, as amended.

          6.7. Pro Rata Treatment.

          Except to the extent otherwise provided in this Agreement: (a) the making and conversion of
Loans shall be made among the Lenders based on their respective Pro Rata Shares as to the Loans and
(b) each payment on account of any Obligations to or for the account of one or more of Lenders in
respect of any Obligations due on a particular day shall be allocated among the Lenders entitled to
such payments based on their respective Pro Rata Shares and shall be distributed accordingly.

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          6.8. Sharing of Payments, Etc.

          (a) Borrower agrees that, in addition to (and without limitation of) any right of setoff,
banker’s lien or counterclaim either Agent or any Lender may otherwise have, each Lender shall be
entitled, at its option (but subject, as among Agents and Lenders, to the provisions of Section
12.3(b) hereof), to offset balances held by it for the account of Borrower at any of its offices,
in dollars or in any other currency, against any principal of or interest on any Loans owed to such
Lender or any other amount payable to such Lender hereunder, that is not paid when due (regardless
of whether such balances are then due to Borrower), in which case it shall promptly notify Borrower
and Administrative Agent thereof; provided, that, such Lender’s failure to give
such notice shall not affect the validity thereof.

          (b) If any Lender (including either Agent) shall obtain from Borrower or any Obligor payment
of any principal of or interest on any Loan owing to it or payment of any other amount under this
Agreement or any of the other Financing Agreements through the exercise of any right of setoff,
banker’s lien or counterclaim or similar right or otherwise (other than from Administrative Agent
as provided herein), and, as a result of such payment, such Lender shall have received more than
its Pro Rata Share of the principal of the Loans or more than its share of such other amounts then
due hereunder or thereunder by Borrower or any Obligor to such Lender than the percentage thereof
received by any other Lender, it shall promptly pay to Administrative Agent, for the benefit of the
applicable Lenders, the amount of such excess and simultaneously purchase from such other
applicable Lenders a participation in the Loans or such other amounts, respectively, owing to such
other Lenders (or such interest due thereon, as the case may be) in such amounts, and make such
other adjustments from time to time as shall be equitable, to the end that all Lenders of the same
category of Loans shall share the benefit of such excess payment (net of any expenses that may be
incurred by such Lender in obtaining or preserving such excess payment) in accordance with their
respective Pro Rata Shares or as otherwise agreed by the applicable Lenders. To such end all
applicable Lenders shall make appropriate adjustments among themselves (by the resale of
participation sold or otherwise) if such payment is rescinded or must otherwise be restored.

          (c) Borrower agrees that any Lender purchasing a participation (or direct interest) as
provided in this Section may exercise, in a manner consistent with this Section, all rights of
setoff, banker’s lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct holder of Loans or other amounts (as the case may be) owing to such
Lender in the amount of such participation.

          (d) Nothing contained herein shall require any Lender to exercise any right of setoff,
banker’s lien, counterclaims or similar rights or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other Indebtedness or
obligation of Borrower or any Obligor. If, under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which this Section applies,
such Lender shall, to the extent practicable, assign such rights to Administrative Agent for the
benefit of Lenders and, in any event, exercise its rights in respect of such secured claim in a
manner consistent with the rights of Lenders entitled under this Section to share in the benefits
of any recovery on such secured claim.

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          6.9. Settlement Procedures.

          Administrative Agent shall promptly remit to each Lender its share of all payments received in
collected funds by Administrative Agent for the account of such Lender. All payments under Section
3.3 shall be made by Borrower directly to the Lender entitled thereto without setoff, counterclaim
or other defense.

SECTION 7. COLLATERAL REPORTING AND COLLATERAL COVENANTS

          7.1. Collateral Reporting.

          Borrower shall provide Collateral Agent with the following documents in a form satisfactory to
Collateral Agent (a) on a monthly basis or more frequently as either Agent may reasonably request
(i) inventory reports by category and location (with such details as to the mix of Inventory as
either Agent may request), (ii) agings of accounts payable, and (iii) reports of sales for each
category of Inventory; (b) upon reasonable request of either Agent (i) the stock status reports of
Borrower, (ii) reports on sales and use tax payment and including monthly sales and use tax
accruals, (iii) reports of amounts of consigned Inventory held by Borrower by category and
consignor, (iv) reports of sales of Inventory indicating net sales, (v) reports of aggregate
Inventory purchases (including all costs related thereto, such as freight, duty and taxes) and
identifying items of Inventory in transit to Borrower related to the applicable documentary letter
of credit and/or bill of lading number, (vi) reports of the Cost of the Inventory (net of
markdowns), (vii) reports on the status of all payments to owners and lessors of the leased retail
store locations of Borrower and other leased premises of Borrower, (viii) copies of customer
statements and credit memos, remittance advices and reports, and copies of deposit slips and bank
statements, (ix) copies of shipping and delivery documents, (x) copies of purchase orders, invoices
and delivery documents for Inventory and Equipment acquired by Borrower, (xi) reports by retail
store location of sales and operating profits for each such retail store location and (xii) the
monthly statements received by Borrower from any Credit Card Issuers or Credit Card Processors,
together with such additional information with respect thereto as shall be sufficient to enable
Collateral Agent to monitor the transactions pursuant to the Credit Card Agreements; and (c) such
other reports as to the Collateral as Collateral Agent shall reasonably request from time to time.
If any of Borrower’s records or reports of the Collateral are prepared or maintained by an
accounting service, contractor, shipper or other agent, Borrower hereby irrevocably authorizes such
service, contractor, shipper or agent to deliver such records, reports, and related documents to
Collateral Agent and to follow the instructions of Administrative Agent or, subject to the prior
written approval of Administrative Agent, Collateral Agent with respect to further services at any
time that an Event of Default exists or has occurred and is continuing.

          7.2. Accounts Covenants.

          (a) Borrower shall notify Administrative Agent promptly of the assertion of any material
claims, offsets, defenses or counterclaims by any account debtor, Credit Card Issuer or Credit Card
Processor or any material disputes with any of such persons or any settlement, adjustment or
compromise thereof and (ii) all material adverse information relating to the financial condition of
any account debtor, Credit Card Issuer or Credit Card Processor. No material credit, discount,
allowance or extension or agreement for any of the foregoing shall be

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granted to any account debtor, Credit Card Issuer or Credit Card Processor except in the
ordinary course of Borrower’s business in accordance with the current practices of Borrower as in
effect on the date hereof. So long as no Event of Default exists or has occurred and is
continuing, Borrower shall settle, adjust or compromise any claim offset, counterclaim or dispute
with any account debtor, Credit Card Issuer, Credit Card Processor. At any time that an Event of
Default exists or has occurred and is continuing, Administrative Agent shall, at its option, have
the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with
account debtors, Credit Card Issuers or Credit Card Processors or grant any credits, discounts or
allowances.

          (b) Borrower shall notify Administrative Agent promptly of (i) any notice of a material
default by Borrower under any of the Credit Card Agreements or of any default which might result in
the Credit Card Issuer or Credit Card Processor ceasing to make payments or suspending payments to
Borrower, (ii) any notice from any Credit Card Issuer or Credit Card Processor that such person is
ceasing or suspending, or will cease or suspend, any present or future payments due or to become
due to Borrower from such person, or that such person is terminating or will terminate any of the
Credit Card Agreements, and (iii) the failure of Borrower to comply with any material terms of the
Credit Card Agreements or any terms thereof which might result in the Credit Card Issuer or Credit
Card Processor ceasing or suspending payments to Borrower.

          (c) With respect to each Account: (i) the amounts shown on any invoice delivered to either
Agent or schedule thereof delivered to either Agent shall be true and complete, (ii) no payments
shall be made thereon except payments immediately delivered to Administrative Agent pursuant to the
terms of this Agreement, (iii) no credit, discount, allowance or extension or agreement for any of
the foregoing shall be granted to any account debtor except as reported, to the extent required
hereunder, to Administrative Agent in accordance with this Agreement and except for credits,
discounts, allowances or extensions made or given in the ordinary course of Borrower’s business in
accordance with practices and policies previously disclosed to Administrative Agent, (iv) there
shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted
with respect thereto except as reported to Administrative Agent in accordance with the terms of
this Agreement, (v) none of the transactions giving rise thereto will violate any applicable
foreign, Federal, State or local laws or regulations, all documentation relating thereto will be
legally sufficient under such laws and regulations and all such documentation will be legally
enforceable in accordance with its terms.

          (d) Collateral Agent may, with the consent of Administrative Agent, at any time or times that
an Event of Default exists or has occurred, (i) notify any or all account debtors, Credit Card
Issuers and Credit Card Processors that the Accounts have been assigned to Collateral Agent and
that Collateral Agent has a security interest therein and Collateral Agent may direct any or all
account debtors, Credit Card Issuers and Credit Card Processors to make payments of Accounts
directly to Collateral Agent, (ii) extend the time of payment of, compromise, settle or adjust for
cash, credit, return of or otherwise, and upon any terms or conditions, any and all Accounts or
other obligations included in the Collateral and thereby discharge or release the account debtor or
any other party or parties in any way liable for payment thereof without affecting any of the
Obligations, (iii) demand, collect or enforce payment of any Accounts or such other obligations,
but without any duty to do so, and Collateral

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Agent shall not be liable for its failure to collect or enforce the payment thereof nor for
the negligence of its agents or attorneys with respect thereto and (iv) take whatever other action
Collateral Agent may deem necessary or desirable for the protection of its interests. At any time
that an Event of Default exists or has occurred and is continuing, at either Agent’s request, all
invoices and statements sent to any account debtor, Credit Card Issuer or Credit Card Processor
shall state that the Accounts due from such account debtor, Credit Card Issuer or Credit Card
Processor and such other obligations have been assigned to Collateral Agent and are payable
directly and only to Collateral Agent and Borrower shall deliver to Collateral Agent such originals
of documents evidencing the sale and delivery of goods or the performance of services giving rise
to any Accounts as Collateral Agent may require.

          (e) Collateral Agent shall have the right at any time or times, in Collateral Agent’s name or
in the name of a nominee of Collateral Agent, to verify the validity, amount or any other matter
relating to any Account or other Collateral, by mail, telephone, facsimile transmission or
otherwise.

          (f) Borrower shall deliver or cause to be delivered to Collateral Agent, with appropriate
endorsement and assignment, with full recourse to Borrower, all chattel paper and instruments which
Borrower now owns or may at any time acquire immediately upon Borrower’s receipt thereof, except as
Collateral Agent may otherwise agree.

          7.3. Inventory Covenants.

          With respect to the Inventory: (a) Borrower shall at all times maintain inventory records
reasonably satisfactory to Collateral Agent, keeping correct and accurate records itemizing and
describing the kind, type, quality and quantity of Inventory, Borrower’s cost therefor and daily
withdrawals therefrom and additions thereto; (b) Borrower shall conduct a physical count of the
Inventory either through periodic cycle counts or wall-to-wall counts so that all Inventory is
covered by such counts at least once each year, but at any time or times as any Agent may request
on or after an Event of Default, and promptly following such physical inventory (whether pursuant
to periodic cycle counts or otherwise) shall, to the extent requested, supply Collateral Agent with
a report in the form and with such specificity as may be reasonably satisfactory to Collateral
Agent concerning such physical count; (c) Borrower shall not remove any Inventory from the
locations set forth or permitted herein, without the prior written consent of Collateral Agent,
except for sales of Inventory in the ordinary course of Borrower’s business and except to move
Inventory directly from one location set forth or permitted herein to another such location or to
return defective, returned or slow moving Inventory to the relevant distribution center or directly
to the supplier for appropriate credit; (d) Borrower shall make all material payments required to
be made under leases of premises at which Inventory is located when due, except as specifically
reported to Collateral Agent pursuant to Section 7.1 above; (e) upon Collateral Agent’s request,
Borrower shall, at its expense, no more than once in any twelve (12) month period, but at any time
or times as Collateral Agent may reasonably request on or after an Event of Default, deliver or
cause to be delivered to Collateral Agent written appraisals as to the Inventory in form, scope and
methodology acceptable to Collateral Agent and by an appraiser acceptable to Collateral Agent,
addressed to Collateral Agent and upon which Collateral Agent is expressly permitted to rely; (f)
upon Collateral Agent’s request, Borrower shall, at its expense, conduct through RGIS Inventory
Specialists, Inc. or another inventory

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counting service acceptable to Collateral Agent, a physical count of the Inventory in form,
scope and methodology acceptable to Collateral Agent no more than once in any twelve (12) month
period, but at any time or times as Collateral Agent may request on or after an Event of Default,
the results of which shall be reported directly by such inventory counting service to Collateral
Agent and Borrower shall promptly deliver confirmation in a form satisfactory to Collateral Agent
that appropriate adjustments have been made to the inventory records of Borrower to reconcile the
inventory count to Borrower’s inventory records; (g) Borrower shall produce, use, store and
maintain the Inventory with all reasonable care and caution and in accordance with applicable
standards of any insurance and in conformity with applicable laws (including the requirements of
the Federal Fair Labor Standards Act of 1938, as amended and all rules, regulations and orders
related thereto); (h) Borrower assumes (as between Lender and Borrower) all responsibility and
liability arising from or relating to the production, use, sale or other disposition of the
Inventory; (i) Borrower shall not sell Inventory to any customer on approval, or any other basis
which entitles the customer to return or may obligate Borrower to repurchase such Inventory except
for the right of return given to retail customers of Borrower in the ordinary course of the
business of Borrower in accordance with the then current return policy of Borrower; (j) Borrower
shall use its best efforts to keep the Inventory in good and marketable condition and to identify
and make appropriate adjustments for Inventory that does not meet that requirement except that
which is to be returned; and (k) Borrower shall not acquire or accept any Inventory on consignment
or approval except to the extent such Inventory is reported to Collateral Agent in accordance with
the terms hereof.

          7.4. Power of Attorney.

          Borrower hereby irrevocably designates and appoints each Agent (and all persons designated by
either Agent) as Borrower’s true and lawful attorney-in-fact, and authorizes Collateral Agent, in
Borrower’s or Collateral Agent’s name, to: (a) at any time an Event of Default exists or has
occurred and is continuing (i) demand payment on Receivables or other Collateral, (ii) enforce
payment of Receivables by legal proceedings or otherwise, (iii) exercise all of Borrower’s rights
and remedies to collect any Receivable or other Collateral, (iv) sell or assign any Receivable upon
such terms, for such amount and at such time or times as the Collateral Agent deems advisable, (v)
settle, adjust, compromise, extend or renew an Account, (vi) discharge and release any Receivable,
(vii) prepare, file and sign Borrower’s name on any proof of claim in bankruptcy or other similar
document against an account debtor or other obligor in respect of any Receivables or other
Collateral, (viii) notify the post office authorities to change the address for delivery of
remittances from account debtors or other obligors in respect of Receivables or other proceeds of
Collateral to an address designated by Collateral Agent, and open and dispose of all mail addressed
to Borrower and handle and store all mail relating to the Collateral; and (ix) do all acts and
things which are necessary, in Collateral Agent’s determination, to fulfill Borrower’s obligations
under this Agreement and the other Financing Agreements and (b) at any time to (i) take control in
any manner of any item of payment in respect of Receivables or constituting Collateral or otherwise
received in or for deposit in the Blocked Accounts or otherwise received by either Agent or any
Lender, (ii) have access to any lockbox or postal box into which remittances from account debtors
or other obligors in respect of Receivables or other proceeds of Collateral are sent or received,
(iii) endorse Borrower’s name upon any items of payment in respect of Receivables or constituting
Collateral or otherwise received by either Agent or any Lender and deposit the same in

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Administrative Agent’s account for application to the Obligations, (iv) endorse Borrower’s
name upon any chattel paper, document, instrument, invoice, or similar document or agreement
relating to any Receivable or any goods pertaining thereto or any other Collateral, including any
warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents,
(v) clear Inventory the purchase of which was financed with Letter of Credit Accommodations through
U.S. Customs or foreign export control authorities in Borrower’s name, Collateral Agent’s name or
the name of Collateral Agent’s designee, and to sign and deliver to customs officials powers of
attorney in Borrower’s name for such purpose, and to complete in Borrower’s or Collateral Agent’s
name, any order, sale or transaction, obtain the necessary documents in connection therewith and
collect the proceeds thereof, (vi) sign Borrower’s name on any verification of Receivables and
notices thereof to account debtors or any secondary obligors or other obligors in respect thereof.
Borrower hereby releases each Agent and Lenders and their respective officers, employees and
designees from any liabilities arising from any act or acts under this power of attorney and in
furtherance thereof, whether of omission or commission, except as a result of such Agent’s or any
Lender’s own gross negligence or willful misconduct as determined pursuant to a final
non-appealable order of a court of competent jurisdiction.

          7.5. Right to Cure.

          Administrative Agent may, at its option upon notice to Borrower (a) cure any default by
Borrower under any material agreement with a third party that affects the Collateral, its value or
the ability of Administrative Agent to collect, sell or otherwise dispose of the Collateral or the
rights and remedies of Administrative Agent therein or the ability of Borrower to perform its
obligations hereunder or under the other Financing Agreements, (b) pay or bond on appeal any
judgment entered against Borrower, (c) discharge taxes, liens, security interests or other
encumbrances at any time levied on or existing with respect to the Collateral and (d) pay any
amount, incur any expense or perform any act which, in Administrative Agent’s judgment, is
necessary or appropriate to preserve, protect, insure or maintain the Collateral and the rights of
Agents and Lenders with respect thereto. Administrative Agent may add any amounts so expended to
the Obligations and charge Borrower’s account therefor, such amounts to be repayable by Borrower on
demand. Agents and Lenders shall be under no obligation to effect such cure, payment or bonding
and shall not, by doing so, be deemed to have assumed any obligation or liability of Borrower. Any
payment made or other action taken by either Agent or any Lender under this Section shall be
without prejudice to any right to assert an Event of Default hereunder and to proceed accordingly.

          7.6. Access to Premises.

          From time to time as reasonably requested by any Agent, at the cost and expense of Borrower,
(a) each Agent or its designee shall have complete access to all of Borrower’s premises during
normal business hours and after notice to Borrower, or at any time and without notice to Borrower
if an Event of Default exists or has occurred and is continuing, for the purposes of conducting
field examinations (which Collateral Agent shall conduct not more than twice per year,
provided, however, that Borrower shall not be obligated to reimburse or pay for
more than fifty percent (50%) of the reasonable and actual out-of-pocket costs and expenses of any
such field examination, or at such greater frequency as Administrative Agent shall elect during the
existence of a Default or Event of Default) inspecting, verifying and auditing the

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Collateral and all of Borrower’s books and records, including the Records, and (b) Borrower
shall promptly furnish to each Agent such copies of such books and records or extracts therefrom as
any Agent may reasonably request, and (c) any Agent or any Agent’s designee may use during normal
business hours such of Borrower’s personnel, equipment, supplies and premises as may be reasonably
necessary for the foregoing and if an Event of Default exists or has occurred and is continuing for
the collection of Receivables and realization of other Collateral.

SECTION 8. REPRESENTATIONS AND WARRANTIES

          Borrower hereby represents and warrants to Agents and Lenders the following (which shall
survive the execution and delivery of this Agreement), the truth and accuracy of which are a
continuing condition of the making of Loans and providing Letter of Credit Accommodations to
Borrower:

          8.1. Corporate Existence; Power and Authority.

          Borrower is a corporation duly organized and in good standing under the laws of its state of
incorporation and is duly qualified as a foreign corporation and in good standing in all states or
other jurisdictions where the nature and extent of the business transacted by it or the ownership
of assets makes such qualification necessary, and in which the failure to so qualify would have a
Material Adverse Effect. The execution, delivery and performance of this Agreement, the other
Financing Agreements and the transactions contemplated hereunder and thereunder (a) are all within
Borrower’s corporate powers, (b) have been duly authorized and (c) are not in contravention of law
or the terms of Borrower’s certificate of incorporation, by-laws, or other organizational
documentation, or any indenture, agreement or undertaking to which Borrower is a party or by which
Borrower or its property are bound. This Agreement and the other Financing Agreements constitute
legal, valid and binding obligations of Borrower enforceable in accordance with their respective
terms. Borrower does not have any Subsidiaries except as set forth on the Information Certificate.

          8.2. Name; State of Organization; Chief Executive Office; Collateral Locations.

          (a) The exact legal name of Borrower is as set forth on the signature page of this Agreement
and in the Information Certificate. Borrower has not, during the past five years, been known by or
used any other corporate or fictitious name or been a party to any merger or consolidation, or
acquired all or substantially all of the assets of any Person, or acquired any of its property or
assets out of the ordinary course of business, except as set forth in the Information Certificate.

          (b) Borrower is an organization of the type and organized in the jurisdiction set forth in the
Information Certificate. The Information Certificate accurately sets forth the organizational
identification number of Borrower or accurately states that Borrower has none and accurately sets
forth the federal employer identification number of Borrower.

          (c) The chief executive office and mailing address of Borrower and Borrower’s Records
concerning Accounts are located only at the address identified as such in Schedule 8.2 to the
Information Certificate and its only other places of business and the only

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other locations of Collateral, if any, are the addresses set forth in Schedule 8.2 to the
Information Certificate, subject to the right of Borrower to establish new locations in accordance
with Section 9.2 below. The Information Certificate correctly identifies any of such locations
which are not owned by Borrower and sets forth the owners and/or operators thereof.

