Document:

Exhibit 10.1

 
                        AMENDMENT AND RESTATEMENT AGREEMENT dated as of December 18,
2008, among MACY'S, INC. (formerly known as FEDERATED DEPARTMENT STORES, INC., “Parent”),
MACY'S RETAIL HOLDINGS, INC. (formerly known as FEDERATED RETAIL HOLDINGS, INC.,
the “Borrower”), the LENDERS party hereto, JPMORGAN CHASE BANK, N.A. and
BANK OF AMERICA, N.A. as Administrative Agents (the “Administrative Agents”)
and JPMORGAN CHASE BANK, N.A., as Paying Agent (the “Paying Agent”),
under the Amended and Restated Credit Agreement dated as of August 30, 2007, as
amended (as in effect on the date hereof, the “Existing Credit Agreement”),
among the Parent, the Borrower, the lenders party thereto, the Administrative Agents
and the Paying Agent.

 WHEREAS Parent and the Borrower have requested,
and the undersigned Lenders and the Administrative Agents have agreed, upon the
terms and subject to the conditions set forth herein, that the Existing Credit
Agreement be amended and restated as provided herein.

NOW, THEREFORE, Parent, the Borrower, the undersigned
Lenders and the Administrative Agents hereby agree as follows:

SECTION 1. Defined Terms.  Capitalized terms
used but not defined herein shall have the meanings assigned to such terms in
the Restated Credit Agreement (as defined in Section 3 below); provided
that the defined term “Lender” as used herein shall have the meaning specified
in the Existing Credit Agreement.

SECTION 2. Restatement Effective Date.  (a)  The amendment and restatement of the Existing Credit Agreement provided for in
Section 3 hereof shall be consummated at a closing to be held on the
Restatement Effective Date at the offices of Cravath, Swaine & Moore LLP.

(b)  The “Restatement Effective Date” shall
be January 5, 2009, provided that all the conditions set forth or referred
to in Section 5 hereof shall have been satisfied.

SECTION 3. Amendment and
Restatement of the Existing Credit Agreement.  (a)  Effective on the
Restatement Effective Date, the Existing Credit Agreement is hereby amended and
restated to read in its entirety as set forth in Exhibit A hereto (the “Restated
Credit Agreement”).  From and after the effectiveness of such amendment and
restatement, the terms “Agreement”, “this Agreement”, “herein”, “hereinafter”,
“hereto”, “hereof” and words of similar import, as used in the Restated Credit
Agreement, shall, unless the context otherwise requires, refer to the Restated Credit
Agreement, and the term “Credit Agreement”, as used in the other Loan
Documents, shall mean the Restated Credit Agreement.

(b)  All “Commitments” as defined in, and in effect
under, the Existing Credit Agreement on the Restatement Effective Date shall
continue in effect under the Restated Credit Agreement, and all “Loans” and “Letters
of Credit” as defined in, and outstanding under, the Existing Credit Agreement
on the Restatement Effective Date shall continue to be outstanding under the Restated
Credit Agreement, and on and after the Restatement Effective Date the terms of
the Restated Credit Agreement will govern the rights and obligations of Parent,
the Borrower, the Lenders, the Administrative Agents and the Paying Agent with
respect thereto.

(c)  The amendment and restatement of the Existing
Credit Agreement as contemplated hereby shall not be construed to discharge or
otherwise affect any obligations of Parent or the Borrower accrued or otherwise
owing under the Existing Credit Agreement that have not been paid, it being
understood that such obligations will constitute obligations under the Restated
Credit Agreement.

SECTION 4. Amendment Fee.  The Borrower
agrees to pay to the Paying Agent, for the account of each Lender that executes
and delivers a counterpart of this Agreement (as provided in Section 5(a)
below) prior to 12:00 noon, New York City time, on December 18, 2008 (or
such later time or date as the Administrative Agents and the Borrower may
agree), a fee equal to 0.375% of the amount of its Commitment as of the Restatement
Effective Date.  Such fee shall be due and payable on the Restatement Effective
Date.

SECTION 5. Conditions.  The effectiveness of
the amendment and restatement of the Existing Credit Agreement pursuant to
Section 3 of this Agreement shall be subject to the satisfaction (or
waiver) of the following conditions precedent:

(a)  The Paying Agent (or its counsel) shall have
received from each of Parent, the Borrower and the Required Lenders under (and
as defined in) the Existing Credit Agreement either a counterpart of this
Agreement signed on behalf of such party or written evidence satisfactory to
the Paying Agent (which may include facsimile or other electronic transmission
of a signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement.

(b)  The Paying Agent (or its counsel) shall have
received from Parent, the Borrower and each Subsidiary Loan Party as of the
Restatement Effective Date, either a counterpart of the Guarantee Agreement (in
the form attached hereto as Exhibit B) signed on behalf of such party or
written evidence satisfactory to the Paying Agent (which may include facsimile
or other electronic transmission of a signed signature page of the Guarantee
Agreement) that such party has signed a counterpart of the Guarantee Agreement.

(c)  The Paying Agent shall have received a favorable
written opinion (addressed to the Paying Agent and the Lenders and dated as of the
Restatement Effective Date) of (i) Jones Day, counsel to the Loan Parties and
(ii) Dennis J. Broderick, the General Counsel for Parent, substantially in
the forms of Exhibits C-1 and C-2, respectively, in each case covering
such matters relating to the Loan Parties, the Transactions or the Loan
Documents as the Required Lenders shall reasonably request.  Parent and the
Borrower hereby request such counsel to deliver such opinions.

(d)  The Paying Agent shall have received such
documents and certificates as the Paying Agent or its counsel may reasonably
request relating to the organization, existence and good standing of the Loan
Parties and the authorization of the Transactions and any other legal matters
relating to the Loan Parties, the Transactions or the Loan Documents, all in
form and substance satisfactory to the Paying Agent and its counsel, including
all documentation and other information required by bank regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including the Patriot Act.

(e)  The representations and warranties of the Loan
Parties set forth in the Loan Documents shall be true and correct in all
material respects as of the Restatement Effective Date (except for the
representations and warranties set forth in the Restated Credit Agreement in
Section 3.04(b) and clause (a) of Section 3.05, which shall be
true and correct in all material respects as of the date hereof), no Default
shall have occurred and be continuing as of the Restatement Effective Date and
the Paying Agent shall have received a certificate, dated the Restatement Effective
Date and signed by a Responsible Officer or a Financial Officer of Parent and
the Borrower, confirming the foregoing.

(f)  The Paying Agent shall have received all fees
and other amounts due and payable on or prior to the Restatement Effective
Date, including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrower under
the Loan Documents.

The Administrative Agents
shall notify the Borrower and the Lenders of the Restatement Effective Date,
and such notice shall be conclusive and binding.  Notwithstanding the
foregoing, the amendment and restatement of the Existing Credit Agreement as
contemplated hereby shall not become effective unless each of the foregoing
conditions is satisfied or waived prior to 5:00 p.m., New York City time, on
January 5, 2009 (and, in the event such conditions are not so satisfied or
waived, the Existing Credit Agreement shall remain in effect without giving
effect to any provisions of this Agreement). 

SECTION 6. Subsidiary Loan Parties.  Parent
and the Borrower represent that Schedule A hereto completely and accurately
sets forth the names and jurisdictions of organization of each Subsidiary Loan
Party as of the Restatement Effective Date.

SECTION 7. Effectiveness; Counterparts;
Amendments.  This Agreement shall become effective and binding when counterparts
hereof which, when taken together, bear the signatures of Parent, the Borrower,
the Administrative Agents and the Required Lenders shall have been received by
the Paying Agent in the manner contemplated by Section 5(a).  This
Agreement may not be amended nor may any provision hereof be waived except
pursuant to a writing signed by Parent, the Borrower, the Administrative Agents
and the Required Lenders.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute a single contract.  Delivery of an executed
counterpart of a signature page of this Agreement by facsimile or other
electronic transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.

SECTION 8. No Novation.  This Agreement
shall not extinguish the Loans or other obligations outstanding under the
Existing Credit Agreement.  This Agreement shall be a Loan Document for all
purposes.

SECTION 9. Notices.  All notices hereunder
shall be given in accordance with the provisions of Section 9.01 of the Restated
Credit Agreement.

SECTION 10. Applicable Law; Waiver of Jury
Trial.  (A)  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

(B)  EACH PARTY HERETO HEREBY AGREES AS
SET FORTH IN SECTION 9.10 OF THE RESTATED CREDIT AGREEMENT AS IF SUCH SECTION
WERE SET FORTH IN FULL HEREIN.

SECTION 11. Headings.  The Section headings
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

 

 

 

[Remainder of page
intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.

	
   

  	
  MACY’S, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Karen M. Hoguet                                   

  Name:
  Karen M. Hoguet

  Title: Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MACY’S RETAIL HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Karen M. Hoguet                                   

  Name:
  Karen M. Hoguet

  Title: Executive Vice President and Chief Financial Officer:

  

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.,
  individually and as Administrative Agent and Paying Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Barry Bergman                                       

  Name:
  Barry Bergman

  Title: Managing Director

  

 

 

	
   

  	
  BANK OF AMERICA, N.A.,
  individually and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Thomas J. Kane                                      

  Name:
  Thomas J. Kane

  Title: SVP

  
	
   

  	
   

  

Signature page to the
Amendment and Restatement Agreement

dated as of December 18,
2008 relating to the 

Amended and Restated Credit Agreement dated as of August 30, 2007, of

Macy’s, Inc. and

Macy’s Retail Holdings,
Inc. 

 

 

 

	
   

  	
                             
  Fifth Third
  Bank                        

                             [Name
  of Lender]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Megan S. Heisel                                     

  Name:
  Megan S. Heisel

  Title: Vice President

   

  

 

Signature page to the
Amendment and Restatement Agreement

dated as of December 18,
2008 relating to the 

Amended and Restated Credit Agreement dated as of August 30, 2007, of

Macy’s, Inc. and

Macy’s Retail Holdings,
Inc. 

 

 

 

	
   

  	
        CREDIT
  SUISSE, Cayman Islands Branch     

                             [Name
  of Lender]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Doreen  Barr                                          

  Name:
  Doreen Barr

  Title: Vice President

   

  
	
   

  	
  By: /s/ Christopher Reo Day                              

  Name: Christopher Reo Day

  Title: Associate

   

  

 

Signature page to the
Amendment and Restatement Agreement

dated as of December 18,
2008 relating to the 

Amended and Restated Credit Agreement dated as of August 30, 2007, of

Macy’s, Inc. and

Macy’s Retail Holdings,
Inc. 

 

 

 

	
   

  	
                              First
  Hawaiian
  Bank                         

                             [Name
  of Lender]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ Dawn Hoffman                                       

  Name:
  Dawn Hoffman

  Title: Vice President

   

  

 

Signature page to the
Amendment and Restatement Agreement

dated as of December 18,
2008 relating to the 

Amended and Restated Credit Agreement dated as of August 30, 2007, of

Macy’s, Inc. and

Macy’s Retail Holdings,
Inc. 

 

 

 

	
   

  	
                       PNC
  Bank, National Association            

                             [Name
  of Lender]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: /s/ C. Joseph Richardson                             

  Name:
  C. Joseph Richardson

  Title: Senior Vice President

   

  

 

 

	
  AMENDED AND RESTATED CREDIT
  AGREEMENT

  dated as of

  August 30, 2007

  As Amended and Restated as of January 5,
  2009,

  among

  MACY'S, INC. 

  (formerly known as FEDERATED DEPARTMENT STORES, INC.)

  MACY'S RETAIL
  HOLDINGS, INC. 

  (formerly known as FEDERATED RETAIL
  HOLDINGS, INC.)

  The Lenders Party Hereto

  JPMORGAN CHASE BANK, N.A.

  and

  BANK OF AMERICA, N.A., 

  as Administrative Agents

  and

  JPMORGAN CHASE BANK, N.A.,

  as Paying Agent

  ___________________________

  J.P. MORGAN SECURITIES INC.

  and

  BANC OF AMERICA SECURITIES LLC,

  as Joint Bookrunners and Joint Lead Arrangers

  

[Reference No.
6701-495]

TABLE OF CONTENTS

Page

ARTICLE I

Definitions

SECTION 1.01...... Defined Terms................................................................................... 1

SECTION 1.02...... Classification of Loans and Borrowings............................................ 20

SECTION 1.03...... Terms Generally.............................................................................. 20

SECTION 1.04...... Accounting Terms; GAAP............................................................... 20

SECTION 1.05...... Amendment and Restatement........................................................... 20

ARTICLE II

The Credits

SECTION 2.01...... Commitments.................................................................................. 21

SECTION 2.02...... Loans and Borrowings..................................................................... 21

SECTION 2.03...... Requests for Revolving Borrowings.................................................. 22

SECTION 2.04...... Competitive Bid Procedure.............................................................. 23

SECTION 2.05...... Swingline Loans............................................................................... 25

SECTION 2.06...... Letters of Credit.............................................................................. 26

SECTION 2.07...... Funding of Borrowings..................................................................... 33

SECTION 2.08...... Interest Elections............................................................................. 33

SECTION 2.09...... Termination and Reduction of Commitments..................................... 35

SECTION 2.10...... Repayment of Loans; Evidence of Debt............................................ 35

SECTION 2.11...... Prepayment of Loans....................................................................... 36

SECTION 2.12...... Fees................................................................................................ 37

SECTION 2.13...... Interest............................................................................................ 38

SECTION 2.14...... Alternate Rate of Interest................................................................. 39

SECTION 2.15...... Increased Costs............................................................................... 39

SECTION 2.16...... Break Funding Payments................................................................. 41

SECTION 2.17...... Taxes.............................................................................................. 41

SECTION 2.18...... Payments Generally; Pro Rata Treatment;
Sharing of Set‐offs........... 43

SECTION 2.19...... Mitigation Obligations; Replacement of
Lenders............................... 44

SECTION 2.20...... Increase in Commitments................................................................. 45

SECTION 2.21...... Currency Fluctuations...................................................................... 46

SECTION 2.22...... Extension of Maturity Date............................................................... 47

SECTION 2.23...... Defaulting Lenders........................................................................... 48

ARTICLE III

Representations and Warranties

SECTION 3.01...... Organization.................................................................................... 48

SECTION 3.02...... Powers; Authorization; No Conflicts;
Enforceability.......................... 48

SECTION 3.03...... Approvals....................................................................................... 48

SECTION 3.04...... Financial Condition; No Material Adverse
Change........................... 49

SECTION 3.05...... Litigation......................................................................................... 49

SECTION 3.06...... Investment Company Status............................................................. 49

SECTION 3.07...... ERISA............................................................................................ 49

SECTION 3.08...... Bloomingdale’s Lease...................................................................... 49

ARTICLE IV

Conditions

SECTION 4.01...... Effective Date.................................................................................. 50

SECTION 4.02...... Each Credit Event............................................................................ 50

ARTICLE V

Affirmative Covenants

SECTION 5.01...... Financial Statements; Ratings Change and
Other Information............ 50

SECTION 5.02...... Existence......................................................................................... 52

SECTION 5.03...... Payment of Obligations.................................................................... 53

SECTION 5.04...... Maintenance of Properties; Insurance............................................... 53

SECTION 5.05...... Books and Records; Inspection Rights............................................. 53

SECTION 5.06...... Compliance with Laws..................................................................... 53

SECTION 5.07...... Use of Proceeds and Letters of Credit............................................. 53

SECTION 5.08...... Additional Subsidiaries; Reinstatement of
Guarantees........................ 54

SECTION 5.09...... Corporate Existence; Inventory
Recordkeeping................................ 54

ARTICLE VI

Negative Covenants

SECTION 6.01...... Subsidiary Indebtedness.................................................................. 55

SECTION 6.02...... Liens............................................................................................... 56

SECTION 6.03...... Fundamental Changes; Conduct of Business..................................... 57

SECTION 6.04...... Sale and Leaseback Transactions..................................................... 58

SECTION 6.05...... Leverage Ratio................................................................................ 58

SECTION 6.06...... Interest Coverage Ratio................................................................... 58

SECTION 6.07...... Subsidiary Loan Parties................................................................... 59

SECTION 6.08...... Restricted Payments........................................................................ 59

SECTION 6.09...... Restricted Agreements..................................................................... 60

SECTION 6.10...... Bloomingdale’s................................................................................ 60

ARTICLE VII

Events of Default

ARTICLE VIII

The Agents

ARTICLE IX

Miscellaneous

SECTION 9.01...... Notices........................................................................................... 66

SECTION 9.02...... Waivers; Amendments..................................................................... 67

SECTION 9.03...... Expenses; Indemnity; Damage Waiver.............................................. 68

SECTION 9.04...... Successors and Assigns................................................................... 69

SECTION 9.05...... Survival........................................................................................... 72

SECTION 9.06...... Counterparts; Integration; Effectiveness............................................ 72

SECTION 9.07...... Severability...................................................................................... 72

SECTION 9.08...... Right of Setoff................................................................................. 73

SECTION 9.09...... Governing Law; Jurisdiction; Consent to
Service of Process............. 73

SECTION 9.10...... WAIVER OF JURY TRIAL........................................................... 74

SECTION 9.11...... Headings......................................................................................... 74

SECTION 9.12...... Confidentiality.................................................................................. 74

SECTION 9.13...... Interest Rate Limitation.................................................................... 75

SECTION 9.14...... Patriot Act....................................................................................... 75

SECTION 9.15...... Conversion of Currencies................................................................. 75

 

SCHEDULES:

Schedule 2.01 -- Commitments

Schedule 6.01 -- Existing Indebtedness

Schedule 6.02 -- Existing Liens

Schedule 6.09 – Existing Restrictions

EXHIBITS:

Exhibit A -- Form of Assignment and Assumption

 

                        AMENDED AND RESTATED CREDIT AGREEMENT dated as of August 30,
2007, as amended and restated as of January 5, 2009, among MACY'S, INC.
(formerly known as FEDERATED DEPARTMENT STORES, INC.), MACY'S RETAIL HOLDINGS,
INC. (formerly known as FEDERATED RETAIL HOLDINGS, INC.), the LENDERS party
hereto, JPMORGAN CHASE BANK, N.A. and BANK OF AMERICA, N.A. as Administrative
Agents and JPMORGAN CHASE BANK, N.A., as Paying Agent.

                        WHEREAS,
pursuant to the Amendment and Restatement Agreement (such term and other
capitalized terms used herein, having the meanings set forth in
Section 1.01 below), Parent and the Borrower have requested, and the
Required Lenders have agreed, upon the terms and subject to the conditions set
forth therein, that the Existing Credit Agreement be amended and restated in
its entirety as provided herein effective as provided in the Amendment and
Restatement Agreement;

NOW, THEREFORE,
the parties hereto agree as follows:

SECTION
12. 

Definitions

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

“ABR”, when used in reference to any
Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the
Alternate Base Rate.

 “Acquisition” means the acquisition of
May by Federated Department Stores, Inc. (now known as Macy's, Inc.) pursuant
to the Merger Agreement, which resulted in the Borrower becoming a direct,
wholly owned subsidiary of Parent.

 “Adjusted LIBO Rate” means, with
respect to any Eurodollar Borrowing for any Interest Period, an interest rate
per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
(a) the LIBO Rate for such Interest Period multiplied by (b) the
Statutory Reserve Rate.

“Administrative Agent” means each of
JPMorgan Chase Bank, N.A. and Bank of America, N.A., each in its capacity as
administrative agent for the Lenders hereunder and under the other Loan
Documents. 

“Administrative Questionnaire” means an
Administrative Questionnaire in a form supplied by the Paying Agent.

“Affiliate” means, with respect to a
specified Person, another Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by or is under common Control
with the Person specified.

“Agents” means the Paying Agent and each
Administrative Agent.

