Document:

exv10w2

Exhibit 10.2

TERM PROMISSORY NOTE

	 	 	 	 	 
	Amount: $1,500,000

	 	Date of Execution:
	 	November 3, 2009
	 

	 	Effective Date:
	 	November 3, 2009

     1. Promise to Pay. FOR VALUE RECEIVED, Hiland Holdings GP, LP, a Delaware limited
partnership, with offices located at 205 West Maple, Suite 1100, Enid, Oklahoma 73701 (“Borrower”),
promises to pay to the order of Harold Hamm, whose office is located at 302 North Independence,
Suite 1500, Enid, Oklahoma 73701, and/or his successors and assigns (“Lender”), or at such place as
Lender may from time to time designate in writing, in lawful money of the United States of America,
and in immediately available funds, the sum of One Million Five Hundred Thousand Dollars
($1,500,000), together with all other amounts added thereto pursuant to this Note (the “Loan”) (or
so much thereof as may from time to time be outstanding) together with interest thereon as set
forth in this Promissory Note (this “Note”).

     This Note and all other documents evidencing or securing the Loan executed in connection with
the Loan, and any modification, renewal, or extension of any of the foregoing are collectively the
“Loan Documents”.

     This is a term note and does not have a re-advance feature.

     2. Principal and Interest; Default Interest Rate; Lawful Rate of Interest.

          (a) Interest Rate. As long as no Event of Default exists, interest shall accrue on the
principal balance hereof from time to time outstanding and Borrower shall pay interest thereon at a
Rate (the “Interest Rate”) equal to a floating rate per annum equal to the national prime rate as
published in The Wall Street Journal, Eastern Edition (the “National Prime Rate”), plus one percent
(1%) but in no event shall the Interest Rate be less than five percent (5%). The Interest Rate
shall be adjusted daily, or when changes occur in the National Prime Rate. Interest shall accrue
daily on the basis of a three hundred sixty (360) day year and charged for the actual number of
days elapsed.

          (b) Default Interest Rate. On the occurrence and during the continuation of an Event
of Default, interest shall be payable on the unpaid principal balance under this Note at a rate
equal to the National Prime Rate plus seven percent (7 %) (the “Default Rate”).

          (c) Lawful Rate of Interest. In no event whatsoever shall the amount of interest
contracted, charged, paid or agreed to be paid to Lender pursuant to this Note or any of the Loan
Documents exceed the highest lawful rate of interest permissible under applicable law. If, from
any circumstances whatsoever, fulfillment of any provision of this Note and the other Loan
Documents shall involve exceeding the lawful rate of interest which a court of competent
jurisdiction may deem applicable (the “Excess Interest”), then ipso facto, the obligation to be
fulfilled shall be reduced to the highest lawful rate of interest permissible under such law and
if, for any reason whatsoever, Lender shall receive, as interest, an amount which would be deemed
unlawful under such applicable law, such interest shall be applied to the principal of the Loan
(whether or not due and payable), and not to the payment of interest, or refunded to Borrower if

 

 

the Loan has been paid in full. Neither Borrower nor endorser shall have any action against Lender
for any damages whatsoever arising out of the payment, contracting, charging for or collection of
any Excess Interest.

     3. (a) Principal and Interest Payments. Borrower shall pay in full the outstanding
principal balance and all unpaid interest on the Maturity Date. Interest shall be calculated based
on a 360-day year and charged for the actual number of days elapsed. All payments shall be
applied in accordance with this Note. By acceptance of this Note and the making of the Loan to
Borrower, Lender acknowledges that payment of this Note is subordinate to the repayment by Borrower
of that certain loan from Borrower payable to The Security National Bank of Enid (“SNB”) in the
original principal amount of $3,000,000 dated as of August 7, 2009 (the “SNB Loan”). Lender
agrees until the SNB Loan has been paid in full, Lender shall not accept any principal or interest
payments from Borrower on the Loan evidenced hereby. The foregoing two sentences are solely for
the purpose of defining the relative rights of SNB, on the one hand, and Lender, on the other hand,
and nothing herein shall impair, as between the Borrower and the Lender, the obligation of the
Borrower which is unconditional and absolute, to pay the principal, interest and Late Fees in
accordance with this Note.

          (b) Application of Payments. All payments under this Note will be applied to as
follows:

(i) First, to accrued interest due;

(ii) Second, to the outstanding principal balance;

(iii) Third, to any outstanding costs or fees including, but not limited to,
service fees, wire fees, and collection costs Borrower is obligated to pay
under this Note and the other Loan Documents; and

(iv) Fourth, to all outstanding Late Fees (defined below).

          (c) Maturity Date. The Loan shall be fully due and payable on or before December 31,
2009 (“Maturity Date”). Lender is under no obligation to renew this Term Note after the maturity
thereof.

     4. Prepayment. Prepayment of this Note is permitted in whole or in part at any time,
without penalty or premium.

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     5. Creation of Security Interest.