          8.3. Financial Statements; No Material Adverse Change.

          All financial statements relating to Borrower which have been or may hereafter be delivered by
Borrower to Agents and Lenders have been prepared in accordance with GAAP (except as to any interim
financial statements, to the extent such statements are subject to normal year-end adjustments and
do not include any notes) and fairly present the financial condition and the results of operation
of Borrower as at the dates and for the periods set forth therein. Except as disclosed in any
interim financial statements furnished by Borrower to Administrative Agent prior to the date of
this Agreement, there has been no material adverse change in the assets, liabilities, properties
and condition, financial or otherwise, of Borrower, since the date of the most recent audited
financial statements furnished by Borrower to Administrative Agent prior to the date of this
Agreement.

          8.4. Priority of Liens; Title to Properties.

          The security interests and liens granted to Collateral Agent under this Agreement and the
other Financing Agreements constitute valid and perfected first priority liens and security
interests in and upon the Collateral which is located within the United States of America, Canada
or Puerto Rico subject only to the liens indicated on Schedule 8.4 to the Information Certificate
and the other liens permitted under Section 9.8 hereof. Borrower has good and marketable fee
simple title to all of its other properties and assets subject to no liens, mortgages, pledges,
security interests, encumbrances or charges of any kind, except those granted to Collateral Agent
and such others as are specifically listed on Schedule 8.4 to the Information Certificate or
permitted under Section 9.8 hereof.

          8.5. Tax Returns.

          Borrower has filed, or caused to be filed, in a timely manner all (i) federal and state tax
returns, reports and declarations which are required to be filed by Borrower and (ii) all other tax
returns, reports and declarations which are required to be filed by Borrower, other than such tax
returns, reports and declarations the failure of which to file could not reasonably be expected to
have a Material Adverse Effect. All information in such tax returns, reports and declarations is
complete and accurate in all material respects. Borrower has paid or caused to be paid all taxes
due and payable or claimed due and payable in any assessment received by it and has collected,
deposited and remitted in accordance with all applicable laws all sales and/or use taxes applicable
to the conduct of its business, except taxes the validity of which are being contested in good
faith by appropriate proceedings diligently pursued and available to Borrower and with respect to
which adequate reserves have been set aside on its books and except for any taxes of less than
$250,000 in the aggregate. Adequate provision has been made for the payment of all accrued and
unpaid Federal, State, county, local, foreign and other taxes whether or not yet due and payable
and whether or not disputed. Borrower has collected and deposited in a separate bank account or
remitted to the appropriate tax authority all sales and/or use taxes applicable to

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its business required to be collected and so deposited under the laws of the United States and
each possession or territory thereof, and each State or political subdivision thereof, including
any State in which Borrower owns any Inventory or owns or leases any other property.

          8.6. Litigation.

          Except as set forth in Schedule 8.6 to the Information Certificate, there is no present
investigation by any Governmental Authority pending, or to the best of Borrower’s knowledge
threatened, against or affecting Borrower, its assets or business and there is no action, suit,
proceeding or claim by any Person pending, or to the best of Borrower’s knowledge threatened,
against Borrower or its assets or goodwill, or against or affecting any transactions contemplated
by this Agreement, which if adversely determined against Borrower could reasonably be expected to
have a Material Adverse Effect.

          8.7. Compliance with Other Agreements and Applicable Laws.

          (a) Borrower is not in default in any respect under, or in violation in any respect of any of
the terms of, any agreement, contract, instrument, lease or other commitment to which it is a party
or by which it or any of its assets are bound, in each case where such default or violation has or
would have a Material Adverse Effect. Borrower is in compliance in all respects with the
requirements of all applicable laws, rules, regulations and orders of any governmental authority
relating to its business, including, without limitation, those set forth in or promulgated pursuant
to the Occupational Safety and Health Act of 1970, as amended, the Fair Labor Standards Act of
1938, as amended, ERISA, the Code, as amended, and the rules and regulations thereunder, the
Environmental Laws, all Federal, State and local statutes, regulations, rules and orders relating
to consumer credit (including, without limitation, as each has been amended, the Truth-in-Lending
Act, the Fair Credit Billing Act, the Equal Credit Opportunity Act and the Fair Credit Reporting
Act, and regulations, rules and orders promulgated thereunder), all Federal, State and local
states, regulations, rules and orders pertaining to sales of consumer goods (including, without
limitation, the Consumer Products Safety Act of 1972, as amended, and the Federal Trade Commission
Act of 1914, as amended, and all regulations, rules and orders promulgated thereunder) in each case
where the failure to comply would have a Material Adverse Effect.

          (b) Borrower has obtained all material permits, licenses, approvals, consents, certificates,
orders or authorizations of any governmental agency required for the lawful conduct of its business
(the “Permits”). Schedule 8.7 to the Information Certificate sets forth all of the Permits
issued to or held by Borrower as of the date hereof by any Federal, State or local governmental
agency and any applications pending by Borrower with such federal, state or local governmental
agency. The Permits constitute all permits, licenses, approvals, consents, certificates, orders or
authorizations necessary for Borrower to own and operate its business as presently conducted or
proposed to be conducted where the failure to have such Permits would have a Material Adverse
Effect. All of the Permits are valid and subsisting and in full force and effect. There are no
actions, claims or proceedings pending or threatened that seek the revocation, cancellation,
suspension or modification of any of the Permits.

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          8.8. Environmental Compliance.

          (a) Except as set forth on Schedule 8.8 to the Information Certificate, Borrower has not
generated, used, stored, treated, transported, manufactured, handled, produced or disposed of any
Hazardous Materials, on or off its premises (whether or not owned by it) in any manner which
violates any applicable Environmental Law and the operations of Borrower comply with all applicable
Environmental Laws, in each case where such violation or failure to so comply would have a Material
Adverse Effect.

          (b) Except as set forth on Schedule 8.8 to the Information Certificate, there is no
investigation, proceeding, complaint, order, directive, claim, citation or notice by any
Governmental Authority or any other person pending or to the best of Borrower’s knowledge
threatened, with respect to any material non-compliance with or material violation of the
requirements of any applicable Environmental Law by Borrower.

          (c) Except as set forth in Schedule 8.8 to the Information Certificate, Borrower does not have
any liability (contingent or otherwise) in connection with a release, spill or discharge,
threatened or actual, of any Hazardous Materials or the generation, use, storage, treatment,
transportation, manufacture, handling, production or disposal of any Hazardous Materials which
would have a Material Adverse Effect.

          (d) Borrower has all licenses, certificates, approvals and other Permits required to be
obtained or filed in connection with the operations of Borrower under any Environmental Law in each
case where the failure to obtain or file the same would have a Material Adverse Effect and all such
licenses, permits, certificates, approvals or similar authorizations are valid and in full force
and effect where the failure to have any of such licenses, permits, certificates, approvals or
similar authorization would have a Material Adverse Effect.

          8.9. Credit Card Agreements.

          Set forth in Schedule 8.9 to the Information Certificate is a correct and complete list, as of
the date hereof, of (a) all of the Credit Card Agreements and all other agreements, documents and
instruments existing as of the date hereof between or among Borrower, any of its affiliates, the
Credit Card Issuers, the Credit Card Processors and any of, their affiliates; (b) the percentage of
each sale payable to the Credit Card Issuer or Credit Card Processor under the terms of the Credit
Card Agreements; (c) the amount of all reserves; or collateral maintained as of the date hereof by
the Credit Card Issuer or Credit Card Processor, if any, (d) all other fees and charges payable by
Borrower under or in connection with the Credit Card Agreements; and (e) the term of such Credit
Card Agreements. The Credit Card Agreements constitute all of such agreements necessary for
Borrower to operate its business as presently conducted with respect to credit cards and debit
cards and no Accounts of Borrower arise from purchases by customers of Inventory with credit cards
or debit cards, other than those which are issued by Credit Card Issuers with whom Borrower has
entered into one of the Credit Card Agreements set forth on Schedule 8.9 to the Information
Certificate or with whom Borrower has entered into a Credit Card Agreement in accordance with
Section 9.13 hereof. Each of the Credit Card Agreements constitutes a legal, valid and binding
obligation of Borrower and to the best of Borrower’s knowledge, the other parties thereto,
enforceable in accordance with their respective terms and

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are in full force and effect. No default or event of default, or act, condition or event which
after notice or passage of time or both, would constitute a default or an event of default under
any of the Credit Card Agreements exists or has occurred and is continuing which would have a
Material Adverse Effect, and Borrower and the other parties thereto have complied with all of the
terms and conditions of the Credit Card Agreements to the extent necessary for Borrower to be
entitled to receive all payments thereunder. Borrower has delivered, or caused to be delivered to
Collateral Agent, true, correct and complete copies of all of the Credit Card Agreements.

          8.10. Employee Benefits.

          (a) Borrower has not engaged in any transaction in connection with which Borrower or any of
its ERISA Affiliates could be subject to either a civil penalty assessed pursuant to ERISA or a tax
imposed the Code, including any accumulated funding deficiency described in Section 8.10(c) hereof
and any deficiency with respect to vested accrued benefits described in Section 8.10(d) hereof.

          (b) No liability to the Pension Benefit Guaranty Corporation has been or is expected by
Borrower to be incurred with respect to any employee benefit plan of Borrower or any of its ERISA
Affiliates. There has been no reportable event (within the meaning of ERISA) or any other event or
condition with respect to any employee benefit plan of Borrower or any of its ERISA Affiliates
which presents a risk of termination of any such plan by the Pension Benefit Guaranty Corporation.

          (c) Full payment has been made of all amounts which Borrower or any of its ERISA Affiliates is
required under ERISA and the Code to have paid under the terms of each employee benefit plan as
contributions to such plan as of the last day of the most recent fiscal year of such plan ended
prior to the date hereof, and no accumulated funding deficiency (as defined in ERISA and the Code),
whether or not waived, exists with respect to any employee pension benefit plan, including any
penalty or tax described in Section 8.10(a) hereof and any deficiency with respect to vested
accrued benefits described in Section 8.10(d) hereof.

          (d) The current value of all vested accrued benefits under all employee pension benefit plans
maintained by Borrower that are subject to Title IV of ERISA does not exceed the current value of
the assets of such plans allocable to such vested accrued benefits, including any penalty or tax
described in Section 8.10(a) hereof and any accumulated funding deficiency described in Section
8.10(c) hereof. The terms “current value” and “accrued benefit” have the meanings specified in
ERISA.

          (e) Neither Borrower nor any of its ERISA Affiliates is or has ever been obligated to
contribute to any “multiemployer plan” (as such term is defined in ERISA) that is subject to Title
I of ERISA.

          8.11. Bank Accounts.

          All of the deposit accounts, investment accounts or other accounts in the name of or used by
Borrower maintained at any bank or other financial institution are set forth in Schedule 6.3 to the
Information Certificate, subject to the right of Borrower to establish new accounts in accordance
with Section 5.3(d) hereof.

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          8.12. Regulation U.

          Borrower is not engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.

          8.13. Investment Company Act.

          Neither Borrower nor any of its Subsidiaries is an “investment company” or a company
“controlled” by an “investment company” or a “subsidiary” of an “investment company,” within the
meaning of the Investment Company Act of 1940.

          8.14. OFAC.

          Neither Borrower nor, to the best knowledge of Borrower, any Affiliate of Borrower (a) is a
Sanctioned Person, (b) does business in a Sanctioned Country in violation of the economic sanctions
of the United States administered by OFAC or (c) does business in such country or with any such
agency, organization or person, in violation of the economic sanctions of the United States
administered by OFAC.

          8.15. Accuracy and Completeness of Information.

          All information furnished by or on behalf of Borrower in writing to any Agent or any Lender in
connection with this Agreement or any of the other Financing Agreements or any transaction
contemplated hereby or thereby, including all information on the Information Certificate is true
and correct in all material respects on the date as of which such information is dated or certified
and does not omit any material fact necessary in order to make such information not misleading. No
event or circumstance has occurred which has had or could reasonably be expected to have a Material
Adverse Effect, which has not been fully and accurately disclosed to Administrative Agent in
writing.

          8.16. Survival of Warranties; Cumulative.

          All representations and warranties contained in this Agreement or any of the other Financing
Agreements shall survive the execution and delivery of this Agreement and shall be deemed to have
been made again to Agents and Lenders on the date of each additional borrowing or other credit
accommodation hereunder except to the extent that any such representations and warranties expressly
relate solely to an earlier date (in which case such representations and warranties shall have been
true and accurate on and as of such earlier date) and shall be conclusively presumed to have been
relied on by Agents and Lenders regardless of any investigation made or information possessed by
any Agent or any Lender. The representations and warranties set forth herein shall be cumulative
and in addition to any other representations or warranties which Borrower shall now or hereafter
give, or cause to be given, to any Agent or any Lender. In no event shall the corporate officers
of Borrower have any personal liability to any Agent or any Lender if any of the representations
and warranties of Borrower in this Section 8 are false or misleading, absent fraud.

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SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS

          9.1. Maintenance of Existence.

          (a) Borrower shall at all times preserve, renew and keep in full, force and effect its
corporate existence and rights and franchises with respect thereto and maintain in full force and
effect all permits, licenses, trademarks, trade names, approvals, authorizations, leases and
contracts necessary to carry on the business as presently or proposed to be conducted.

          (b) Borrower shall not change its name unless each of the following conditions is satisfied:
(ii) Administrative Agent shall have received not less than thirty (30) days prior written notice
from Borrower of such proposed change in its corporate name, which notice shall accurately set
forth the new name; and (ii) Administrative Agent shall have received a copy of the amendment to
the Certificate of Incorporation of Borrower providing for the name change certified by the
Secretary of State of the jurisdiction of incorporation or organization of Borrower as soon as it
is available.

          (c) Borrower shall not change its chief executive office or its mailing address or
organizational identification number (or if it does not have one, shall not acquire one) unless
Administrative Agent shall have received not less than thirty (30) days’ prior written notice from
Borrower of such proposed change, which notice shall set forth such information with respect
thereto as Administrative Agent may require and Administrative Agent shall have received such
agreements as Administrative Agent may reasonably require in connection therewith. Borrower shall
not change its type of organization, jurisdiction of organization or other legal structure.

          9.2. New Collateral Locations.

          Borrower may only open any new location within the United States of America, Canada or Puerto
Rico provided Borrower has granted to Collateral Agent (i) a perfected security interest in the
Collateral at such location and (ii) a Landlord Agreement in respect of such new location if
required by Collateral Agent. From time to time, upon request of the Collateral Agent, Borrower
shall provide Collateral Agent with an accurate list showing any new locations or closed locations
since the last such listing provided hereunder.

          9.3. Compliance with Laws, Regulations, Etc.

          (a) Borrower shall, and shall cause any Subsidiary to, at all times, comply in all material
respects with all laws, rules, regulations, licenses, Permits, approvals and orders applicable to
it and duly observe all requirements of any foreign, Federal, State or local Governmental
Authority, including ERISA, the Code, the Occupational Safety and Health Act of 1970, as amended,
the Fair Labor Standards Act of 1938, as amended, and all statutes, rules, regulations, orders,
permits and stipulations relating to environmental pollution and employee health and safety,
including all of the Environmental Laws in each case where the failure to so comply therewith or
observe such requirements would have a Material Adverse Effect. Without limitation of the
preceding provisions of this Section 9.3, Borrower shall (x) ensure that neither Borrower nor, to
the best knowledge of Borrower, any Affiliate of Borrower (i) becomes a Sanctioned Person, (ii)
does business in a Sanctioned Country in violation of the economic sanctions of the United States
administered by OFAC or (iii) does business in such country or

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with any such agency, organization or person, in violation of the economic sanctions of the
United States administered by OFAC, and (y) comply, and cause each of its Subsidiaries to comply,
with all applicable Bank Secrecy Act and anti-money laundering laws and regulations.

          (b) Borrower shall give both oral and written notice to Administrative Agent within five (5)
Business Days of Borrower’s receipt of any notice of, or Borrower’s otherwise obtaining knowledge
of, (i) the occurrence of any event involving the release, spill or discharge, threatened or
actual, of any Hazardous Material at any one of Borrower’s properties or (ii) any investigation,
proceeding, complaint, order, directive, claims, citation or notice with respect to: (A) any
material non-compliance with or material violation of any Environmental Law by Borrower or (B) the
release, spill or discharge, threatened or actual, of any Hazardous Material or (C) the generation,
use, storage, treatment, manufacture, handling, production or disposal of any Hazardous Materials
or (D) any other environmental, health or safety matter which has or would have a Material Adverse
Effect.

          (c) Without limiting the generality of the foregoing, whenever Administrative Agent reasonably
determines that there is non-compliance, or any condition which requires any action by or on behalf
of Borrower in order to avoid any material non-compliance, with any Environmental Law, Borrower
shall, at Administrative Agent’s request and Borrower’s expense: (i) cause an independent
environmental engineer acceptable to Administrative Agent to conduct such tests of the site where
Borrower’s non-compliance or alleged non-compliance with such Environmental Laws has occurred as to
such non-compliance and prepare and deliver to Administrative Agent a report as to such
non-compliance setting forth the results of such tests, a proposed plan for responding to any
material environmental problems described therein, and an estimate of the costs thereof and (ii)
provide to Administrative Agent a supplemental report of such engineer whenever the scope of such
non-compliance, or Borrower’s response thereto or the estimated costs thereof, shall change in any
material respect.

          (d) Borrower shall indemnify and hold harmless Agents and Lenders and their respective
directors, officers, employees, agents, invitees, representatives, successors and assigns, from and
against any and all losses, claims, damages, liabilities, costs, and expenses (including attorneys’
fees and legal expenses) directly or indirectly arising out of or attributable to the use,
generation, manufacture, reproduction, storage, release, threatened release, spill, discharge,
disposal or presence of a Hazardous Material, including the costs of any required or necessary
repair, cleanup or other remedial work with respect to any property of Borrower and the preparation
and implementation of any closure, remedial or other required plans. All representations,
warranties, covenants and indemnifications in this Section 9.3 shall survive the payment of the
Obligations and the termination of this Agreement.

          9.4. Payment of Taxes and Claims.

          Borrower shall, and shall cause any Subsidiary to, duly pay and discharge all taxes,
assessments, contributions and governmental charges upon or against it or its properties or assets,
except for taxes the validity of which are being contested in good faith by appropriate proceedings
diligently pursued and available to Borrower or such Subsidiary, as the case may be, and with
respect to which adequate reserves have been set aside on its books. Borrower shall be liable for
any tax or penalties imposed on any Agent or any Lender as a result of the financing

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arrangements provided for herein and Borrower agrees to indemnify and hold Agents and Lenders
harmless with respect to the foregoing, and to repay to Administrative Agent, for the benefit of
Agents and Lenders, on demand the amount thereof, and until paid by Borrower such amount shall be
added and deemed part of the Loans, provided, that, nothing contained herein shall
be construed to require Borrower to pay any income or franchise taxes attributable to the income of
Lenders from any amounts charged or paid hereunder to Lenders. The foregoing indemnity shall
survive the payment of the Obligations and the termination of this Agreement.

          9.5. Insurance.

          Borrower shall, and shall cause any Subsidiary to, at all times, maintain with financially
sound and reputable insurers insurance with respect to the Collateral against loss or damage and
all other insurance of the kinds and in the amounts customarily insured against or carried by
corporations of established reputation engaged in the same or similar businesses and similarly
situated. Said policies of insurance shall be reasonably satisfactory to Administrative Agent as
to form, amount and insurer. Borrower shall furnish certificates, policies or endorsements to
Administrative Agent as Administrative Agent shall require as proof of such insurance, and, if
Borrower fails to do so, Administrative Agent is authorized, but not required, to obtain after
providing written notice thereof to Borrower such insurance with respect to the Collateral at the
expense of Borrower. All policies shall provide for at least thirty (30) days prior written notice
to Administrative Agent of any cancellation or reduction of coverage. Administrative Agent may act
as attorney for Borrower in obtaining, and at any time an Event of Default exists or has occurred
and is continuing, adjusting, settling, amending and canceling any such insurance which relates to
the Collateral. Borrower shall cause Collateral Agent to be named as a loss payee and each Agent
an additional insured (but without any liability for any premiums) under such insurance policies
relating to the Collateral and Borrower shall obtain non-contributory lender’s loss payable
endorsements to all such insurance policies in form and substance satisfactory to Administrative
Agent. Such lender’s loss payable endorsements shall specify that the proceeds of such insurance
shall be payable to Collateral Agent as its interests may appear and further specify that
Collateral Agent shall be paid regardless of any act or omission by Borrower or any of its
Affiliates. Any insurance proceeds received by Collateral Agent at any time shall be applied to
payment of the Obligations in the order and manner set forth in Section 6.4(a) hereof.