“Alternate Base Rate” means, for any
day, a rate per annum equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Federal Funds Effective Rate on such day plus
1/2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period
on such day (or if such day is not a Business Day, the immediately preceding
Business Day) plus 1%; provided that, for the avoidance of doubt, for
purposes of calculating the Alternate Base Rate, the Adjusted LIBO Rate for any
day shall be based on the Reuters BBA Libor Rates page 3750 (or on any
successor or substitute page of such page) at approximately 11:00 a.m.
London time on such day.  Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall
be effective from and including the effective date of such change in the Prime
Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

“Alternate Currency” means any currency
other than dollars as to which a Spot Exchange Rate may be calculated.

“Alternate Currency Letter of Credit”
means any Letter of Credit which provides for the payment of drawings in an
Alternate Currency.

“Amendment and Restatement Agreement”
means the Amendment and Restatement Agreement dated as of December 18,
2008, among Parent, the Borrower, the Lenders party thereto, the Administrative
Agents and the Paying Agent.

“Applicable Percentage” means, with
respect to any Lender, the percentage of the Total Commitments represented by
such Lender’s Commitment.  If the Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Commitments most
recently in effect, giving effect to any assignments.

“Applicable Rate” means, for any day,
with respect to any Eurodollar Revolving Loan or ABR Loan, or with respect
to the commitment fees payable hereunder, as the case may be, the applicable
rate per annum set forth below under the caption “Eurodollar Spread”,
“ABR Spread” or “Commitment Fee Rate”, as the case may be, based upon the Public
Debt Ratings in effect on such date:

	
  Public Debt Ratings

  	
  Eurodollar Spread

  	
  ABR Spread

  	
  Commitment Fee Rate

  
	
  Level 1

  Greater than or equal to Baa2 and BBB

  	
  2.75%

  	
  2.25%

  	
  0.50%

  
	
  Level  2

  Baa3 and BBB-

  	
  3.00%

  	
  2.50%

  	
  0.50%

  
	
  Level 3

  Split rated between Level 2 and Level 4

  	
  3.50%

  	
  3.00%

  	
  0.50%

  
	
  Level 4

  Less than or equal to Ba1 and BB+

  	
  4.00%

  	
  3.50%

  	
  0.625%

  

For purposes of the
foregoing, (i) if either Moody’s or S&P shall not have in effect a
Public Debt Rating (other than by reason of the circumstances referred to in
the last sentence of this definition), then such rating agency shall be deemed
to have established a rating in Level 4; (ii) if the Public Debt
Ratings established or deemed to have been established by Moody’s and S&P
shall fall within different Levels then, except as contemplated by Level 3,
the Applicable Rate shall be based on the lower of the two Public Debt Ratings
unless one of the two Levels is two or more Levels lower than the other, in
which case the Applicable Rate shall be determined by reference to the Level
next below that of the higher of the two Public Debt Ratings; and (iii) if
the Public Debt Ratings established or deemed to have been established by
Moody’s and S&P shall be changed (other than as a result of a change in the
ratings system of Moody’s or S&P), such change shall be effective as of the
date on which it is first announced by the applicable rating agency,
irrespective of when notice of such change shall have been furnished pursuant
to Section 5.01 or otherwise.  Each change in the Applicable Rate shall
apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such
change.  If the rating system of Moody’s or S&P shall change, or if either
such rating agency shall cease to be in the business of rating corporate debt
obligations, the Borrower and the Lenders shall negotiate in good faith to
amend this definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Rate shall be determined by
reference to the rating most recently in effect prior to such change or
cessation.

“Assignment and Assumption” means an
assignment and assumption entered into by a Lender and an assignee (with the
consent of any party whose consent is required by Section 9.04), and
accepted by the Paying Agent, in the form of Exhibit A or any other form
approved by the Paying Agent.

“Augmenting Lender” has the meaning set
forth in Section 2.20(a).

“Availability Period” means the period
from and including the Effective Date to but excluding the earlier of the
Maturity Date and the date of termination of the Commitments.

“Bloomingdale’s” means Bloomingdale’s,
Inc., an Ohio corporation, together with its successors and assigns.

“Bloomingdale’s Lease” means the Amended
and Restated Lease, dated as of February 1, 1998, between B. Bros. Realty
Limited Partnership and Bloomingdale’s, as amended, waived or otherwise
modified from time to time.

“Bloomingdale’s Parties” means Bloomingdale’s
and any of its subsidiaries that are Subsidiary Loan Parties.

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

“Borrower” means Macy's Retail Holdings,
Inc. (formerly known as Federated Retail Holdings, Inc.), a New York
corporation.

“Borrowing” means (a) Revolving
Loans of the same Type, made, converted or continued on the same date and, in
the case of Eurodollar Loans, as to which a single Interest Period is in
effect, (b) a Competitive Loan or group of Competitive Loans of the same
Type made on the same date and as to which a single Interest Period is in
effect or (c) a Swingline Loan.

“Borrowing Request” means a request by
the Borrower for a Revolving Borrowing in accordance with Section 2.03.

 “Business Day” means any day that is
not a Saturday, Sunday or other day on which commercial banks in New York
City are authorized or required by law to remain closed; provided that, (a) when
used in connection with a Eurodollar Loan, the term “Business Day” shall
also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market and (b) when used in connection
with an Alternate Currency Letter of Credit, the term “Business Day” shall also
exclude any day on which commercial banks in the principal financial center (as
determined by the Paying Agent) of such Alternate Currency are authorized or
required by law to remain closed.

“Calculation Date” means the last
Business Day of March, June, September and December of each year.

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

“Change in Control” means (a) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person or group (within the meaning of the Securities Exchange Act of 1934
and the rules of the Securities and Exchange Commission thereunder as in effect
on the date hereof), of Equity Interests representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding
Equity Interests of Parent; (b) occupation of a majority of the seats
(other than vacant seats) on the board of directors of Parent by Persons who
were neither (i) nominated by the board of directors of Parent nor
(ii) appointed by directors so nominated; or (c) after the Effective
Date the Borrower ceases to be a direct, wholly owned subsidiary of Parent. 

“Change in Law” means (a) the
adoption of any law, rule or regulation after the Restatement Effective Date,
(b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this
Agreement or (c) compliance by any Lender or Issuing Bank (or, for
purposes of Section 2.15(b), by any lending office of such Lender or by
such Lender’s or Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

“Class”, when used in reference to any
Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are Revolving Loans, Competitive Loans or Swingline Loans.

“Code” means the Internal Revenue Code
of 1986, as amended from time to time.

“Commitment” means, with respect to each
Lender, the commitment of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender’s Revolving
Credit Exposure hereunder, as such commitment may be (a) reduced from time
to time pursuant to Section 2.09 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. 
The initial amount of each Lender’s Commitment is set forth on Schedule 2.01,
or in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Commitment, as applicable.  The initial aggregate amount of the
Lenders’ Commitments is $2,000,000,000.

“Commitment Increase” has the meaning
set forth in Section 2.20(b).

“Competitive Bid” means an offer by a
Lender to make a Competitive Loan in accordance with Section 2.04.

“Competitive Bid Rate” means, with
respect to any Competitive Bid, the Margin or the Fixed Rate, as applicable,
offered by the Lender making such Competitive Bid.

“Competitive Bid Request” means a
request by the Borrower for Competitive Bids in accordance with
Section 2.04.

“Competitive Loan” means a Loan made
pursuant to Section 2.04.

“Consenting Lender” has the meaning set
forth in Section 2.22(b).

“Consolidated EBITDA” means, for any period,
(a) the sum of (without duplication and in the case of clauses (ii)-(viii)
to the extent deducted in calculating Consolidated Net Income) (i) Consolidated
Net Income (or net loss), (ii) interest expense, (iii) income tax
expense, (iv) depreciation expense, (v) amortization expense
(including amortization of (A) excess of cost over net assets acquired, (B) reorganization
value in excess of amounts allocable to identifiable assets and (C) unearned
restricted stock), (vi) non-cash charges for such period arising from
impairment of goodwill, impairment of intangibles or impairments/write downs of
real estate or other long-term assets, (vii) extraordinary losses and (viii)
non-recurring cash charges in an aggregate amount for all periods commencing on
or after the Restatement Effective Date not to exceed $500,000,000 (and not
more than 20% of which shall be inventory valuation adjustments pursuant to
clause (D) below), in respect of (A) store, corporate office and support
function closings, eliminations, relocations and divisional realignments, (B) employee
severance costs, (C) fees, costs and expenses resulting from, or incurred
in connection with, any of the foregoing, and (D) inventory valuation
adjustments resulting from, or incurred in connection with, any of the
foregoing, less (b) the sum of (i) non-recurring or extraordinary
gains, (ii) interest income and (iii)  any payments made during such
period that were deducted as a non-cash charge in a previous period pursuant to
clause (a)(viii) above, in each case in clauses (a) and (b) of Parent and
the Subsidiaries, determined on a consolidated basis in accordance with GAAP.

 “Consolidated Net Income” means, for
any period, the net income or loss of Parent and the Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP.

“Consolidated Net Interest Expense”
means, for any period, the amount (if any) by which (a) interest payable on all
Indebtedness (including the interest component of Capitalized Lease
Obligations, but excluding tender premiums) and amortization of deferred financing
fees and debt discount in respect of all Indebtedness exceeds (b) interest
income, in each case in clauses (a) and (b), of Parent and the Subsidiaries, determined
on a consolidated basis in accordance with GAAP; provided
that any write-ups or write-downs of long-term Indebtedness of May (including
current portions) or its subsidiaries as a result of the Acquisition, and any
related amortization expense resulting therefrom, shall be disregarded for
purposes of determining Consolidated Net Interest Expense.

“Consolidated Net Tangible Assets”
means, at any date of determination,  (a) the aggregate amount of assets (less
applicable reserves and other properly deductible items), minus (b) all current
liabilities, minus (c) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, in each case
in clauses (a), (b) and (c) of Parent and the Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that any write-ups
or write-downs of long-term Indebtedness of May (including current portions) or
its subsidiaries as a result of the Acquisition, and any related amortization
expense resulting therefrom, shall be disregarded for purposes of determining
Consolidated Net Tangible Assets.

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

“Declining Lender” has the meaning set
forth in Section 2.22(b).

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

“Defaulting Lender” means any Lender, as
determined by the Administrative Agents, that has (a) failed to fund any
portion of its Loans or participations in Letters of Credit or Swingline Loans
within three Business Days of the date required to be funded by it hereunder,
(b) notified Parent, the Borrower, the Administrative Agents, an Issuing
Bank, a Swingline Lender or any Lender in writing that it does not intend to
comply with any of its funding obligations under this Agreement or has made a
public statement to the effect that it does not intend to comply with its
funding obligations under this Agreement or under other agreements in which it
commits to extend credit, (c) failed, within three Business Days after
request by the Administrative Agents, to confirm that it will comply with the
terms of this Agreement relating to its obligations to fund prospective Loans
and participations in then outstanding Letters of Credit and Swingline Loans; provided
that confirmation received by the Administrative Agents beyond three Business
Days shall remedy the default under this clause (c), (d) otherwise failed
to pay over to the Administrative Agents or any other Lender any other amount
required to be paid by it hereunder within three Business Days of the date when
due, unless the subject of a good faith dispute, or (e)(i) become or is
insolvent or has a parent company that has become or is insolvent or (ii) become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee or custodian appointed for it, or has taken any action in furtherance
of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment or has a parent company that has become the subject
of a bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee or custodian appointed for it, or has taken any action in furtherance
of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment.

“Disqualified Equity Interest” means,
with respect to any Person, any Equity Interest in such Person that by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable, either mandatorily or at the option of the holder
thereof), or upon the happening of any event or condition:

(i) matures or is mandatorily
redeemable (other than solely for Equity Interests in such Person that do not
constitute Disqualified Equity Interests and cash in lieu of fractional shares
of such Equity Interests), whether pursuant to a sinking fund obligation or
otherwise;

(ii) is convertible or
exchangeable at the option of the holder thereof for Indebtedness or Equity
Interests (other than solely for Equity Interests in such Person that do not
constitute Disqualified Equity Interests and cash in lieu of fractional shares
of such Equity Interests); or

(iii) is redeemable (other than
solely for Equity Interests in such Person that do not constitute Disqualified
Equity Interests and cash in lieu of fractional shares of such Equity
Interests) or is required to be repurchased by such Person or any of its
Affiliates, in whole or in part, at the option of the holder thereof.

“Documentary LC” means any letter of
credit (other than a Letter of Credit) that is issued by a Person that is not
an Affiliate of Parent for the benefit of a supplier of inventory to Parent or
any Subsidiary to effect payment for such inventory.

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

“Dollar Amount” means, with respect to any
Alternate Currency Letter of Credit or LC Disbursement in respect thereof, the
amount determined pursuant to Section 2.06(m).

“Dollar Equivalent” means, on any date
of determination, (a) with respect to any amount in dollars, such amount,
and (b) with respect to any amount in any Alternate Currency, the
equivalent in dollars of such amount, determined by the Paying Agent pursuant
to Section 2.21(a) using the relevant Dollar Amount.

“Effective Date” means August 30,
2007.

“Equity Interests” means shares of
capital stock, partnership interests, membership interests in a limited
liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the
holder thereof to purchase or acquire any such equity interest.

“ERISA” means the Employee Retirement
Income Security Act of 1974, as amended from time to time.

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

“ERISA Event” means (a) any “reportable
event”, as defined in Section 4043 of ERISA or the regulations issued
thereunder with respect to a Plan (other than an event for which the 30‐day
notice period is waived); (b) the existence with respect to any Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant
to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by Parent or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by Parent or any ERISA Affiliate from the PBGC or a
plan administrator of any notice relating to an intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan; (f) the
incurrence by Parent or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by Parent or any ERISA Affiliate of any notice,
or the receipt by any Multiemployer Plan from Parent or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.

“Eurodollar”, when used in reference to
any Loan or Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate (or, in the case of a Competitive Loan, the LIBO Rate).

“Event of Default” has the meaning
assigned to such term in Article VII.

“Excluded Taxes” means, with respect to
the Paying Agent, any Lender, any Issuing Bank or any other recipient of any
payment to be made by or on account of any obligation of the Borrower
hereunder, (a) income or franchise taxes imposed on (or measured by) its
net income by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which any
Lender is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 2.19(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Foreign Lender’s failure to
comply with Section 2.17(e), except to the extent that such Foreign Lender
(or its assignor, if any) was entitled, at the time of designation of a new
lending office (or assignment), to receive additional amounts from the Borrower
with respect to such withholding tax pursuant to Section 2.17(a).

“Existing Credit Agreement” means the
Amended and Restated Credit Agreement dated as of August 30, 2007, among
Parent, the Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A. and
Bank of America, N.A., as administrative agents and JPMorgan Chase Bank, N.A.,
as paying agent.

“Existing Indebtedness” has the meaning
assigned to such term in Section 6.01(b).

“Existing Letter of Credit” means any
letter of credit issued for the account of Parent or the Borrower and
outstanding on the Effective Date under the Original Credit Agreement; provided
that (a) the issuer of such letter of credit is a Lender and such Lender
becomes an Issuing Bank under this Agreement pursuant to Section 2.06 and
(b) Parent or the Borrower and such Lender consent to such letter of
credit becoming a Letter of Credit.

“Existing Maturity Date” has the meaning
set forth in Section 2.22(c).

“Extension Date” has the meaning set
forth in Section 2.22(b).

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

“Financial Officer” means the chief
financial officer, principal accounting officer, treasurer or controller of
Parent or the Borrower, as applicable.

“Fixed Rate” means, with respect to any
Competitive Loan (other than a Eurodollar Competitive Loan), the fixed rate of
interest per annum specified by the Lender making such Competitive Loan in its
related Competitive Bid.

“Fixed Rate Loan” means a Competitive
Loan bearing interest at a Fixed Rate.

“Foreign Lender” means any Lender that
is organized under the laws of a jurisdiction other than that in which the
Borrower is located.  For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.

“GAAP” means generally accepted
accounting principles in the United States of America.

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

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

“Guarantee Agreement” means the Amended
and Restated Guarantee Agreement among the Guarantors, the Borrower and the
Paying Agent substantially in the form of Exhibit B to the Amendment and
Restatement Agreement.

“Guarantors” means, as of any date,
Parent and each Subsidiary Loan Party that is a party to the Guarantee
Agreement as a guarantor thereunder as of such date.

“Indebtedness” of any Person means,
without duplication, (a) all obligations of such Person for borrowed
money, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments (other than performance, surety and appeals bonds
arising in the ordinary course of business), (c) all obligations of such
Person upon which interest charges are customarily paid, (d) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of
property or services (other than obligations for property (excluding real
property, capital stock and property subject to capital leases) and services purchased,
and expense accruals and deferred compensation items arising in the ordinary
course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed,
(g) all Guarantees by such Person of Indebtedness of others, (h) all
Capital Lease Obligations of such Person, (i) all obligations, contingent
or otherwise, of such Person as an account party in respect of letters of
credit and letters of guaranty and (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances.  The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such
Person is liable therefor under applicable law as a result of such Person’s
ownership interest in or other relationship with such entity, except to the
extent the terms of such Indebtedness provide that such Person is not liable
therefor.

“Indemnified Taxes” means Taxes other
than Excluded Taxes.

 “Initial Loans” has the meaning set
forth in Section 2.20(b).

“Interest Coverage Ratio” means, at any
date of determination, the ratio of (a) Consolidated EBITDA for the
Measurement Period then most recently ended to (b) Consolidated Net Interest
Expense for such Measurement Period.

“Interest Election Request” means a
request by the Borrower to convert or continue a Revolving Borrowing in
accordance with Section 2.08.

“Interest Payment Date” means
(a) with respect to any ABR Loan (other than a Swingline Loan), the last
day of each March, June, September and December, (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period, (c) with
respect to any Fixed Rate Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Fixed Rate
Borrowing with an Interest Period of more than 90 days’ duration (unless
otherwise specified in the applicable Competitive Bid Request), each day prior
to the last day of such Interest Period that occurs at intervals of 90 days’
duration after the first day of such Interest Period, and any other dates that
are specified in the applicable Competitive Bid Request as Interest Payment
Dates with respect to such Borrowing and (d) with respect to any Swingline
Loan, the day that such Loan is required to be repaid.

“Interest Period” means (a) with
respect to any Eurodollar Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the calendar month
that is seven days or one, two, three or six months thereafter, as the
Borrower may elect and (b) with respect to any Fixed Rate Borrowing, the
period (which shall not be less than seven days or more than 180 days)
commencing on the date of such Borrowing and ending on the date specified in
the applicable Competitive Bid Request; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the
case of a Eurodollar Borrowing only, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end
on the next preceding Business Day and (ii) any Interest Period pertaining
to a Eurodollar Borrowing that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period.  For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and,
in the case of a Revolving Borrowing, thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.

“Inventory Ratio” means, as of any date,
the ratio of (a) the aggregate amount of inventory directly owned by the Subsidiary
Loan Parties as of such date, in the amount that would be reflected on a
balance sheet prepared as of such date in accordance with GAAP to (b) the
aggregate amount of inventory owned by Parent and the Subsidiaries as of such
date, in the amount that would be reflected on a balance sheet prepared as of
such date on a consolidated basis in accordance with GAAP; provided
that, to the extent that the amount of inventory owned directly by the
Bloomingdale’s Parties exceeds the maximum liability of the Bloomingdale’s
Parties with respect to the Obligations pursuant to the Guarantee Agreement as
of the relevant date of determination, such excess shall be excluded for purposes
of determining each of the amounts pursuant to clause (a) and clause (b) above.

“Issuing Bank” means, as the context may
require, (a) JPMorgan Chase Bank, N.A., (b) Bank of America, N.A.,
and (c) any other Lender that becomes an Issuing Bank pursuant to
Section 2.06(k), in each case, in its capacity as an issuer of Letters of
Credit hereunder, and each such Person’s successors in such capacity as
provided in Section 2.06(i).  Any Issuing Bank may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing
Bank, in which case the term “Issuing Bank” shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.