          (a) Borrower grants and pledges to Lender a continuing security interest in all of Borrower’s
right, title and interest in and to all of the following property, whether now owned or existing or
hereafter acquired or arising and regardless of where located (collectively, the “Collateral”), as
collateral security for the prompt and complete payment and performance when due (whether at stated
maturity, by acceleration or otherwise) of the Loan:

          (i) all common units of Hiland Partners, LP, a Delaware limited partnership (the
“Partnership”), owned by Borrower (the “Common Units”);

          (ii) all subordinated units of the Partnership owned by the Borrower (the “Subordinated
Units”);

          (iii) all distributions (whether made in cash, instruments, income, securities or other
property), dividends, cash, securities, instruments and other property now or hereafter
received, receivable or otherwise made with respect to, in substitution for, or in exchange
for the Common Units or the Subordinated Units, including interim distributions, returns of
capital, loan repayments, and payments made in (or proceeds received from any) liquidation
of the Partnership; and

          (iv) all proceeds of all or any of the foregoing, in whatever form.

          (b) The security interest in the Collateral created hereunder is subordinate to the security
interest in the Collateral granted by Borrower pursuant to that certain Pledge Agreement dated
August 7, 2009 by Borrower in favor of The Security National Bank of Enid, to secure Borrower’s
obligations under that certain First Amended and Restated Senior Secured Credit Agreement dated as
of August 7, 2009 between Hiland Holdings GP, LP, as borrower, and The Security National Bank of
Enid, as lender (as amended, restated, supplemented or otherwise modified from time to time, the
“Senior Credit Agreement”).

          (c) Borrower hereby confirms that by signing this Note, Borrower has authenticated this Note,
within the meaning of Section 9 of the Uniform Commercial Code of the State of Oklahoma. This Note
shall constitute full authorization in favor of Lender to file appropriate financing statements,
initial or “in lieu” financing statements, continuation statements, and statements of amendment,
with or without Borrower’s signature, as may be necessary or advisable to perfect and maintain the
perfection and priority of the security interest granted to Lender in this Note. Any such financing
statements, continuation statements or amendments may be signed by Lender on Borrower’s behalf.

     6. Event of Default and Remedies.

          (a) Event of Default. An “Event of Default” under this Note means the occurrence of
any of the following:

          (i) the failure to pay any payment as and when required under this Note;

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          or

          (ii) the occurrence of an Event of Default (as such term is defined in the Senior
Credit Agreement) pursuant to either Section 6.01(c) or Section 6.01(e) of the Senior Credit
Agreement.

          (b) Remedies. On and during the occurrence of an Event of Default: (i) interest shall
accrue at the Default Rate; (ii) Lender may, at its option and without notice (such notice being
expressly waived), declare the Loan immediately due and payable; and (iii) Lender may pursue all
rights and remedies available under all other Loan Documents. Lender’s rights, remedies, and
powers, as provided in this Note and the other Loan Documents, are cumulative and concurrent, and
may be pursued singly, successively, or together against Borrower, the security described in the
Loan Documents, and all other security given at any time to secure the payment of this Note, all at
the sole discretion of Lender. Additionally, Lender may resort to every other right or remedy
available at law or in equity without first exhausting the rights and remedies contained in this
Note, all in Lender’s sole discretion. Failure of Lender, for any period of time or on more than
one occasion, to exercise its option to accelerate the Maturity Date shall not constitute a waiver
of the right to exercise the same at any time during the continued existence of any Event of
Default or any subsequent Event of Default. No course of dealing between Borrower and Lender or
any delay on the part of Lender in exercising any rights under this Note shall operate as a waiver
of any rights of Lender.

     If any attorney is engaged: (i) to collect the Loan or any sums due under the Loan Documents,
whether or not legal proceedings are thereafter instituted by Lender; (ii) to represent Lender in
any bankruptcy, reorganization, receivership, or other proceedings affecting creditors’ rights and
involving a claim under this Note; (iii) to protect the liens and security interests; (iv) to
foreclose on the collateral under the Loan Documents; (v) to represent Lender in any other
proceedings whatsoever in connection with any of the Loan Documents including, without limitation,
post judgment proceedings to enforce any judgment related to the Loan Documents and probate
proceedings; or (vi) in connection with seeking an out-of-court workout or settlement of any of the
foregoing, then Borrower shall pay to Lender all reasonable costs, attorneys’ fees, and expenses in
connection therewith, in addition to all other amounts due under this Note.

     7. Late Fees. If payments of principal or interest, or any other amount under the
Note or other Loan Documents are not timely made or remain overdue for a period of ten (10) days,
Borrower, without notice or demand by Lender, promptly shall pay in addition to any other amounts
due hereunder an amount (“Late Fee”) equal to five percent (5.0%) of each delinquent payment.

     8. Waiver. Borrower, for itself and all endorsers, and sureties of this Note, and
their heirs, successors, assigns, and legal representatives, waives presentment for payment,
demand, notice of nonpayment, notice of dishonor, protest of any dishonor, notice of protest, and
protest of this Note, and all other notices in connection with the delivery, acceptance,
performance, default, or enforcement of the payment of this Note, and agrees that their respective
liability shall be unconditional and without regard to the liability of any other party and shall
not be in any

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manner affected by any indulgence, extension of time, renewal, waiver, or modification granted
or consented to by Lender. Borrower, for itself and all endorsers, and sureties of this Note, and
their heirs, legal representatives, successors, and assigns, consents to every extension of time,
renewal, waiver, or modification that may be granted by Lender with respect to the payment or other
provisions of this Note, and to the release of any makers, endorsers, or sureties, and of any
collateral given to secure the payment of this Note, or any part of this Note, with or without
substitution, and agrees that additional makers, endorsers, or sureties may become parties to this
Note without notice to Borrower or to any endorser, or surety, and without affecting the liability
of any of them.