          9.6. Financial Statements and Other Information.

          (a) Borrower shall keep proper books and records in which true and complete entries shall be
made of all dealings or transactions of or in relation to the Collateral and the business of
Borrower and its Subsidiaries (if any) in accordance with GAAP and Borrower shall furnish or cause
to be furnished to Administrative Agent: (i) within thirty-five days after the end of each fiscal
month, monthly unaudited consolidated financial statements (including in each case balance sheets,
statements of income and loss statements of cash flow and statements of shareholders’ equity), all
in reasonable detail, fairly presenting the financial position and the results of the operations of
borrower an its Subsidiaries, as of the end of and through such fiscal month and (ii) within ninety
(90) days after the end fiscal year, audited consolidated financial statements and, if Borrower has
any Subsidiaries, audited consolidating financial statements of Borrower and its Subsidiaries
(including in each case balance sheets, statements of income and

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loss, statements of cash flow and statements of shareholders’ equity), and the accompanying
notes thereto, all in reasonable detail, fairly presenting the financial position and the results
of the operations of Borrower and its Subsidiaries, as of the end of and for such fiscal year,
together with the opinion of independent certified public accountants, which accountants shall be
an independent accounting firm selected by Borrower and reasonably acceptable to Lender, that such
financial statements have been prepared in accordance with GAAP, and present fairly the results of
operations and financial condition of Borrower and its subsidiaries as of the end of and for the
fiscal year then ended.

          (b) Borrower shall promptly notify Administrative Agent in writing of the details of (i) any
material loss, damage, investigation, action, suit, proceeding or claim relating to the Collateral
or any other property which is security for the Obligations or which has or would have a Material
Adverse Effect and (ii) the occurrence of any Event of Default or act condition or event which,
with the passage of time or giving of notice or both, would constitute an Event of Default.

          (c) Borrower shall promptly after the sending or filing thereof furnish or cause to be
furnished to Administrative Agent copies of all reports which Borrower sends to its stockholders
generally and copies of all reports and registration statements which Borrower files with the
Securities and Exchange Commission, any national securities exchange or the National Association of
Securities Dealers, Inc.

          (d) Borrower shall furnish or cause to be furnished to Administrative Agent such budgets,
forecasts, projections and other information respecting the Collateral and the business of
Borrower, as Administrative Agent may, from time to time, reasonably request. Administrative Agent
is hereby authorized to deliver a copy of any financial statement or any other information relating
to the business of Borrower to any court or other Governmental Authority or to any Lender or
Participant or to any prospective Lender or prospective Participant. Borrower hereby irrevocably
authorizes and directs all accountants or auditors to deliver to Administrative Agent, at
Borrower’s expense, copies of the financial statements of Borrower and any reports or management
letters prepared by such accountants or auditors on behalf of Borrower and to disclose to any Agent
or any Lender such information as they may have regarding the business of Borrower. Any documents,
schedules, invoices or other papers delivered to any Agent or any Lender may be destroyed or
otherwise disposed of by such Agent or such Lender one (1) year after the same are delivered to
such Agent or such Lender, except as otherwise designated by Borrower to such Agent or such Lender
in writing.

          9.7. Sale of Assets, Consolidation, Merger, Dissolution, Etc.

          Borrower shall not, and shall not permit any Subsidiary to (and no Agent nor any Lender
authorizes Borrower to), directly or indirectly,

          (a) merge into or with or consolidate with any other Person or permit any other Person to
merge into or with or consolidate with it if such merger or consolidation results in a Change of
Control;

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          (b) sell, assign, lease, transfer, abandon or otherwise dispose of any Capital Stock or
indebtedness to any other Person or any of its assets to any other Person, except for

     (i) sales of Inventory in the ordinary course of business,

     (ii) the disposition of worn-out or obsolete Equipment so long as (A) any
proceeds are paid to Administrative Agent and (B) such sales do not involve
Equipment having an aggregate fair market value in excess of $2,000,000 for all such
Equipment disposed of in any fiscal year of Borrower;

     (iii) sales or other dispositions by Borrower of assets in connection with the
closing or sale of a retail store location of Borrower in the ordinary course of
Borrower’s business which consist of leasehold interests in the premises of such
store, the Equipment and fixtures located at such premises and the books and records
relating exclusively and directly to the operations of such store; provided,
that, as to each and all such sales, (A) on the date of, and after giving
effect to, any such sale, in any calendar year, Borrower shall not have closed or
sold retail store locations accounting for more than seven and one-half (7 1/2%)
percent of all sales of Borrower in the immediately preceding twelve (12) month
period, (B) Administrative Agent shall have received not less than ten (10) Business
Days prior written notice of such sale, which notice shall set forth in reasonable
detail satisfactory to Administrative Agent, the parties to such sale or other
disposition, the assets to be sold or otherwise disposed of, the purchase price and
the manner of payment thereof and such other information with respect thereto as
Administrative Agent may request, (C) as of the date of such sale or other
disposition and after giving effect thereto, no Event of Default, or act, condition
or event which with notice or passage of time would constitute an Event of Default,
shall exist or have occurred, (D) such sale shall be on commercially reasonable
prices and terms in a bona fide arms length transaction, and (E) any and all net
proceeds payable or delivered to respect of such sale or other disposition shall be
paid or delivered, or caused to be paid or delivered, to Administrative Agent in
accordance with the terms of this Agreement either, at Administrative Agent’s
option, for application to the Obligations in accordance with the terms hereof
(except to the extent such proceeds reflect payment in respect of indebtedness
secured by a properly perfected first priority security interest in the assets sold,
in which case, such proceeds shall be applied to such indebtedness secured thereby)
or to be held by Administrative Agent as cash collateral for the Obligations on
terms and conditions acceptable to Administrative Agent;

     (iv) sales of Capital Stock of Borrower pursuant to a Qualified Public
Offering; provided, that, (A) Borrower shall not (except as
permitted by Section 9.11) pay or be required to pay any dividends or repurchase or
redeem such stock or make any other payments in respect thereof on or prior to the
end of the then current term of this Agreement and (B) the terms of such Capital
Stock and the purchase and sale thereof shall otherwise be reasonably acceptable to
Administrative Agent in all respects;

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     (v) sales or other issuance’s of Capital Stock of Borrower to Borrower’s
directors, officers, employees and/or consultants pursuant to the Borrower’s
Restricted Stock Plan or any of Borrower’s other stock ownership arrangements
established for the benefit of such directors, officers, employees and/or
consultants;

     (vi) sales of Capital Stock to existing shareholders of the Borrower or
pursuant to rights offerings to such existing shareholders; or

     (vii) sales of Capital Stock to new investors if the sale of the stock is
authorized under the Amended and Restated Reclassification and Sale of Shares
Agreement, dated April 29, 1998, as amended or otherwise modified from time to time
pursuant to the terms thereof;

          (c) form or acquire any subsidiaries; or

          (d) wind up, liquidate or dissolve (other than wind up, liquidate or dissolve Internet Sub in
accordance with Section 9.16); or

          (e) agree to do any of the foregoing.

          9.8. Encumbrances.

          Borrower shall not, and shall not permit any Subsidiary to, create, incur, assume, suffer or
permit to exist any security interest, mortgage, pledge, lien, charge or other encumbrance of any
nature whatsoever on any of its assets or properties, including the Collateral, except:
(a) the security interests and liens of Collateral Agent for itself and the benefit of Lenders; (b)
liens securing the payment of taxes, either not yet overdue or the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and available to Borrower or
such Subsidiary, as the case may be and with respect to which adequate reserves have been set aside
on its books; (c) non-consensual statutory liens (other than liens securing the payment of taxes)
arising in the ordinary course of Borrower’s or such Subsidiary’s business to the extent: (i) such
liens secure Indebtedness which is not overdue or (ii) such liens secure Indebtedness relating to
claims or liabilities which are fully insured and being defended at the sole cost and expense and
at the sole risk of the insurer or being contested in good faith by appropriate proceedings
diligently pursued and available to Borrower or such Subsidiary, in each case prior to the
commencement of foreclosure or other similar proceedings and with respect to which adequate
reserves have been set aside on its books; (d) zoning restrictions, easements, licenses, covenants
and other restrictions affecting the use of real property which do not interfere in any material
respect with the use of such real property or ordinary conduct of the business of Borrower or such
Subsidiary as presently conducted thereon or materially impair the value of the real property which
may be subject thereto; (e) purchase money security interests in Equipment (including Capital
Leases) and purchase money mortgages on real estate not to exceed $15,000,000 in the aggregate at
any time outstanding so long as such interests and mortgages do not apply to any property of
Borrower other than the Equipment or real estate so acquired, and the indebtedness secured thereby
does not exceed the cost of the Equipment or real estate so acquired, and the indebtedness secured
thereby does not exceed the cost of the Equipment or real

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estate so acquired, as the case may be; (f) liens or rights of setoffs or credit balances of
Borrower with Credit Card Processors as a result of fees and chargebacks; (g) deposits of cash with
the owner or lessor of retail store locations leased and operated by Borrower in the ordinary
course of the business of Borrower to secure the performance by Borrower of its obligations under
the terms of the lease for such premises; (h) liens on assets of Borrower to secure indebtedness of
Borrower permitted under Section 9.9(d) below, provided, that, such liens shall be
junior and subordinate to the liens of Collateral Agent on terms and conditions acceptable to
Collateral Agent; (i) pledges and deposits of cash, Cash Equivalents or investment securities by
Borrower to secure indebtedness of Borrower permitted under Section 9.9(g) hereof;
provided, that, (i) the aggregate amount so pledged or deposited, together with the
amount of all Letter of Credit Accommodations issued in connection with any Hedging Agreements,
shall not in the aggregate exceed $2,500,000, (ii) as of each of the thirty (30) days immediately
preceding the date of such pledge or deposit and after giving effect thereto, Excess Availability
shall not be less than $4,000,000, (iii) such pledge or deposit (or the right to demand such pledge
or deposit) shall be required by the other party to the Hedging Agreement as a condition to it
entering into such contract with Borrower and Administrative Agent shall have received evidence
thereof in form and substance satisfactory to Administrative Agent and (iv) as of the date of such
pledge or deposit and after giving effect thereto, no Default or Event of Default shall exist or
have occurred and be continuing; and (j) the security interests and liens set forth on Schedule 8.4
to the Information Certificate.

          9.9. Indebtedness.

          Borrower shall not, and shall not permit any Subsidiary to, incur, create, assume, become or
be liable in any manner with respect to, suffer or permit to exist, any obligations or
indebtedness, except:

          (a) the Obligations (excluding those described in Section 9.9(g) below);

          (b) trade obligations and normal accruals in the ordinary course of business not yet due and
payable, or with respect to which Borrower is contesting in good faith the amount or validity
thereof by appropriate proceedings diligently pursued and available to Borrower and with respect to
which adequate reserves have been set aside on its books;

          (c) purchase money indebtedness (including capital leases) to the extent not incurred or
secured by liens (including capital leases) in violation of any other provision of this Agreement;

          (d) indebtedness of Borrower for borrowed money (other than indebtedness permitted under
Section 9.9(c) above or Section 9.9(e) below) arising after the date hereof owing to any person in
an aggregate amount not to exceed $20,000,000 at any time outstanding; provided,
that, as to each and all of such indebtedness: (i) Administrative Agent shall have received
not less than ten (10) Business Days prior written notice of the intention to incur such
indebtedness, which notice shall set forth in reasonable detail satisfactory to Administrative
Agent, the amount of such indebtedness, the person to whom such indebtedness will be owed, the
interest rate, the schedule of repayments and maturity date with respect thereto and such other
information with respect thereto as Administrative Agent may request, (ii) Administrative

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Agent shall have received true, correct and complete copies of all agreements, documents and
instruments evidencing or otherwise related to such indebtedness, as duly authorized, executed and
delivered by the parties thereto, (iii) such indebtedness shall be incurred by Borrower at
commercially reasonable rates and terms in a bona fide arms’ length transaction, (iv) if any of
such indebtedness is to be secured by any assets of Borrower, then (A) all of the terms and
conditions of such indebtedness and the person to whom such indebtedness is owed shall be
reasonably acceptable to Administrative Agent, (B) the security interests and liens on the assets
of Borrower in favor of such person to secure such indebtedness shall be junior and subordinate to
the security interests and liens of Administrative Agent on such assets on terms and conditions
reasonably acceptable to Administrative Agent, and (C) Administrative Agent shall have received, in
form and substance satisfactory to Administrative Agent, an intercreditor agreement between
Administrative Agent and such person, as acknowledged and agreed to by Borrower, duly authorized,
executed and delivered by such person and Borrower, providing for, inter alia, the
parties’ relative rights and priorities with respect to the assets of Borrower, (v) such
indebtedness shall not at any time include terms and conditions which in any manner adversely
affect Agents or Lenders or any rights of either Agent or Lenders as determined in good faith by
Administrative Agent and confirmed by Administrative Agent to Borrower in writing or which are more
restrictive or burdensome than the terms or conditions of any other indebtedness of Borrower as in
effect on the date hereof (other than the Obligations), (vi) as of the date of incurring such
indebtedness and after giving effect thereto, no Event of Default shall exist or have occurred,
(vii) Borrower may only make regularly scheduled payments of principal and interest in respect of
such indebtedness, (viii) Borrower shall not, directly or indirectly, (A) amend, modify, alter or
change the terms of the agreements with respect to such indebtedness, except, that,
Borrower may, after prior written notice to Administrative Agent, amend, modify, alter or change
the terms thereof so as to extend the maturity thereof or defer the timing of any payments in
respect thereof, or to forgive or cancel a portion of such indebtedness (other than pursuant to
payments thereof), or to release any liens or security interests in any assets of Borrower which
secure such indebtedness (if any), or to reduce the rate or any fees in connection therewith, or to
make any covenants contained therein less restrictive or burdensome as to Borrower or otherwise
more favorable to Borrower (as determined in good faith by Administrative Agent), or (B) redeem,
retire, defease, purchase or otherwise acquire such indebtedness, or set aside or otherwise deposit
or invest any sums for such purpose, and (ix) Borrower shall furnish to Administrative Agent all
notices or demands in connection with such indebtedness either received by Borrower or on its
behalf promptly after the receipt thereof, or sent by Borrower on its behalf, concurrently with the
sending thereof, as the case may be;

          (e) indebtedness of Borrower for borrowed money after the date hereof (other than indebtedness
permitted under Sections 9.9(c) and (d) above) arising after the date hereof; provided,
that, as to each and all of such indebtedness: (i) Administrative Agent shall have received
not less than ten (10) Business Days prior written notice of the intention to incur such
indebtedness, which notice shall set forth in reasonable detail satisfactory to Administrative
Agent, the amount of such indebtedness, the person to whom such indebtedness will be owed, the
interest rate, the schedule of repayments and maturity date with respect thereto and such other
information with respect thereto as Administrative Agent may request (ii) Administrative Agent
shall have received true, correct and complete copies of all agreements, documents and instruments
evidencing or otherwise related to such indebtedness, as duly authorized, executed and delivered by
the parties thereto, (iii) such indebtedness shall be incurred by Borrower at

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commercially reasonable rates and terms in a bona fide arms’ length transaction, (iv) such
indebtedness is and shall remain at all times unsecured, (v) such indebtedness is, and shall be,
subject and subordinate in right of payment to the right of Administrative Agent to receive the
prior indefeasible payment and satisfaction in full of all of the Obligations, and Borrower shall
not make or be required to make payments in cash or other immediately available funds or other
property (but may make payment of interest by issuing indebtedness on the same terms) at any time
during the then current term of this Agreement, (vi) Administrative Agent shall have received, in
form and substance satisfactory to Administrative Agent, a subordination agreement between
Administrative Agent and such person, as acknowledged and agreed to by Borrower, duly authorized,
executed and delivered by such person and Borrower, providing for, inter alia the
terms of the subordination in right of payment of the indebtedness of Borrower to such person to
the prior indefeasible payment and satisfaction in full of all of the Obligations, (vii) such
indebtedness shall not at any time include terms and conditions which in any manner adversely
affect Administrative Agent or any rights of Administrative Agent as determined in good faith by
Administrative Agent and confirmed by Administrative Agent to Borrower in writing or which are more
restrictive or burdensome than the terms or conditions of any other indebtedness of Borrower as in
effect on the date hereof (other than the Obligations), (viii) as of the date of incurring such
indebtedness and after giving effect thereto, no Event of Default shall exist or have occurred,
(ix) Borrower shall not, directly or indirectly, (A) amend, modify, alter or change the terms of
the agreements with respect to such indebtedness, except, that, Borrower may, after
prior written notice to Administrative Agent, amend, modify, alter or change the terms thereof so
as to extend the maturity thereof or defer the timing of any payments in respect thereof, or to
forgive or cancel a portion of such indebtedness (other than pursuant to Payments thereof), or to
reduce the rate or any fees in connection therewith, or to make any covenants contained therein
less restrictive or burdensome as to Borrower or otherwise more favorable to Borrower (as
determined in good faith by Administrative Agent), or (B) redeem, retire, defease, purchase or
otherwise acquire such indebtedness, or set aside or otherwise deposit or invest any sums for such
purpose, and (x) Borrower shall furnish to Administrative Agent all notices or demands in
connection with such indebtedness either received by Borrower or on its behalf promptly after the
receipt thereof, or sent by Borrower on its behalf, concurrently with the sending thereof, as the
case may be;

          (f) obligations or indebtedness existing as of the date hereof set forth on Schedule 9.9 to
the Information Certificate, provided, that, (i) Borrower may only make regularly
scheduled payments of principal and interest in respect of such indebtedness in accordance with the
terms of the agreement or instrument evidencing or giving rise to such indebtedness as in effect on
the date hereof, (ii) Borrower shall not, directly or indirectly, (A) amend, modify, alter or
change the terms of such indebtedness or any agreement, document or instrument related thereto as
in effect on the date hereof, except, that, Borrower may, after prior written
notice to Administrative Agent, amend, modify, alter or change the terms thereof so as to extend
the maturity thereof or defer the timing of any payments in respect thereof, or to forgive or
cancel a portion of such indebtedness (other than pursuant to payments thereof), or to reduce the
interest rate or any fees in connection therewith, or to release any of the liens or security
interests in any assets and properties of Borrower which secure such indebtedness, or to make any
covenants contained therein less restrictive or burdensome as to Borrower or otherwise more
favorable to Borrower (as determined in good faith by Administrative Agent), or (B) redeem, retire,
defease, purchase or otherwise acquire such indebtedness, or set aside or otherwise deposit

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or invest any sums for such purpose, and (iii) Borrower shall furnish to Administrative Agent
all notices or demands in connection with such indebtedness either received by Borrower or on its
behalf, promptly after the receipt thereof, or sent by Borrower or on its behalf, concurrently with
the sending thereof, as the case may be; and

          (g) (A) contingent liabilities of Borrower pursuant to any Hedging Agreements entered into by
Borrower; provided that the aggregate principal notional amount of indebtedness
that may be subject to Hedging Agreements at any one time shall not exceed (i) $50,000,000 prior to
May 31, 2008, (ii) $60,000,000 from and after May 31, 2008 but prior to May 31, 2009, (iii)
$70,000,000 from and after May 31, 2009 but prior to May 31, 2010 and (iv) $80,00,000 from and
after May 31, 2010. Notwithstanding any provision herein to the contrary, no Affiliate of a Lender
shall act as a counterparty to a Hedging Agreement unless and until such Affiliate shall have
entered into a written agreement and acknowledgement in favor of Administrative Agent, in form and
substance satisfactory to Administrative Agent, in which such Affiliate agrees to be bound by the
terms of this Agreement, in the capacity as a counterparty to a Hedging Agreement, in the same
manner as a Lender hereunder, in the capacity as a counterparty to a Hedging Agreement and (B)
contingent liabilities of Borrower pursuant to any Other Hedging Agreements entered into by
Borrower; provided that (i) Lenders shall have been given a reasonable opportunity
to match the proposed terms of the Other Hedging Agreements prior to Borrower entering into the
Other Hedging Agreements and (ii) the aggregate principal notional amount of indebtedness that may
be subject to Other Hedging Agreements at any one time shall not exceed $25,000,000.