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

“LC Exposure” means, at any time, the
sum of (a) the aggregate undrawn amount of all outstanding Letters of
Credit at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Borrower at such
time.  In the case of any Alternate Currency Letters of Credit or any LC
Disbursement in respect thereof, the LC Exposure attributable thereto shall be
the Dollar Amount thereof.  The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.

“Lenders” means the Persons listed on
Schedule 2.01 and any other Person that shall have become a party hereto
pursuant to an Assignment and Assumption, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Assumption.  Unless
the context otherwise requires, the term “Lenders” includes each Swingline
Lender.

“Letter of Credit” means each Existing
Letter of Credit and any letter of credit issued pursuant to this Agreement.

“Leverage Ratio” means, at any date of
determination, the ratio of (a) Total Indebtedness as of such date to
(b) Consolidated EBITDA for the Measurement Period (or, if such date is
not the last day of a fiscal quarter, ended on the last day of the fiscal
quarter of Parent most recently ended prior to such date).

“LIBO Rate” means, with respect to any
Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters BBA
Libor Rates Page 3750 (or on any successor or substitute page of such Service,
or any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Paying Agent from time to time for purposes of providing
quotations of interest rates applicable to dollar deposits in the London
interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period.  In the event that
such rate is not available at such time for any reason, then the “LIBO Rate”
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the Paying Agent
in immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period.

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

“Loan Documents” means this Agreement,
the Guarantee Agreement and the Amendment and Restatement Agreement.

“Loan Parties” means Parent, the
Borrower and the Subsidiary Loan Parties.

“Loans” means the loans made by the Lenders
to the Borrower pursuant to this Agreement.

“Margin” means, with respect to any
Competitive Loan bearing interest at a rate based on the LIBO Rate, the
marginal rate of interest, if any, to be added to or subtracted from the LIBO
Rate to determine the rate of interest applicable to such Loan, as specified by
the Lender making such Loan in its related Competitive Bid.

“Material Adverse Effect” means an
effect that causes or results in or has a reasonable likelihood of causing or
resulting in any material adverse change in (a) the business, condition
(financial or otherwise), operations, performance or properties of Parent and
the Subsidiaries, taken as a whole, (b) the rights and remedies of any Agent or
any Lender under any Loan Document, (c) the ability of the Loan Parties, taken
as a whole, to perform their obligations under any Loan Document or (d) the
legality, validity or enforceability of any Loan Document.

“Material Indebtedness” means
Indebtedness (other than the Loans and Letters of Credit), or obligations in
respect of one or more Swap Agreements, of any one or more of Parent and its
Subsidiaries in an aggregate principal amount exceeding $150,000,000.  For
purposes of determining Material Indebtedness, the “principal amount” of the
obligations of Parent or any Subsidiary in respect of any Swap Agreement at any
time shall be the maximum aggregate amount (giving effect to any netting
agreements) that Parent or such Subsidiary would be required to pay if such
Swap Agreement were terminated at such time.

“Material Subsidiary” means, as of any
date of determination, (a) the Borrower and (b) any other Subsidiary
having (i) assets with a value of not less than 5% of the total value of
the assets of Parent and its consolidated subsidiaries, taken as a whole, or (ii) Consolidated
EBITDA of not less than 5% of the Consolidated EBITDA of Parent and its
consolidated subsidiaries, taken as a whole, in each case as of the end of or
for the most recently completed fiscal year of Parent.

“Maturity Date” means the date that is
five years after the Effective Date, subject to extension pursuant to
Section 2.22; provided that, if such date is not a Business Day,
then the Maturity Date shall be the next succeeding Business Day.

“Maturity Date Extension Request” has
the meaning set forth in Section 2.22(a).

“May” means The May Department Stores
Company, a Delaware corporation.

“Measurement Period” means, as of any
date of determination, the period of four fiscal quarters of Parent then most
recently ended on or prior to such date of determination.

“Merger Agreement” means the Agreement
and Plan of Merger dated as of February 27, 2005, by and among Federated
Department Stores, Inc. (now known as Macy's, Inc.), Milan Acquisition Corp., a
Delaware corporation, and May.

“Minor Subsidiary” means any Subsidiary
that is not a Material Subsidiary.

“Moody’s” means Moody’s Investors
Service, Inc. or any successor thereto.

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

“Obligations” has the meaning assigned
to such term in the Guarantee Agreement.

“Original Credit Agreement” means the
Amended and Restated Credit Agreement dated as of August 30, 2006, among
Parent, the Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A. and
Bank of America, N.A., as administrative agents and JPMorgan Chase Bank, N.A.,
as paying agent.

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

“Parent” means Macy's, Inc. (formerly
known as Federated Department Stores, Inc.), a Delaware corporation.

“Participant” has the meaning set forth
in Section 9.04.

“Patriot Act” means the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107‐56
(signed into law October 26, 2001)).

“Paying Agent” means JPMorgan Chase
Bank, N.A., in its capacity as paying agent for the Lenders hereunder and under
the other Loan Documents.

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

“Permitted
Encumbrances” means:

(a) Liens imposed by law for taxes that are not yet
due or are being contested in compliance with Section 5.03;

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

(c) Liens (if any) arising by operation of law and pledges
and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance, old-age pensions and other social
security laws or regulations;

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

(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII; and

(f) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising in the ordinary
course of business that do not materially detract from the value of the
affected property to Parent or any Subsidiary or interfere with the ordinary
conduct of business of Parent or any Subsidiary;

provided that the term “Permitted Encumbrances”
shall not include any Lien securing Indebtedness.

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

“Plan” means any employee pension
benefit plan (other than a Multiemployer Plan) subject to the provisions of
Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if
such plan were terminated, would under Section 4069 of ERISA be deemed to
be) an “employer” as defined in Section 3(5) of ERISA.

“Prime Rate” means the rate of interest
per annum publicly announced from time to time by JPMorgan Chase Bank, N.A., as
its prime rate in effect at its principal office in New York City; each
change in the Prime Rate shall be effective from and including the date such
change is publicly announced as being effective.

“Pro Forma Basis” means (a) with
respect to compliance with Section 6.05, that such compliance shall be
determined as of the last day of the most recent Measurement Period as though
Total Indebtedness on such day were equal to Total Indebtedness on the date of
the relevant Restricted Payment (giving effect to any Indebtedness being
incurred on such date) and (b) with respect to compliance with
Section 6.06, that such compliance shall be determined as of the last day
of the most recent Measurement Period as though any and all Indebtedness
incurred during the period from the end of such Measurement Period to and
including the date of the relevant Restricted Payment in order to (directly or
indirectly) finance any Restricted Payment had been incurred on the first day
of such Measurement Period and remained outstanding during such Measurement
Period.

“Public Debt Ratings” means, as of any
date of determination (a) Parent’s “Senior Unsecured Rating” most recently
announced by Moody’s and (b) Parent’s “Corporate Credit Rating” most
recently announced by S&P.  If Moody’s or S&P shall change the basis on
which such ratings are established, then the foregoing references shall be to
the then equivalent rating by Moody’s or S&P, as the case may be, as
determined by the Paying Agent.

 “Register” has the meaning set forth in
Section 9.04.

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

“Required Lenders” means, at any time,
Lenders having Revolving Credit Exposures and unused Commitments representing
more than 50% of the sum of the total Revolving Credit Exposures and unused
Commitments at such time; provided that, for purposes of declaring the
Loans to be due and payable pursuant to Article VII, and for all purposes
after the Loans become due and payable pursuant to Article VII and the
Commitments expire or terminate, the outstanding Competitive Loans of the
Lenders shall be included in their respective Revolving Credit Exposures in
determining the Required Lenders.

“Reset Date” has the meaning set forth
in Section 2.21(a).

“Responsible Officer” means any
executive officer of Parent or any Subsidiary or any other officer of Parent or
any Subsidiary responsible for overseeing or reviewing compliance with this
Agreement or any other Loan Document.

“Restatement Effective Date” has the
meaning set forth in the Amendment and Restatement Agreement.

“Restricted Payment” means any dividend
or other distribution (whether in cash, securities or other property) with
respect to any Equity Interests in Parent, the Borrower or any other Subsidiary,
or any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Equity Interests in Parent,
the Borrower or any other Subsidiary.

“Revolving Credit Exposure” means, with
respect to any Lender at any time, the sum of the outstanding principal amount
of such Lender’s Revolving Loans and its LC Exposure and Swingline Exposure at
such time.

“Revolving Loan” means a Loan made
pursuant to Section 2.03.

“S&P” means Standard & Poor’s
Ratings Service or any successor thereto.

“Spot Exchange Rate” means, on any day,
with respect to any Alternate Currency in which an Alternate Currency Letter of
Credit (or LC Disbursement thereunder) is denominated, the spot rate at which dollars
are offered on such day by the applicable Issuing Bank (or the Paying Agent, in
the case of determinations made by it) in London (or, in its discretion, any
other city in which it conducts its foreign exchange activities in such
Alternate Currency) for such Alternate Currency at approximately
11:00 a.m. (local time in London or such other city).

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

“subsidiary” means, with respect to any
Person (the “parent”) at any date, any corporation, limited liability
company, partnership, association or other entity of which securities or
other ownership interests representing more than 50% of the equity or more than
50% of the ordinary voting power or, in the case of a partnership, more than
50% of the general partnership interests are, as of such date, owned,
controlled or held by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.

“Subsidiary” means any subsidiary of
Parent.

“Subsidiary Loan Party” means any
subsidiary of the Borrower that is organized under the laws of the United
States of America or any State thereof or the District of Columbia.

“Swap Agreement” means any agreement
with respect to any swap, forward, future or derivative transaction or option
or similar agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk
or value or any similar transaction or any combination of these transactions; provided
that no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of Parent or the Subsidiaries shall be a Swap Agreement.

“Swingline Exposure” means, at any time,
the aggregate principal amount of all Swingline Loans outstanding at such
time.  The Swingline Exposure of any Lender at any time shall be its Applicable
Percentage of the total Swingline Exposure at such time.

“Swingline Lender” means, as the context
may require, (a) JPMorgan Chase Bank, N.A., (b) Bank of America,
N.A., and (c) any other Lender that becomes a Swingline Lender pursuant to
Section 2.05(d), in each case in its capacity as lender of Swingline Loans
hereunder.

“Swingline Loan” means a Loan made
pursuant to Section 2.05.

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

“Total Commitments” means, at any time,
the aggregate amount of the Lenders’ Commitments at such time.

“Total Indebtedness” means, as of any
date, the aggregate principal amount of Indebtedness of Parent and the
Subsidiaries outstanding as of such date, in the amount that would be reflected
on a balance sheet prepared as of such date on a consolidated basis in
accordance with GAAP; provided that any write-ups or write-downs of
long-term Indebtedness (including current portions) of May or its subsidiaries
as a result of the Acquisition shall be disregarded.

“Trade Letter of Credit” means any
Letter of Credit that is issued for the benefit of a supplier of inventory to
Parent or any Subsidiary to effect payment for such inventory, the conditions
to drawing under which include the presentation to the applicable Issuing Bank
of negotiable bills of lading, invoices and related documents sufficient, in
the judgment of such Issuing Bank, to create a valid and perfected lien on or
security interest in such inventory, bills of lading, invoices and related
documents in favor of such Issuing Bank.

“Transactions” means the execution,
delivery and performance by each Loan Party of the Loan Documents to which it
is to be a party, the borrowing of Loans, the use of the proceeds thereof and
the issuance of Letters of Credit hereunder.

“Type”, when used in reference to any
Loan or Borrowing, refers to whether the rate of interest on such Loan, or on
the Loans comprising such Borrowing, is determined by reference to the Adjusted
LIBO Rate, the Alternate Base Rate or, in the case of a Competitive Loan or
Borrowing, the LIBO Rate or a Fixed Rate.

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

(b)  Classification of
Loans and Borrowings.  For purposes of this Agreement, Loans may be
classified and referred to by Class (e.g., a “Revolving Loan”) or by
Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar
Revolving Loan”).  Borrowings also may be classified and referred to by Class (e.g.,
a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or
by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

(c)  Terms Generally. 
The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”.  The word “will” shall be construed to have
the same meaning and effect as the word “shall”.  Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns,
(c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not
to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

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

(e)  Amendment and
Restatement.  (A)  Upon the Restatement Effective Date, this Agreement
amends, restates and supersedes in its entirety the Existing Credit Agreement.

(B)  This Agreement is given in substitution
of the Existing Credit Agreement and not as payment of any of the obligations
of the Borrower thereunder, and is in no way intended to constitute a novation
of the Existing Credit Agreement.

(C)  This Agreement amends, restates and
supersedes only the Existing Credit Agreement.  Nothing contained herein,
unless expressly herein stated to the contrary, is intended to amend, modify or
otherwise affect any other instrument, document or agreement executed and/or
delivered in connection with the Existing Credit Agreement.

SECTION
13. 

The Credits

(a)  Commitments. 
Subject to the terms and conditions set forth herein, each Lender agrees to
make Revolving Loans to the Borrower in Dollars from time to time during the
Availability Period in an aggregate principal amount that will not result in
(a) such Lender’s Revolving Credit Exposure exceeding such Lender’s
Commitment or (b) the sum of the total Revolving Credit Exposures plus the
aggregate principal amount of outstanding Competitive Loans exceeding the Total
Commitments.  Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans.

(b)  Loans and
Borrowings.  (A)  Each Revolving Loan shall be made as part of a
Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective Commitments.  Each Competitive Loan shall be
made in accordance with the procedures set forth in Section 2.04.  The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments and Competitive Bids of the Lenders are several and no Lender shall
be responsible for any other Lender’s failure to make Loans as required.

(B)  Subject to Section 2.14,
(i) each Revolving Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request in accordance herewith, and
(ii) each Competitive Borrowing shall be comprised entirely of Eurodollar
Loans or Fixed Rate Loans as the Borrower may request in accordance herewith. 
Each Swingline Loan shall be an ABR Loan.  Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement.

(C)  At the commencement of each Interest
Period for any Eurodollar Revolving Borrowing, such Borrowing shall be in an
aggregate amount that is an integral multiple of $5,000,000 and not less than $5,000,000. 
At the time that each ABR Revolving Borrowing is made, such Borrowing shall be
in an aggregate amount that is an integral multiple of $5,000,000 and not less
than $5,000,000; provided that an ABR Revolving Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the Total
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(e).  Each request for a Competitive
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $10,000,000.  Each Swingline Loan shall be in an
amount that is an integral multiple of $1,000,000 and not less than $5,000,000. 
Borrowings of more than one Type and Class may be outstanding at the same time;
provided that there shall not at any time be more than a total of ten Eurodollar
Revolving Borrowings outstanding.

(D)  Notwithstanding any other provision of
this Agreement, the Borrower shall not be entitled to request, or to elect to
convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.

(c)  Requests for
Revolving Borrowings.  To request a Revolving Borrowing, the Borrower shall
notify the Paying Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 11:00 a.m.,
New York City time on the date of the proposed Borrowing; provided
that any such notice of an ABR Revolving Borrowing to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.06(e) may be given not
later than 10:00 a.m., New York City time, on the date of the proposed
Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Paying Agent of
a written Borrowing Request in a form approved by the Paying Agent and signed
by the Borrower.  Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.02:

(A) the aggregate amount of the
requested Borrowing;

(B) the date of such Borrowing,
which shall be a Business Day;

(C) whether such Borrowing is to
be an ABR Borrowing or a Eurodollar Borrowing;

(D) in the case of a Eurodollar
Borrowing, the initial Interest Period to be applicable thereto, which shall be
a period contemplated by the definition of the term “Interest Period”; and

(E) the location and number of
the Borrower’s account to which funds are to be disbursed, which shall comply
with the requirements of Section 2.07.

If no election as to the Type of Revolving Borrowing
is specified, then the requested Revolving Borrowing shall be an ABR
Borrowing.  If no Interest Period is specified with respect to any requested
Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.  Promptly following
receipt of a Borrowing Request in accordance with this Section, the Paying
Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.

(d)  Competitive Bid
Procedure.  (A)  Subject to the terms and conditions set forth herein,
from time to time during the Availability Period the Borrower may request
Competitive Bids and may (but shall not have any obligation to) accept
Competitive Bids and borrow Competitive Loans; provided that the sum of
the total Revolving Credit Exposures plus the aggregate principal amount of
outstanding Competitive Loans at any time shall not exceed the Total
Commitments.  To request Competitive Bids, the Borrower shall notify the Paying
Agent of such request by telephone, in the case of a Eurodollar Borrowing, not
later than 11:00 a.m., New York City time, four Business Days before
the date of the proposed Borrowing and, in the case of a Fixed Rate Borrowing,
not later than 10:00 a.m., New York City time, one Business Day
before the date of the proposed Borrowing; provided that the Borrower
may submit up to (but not more than) three Competitive Bid Requests on the same
day, but a Competitive Bid Request shall not be made within five Business Days
after the date of any previous Competitive Bid Request, unless any and all such
previous Competitive Bid Requests shall have been withdrawn or all Competitive
Bids received in response thereto rejected.  Each such telephonic Competitive
Bid Request shall be confirmed promptly by hand delivery or telecopy to the Paying
Agent of a written Competitive Bid Request in a form approved by the Paying Agent
and signed by the Borrower.  Each such telephonic and written Competitive Bid
Request shall specify the following information in compliance with Section 2.02:

(A) the aggregate amount of the
requested Borrowing;

(B) the date of such Borrowing,
which shall be a Business Day;

(C) whether such Borrowing is to
be a Eurodollar Borrowing or a Fixed Rate Borrowing;

(D) the Interest Period to be
applicable to such Borrowing, which shall be a period contemplated by the
definition of the term “Interest Period”; and

(E) the location and number of
the Borrower’s account to which funds are to be disbursed, which shall comply
with the requirements of Section 2.07.

Promptly following receipt of a Competitive Bid
Request in accordance with this Section, the Paying Agent shall notify the
Lenders of the details thereof by telecopy, inviting the Lenders to submit
Competitive Bids.

(B)  Each Lender may (but shall not have any
obligation to) make one or more irrevocable Competitive Bids to the Borrower in
response to a Competitive Bid Request.  Each Competitive Bid by a Lender must
be in a form approved by the Paying Agent and must be received by the Paying
Agent by telecopy, in the case of a Eurodollar Competitive Borrowing, not later
than 9:30 a.m., New York City time, three Business Days before the
proposed date of such Competitive Borrowing, and in the case of a Fixed Rate
Borrowing, not later than 9:30 a.m., New York City time, on the
proposed date of such Competitive Borrowing.  Competitive Bids that do not
conform substantially to the form approved by the Paying Agent may be rejected
by the Paying Agent, and the Paying Agent shall notify the applicable Lender as
promptly as practicable.  Each Competitive Bid shall specify (i) the
principal amount (which shall be a minimum of $5,000,000 and an integral
multiple of $1,000,000 and which may equal the entire principal amount of the
Competitive Borrowing requested by the Borrower) of the Competitive Loan or
Loans that the Lender is willing to make, (ii) the Competitive Bid Rate or
Rates at which the Lender is prepared to make such Loan or Loans (expressed as a
percentage rate per annum in the form of a decimal to no more than four decimal
places) and (iii) the Interest Period applicable to each such Loan and the
last day thereof.

(C)  The Paying Agent shall notify the
Borrower by telecopy of the Competitive Bid Rate and the principal amount
specified in each Competitive Bid and the identity of the Lender that shall
have made such Competitive Bid, in the case of a Eurodollar Competitive
Borrowing, not later than 10:00 a.m., New York City time, three Business Days
before the proposed date of such Competitive Borrowing, and in the case of a
Fixed Rate Borrowing, not later than 10:00 a.m., New York City time, on the
proposed date of such Competitive Borrowing.