     9. Evidence of Indebtedness. This Note is given and accepted as evidence of
indebtedness only and not in payment or satisfaction of any indebtedness or obligation.

     10. Choice of Law, Jurisdiction, and Venue. This Note shall be deemed to have been
made and executed in the State of Oklahoma, and this Note shall be interpreted, construed, and
enforced in accordance with the laws of the State of Oklahoma without regard to the principles of
conflict of laws.

     BORROWER AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING DIRECTLY, INDIRECTLY, OR OTHERWISE IN
CONNECTION WITH, OUT OF, RELATED TO OR FROM THIS NOTE SHALL BE LITIGATED, AT LENDER’S SOLE
DISCRETION AND ELECTION, IN COURTS HAVING A SITUS WITHIN THE STATE OF OKLAHOMA. BORROWER HEREBY
CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED WITHIN SAID
STATE. BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY
LITIGATION BROUGHT AGAINST IT BY LENDER ON THE LOAN DOCUMENTS IN ACCORDANCE WITH THIS PARAGRAPH.

     11. Severability. If one or more of the provisions of this Note shall for any reason
be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions of this Note, but this Note shall be
construed as if such invalid, illegal, or unenforceable provision had never been contained in this
Note.

     12. Modification. This Note shall not be modified, amended, changed, terminated,
supplemented, or any term or condition hereof waived except in writing signed by Borrower and
Lender.

     13. Assignment. Borrower shall not assign its obligations under this Note without the
express written consent of Lender. Lender, however, may assign, transfer, pledge or sell its
interest in this Note. On notification of such assignment, Borrower shall remit any payments due
hereunder directly to the address of the assignee set forth on the notification.

     14. Headings. Headings are for convenience of reference only and shall not be deemed
to modify, explain, enlarge, or restrict any of the provisions of this Note.

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     15. Notices. Notices shall be given under this Note at the addresses of the parties
shown above by first class mail, postage prepaid, or by overnight delivery.

     16. Joint and Several Obligations. The obligations of Borrower under this Note are
joint and several obligations of Borrower and of each Borrower, if more than one, and of each
Borrower’s heirs, personal representatives, successors, and assigns, provided nothing in this Note
shall be deemed consent to any assignment restricted or prohibited by the Loan Documents.

     17. Time of Essence. Time is of the essence on this Note and the performance of each
of the covenants and agreements in the Note.

     18. Sale of Loan. Lender, at any time and without the consent of Borrower, may grant
participations in or sell, transfer, assign, and convey all or any portion of its right, title, and
interest in and to the Loan, this Note and the other Loan Documents, any guaranties given in
connection with the Loan, and any collateral given to secure the Loan. If Lender sells, transfers,
conveys, or assigns all of Lender’s right, title, and interest in this Note or the Loan, Lender
shall give notice thereof to Borrower and Lender shall thereon be released from liability and
obligations of Lender under this Note and under all other transferred Loan Documents from and after
the date of such transfer; provided such transferee agrees to be bound by the obligations of Lender
thereunder. Notice to Borrower shall not be required for any partial sale, transfer, assignment,
or conveyance of this Note.

     19. Jury Trial Waiver. BORROWER, AND HOLDER BY ITS ACCEPTANCE OF THIS NOTE, HEREBY
WAIVE THEIR RESTRICTIVE RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON, OR RELATED
TO, THE SUBJECT MATTER OF THIS NOTE AND THE BUSINESS RELATIONSHIP THAT IS BEING ESTABLISHED. THIS
WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY BORROWER AND BY LENDER, AND BORROWER
ACKNOWLEDGES THAT NEITHER HOLDER NOR ANY PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY
REPRESENTATIONS OF FACT TO INCLUDE THIS WAIVER OR TRIAL BY JURY OR HAS TAKEN ANY ACTIONS WHICH IN
ANY WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT BORROWER AND LENDER HAVE ALREADY
RELIED ON THIS WAIVER IN ENTERING INTO THIS NOTE AND THAT EACH OF THEM WILL CONTINUE TO RELY ON
THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER AND LENDER FURTHER ACKNOWLEDGE THAT THEY
HAVE BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
COUNSEL.

(continued on the following page)

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     In witness whereof, the undersigned has executed this Note or has caused the same to be
executed by its duly authorized representative as of the date above first written.