          9.10. Loans, Investments, Etc.

          Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly, make, or
suffer or permit to exist, any loans or advance money or property to any person, or any investment
in (by capital contribution, dividend or otherwise) or purchase or repurchase the Capital Stock or
indebtedness or all or a substantial part of the assets or property of any Person, or guarantee,
assume, endorse or otherwise become responsible for (directly or indirectly) the indebtedness,
performance, obligations or dividends of any Person, or agree to do any of the foregoing,
except:

          (a) the endorsement of instruments for collection or deposit in the ordinary course of
business;

          (b) investments in Cash Equivalents, provided, that, as to any of the
foregoing, unless waived in writing by Administrative Agent, Borrower shall take such actions as
are deemed necessary by Administrative Agent to perfect the security interest of Collateral Agent
in such investments;

          (c) loans and advances by Borrower to employees of Borrower not to exceed the principal amount
of $500,000 in the aggregate at any time outstanding for reasonable and necessary work-related
travel or other ordinary business expenses to be incurred by employees in connection with their
work for Borrower;

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          (d) the existing loans, advances and guarantees by Borrower outstanding as of the date hereof
as set forth on Schedule 9.10 to the Information Certificate; provided, that, as to
such loans, advances and guarantees, (i) Borrower shall not directly or indirectly, (A) amend,
modify, alter or change the term of such loans, advances or guarantees or any agreement, document
or instrument related thereto, or (B) as to such guarantees, redeem, retire, defease, purchase or
otherwise acquire such guarantee or set aside or otherwise deposit or invest any sums for such
purpose and (ii) Borrower shall furnish to Administrative Agent all notices, demands or other
materials in connection with such loans, advances or guarantees either received by Borrower or on
its behalf, promptly after the receipt thereof, or sent by Borrower or on its behalf, concurrently
with the sending thereof, as the case may be; and

          (e) loans by Borrower to officers or directors of Borrower not to exceed $15,000,000 in the
aggregate at any time, provided, that, with respect to any such loan, (i) the
officer or director shall have executed and delivered to the Borrower a promissory note in form and
substance sufficient to evidence the loan, (ii) the loan shall be recorded on the books and records
of Borrower in a manner satisfactory to Administrative Agent, (iii) the proceeds of the loan shall
be used either to purchase common or preferred stock in the Borrower, or to finance the exercise of
restricted stock options, together with the ordinary income tax attributable to such exercise
(provided, that the aggregate outstanding amount of such loans used to finance tax
liabilities shall at no time exceed $7,500,000), (iv) the stock so purchased shall be pledged by
such officer or director to the Borrower as security for the loan, (v) the maturity date of the
loan shall not be more than ten (10) years from the date the loan is made and (vi) the interest
rate on the loan shall be sufficient under regulations promulgated by the Internal Revenue Service
to prevent such loan from being treated as a below-market loan causing the attribution to such
officer or director of income as a result of the loan transaction.

          9.11. Dividends and Redemptions.

          Borrower shall not, directly or indirectly, declare or pay any dividends on account of any
shares of class of Capital Stock of Borrower now or hereafter outstanding, or set aside or
otherwise deposit or invest any sums for such purpose, or redeem, retire, defease, purchase or
otherwise acquire any shares of any class of Capital Stock (or set aside or otherwise deposit or
invest any sums for such purpose) for any consideration other than common stock or apply or set
apart any sum, or make any other distribution (by reduction of capital or otherwise) in respect of
any such shares or agree to do any of the foregoing, except, that

          (a) Borrower may repurchase shares of Capital Stock of Borrower from any former employee of
Borrower (or in connection with any severance arrangement with any employee) to the extent such
Capital Stock was obtained by such employee pursuant to the exercise of a stock option or any other
employee stock purchase arrangement granted in the ordinary course of the business of Borrower;
provided, that, (i) no Default or Event of Default shall exist or have occurred at the time
of or after giving effect to any such payments, (ii) the aggregate amount paid by Borrower
(including any amount forgiven by Borrower with respect to any loan or advance made to any such
employees under clause (e) of Section 9.10) to all such former employees of Borrower shall not in
any twelve (12) month period exceed $25,000,000 less the amount of any payments which are made in
such period under Section 9.11(c) below and which are not funded from a Qualified Public Offering,
(iii) as of the date of any such payments,

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the daily average of the Excess Availability for the immediately preceding thirty (30)
consecutive day period shall be not less than $7,500,000, and after giving effect to such payments,
Excess Availability shall be not less than $5,000,000, and (iv) there shall be no limitation on the
right of Borrower to make such purchases using net cash proceeds of a Qualified Public Offering;
and

          (b) Borrower may declare and pay dividends in respect of the Capital Stock of Borrower
constituting common stock, provided, that, each of the following conditions is
satisfied: (i) no Default or Event of Default shall exist or have occurred at the time of or after
giving effect to any such dividends, (ii) any dividends shall be out of funds legally available
therefor, (iii) immediately after giving effect to any such dividends, the aggregate amount of all
such dividends paid in any fiscal year of Borrower shall not exceed the amount equal to fifty (50%)
percent of the positive Adjusted Cash Flow of Borrower in the immediately preceding fiscal year
calculated based on the annual audited financial statements for such fiscal year delivered to
Administrative Agent in accordance with Section 9.6(a) hereof, (iv) as of the date of any such
payments, the daily average of the Excess Availability for the immediately preceding thirty (30)
consecutive day period shall be not less than $7,500,000, and after giving effect to such payments,
Excess Availability shall be not less than $5,000,000, and (v) Administrative Agent shall have
received not less than ten (10) Business Days prior written notice of the intention of Borrower to
pay such dividends specifying the amount of such dividends which Borrower intends to pay; and

          (c) Borrower may declare and pay any accrued and unpaid dividends, or redeem or retire any
shares of Capital Stock of Borrower (in addition to any dividends permitted under Section 9.11(b)
above), provided, that, each of the following conditions is satisfied: (i) no
Default or Event of Default shall exist or have occurred at the time of or after giving effect to
any such payments, (ii) any such payments shall be out of funds legally available therefor, (iii)
all such payments shall either (A) be made solely with the net cash proceeds received by Borrower
from a Qualified Public Offering or (B) be limited to an amount in any twelve (12) month period of
$25,000,000 less any amounts paid during such period under Section 9.11(a) above, provided
that, as of the date of any payment under this Section 9.11(c)(iii)(B), the daily average
of the Excess Availability for the immediately preceding thirty (30) consecutive day period shall
be not less than $7,500,000, and after giving effect to such payments, Excess Availability shall be
not less than $5,000,000, and (iv) Administrative Agent shall have received not less than five (5)
Business Days prior written notice of the intention of Borrower to make such payments specifying
the amount of such payments which Borrower intends to make.

          (d) In connection with any stockholder rights agreement or rights plan adopted by Borrower’s
Board of Directors (commonly referred to as a “poison pill”) Borrower may declare and pay a
dividend in respect of the Capital Stock of Borrower, consisting, with respect to each share of
such Capital Stock, solely of the right to purchase a specified fraction of a share of a newly
created junior preferred stock, such specified fraction of a share of preferred stock to have
equivalent voting and dividend rights as one whole share of common stock.

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          9.12. Transactions with Affiliates.

          Borrower shall not directly or indirectly, (a) purchase, acquire or lease any property from or
sell, transfer or lease any property to, any officer, employee, shareholder, director, agent or any
other affiliate of Borrower, except in the ordinary course of and pursuant to the reasonable
requirements of Borrower’s business and upon fair and reasonable terms no less favorable to
Borrower than Borrower would obtain in a comparable arm’s length transaction with a person who is
not an Affiliate or (b) make any payments of management, consulting or other fees for management or
similar services, or of any Indebtedness owing to any officer, employee, shareholder, director or
other person affiliated with Borrower except reasonable compensation to officers, employees and
directors for services rendered to Borrower in the ordinary course of business.

          9.13. Credit Card Agreements.

          Borrower shall (a) observe and perform all material terms, covenants, conditions and
provisions of the Credit Card Agreements to be observed and performed by it at the times set forth
therein; (b) not do, permit, suffer or refrain from doing anything, as a result of which there
could be a default under or breach of any of the terms of any of the Credit Card Agreements and (c)
at all times maintain in full force and effect the Credit Card Agreements and not terminate,
cancel, surrender, modify, amend, waive or release any of the Credit Card Agreements, or consent to
or permit to occur any of the foregoing; except, that, Borrower may terminate or
cancel any of the Credit Card Agreements in the ordinary course of the business of Borrower,
provided, that, Borrower shall give each Agent not less than fifteen (15) days
prior written notice of its intention to so terminate or cancel any of the Credit Card Agreements;
(d) not enter into any new Credit Card Agreements with any new Credit Card Issuer unless (i) each
Agent shall have received not less than thirty (30) days prior written notice of the intention of
Borrower to enter into such agreement (together with such other information with respect thereto as
any Agent may reasonably request) and (ii) Borrower delivers, or causes to be delivered to
Collateral Agent, a Credit Card Acknowledgment in favor of Collateral Agent, (e) give each Agent
immediate written notice of any Credit Card Agreement entered into by Borrower after the date
hereof, together with a true, correct and complete copy thereof and such other information with
respect thereto as any Agent may reasonably request; and (f) furnish to each Agent, promptly upon
the request of any Agent, such information and evidence as any Agent may reasonably request from
time to time concerning the observance, performance and compliance by Borrower or the other party
or parties thereto with the terms, covenants or provisions of the Credit Card Agreements.

          9.14. Adjusted Tangible Net Worth.

          Borrower shall, at all times have and maintain Adjusted Tangible Net Worth of not less than
$80,000,000.

          9.15. Compliance with ERISA.

          (a) Borrower shall not with respect to any “employee benefit plans” maintained by Borrower or
any of its ERISA Affiliates: (i) terminate any of such employee

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pension plans so as to incur any liability to the Pension Benefit Guaranty Corporation
established pursuant to ERISA, (ii) allow or suffer to exist any prohibited transaction involving
any of such employee benefit plans or any trust created them-under which would subject Borrower or
such ERISA Affiliate to a tax or penalty or other liability on prohibited transactions imposed
under the Code or ERISA, (iii) fail to pay to any such employee benefit plan any contribution which
it is obligated to pay under ERISA, the Code or the term of such plan, (iv) allow or suffer to
exist any accumulated funding deficiency, whether or not waived, with respect to any such employee
benefit plan, (v) allow or suffer to exist any occurrence of a reportable event or any other event
or condition which presents a material risk of termination by the Pension Benefit Guaranty
Corporation of any such employee benefit plan that is a single employer plan, which termination
could result in any liability to the Pension Benefit Guaranty Corporation or (ii) incur any
withdrawal liability with respect to any multiemployer pension plan.

          (b) As used in this Section 9.15, the term “employee pension benefit plans,” “employee benefit
plans”, “accumulated funding deficiency” and “reportable event” shall have the respective meanings
assigned to them in ERISA, and the term “prohibited transaction” shall have the meaning assigned to
it in the Code and ERISA.

          9.16. Costs and Expenses.

          Borrower shall pay to each Agent on demand all reasonable costs, expenses, filing fees and
taxes paid or payable in connection with the preparation, negotiation, execution, delivery,
recording, administration, collection, liquidation, enforcement and defense of the Obligations,
Collateral Agent’s rights in the Collateral, this Agreement, the other Financing Agreements and all
other documents related hereto or thereto, including any amendments, supplements or consents which
may hereafter be contemplated (whether or not executed) or entered into in respect hereof and
thereof, including, but not limited to: (a) all costs and expenses of filing or recording
(including Uniform Commercial Code financing statement filing taxes and fees, documentary taxes,
intangibles taxes and mortgage recording taxes and fees, if applicable); (b) all reasonable
appraisal fees and search fees; (c) costs and expenses of remitting loan proceeds, collecting
checks and other items of payment, and establishing and maintaining the Blocked Accounts, together
with each Agent’s customary charges and fees with respect thereto; (d) charges, fees or expenses
charged by any bank or LC Issuer in connection with the Letter of Credit Accommodations; (e)
reasonable costs and expenses of preserving and protecting the Collateral; (f) costs and expenses
paid or incurred in connection with obtaining payment of the Obligations, enforcing the security
interests and liens of Collateral Agent, selling or otherwise realizing upon the Collateral, and
otherwise enforcing the provisions of this Agreement and the other Financing Agreements or
defending any claims made or threatened against any Agent or any Lender arising out of the
transactions contemplated hereby and thereby (including, without limitation, preparations for and
consultations concerning any such matters); (g) all reasonable out-of-pocket expenses and costs
heretofore and from time to time hereafter incurred by Collateral Agent during the course of
periodic field examinations of the Collateral and Borrower’s operations, plus a per diem charge at
the rate of $750 per person per day for Collateral Agent’s examiners in the field and office,
provided, that, so long as no Default or Event of Default shall exist or have
occurred, Borrower shall not be required to pay such costs and expenses or per diem charge in
connection with more than four (4) such field examinations

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in any calendar year; and (h) the fees and disbursements of counsel (including legal
assistants) to Agents and Lenders in connection with any of the foregoing.

          9.17. Further Assurances.

          At the request of any Agent at any time and from time to time, Borrower shall, at its expense,
duly execute and deliver, or cause to be duly executed and delivered, such further agreements,
documents and instruments, and do or cause to be done such further acts as may be necessary or
proper to evidence, perfect, maintain and enforce the security interests and the priority thereof
in the Collateral and to otherwise effectuate the provisions or purposes of this Agreement or any
of the other Financing Agreements. Administrative Agent may at any time and from time to time
request a certificate from an officer of Borrower representing that all conditions precedent to the
making of Loans and providing Letter of Credit Accommodations contained herein are satisfied. In
the event of such request by Administrative Agent, Agents and Lenders may, at Administrative
Agent’s option, cease to make any further Loans or provide any further Letter of Credit
Accommodations until Administrative Agent has received such certificate and, in addition,
Administrative Agent has determined that such conditions are satisfied.

SECTION 10. EVENTS OF DEFAULT AND REMEDIES

          10.1. Events of Default.

          The occurrence or existence of any one or more of the following events is referred to herein
individually as an “Event of Default”, and collectively as “Events of Default”:

          (a) (i) Borrower fails to pay any of the Obligations within three (3) Business Days after the
same becomes due and payable or (ii) Borrower or any Obligor fails to perform any of the covenants
contained in Sections 5.3(d), 9.1, 9.2, 9.3, 9.4, 9.6, 9.13, 9.14, 9.15 and 9.16 of this Agreement
and such failure shall continue for ten (10) days; provided, that, such ten (10)
day period shall not apply in the case of: (A) any failure to observe any such covenant which is
not capable of being cured at all or within such ten (10) day period or which has been the subject
of a prior failure within a six (6) month period or (B) an intentional breach by Borrower or any
Obligor of any such covenant or (iii) Borrower fails to perform any of the terms, covenants,
conditions or provisions contained in this Agreement or any of the other Financing Agreements other
than those described in Sections 10.1(a)(i) and 10.1(a)(ii) above;

          (b) any representation, warranty or statement of fact made by Borrower to any Agent or any
Lender in this Agreement, the other Financing Agreements or any other agreement, schedule,
confirmatory assignment or otherwise shall when made or deemed made be false or misleading in any
material respect;

          (c) any Obligor revokes, terminates or fails to perform any of the terms, covenants,
conditions or provisions of any guarantee, endorsement or other agreement of such party in favor of
any Agent or any Lender;

          (d) any judgment for the payment of money is rendered against Borrower or any Obligor in
excess of $2,500,000 in any one case or in excess of $5,000,000 in the aggregate

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and shall remain undischarged or unvacated for a period in excess of thirty (30) days or
execution shall at any time not be effectively stayed, or any judgment other than for the payment
of money, or injunction, attachment, garnishment or execution is rendered against Borrower or any
Obligor or any of their assets;

          (e) any Obligor (being a natural person or a general partner of an Obligor which is a
partnership) dies or Borrower or any Obligor, which is a partnership, limited liability company,
limited liability partnership or a corporation, dissolves or suspends or discontinues doing
business;

          (f) Borrower or any Obligor becomes insolvent (however defined or evidenced), makes an
assignment for the benefit of creditors, makes or sends notice of a bulk transfer or calls a
meeting of its creditors or principal creditors;

          (g) a case or proceeding under the bankruptcy laws of the United States of America now or
hereafter in effect or under any insolvency, reorganization, receivership, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction now or hereafter in effect (whether
at law or in equity) is filed against Borrower or any Obligor or all or any part of its properties
and such petition or application is not dismissed within sixty (60) days after the date of its
filing or Borrower or any Obligor shall file any answer admitting or not contesting such petition
or application or indicates its consent to, acquiescence in or approval of, any such action or
proceeding or the relief requested is granted sooner;

          (h) a case or proceeding under the bankruptcy laws of the United States of America now or
hereafter in effect or under any insolvency, reorganization, receivership, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction now or hereafter in effect (whether
at a law or equity) is filed by Borrower or any Obligor or for all or any part of its property; or

          (i) any default by Borrower or any Obligor under any agreement, document or instrument
relating to any indebtedness for borrowed money owing to any person other than Agent and Lenders,
or any capitalized lease obligations, contingent indebtedness in connection with any guarantee,
letter of credit, indemnity or similar type of instrument in favor of any person other than Agents
and Lenders, in any case in an amount in excess of $5,000,000, which default continues for more
than the applicable cure period, if any, with respect thereto, or any default by Borrower or any
Obligor under any material contract, lease, license or other obligation to any person other than
Agents and Lenders, which default continues for more than the applicable cure period, if any, with
respect thereto;

          (j) any Change of Control;

          (k) the indictment or threatened indictment of Borrower or any Obligor under any criminal
statute. or commencement or threatened commencement of criminal or civil proceedings against
Borrower or any Obligor, pursuant to which statute or proceedings the penalties or remedies sought
or available include forfeiture of any of the property of Borrower or such Obligor; or

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          (l) there shall be an event of default under any of the other Financing Agreements.

          10.2. Remedies.

          (a) At any time an Event of Default exists or has occurred and is continuing, Agents and
Lenders shall have all rights and remedies provided in this Agreement, the other Financing
Agreements, the UCC and other applicable law, all of which rights and remedies may be exercised
without notice to or consent by Borrower or any Obligor, except as such notice or consent is
expressly provided for hereunder or required by applicable law. All rights, remedies and powers
granted to Agents and Lenders hereunder, under any of the other Financing Agreements, the UCC or
other applicable law, are cumulative, not exclusive, and enforceable, in Administrative Agent’s
discretion, alternatively, successively, or concurrently on any one or more occasions, and shall
include, without limitation, the right to apply to a court of equity for an injunction to restrain
a breach or threatened breach by Borrower or of this Agreement or any of the other Financing
Agreements. Administrative Agent may, in accordance with the terms hereof, at any time or times,
proceed directly against Borrower or any Obligor to collect the Obligations without prior recourse
to any Obligor or any of the Collateral.

          (b) Without limiting the foregoing, at any time an Event of Default exists or has occurred and
is continuing, Administrative Agent may, in its discretion, or upon the direction of Required
Lenders shall, and, without limitation, (i) accelerate the payment of all Obligations and demand
immediate payment thereof to Administrative Agent for itself and for the ratable benefit of Lenders
(provided, that, upon the occurrence of any Event of Default described in Sections
10.1(g) and 10.1(h), all Obligations shall automatically become immediately due and payable), (ii)
with or without judicial process or the aid or assistance of others, direct Collateral Agent to,
and Collateral Agent shall, enter upon any premises on or in which any of the Collateral may be
located and take possession of the Collateral or complete processing, manufacturing and repair of
all or any portion of the Collateral, (iii) require Borrower, at Borrower’s expense, to assemble
and make available to Collateral Agent any part or all of the Collateral at any place and time
designated by Collateral Agent, (iv) direct Collateral Agent to, and Collateral Agent shall,
collect, foreclose, receive, appropriate, setoff and realize upon any and all Collateral, (v)
direct Collateral Agent to, and Collateral Agent shall, remove any or all of the Collateral from
any premises on or in which the same may be located for the purpose of effecting the sale,
foreclosure or other disposition thereof or for any other purpose, (vi) direct Collateral Agent to,
and Collateral Agent shall, sell, lease, transfer, assign, deliver or otherwise dispose of any and
all Collateral (including entering into contracts with respect thereto, public or private sales at
any exchange, broker’s board, at any office of Collateral Agent or elsewhere) at such prices or
terms as Collateral Agent may deem reasonable, for cash, upon credit or for future delivery, with
the Collateral Agent having the right to purchase the whole or any part of the Collateral at any
such public sale, all of the foregoing being free from any right or equity of redemption of
Borrower, which right or equity of redemption is hereby expressly waived and released by Borrower
and/or (vii) terminate this Agreement. If any of the Collateral is sold or leased by Collateral
Agent upon credit terms or for future delivery, the Obligations shall not be reduced as a result
thereof until payment therefor is finally collected by Collateral Agent. If notice of disposition
of Collateral is required by law, ten (10) days prior notice by Collateral Agent to Borrower
designating the time and place of any public sale or the time after which any

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private sale or other intended disposition of Collateral is to be made, shall be deemed to be
reasonable notice thereof and Borrower waives any other notice. In the event any Agent institutes
an action to recover any Collateral or seeks recovery of any Collateral by way of prejudgment
remedy, Borrower waives the posting of any bond which might otherwise be required. At any time an
Event of Default exists or has occurred and is continuing, upon Administrative Agent’s request,
Borrower will either, as Administrative Agent shall specify, furnish cash collateral to the LC
Issuer to be used to secure and fund Agent’s reimbursement obligations to the LC Issuer in
connection with any Letter of Credit Accommodations or furnish cash collateral to Administrative
Agent for the Letter of Credit Accommodations. Such cash collateral shall be in the amount equal
to one hundred ten (110%) percent of the amount of the Letter of Credit Accommodations plus the
amount of any fees and expenses payable in connection therewith through the end of the expiration
of such Letter of Credit Accommodations.