(D)  Subject only to the provisions of this
paragraph, the Borrower may accept or reject any Competitive Bid.  The Borrower
shall notify the Paying Agent by telephone, confirmed by telecopy in a form
approved by the Paying Agent, whether and to what extent it has decided to
accept or reject each Competitive Bid, in the case of a Eurodollar Competitive
Borrowing, not later than 1:00 p.m., New York City time, three
Business Days before the date of the proposed Competitive Borrowing, and in the
case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York
City time, on the proposed date of the Competitive Borrowing; provided
that (i) the failure of the Borrower to give such notice shall be deemed
to be a rejection of each Competitive Bid, (ii) the Borrower shall not
accept a Competitive Bid made at a particular Competitive Bid Rate if the
Borrower rejects a Competitive Bid made at a lower Competitive Bid Rate,
(iii) the aggregate amount of the Competitive Bids accepted by the
Borrower shall not exceed the aggregate amount of the requested Competitive
Borrowing specified in the related Competitive Bid Request, (iv) to the
extent necessary to comply with clause (iii) above, the Borrower may
accept Competitive Bids at the same Competitive Bid Rate in part, which
acceptance, in the case of multiple Competitive Bids at such Competitive Bid
Rate, shall be made pro rata in accordance with the amount of each such
Competitive Bid, and (v) except pursuant to clause (iv) above, no
Competitive Bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in a minimum principal amount of $5,000,000 and an integral
multiple of $1,000,000; provided further that if a Competitive Loan must
be in an amount less than $5,000,000 because of the provisions of
clause (iv) above, such Competitive Loan may be for a minimum of $1,000,000
or any integral multiple thereof, and in calculating the pro rata allocation of
acceptances of portions of multiple Competitive Bids at a particular
Competitive Bid Rate pursuant to clause (iv) the amounts shall be rounded
to integral multiples of $1,000,000 in a manner determined by the Borrower.  A
notice given by the Borrower pursuant to this paragraph shall be irrevocable.

(E)  The Paying Agent shall promptly notify
each bidding Lender by telecopy whether or not its Competitive Bid has been
accepted (and, if so, the amount and Competitive Bid Rate so accepted), and
each successful bidder will thereupon become bound, subject to the terms and
conditions hereof, to make the Competitive Loan in respect of which its
Competitive Bid has been accepted.

(F)  If the Paying Agent shall elect to
submit a Competitive Bid in its capacity as a Lender, it shall submit such
Competitive Bid directly to the Borrower at least one quarter of an hour
earlier than the time by which the other Lenders are required to submit their
Competitive Bids to the Paying Agent pursuant to paragraph (b) of this
Section.

(e)  Swingline Loans. 
(A)  Subject to the terms and conditions set forth herein, each Swingline
Lender agrees to make Swingline Loans to the Borrower from time to time during
the Availability Period, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate principal amount of
outstanding Swingline Loans exceeding $100,000,000 or (ii) the sum of the
total Revolving Credit Exposures plus the aggregate principal amount of
outstanding Competitive Loans exceeding the Total Commitments; provided
that a Swingline Lender shall not be required to make a Swingline Loan to
refinance an outstanding Swingline Loan.  Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Swingline Loans.

(B)  To request a Swingline Loan, the
Borrower shall notify the Paying Agent of such request by telephone (confirmed
by telecopy), not later than 12:00 noon, New York City time, on the
day of a proposed Swingline Loan.  Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day), the amount of
the requested Swingline Loan and the Swingline Lender from which such Swingline
Loan is requested.  The Paying Agent will promptly advise the applicable Swingline
Lender of any such notice received from the Borrower.  Such Swingline Lender
shall make each Swingline Loan available to the Borrower by means of a credit
to the general deposit account of the Borrower with such Swingline Lender (or,
in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.06(e), by remittance to the applicable
Issuing Bank) as promptly as practicable, but no later than 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan.

(C)  A Swingline Lender may by written
notice given to the Paying Agent not later than 10:00 a.m., New York
City time, on any Business Day require the Lenders to acquire participations on
such Business Day in all or a portion of its Swingline Loans outstanding.  Such
notice shall specify the aggregate amount of Swingline Loans in which Lenders
will participate.  Promptly upon receipt of such notice, the Paying Agent will
give notice thereof to each Lender, specifying in such notice such Lender’s
Applicable Percentage of such Swingline Loan or Loans.  Each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided
above, to pay to the Paying Agent, for the account of the applicable Swingline
Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans. 
Each Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.  Each Lender shall
comply with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Paying Agent
shall promptly pay to the applicable Swingline Lender the amounts so received
by it from the Lenders.  The Paying Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this paragraph, and
thereafter payments in respect of such Swingline Loan shall be made to the Paying
Agent and not to the applicable Swingline Lender.  Any amounts received by a Swingline
Lender from the Borrower (or other party on behalf of the Borrower) in respect
of a Swingline Loan after receipt by such Swingline Lender of the proceeds of a
sale of participations therein shall be promptly remitted to the Paying Agent;
any such amounts received by the Paying Agent shall be promptly remitted by the
Paying Agent to the Lenders that shall have made their payments pursuant to
this paragraph and to such Swingline Lender, as their interests may appear; provided
that any such payment so remitted shall be repaid to the applicable Swingline
Lender or to the Paying Agent, as applicable, if and to the extent such payment
is required to be refunded to the Borrower for any reason.  The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.

(D)  Any Lender may at any time become a
Swingline Lender hereunder by written agreement between the Borrower and such
Lender, subject to notice to, and the consent of, the Paying Agent, which
consent shall not unreasonably be withheld.  From and after the effective date
of any such Lender becoming a Swingline Lender, such Lender shall have the
rights and obligations of a Swingline Lender under this Agreement.

(f)  Letters of Credit. 
(A)  General.  Subject to the terms and conditions set forth herein,
the Borrower may request the issuance of Letters of Credit for its own account,
in a form reasonably acceptable to the Paying Agent and the applicable Issuing
Bank, at any time and from time to time during the Availability Period.  In the
event of any inconsistency between the terms and conditions of this Agreement
and the terms and conditions of any form of letter of credit application or
other agreement submitted by the Borrower to, or entered into by the Borrower
with, any Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.  On the Effective Date, each
Existing Letter of Credit shall be deemed to be a Letter of Credit for all
purposes hereof and shall be deemed to have been issued hereunder on the
Effective Date.  All Letters of Credit shall provide for drawings thereunder to
be denominated in dollars except as provided for Alternate Currency Letters of
Credit pursuant to Section 2.06(m).

(B)  Notice of Issuance, Amendment,
Renewal, Extension; Certain Conditions.  To request the issuance of a
Letter of Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by
the relevant Issuing Bank) to the relevant Issuing Bank (reasonably in advance
of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit, the
name and address of the beneficiary thereof and such other information as shall
be necessary to prepare, amend, renew or extend such Letter of Credit, and such
Issuing Bank shall promptly deliver a copy of such notice by telecopy to the Paying
Agent.  If requested by the applicable Issuing Bank, the Borrower also shall
submit a letter of credit application on such Issuing Bank’s standard form in
connection with any request for a Letter of Credit.  A Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed $1,000,000,000, (ii)
the portion of the LC Exposure attributable to Alternate Currency Letters of
Credit shall not exceed $100,000,000 and (iii) the sum of the total
Revolving Credit Exposures plus the aggregate principal amount of outstanding
Competitive Loans shall not exceed the Total Commitments.

(C)  Expiration Date.  Each Letter of
Credit shall expire at or prior to the close of business on the earlier of
(i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after
such renewal or extension) and (ii) the date that is five Business Days
prior to the Maturity Date.

(D)  Participations.  By the issuance
of a Letter of Credit (or an amendment to a Letter of Credit increasing the
amount thereof) and without any further action on the part of the applicable Issuing
Bank or the Lenders, the Issuing Bank in respect of such Letter of Credit hereby
grants to each Lender, and each Lender hereby acquires from such Issuing Bank,
a participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit.  In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Paying Agent, for
the account of the applicable Issuing Bank, such Lender’s Applicable Percentage
of each LC Disbursement made by such Issuing Bank and not reimbursed by the
Borrower on the date due as provided in paragraph (e) of this Section, or
of any reimbursement payment required to be refunded to the Borrower for any
reason (subject to Section 2.06(m), in the case of Alternate Currency Letters
of Credit).  Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.  On the
Effective Date and without any further action by any party hereto, each Issuing
Bank that has issued an Existing Letter of Credit shall be deemed to have
granted to each Lender, and each Lender shall be deemed to have acquired from
such Issuing Bank, a participation in each such Existing Letter of Credit in
accordance with the foregoing provisions of this paragraph (d).

(E)  Reimbursement.  If an Issuing
Bank shall make any LC Disbursement in respect of a Letter of Credit, the
Borrower shall reimburse such LC Disbursement by paying to the Paying Agent an
amount equal to such LC Disbursement not later than 12:00 noon,
New York City time, on the date that such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m.,
New York City time, on such date, or, if such notice has not been received
by the Borrower prior to such time on such date, then not later than 12:00 noon,
New York City time, on (i) the Business Day that the Borrower
receives such notice, if such notice is received prior to 10:00 a.m.,
New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided
that in the case of a LC Disbursement in respect of an Alternate Currency
Letter of Credit, the times of day referred to above in this clause (e) shall
be deemed to be the local time at the place of payment; provided further
that, if such LC Disbursement is denominated in dollars, the Borrower may,
subject to the conditions to borrowing set forth herein, request in accordance
with Section 2.03 or 2.05 that such payment be financed with an ABR
Revolving Borrowing or Swingline Loan in an equivalent amount and, to the
extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan.  If the Borrower fails to make such payment when due, the Paying Agent
shall notify each Lender of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such Lender’s Applicable
Percentage thereof.  Promptly following receipt of such notice (but subject to
Section 2.06(m), in the case of Alternate Currency Letters of Credit), each
Lender shall pay to the Paying Agent its Applicable Percentage of the payment
then due from the Borrower, in the same manner as provided in Section 2.07
with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Paying
Agent shall promptly pay to the applicable Issuing Bank the amounts so received
by it from the Lenders.  Promptly following receipt by the Paying Agent of any
payment from the Borrower pursuant to this paragraph, the Paying Agent shall
distribute such payment to the applicable Issuing Bank or, to the extent that
Lenders have made payments pursuant to this paragraph to reimburse such Issuing
Bank, then to such Lenders and such Issuing Bank as their interests may
appear.  Any payment made by a Lender pursuant to this paragraph to reimburse an
Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving
Loans or a Swingline Loan as contemplated above) shall not constitute a Loan
and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

(F)  Obligations Absolute.  The
Borrower’s obligation to reimburse LC Disbursements as provided in
paragraph (e) of this Section shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit or this
Agreement, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by an Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms
of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of,
or provide a right of setoff against, the Borrower’s obligations hereunder. 
Neither the Paying Agent, the Lenders nor any Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of any
Issuing Bank; provided that the foregoing shall not be construed to
excuse an Issuing Bank from liability to the Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by such Issuing Bank’s failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof.  Unless otherwise
separately agreed in writing between the Borrower and the applicable Issuing
Bank, (A) the parties hereto expressly agree that, in the absence of gross
negligence or wilful misconduct on the part of such Issuing Bank (as finally
determined by a court of competent jurisdiction), such Issuing Bank shall be
deemed to have exercised care in each such determination, and (B) in
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, such
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.

(G)  Disbursement Procedures.  The applicable
Issuing Bank shall, promptly following its receipt thereof, examine all
documents purporting to represent a demand for payment under a Letter of
Credit.  Such Issuing Bank shall promptly notify the Paying Agent and the
Borrower by telephone (confirmed by telecopy) of such demand for payment and
whether such Issuing Bank has made or will make an LC Disbursement thereunder; provided
that any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse such Issuing Bank and the Lenders with
respect to any such LC Disbursement.

(H)  Interim Interest.  If an Issuing
Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse
such LC Disbursement in full on the date such LC Disbursement is made, the
unpaid amount thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that the Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Revolving Loans; provided that, if the Borrower fails to reimburse such
LC Disbursement when due pursuant to paragraph (e) of this Section, then
Section 2.13(d) shall apply.  Interest accrued pursuant to this paragraph
shall be for the account of the applicable Issuing Bank, except that interest
accrued on and after the date of payment by any Lender pursuant to paragraph (e)
of this Section to reimburse the applicable Issuing Bank shall be for the
account of such Lender to the extent of such payment.

(I)  Replacement of an Issuing Bank. 
An Issuing Bank may be replaced at any time by written agreement among the
Borrower, the Paying Agent, the replaced Issuing Bank and the successor Issuing
Bank.  An Issuing Bank’s obligations to issue additional Letters of Credit
hereunder may be terminated at any time by written agreement among the
Borrower, the Paying Agent and such Issuing Bank; provided that after
giving effect thereto there is at least one remaining Issuing Bank obligated to
issue Letters of Credit.  The Paying Agent shall notify the Lenders of any such
replacement or termination of an Issuing Bank.  At the time any such
replacement or termination shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced or terminated Issuing Bank
pursuant to Section 2.12(b).  From and after the effective date of any
such replacement, the successor Issuing Bank shall have all the rights and obligations
of the replaced Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter.  After the replacement or termination of an
Issuing Bank hereunder, the replaced or terminated Issuing Bank shall remain a
party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by
it prior to such replacement or termination, but shall not be required to issue
additional Letters of Credit.

(J)  Cash Collateralization.  If any
Event of Default shall occur and be continuing, on the Business Day that the
Borrower receives notice from the Paying Agent or the Required Lenders (or, if
the maturity of the Loans has been accelerated, Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Paying Agent, in the name of the Paying Agent and for the benefit of
the Lenders, an amount in cash equal to the LC Exposure as of such date plus
any accrued and unpaid interest thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other
notice of any kind, upon the occurrence of any Event of Default with respect to
either Loan Party described in clause (h) or (i) of Article VII. 
Such deposit shall be held by the Paying Agent as collateral for the payment
and performance of the obligations of the Borrower under this Agreement.  The Paying
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account.  Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Paying Agent and at the Borrower’s risk and expense,
such deposits shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account.  Moneys in such account shall be
applied by the Paying Agent to reimburse any Issuing Bank for LC Disbursements
for which it has not been reimbursed and, to the extent not so applied, shall
be held for the satisfaction of the reimbursement obligations of the Borrower
for the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders with LC Exposure representing
greater than 50% of the total LC Exposure), be applied to satisfy other
obligations of the Borrower under this Agreement.  If the Borrower is required
to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrower within three Business Days after all Events
of Default have been cured or waived.  If the Borrower is required to provide
an amount of cash collateral hereunder pursuant to Section 2.11(b), such amount
(to the extent not applied as aforesaid) shall be returned to the Borrower as
and to the extent that, after giving effect to such return, the Borrower would
remain in compliance with Section 2.11(b) and no Default shall have occurred
and be continuing.

(K)  Additional Issuing Banks.  Any
Lender may at any time become an Issuing Bank hereunder by written agreement
between the Borrower and such Lender, subject to notice to the Paying Agent. 
From and after the effective date of any such Lender becoming an Issuing Bank,
such Lender shall have the rights and obligations of an Issuing Bank under this
Agreement.  Any Lender that becomes an Issuing Bank shall not cease to be an
Issuing Bank hereunder if it later ceases to be a Lender hereunder.

(L)  Certain Notices by Issuing Banks. 
Each Issuing Bank that is not the same Person as the Person serving as the
Paying Agent shall notify the Paying Agent of (i) the currency, amount
(including the Dollar Amount thereof in the case of Alternate Currency Letters
of Credit) and expiration date of each Letter of Credit issued by such Issuing Bank
at or prior to the time of issuance thereof (or in the case of an Existing
Letter of Credit, such notice shall be provided on the Effective Date),
(ii) any amendment or modification to, or LC Disbursement under, any such
Letter of Credit at or prior to the time of such amendment, modification or LC
Disbursement and (iii) any termination, surrender, cancellation or expiry
of any such Letter of Credit at or prior to the time of such termination,
surrender, cancellation or expiration.

(m) Alternate Currency Letters of Credit.  Subject to the terms and
conditions set forth herein, the other conditions applicable to the issuance of
Letters of Credit hereunder and the approval of the applicable Issuing Bank, the
Borrower may request the issuance of Alternate Currency Letters of Credit. 
Upon the issuance of any Alternate Currency Letter of Credit, and so long as
any Alternate Currency Letter of Credit remains outstanding, the following
provisions shall apply:

(i)  For purposes of determining
the total LC Exposure at any time and for purposes of calculating fees payable
under Sections 2.12(b) and (c), the amount of any Alternate Currency
Letter of Credit and of any LC Disbursements in respect thereof shall be deemed
to be, as of any date of determination, the Dollar Amount thereof at such
date.  The initial Dollar Amount of any Alternate Currency Letter of Credit
shall be determined by the applicable Issuing Bank on the date of issuance
thereof and adjusted from time to time thereafter, in each case, as provided below. 
The Dollar Amount of each Alternate Currency Letter of Credit outstanding shall
be adjusted by the applicable Issuing Bank on each Calculation Date as provided
in Section 2.21(a).  If an LC Disbursement is made by the Issuing Bank
under any Alternate Currency Letter of Credit, the Dollar Amount of such LC
Disbursement shall be determined by such Issuing Bank on the date that such LC
Disbursement is made.  The applicable Issuing Bank shall make each such
determination to be made by it by calculating the amount in dollars that would
be required in order for such Issuing Bank to purchase an amount of the
applicable Alternate Currency equal to the amount of the relevant Alternate
Currency Letter of Credit or unpaid LC Disbursement, as the case may be, on the
date of determination at the Spot Exchange Rate with respect to such Alternate
Currency on such date of determination.  Each applicable Issuing Bank shall
notify the Paying Agent and the Borrower promptly of each such Dollar Amount
determined by it, on the date that such determination is required to be made.

(ii) Subject to paragraph (iv)
below, the obligation of the Borrower to reimburse the applicable Issuing Bank
for any LC Disbursement under any Alternate Currency Letter of Credit, and to
pay interest thereon, shall be payable only in the Alternate Currency in which
such LC Disbursement is made, and shall not be discharged by paying an amount
in dollars or any other currency; provided that the applicable Issuing
Bank may agree, in its sole discretion, to accept reimbursement in another
currency, but any such agreement shall not affect the obligations of the
Lenders or the Borrower under paragraphs (iii) and (iv) below if such
reimbursement is not actually made to the applicable Issuing Bank when due.

(iii) The obligation of each
Lender under paragraphs (d) and (e) of this Section to pay its Applicable
Percentage of any unpaid LC Disbursement under any Alternate Currency Letter of
Credit shall be payable only in dollars and shall be in an amount equal to such
Applicable Percentage of the Dollar Amount of such unpaid drawing determined as
provided in paragraph (i) above.  Under no circumstances shall the provisions
hereof permitting the issuance of Letters of Credit in an Alternate Currency be
construed, by implication or otherwise, as imposing any obligation upon any
Lender to make any Loan or other payment under the Loan Documents, or to accept
any payment from the Borrower in respect of any unreimbursed LC Disbursement,
in any currency other than dollars, it being understood that the parties intend
all payments of Indebtedness created under the Loan Documents to be denominated
and payable only in dollars except as expressly provided in paragraph (ii)
above and in Section 2.18(a).

(iv) If and to the extent that
any Lender pays its Applicable Percentage of any unreimbursed LC Disbursement
under any Alternate Currency Letter of Credit, then, notwithstanding clause
(ii) above, the obligation of the Borrower to reimburse the portion of such
unreimbursed LC Disbursement funded by such Lender shall be converted to, and
shall be payable only in, dollars (in an amount equal to the dollar amount
funded by such Lender as provided above) and shall not be discharged by paying
an amount in any other currency.  Interest accrued on such unreimbursed LC
Disbursement to and excluding the date of such payment by such Lender shall be
for the account of the applicable Issuing Bank and be payable in the applicable
Alternate Currency, but interest thereafter shall accrue on the dollar amount
owed to such Lender and shall be payable in dollars.