	 	 	 	 	 	 	 
	 	 	Lender:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Harold Hamm	 	 
	 	 	 	 	 
	 	 	Harold Hamm	 	 
	 
	 	 	 	 	 	 
	 	 	Borrower:	 	 
	 
	 	 	 	 	 	 
	 	 	HILAND HOLDINGS GP, LP, a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 
	 	 	By:	 	Hiland Partners GP Holdings, LLC, its general partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Matthew S. Harrison
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Matthew S. Harrison	 	 
	 

	 	Title:
	 	Vice President-Finance, Chief Financial Officer and Secretaryexv10w12

Exhibit 10.12

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (this “Agreement”), dated as of [       ], 2009, by
and between rue21, inc., a Delaware corporation (the “Company”) and [       ]
(the “Indemnitee”).

RECITALS 

     A. It is reasonable, prudent and in the best interests of the Company and its stockholders for
the Company contractually to obligate itself to indemnify persons serving as directors of the
Company to the fullest extent permitted by applicable law so that they will serve or continue to
serve as directors of the Company free from undue concern that they will not be so indemnified.

     B. The Indemnitee was asked to serve on the board of directors of the Company (the “Board
of Directors”).

     C. To the extent permitted by law, this Agreement is a supplement to and in furtherance of the
certificate of incorporation of the Company and provisions of the bylaws or resolutions adopted
pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any
rights of the Indemnitee thereunder.

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and the Indemnitee do hereby covenant and agree as follows:

     Section 1. Definitions. As used in the foregoing Recitals and in this Agreement, the following terms will have
those meanings set forth in this Section 1 unless the context dictates otherwise.

          (a) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations promulgated under the Securities
Exchange Act of 1934 (the “Exchange Act”), and the term “person” as used therein shall mean
any person or entity.

          (b) a “Change of Control” shall mean the happening after the date of this Agreement of
any of the following events:

               (i) if any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act, or any successor provisions to either of the preceding), including any individual,
entity or group agreeing to act together for the purpose of acquiring, holding, voting or disposing
of securities (as defined in Rule l3d-5(b)(1) under the Exchange Act), becomes the “beneficial
owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
50% or more of either (A) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”), or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Power”); provided, however, that
for purposes of this subsection (i) any acquisition by (A) any employee benefit plan (or related
trust)

 

 

sponsored or maintained by the Company or any corporation controlled by the Company or (B) any
Sponsor shall not constitute a Change of Control; or

               (ii) individuals who, as of the date of this Agreement, constitute the Board of Directors (the
“Incumbent Board”) cease for any reason not to constitute at least a majority of the Board
of Directors; provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors; and provided, further, that any change in the composition of
the Board of Directors instituted or approved by the holder or holders, either directly or
indirectly, of a majority of the Outstanding Company Voting Power on the date hereof shall not
constitute a Change of Control; or

               (iii) consummation of a reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company (a “Business Combination”), in
each case, unless, following such Business Combination all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Power immediately prior to such Business Combination, or their
respective Affiliates, beneficially own, directly or indirectly, more than 50% of, respectively,
the then outstanding shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries); or

               (iv) approval by the shareholders of the Company of a liquidation or dissolution of the
Company.

          (c) “Corporate Status” describes the status of a person who is or was a director of
the Company or is or was serving in such capacity, at the request of the Company, of another
corporation, partnership, joint venture, trust or other enterprise.

          (d) “Disinterested Director” means a director of the Company who is not and was not a
party to, or otherwise involved in, the Proceeding for which indemnification is sought by the
Indemnitee.

          (e) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, costs of any appeal bond, witness fees, travel expenses,
duplicating costs and printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred in connection
with prosecuting, defending, preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding.

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          (f) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the past five (5) years
has been, retained to represent: (i) the Company or the Indemnitee in any matter material to either
such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include
any person who, under the applicable standards of professional conduct then prevailing, would have
a conflict of interest in representing either the Company or the Indemnitee in an action to
determine the Indemnitee’s rights under this Agreement.

          (g) “Proceeding” includes any action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other proceeding whether civil, criminal,
administrative or investigative.

          (h) “Sponsor” means Apax Partners, L.P., funds advised by Apax Partners, L.P. and
their respective Affiliates and Associates.

     Section 2. Indemnification (General). The Company shall indemnify and advance Expenses to the Indemnitee as provided in this
Agreement and to the fullest extent permitted by applicable law in effect on the date hereof and to
such greater extent as applicable law may thereafter from time to time permit. The rights of the
Indemnitee provided under the preceding sentence shall include, but shall not be limited to, the
rights set forth in other sections of this Agreement.

     Section 3. Proceedings Other Than Proceeding by or in the Right of the Company. The Indemnitee shall be entitled to the right of indemnification provided in this Section 3
if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or
participant in any threatened, pending or completed Proceeding, other than a Proceeding by or in
the right of the Company. Under this Section 3, the Company will indemnify the Indemnitee against
Expenses, judgments, penalties, fines and amounts paid in settlement (as and to the extent
permitted hereunder) actually and reasonably incurred by him or on his behalf in connection with
such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company and, with respect
to any criminal Proceeding, had no reasonable cause to believe this conduct was unlawful.