          (c) To the extent that applicable law imposes duties on any Agent or any Lender to exercise
remedies in a commercially reasonable manner (which duties cannot be waived under such law),
Borrower acknowledges and agrees that it is not commercially unreasonable for Agents and Lenders
(i) to fail to incur expenses reasonably deemed significant by any Agent or any Lender to prepare
Collateral for disposition or otherwise to complete raw material or work in process into finished
goods or other finished products for disposition, (ii) to fail to obtain third party consents for
access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to
obtain consents of any Governmental Authority or other third party for the collection or
disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection
remedies against account debtors, secondary obligors or other persons obligated on Collateral or to
remove liens or encumbrances on or any adverse claims against Collateral, (iv) to exercise
collection remedies against account debtors and other persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists, (v) to advertise
dispositions of Collateral through publications or media of general circulation, whether or not the
Collateral is of a specialized nature, (vi) to contact other persons, whether or not in the same
business as Borrower for expressions of interest in acquiring all or any portion of the Collateral,
(vii) to hire one or more professional auctioneers to assist in the disposition of Collateral,
whether or not the collateral is of a specialized nature, (viii) to dispose of Collateral by
utilizing Internet sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of
assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim
disposition warranties, (xi) to purchase insurance or credit enhancements to insure Agents and
Lenders against risks of loss, collection or disposition of Collateral or to provide to Collateral
Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent
deemed appropriate by Collateral Agent, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist Collateral Agent in the collection or
disposition of any of the Collateral. Borrower acknowledges that the purpose of this Section is to
provide non-exhaustive indications of what actions or omissions by Collateral Agent would not be
commercially unreasonable in Collateral Agent’s exercise of remedies against the Collateral and
that other actions or omissions by any Agent or any Lender shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section. Without limitation of the
foregoing, nothing contained in this Section shall be construed to grant any rights to Borrower or
to impose any duties on any Agent or any Lender that would not have been granted or imposed by this
Agreement or by applicable law in the absence of this Section.

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                  (d) For the purpose of enabling Agents to exercise the rights and remedies hereunder, Borrower
hereby grants to Agents, to the extent assignable, an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to Borrower) to use, assign, license
or sublicense any of the trademarks, service-marks, trade names, business names, trade styles,
designs, logos and other source of business identifiers and other Intellectual Property and general
intangibles now owned or hereafter acquired by Borrower, wherever the same maybe located, including
in such license reasonable access to all media in which any of the licensed items may be recorded
or stored and to all computer programs used for the compilation or printout thereof.

                  (e) Administrative Agent may apply the cash proceeds of Collateral actually received by
Collateral Agent from any sale, lease, foreclosure or other disposition of the Collateral to
payment of the Obligations, in whole or in part and in such order as Administrative Agent may
elect, whether or not then due. Borrower shall remain liable to Agents and Lenders for the payment
of any deficiency with interest at the highest rate provided for herein and all costs and expenses
of collection or enforcement, including attorneys’ fees and legal expenses.

                  (f) Without limiting the foregoing, upon the occurrence of a Default or Event of Default,
Administrative Agent may, at its option, or upon the direction of Required Lenders shall, without
notice, (i) cease making Loans or arranging for Letter of Credit Accommodations or reduce the
lending formulas or amounts of Revolving Loans and Letter of Credit Accommodations available to
Borrower and/or (ii) terminate any provision of this Agreement providing for any future Loans or
Letter of Credit Accommodations to be made by Agents and Lenders to Borrower.

			
	SECTION 11.	 	JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

                  11.1. Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.

                  (a) The validity, interpretation and enforcement of this Agreement and the other Financing
Agreements and any dispute arising out of the relationship between the parties hereto, whether in
contract, tort, equity or otherwise, shall be governed by the internal laws of the State of
Illinois (without giving effect to principles of conflicts of law).

                  (b) Borrower, Agents and Lenders irrevocably consent and submit to the non-exclusive
jurisdiction of the Circuit Court of Cook County, Illinois and the United States District Court for
the Northern District of Illinois and waive any objection based on venue or forum
non conveniens with respect to any action instituted therein arising under this
Agreement or any of the other Financing Agreements or in any way connected with or related or
incidental to the dealings of the parties hereto in respect of this Agreement or any of the other
Financing Agreements or the transactions related hereto or thereto, in each case whether now
existing or hereafter arising, and whether in contract, tort, equity or otherwise, and agree that
any dispute with respect to any such matters shall be heard only in the courts described above
(except that Agents and Lenders shall have the right to bring any action or proceeding against
Borrower or its property in the courts of any other jurisdiction which Administrative Agent deems
necessary or

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appropriate in order to realize on the Collateral or to otherwise enforce its rights against
Borrower or its property).

                  (c) Borrower hereby waives personal service of any and all process upon it and consents that
all such service of process may be made by certified mail (return receipt requested) directed to
its address set forth herein and service so made shall be deemed to be completed five (5) days
after the same shall have been so deposited in the U.S. mails, or, at Administrative Agent’s
option, by service upon Borrower in any other manner provided under the rules of any such courts.
Within thirty (30) days after such service, Borrower shall appear in answer to such process,
failing which Borrower shall be deemed in default and judgment may be entered by Administrative
Agent against Borrower for the amount of the claim and other relief requested.

                  (d) BORROWER, AGENTS AND LENDERS EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING
AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWER, AGENTS AND LENDERS EACH HEREBY AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT BORROWER OR LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.

                  (e) Agents and Lenders shall not have any liability to Borrower (whether in tort, contract,
equity or otherwise) for losses suffered by Borrower in connection with, arising out of, or in any
way related to the transactions or relationships contemplated by this Agreement, or any act,
omission or event occurring in connection herewith, unless it is determined by a final and
non-appealable judgment or court order binding on such Agent and such Lender, that the losses were
the result of acts or omissions constituting gross negligence or willful misconduct of such Agent
or such Lender. In any such litigation, Agents and Lenders shall be entitled to the benefit of the
rebuttable presumption that it acted in good faith and with the exercise of ordinary care in the
performance by it of the terms of this Agreement.

                  11.2. Waiver of Notices.

                  Borrower hereby expressly waives demand, presentment, protest and notice of protest and notice
of dishonor with respect to any and all instruments and chattel paper, included in or evidencing
any of the Obligations or the Collateral, and any and all other demands and notices of any kind or
nature whatsoever with respect to the Obligations, the Collateral and this Agreement, except such
as are expressly provided for herein. No notice to or demand on Borrower which any Agent or any
Lender may elect to give shall entitle Borrower to any other or further notice or demand in the
same, similar or other circumstances.

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                  11.3. Amendments and Waivers.

                  (a) Except for actions expressly permitted to be taken by any Agent, no amendment,
modification, termination or waiver of any provision of this Agreement or any other Financing
Agreement, or any consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by an authorized officer of Administrative Agent and
Borrower, and by Required Lenders or all affected Lenders, as applicable. Except as set forth in
clauses (b) and (c) below, all such amendments, modifications, terminations or waivers requiring
the consent of any Lenders shall require the written consent of Required Lenders.

                  (b) No amendment, modification, termination or waiver of or consent with respect to any
provision of this Agreement that (i) increases the percentage advance rates set forth in Section
2.1(a) hereof, makes less restrictive the nondiscretionary criteria for exclusion from
“Eligible Inventory” set forth in the definition of such term, or (ii) amends Section 12.8
hereof or amends the maximum dollar amount in Section 12.11(a)(i) hereof shall be effective unless
the same shall be in writing and signed by Administrative Agent, Required Lenders and Borrower. No
amendment, modification, termination or waiver of or consent with respect to any provision of this
Agreement that waives compliance with the conditions precedent set forth in Section 4.2 to
the making of any Revolving Loan or the incurrence of any Letter of Credit Accommodation shall be
effective unless the same shall be in writing and signed by Administrative Agent, Required Lenders
and Borrower. Notwithstanding anything contained in this Agreement to the contrary, no waiver or
consent with respect to any Event of Default shall be effective for purposes of the conditions
precedent to the making of Revolving Loans or the incurrence of Letter of Credit Accommodations set
forth in Section 4.2 unless the same shall be in writing and signed by Administrative
Agent, Required Lenders and Borrower.

                  (c) No amendment, modification, termination or waiver shall, unless in writing and signed by
Administrative Agent and each Lender directly affected thereby: (i) increase the principal amount
of such Lender’s Commitment over the amount then in effect; (ii) reduce the principal of, rate of
interest on or fees payable with respect to any Loan or Letter of Credit Accommodations of any
affected Lender; (ii) extend any scheduled payment date or final maturity date of the principal
amount of any Loan of any affected Lender; (iv) waive, forgive, defer, extend or postpone any
payment of interest or fees as to any affected Lender; (v) release any Obligor except as otherwise
permitted herein (which action shall be deemed to directly affect all Lenders); (vi) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the Loans that shall
be required for Lenders or any of them to take any action hereunder (which action shall be deemed
to directly effect all Lenders); (vii) amend or waive this Section 11.3 or the definition
of the term “Required Lenders” insofar as such definition affects the substance of this
Section 11.3; or (viii) permit the assignment or transfer by Borrower of any of its right
and obligations hereunder (which action shall be deemed to directly affect all Lenders).

                  (d) No amendment, modification, termination or waiver shall, unless otherwise permitted by
this Agreement or unless consented to in writing and signed by Administrative Agent and all
Lenders, (i) release, or permit Borrower or any Obligor to sell or

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otherwise dispose of, all or substantially all of the Collateral, or release any Obligor from
any guaranty of any or all of the Obligations or (ii) amend Section 6.4(a) hereof.

                  (e) Agents and Lenders shall not, by any act, delay, omission or otherwise be deemed to have
expressly or impliedly waived any of its or their rights, powers and/or remedies unless such waiver
shall be in writing and signed as provided herein. Any such waiver shall be enforceable only to
the extent specifically set forth therein. A waiver by any Agent or any Lender of any right, power
and/or remedy on any one occasion shall not be construed as a bar to or waiver of any such right,
power and/or remedy which any Agent or any Lender would otherwise have on any future occasion,
whether similar in kind or otherwise.

                  (f) The consent of each Agent shall be required for any amendment, waiver or consent affecting
the rights or duties of such Agent hereunder or under any of the other Financing Agreements, in
addition to the consent of the Lenders otherwise required by this Section.

                  (g) The consent of Swing Line Lender shall be required for any amendment, waiver or consent
affecting the rights or duties of the Swing Line Lender in its capacity as such.

                  11.4. Waiver of Counterclaims.

                  Borrower waives all rights to interpose any claims, deductions, setoffs or counterclaims of
any nature (other then compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Collateral or any matter arising therefrom or relating hereto or
thereto.

                  11.5. Indemnification.

                  Borrower shall indemnify and hold each Agent and each Lender, and their respective directors,
agents, employees and counsel, harmless from and against any and all losses, claims, damages,
liabilities, costs or expenses imposed on, incurred by or asserted against any of them in
connection with any litigation, investigation, claim or proceeding commenced or threatened related
to the negotiation, preparation, execution, delivery, enforcement, performance or administration of
this Agreement, any other Financing Agreements, or any undertaking or proceeding related to any of
the transactions contemplated hereby or any act, omission, event or transaction related or
attendant thereto, including amounts paid in settlement, court costs, and the fees and expenses of
counsel except for any such losses, claims, liabilities, costs or expenses resulting from the gross
negligence or willful misconduct of any Agent or any Lender as determined pursuant to a final
non-appealable order of a court of competent jurisdiction. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in this Section may be unenforceable because it violates
any law or public policy, Borrower shall pay the maximum portion which it is permitted to pay under
applicable law to Agents and Lenders in satisfaction of indemnified matters under this Section.
The foregoing indemnity shall survive the payment of the Obligations and the termination of this
Agreement.

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	SECTION 12.	 	 THE AGENTS

                  12.1.  Appointment, Powers and Immunities.

                  Each Lender (including any Lender in its capacity as a counterparty to a Hedging Agreement)
irrevocably designates, appoints and authorizes LaSalle to act as Administrative Agent, and
Wachovia to act as Collateral Agent, hereunder and under the other Financing Agreements with such
powers as are specifically delegated to Administrative Agent and Collateral Agent, respectively by
the terms of this Agreement and of the other Financing Agreements, together with such other powers
as are reasonably incidental thereto. Agents (a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and in the other Financing Agreements, and shall not by
reason of this Agreement or any other Financing Agreement be a trustee or fiduciary for any Lender
(including any Lender in its capacity as a counterparty to a Hedging Agreement); (b) shall not be
responsible to Lenders (including any Lender in its capacity as a counterparty to a Hedging
Agreement) for any recitals, statements, representations or warranties contained in this Agreement
or in any of the other Financing Agreements, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other Financing Agreement,
or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Financing Agreement or any other document referred to or provided for herein
or therein or for any failure by Borrower or any Obligor or any other Person to perform any of its
obligations hereunder or thereunder; and (c) shall not be responsible to Lenders (including any
Lender in its capacity as a counterparty to a Hedging Agreement) for any action taken or omitted to
be taken by it hereunder or under any other Financing Agreement or under any other document or
instrument referred to or provided for herein or therein or in connection herewith or therewith,
except for its own gross negligence or willful misconduct as determined by a final non-appealable
judgment of a court of competent jurisdiction. Each Agent may employ agents and attorneys-in-fact
and shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. Agents may deem and treat the payee of any note as
the holder thereof for all purposes hereof unless and until the assignment thereof pursuant to an
agreement (if and to the extent permitted herein) in form and substance satisfactory to Agents
shall have been delivered to and acknowledged by Agents.

                  12.2. Reliance by Agents.

                  Each Agent shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telecopy, telex, telegram or cable) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent accountants and other experts
selected by such Agent. As to any matters not expressly provided for by this Agreement or any
other Financing Agreement, each Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with instructions given by the
Required Lenders or all Lenders as is required in such circumstance, and such instructions of such
Agent and any action taken or failure to act pursuant thereto shall be binding on all Lenders.

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                  12.3. Events of Default.

                  (a) Agents shall not be deemed to have knowledge or notice of the occurrence of an Event of
Default or other failure of a condition precedent to the Loans and Letter of Credit Accommodations
hereunder, unless and until the respective Agent has received written notice from a Lender, or
Borrower specifying such Event of Default or any unfulfilled condition precedent, and stating that
such notice is a “Notice of Default or Failure of Condition”. In the event that
Administrative Agent receives such a Notice of Default or Failure of Condition, Administrative
Agent shall give prompt notice thereof to the Lenders. Each Agent shall (subject to Section 12.7)
take such action with respect to any such Event of Default or failure of condition precedent as
shall be directed by the Required Lenders. Notwithstanding the existence or occurrence and
continuance of an Event of Default or any other failure to satisfy any of the conditions precedent
set forth in Section 4 of this Agreement to the contrary, Administrative Agent may, but shall have
no obligation to, continue to make Revolving Loans and issue or cause to be issued Letter of Credit
Accommodations for the ratable account and risk of Lenders from time to time if Administrative
Agent believes making such Revolving Loans or issuing or causing to be issued such Letter of Credit
Accommodations is in the best interests of Lenders.

                  (b) Except with the prior written consent of Administrative Agent, neither Collateral Agent
nor any Lender (including any Lender in its capacity as a counterparty to a Hedging Agreement) may
assert or exercise any enforcement right or remedy in respect of the Loans, Letter of Credit
Accommodations or other Obligations, as against Borrower or any Obligor or any of the Collateral or
other property of Borrower or any Obligor.

                  12.4. LaSalle/Wachovia in its Individual Capacity.

                  With respect to any Commitment it may make and any Loans made and Letter of Credit
Accommodations issued or caused to be issued by it (and any successor acting as an Agent), if and
to the extent that each of LaSalle and Wachovia shall be a Lender hereunder, it shall have the same
rights and powers hereunder as any other Lender and may exercise the same as though it were not
acting as an Agent, and the term “Lender” or “Lenders” shall, unless the context
otherwise indicates, include each of LaSalle and Wachovia in its individual capacity as Lender
hereunder. Each of LaSalle and Wachovia (and any successor acting as Administrative Agent or
Collateral Agent, respectively) and its Affiliates may (without having to account therefor to any
Lender) lend money to, make investments in and generally engage in any kind of business with
Borrower (and any of its Subsidiaries or Affiliates) as if it were not acting as an Agent, and
each of LaSalle and Wachovia and their Affiliates may accept fees and other consideration from
Borrower and any of its Subsidiaries and Affiliates for services in connection with this Agreement
or otherwise without having to account for the same to Lenders.

                  12.5. Indemnification.

                  Lenders (including any Lender in its capacity as a counterparty to a Hedging Agreement) agree
to indemnify Agents (to the extent not reimbursed by Borrower hereunder and without limiting any
obligations of Borrower hereunder) ratably, in accordance with their Pro Rata Shares, for any and
all claims of any kind and nature whatsoever that may be imposed on, incurred by or asserted
against any Agent (including by any Lender (including any Lender in its

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capacity as a counterparty to a Hedging Agreement)) arising out of or by reason of any
investigation in or in any way relating to or arising out of this Agreement, any Hedging Agreement
or any other Financing Agreement or any other documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby (including the costs and expenses that
each Agent is obligated to pay hereunder) or the enforcement of any of the terms hereof or thereof
or of any such other documents, provided, that, no Lender (including any Lender in its capacity as
a counterparty to a Hedging Agreement) shall be liable for any of the foregoing to the extent it
arises from the gross negligence or willful misconduct of the party to be indemnified as determined
by a final non-appealable judgment of a court of competent jurisdiction.

                  12.6. Non-Reliance on Agents and Other Lenders.

                  Each Lender (including any Lender in its capacity as a counterparty to a Hedging Agreement)
agrees that it has, independently and without reliance on any Agent or other Lenders, and based on
such documents and information as it has deemed appropriate, made its own credit analysis of
Borrower and Obligors and has made its own decision to enter into this Agreement and that it will,
independently and without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the other Financing
Agreements. Neither Agent shall be required to keep itself informed as to the performance or
observance by Borrower or any Obligor of any term or provision of this Agreement or any of the
other Financing Agreements or any other document referred to or provided for herein or therein or
to inspect the properties or books of Borrower or any Obligor. Administrative Agent will use
reasonable efforts to provide Lenders with any information received by Administrative Agent from
Borrower or any Obligor regarding its financial performance or the Collateral(including the
collateral reports identified in Section 7.1 and the financial information delivered by the
Borrower hereunder) or which is otherwise required to be provided to Lenders hereunder and with a
copy of any Notice of Default or Failure of Condition received by Administrative Agent from
Borrower or any Lender; provided, that, Administrative Agent shall not be liable to any Lender for
any failure to do so, except to the extent that such failure is attributable to Administrative
Agent’s own gross negligence or willful misconduct as determined by a final non-appealable judgment
of a court of competent jurisdiction.

                  12.7. Failure to Act.

                  Except for action expressly required of Agents hereunder and under the other Financing
Agreements, each Agent shall in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further assurances to its satisfaction from
Lenders (including any Lender in its capacity as a counterparty to a Hedging Agreement) of their
indemnification obligations under Section 12.5 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such action.

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                  12.8. Additional Loans.

                  Administrative Agent shall not make any Revolving Loans or provide any Letter of Credit
Accommodations to Borrower on behalf of Lenders intentionally and with actual knowledge that such
Revolving Loans or Letter of Credit Accommodations would cause the aggregate amount of the total
outstanding Revolving Loans and Letter of Credit Accommodations to Borrower to exceed the amount of
the Loans available to Borrower as of such time based on the lending formulas set forth in Section
2.1(a), without the prior consent of all Lenders, except, that, Administrative Agent may make such
additional Revolving Loans or provide such additional Letter of Credit Accommodations on behalf of
Lenders, intentionally and with actual knowledge that such Loans or Letter of Credit Accommodations
will cause the total outstanding Revolving Loans and Letter of Credit Accommodations to Borrower to
exceed the amount of the Loans available to Borrower as of such time based on the lending formulas
set forth in Section 2.1(a), as Administrative Agent may deem necessary or advisable in its
discretion, provided, that: (a) the total principal amount of the additional Revolving Loans or
additional Letter of Credit Accommodations to Borrower which Administrative Agent may make or
provide after obtaining such actual knowledge that the aggregate principal amount of the Revolving
Loans equal or exceed the amount of the Loans available to Borrower as of such time based on the
lending formulas set forth in Section 2.1.(a) shall not exceed the amount equal to $2,000,000
outstanding at any time less the then outstanding amount of any Special Agent Advances and shall
not cause the total principal amount of the Revolving Loans and Letter of Credit Accommodations to
exceed the Maximum Credit and (b) without the consent of all Lenders, Administrative Agent shall
not make any such additional Revolving Loans or Letter of Credit Accommodations more than sixty
(60) days from the date of the first such additional Revolving Loans or Letter of Credit
Accommodations. Each Lender shall be obligated to pay Administrative Agent the amount of its Pro
Rata Share of any such additional Revolving Loans or Letter of Credit Accommodations provided that
Administrative Agent is acting in accordance with the terms of this Section 12.8.

                  12.9. Concerning the Collateral and the Related Financing Agreements.

                  Each Lender (including any Lender in its capacity as a counterparty to a Hedging Agreement)
authorizes and directs Agents to enter into this Agreement and the other Financing Agreements.
Each Lender (including any Lender in its capacity as a counterparty to a Hedging Agreement) agrees
that any action taken by any Agent or Required Lenders or all Lenders in accordance with the terms
of this Agreement or the other Financing Agreements and the exercise by any Agent or any category
of Lenders of their respective powers set forth therein or herein, together with such other powers
that are reasonably incidental thereto, shall be binding upon all of the Lenders (including any
Lender in its capacity as a counterparty to a Hedging Agreement).