(g)  Funding of
Borrowings.  (A)  Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately
available funds by 12:00 noon, New York City time, to the account of
the Paying Agent most recently designated by it for such purpose by notice to
the Lenders; provided that Swingline Loans shall be made as provided in
Section 2.05.  The Paying Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Paying Agent in New York City
and designated by the Borrower in the applicable Borrowing Request or
Competitive Bid Request; provided that ABR Revolving Loans made to
finance the reimbursement of an LC Disbursement as provided in Section 2.06(e)
shall be remitted by the Paying Agent to the applicable Issuing Bank.

(B)  Unless the Paying Agent shall have
received notice from a Lender prior to the proposed date of any Borrowing that
such Lender will not make available to the Paying Agent such Lender’s share of
such Borrowing, the Paying Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount.  In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Paying Agent, then
the applicable Lender and the Borrower severally agree to pay to the Paying
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Paying Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Paying Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans.  If such Lender pays such
amount to the Paying Agent, then such amount shall constitute such Lender’s
Loan included in such Borrowing.

(h)  Interest Elections. 
(A)  Each Revolving Borrowing initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar Revolving
Borrowing, shall have an initial Interest Period as specified in such Borrowing
Request.  Thereafter, the Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Revolving Borrowing, may elect Interest Periods therefor, all as provided in
this Section.  The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.  This Section shall not apply to Competitive Borrowings or
Swingline Borrowings, which may not be converted or continued.

(B)  To make an election pursuant to this
Section, the Borrower shall notify the Paying Agent of such election by
telephone by the time that a Borrowing Request would be required under Section 2.03
if the Borrower were requesting a Revolving Borrowing of the Type resulting
from such election to be made on the effective date of such election.  Each
such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Paying Agent of a
written Interest Election Request in a form approved by the Paying Agent and
signed by the Borrower.

(C)  Each telephonic
and written Interest Election Request shall specify the following information
in compliance with Section 2.02:

(A) the Borrowing to which such
Interest Election Request applies and, if different options are being elected
with respect to different portions thereof, the portions thereof to be
allocated to each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be specified for
each resulting Borrowing);

(B) the effective date of the
election made pursuant to such Interest Election Request, which shall be a
Business Day;

(C) whether the resulting
Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(D) if the resulting Borrowing is
a Eurodollar Borrowing, the Interest Period to be applicable thereto after
giving effect to such election, which shall be a period contemplated by the
definition of the term “Interest Period”.

If any such Interest Election Request requests a
Eurodollar Borrowing but does not specify an Interest Period, then the Borrower
shall be deemed to have selected an Interest Period of one month’s duration.

(D)  Promptly following receipt of an
Interest Election Request, the Paying Agent shall advise each Lender of the
details thereof and of such Lender’s portion of each resulting Borrowing.

(E)  If the Borrower fails to deliver a
timely Interest Election Request with respect to a Eurodollar Revolving
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing.  Notwithstanding
any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Paying Agent, at the request of the Required Lenders, so
notifies the Borrower, then, so long as an Event of Default is continuing
(i) no outstanding Revolving Borrowing may be converted to or continued as
a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Revolving
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.

(i)  Termination and
Reduction of Commitments.  

(A)  Unless previously terminated, the Commitments shall terminate on the
Maturity Date.

(B)  The Borrower may at any time terminate,
or from time to time reduce, the Commitments; provided that
(i) each reduction of the Commitments shall be in an amount that is an
integral multiple of $10,000,000 and not less than $25,000,000 and
(ii) the Borrower shall not terminate or reduce the Commitments if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.11, the sum of the Revolving Credit Exposures plus the aggregate
principal amount of outstanding Competitive Loans would exceed the Total
Commitments.

(C)  The Borrower shall notify the Paying
Agent of any election to terminate or reduce the Commitments under
paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof.  Promptly following receipt of any notice, the Paying
Agent shall advise the Lenders of the contents thereof.  Each notice delivered
by the Borrower pursuant to this Section shall be irrevocable; provided
that a notice of termination of the Commitments delivered by the Borrower may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Paying Agent on or prior to the specified effective date) if such
condition is not satisfied.  Any termination or reduction of the Commitments
shall be permanent.  Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.

(j)  Repayment of
Loans; Evidence of Debt.  (A)  The Borrower hereby unconditionally promises
to pay (i) to the Paying Agent for the account of each Lender the then
unpaid principal amount of each Revolving Loan on the Maturity Date,
(ii) to the Paying Agent for the account of each Lender the then unpaid
principal amount of each Competitive Loan on the last day of the Interest
Period applicable to such Loan and (iii) to the applicable Swingline
Lender the then unpaid principal amount of each Swingline Loan on the earlier
of the Maturity Date and the first date after such Swingline Loan is made that
is the 15th or last day of a calendar month and is at least four Business Days
after such Swingline Loan is made; provided that on each date that a
Revolving Borrowing or Competitive Borrowing is made, the Borrower shall repay
all Swingline Loans then outstanding.

(B)  Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid
to such Lender from time to time hereunder.

(C)  The Paying Agent shall maintain
accounts in which it shall record (i) the amount of each Loan made
hereunder, the Class and Type thereof and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder and
(iii) the amount of any sum received by the Paying Agent hereunder for the
account of the Lenders and each Lender’s share thereof.

(D)  The entries made in the accounts
maintained pursuant to paragraph (b) or (c) of this Section shall be prima
facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Paying Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the terms of
this Agreement.

(E)  Any Lender may request that Loans made
by it be evidenced by a promissory note.  In such event, the Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Paying Agent.  Thereafter,
the Loans evidenced by such promissory note and interest thereon shall at all
times (including after assignment pursuant to Section 9.04) be represented
by one or more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).

(k)  Prepayment of
Loans.  (A)  The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, subject to prior notice
in accordance with paragraph (c) of this Section; provided that the
Borrower shall not have the right to prepay any Competitive Loan without the
prior consent of the Lender thereof.

(B)  In the event that, on any Reset Date,
the sum of the total Revolving Credit Exposures and the aggregate principal
amount of outstanding Competitive Loans exceeds 105% of the Total Commitments,
then, within three Business Days after notice thereof to the Borrower from the Paying
Agent, the Borrower shall prepay Revolving Borrowings (or, if no such
Borrowings are outstanding, deposit cash collateral in an account with the Paying
Agent pursuant to Section 2.06(j)) such that, after giving effect thereto, the
sum of the total Revolving Credit Exposures plus the aggregate principal amount
of outstanding Competitive Loans does not exceed the Total Commitments.  Solely
for purposes of determining compliance with this paragraph, the total Revolving
Credit Exposure shall be deemed reduced by the amount of cash collateral
deposited with and held by the Paying Agent pursuant to Section 2.05(j).

(C)  The Borrower shall notify the Paying Agent
(and, in the case of prepayment of a Swingline Loan, the applicable Swingline
Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in
the case of prepayment of a Eurodollar Revolving Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the date
of prepayment, (ii) in the case of prepayment of an ABR Revolving
Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, New York
City time, on the date of prepayment.  Each such notice shall be irrevocable
and shall specify the prepayment date and the principal amount of each
Borrowing or portion thereof to be prepaid; provided that, if a notice
of prepayment is given in connection with a conditional notice of termination
of the Commitments as contemplated by Section 2.09, then such notice of
prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.09.  Promptly following receipt of any such
notice relating to a Revolving Borrowing, the Paying Agent shall advise the
Lenders of the contents thereof.  Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in Section 2.02. 
Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.13.

(l)  Fees.  (A)  The Borrower agrees to pay to the Paying Agent for the account of each Lender a commitment
fee, which shall accrue at the Applicable Rate on the average daily unused
amount of the Commitment of such Lender during the period from and including
Restatement Effective Date to but excluding the date on which such Commitment
terminates.  Accrued commitment fees shall be payable in arrears on the last
day of March, June, September and December of each year and on the date on
which the Commitments terminate, commencing on the first such date to occur
after the date hereof.  All commitment fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).  For purposes of
computing commitment fees with respect to Commitments, a Commitment of a Lender
shall be deemed to be used to the extent of the outstanding Revolving Loans and
LC Exposure of such Lender (and the Swingline Exposure of such Lender shall be
disregarded for such purpose).

(B)  The Borrower agrees to pay (i) to
the Paying Agent for the account of each Lender a participation fee with
respect to its participations in Letters of Credit, which shall accrue at the
same Applicable Rate used to determine the interest rate applicable to
Eurodollar Revolving Loans (or in the case of a Trade Letter of Credit, 50% of
such Applicable Rate) on the average daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the later
of the date on which such Lender’s Commitment terminates and the date on which
such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank
a fronting fee separately agreed upon between the Borrower and such Issuing
Bank.  Participation fees accrued through and including the last day of March,
June, September and December of each year shall be payable on the fifth
Business Day following such last day, commencing on the first such date to
occur after the Effective Date; provided that all such fees shall be
payable on the date on which the Commitments terminate and any such fees
accruing after the date on which the Commitments terminate shall be payable on
demand.  Any other fees payable to an Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand.  All participation fees
shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding
the last day).

(C)  The Borrower agrees to pay to the Paying
Agent, for its own account or for the account of the Lenders, as applicable,
fees payable in the amounts and at the times separately agreed upon between the
Borrower and the Paying Agent.

(D)  All fees payable hereunder shall be
paid on the dates due, in immediately available funds, to the Paying Agent (or
to the applicable Issuing Bank, in the case of fees payable to it) for
distribution, in the case of commitment fees, participation fees and other fees
separately agreed upon to be payable to the Lenders, to the Lenders.  Fees paid
shall not be refundable under any circumstances, except to the extent that the
Borrower demonstrates that any amounts paid represent overpayments.

(m)  Interest.  (A)  The Loans comprising each ABR Borrowing (including each Swingline Loan) shall
bear interest at the Alternate Base Rate plus the Applicable Rate.

(B)  The Loans comprising each Eurodollar
Borrowing shall bear interest (i) in the case of a Eurodollar Revolving
Loan, at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate, or (ii) in the case of a Eurodollar
Competitive Loan, at the LIBO Rate for the Interest Period in effect for such
Borrowing plus (or minus, as applicable) the Margin applicable to such Loan.

(C)  Each Fixed Rate Loan shall bear
interest at the Fixed Rate applicable to such Loan.

(D)  Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of
overdue principal of any Loan, 2% plus the rate otherwise applicable to such
Loan as provided in the preceding paragraphs of this Section or (ii) in
the case of any other amount, 2% plus the rate applicable to ABR Loans as
provided in paragraph (a) of this Section.

(E)  Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan and, in the case
of Revolving Loans, upon termination of the Commitments; provided that
(i) interest accrued pursuant to paragraph (d) of this Section shall
be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of
the Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Revolving Loan
prior to the end of the current Interest Period therefor, accrued interest on
such Loan shall be payable on the effective date of such conversion.

(F)  All interest hereunder shall be
computed on the basis of a year of 360 days, except that interest computed
by reference to the Alternate Base Rate at times when the Alternate Base Rate
is based on the Prime Rate shall be computed on the basis of a year of
365 days (or 366 days in a leap year), and in each case shall be payable
for the actual number of days elapsed (including the first day but excluding
the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO
Rate shall be determined by the Paying Agent, and such determination shall be
conclusive absent manifest error.

(n) 
Alternate Rate of Interest.  If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(i) the Paying Agent determines
(which determination shall be conclusive absent manifest error) that adequate
and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or
the LIBO Rate, as applicable, for such Interest Period; or

(ii) the Paying Agent is advised
by the Required Lenders (or, in the case of a Eurodollar Competitive Loan, the
Lender that is required to make such Loan) that the Adjusted LIBO Rate or the
LIBO Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for such Interest Period;

then the Paying Agent shall give notice thereof to
the Borrower and the Lenders by telephone or telecopy as promptly as
practicable thereafter and, until the Paying Agent notifies the Borrower and
the Lenders that the circumstances giving rise to such notice no longer exist,
(i) any Interest Election Request that requests the conversion of any
Revolving Borrowing to, or continuation of any Revolving Borrowing as, a
Eurodollar Borrowing shall be ineffective, (ii) if any Borrowing Request
requests a Eurodollar Revolving Borrowing, such Borrowing shall be made as an
ABR Borrowing and (iii) any request by the Borrower for a Eurodollar
Competitive Borrowing shall be ineffective; provided that (A) if
the circumstances giving rise to such notice do not affect all the Lenders,
then requests by the Borrower for Eurodollar Competitive Borrowings may be made
to Lenders that are not affected thereby and (B) if the circumstances
giving rise to such notice affect only one Type of Borrowings, then the other Type
of Borrowings shall be permitted.

(o) 
Increased Costs.  (A)  If any Change in Law shall:

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

(B) impose on any Lender or
Issuing Bank or the London interbank market any other condition affecting this
Agreement or Eurodollar Loans or Fixed Rate Loans made by such Lender or any
Letter of Credit or participation therein;

and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan
or Fixed Rate Loan (or of maintaining its obligation to make any such Loan) or
to increase the cost to such Lender or an Issuing Bank of participating in,
issuing or maintaining any Letter of Credit or to reduce the amount of any sum
received or receivable by such Lender or Issuing Bank hereunder (whether of
principal, interest or otherwise), then the Borrower will pay to such Lender or
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or Issuing Bank, as the case may be, for such additional
costs incurred or reduction suffered.

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

(C)  A certificate of a Lender or an Issuing
Bank setting forth the amount or amounts necessary to compensate such Lender or
Issuing Bank or its holding company, as the case may be, as specified in
paragraph (a) or (b) of this Section shall be delivered to the Borrower
and shall be conclusive absent manifest error.  The Borrower shall pay such
Lender or Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.

(D)  Failure or delay on the part of any
Lender or Issuing Bank to demand compensation pursuant to this Section shall
not constitute a waiver of such Lender’s or Issuing Bank’s right to demand such
compensation; provided that the Borrower shall not be required to
compensate a Lender or an Issuing Bank pursuant to this Section for any
increased costs or reductions incurred more than 270 days prior to the
date that such Lender or Issuing Bank, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or Issuing Bank’s intention to claim compensation
therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270‐day
period referred to above shall be extended to include the period of retroactive
effect thereof.

(E)  Notwithstanding the foregoing
provisions of this Section, a Lender shall not be entitled to compensation
pursuant to this Section in respect of any Competitive Loan if the Change in
Law that would otherwise entitle it to such compensation shall have been
publicly announced prior to submission of the Competitive Bid pursuant to which
such Loan was made.

(p)  Break Funding
Payments.  In the event of (a) the payment of any principal of any
Eurodollar Loan or Fixed Rate Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last day of
the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan or Fixed Rate Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice may be revoked under Section 2.11(b) and is revoked in accordance
therewith), (d) the failure to borrow any Competitive Loan after accepting
the Competitive Bid to make such Loan, or (e) the assignment of any
Eurodollar Loan or Fixed Rate Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each
Lender for the loss, cost and expense attributable to such event.  In the case
of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed
to include an amount determined by such Lender to be the excess, if any, of
(i) the amount of interest which would have accrued on the principal
amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that
would have been applicable to such Loan, for the period from the date of such
event to the last day of the then current Interest Period therefor (or, in the
case of a failure to borrow, convert or continue, for the period that would
have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement
of such period, for dollar deposits of a comparable amount and period from
other banks in the eurodollar market.  A certificate of any Lender setting
forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error.  The Borrower shall pay such Lender the amount shown as due on
any such certificate within 30 days after receipt thereof.

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

(B)  In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

(C)  The Borrower shall indemnify the Paying
Agent, each Lender and each Issuing Bank, within 30 days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Paying Agent, such Lender or such Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or an Issuing Bank, or by the Paying Agent on its own
behalf or on behalf of a Lender or an Issuing Bank, shall be conclusive absent
manifest error.

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

(E)  Any Foreign Lender that is entitled to
an exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Paying Agent), at the time or times
prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate.

(F)  If the Paying Agent or a Lender
determines, in its sole discretion, that it has received a refund of any Taxes
or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section 2.17, it shall pay over such refund to the Borrower (but only to
the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section 2.17 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the Paying
Agent or such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided,
that the Borrower, upon the request of the Paying Agent or such Lender, agrees
to repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the Paying
Agent or such Lender in the event the Paying Agent or such Lender is required
to repay such refund to such Governmental Authority.  This Section shall not be
construed to require the Paying Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

(r)  Payments Generally;
Pro Rata Treatment; Sharing of Set‐offs.  (A)  The Borrower shall
make each payment required to be made by it hereunder (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable
under Section 2.15, 2.16 or 2.17, or otherwise) prior to 1:00 p.m.,
New York City time (or, in the case of an amount payable in an Alternate Currency,
1:00 p.m. local time at the place of payment), on the date when due, in
immediately available funds, without set‐off or counterclaim.  Any
amounts received after such time on any date may, in the discretion of the Paying
Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon.  All such payments shall be made to
the Paying Agent at its offices at 270 Park Avenue, New York,
New York (or, in the case of payments in an Alternate Currency, such other
location as provided below), except payments to be made directly to an Issuing
Bank or a Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made
directly to the Persons entitled thereto.  The Paying Agent shall distribute
any such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof.  If any payment hereunder
shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension.  All payments hereunder shall be made in dollars, except as
expressly provided herein with respect to Alternate Currency Letters of
Credit.  All payments to be made by the Borrower in an Alternate Currency
pursuant to Section 2.06(m) shall be made in such Alternate Currency in such
funds as may then be customary for the settlement of international transactions
in such Alternate Currency for the account of the applicable Issuing Bank at
such time and at such place as shall have been notified by such Issuing Bank to
the Borrower by not less than four Business Days’ notice.

(B)  If at any time insufficient funds are
received by and available to the Paying Agent to pay fully all amounts of
principal, unreimbursed LC Disbursements, interest and fees then due hereunder,
such funds shall be applied (i) first, towards payment of interest and
fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, towards payment of principal and unreimbursed LC
Disbursements then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed LC Disbursements then
due to such parties.

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

(D)  Unless the Paying Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to the Paying Agent for the account of the Lenders or any Issuing Bank
hereunder that the Borrower will not make such payment, the Paying Agent may
assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders
or such Issuing Bank, as the case may be, the amount due.  In such event, if
the Borrower has not in fact made such payment, then each of the Lenders or the
applicable Issuing Bank, as the case may be, severally agrees to repay to the Paying
Agent forthwith on demand the amount so distributed to such Lender or Issuing
Bank with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the Paying Agent,
at the greater of the Federal Funds Effective Rate and a rate determined by the
Paying Agent in accordance with banking industry rules on interbank
compensation.

(E)  If any Lender shall fail to make any
payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or
(e), 2.07(b) or 2.18(d), then the Paying Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Paying Agent for the account of such Lender to satisfy such
Lender’s obligations under such Sections until all such unsatisfied obligations
are fully paid.

(s)  Mitigation
Obligations; Replacement of Lenders.  (A)  If any Lender requests
compensation under Section 2.15, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in
the future and (ii) would not subject such Lender to any unreimbursed cost
or expense and would not otherwise be disadvantageous to such Lender.  The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.