     Section 4. Proceedings by or in the Right of the Company. The Indemnitee shall be entitled to the rights of indemnification provided in this Section
4 if, by reason of his Corporate Status, he is, or is threatened to be made, party to or
participant in any threatened, pending or completed Proceeding brought by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section 4, the Indemnitee shall
be indemnified against Expenses actually and reasonably incurred by him or on his behalf in
connection with such Proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Company. Notwithstanding the foregoing, no
indemnification against such Expenses shall be made in respect of any claim, issue or matter in
such Proceeding as to which the Indemnitee shall have been adjudged to be liable to the Company, or
if applicable law prohibits such indemnification; provided, however, that if
applicable law so permits, indemnification against Expenses shall nevertheless be made by the

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Company in such event if and to the extent that the court in which such Proceeding shall have been
brought or is pending, shall determine upon application that, despite the adjudication of
liability, but in view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem proper.

     Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.

          (a) To the extent that the Indemnitee is, by reason of his Corporate Status, a party to and is
successful, on the merits, in any Proceeding, the Company will indemnify the Indemnitee against all
Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If the
Indemnitee is not wholly successful in defense of any Proceeding but is successful on the merits,
as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall
indemnify the Indemnitee against all Expenses actually and reasonably incurred by him or on his
behalf in connection with each such successfully resolved claim, issue or matter. For purposes of
this Section 5(a) and without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to
such claim, issue or matter. The provisions of this Section 5(a) are subject to Section 5(b)
hereof.

          (b) In no event shall the Indemnitee be entitled to indemnification under Section 5(a) hereof
with respect to a claim, issue or matter to the extent (i) applicable law prohibits such
indemnification, or (ii) an admission is made by the Indemnitee in writing to the Company or in
such Proceeding or a determination is made in such Proceeding that the standard of conduct required
for Indemnification under this Agreement has not been met with respect to such claim, issue or
matter.

     Section 6. Indemnification for Expenses as a Witness. Notwithstanding any provisions herein to the contrary, to the extent that the Indemnitee
is, by reason of his Corporate Status, a witness (which includes depositions, interrogatories,
document production, and similar demands or requests for information that may be relevant to a
Proceeding) in any Proceeding, he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith.

     Section 7. Advancement of Expenses.

          (a) The Company shall advance all reasonable Expenses incurred by or on behalf of the
Indemnitee in connection with any Proceeding within ten (10) days after the receipt by the Company
of a statement or statements from the Indemnitee requesting such advance or advances from time to
time, whether prior to or after the final disposition of such Proceeding; provided,
however, that the person or persons or entity making the determination of the Indemnitee’s
entitlement to indemnification under Section 5 (the “Reviewing Party”) hereof has not
determined that the Indemnitee would not be permitted to be indemnified under applicable law. Such
statement or statements shall reasonably evidence the Expenses incurred by or on behalf of the
Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of the
Indemnitee to repay any Expenses advanced if it shall ultimately be determined that the Indemnitee
is not entitled to be indemnified against such Expenses. The

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Company shall accept any such
undertaking without reference to the financial ability of the Indemnitee to make repayment and
without regard to the prospect of whether the Indemnitee may ultimately be found to be entitled to
indemnification under the provisions of this Agreement.

          (b) The Company’s obligation to advance Expenses pursuant to Section 7(a) hereof shall be
subject to the condition that, if, when and to the extent that the Reviewing Party determines that
the Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall
be entitled to be reimbursed by the Indemnitee (who agrees to reimburse the Company) for all such
amounts theretofore paid; provided, however, that if the Indemnitee has commenced
or thereafter commences legal proceedings hereunder to secure a determination that the Indemnitee
should be indemnified under applicable law, any determination made by the Reviewing Party to the
contrary shall not be binding and the Indemnitee shall not be required to reimburse the Company for
any Expenses advanced until a final judicial determination is made with respect thereto. Any
required reimbursement of Expenses by the Indemnitee shall be made by the Indemnitee to the Company
within ten (10) days following the determination that the Indemnitee would not be entitled to
indemnification.

     Section 8. Procedure for Determination of Entitlement to Indemnification.

          (a) To obtain indemnification under this Agreement, the Indemnitee shall submit to the Company
a written request, including therein or therewith such documentation and information as is
reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what
extent the Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly
upon receipt of such a request for indemnification, advise the Board of Directors in writing that
the Indemnitee has requested indemnification.

          (b) Upon written request by the Indemnitee for indemnification pursuant to Section 8(a)
hereof, a determination, if required by applicable law, with respect to the Indemnitee’s
entitlement thereto shall be made in the specific case:

               (i) by the Board of Directors by a majority vote or consent of Disinterested Directors, even
though less than a quorum; or

               (ii) by majority vote or consent of a committee of Disinterested Directors duly designated by
the Board of Directors, even though less than a quorum (in which designation of the committee, the
directors, whether or not Disinterested Directors, may participate); or

               (iii) by Independent Counsel, as selected pursuant to Section 8(c) hereof, if there are no
Disinterested Directors, or if the Disinterested Directors so direct, in a written opinion to the
Board of Directors, a copy of which opinion shall be delivered to the Indemnitee; or

               (iv) by vote or consent of the holders of a majority of the Company’s common stock that are
represented in person or by proxy and entitled to vote at a meeting called for such purpose.