                  12.10. Field Audit, Examination Reports and other Information; Disclaimer by Lenders.

                  By signing this Agreement, each Lender:

                  (a) is deemed to have requested that Collateral Agent furnish such Lender, promptly after it
becomes available, a copy of each field audit or examination report and a

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weekly report with respect to the amount of the Loans available to Borrower as of such time
based on the lending formulas set forth in Section 2.1.(a) prepared by Collateral Agent (each field
audit or examination report and weekly report with respect to the amount of the Loans available to
Borrower as of such time based on the lending formulas set forth in Section 2.1.(a) being referred
to herein as a “Report” and collectively, “Reports”) and Borrower hereby consents
to the distribution of such Reports;

                  (b) expressly agrees and acknowledges that Collateral Agent (A) does not make any
representation or warranty as to the accuracy of any Report, or (B) shall not be liable for any
information contained in any Report;

                  (c) expressly agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that Collateral Agent or any other party performing any audit or examination will
inspect only specific information regarding Borrower and the Subsidiaries and will rely
significantly upon Borrower’s and the Subsidiaries’ books and records, as well as on
representations of Borrower’s and the Subsidiaries’ personnel; and

                  (d) agrees to keep all Reports confidential and strictly for its internal use and not to
distribute or use any Report in any other manner.

                  12.11. Collateral Matters.

                  (a) Administrative Agent may, at its option, from time to time, at any time on or after an
Event of Default and for so long as the same is continuing or upon any other failure of a condition
precedent to the Revolving Loans and Letter of Credit Accommodations hereunder, make such
disbursements and advances (“Special Agent Advances”) which Administrative Agent, in its
sole discretion, deems necessary or desirable either (i) to preserve or protect the Collateral or
any portion thereof (provided that in no event shall Special Agent Advances for such purpose exceed
the amount equal to $2,000,000 in the aggregate outstanding at any time less the then outstanding
Revolving Loans under Section 12.8 hereof) or (ii) to pay any other amount chargeable to Borrower
pursuant to the terms of this Agreement or any of the other Financing Agreements consisting of
costs, fees and expenses and payments to any LC Issuer of Letter of Credit Accommodations. Special
Agent Advances shall be repayable on demand and be secured by the Collateral. Special Agent
Advances shall not constitute Loans but shall otherwise constitute Obligations hereunder.
Administrative Agent shall notify each Lender and Borrower in writing of each such Special Agent
Advance, which notice shall include a description of the purpose of such Special Agent Advance.
Without limitation of its obligations pursuant to Section 6.9, each Lender agrees that it shall
make available to Administrative Agent, upon Administrative Agent’s demand, in immediately
available funds, the amount equal to such Lender’s Pro Rata Share of each such Special Agent
Advance. If such funds are not made available to Administrative Agent by such Lender,
Administrative Agent shall be entitled to recover such funds, on demand from such Lender together
with interest thereon for each day from the date such payment was due until the date such amount is
paid to Administrative Agent at the Federal Funds Rate for each day during such period and if such
amounts are not paid within three (3) days of Administrative Agent’s demand, at the highest
Interest Rate provided for in Section 3.1 hereof applicable to Prime Rate Loans.

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                  (b) Lenders (including any Lender in its capacity as a counterparty to a Hedging Agreement)
hereby irrevocably authorize Collateral Agent, to release any security interest in, mortgage or
lien upon, any of the Collateral (i) upon termination of the Commitments and payment and
satisfaction of all of the Obligations and delivery of cash collateral to the extent required under
Section 13.1 below, or (ii) constituting property being sold or disposed of if Borrower certifies
to Collateral Agent that the sale or disposition is made in compliance with Section 9.7 or 9.16
hereof (and Collateral Agent may rely conclusively on any such certificate, without further
inquiry), or (iii) constituting property in which Borrower or any Obligor did not own an interest
at the time the security interest, mortgage or lien was granted or at any time thereafter, or (iv)
if approved, authorized or ratified in writing by the applicable Lenders pursuant to Section
11.3(d) hereof. Except as provided above, Collateral Agent will not release any security interest
in, mortgage or lien upon, any of the Collateral without the prior written authorization of all the
applicable Lenders pursuant to Section 11.3(d) hereof.

                  (c) Without any manner limiting Collateral Agent’s authority to act without any specific or
further authorization or consent by the Lenders (including any Lender in its capacity as a
counterparty to a Hedging Agreement), each Lender (including any Lender in its capacity as a
counterparty to a Hedging Agreement) agrees to confirm in writing, upon request by Collateral
Agent, the authority to release Collateral conferred upon Collateral Agent under this Section and
in Section 11.3(d) hereof. Collateral Agent shall (and is hereby irrevocably authorized by Lenders
to) execute such documents as may be necessary to evidence the release of the security interest,
mortgage or liens granted to Collateral Agent upon any Collateral to the extent set forth above and
in Section 11.3(d) hereof; provided, that, (i) Collateral Agent shall not be
required to execute any such document on terms which, in either Agent’s opinion, would expose
Collateral Agent to liability or create any obligations or entail any consequence other than the
release of such security interest, mortgage or liens without recourse or warranty and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or any security
interest, mortgage or lien upon (or obligations of Borrower or any Obligor in respect of) the
Collateral retained by Borrower or such Obligor.

                  (d) No Agent shall have any obligation whatsoever to any Lender (including any Lender in its
capacity as a counterparty to a Hedging Agreement) or any other Person to investigate, confirm or
assure that the Collateral exists or is owned by Borrower or any Obligor or is cared for, protected
or insured or has been encumbered, or that any particular items of Collateral meet the eligibility
criteria applicable in respect of the Loans or Letter of Credit Accommodations hereunder, or
whether any particular reserves are appropriate, or that the liens and security interests granted
to Collateral Agent pursuant hereto or any of the Financing Agreements or otherwise have been
properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to
any particular priority, or to exercise at all or in any particular manner or under any duty of
care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to Collateral Agent in this Agreement or in any of the other Financing
Agreements, it being understood and agreed that in respect of the Collateral, or any act, omission
or event related thereto, subject to the prior consent of Administrative Agent, Collateral Agent
may act in any manner it may deem appropriate, in its discretion, given Collateral Agent’s own
interest in the Collateral as a Lender and that, subject to acting in accordance with the consent
of Administrative Agent, Collateral Agent shall have no duty or liability whatsoever to any other
Lender.

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                  12.12. Agency for Perfection.

                  Each Lender (including any Lender in its capacity as a counterparty to a Hedging Agreement)
and Administrative Agent hereby appoints Collateral Agent and each other Lender (including any
Lender in its capacity as a counterparty to a Hedging Agreement) and Agent as agent and bailee for
the purpose of perfecting the security interests in and liens upon the Collateral of Collateral
Agent in assets which, in accordance with Article 9 of the UCC can be perfected only by possession
(or where the security interest of a secured party with possession has priority over the security
interest of another secured party) and each Lender (including any Lender in its capacity as a
counterparty to a Hedging Agreement) and Agent hereby acknowledges that it holds possession of any
such Collateral for the benefit of Collateral Agent as secured party. Should any Lender (including
any Lender in its capacity as a counterparty to a Hedging Agreement) obtain possession of any such
Collateral, such Lender (including any Lender in its capacity as a counterparty to a Hedging
Agreement) shall notify Collateral Agent thereof, and, promptly upon Collateral Agent’s request
therefor shall deliver such Collateral to Collateral Agent or in accordance with Collateral Agent’s
instructions.

                  12.13. Successor Agent.

                  Either Agent may resign at any time by giving not less than 30 days’ prior written notice
thereof to Lenders and Borrower. Upon any such resignation, the Required Lenders shall have the
right, with the prior consent of each other Agent, to appoint a successor Administrative Agent or
Collateral Agent, as applicable. If no successor Agent shall have been so appointed by the
Required Lenders and other Agents and shall have accepted such appointment within 30 days after the
resigning Agent’s giving notice of resignation, then the resigning Agent may, on behalf of Lenders
(including any Lender in its capacity as a counterparty to a Hedging Agreement), appoint a
successor Agent, which shall be a Lender, if a Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary of a commercial bank
or financial institution if such commercial bank or financial institution is organized under the
laws of the United States of America or of any State thereof and has a combined capital and surplus
of at least $500,000,000. If no successor Agent has been appointed pursuant to the foregoing,
within 30 days after the date such notice of resignation was given by the resigning Agent, such
resignation shall become effective and the Required Lenders shall thereafter perform all the duties
of such resigning Agent hereunder until such time, if any, as the Required Lenders appoint a
successor Agent as provided above. Any successor Agent appointed by Required Lenders and Agents
hereunder shall be subject to the approval of Borrower, such approval not to be unreasonably
withheld or delayed; provided that such approval shall not be required if an Event of Default has
occurred and is continuing. Upon the acceptance of any appointment as Administrative Agent or
Collateral Agent, as applicable, hereunder by a successor Agent, such successor Agent shall succeed
to and become vested with all the rights, powers, privileges and duties of the resigning Agent.
Upon the earlier of the acceptance of any appointment as Agent hereunder by a successor Agent or
the effective date of the resigning Agent’s resignation, the resigning Agent shall be discharged
from its duties and obligations under this Agreement and the other Financing Agreements, except
that any indemnity rights or other rights in favor of such resigning Agent shall continue. After
any resigning Agent’s resignation hereunder, the provisions of this Section 12 shall inure to its
benefit as to any actions

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taken or omitted to be taken by it while it was acting as Agent under this Agreement and the
other Financing Agreements.

                  12.14. Hedging Agreements.

                  Each Lender agrees that in its capacity as a counterparty to a Hedging Agreement with
Borrower, it shall not be deemed to have any rights as a Lender hereunder except for the right to
receive proceeds of Collateral, as a counterparty to a Hedging Agreement, in the order and manner
set forth in Section 6.4(a) hereof. Each Lender further agrees that Administrative Agent shall
have no duties to a Lender hereunder in its capacity as a counterparty to a Hedging Agreement other
than in respect of such Lender’s entitlements to proceeds of Collateral, as a counterparty to a
Hedging Agreement, in the order and manner set forth in Section 6.4(a) hereof. Nothing in this
Section 12.14 is intended to diminish or otherwise alter any Lender’s rights, or either Agent’s
duties to such Lender, under this Agreement as to Lender in its capacity as a Lender hereunder.

                  12.15. Other Agents; Arrangers and Managers.

                  None of the Lenders or other Persons identified on the facing page or signature pages of this
Agreement as a “syndication agent,” “documentation agent,” “co-agent,” “book manager,” “lead
manager,” “arranger,” “lead arranger” or “co-arranger”, if any, shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such. Without limiting the foregoing, none of the
Lenders or other Persons so identified shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not
taking action hereunder.

			
	SECTION 13.	 	 TERM OF AGREEMENT; MISCELLANEOUS

                  13.1.  Term.

                  (a) This Agreement and the other Financing Agreements shall become effective as of the date
set forth on the first page hereof and shall continue in full force and effect for a term ending on
May 31, 2011 (the “Termination Date”), unless sooner terminated pursuant to the terms
hereof. Borrower may terminate this Agreement at any time upon ten (10) days prior written notice
to Administrative Agent (which notice shall be irrevocable) and Administrative Agent or Required
Lenders may terminate this Agreement at any time on or after an Event of Default. Upon the
effective date of termination of this Agreement, Borrower shall pay to Administrative Agent, in
full, all outstanding and unpaid Obligations and shall furnish cash collateral to Administrative
Agent in such amounts as Administrative Agent determines are reasonably necessary to secure (or
reimburse) Administrative Agent from loss, cost, damage or expense, including attorneys’ fees and
legal expenses, in connection with any contingent Obligations, including issued and outstanding
Letter of Credit Accommodations and checks or other payments provisionally credited to the
Obligations and/or as to which any Agent or any Lender has not yet received final and indefeasible
payment. Such payments in respect of the Obligations and cash collateral shall be remitted by wire
transfer in Federal funds to such bank

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account of Administrative Agent, as Administrative Agent may, in its discretion, designate in
writing to Borrower for such purpose. Interest shall be due until and including the next Business
Day, if the amounts so paid by Borrower to the bank account designated by Administrative Agent are
received in such bank account later than 2:00 P.M., Chicago time, or as may be otherwise permitted
by the Administrative Agent at its sole discretion.

                  (b) No termination of this Agreement or the other Financing Agreements shall relieve or
discharge Borrower of its respective duties, obligations and covenants under this Agreement or the
other Financing Agreements until all Obligations have been fully and finally discharged and paid,
and Collateral Agent’s continuing security interest in the Collateral and the rights and remedies
of Agents and the Lenders hereunder, under the other Financing Agreements and applicable law, shall
remain in effect until all such Obligations have been fully and finally discharged and paid.

                  (c) If for any reason this Agreement is terminated prior to May 31, 2009, or any portion of
the Commitments are reduced pursuant to Section 2.4(b) prior to May 31, 2009, in view of the
impracticality and extreme difficulty of ascertaining actual damages and by mutual agreement of the
parties as to a reasonable calculation each Agent’s and each Lender’s lost profits as a result
thereof, Borrower agrees to pay to Administrative Agent for itself and the ratable benefit of
Lenders, upon the effective date of such termination and on each effective date of any Commitment
reduction, an early termination fee in the amount set forth below if such termination or reduction,
as applicable, is effective in the period indicated:

	 	 	 	 	 	 	 	 
		 	 	Amount	 	 	Period	 
		(i)

	 	fifteen one-hundredths of one
(.15%) percent of the Stated
Amount
	 	From the Closing Date to and
including May 31, 2008
		(ii)

	 	one tenth of one (.10%) percent
of the Stated Amount
	 	From May 31, 2008 to and
including May 31 2009

Such early termination fee shall be presumed to be the amount of damages sustained by
Administrative Agent and Lenders as a result of such early termination or reduction and Borrower
agrees that it is reasonable under the circumstances currently existing. The early termination fee
provided for in this Section 13.1 shall be deemed included in the Obligations.

                  (d) Notwithstanding anything to the contrary contained in Section 13.1(c), in the event of
termination of this Agreement by Borrower prior to May 31, 2009 and the full and final repayment of
all of the Obligations and the receipt by Administrative Agent of cash collateral all as provided
in Section 13.1(a) above, Borrower shall only be required to pay to Administrative Agent, for its
benefit and the ratable benefit of Lenders, an early termination fee in an amount equal to fifty
(50%) percent of the early termination fee otherwise payable under Section 13.1(c) if each of the
following conditions is satisfied: (i) no Default or Event of Default shall exist or have occurred
and be continuing, (ii) Administrative Agent shall have received not less than thirty (30) days
prior written notice of the intention of Borrower to so terminate this Agreement and (iii) the full
and final repayment of all of the Obligations and the cash collateral

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is paid with the proceeds from a Qualified Public Offering upon the consummation of such
Qualified Public Offering or from another transaction resulting in a Change of Control upon the
consummation of such transaction.

                  13.2. Interpretative Provisions.

                  (a) All terms used herein which are defined in Article 1 or Article 9 of the UCC shall have
the meanings given therein unless otherwise defined in this Agreement.

                  (b) All references to the plural herein shall also mean the singular and to the singular shall
also mean the plural unless the context otherwise requires.

                  (c) All references to Borrower, Agents and Lenders pursuant to the definitions set forth in
the recitals hereto, or to any other person herein, shall include their respective successors and
assigns.

                  (d) The words “hereof”, “herein”, “hereunder”, “this Agreement” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not any particular
provision of this Agreement and as this Agreement now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

                  (e) The word “including” when used in this Agreement shall mean “including, without
limitation”.

                  (f) All references to the term “good faith” used herein when applicable to either Agent shall
mean, notwithstanding anything to the contrary contained herein or in the UCC, honesty in fact in
the conduct or transaction concerned. Borrower shall have the burden of proving any lack of good
faith on the part of such Agent alleged by Borrower at any time.

                  (g) An Event of Default shall exist or continue or be continuing until such Event of Default
is waived in accordance with Section 11.3 or is cured in a manner reasonably satisfactory to
Administrative Agent, if such Event of Default is capable of being cured as reasonably determined
by Administrative Agent.

                  (h) Any accounting term used in this Agreement shall have, unless otherwise specifically
provided herein, the meaning customarily given in accordance with GAAP, and all financial
computations hereunder shall be computed unless otherwise specifically provided herein, in
accordance with GAAP as consistently applied and using the same method for inventory valuation as
used in the preparation of the financial statements of Borrower most recently received by
Administrative Agent prior to the date hereof.

                  (i) In the computation of periods of time from a specified date to a later specified date, the
word “from” means “from and including”, the words “to” and “until” each mean “to but excluding” and
the word “through” means “to and including”.

                  (j) Unless otherwise expressly provided herein, (i) references herein to any agreement,
document or instrument shall be deemed to include all subsequent amendments, modifications,
supplements, extensions, renewals, restatements or replacements with respect

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thereto, but only to the extent the same are not prohibited by the terms hereof or of any
other Financing Agreement, and (ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending, replacing, recodifying,
supplementing or interpreting the statute or regulation.

                  (k) The captions and headings of this Agreement are for convenience of reference only and
shall not affect the interpretation of this Agreement.

                  (l) This Agreement and other Financing Agreements may use several different limitations, tests
or measurements to regulate the same or similar matters. All such limitations, tests and
measurements are cumulative and shall each be performed in accordance with their terms.

                  (m) This Agreement and the other Financing Agreements are the result of negotiations among and
have been reviewed by counsel to Administrative Agent and the other parties, and are the products
of all parties. Accordingly, this Agreement and the other Financing Agreements shall not be
construed against Agents or Lenders merely because of either Agent’s or any Lender’s involvement in
their preparation.

                  13.3. Notices.

                  All notices, requests and demands hereunder shall be in writing and deemed to have been given
or made: if delivered in person, immediately upon delivery; if by telex, telegram or facsimile
transmission, immediately upon sending and upon confirmation of receipt; if by nationally
recognized overnight courier service with instructions to deliver the next Business Day, one (1)
Business Day after sending; and if by certified mail, return receipt requested, five (5) days after
mailing. All notices, requests and demands upon the parties are to be given to the following
addresses (or to such other address as any party may designate by notice in accordance with this
Section):

	 	 	 
	If to Borrower:

	 	Ulta Salon, Cosmetics & Fragrance, Inc.

1135 Arbor Drive

Romeoville, Illinois 60646

Attention: Gregg Bodnar

Telephone No.: (630) 226-8212

Telecopy No.: (630) 226-0020
	 
	 	 
	with a copy, in the

case of a Default or

Event of Default, to:

	 	Latham & Watkins

5800 Sears Tower

233 S. Wacker Drive

Chicago, Illinois 60606

Attention: Donald L. Schwartz

Telephone No.: (312) 876-7700

Telecopy No.: (312) 993-9767

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	If to Administrative Agent:

	 	LaSalle Bank National Association,

as Administrative Agent

135 South LaSalle Street

Chicago, Illinois 60603

Attention: Scott Carbon

Telephone No.: (312) 904-4818

Telecopy No.: (312) 904-6150
	 
	 	 
	If to Collateral Agent:

	 	Wachovia Capital Finance Corporation (Central),

as Collateral Agent

150 S. Wacker Drive

Suite 2200

Chicago, Illinois 60606

Attention: Account Officer (Ulta Cosmetics)

Telephone No.: (312) 332-0420

Telecopy No.: (312) 332-0424

                  13.4. Partial Invalidity.

                  If any provision of this Agreement is held to be invalid or unenforceable, such invalidity or
unenforceability shall not invalidate this Agreement as a whole, but this Agreement shall be
construed as though it did not contain the particular provision held to be invalid or unenforceable
and the rights and obligations of the parties shall be construed and enforced only to such extent
as shall be permitted by applicable law.

                  13.5. Successors.

                  This Agreement, the other Financing Agreements and any other document referred to herein or
therein shall be binding upon and inure to the benefit of and be enforceable by Agents, Lenders,
Borrower and their respective successors and assigns, except that Borrower may not assign its
rights under this Agreement, the other Financing Agreements and any other document referred to
herein or therein without the prior written consent of Agents and Lenders. Any such purported
assignment without the prior written consent shall be void. No Lender may assign its rights and
obligations under this Agreement without the prior written consent of Administrative Agent, except
as provided in Section 13.6 below. The terms and provisions of this Agreement and the other
Financing Agreements are for the purpose of defining the relative rights and obligations of
Borrower, Agents and Lenders with respect to the transactions contemplated hereby and there shall
be no third party beneficiaries of any of the terms and provisions of this Agreement or any of the
other Financing Agreements.