(B)  If any Lender requests compensation
under Section 2.15, or if the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.17, or if any Lender is a Declining Lender, or
if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Paying Agent, require such Lender to assign and delegate, without recourse
(in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this
Agreement (other than any outstanding Competitive Loans held by it) to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the
Borrower shall have received the prior written consent of the Paying Agent,
which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans (other than Competitive Loans) and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts), (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in
such compensation or payments and (iv) in the case of any such assignment
resulting from a Lender being a Declining Lender, the assignee shall have
agreed to the applicable Maturity Date Extension Request.  A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

(t)  Increase in
Commitments.  (A)    At any time after the Effective Date and no more
than two times during any calendar year, the Borrower may, by written notice to
the Paying Agent (which shall promptly deliver a copy to each of the Lenders),
request at any time or from time to time that the Total Commitments be
increased; provided that (i) the aggregate amount of each such increase
pursuant to this Section 2.20 shall not be less than $50,000,000 and the
aggregate amount of all such increases pursuant to this Section 2.20 shall not
exceed $500,000,000, (ii) each such request of the Borrower shall be deemed to
be an offer to each  Lender to increase its Commitment by its Applicable
Percentage of the proposed increased amount and (iii) each Lender, in its sole
discretion, may either (A) agree to increase its Commitment by all or a portion
of the offered amount or (B) decline to increase its Commitment.  Any such
notice shall set forth the amount of the requested increase in the Total
Commitments and the date on which such increase is requested to become
effective.  In the event that the Lenders shall have agreed to increase their
Commitments by an aggregate amount less than the increase in the Total
Commitments requested by the Borrower, the Borrower may arrange for one or more
banks or other financial institutions (any such bank or other financial
institution being called an “Augmenting Lender”), which may include any
Lender, to extend Commitments or increase its existing Commitment in an aggregate
amount equal to the unsubscribed amount; provided that each Augmenting
Lender, if not already a Lender hereunder, shall be subject to the approval of
the Paying Agent (not to be unreasonably withheld).  Increases of Commitments
and new Commitments created pursuant to this paragraph (a) shall become
effective upon the execution and delivery by Parent, the Borrower, the Paying
Agent and any Lenders (including any Augmenting Lenders) agreeing to increase
their existing Commitments or extend new Commitments, as the case may be, of an
agreement providing for such increased or additional Commitments, subject to
the satisfaction of any conditions set forth in such agreement. 
Notwithstanding the foregoing, no increase in the Total Commitments (or in the
Commitment of any Lender) shall become effective under this paragraph (a)
unless, on the date of such increase, the conditions set forth in paragraphs
(a) and (b) of Sections 4.02 shall be satisfied (as though a Borrowing were
being made on such date) and the Paying Agent shall have received a certificate
to that effect dated such date and executed by a Responsible Officer or a
Financial Officer of Parent and the Borrower.

(B)  At the time that any increase in the
Total Commitments pursuant to paragraph (a) of this Section 2.20 (a “Commitment
Increase”) becomes effective, if any Revolving Loans are outstanding, the
Borrower shall prepay the aggregate principal amount outstanding in respect of
such Revolving Loans in accordance with Section 2.11 (the “Initial Loans”);
provided that (i) nothing in this Section 2.20 shall prevent the
Borrower from funding the prepayment of Initial Loans with concurrent Revolving
Loans hereunder in accordance with the provisions of this Agreement, giving
effect to the Commitment Increase, and (ii) no such prepayment shall be
required if, after giving effect to the Commitment Increase, each Lender has
the same Applicable Percentage as immediately prior to such Commitment
Increase.

(u)  Currency
Fluctuations.  (A)  Not later than 1:00 p.m., New York City time, on
each Calculation Date, if there are any Alternate Currency Letters of Credit
outstanding, (i) each Issuing Bank that has outstanding any Alternate
Currency Letter of Credit or LC Disbursement thereunder shall determine the
Dollar Amount as of such Calculation Date of each outstanding Alternate
Currency Letter of Credit issued by it or LC Disbursement thereunder, and such
Issuing Bank shall notify the Paying Agent and the Borrower of each Dollar
Amount so determined and the relevant Spot Exchange Rate used by it to make
such determination and (ii) the Paying Agent shall give notice to the Lenders
and the Borrower of the Spot Exchange Rates so determined.  The Spot Exchange
Rates so determined shall become effective on the first Business Day
immediately following the relevant Calculation Date (a “Reset Date”) and
(subject to Section 2.06(m)) shall remain effective until the next
succeeding Reset Date.

(B)  Not later than 5:00 p.m., New York City
time, on each Reset Date and the date of each Borrowing or issuance of a Letter
of Credit, if there are any Alternate Currency Letters of Credit then
outstanding, the Paying Agent shall (i) determine the Dollar Equivalent of the Alternate
Currency Letters of Credit then outstanding (after giving effect to any Loans
to be made or repaid on such date) and (ii) notify the Lenders and the Borrower
of the results of such determination and of the resulting total Revolving Credit
Exposures.

(v)  Extension of
Maturity Date.  (A)  The Borrower may, by delivery of a written request
(a “Maturity Date Extension Request”) to the Paying Agent (which shall
promptly deliver a copy to each of the Lenders) not less than 30 days and
not more than 90 days prior to the first or second anniversary of the
Effective Date, request that the Lenders extend the Maturity Date for an
additional period of one year; provided that there shall be no more than two
extensions of the Maturity Date pursuant to this Section.

(B)  Each Lender shall, by notice to the
Borrower and the Administrative Agent given not later than the 20th day
after the date of the Paying Agent’s receipt of the Borrower’s Maturity Date
Extension Request (or such other date as the Borrower and the Paying Agent may
agree; such date, the “Extension Date”), advise the Borrower whether or
not it agrees to the requested extension (each Lender agreeing to a requested
extension being called a “Consenting Lender”, and each Lender declining
to agree to a requested extension being called a “Declining Lender”). 
Any Lender that has not so advised the Borrower and the Paying Agent by such
Extension Date shall be deemed to have declined to agree to such extension and
shall be a Declining Lender.

(C)  If Lenders constituting the Required
Lenders shall have agreed to a Maturity Date Extension Request by the Extension
Date, then the Maturity Date shall, as to the Consenting Lenders, be extended
to the first anniversary of the Maturity Date theretofore in effect.  The
decision to agree or withhold agreement to any Maturity Date Extension Request
shall be at the sole discretion of each Lender.  The Commitment of any
Declining Lender shall terminate on the Maturity Date in effect prior to giving
effect to any such extension (such Maturity Date being called the “Existing
Maturity Date”).  The principal amount of any outstanding Loans made by
Declining Lenders, together with any accrued interest thereon and any accrued
fees and other amounts payable to or for the account of such Declining Lenders
hereunder, shall be due and payable on the Existing Maturity Date, and on the
Existing Maturity Date the Borrower shall also make such other prepayments of
Loans pursuant to Section 2.11 as shall be required in order that, after
giving effect to the termination of the Commitments of, and all payments to,
Declining Lenders pursuant to this sentence, the sum of the total Revolving
Credit Exposures plus the aggregate principal amount of outstanding Competitive
Loans would not exceed the Total Commitments.

(D)  Notwithstanding the foregoing
provisions of this Section 2.22, the Borrower shall have the right,
pursuant to Section 2.19(b), at any time prior to the Existing Maturity
Date, to replace a Declining Lender with a Lender or other financial
institution that will agree to the applicable Maturity Date Extension Request,
and any such replacement Lender shall for all purposes constitute a Consenting
Lender.

(E)  Notwithstanding the foregoing
provisions of this Section 2.22, no extension of the Maturity Date
pursuant to this Section 2.22 shall become effective unless, on or
promptly following the Extension Date, the conditions set forth in
Section 4.02 shall be satisfied (with all references in such Section to a
Borrowing being deemed to be references to such extension and without giving
effect to the parenthetical in Section 4.02(a))  and the Paying Agent
shall have received a certificate to that effect dated the Extension Date and
executed by a Responsible Officer or a Financial Officer of each of Parent and
the Borrower.

(w) 
Defaulting Lenders.  Notwithstanding any other provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

(i) if any Swingline Exposure or
LC Exposure exists at the time a Lender is a Defaulting Lender, the Borrower
shall within one Business Day following notice by the Paying Agent
(i) prepay such Swingline Exposure or, if agreed by the applicable
Swingline Lender or Lenders, cash collateralize the Swingline Exposure of the
Defaulting Lender on terms satisfactory to the Swingline Lender or Lenders and
(ii) cash collateralize such Defaulting Lender’s LC Exposure in accordance
with the procedures set forth in Section 2.06(j) for so long as such LC
Exposure is outstanding; and 

(ii) the Swingline Lender shall
not be required to fund any Swingline Loan and the Issuing Bank shall not be
required to issue, amend or increase any Letter of Credit unless it is
satisfied that cash collateral will be provided by the Borrower in accordance
with Section 2.23(a).

SECTION
14. 

Representations and Warranties

Each of Parent
and the Borrower represents and warrants to the Lenders that:

(a)  Organization.  Each
of Parent and the Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation.

(b)  Powers; Authorization;
No Conflicts; Enforceability.  The Transactions are within each Loan
Party’s corporate powers, have been duly authorized by all necessary corporate
action, and do not contravene (a) any Loan Party’s charter or by‐laws
or (b) law or any contractual restriction binding on or affecting any Loan
Party.  This Agreement has been, and each of the other Loan Documents to which
any Loan Party is to be a party when delivered hereunder will have been, duly
executed and delivered by each Loan Party that is a party hereto or thereto, as
applicable.  This Agreement is, and each of the other Loan Documents to which
any Loan Party is to be a party when delivered will be, the legal, valid and
binding obligation of each Loan Party that is a party hereto or thereto, as
applicable, enforceable against each such Loan Party in accordance with its
terms.

(c)  Approvals.  No
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or any other third party is required for the due
execution, delivery and performance by any Loan Party of any Loan Document to
which it is to be a party, the borrowing of the Loans, the use of the proceeds
thereof or the issuance of Letters of Credit hereunder.

(d)  Financial
Condition; No Material Adverse Change.  

(A)  The consolidated balance sheet of Parent and its subsidiaries as at
February 2, 2008, and the related consolidated statements of income and cash
flows of Parent and its subsidiaries for the fiscal year then ended,
accompanied by an opinion of KPMG LLP, independent public accountants, and the
consolidated balance sheet of Parent and its subsidiaries as at November 1,
2008, and the related consolidated statements of income and cash flows of
Parent and its subsidiaries for the nine months then ended, duly certified by a
Financial Officer of Parent, copies of which have been furnished to the
Lenders, fairly present, subject, in the case of said balance sheet as at
November 1, 2008, and said statements of income and cash flows for the nine
months then ended, to year-end audit adjustments, the consolidated financial
condition of Parent and its subsidiaries as at such dates and the consolidated
results of the operations of Parent and its subsidiaries for the periods ended
on such dates, all in accordance with GAAP consistently applied.

(B)  Since February 2, 2008, there has been
no material adverse change in the business, condition (financial or otherwise),
operations, performance, properties or prospects of Parent and its
subsidiaries, taken as a whole.

(e)  Litigation.  There
is no pending or threatened action, suit, investigation, litigation or
proceeding affecting Parent or any Subsidiary pending or threatened before any
Governmental Authority or arbitrator that (a) would be reasonably likely
to have a Material Adverse Effect or (b) purports to affect the legality,
validity or enforceability of any Loan Document or the consummation of the
transactions contemplated hereby.

(f)  Investment Company
Status.  None of the Loan Parties is an “investment company”, within the
meaning of the Investment Company Act of 1940.

(g)  ERISA.  (A)  No ERISA Event has occurred or is reasonably expected to occur with respect to any
Plan that has resulted in or is reasonably expected to have a Material Adverse
Effect.

(B)  Neither the Borrower nor any ERISA
Affiliate has incurred or is reasonably expected to incur any Withdrawal
Liability to any Multiemployer Plan that could be reasonably expected to have a
Material Adverse Effect.

(C)  Each Plan satisfies the funding
requirements under Section 302 of ERISA and there has been no change in the
funding status of any such Plan since the last annual actuarial valuation date
that would reasonably be expected to have a Material Adverse Effect. 

(h)  Bloomingdale’s
Lease.  As of December 18, 2008, if the Guarantee Agreement had been in
effect and the Bloomingdale’s Parties had been party thereto, the amount of
their maximum liablity under the Guarantee Agreement would have exceeded
$500,000,000.

SECTION
15. 

Conditions

(a) 
Effective Date.  [Intentionally Omitted.]

(b) 
Each Credit Event.  The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of an Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions:

(i) The representations and
warranties of the Loan Parties set forth in this Agreement (other than those in
Section 3.04(b) and clause (a) of Section 3.05, at such times
when the Public Debt Ratings are Baa2 and BBB or better, respectively) shall be
true and correct on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable.

(ii) At the time of and
immediately after giving effect to such Borrowing or the issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, no Default shall
have occurred and be continuing.

Each Borrowing and each issuance, amendment, renewal
or extension of a Letter of Credit shall be deemed to constitute a representation
and warranty by the Loan Parties on the date thereof as to the matters
specified in paragraphs (a) and (b) of this Section.

SECTION
16. 

Affirmative Covenants

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

(a)  Financial
Statements; Ratings Change and Other Information.  Parent or the Borrower
will furnish to the Paying Agent and each Lender:

(i) as soon as available and in
any event within 90 days after the end of each fiscal year of Parent, a
copy of the annual audit report for such year for Parent and its consolidated subsidiaries,
containing a consolidated balance sheet of Parent and its consolidated subsidiaries
as of the end of such fiscal year and consolidated statements of income and
cash flows of Parent and its consolidated subsidiaries for such fiscal year, in
each case accompanied by an opinion by KPMG LLP or other independent public
accountants of recognized national standing (without a “going concern” or like
qualification or exception and without any qualification or exception as to the
scope of such audit) and certificates of a Financial Officer of Parent (i) as
to compliance with the terms of this Agreement, (ii) setting forth in
reasonable detail the then applicable Public Debt Ratings and the Interest Coverage
Ratio and the Leverage Ratio as of the end of such fiscal year and the calculations
necessary to demonstrate compliance with Sections 6.05 and 6.06 as of the
end of such fiscal year and (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the last consolidated
financial statements of Parent and its consolidated subsidiaries referred to in
Section 3.04(a) that materially affects the financial statements accompanying
such certificate and, if any such change has occurred, specifying the effect of
such change on the financial statements accompanying such certificate;

(ii) as soon as available and in
any event within 45 days after the end of each of the first three fiscal quarters
of each fiscal year of Parent, a consolidated balance sheet of Parent and its
consolidated subsidiaries as of the end of such quarter and consolidated
statements of income and cash flows of Parent and its consolidated subsidiaries
for the period commencing at the end of the previous fiscal year of Parent and
ending with the end of such quarter, duly certified (subject to year-end audit
adjustments) by a Financial Officer of Parent as having been prepared in accordance
with GAAP, and certificates of a Financial Officer of Parent  (i) as to compliance
with the terms of this Agreement, (ii) setting forth in reasonable detail the
then applicable Public Debt Ratings and the Interest Coverage Ratio and the Leverage
Ratio as of the end of such fiscal quarter and the calculations necessary to
demonstrate compliance with Sections 6.05 and 6.06 as of the end of such
fiscal quarter and (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the last consolidated
financial statements of Parent and its consolidated subsidiaries referred to in
Section 3.04(a) that materially affects the financial statements accompanying
such certificate and, if any such change has occurred, specifying the effect of
such change on the financial statements accompanying such certificate;

(iii) as soon as possible and in
any event within five days after any Responsible Officer becomes aware of the
occurrence of a Default or an event, development or circumstance that has had
or could reasonably be expected to have a Material Adverse Effect, in each case
continuing on the date of such statement, a statement of a Financial Officer of
Parent or the Borrower setting forth details of such Default, event,
development or other circumstance (including the anticipated effect thereof)
and the action that Parent or the Borrower has taken and proposes to take with
respect thereto;

(iv) promptly after the sending
thereof, copies of all reports that Parent or the Borrower sends to any of the
holders of any class of its outstanding securities;

(v) promptly after the
commencement thereof, notice of all actions, suits, investigations, litigation
and proceedings before any Governmental Authority or arbitrator affecting
Parent or any Subsidiary of the type described in Section 3.05;

(vi) as soon as possible and in
any event within five Business Days after any change in either Public Debt
Rating, a certificate of a Financial Officer of Parent setting forth such
Public Debt Rating;

(vii) concurrently with any
financial statements delivered under clause (a) above, an annual financial forecast
for Parent and its consolidated subsidiaries for the subsequent fiscal year
(including a consolidated balance sheet of Parent and its consolidated
subsidiaries as of the end of such fiscal year and consolidated statements of
income and cash flows of Parent and its consolidated subsidiaries for such
fiscal year); and

(viii) such other information
respecting the business, condition (financial or otherwise), operations,
performance, properties or prospects of Parent or any Subsidiary as any Lender
through either Administrative Agent may from time to time reasonably request.

                        The
Borrower and Parent also agree that promptly after any report or registration
statement, other than a registration statement on Form S‐8 or any
successor form thereto, is filed by Parent or any Subsidiary with the
Securities and Exchange Commission or any national securities exchange a copy
thereof will be made available on Parent’s website.

(b)  Existence.  Parent
will, and will cause each of the Subsidiaries to, preserve and maintain, its
corporate existence, rights (charter and statutory), permits, licenses,
approvals, privileges and franchises, except, with respect to such rights,
permits, licenses, approvals, privileges and franchises, where the failure to
do so could not be reasonably expected to have a Material Adverse Effect; provided
that Parent and the Subsidiaries may consummate any merger or consolidation
permitted under Section 6.03 and, provided, further, that,
unless required in order to comply with Section 6.03, neither Parent nor
any Subsidiary shall be required to preserve or maintain (i) the corporate
existence of any Minor Subsidiary if the Board of Directors of the parent of
such Minor Subsidiary, or an executive officer of such parent to whom such
Board of Directors has delegated the requisite authority, shall determine that
the preservation and maintenance thereof is no longer desirable in the conduct
of the business of such parent and that the loss thereof is not disadvantageous
in any material respect to Parent, the Borrower, such parent, the Paying Agent,
the Issuing Banks or the Lenders or (ii) any right, permit, license,
approval, privilege or franchise if the Board of Directors of Parent or such
Subsidiary shall determine that the preservation thereof is no longer desirable
in the conduct of the business of Parent or such Subsidiary, as the case may
be, and that the loss thereof is not disadvantageous in any material respect to
Parent, such Subsidiary, the Paying Agent, the Issuing Banks or the Lenders.

(c)  Payment of Obligations.
 Parent will, and will cause each of the Subsidiaries to, pay and
discharge, before the same shall become delinquent, (a) all Taxes imposed
upon it or upon its property and (b) all lawful claims that, if unpaid,
might by law become a Lien upon its property; provided that neither
Parent nor any Subsidiary shall be required to pay or discharge any such Tax or
claim (i) that is being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained, unless and until any
Lien resulting therefrom attaches to its property and becomes enforceable
against its other creditors and (ii) if such non-payments, either
individually or in the aggregate, could not be reasonably expected to have a
Material Adverse Effect.

(d)  Maintenance of
Properties; Insurance.  (A)  Except where the failure to do so, either
individually or in the aggregate, could not be reasonably expected to have a
Material Adverse Effect, Parent will, and will cause each of the Subsidiaries
to, maintain and preserve all of its properties that are used or useful in the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.

(B)  Parent will, and will cause each of the
Subsidiaries to, maintain insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which Parent or such Subsidiary operates,
except where failure to maintain such insurance could not be reasonably
expected to have a Material Adverse Effect.

(e)  Books and Records;
Inspection Rights.  (A)   Parent will, and will cause each of the
Subsidiaries to, keep proper books of record and account in such detail as is
necessary to allow the delivery of the reports required by Section 5.01, in
which full and correct entries shall be made of all financial transactions and
the assets and business of Parent and its consolidated subsidiaries in
accordance with GAAP.

(B)  Parent will, and will cause each of the
Subsidiaries to, at any reasonable time and from time to time, upon reasonable
notice, permit any Agent or any of the Lenders or any agents or representatives
thereof, to examine the records and books of account of, and visit the properties
of, Parent or any Subsidiary and to discuss the affairs, finances and accounts
of Parent or any Subsidiary with any of their financial officers.

(f)  Compliance with
Laws.  Parent will, and will cause each of the Subsidiaries to comply, in
all material respects, with all applicable laws, rules, regulations and orders (including
ERISA and environmental laws), except, in any case, where the failure so to
comply, either individually or in the aggregate, could not be reasonably
expected to have a Material Adverse Effect.

(g)  Use of Proceeds and
Letters of Credit.  The proceeds of the Loans will be used only for working
capital and general corporate purposes, including to support commercial paper. 
No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations T, U and X.  Letters of Credit will be
issued only for general corporate purposes.