5

 

          (c) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel, the Independent Counsel shall be selected as provided in this Section 8(c).
If a Change of Control has not occurred, the Independent Counsel shall be selected by the Board of
Directors (including a vote of a majority of the Disinterested Directors if obtainable), and the
Company shall give written notice to the Indemnitee advising him of the identity of the Independent
Counsel so selected. If a Change of Control has occurred, the Independent Counsel shall be
selected by the Indemnitee (unless the Indemnitee shall request that such selection be made by the
Board of Directors, in which event the preceding sentence shall apply), and approved by the Board
of Directors (which approval shall not be unreasonably withheld). If (i) an Independent Counsel is
to make the determination of entitlement pursuant to this Section 8, and (ii) within twenty (20)
days after submission by the Indemnitee of a written request for indemnification pursuant to
Section 8(a) hereof, no Independent Counsel shall have been selected, either the Company or the
Indemnitee may petition the appropriate court of the State of Delaware or another court of
competent jurisdiction (the “Court”) for the appointment of an Independent Counsel to be
selected by the Court or by such other person as the Court shall designate. The fees and expenses
incurred by the Independent Counsel in making any determination shall be borne solely by the
Company regardless of the results of any determination and, if requested by the Independent
Counsel, the Company shall give such Independent Counsel an appropriate written agreement with
respect to the payment of the fees and expenses and such other matters as may be reasonably
requested by the Independent Counsel. Furthermore, the Company shall pay all reasonable fees and
expenses in connection with the procedures set forth in this Section 8(c) regardless of the manner
in which such Independent Counsel was appointed. Upon the due commencement of any judicial
proceeding or arbitration pursuant to Section 10(a)(iii) hereof, the Independent Counsel shall be
discharged and relieved of any further responsibility in such capacity.

     Section 9. Presumptions and Effect of Certain Proceedings.

          (a) In making a determination with respect to whether the Indemnitee is entitled to
indemnification hereunder, the Reviewing Party making such determination shall presume that the
Indemnitee is entitled to indemnification under this Agreement if the Indemnitee has submitted a
request for indemnification in accordance with Section 8(a) hereof, and anyone seeking to overcome
this presumption shall have the burden of proof and the burden of persuasion, by clear and
convincing evidence.

          (b) Subject to the terms of Section 14.4 hereof, the termination of any Proceeding or of any
claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of the Indemnitee to indemnification or create a
presumption that the Indemnitee did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interest of the Company and, with respect to any
criminal Proceeding, had reasonable cause to believe that his conduct was unlawful.

          (c) For purposes of any determination of good faith, the Indemnitee shall be deemed to have
acted in good faith, if the Indemnitee’s action is based on (i) the records or books of account of
the Company, including financial statements, (ii) information supplied to the

6

 

Indemnitee by the
officers of the Company in the course of their duties, (iii) the advice of legal or financial
counsel for the Company or the Board of Directors (or any committee thereof) or (iv) information or
records given or reports made by an independent certified public accountant or by an appraiser or
other expert selected by the Company or the Board of Directors (or any committee thereof). The
provisions of this Section 9(c) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed or found to have met the applicable
standard of conduct set forth in this Agreement. In addition, the knowledge and/or actions, or
failure to act, of any other director, trustee, partner, managing member, fiduciary, officer, agent
or employee of the Company shall not be imputed to the Indemnitee for purposes of determining the
right to indemnification under this Agreement.

     Section 10. Remedies of the Indemnitee. 

          (a) In the event (i) a determination is made pursuant to Section 8 hereof that the Indemnitee
is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely
made pursuant to Section 7 hereof, (iii) the determination of entitlement to indemnification is to
be made by Independent Counsel pursuant to Section 8(b) or Section 8(c) hereof and such
determination shall not have been made and delivered in a written opinion within forty-five (45)
days after receipt by the Company of the request for indemnification, (iv) payment of
indemnification is not made pursuant hereto within ten (10) days after receipt by the Company of a
written request therefor, or (v) payment of indemnification is not made within ten (10) days after
a determination has been made that the Indemnitee is entitled to indemnification or such
determination is deemed to have been made pursuant to this Agreement, the Indemnitee
shall be entitled to seek an adjudication in the Court of Chancery of the State of Delaware of
his entitlement to such indemnification or advancement of Expenses. Alternatively, the Indemnitee,
at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to
the rules of the American Arbitration Association. The Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within one hundred eighty (180) days following
the date on which the Indemnitee first has the right to commence such proceeding pursuant to this
Section 10(a); provided, however, that the foregoing clause shall not apply in
respect of a proceeding brought by the Indemnitee to enforce his rights hereunder.

          (b) In the event that a determination is made that the Indemnitee is not entitled to
indemnification hereunder, any judicial proceeding or arbitration commenced pursuant to this
Section 10 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and
the Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial
proceeding or arbitration commenced pursuant to this Section 10, the Company shall have the burden
of proving that the Indemnitee is not entitled to indemnification or advancement of Expenses, as
the case may be, and the Company shall be precluded from referring to or offering into evidence a
determination made pursuant to Section 8 hereof that is adverse to the Indemnitee’s right to
indemnification or advancement of Expenses, as the case may be. If the Indemnitee commences a
judicial proceeding or arbitration pursuant to this Section 10, the Indemnitee shall not be
required to reimburse the Company for any advances hereunder until a final determination is made
with respect to the Indemnitee’s entitlement to indemnification (as to which rights of appeal have
been exhausted or lapsed).