                  13.6. Assignments; Participations.

                  (a) Each Lender may (i) assign all or a portion of its rights and obligations under this
Agreement (including, without limitation, a portion of its Commitments, the Loans owing to it and
its rights and obligations as a Lender with respect to Letter of Credit Accommodations) and the
other Financing Agreements to (A) its parent company and/or any Affiliate of such Lender which is
at least fifty (50%) percent owned by such Lender or its parent

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company or (B) one or more Lenders or (C) any person (whether a corporation, partnership,
trust or otherwise) that is engaged in the business of making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course of its business and
is administered or managed by a Lender or with respect to any Lender that is a fund which invests
in bank loans and similar extensions of credit, any other fund that invests in bank loans and
similar extensions of credit and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor or (ii) assign all or a portion of its rights and obligations
under this Agreement to one or more Eligible Transferees, each of which assignees shall become a
party to this Agreement as a Lender by execution of an Assignment and Acceptance; provided,
that, (A) the consent of Administrative Agent shall be required in connection with any
assignment to an Eligible Transferee pursuant to clause (ii) above, which consent shall not be
unreasonably withheld, (B) absent the existence of an Event of Default, the consent of Borrower
shall be required in connection with any assignment to an Eligible Transferee pursuant to clause
(ii) above, which consent shall not be unreasonably withheld; (C) if such Eligible Transferee is
not a bank, Administrative Agent shall receive a representation in writing by such Eligible
Transferee that either (1) no part of its acquisition of its Loans is made out of assets of any
employee benefit plan, or (2) after consultation, in good faith, with Borrower and provision by
Borrower of such information as may be reasonably requested by such Eligible Transferee, the
acquisition and holding of such Commitments and Loans does not constitute a non-exempt prohibited
transaction under Section 406 of ERISA and Section 4975 of the Code, or (3) such assignment is an
“insurance company general account,” as such term is defined in the Department of Labor Prohibited
Transaction Class Exemption 95.60 (issued July 12, 1995) (“PTCE 95-60), and, as of the date of the
assignment, there is no “employee benefit plan” with respect to which the aggregate amount of such
general account’s reserves and liabilities for the contracts held by or on behalf of such “employee
benefit plan” and all other “employee benefit plans” maintained by the same employer (and
affiliates thereof as defined in Section V(a)(1) of PTCE 95-60) or by the same employee
organization (in each case determined in accordance with the provisions of PTCE 95-60) exceeds ten
(10%) percent of the total reserves and liabilities of such general account (as determined under
PTCE 95-60) (exclusive of separate account liabilities) plus surplus as set forth in the National
Association of Insurance Commissioners Annual Statement filed with the state of domicile of such
Eligible Transferee, (D) such transfer or assignment will not be effective until recorded by the
Administrative Agent on the Register, (E) except as Administrative Agent shall otherwise agree, any
such assignment shall be in a minimum aggregate amount equal to $5,000,000 or, if less, the
remaining Commitment and Loans held by the assigning Lender. As used in this Section, the term
“employee benefit plan” shall have the meaning assigned to it in Title I of ERISA and shall also
include a “plan” as defined in Section 4975(e)(1) of the Code and (F) any Lender desiring to assign
all or any portion of its rights and obligations under this Agreement to a Person other than a
Lender shall first and prior to any assignment to such Person provide a written offer to each of
the other existing Lenders to accept such assignment, and each Lender who has received such offer
shall have the right, but no obligation, to accept such assignment, provided that, no later
than seven (7) days
 after receipt of such notice, each such Lender shall advise Administrative
Agent and the Borrower whether it intends to accept such assignment, and any Lender that has not
responded within such period shall be deemed to have declined such assignment and in the event that
more than one Lender accepts such assignment, the assigning Lender shall assign its rights and
obligations to such Lenders on a pro rata basis.

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                  (b) Administrative Agent shall maintain a register of the names and addresses of Lenders,
their Commitments and the principal amount of their Loans (the “Register”). Administrative
Agent shall also maintain a copy of each Assignment and Acceptance delivered to and accepted by it
and shall modify the Register to give effect to each Assignment and Acceptance. The entries in the
Register shall be conclusive and binding for all purposes, absent manifest error, and Borrower, any
Obligor, Agents and Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be available for
inspection by Borrower and any Lender at any reasonable time and from time to time upon reasonable
prior notice.

                  (c) Upon such execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto
and to the other Financing Agreements and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations
(including, without limitation, the obligation to participate in Letter of Credit Accommodations)
of a Lender hereunder and thereunder and (ii) the assigning Lender shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement. In the event that
any Lender assigns or otherwise transfers all or any part of the Obligations, Administrative Agent
shall so notify Borrower and Borrower shall, upon the request of the Administrative Agent, execute
new promissory notes in exchange for the promissory notes of such assigning Lender, if any.

                  (d) By execution and delivery of an Assignment and Acceptance, the assignor and assignee
thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any of the other Financing
Agreements or the execution, legality, enforceability, genuineness, sufficiency or value of this
Agreement or any of the other Financing Agreements furnished pursuant hereto, (ii) the assigning
Lender makes no representation or warranty and assumes no responsibility with respect to the
financial condition of Borrower, any Obligor or any of their Subsidiaries or the performance or
observance by Borrower or any Obligor of any of the Obligations; (iii) such assignee confirms that
it has received a copy of this Agreement and the other Financing Agreements, together with such
other documents and information it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance, (iv) such assignee will, independently and
without reliance upon the assigning Lender, Administrative Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Financing Agreements, (v) such
assignee appoints and authorizes Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Financing Agreements as are
delegated to Agents by the terms hereof and thereof, together with such powers as are reasonably
incidental thereto, and (vi) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement and the other Financing
Agreements are required to be performed by it as a Lender. Agents and Lenders may furnish any
information concerning

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Borrower or any Obligor in the possession of either Agent or any Lender from time to time to
assignees and Participants.

                  (e) Each Lender may sell participations to one or more banks or other entities in or to all or
a portion of its rights and obligations under this Agreement and the other Financing Agreements
(including, without limitation, all or a portion of its Commitments and the Loans owing to it and
its participation in the Letter of Credit Accommodations, without the consent of Administrative
Agent or the other Lenders); provided, that, (i) such Lender’s obligations under
this Agreement (including, without limitation, its Commitment hereunder) and the other Financing
Agreements shall remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, and Borrower, and Administrative Agent
shall continue to deal solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement and the other Financing Agreements, (iii) the Participant
shall not have any rights under this Agreement or any of the other Financing Agreements (the
Participant’s rights against such Lender in respect of such participation (including rights in
connection with increased costs pursuant to Section 3.3 hereof) to be those set forth in the
agreement executed by such Lender in favor of the Participant relating thereto) and all amounts
payable by Borrower or any Obligor hereunder shall be determined as if such Lender had not sold
such participation; provided, that the Borrower shall not be required to reimburse any
Participant pursuant to the increased cost provisions of Section 3.3 in any amount which exceeds
the amount that would have been payable under such provisions to such Lender had such Lender not
sold such participation, (iv) absent the existence of an Event of Default, the consent of Borrower,
which consent shall not be unreasonably withheld, shall be required in connection with any
participation to an Eligible Transferee that does not consist of (A) any Lender’s parent company
and/or any Affiliate of such Lender which is at least fifty (50%) percent owned by such Lender or
its parent company or (B) one or more Lenders or (C) any person (whether a corporation,
partnership, trust or otherwise) that is engaged in the business of making, purchasing, holding or
otherwise investing in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or with respect to any Lender that is a fund
which invests in bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment advisor as such Lender
or by an Affiliate of such investment advisor, and (v) if such Participant is not a bank, represent
that either (A) no part of its acquisition of its participation is made out of assets of any
employee benefit plan, or (B) after consultation, in good faith, with Borrower and provision by
Borrower of such information as may be reasonably requested by the Participant, the acquisition and
holding of such participation does not constitute a non-exempt prohibited transaction under Section
406 of ERISA and Section 4975 of the Code, or (C) such participation is an “insurance company
general account, “ as such term is defined in the “PTCE 95-60”, and, as of the date of the transfer
there is no “employee benefit plan” with respect to which the aggregate amount of such general
account’s reserves and liabilities for the contracts held by or on behalf of such “employee benefit
plan” and all other “employee benefit plans” maintained by the same employer (and affiliates
thereof as defined in Section V(a)(1) of PTCE 95-60) or by the same employee organization (in each
case determined in accordance with the provisions of PTCE 95-60) exceeds ten (10%) percent of the
total reserves and liabilities of such general account (as determined under PTCE 95-60) (exclusive
of separate account liabilities) plus surplus as set forth in the National Association of Insurance
Commissioners Annual Statement filed with the state of domicile of the Participant. As used in
this Section, the term

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“employee benefit plan” shall have the meaning assigned to it in Title I of ERISA and shall
also include a “plan” as defined in Section 4975(e)(1) of the Code.

                  (f) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal
Reserve Bank.

                  (g) Borrower shall, and shall cause each of its Subsidiaries to, assist any Agent or any
Lender permitted to sell assignments or participations under this Section 13.6 in whatever manner
reasonably necessary in order to enable or effect any such assignment or participation, including
(but not limited to) the execution and delivery of any and all agreements, notes and other
documents and instruments as shall be requested and the delivery of informational materials,
appraisals or other documents for, and the participation of relevant management in meetings and
conference calls with, potential Lenders or Participants. Borrower shall certify the correctness,
completeness and accuracy, in all material respects, of all descriptions of Borrower and its
Subsidiaries and their affairs provided, prepared or reviewed by Borrower that are contained in any
selling materials and all other information provided by it and included in such materials.

                  13.7. Confidentiality.

                  (a) Each Agent and each Lender shall use all reasonable efforts to keep confidential, in
accordance with its respective customary procedures for handling confidential information and safe
and sound lending practices, any non-public information supplied to them by Borrower pursuant to
this Agreement which is clearly and conspicuously marked as confidential at the time such
information is furnished by Borrower to any Agent or any Lender, provided, that,
nothing contained herein shall limit the disclosure of any such information: (i) to the extent
required by statute, rule, regulation, subpoena or court order, (ii) to bank examiners and other
regulators, auditors and/or accountants, (iii) in connection with any litigation to which any Agent
or any Lender is a party, (iv) to any assignee or Participant (or prospective assignee or
Participant) so long as such assignee or Participant (or prospective assignee or Participant) shall
have first agreed in writing to treat such information as confidential in accordance with this
Section 13.7, (v) to any Affiliate, employee, director, officer or agent of such Agent or such
Lender so long as such Affiliate, employee, director, officer of agent shall have been instructed
to treat such information as confidential in accordance with this Section 13.7 or (vi) to counsel
for either Agent or any Lender or any Participant or assignee (or prospective participant or
assignee); provided, that, in the case of clause (i), such Agent or Lender,
as applicable, shall use reasonable efforts to provide Borrower with prior notice of such required
disclosure and the opportunity to obtain a protective order in respect thereof if no conflict
exists with such Agent’s or Lender’s governmental, regulatory or legal requirements.

                  (b) In no event shall this Section 13.7 or any other provision of this Agreement or applicable
law be deemed: (i) to apply to or restrict disclosure of information that has been or is made
public by Borrower or any third party without breach of this Section 13.7 or otherwise become
generally available to the public other than as a result of a disclosure in violation hereof, (ii)
to apply to or restrict disclosure of information that was or becomes available to Agents or
Lenders on a non-confidential basis from a person other than Borrower,

-94-

 

(iii) require Agents or Lenders to return any materials furnished by Borrower to Agents or
Lenders or (iv) prevent Agents or Lenders from responding to routine informational requests in
accordance with the Code of Ethics for the Exchange of Credit Information promulgated The
Robert Morris Associates or other applicable industry standards relating to the exchange of credit
information. The obligations of Agents and Lenders under this Section 13.7 shall supersede and
replace the obligations of Agents and Lenders under any confidentiality letter signed prior to the
date hereof.

                  13.8. Entire Agreement.

                  This Agreement, the other Financing Agreements, any supplements hereto or thereto, and any
instruments or documents delivered or to be delivered in connection herewith or therewith
represents the entire agreement and understanding concerning the subject matter hereof and thereof
between the parties hereto, and supersede all other prior agreements, understandings, negotiations
and discussions, representations, warranties, commitments, proposals, offers and contracts
concerning the subject matter hereof, whether oral or written. In the event of any inconsistency
between the terms of this Agreement and any schedule or exhibit hereto, the terms of this Agreement
shall govern.

                  13.9. Counterparts, Etc.

                  This Agreement or any of the other Financing Agreements may be executed in any number of
counterparts, each of which shall be an original, but all of which taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of this Agreement or any of the
other Financing Agreements by telefacsimile shall have the same force and effect as the delivery of
an original executed counterpart of this Agreement or any of such other Financing Agreements. Any
party delivering an executed counterpart of any such agreement by telefacsimile shall also deliver
an original executed counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of such agreement.

                  13.10.
Customer Identification - USA Patriot Act Notice.

                  Each Lender and Administrative Agent (for itself and not on behalf of any other party) hereby
notifies Borrower 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 Borrower and/or its subsidiaries, which information includes the
name and address of Borrower and/or its subsidiaries and other information that will allow such
Lender or Administrative Agent, as applicable, to identify Borrower and/or its subsidiaries in
accordance with the Act.

			
	SECTION 14.	 	 ACKNOWLEDGMENT AND RESTATEMENT

                  14.1.  Existing Obligations.

                  Borrower hereby acknowledges, confirms and agrees that it is indebted to Original Lenders for
Loans and advances to Borrower under the 2005 Loan Agreement, as of the close of business on June
29, 2007, in the aggregate principal amount of $82,712,131 and the amount of $326,264 in respect of
that certain Letter of Credit Accommodation (as defined in the

-95-

 

2005 Loan Agreement) described on Exhibit I hereto (the “2005 Letter of Credit
Accommodation”), together with all interest accrued and accruing thereon (to the extent
applicable), and all fees, costs, expenses and other charges relating thereto, all of which are
unconditionally owing by Borrower to Original Lenders, without offset, defense or counterclaim of
any kind, nature or description whatsoever. All such Loans under, and as such term is defined in
the 2005 Loan Agreement, outstanding on the Closing Date shall be deemed to be Loans outstanding
under this Agreement as of the Closing Date, the 2005 Letter of Credit Accommodation shall be
deemed to be a Letter of Credit Accommodation existing as of the Closing Date under this Agreement
and any and all other Obligations under, and as such term is defined in the 2005 Loan Agreement,
existing as of the Closing Date shall be deemed to be comparable Obligations existing as of the
Closing Date under this Agreement.

                  14.2. Acknowledgment of Security Interests.

                  (a) Borrower hereby acknowledges, confirms and agrees that Collateral Agent, for itself and
the ratable benefit of Lenders, has and shall continue to have a security interest in and lien upon
the Collateral heretofore granted to Collateral Agent pursuant to the 2005 Loan Agreement to secure
the Obligations, as well as any Collateral granted under this Agreement or under any of the other
Financing Agreements or otherwise granted to or held by any Agent or any Lender.

                  (b) The liens and security interests of Collateral Agent, for itself and the ratable benefit
of Lenders, in the Collateral shall be deemed to be continuously granted and perfected from the
earliest date of the granting and perfection of such liens and security interests, whether under
the 2005 Loan Agreement, this Agreement or any other Financing Agreements.

                  14.3. Existing Agreement.

                  Borrower hereby acknowledges, confirms and agrees that: (a) the 2005 Loan Agreement has been
duly executed and delivered by Borrower and is in full force and effect as of the date hereof and
(b) the agreements and obligations of Borrower contained in the 2005 Loan Agreement constitute the
legal, valid and binding obligations of Borrower enforceable against it in accordance with their
respect terms and Borrower has no valid defense to the enforcement of such obligations and (c)
Original Lenders are entitled to all of the rights and remedies provided for in the 2005 Loan
Agreement.

                  14.4. Restatement.

                  (a) Except as otherwise stated in Section 14.2 hereof and this Section 14.4, as of the date
hereof, the terms, conditions, agreements, covenants, representations and warranties set forth in
the 2005 Loan Agreement are hereby amended and restated in their entirety, and as so amended and
restated, replaced and superseded, by the terms, conditions, agreements, covenants, representations
and warranties set forth in this Agreement and the other Financing Agreements, except that
nothing herein or in the other Financing Agreements shall impair or adversely affect the
continuation of the liability of Borrower for the Obligations heretofore granted, pledged and/or
assigned to any Agent or any Lender. The amendment and restatement contained herein shall not, in
any manner, be construed to constitute payment of, or impair, limit, cancel or

-96-

 

extinguish, or constitute a novation in respect of, the indebtedness and other obligations and
liabilities of Borrower evidenced by or arising under the 2005 Loan Agreement, and the liens and
security interests securing such indebtedness and other obligations and liabilities, which shall
not in any manner be impaired, limited, terminated, waived or released.

                  (b) Notwithstanding the foregoing, with respect to any Eurodollar Rate Loan (as defined in the
2005 Loan Agreement) having an Interest Period (as defined in the 2005 Loan Agreement) that
terminates after the date hereof, such Eurodollar Rate Loan shall continue to be a Eurodollar Rate
Loan under this Agreement with the same maturity (but reduced margin to reflect this Agreement)
that it had under the 2005 Loan Agreement.

                  (c) All references in any or all of the Financing Agreements to the 2005 Loan Agreement shall
be deemed to be a reference to this Agreement, as it may be amended, restated, supplemented or
otherwise modified from time to time, and such Financing Agreements are hereby amended to reflect
such reference. All references in any or all of the Financing Agreements to Congress Financial
Corporation (Central) (i) in its capacity as collateral agent shall continue to be deemed to be a
reference to Collateral Agent and (ii) in its capacity as administrative agent shall continue to be
deemed to be a reference to Administrative Agent.

[SIGNATURE PAGE FOLLOWS]

-97-

 

          IN WITNESS WHEREOF, Agents, Lenders and Borrower have caused these presents to be duly
executed as of the day and year first above written.

	 	 	 	 	 	 	 	 	 
	LASALLE BANK NATIONAL

ASSOCIATION,	 	 	 	 BORROWER 
	as Administrative Agent, as a Lender and as 

LC Issuer	 	 	 	ULTA SALON , COSMETICS & 

FRAGRANCE, INC.
	 
	 	 	 	 	 	 	 	 
	By: 

Title:

	 	/s/ Scott Carbon 

First Vice President
	 	 	 	By:

Title:
	 	/s/ Gregg Bodnar

CFO
	 
	 	 	 	 	 	 	 	 
	Address:	 	 	 	Chief Executive Office:
	 
	 	 	 	 	 	 	 	 
	135 South LaSalle Street 

Chicago, Illinois 60603	 	 	 	1135 Arbor Drive

Romeoville, Illinois 60446
	 
	 	 	 	 	 	 	 	 
	WACHOVIA CAPITAL FINANCE

CORPORATION (CENTRAL),

as Collateral Agent and as a Lender	 	 	 	JPMORGAN CHASE BANK, N.A., as a

Lender
	 
	 	 	 	 	 	 	 	 
	By: 

Title:

	 	/s/ Anthony Vizgirda 

Director
	 	 	 	By:

Title:
	 	/s/ Teresa M. Bolick

Vice President
	 
	 	 	 	 	 	 	 	 
	Address:	 	 	 	Address:
	 
	 	 	 	 	 	 	 	 
	150 South Wacker Drive 

Chicago, Illinois 60606	 	 	 	JPMorgan Chase

120 South LaSalle Street, Floor 8

Mail Code, IL1-1458

Chicago, IL 60603

Attention: Teresa M. Bolick

Third Amended and Restated Loan and Security Agreement

 

EXHIBIT A

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

Date:                                        

			
	To:	 	Ulta Salon, Cosmetics and Fragrance, Inc. and

LaSalle Bank National Association, as Administrative Agent

			
	Re:	 	Assignment under the Loan Agreement referred to below

Gentlemen and Ladies:

          Please refer to Section 13.6 of the Third Amended and Restated Loan and Security
Agreement dated as of June 29, 2007 (as amended or otherwise modified from time to time, the
“Loan Agreement”) among Ulta Salon, Cosmetics and Fragrance, Inc. (the “Borrower”),
various financial institutions and LaSalle Bank National Association, as administrative agent (in
such capacity, the “Administrative Agent”). Unless otherwise defined herein or the context
otherwise requires, terms used herein have the meanings provided in the Loan Agreement.

                              (the “Assignor”) hereby sells and assigns, without
recourse, to (the “Assignee”), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to the Assignor’s rights and obligations under the Loan Agreement as
of the date hereof equal to ___% of all of the Loans, of the participation interests in
the Letter of Credit Accommodations and of the Commitments, such sale, purchase, assignment and
assumption to be effective as of                     , ___, or such later date on which the
Borrower and the Administrative Agent shall have consented hereto (the “Effective Date”).
After giving effect to such sale, purchase, assignment and assumption, the Assignee’s and the
Assignor’s respective Pro Rata Shares for purposes of the Loan Agreement will be as set forth
opposite their names on the signature pages hereof.

          The Assignor hereby instructs the Administrative Agent to make all payments from and after the
Effective Date in respect of the interest assigned hereby directly to the Assignee. The Assignor
and the Assignee agree that all interest and fees accrued up to, but not including, the Effective
Date are the property of the Assignor, and not the Assignee. The Assignee agrees that, upon
receipt of any such interest or fees, the Assignee will promptly remit the same to the Assignor.

          The Assignor represents and warrants that it is the legal and beneficial owner of the interest
being assigned by it hereunder and that such interest is free and clear of any adverse claim.

          The Assignee represents and warrants to the Borrower and the Administrative Agent that, as of
the date hereof, the Borrower will not be obligated to pay any greater amount under Section 3.3 of
the Loan Agreement than the Borrower is obligated to pay to the Assignor under such Section. The
[Assignee/Assignor] [Borrower] shall pay a processing fee equal to $3,500 to the Administrative
Agent.