(h)  Additional
Subsidiaries; Reinstatement of Guarantees.  (A)  If any additional
Subsidiary Loan Party is formed or acquired after the Restatement Effective
Date, then, the Borrower will promptly, but in no event later than five
Business Days after such formation or acquisition, cause such Subsidiary Loan
Party to execute and deliver a supplement to the Guarantee Agreement thereby
becoming a Guarantor in accordance with the terms of the Guarantee Agreement; provided
that the requirements of this paragraph shall not apply if at the time of
formation or acquisition either Public Debt Rating is Baa1 or BBB+ or better
(provided that the lower rating is not more than one notch worse than the
higher rating).

(B)  If the Guarantees of the Subsidiary
Loan Parties are released and terminated as provided in the Guarantee
Agreement, the Borrower agrees:  (i) if at any time thereafter a Public
Debt Rating is worse than Baa2 or BBB, then the Borrower will promptly, but in
any event within five Business Days, cause each Subsidiary Loan Party to
execute and deliver a supplement to the Guarantee Agreement thereby becoming a
Guarantor in accordance with the terms of the Guarantee Agreement; and
(ii) if at any time thereafter one or more Subsidiary Loan Parties have in
effect Guarantees of Indebtedness of Parent or the Borrower, and the aggregate
principal amount of Indebtedness so Guaranteed by any or all such Subsidiary
Loan Parties (combined) exceeds $100,000,000, then the Borrower will promptly,
but in any event within five Business Days, cause each Subsidiary Loan Party
that has Guaranteed any Indebtedness of Parent or the Borrower to execute and
deliver a supplement to the Guarantee Agreement thereby becoming a Guarantor in
accordance with the terms of the Guarantee Agreement.

(C)  If requested by either of the
Administrative Agents, the Borrower will provide to the Administrative Agents
such evidence of authority and legal opinions regarding any execution and
delivery of a supplement to the Guarantee Agreement by a Subsidiary Loan Party
as provided above, as either Administrative Agent shall reasonably request.

(i)  Corporate
Existence; Inventory Recordkeeping.  (a)  Parent and the Borrower will, and
will cause each Subsidiary Loan Party to, maintain the corporate or limited
liability company, as applicable, existence of each Subsidiary Loan Party
(subject to the exceptions set forth in Section 5.02) and ensure that each
Subsidiary Loan Party observes all corporate or limited liability company
requirements, procedures, and formalities consistent with its status as a
validly existing corporation or limited liability company, as applicable.

                        (b)  Parent and the
Borrower will maintain a system of inventory recordkeeping under which the
location and sales of inventory are tracked by individual store location pursuant
to which the inventory owned by each Subsidiary Loan Party may be separately
determined.

                        (c)  Parent and the
Borrower will, or will cause each Subsidiary Loan Party to, maintain a
recordkeeping system pursuant to which the assets and liabilities of each
Subsidiary Loan Party may be separately determined in accordance with GAAP.

SECTION
17. 

Negative Covenants

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

(a) 
Subsidiary Indebtedness.  Parent will not permit any Subsidiary (other
than the Borrower) to create, assume or suffer to exist, any Indebtedness, other
than:

(i) Indebtedness owed to Parent
or to a wholly owned Subsidiary; provided that any such Indebtedness
owed by a Subsidiary Loan Party shall be subordinated to such Subsidiary Loan
Party’s Guarantee of the Obligations on the terms set forth on Schedule B
to the Guarantee Agreement;

(ii) Indebtedness existing on the
Restatement Effective Date (whether such Indebtedness is Indebtedness of a
subsidiary of Parent or a subsidiary of the Borrower) and described on Schedule 6.01
(the “Existing Indebtedness”), and any Indebtedness extending the
maturity of, or refunding or refinancing, in whole or in part, the Existing Indebtedness;
provided that the principal amount of such Existing Indebtedness shall
not be increased above the principal amount thereof outstanding immediately
prior to such extension, refunding or refinancing, and the direct and
contingent obligors therefor shall not be changed as a result of, or in
connection with, such extension, refunding or refinancing;

(iii) endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business;

(iv) [RESERVED];

(v) Indebtedness of any Person
that becomes a Subsidiary after the date hereof that is existing at the time
such Person becomes a Subsidiary (other than Indebtedness incurred solely in contemplation
of such Person becoming a Subsidiary) and any Indebtedness extending the
maturity of, or refunding or refinancing, such Indebtedness, in whole or in part;
provided that the principal amount of such Indebtedness shall not be
increased above the principal amount thereof outstanding immediately prior to
such extension, refunding or refinancing, and the direct and contingent obligors
therefor shall not be changed as a result of, or in connection with, such
extension, refunding or refinancing; and

(vi) other Indebtedness in an
aggregate principal amount at any time outstanding not to exceed $500,000,000.

(b)  Liens.  Parent
will not, and will not permit any Subsidiary to, create, incur, assume or
suffer to exist any Lien on or with respect to any of its assets of any
character (including accounts) whether now owned or hereafter acquired, or
assign any accounts or other right to receive income, except:

(i) Liens created or existing
under the Loan Documents; 

(ii) Permitted Encumbrances;

(iii) the Liens existing on the
Restatement Effective Date and described on Schedule 6.02 (whether such
Liens are on the assets of Parent or any of its subsidiaries);

(iv) purchase money Liens upon or
in real property or equipment acquired or held in the ordinary course of
business to secure the purchase price of such property or equipment or to
secure Indebtedness incurred solely for the purpose of financing the
acquisition, construction or improvement of any such property or equipment to
be subject to such Liens, or Liens existing on any such property or equipment
at the time of acquisition (other than any such Liens created in contemplation
of such acquisition that were not incurred to finance the acquisition of such
property or equipment), or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; provided that no such Lien
shall extend to or cover any properties of any character other than the real
property or equipment being acquired, constructed or improved (except that
Liens incurred in connection with the construction or improvement of real
property may extend to additional real property immediately contiguous to such
property being constructed or improved) and no such extension, renewal or
replacement shall extend to or cover any such properties not theretofore
subject to the Lien being extended, renewed or replaced;

(v) Liens arising in connection
with Capital Lease Obligations; provided that no such Lien shall extend
to or cover any assets other than the assets subject to the applicable capital
leases;

(vi) Liens on property of a
Person existing at the time such Person is merged into or consolidated with
Parent or any Subsidiary or becomes a Subsidiary; provided that such
Liens (other than replacement Liens permitted under clause (k) below) were
not created in contemplation of such merger, consolidation or investment and do
not extend to any assets other than those of the Person merged into or
consolidated with Parent or such Subsidiary or acquired by the Parent or such
Subsidiary; 

(vii) [RESERVED]

(viii) Liens securing Documentary
LCs or Trade Letters of Credit; provided that no such Lien shall extend
to or cover any assets of Parent or any Subsidiary other than the inventory
(and bills of lading and other documents related thereto) being financed by any
such Documentary LCs or Trade Letter of Credit, as the case may be;

(ix) Liens in respect of goods
consigned to Parent or any of its Subsidiaries in the ordinary course of business;
provided that such Liens are limited to the goods so consigned;

(x) Liens (other than on
inventory) securing Indebtedness incurred by Parent or the Subsidiaries; provided
that the sum of the aggregate amount of such Indebtedness at any time
outstanding shall not exceed $100,000,000; and

(xi) the replacement, extension
or renewal of any Lien permitted by clause (c) or (f) above upon or in the
same property theretofore subject thereto or, in the case of Liens on real
property and related personal property of Parent or any of the Subsidiaries,
upon or in substitute property of like kind of Parent or such Subsidiary, as
the case may be, determined in good faith by the Board of Directors of Parent
or such Subsidiary to be of the same or lesser value than the property
theretofore subject thereto, or the replacement, extension or renewal (without
increase in the amount or change in any direct or contingent obligor) of the
Indebtedness secured thereby.

(c)  Fundamental Changes;
Conduct of Business.  (A)  Parent will not, and will not permit the
Borrower, any Subsidiary Loan Party or any other Material Subsidiary to, merge
or consolidate with or into any Person except that (i) any Subsidiary may
merge or consolidate with or into any other Subsidiary (provided that, if the
Borrower is a party to any such merger or consolidation, the Borrower shall be
the surviving entity and shall remain a direct, wholly owned subsidiary of
Parent), (ii) any Subsidiary may merge into Parent and Parent may merge
with any other Person, so long as in either case Parent is the surviving
corporation and (iii) in connection with any acquisition, any Subsidiary may
merge into or consolidate with any other Person or permit any other Person to
merge into or consolidate with it, so long as the Person surviving such merger
shall be a Subsidiary (provided that, if the Borrower is a party to any such
merger or consolidation, the Borrower shall be the surviving entity and shall
remain a direct, wholly owned subsidiary of Parent); provided that (A) in
each case, no Event of Default shall have occurred and be continuing at the
time of such proposed transaction or would result therefrom and
(B) notwithstanding any of the foregoing, a Subsidiary Loan Party shall
not merge or consolidate with Parent, the Borrower or any other Subsidiary that
is not a Subsidiary Loan Party.

(B)  Parent and the Borrower will not
liquidate or dissolve, and Parent will not, and will not permit any Subsidiary
to sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of the assets of Parent and
the Subsidiaries, taken as a whole (whether now owned or hereafter acquired). 
The Borrower will not permit any Subsidiary Loan Party to liquidate into
Parent, the Borrower or any other Subsidiary that is not a Subsidiary Loan
Party.

(C)  Parent will not, and will not permit
any Subsidiary to, engage to any material extent in any business other than
businesses of the type conducted by Parent and its subsidiaries on the date of
execution of this Agreement and businesses reasonably related thereto.

(d)  Sale and Leaseback
Transactions.  Parent will not, and will not permit any Subsidiary to,
enter into any arrangement, directly or indirectly, whereby it shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereinafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property sold or transferred, except for (a) any
such sale of any fixed or capital assets that is made for cash consideration in
an amount not less than the cost of such fixed or capital asset and is
consummated within 90 days after Parent or such Subsidiary acquires or
completes the construction of such fixed or capital asset and (b) any such sale
of any fixed or capital assets for fair market value; provided that the
fair market value of all such assets sold in reliance upon this clause (b)
plus the aggregate amount of Indebtedness at any time outstanding secured by
Liens in reliance on Section 6.02(j) shall not exceed 12.5% of
Consolidated Net Tangible Assets, determined as of the date of any such sale; provided
further that the fair market value of all such assets sold by Subsidiary
Loan Parties after the Restatement Effective Date in reliance upon this
clause (b) shall not exceed $250,000,000 in aggregate.

(e)  Leverage Ratio.
 Parent will not permit the Leverage Ratio as of the last day of any
Measurement Period to exceed the ratio set forth opposite such Measurement
Period below:

	
  Period

  	
  Leverage
  Ratio

  
	
  Measurement
  Periods ending prior to or on October 31, 2009

  	
  4.90
  to 1.00

  
	
  Measurement
  Periods ending thereafter, but prior to or on October 30, 2010

  	
  4.75
  to 1.00

  
	
  Measurement
  Periods ending thereafter

  	
  4.50
  to 1.00

  

 

(f)  Interest Coverage
Ratio.  Parent will not permit the Interest Coverage Ratio as of the last
day of any Measurement Period to be less than the ratio set forth opposite such
Measurement Period below:

	
  Period

  	
  Interest
  Coverage Ratio

  
	
  Measurement
  Periods ending prior to or on October 30, 2010

  	
  3.00
  to 1.00

  
	
  Measurement
  Periods ending thereafter

  	
  3.25
  to 1.00

  

 

(g)  Subsidiary Loan
Parties.  (A)  Parent and the Borrower will not permit the Inventory
Ratio as of the last day of any Measurement Period to be less than 0.35 to
1.00.

(B)  Parent and the Borrower will not permit
any Subsidiary Loan Party to sell, transfer, lease or otherwise dispose of any
real property owned by it to Parent, the Borrower or any other Subsidiary that
is not a Subsidiary Loan Party.

(C)  Parent and the Borrower will not permit
any Subsidiary Loan Party to sell, transfer or otherwise dispose of inventory
owned by it to Parent, the Borrower or any other Subsidiary that is not a
Subsidiary Loan Party, except in the ordinary course of business consistent
with past practice.

(h)  Restricted Payments. 
Parent and the Borrower will not, and will not permit any of their respective
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except:  (a) Subsidiaries may declare
and pay dividends ratably with respect to their Equity Interests; (b) Parent
may make Restricted Payments in cash in an aggregate amount not to exceed
$230,000,000 during any fiscal year; provided that, at the time of and
after giving effect to any such Restricted Payment, no Default shall have
occurred and be continuing and Parent shall be in compliance, on a Pro Forma
Basis, with Sections 6.05 and 6.06; and (c) Parent may make any
additional Restricted Payment in cash; provided that (i) the amount
of such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by Parent after the Restatement Effective Date
(including those made pursuant to clause (b) above), is not greater than
the sum, without duplication, of (A) 50% of Consolidated Net Income
(without giving effect to non-cash charges arising from impairments of
goodwill, impairments of intangibles or impairments/write downs of real estate)
for the period (taken as one accounting period) from the beginning of the first
fiscal quarter commencing after the Restatement Effective Date to the end of
Parent’s most recently ended fiscal quarter for which financial statements are
publicly available at the time of such Restricted Payment (or, if such
Consolidated Net Income (without giving effect to non-cash charges arising from
impairments of goodwill, impairments of intangibles or impairments/write downs
of real estate) for such period is a deficit, less 100% of such deficit); plus
(B) 100% of the aggregate net cash proceeds received by Parent, during the
period from the Restatement Effective Date to the date of such Restricted
Payment, from the issuance by Parent of additional Equity Interests (other than
Disqualified Equity Interests or Equity Interests issued to a Subsidiary or to
an employee stock ownership plan or trust), and (ii) at the time of and
after giving effect to such Restricted Payment, no Default shall have occurred
and be continuing and Parent shall be in compliance, on a Pro Forma Basis, with
Sections 6.05 and 6.06.  Notwithstanding the foregoing, any Restricted
Payment that would otherwise not be permitted by this Section shall be
permitted if the Public Debt Ratings at the time are Baa2 and BBB or better.

(i)  Restricted
Agreements.  Neither Parent nor the Borrower will,
nor will they permit any Subsidiary Loan Party to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon the ability of Parent, the
Borrower or any other Loan Party to create, incur or permit to exist any Lien
upon any of its property or assets to secure the Obligations (or any credit
facility that refinances or replaces this Agreement); provided that (a) the
foregoing shall not apply to restrictions and conditions imposed by (i) law
or (ii) any Loan Document, (b) the foregoing shall not apply to
restrictions and conditions existing on the Restatement Effective Date
contained in any of the instruments, indentures and other agreements identified
on Schedule 6.09 or any extension, renewal, supplement, amendment or other
modification of any thereof or any additional such instrument, indenture or
other agreement so long as, in each case, any such prohibition, restriction or
condition contained therein is not more restrictive in any material respect
than the prohibitions, restrictions and conditions contained in the
instruments, indentures and other agreements indentified on Schedule 6.09 as in
effect on the Restatement Effective Date (provided that the foregoing
shall not permit the restrictions and conditions contained in the
Bloomingdale’s Lease to be in any other instrument, indenture or agreement),
(c) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary Loan Party or any
assets pending such sale, provided that such restrictions and conditions apply
only to the Subsidiary Loan Party or assets that is or are to be sold and such sale
is permitted hereunder, (d) the foregoing shall not apply to restrictions
or conditions imposed by any agreement relating to secured Indebtedness
permitted by clause (d) or (h) of Section 6.02 if such restrictions
or conditions apply only to the property or assets securing such Indebtedness and
(e) the foregoing shall not apply to customary provisions in leases
restricting the assignment thereof.

(j)  Bloomingdale’s. 

(A)  Parent and the Borrower will not permit
Bloomingdale’s or any of its subsidiaries to create, assume or suffer to exist
any “Guaranties” or “Debt”, or make or hold any “Investments” other than
“Permitted Investments” (as each such quoted term is defined in the
Bloomingdale’s Lease), other than those existing as of December 18, 2008, and
Guarantees made under the Guarantee Agreement, if the effect of such
“Guaranties”, “Debt” or “Investments” is to reduce the maximum liability of the
Bloomingdale’s Parties under the Guarantee Agreement; provided that,
notwithstanding the foregoing, additional such “Guaranties”, “Debt” and
“Investments” shall be permitted in an aggregate amount that would not at any
time result in the maximum liability of the Bloomingdale’s Parties under the
Guarantee Agreement being more than $125,000,000 less than such maximum liability
would have been at such time had no such additional “Guaranties”, “Debt” or
“Investments” been incurred or made.  

(B)  Parent and the Borrower will not permit
any Subsidiary Loan Party that is not a Bloomingdale’s Party (i) to sell,
transfer or otherwise dispose of any real property owned by it to
Bloomingdale’s or any of its subsidiaries, (ii) to merge or consolidate with or
into Bloomingdale’s or any of its subsidiaries or (iii) to become a subsidiary
of Bloomingdale’s, in each case if, after giving effect thereto, the maximum
liability of the Bloomingdale’s Parties under the Guarantee Agreement would be
reduced by more than 10% ; provided that the foregoing restrictions set
forth in clauses (ii) and (iii) shall not apply to (A) Bloomingdale’s By Mail
Ltd., a New York corporation, (B) Bloomingdale’s, LLC, an Ohio limited
liability company or (C) the assets comprising Bloomingdales.com, a division of
Bloomingdale's.

(C)  Parent and the Borrower will not permit
any amendment or modification to the Bloomingdale’s Lease that would have the
effect of reducing the maximum liability of the Bloomingdale’s Parties under
the Guarantee Agreement.

SECTION
18. 

Events of Default

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

(i) the Borrower shall fail to
pay any principal of any Loan when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise;

(ii) the Borrower or Parent shall
fail to pay any interest on any Loan or any fee or any other amount (other than
an amount referred to in clause (a) of this Article) payable under this
Agreement, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of three Business Days;

(iii) any representation or
warranty made or deemed made by or on behalf of any Loan Party in or in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made;

(iv) either Parent or the
Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.01(c) or (e), 5.02 (with respect to Parent’s or the
Borrower’s existence) or 5.07 or in Article VI;

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

(vi) Parent, the Borrower or any other
Subsidiary shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness,
when and as the same shall become due and payable (after giving effect to any
applicable grace periods);

(vii) any event or condition
occurs that results in any Material Indebtedness becoming due prior to its
scheduled maturity or that enables or permits (after giving effect to any
applicable grace periods) the holder or holders of any Material Indebtedness or
any trustee or agent on its or their behalf to cause any Material Indebtedness
to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity; provided that this
clause (g) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing
such Indebtedness;

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

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

(x) Parent, the Borrower or any other
Subsidiary shall become unable, admit in writing its inability or fail
generally to pay its debts as they become due;

(xi) one or more judgments for
the payment of money in an aggregate amount in excess of $150,000,000 shall be
rendered against Parent, the Borrower, any other Subsidiary or any combination
thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach
or levy upon any assets of Parent, the Borrower or any other Subsidiary to
enforce any such judgment; provided that any such judgments shall only
result in an Event of Default under this clause (k) if and to the extent that
the aggregate amount of such judgments not covered by a valid and binding
policy of insurance between the defendant and the insurer covering the payment
thereof exceeds $150,000,000 so long as such insurer, which shall be rated at
least “A” by A.M. Best Company, has been notified of, and has not disputed the
claim made for payment of, the amount of such judgments;

(xii) an ERISA Event shall have
occurred that, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of Parent, the
Borrower or any other Subsidiary in an aggregate amount exceeding $150,000,000;

(xiii) any Guarantor’s Guarantee
of the Obligations purported to be created under the Guarantee Agreement shall
cease to be, or shall be asserted by any Loan Party not to be, in full force
and effect (other than in accordance with the express terms of any Loan
Document); or

(xiv) a Change in Control shall
occur;

then, and in every such event (other than an event
with respect to the Borrower described in clause (h) or (i) of this
Article), and at any time thereafter during the continuance of such event, the Paying
Agent may, and at the request of the Required Lenders shall, by notice to
Parent or the Borrower, take either or both of the following actions, at the
same or different times:  (i) terminate the Commitments, and
thereupon the Commitments shall terminate immediately, and (ii) declare
the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Loan Parties accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Loan Parties; and in case of
any event with respect to the Borrower described in clause (h) or (i) of
this Article, the Commitments shall automatically terminate and the principal
of the Loans then outstanding, together with accrued interest thereon and all
fees and other obligations of the Loan Parties accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Loan Parties.