7

 

          (c) If a determination is made or deemed to have been made hereunder that the Indemnitee is
entitled to indemnification, the Company shall be bound by such determination in any judicial
proceeding or arbitration commenced pursuant to this Section 10, absent (i) a misstatement by the
Indemnitee of a material fact, or an omission by the Indemnitee of a material fact necessary to
make the Indemnitee’s statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable law.

          (d) The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 10 that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement.

          (e) In the event that the Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication or an award in arbitration to enforce his rights under, or to recover damages for
breach of, this Agreement, the Indemnitee shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any and all Expenses actually and reasonably incurred by him
in such judicial adjudication or arbitration; provided, however, if the court or
arbitrator rules that the Indemnitee had no reasonable basis to bring the claim. the Indemnitee is
not entitled to recover any Expenses incurred by the Indemnitee in the judicial adjudication or
arbitration.

          (f) Any judicial adjudication or arbitration determined under this Section 10 shall be final
and binding on the parties.

     Section 11. Non-Disclosure of Payments. Except as expressly required by the securities laws of the United States of America,
neither party shall disclose any payments under this Agreement unless prior approval of the other
party is obtained. If any payment information must be disclosed, the Company shall afford the
Indemnitee an opportunity to review all such disclosures and, if requested, to explain in such
statement any mitigating circumstances regarding the events to be reported.

     Section 12. Duration of Agreement. This Agreement shall continue for so long as the Indemnitee may have any liability or
potential liability by virtue of serving as a director of the Company, including, without
limitation, the final termination of all pending Proceedings in respect of which the Indemnitee is
granted rights of indemnification or advancement of Expenses hereunder and of any Proceeding
commenced by the Indemnitee pursuant to Section 10 hereof relating thereto. This Agreement shall
be binding upon and inure to the benefit of and be enforceable by the parties hereto and their
respective successors (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company),
assigns, spouses, heirs, executors and personal and legal representatives.

     Section 13. Maintenance of Insurance. The Company shall use commercially reasonable efforts to obtain and maintain in effect
during the entire period for which the Company is obligated to indemnify the Indemnitee under this
Agreement, one or more policies of insurance with reputable insurance companies to provide the
directors of the Company with

8

 

coverage for losses from wrongful acts and omissions and to ensure
the Company’s performance of its indemnification obligations under this Agreement. The Indemnitee
shall be covered by such policy or policies in accordance with its or their terms to the maximum
extent of the coverage available for any such director or officer under such policy or policies.
In all such insurance policies, the Indemnitee shall be named as an insured in such a manner as to
provide the Indemnitee with the same rights and benefits as are accorded to the most favorably
insured of the Company’s directors and officers.

     Section 14. Miscellaneous.

     Section 14.1 Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

          (a) The rights of indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which the Indemnitee may at any time
be entitled under applicable law, the certificate of incorporation, the bylaws, any agreement, a
vote of stockholders or resolutions of directors, or otherwise. No
amendment, alteration or repeal of this Agreement or any provision hereof shall be effective
as to the Indemnitee with respect to any action taken or omitted by the Indemnitee in his Corporate
Status prior to such amendment, alteration or repeal.

          (b) The Company is the primary indemnitor, and any indemnification or advancement obligation
of the Sponsor is secondary.

          (c) In the event of any payment under this Agreement, the Company shall be subrogated to the
extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all
papers required and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such rights, provided,
however, the Company waives, and releases the Sponsor from, any claims for contribution,
subrogation, or any other recovery of any kind.

          (d) The Company shall be liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder if and to the extent that the Indemnitee has otherwise actually received
such payment from any Sponsor.

     Section 14.2 Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or
unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the
remaining provisions of this Agreement (including, without limitation, each portion of any section
of this Agreement containing any such provision held to be invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby; (b) such provision or provisions will be deemed
reformed to the extent necessary to conform to applicable law and to give maximum effect to the
intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any section of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or enforceable) shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.

     Section 14.3 Exception to Right of Indemnification or Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Indemnitee shall not be entitled
to

9

 

indemnification or advancement of Expenses under this Agreement with respect to any Proceeding,
or any claim therein, brought or made by him against the Company except for any claim or Proceeding
in respect of this Agreement and/or the Indemnitee’s rights hereunder.

     Section 14.4 Settlement of Claims. The Company shall not be liable to indemnify the Indemnitee under this Agreement for any
amounts paid in settlement of any Proceeding effected without the Company’s written consent. The
Company will not unreasonably withhold its consent to any proposed settlement. The Company shall
furthermore not be liable to indemnify the Indemnitee under this Agreement
with regard to any judicial award if the Company was not given a reasonable and timely
opportunity, at its expense, to participate in the defense of such action.