          The Assignee hereby confirms that it has received a copy of the Loan Agreement. Except as
otherwise provided in the Loan Agreement, effective as of the Effective Date:

          (d) the Assignee (i) shall be deemed automatically to have become a party to the Loan
Agreement and to have all the rights and obligations of a “Lender” under the Loan Agreement
as if it were an original signatory thereto to the extent specified in the second paragraph hereof;
and (ii) agrees to be bound by the terms and conditions set forth in the Loan Agreement as if it
were an original signatory thereto; and

          (e) the Assignor shall be released from its obligations under the Loan Agreement to the extent
specified in the second paragraph hereof.

i

 

          The Assignee hereby advises each of you of the following administrative details with respect
to the assigned Loans and Commitment:

	 	 	 	 	 
	 

	 	(A)
	 	Institution Name:
	 

	 	 	 	Address:
	 

	 	 	 	Attention:
	 

	 	 	 	Telephone:
	 

	 	 	 	Facsimile:
	 

	 	(B)
	 	Payment Instructions:

          This Assignment shall be governed by and construed in accordance with the laws of the State of
Illinois

          Please evidence your receipt hereof and your consent to the sale, assignment, purchase and
assumption set forth herein by signing and returning counterparts hereof to the Assignor and the
Assignee.

	 	 	 	 	 	 	 
	Percentage = __%	 	[ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	Adjusted Percentage = __%	 	[ASSIGNOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 
	ACKNOWLEDGED AND CONSENTED TO	 	 
	this ____ day of                     , ____	 	 
	 
	 	 	 	 
	LASALLE BANK NATIONAL ASSOCIATION, as	 	 
	Administrative Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	[ACKNOWLEDGED AND CONSENTED TO	 	 
	this ____ day of                     , ____	 	 
	 
	 	 	 	 
	ULTA SALON, COSMETICS AND FRAGRANCE, INC.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	] 	 
	 

	 	 

	 	 

ii

 

EXHIBIT B

INFORMATION CERTIFICATE

See attached.

iii

 

EXHIBIT C

FORM OF SWAP ACKNOWLEDGMENT AGREEMENT

                    , 200_

LaSalle Bank National Association, as

Administrative Agent for itself and the Lenders as referred

to below

135 South LaSalle Street

Chicago, Illinois 60603

Ladies and Gentlemen:

          Reference is made to the Third Amended and Restated Loan and Security Agreement among LaSalle
Bank National Association as administrative agent (in such capacity, “Administrative
Agent”) for itself and the financial institutions from time to time party thereto, as lenders
(collectively, “Lenders”), Wachovia Capital Finance Corporation (Central) as Collateral
Agent for itself and the Lenders, the Lenders, and Ulta Salon, Cosmetics & Fragrance, Inc. (the
“Borrower”), as the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced (the “Loan Agreement”). All capitalized terms used
herein, unless otherwise defined herein, shall have the meanings given to such terms in the Loan
Agreement.

          Pursuant to such financing arrangements, Administrative Agent and Lenders may from time to
time make loans to Borrower secured by substantially all of the assets and properties of Borrower
including among other things, all right, title and interest of Borrower in, to and under the swap
agreements, cap agreements, collar agreements, exchange agreements, futures or forward hedging
contracts or similar contractual arrangements intended to protect Borrower against fluctuations in
interest rates as listed on Exhibit A hereto, and at any time entered into between Borrower and
                     (the “Bank”; collectively, “Hedge Agreements” and individually, a
“Hedge Agreement”).

          Bank and Borrower agree in favor of Agents and Lenders that upon receipt by Bank of written
instructions from Administrative Agent in the form annexed hereto as Exhibit B, Bank will no longer
comply with any instructions or orders originated by Borrower or any of its affiliates or
representatives concerning any Hedge Agreement and will comply only with the instructions or orders
of Administrative Agent with respect thereto, without any further consent by Borrower or its
affiliates or representatives. Bank is hereby irrevocably authorized and directed to follow such
instructions or orders without any inquiry as to Administrative Agent’s right or authority to give
such instructions or orders and Bank is fully protected in acting in accordance therewith. Bank
shall not for any reason exercise any lien rights or rights of setoff or other claims against
amounts owing to Borrower pursuant to Hedge Agreements, without the prior consent of Administrative
Agent. Upon Administrative Agent’s request, Bank will report to Administrative Agent the amounts
then outstanding with respect to the Hedge Agreements consistent with its current practices as of
the date hereof with Borrowers or more frequently as Administrative Agent may request after
Administrative Agent has sent the written instructions

iv

 

referred to above, together with such other information with respect thereto as Administrative
Agent may reasonably request.

          Nothing contained herein shall be construed as an assumption by Administrative Agent or any
Lender of the obligations or liabilities of Borrower or any of its affiliates to Bank or any other
person pursuant to any Hedge Agreement or otherwise. Bank agrees that in its capacity as a
counterparty to the Hedge Agreement, it shall not be deemed to have any rights as a “Lender” under
the Loan Agreement except for the right to receive proceeds of Collateral, as a counterparty to the
Hedge Agreement, in the order and manner set forth in Section 6.4(a) of the Loan Agreement. Bank
further aggress that Administrative Agent has no duties to Bank under the Loan Agreement in its
capacity as a counterparty to the Hedge Agreement other than in respect of Bank’s entitlement to
proceeds of Collateral, as a counterparty to the Hedge Agreement, in the order and manner set forth
in Section 6.4(a) of the Loan Agreement. To the extent Bank is also a “Lender” under the Loan
Agreement, nothing in the preceding two sentences is intended to diminish or otherwise alter Bank’s
rights, or Administrative Agent’s duties to Bank, under the Loan Agreement as to Bank in its
capacity as a “Lender” thereunder.

          Administrative Agent and Lenders are relying upon this letter agreement in providing financing
to Borrower and this letter agreement shall be binding upon Borrower and its successors and assigns
and inure to the benefit of Administrative Agent and Lenders and their successors and assigns. This
agreement may not be amended, modified, supplemented or terminated orally or by course of conduct
or otherwise. This agreement may only be amended, modified, supplemented or terminated with the
written agreement of Administrative Agent.

          Borrower agrees that it will not assert any claims against the Bank as counterparty to the
Hedge Agreement solely as a result of Bank following the instructions or orders of Administrative
Agent pursuant to the terms hereof with respect to any Hedge Agreement.

          This agreement shall be governed by and construed in accordance with the laws of the State of
Illinois.

          This agreement may be executed in any number of counterparts, but all of such counterparts
shall together constitute but one and the same agreement. In making proof of this agreement, it
shall not be necessary to produce or account for more than one counterpart thereof signed by each
of the parties hereto.

[Signature Page Follows]

v

 

          This agreement shall be binding upon Bank and Borrower and inure to the benefit of
Administrative Agent, Lenders and each of the parties hereto and their respective successors and
assigns.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	[BANK]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	ULTA SALON, COSMETICS & FRAGRANCE, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 
	ACKNOWLEDGED AND AGREED:	 	 
	 
	 	 	 	 
	LASALLE BANK NATIONAL ASSOCIATION,	 	 
	as Administrative Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

vi

 

EXHIBIT A

TO

SWAP ACKNOWLEDGMENT AGREEMENT

[Details to be completed for each such agreement.]

vii

 

EXHIBIT B

TO

SWAP ACKNOWLEDGMENT AGREEMENT

Form of Notice to Bank

	 	 	 	 	 
	[Name and Address
	of Hedge Lender]
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	Attn:
	 	 	 	 
	 

	 	 

	 	 

Re:  Swap Transactions with

Ladies and Gentlemen:

          Reference is made to the Third Amended and Restated Loan and Security Agreement among LaSalle
Bank National Association, as administrative agent (in such capacity, “Administrative
Agent”) for itself and the financial institutions from time to time party thereto as lenders
(collectively, together with Administrative Agent, “Lenders”), the Lenders, and Ulta Salon,
Cosmetics & Fragrance, Inc. (“Borrower”), as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced (the “Loan
Agreement”). All capitalized terms used herein, unless otherwise defined herein, shall have the
meanings given to such terms in the Loan Agreement.

          A default or event of default under the Loan Agreement exists or has occurred and is
continuing. Accordingly, Bank is no longer to comply with any instructions or orders originated by
Borrower or any of its affiliates or representatives and Bank is only to comply with the
instructions or orders or Administrative Agent with respect thereto. Borrower and its affiliates
and representatives no longer have any authority with respect to the Hedge Agreement (as defined in
the Loan Agreement) except as Administrative Agent may otherwise specify to Bank in writing.

	 	 	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	LASALLE BANK NATIONAL ASSOCIATION,
	 	 	as Administrative Agent
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

viii

 

EXHIBIT D

FORM OF NOTICE OF CONTINUATION/CONVERSION

     To:      LaSalle Bank National Association, as Administrative Agent

          Please refer to the Third Amended and Restated Loan and Security Agreement dated as of June
29, 2007 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”) among Ulta Salon, Cosmetics and Fragrance, Inc. (the “Borrower”), various
financial institutions and LaSalle Bank National Association, as Administrative Agent. Terms used
but not otherwise defined herein are used herein as defined in the Loan Agreement.

          The undersigned hereby gives irrevocable notice, pursuant to Section 3.1(b) of the
Loan Agreement, of its request to:

          (a) on
[   date   ] convert $[                    ] of the aggregate outstanding principal amount of the
[                    ] Loan, bearing interest at the [                    ] Rate, into a(n) [                    ] Loan [and, in the
case of a Eurodollar Rate Loan, having an Interest Period of
[                    ]
month(s)]; [(b) on [   date   ] continue $[                    ] of the aggregate outstanding principal amount of the [___] Loan, bearing
interest at the Eurodollar Rate, as a Eurodollar Rate Loan having an Interest Period of [                    ]
month(s)].

          The undersigned hereby represents and warrants that all of the conditions contained in
Section 4.2 of the Loan Agreement have been satisfied on and as of the date hereof, and
will continue to be satisfied on and as of the date of the conversion/continuation requested
hereby, before and after giving effect thereto.

          The Borrower has caused this Notice of Conversion/Continuation to be executed and delivered by
its officer thereunto duly authorized on                                         ,                     .

	 	 	 	 	 	 	 
	 	 	ULTA SALON, COSMETICS AND FRAGRANCE, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

ix

 

EXHIBIT E

CLOSING CHECKLIST

	1.	 	Third Amended & Restated Loan & Security Agreement
	 
	2.	 	Amended and Restated Promissory Notes payable to each Lender (if requested)
	 
	3.	 	Certificates of good standing for Borrower in the States of Delaware and in all other
jurisdictions in which Borrower is qualified to do business
	 
	4.	 	Secretary’s Certificate as to Borrower’s Articles of Incorporation, By-Laws and Resolution
authorizing transaction
	 
	5.	 	Amended & Restated Fee Letter
	 
	6.	 	Latham & Watkins Opinion

x

 

EXHIBIT F

FORM OF NOTICE OF BORROWING

     To:      LaSalle Bank National Association, as Administrative Agent

     Please refer to the Third Amended and Restated Loan and Security Agreement dated as of June
29, 2007 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”) among Ulta Salon, Cosmetics and Fragrance, Inc. (the “Borrower), various
financial institutions and LaSalle Bank National Association, as Administrative Agent. Terms used
but not otherwise defined herein are used herein as defined in the Loan Agreement.

     The undersigned hereby gives irrevocable notice, pursuant to Section 6.5 of the Loan
Agreement, of a request hereby for a borrowing as follows:

     (i) The requested borrowing date for the proposed borrowing (which is a Business Day) is                                         ,        
             .

     (ii) The aggregate amount of the proposed borrowing is $                                        .

     (iii) The type of Revolving Loans comprising the proposed borrowing is [Prime Rate]
[Eurodollar Rate] Loans.

     (iv) The duration of the Interest Period for each Eurodollar Rate Loan made as part of the
proposed borrowing, if applicable, is                      months (which shall be 1, 2, 3 or 6 months).

     The undersigned hereby certifies that on the date hereof and on the date of borrowing set
forth above, and immediately after giving effect to the borrowing requested hereby: (i) there
exists and there shall exist no Default or Event of Default under the Loan Agreement; and (ii) each
of the representations and warranties contained in the Loan Agreement and the other Financing
Agreements is true and correct as of the date hereof, except to the extent that such representation
or warranty expressly relates to another date and except for changes therein expressly permitted or
expressly contemplated by the Loan Agreement.

     The undersigned requests, subject to the provisions of Section 2.5, that the requested
borrowing be funded as a Swing Line Loan. [Delete as applicable]

     The Borrower has caused this Notice of Borrowing to be executed and delivered by its officer
thereunto duly authorized on                                         ,                     .

	 	 	 	 	 	 	 
	 	 	ULTA SALON, COSMETICS AND FRAGRANCE, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

xi

 

SCHEDULE I

LENDERS AND PRO RATA SHARES

	 	 	 	 	 	 	 	 	 
	Lender	 	Commitment Amount	 	Pro Rata Share
	LaSalle Bank National Association
	 	$ 75,000,000.001	 	50.000000000%
	Wachovia Capital Finance Corporation (Central)
	 	$ 45,000,000.00	 	30.000000000%
	JPMorgan Chase Bank, N.A.
	 	$ 30,000,000.00	 	20.000000000%
	TOTALS
	 	$ 150,000,000.00	 	100%

 

			
	1 This amount includes Swing Line Commitment Amount of $10,000,000.

xii

 

EXHIBIT G

EXISTING LANDLORD AGREEMENTS

xiii

 

EXHIBIT H

FORM OF LANDLORD AGREEMENT

     THIS LANDLORD’S WAIVER AND CONSENT (“Waiver and Consent”) is made and entered into as of this
                     day of                                         , by and between             
                            , a                                          (“Landlord”),
and Wachovia Capital Finance Corporation (Central), an Illinois corporation (“Lender”), in its
capacity as Collateral Agent (“Agent”) for various lenders (“Lenders”).

     A. Landlord is the owner of the real property commonly known as                                         (the “Premises”).

     B. Landlord has entered into a certain Lease Agreement (together with all amendments and
modifications thereto and waivers thereof, the “Lease”) with Ulta Salon, Cosmetics & Fragrance,
Inc. (“Company”), with respect to the Premises.

     C. Agent and the Lenders have entered into a certain Third Amended and Restated Loan and
Security Agreement with Company (as amended from time to time, the “Credit Agreement”), and to
secure the obligations arising under such Credit Agreement, Company has granted to Agent for its
benefit and the benefit of the Lenders a security interest in and lien upon certain assets of
Company which assets may from time to time be located at the Premises, including, without
limitation, all of Company’s cash, cash equivalents, goods, inventory, machinery, equipment, and
furniture and trade fixtures (such as equipment bolted to floors), together with all additions,
substitutions, replacements and improvements to, and proceeds of, the foregoing, but
excluding building fixtures (such as plumbing, lighting and HVAC systems and other fixtures
not constituting trade fixtures) (collectively, the “Collateral”).

     NOW, THEREFORE, in consideration of any financial accommodations extended by Agent and the
Lenders to Company at any time, and other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

     1. Landlord acknowledges that (a) the Lease is in full force and effect and (b) Landlord is
not aware of any existing default under the Lease.

     2. Landlord will use commercially reasonable efforts to provide Lender with written notice of
any default by Company under the Lease resulting in termination of the Lease (a “Default Notice”).
Agent shall have at least 15 days following receipt of such Default Notice to cure such default,
but Agent shall not be under any obligation to cure any default by Company under the Lease. No
action by Agent pursuant to this Waiver and Consent shall be deemed to be an assumption by Agent or
any Lender of any obligation under the Lease, and, except as provided in paragraphs 5, 6, 7 and 8
below, neither Agent nor any Lender shall have any obligation to Landlord hereunder.

     3. Landlord acknowledges the validity of Lender’s lien on the Collateral and, until such time
as the obligations of Company to Agent and the Lenders are indefeasibly paid in full,

xiv

 

Landlord waives any interest in the Collateral and agrees not to distrain or levy upon any
Collateral or to assert any landlord lien, right of distraint or other claim against the Collateral
for any reason, provided that the foregoing provision shall not prevent Landlord from suing the
Company for rent or other charges owing under the Lease.

     4. Landlord agrees that the Collateral consisting of trade fixtures such as equipment bolted
to the floor shall not be deemed a fixture or part of the real estate but shall at all times be
considered personal property.

     5. Prior to a termination of the Lease, Agent or its representatives or invitees may enter
upon the Premises at any time without any interference by Landlord to inspect, remove, sell or
otherwise dispose of any or all of the Collateral, subject, in each case, to any restrictions
contained in any applicable restrictive covenants, easements or other documents recorded in the
applicable public records against the Premises, publicly stated rules or regulations or governing
laws (“Sale Restrictions”). Lender will use commercially reasonable efforts to provide Landlord
with prior written notice of its intention to enter onto the Premises to conduct any sale, removal
or disposition of Collateral.

     6. Upon a termination of the Lease, Landlord will permit Agent and its representatives and
invitees to occupy and remain on the Premises; provided, that (a) such period of occupation
(the “Disposition Period”) shall not exceed up to 60 days following receipt by Agent of a Default
Notice or, if the Lease has expired by its own terms (absent a default thereunder) and the Company
has failed to remove all of the Collateral from the Premises, up to 45 days following Agent’s
receipt of written notice from Landlord of such failure, (b) for the actual period of occupancy by
Agent, Agent will pay to Landlord all rent and other charges due and payable by the Company under
the Lease (including, without limitation, taxes, common area maintenance costs and insurance, but
excluding any percentage or contingent rent) which becomes due under the Lease pro-rated on a per
diem basis determined on a 30-day month, and shall provide and retain liability and property
insurance coverage, electricity and heat to the extent required by the Lease, and (c) such amounts
paid by Agent to Landlord shall exclude any rent adjustments, indemnity payments or similar amounts
for which the Company remains liable under the Lease for default, holdover status or other similar
charges. If any injunction or stay is issued that prohibits Agent from removing the Collateral,
the commencement of the Disposition Period will be deferred until such injunction or stay is lifted
or removed.

     7. During any Disposition Period, (a) Agent and its representatives and invitees may inspect,
repossess, remove and otherwise deal with the Collateral, and Agent may, subject to any applicable
Sale Restrictions, advertise and sell or otherwise dispose of the Collateral at the Premises, in
each case without interference by Landlord or liability of Agent to Landlord, and (b) Agent shall
make the Premises available for inspection by Landlord and prospective tenants and shall cooperate
in Landlord’s reasonable efforts to re-lease the Premises. If Agent conducts a sale of the
Collateral at the Premises, Agent shall use commercially reasonable efforts to notify Landlord
first and to conduct such sale in a manner that would not unduly disrupt Landlord’s or any other
tenant’s use of the Premises. In no event shall Agent disturb or interfere with other tenants’
rights of quiet enjoyment of their leased space and no auction or other advertised sale shall be
held by Agent at the Premises. Upon request by the Landlord, Agent shall promptly

xv

 

provide Landlord with evidence that commercially reasonable insurance is in force throughout
Agent’s period of possession.

     8. Agent shall promptly repair, at Agent’s expense, or reimburse Landlord for any physical
damage to the Premises actually caused by the conduct of any sale, removal or other disposition of
Collateral by or through Agent (ordinary wear and tear excluded). Agent shall not be liable for
any diminution in value of the Premises caused by the absence of Collateral removed, and Agent
shall not have any duty or obligation to remove or dispose of any Collateral or any other property
left on the Premises by Company.

     9. All notices hereunder shall be in writing, sent by certified mail, return receipt requested
or by telecopy, to the respective parties and the addresses set forth on the signature page or at
such other address as the receiving party shall designate in writing.

     10. This Waiver and Consent may be executed in any number of several counterparts, shall be
governed and controlled by, and interpreted under, the laws of the state in which the Premises are
located and shall inure to the benefit of Agent and its successors and assigns and shall be binding
upon Landlord and its successors and assigns (including any transferees of the Premises).

xvi

 

     IN WITNESS WHEREOF, this Landlord’s Waiver and Consent is entered into as of the date first
set forth above.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	“LANDLORD”	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Attention:

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Telephone:

	 	 	 	 	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Facsimile:

	 	 	 	 	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Landlord’s Notice Address:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	“AGENT”	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Wachovia Capital Finance Corporation

(Central), an Illinois corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Attention:

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Telephone:

	 	 	 	 	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Facsimile:

	 	 	 	 	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Lender’s Notice Address:	 	 
	 	 	 	 	 	 	Wachovia Capital Finance	 	 
	 	 	 	 	 	 	Corporation (Central), as agent	 	 
	 	 	 	 	 	 	150 South Wacker Drive	 	 
	 	 	 	 	 	 	Chicago, IL 60606-4401	 	 
	 	 	 	 	 	 	Attn: Portfolio Manager	 	 

xvii

 

EXHIBIT I

2005 LETTER OF CREDIT ACCOMMODATION

That certain Letter of Credit No. S585314 issued by LaSalle to Aetna Life Insurance Company c/o
Nicholson, Porter and List Inc. on November 18, 2005 in the original face amount of $326,264.00.

xviii

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