     Section 14.5 Counterparts. This Agreement may be executed in one or more counterparts (whether by original, photocopy
or facsimile signature), each of which shall for all purposes be deemed to be an original but all
of which together shall constitute one and the same agreement. Only one such counterpart executed
by the party against whom enforceability is sought needs to be produced to evidence the existence
of this Agreement.

     Section 14.6 Headings. The headings of the sections or paragraphs of this Agreement are inserted for convenience
only and shall not be deemed to constitute a part of this Agreement or to affect the construction
thereof.

     Section 14.7 Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed
in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.

     Section 14.8 Notice by Indemnitee. The Indemnitee agrees promptly to notify the Company in writing upon being served with any
summons, citation, subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter which may be subject to indemnification or advancement of Expenses covered
hereunder.

     Section 14.9 Notices. All notices, requests, demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given if (i) delivered by hand and received for by the party to
whom said notice or other communication shall have been directed, or (ii) mailed by U.S. certified
or registered mail with postage prepaid by overnight courier: (a) if to the Company: 2101 91st
Street, North Bergen, New Jersey 07047, Attention: General Counsel; and (b) if to any other party
hereto, including the Indemnitee, to the address of such party set forth on the signature page
hereof; or to such other address as may have been furnished by any party to the other(s), in
accordance with this Section 14.9.

     Section 14.10 Governing Law; Venue, Etc.

          (a) THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.

10

 

          (b) ANY “ACTION OR PROCEEDING” (AS SUCH TERM IS DEFINED BELOW) ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE FILED IN AND LITIGATED SOLELY BEFORE THE COURT OF CHANCERY
LOCATED IN THE STATE OF DELAWARE AND EACH PARTY TO THIS AGREEMENT: (1) GENERALLY AND
UNCONDITIONALLY ACCEPTS THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND VENUE THEREIN, AND
WAIVES TO THE FULLEST EXTENT PROVIDED BY LAW ANY DEFENSE OR OBJECTION TO SUCH JURISDICTION AND
VENUE BASED UPON THE DOCTRINE OF “FORUM NON CONVENIENS”; AND (2) GENERALLY AND UNCONDITIONALLY
CONSENTS TO SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING BY DELIVERY OF CERTIFIED OR
REGISTERED MAILING OF THE SUMMONS AND COMPLAINT IN ACCORDANCE WITH THE NOTICE PROVISIONS OF THIS
AGREEMENT. FOR PURPOSES OF THIS SECTION 15.1, THE TERM “ACTION OR PROCEEDING” IS DEFINED AS ANY
AND ALL CLAIMS, SUITS, ACTIONS, HEARINGS, ARBITRATIONS OR OTHER SIMILAR PROCEEDINGS, INCLUDING
APPEALS AND PETITIONS THEREFROM, WHETHER FORMAL OR INFORMAL, GOVERNMENTAL OR NON-GOVERNMENTAL, OR
CIVIL OR CRIMINAL. THE FOREGOING CONSENT TO JURISDICTION SHALL NOT CONSTITUTE GENERAL CONSENT TO
SERVICE OF PROCESS IN THE STATE FOR ANY PURPOSE EXCEPT AS PROVIDED ABOVE, AND SHALL NOT BE DEEMED
TO CONFER RIGHTS ON ANY PERSON OTHER THAN THE PARTIES TO THIS AGREEMENT.

          (c) The Company acknowledges that the Indemnitee may, as a result of the Company’s breach of
its covenants and obligations under this Agreement, sustain immediate and long-term substantial and
irreparable injury and damage, which cannot be reasonably or adequately compensated by damages at
law. Consequently, the Company agrees that the Indemnitee shall be entitled, in the event of the
Company’s breach or threatened breach of its covenants and obligations hereunder, to obtain
equitable relief from a court of competent jurisdiction, including enforcement of each provision of
this Agreement by specific performance and/or temporary, preliminary and/or permanent injunctions
enforcing any of the Indemnitee’s rights, requiring performance by the Company, or enjoining any
breach by the Company, all without proof of any actual damages that have been or may be caused by
the Indemnitee by such breach or threatened breach and without the posting of bond or other
security in connection therewith. The Company waives the claim or defense therein that the
Indemnitee has an adequate remedy at law, and the Company shall not allege or otherwise assert the
legal position that any such remedy at law exists. The Company agrees and acknowledges that: (i)
the terms of this Section 15.1(c) are fair, reasonable and necessary to protect the legitimate
interests of the Indemnitee; (ii) this waiver is a material inducement to the Indemnitee to enter
into the transactions contemplated hereby; (iii) the Indemnitee relied upon this waiver in entering
into this Agreement; and will continue to rely on this waiver in its future dealings with the
Company. The Company warrants and represents that it has reviewed this provision with its legal
counsel,
and that it has knowingly and voluntarily waived its rights referenced in this Section 15.1(c)
following consultation with such legal counsel.

     Section 14.11 Usage of Pronouns. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where
appropriate.

11

 

[Signatures on Following Page]

12

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day
and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	

	ATTEST:	 	 	 	rue21, inc.	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	Name:

	 	 

	 	 
	 	Name:
	 	 

	 	 
	Title:

	 	 

	 	 
	 	Title:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	INDEMNITEE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Address:

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