SECTION
19. 

The Agents

Each of the Lenders and the Issuing Banks
hereby irrevocably appoints each Agent as its agent and authorizes each Agent
to take such actions on its behalf and to exercise such powers as are delegated
to such Agent by the terms of the Loan Documents, together with such actions
and powers as are reasonably incidental thereto.

Each bank serving as an Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not an Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with Parent, the Borrower or any other Subsidiary or other
Affiliate thereof as if it were not an Agent hereunder.

No Agent shall have any duties or obligations
except those expressly set forth in the Loan Documents.  Without limiting the
generality of the foregoing, (a) no Agent shall be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) no Agent shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that such Agent
is required to exercise in writing as directed by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as
expressly set forth in the Loan Documents, no Agent shall have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to Parent, the Borrower or any of the other Subsidiaries that is
communicated to or obtained by the bank serving as an Agent or any of its
Affiliates in any capacity.  No Agent shall be liable for any action taken or
not taken by it with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own
gross negligence or wilful misconduct.  No Agent shall be deemed to have
knowledge of any Default unless and until written notice thereof is given such
Agent by Parent, the Borrower or a Lender, and no Agent shall be responsible
for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document,
(ii) the contents of any certificate, report or other document delivered
hereunder or in connection herewith, (iii) the performance or observance
of any of the covenants, agreements or other terms or conditions set forth in
any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to such Agent.

Each Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person.  Each
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon.  Each Agent may consult with legal counsel (who
may be counsel for Parent or the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.

Each Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by such Agent.  Each Agent and any such sub-agent may perform any and
all its duties and exercise its rights and powers through their respective
Related Parties.  The exculpatory provisions of the preceding paragraphs shall
apply to any such sub-agent and to the Related Parties of each Agent and any
such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as such Agent.

Subject to the appointment and acceptance of a
successor Paying Agent or Administrative Agent as provided in this paragraph,
the Paying Agent or an Administrative Agent may resign at any time by notifying
the Lenders, the Issuing Banks and Parent.  Upon any such resignation, the
Required Lenders shall have the right with the consent of Parent (not to be unreasonably
withheld), to appoint a successor.  If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Paying Agent or Administrative Agent, as
the case may be, gives notice of its resignation, then the retiring Paying
Agent or Administrative Agent may, on behalf of the Lenders and the Issuing
Banks, appoint a successor Paying Agent or Administrative Agent, as applicable,
which shall be a bank with an office in New York, New York, or an
Affiliate of any such bank.  Upon the acceptance of its appointment as Paying
Agent or Administrative Agent hereunder by a successor, such successor shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Paying Agent or Administrative Agent, as applicable, and the
retiring Paying Agent or Administrative Agent shall be discharged from its
duties and obligations hereunder.  The fees payable by either Parent or the
Borrower to a successor Paying Agent or Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between such Loan
Party and such successor.  After the Paying Agent’s or Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 9.03
shall continue in effect for the benefit of such retiring Paying Agent or
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Paying Agent or Administrative Agent.

Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.  Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document
or related agreement or any document furnished hereunder or thereunder.

SECTION
20. 

Miscellaneous

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

(A) if to Parent or the Borrower,
to it at Macy's, Inc., 7 West  Seventh Street, Cincinnati, Ohio 45202,
Attention of the Chief Financial Officer, with a copy to the General Counsel (other
than in the case of any notice or communication provided for under Article II)
(Telecopy No. (513) 579-7462);

(B) if to the Paying Agent or
JPMorgan Chase Bank, N.A. as Administrative Agent, Issuing Bank or Swingline
Lender, to JPMorgan Chase Bank, N.A., Loan and Agency Services Group, 1111
Fanin Street, Houston, Texas 77002, Attention of Jennifer Anyigbo (Telecopy No.
(713) 750-2782), with a copy to JPMorgan Chase Bank, N.A., 270 Park
Avenue, New York, New York 10017, Attention of Barry Bergman 
(Telecopy No. (212) 270-6637);

(C) if to Bank of America, N.A.,
as Administrative Agent, Issuing Bank or Swingline Lender, to it at 2001
Clayton Road, Building B, 2nd Floor, CA4-704-02-25, Concord,
California 94520.  Attention of GK Lapitan (Telecopy No. (888) 969-9170); and

(D) if to any other Lender,
Swingline Lender or Issuing Bank, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.

(B)  Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communications
pursuant to procedures approved by the Paying Agent; provided that the
foregoing shall not apply to notices pursuant to Article II unless
otherwise agreed by the Paying Agent and the applicable Lender.  The Paying
Agent, Parent or the Borrower may, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant
to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications.

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

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

(B)  Neither this Agreement nor any other
Loan Document nor any provision hereof or thereof may be waived, amended or
modified except, in the case of this Agreement, pursuant to an agreement or
agreements in writing entered into by Parent, the Borrower and the Required
Lenders or by Parent, the Borrower and the Paying Agent with the consent of the
Required Lenders or, in the case of any other Loan Document, pursuant to an
agreement or agreements in writing entered into by the Paying Agent and the
Loan Party or Loan Parties that are parties thereto with the consent of the
Required Lenders; provided that no such agreement shall (i) except
as contemplated by Section 2.20, increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the scheduled date of payment of the principal
amount of any Loan or LC Disbursement, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment,
or postpone the scheduled date of expiration of any Commitment, without the
written consent of each Lender affected thereby, (iv) change Section 2.18(b)
or (c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section or the definition of “Required Lenders” or any other
provision of any Loan Document specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or make any determination
or grant any consent hereunder, without the written consent of each Lender or (vi) release
Parent from its Guarantee under the Guarantee Agreement or limit its liability
thereunder, without the written consent of each Lender; provided further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of any Agent, an Issuing Bank or a Swingline Lender hereunder without
the prior written consent of such Agent, such Issuing Bank or such Swingline
Lender, as the case may be.  Notwithstanding the foregoing, the consent of the
Required Lenders shall not be required to amend this Agreement to increase the
Total Commitments pursuant to Section 2.20.

(c)  Expenses;
Indemnity; Damage Waiver.  (A)  The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by each Agent and its Affiliates,
including the reasonable fees, charges and disbursements of one outside counsel
(and any local counsel where appropriate) for the Agents, collectively, in
connection with the syndication of the credit facilities provided for herein,
the preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), and (ii) all
out-of-pocket expenses incurred by any Agent, any Issuing Bank or any Lender,
including the fees, charges and disbursements of any counsel for any Agent, any
Issuing Bank or any Lender, in connection with the enforcement or protection of
its rights in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.

(B)  The Borrower shall indemnify each
Agent, each Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of any Loan Document or any agreement or
instrument contemplated hereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the use of the proceeds therefrom (including any refusal
by an Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), or (iii) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.

(C)  To the extent that the Borrower fails
to pay any amount required to be paid by it to an Agent, an Issuing Bank or a
Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to such Agent, such Issuing Bank or such Swingline
Lender, as the case may be, such Lender’s Applicable Percentage (determined as
of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that (i) the unreimbursed
expense or indemnified loss, claim, damage, liability or related expense, as
the case may be, was incurred by or asserted against such Agent, such Issuing
Bank or such Swingline Lender in its capacity as such and (ii) if an Issuing
Bank separately agrees, as contemplated by the last sentence of Section
2.06(f), to be subject to a standard of care different than that set forth
therein, no Lender shall be liable to such Issuing Bank hereunder for any
greater amount than would have been due if such Issuing Bank had not agreed to
such different standard of care.

(D)  To the extent permitted by applicable
law, neither Parent nor the Borrower shall assert, and each hereby waives, any
claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, any Loan
Document or any agreement or instrument contemplated thereby, the Transactions
or the other transactions contemplated hereby, any Loan or Letter of Credit or
the use of the proceeds thereof.

(E)  All amounts due under this Section
shall be payable promptly after written demand therefor.

(d)  Successors and
Assigns.  (A)  The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby (including any Affiliate of an Issuing Bank that
issues any Letter of Credit), except that (i) neither Parent nor the
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by Parent or the Borrower without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section. 
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of an Issuing Bank that
issues any Letter of Credit), Participants (to the extent provided in paragraph (c)
of this Section) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agents, the Issuing Banks and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

(B)  (1)Subject to the conditions set forth
in paragraph (b)(ii) below, any Lender may assign to one or more assignees all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans at the time owing to it) with the
prior written consent (such consent not to be unreasonably withheld) of:

Parent or the
Borrower; provided that no consent of Parent or the Borrower shall be
required for an assignment to a Lender or, if an Event of Default has occurred
and is continuing, any other assignee;

the Paying
Agent; provided that no consent of the Paying Agent shall be required
for an assignment of a Commitment to an assignee that is a Lender with a
Commitment immediately prior to giving effect to such assignment; and

(C)  each
Issuing Bank and each Swingline Lender; provided that no consent of an
Issuing Bank or a Swingline Lender shall be required for an assignment of a
Commitment to an assignee that is a Lender with a Commitment immediately prior
to giving effect to such assignment. 

(2) Assignments
shall be subject to the following additional conditions:

except in the
case of an assignment to a Lender or an Affiliate of a Lender or an assignment
of the entire remaining amount of the assigning Lender’s Commitment or Competitive
Loans, the amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Paying Agent) shall not be less
than $10,000,000, unless each of the Borrower (or Parent) and the Paying Agent
otherwise consent; provided that no such consent of the Borrower (or
Parent) shall be required if an Event of Default has occurred and is
continuing;

each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement; provided
that this clause shall not apply to rights in respect of outstanding
Competitive Loans;

the parties to
each assignment shall execute and deliver to the Paying Agent an Assignment and
Assumption, together with a processing and recordation fee of $3,500; and

the assignee, if
it shall not be a Lender, shall deliver to the Paying Agent an Administrative
Questionnaire.

(3) Subject to acceptance and
recording thereof pursuant to paragraph (b)(iv) of this Section, from and
after the effective date specified in each Assignment and Assumption the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of
a Lender under this Agreement, and the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.15, 2.16,
2.17 and 9.03).  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c)
of this Section.

(4) The Paying Agent, acting for
this purpose as an agent of the Loan Parties, shall maintain at one of its
offices a copy of each Assignment and Assumption delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”). 
The entries in the Register shall be conclusive, and the Loan Parties, the
Agents, the Issuing Banks and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary.  The
Register shall be available for inspection by the Borrower, any Issuing Bank
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

(5) Upon its receipt of a duly
completed Assignment and Assumption executed by an assigning Lender and an
assignee, the assignee’s completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent
to such assignment required by paragraph (b) of this Section, the Paying
Agent shall accept such Assignment and Assumption and record the information
contained therein in the Register.  No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.

(C)  (1)Any Lender may, without the consent
of the Loan Parties, the Agents, the Issuing Banks or the Swingline Lenders,
sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Loan Parties, the Agents, the Issuing Banks and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under the Loan Documents. 
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce the Loan Documents and to approve any amendment, modification or waiver
of any provision of the Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such Participant.  Subject
to paragraph (c)(ii) of this Section, the Loan Parties agree that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and
2.17 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees
to be subject to Section 2.18(c) as though it were a Lender.

(2) A Participant shall not be
entitled to receive any greater payment under Section 2.15 or 2.17 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with a Loan Party’s prior written consent.  A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.17 unless a Loan Party is notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of the Loan Parties, to comply with Section 2.17(e) as though
it were a Lender.

(D)  Any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or assignment of a security interest; provided
that no such pledge or assignment of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

(e)  Survival.  All
covenants, agreements, representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and thereto
and shall survive the execution and delivery of the Loan Documents and the
making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that any Agent, any Issuing Bank or any Lender may have had notice or knowledge
of any Default or incorrect representation or warranty at the time any credit
is extended hereunder, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated.  The provisions of Sections 2.15, 2.16,
2.17 and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement or any other
Loan Document or any provision hereof or thereof.

(f)  Counterparts;
Integration; Effectiveness.  This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract.  This Agreement, the other Loan Documents and any
separate letter agreements with respect to fees payable to any Agent, Lender or
Issuing Bank constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  Except
as provided in Section 4.01, this Agreement shall become effective when it
shall have been executed by the Paying Agent and when the Paying Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto (other than the Borrower), and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

(g)  Severability. 
Any provision of this Agreement held to be invalid, illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such invalidity, illegality or unenforceability without affecting the
validity, legality and enforceability of the remaining provisions hereof; and
the invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

(h)  Right of Setoff. 
If an Event of Default shall have occurred and be continuing, each Lender and
each of its Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of any Loan Party against any of and all the
obligations of such Loan Party now or hereafter existing under any Loan
Document held by such Lender, irrespective of whether or not such Lender shall
have made any demand under any Loan Document and although such obligations may
be unmatured.  The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Lender
may have.

(i)  Governing Law;
Jurisdiction; Consent to Service of Process.  (A)  This Agreement shall
be construed in accordance with and governed by the law of the State of
New York.

(B)  Each of Parent and the Borrower hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the
Southern District of New York, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or any
other Loan Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in
such Federal court.  Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. 
Nothing in this Agreement or any other Loan Document shall affect any right
that any Agent, any Issuing Bank or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement or any other Loan Document against
Parent, the Borrower or their respective properties in the courts of any
jurisdiction.

(C)  Each of Parent and the Borrower hereby
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in paragraph
(b) of this Section.  Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.

(D)  Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 9.01.  Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

(j)  WAIVER OF JURY
TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED
ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

(k)  Headings. 
Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting,
this Agreement.

(l)  Confidentiality. 
Each of the Agents, the Issuing Banks and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to
any other party to this Agreement, (e) in connection with the exercise of
any remedies hereunder or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of Parent
or the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or
(ii) becomes available to any Agent, any Issuing Bank or any Lender on a
nonconfidential basis from a source other than Parent or the Borrower.  For the
purposes of this Section, “Information” means all information received
from Parent or the Borrower relating to Parent or the Borrower or their
respective businesses, other than any such information that is available to any
Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to
disclosure by Parent or the Borrower.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

(m)  Interest Rate
Limitation.  Notwithstanding anything herein to the contrary, if at any
time the interest rate applicable to any Loan, together with all fees, charges
and other amounts which are treated as interest on such Loan under applicable
law (collectively the “Charges”), shall exceed the maximum lawful rate
(the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with applicable
law, the rate of interest payable in respect of such Loan hereunder, together
with all Charges payable in respect thereof, shall be limited to the Maximum
Rate and, to the extent lawful, the interest and Charges that would have been
payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

(n)  Patriot Act.  Each Lender hereby notifies the Loan Parties that pursuant
to the requirements of the Patriot Act, it is required to obtain, verify and
record information that identifies the Loan Parties, which information includes
the name and address of the Loan Parties and other information that will allow
such Lender to identify the Loan Parties in accordance with the Act.

(o)  Conversion of
Currencies.  (A)  If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due under
this Agreement in dollars into another currency, the parties hereto agree, to
the fullest extent that they may legally and effectively do so, that the rate
of exchange used shall be that at which in accordance with normal banking
procedures the Paying Agent could purchase dollars with such other currency in
New York, New York, on the Business Day immediately preceding the day on which
final judgment is given.

(B)  The
obligations of the Borrower in respect of any sum due to the Paying Agent, any
Lender or any Issuing Bank hereunder in dollars shall, to the extent permitted
by applicable law, notwithstanding any judgment in a currency other than
dollars, be discharged only to the extent that on the Business Day following
receipt of any sum adjudged to be so due in the judgment currency, the Paying
Agent, such Lender or such Issuing Bank may in accordance with normal banking
procedures purchase dollars in the amount originally due to the Paying Agent,
such Lender or such Issuing Bank with the judgment currency.  If the amount of
dollars so purchased is less than the sum originally due to the Paying Agent,
such Lender or such Issuing Bank, the Borrower agrees, as a separate obligation
and notwithstanding any such judgment, to indemnify the Paying Agent, such
Lender or such Issuing Bank against the resulting loss.

 

	
  AMENDED AND RESTATED GUARANTEE AGREEMENT

  dated
  as of

  January
  5, 2009,

  among

  macy's, inc.

  (formerly known as FEDERATED DEPARTMENT STORES, INC.)

  macy's retail holdings, inc.

  (formerly known as FEDERATED RETAIL HOLDINGS, INC.)

  the subsidiary guarantors PARTY HERETO

  and

  JPMORGAN CHASE BANK, N.A.,

  as
  Paying Agent

  

[Reference No.
6701-495]

 

TABLE
OF CONTENTS

ARTICLE I

Definitions

SECTION
1.01. Credit Agreement....................................................................................... 1

SECTION
1.02. Other Defined Terms.................................................................................. 1

ARTICLE II

Guarantee

SECTION 2.01. Guarantee................................................................................................... 2

SECTION 2.02. Guarantee of Payment................................................................................. 3

SECTION 2.03. Limitations.................................................................................................. 3

SECTION 2.04. Reinstatement............................................................................................. 4

SECTION 2.05. Agreement To Pay; Subrogation.................................................................. 4

SECTION 2.06. Information................................................................................................. 4

ARTICLE III

Indemnity, Subrogation and Subordination

SECTION 3.01. Indemnity and Subrogation.......................................................................... 4

SECTION 3.02. Contribution and Subrogation...................................................................... 5

SECTION 3.03. Subordination............................................................................................. 5

ARTICLE IV

Miscellaneous

SECTION 4.01. Notices....................................................................................................... 6

SECTION 4.02. Waivers; Amendment.................................................................................. 6

SECTION 4.03. Successors and Assigns.............................................................................. 6

SECTION 4.04. Survival of Agreement................................................................................. 6

SECTION 4.05. Counterparts; Effectiveness; Several
Agreement.......................................... 7

SECTION 4.06. Severability................................................................................................. 7

SECTION 4.07. Right of Set-Off.......................................................................................... 7

SECTION 4.08. Governing Law........................................................................................... 7

SECTION 4.09. Headings.................................................................................................... 8

SECTION 4.10. Termination or Release................................................................................ 8

 

Schedule A – List of Initial
Subsidiary Guarantors

Schedule B -- Subordination Terms

Exhibit A – Supplement to the Amended and Restated Guarantee
Agreement

 

                        AMENDED AND
RESTATED GUARANTEE AGREEMENT dated as of January 5, 2009, among MACY'S, INC.
(formerly known as FEDERATED DEPARTMENT STORES, INC.) (“Parent”), MACY'S
RETAIL HOLDINGS, INC. (formerly known as FEDERATED RETAIL HOLDINGS, INC.) (the
“Borrower”), the SUBSIDIARY GUARANTORS party hereto and JPMORGAN CHASE
BANK, N.A., as Paying Agent. 

Reference
is made to (a) the Amended and Restated Credit Agreement dated as of August 30,
2007 (as in effect on the date hereof, the “Existing Credit Agreement”)
among Parent, the Borrower, the lenders party thereto, JPMorgan Chase Bank,
N.A. and Bank of America, N.A., as administrative agents and JPMorgan Chase
Bank, N.A., as paying agent and (b) the Amended and Restated Guarantee
Agreement dated as of August 30, 2007 (as in effect on the date hereof, the “Existing
Guarantee Agreement”) among Parent, the Borrower and JPMorgan Chase Bank, N.A.,
as paying agent.  The Existing Credit Agreement is being amended and restated
pursuant to and in accordance with the Amendment and Restatement Agreement
dated as of December 18, 2008 (the “Amendment and Restatement Agreement”)
among Parent, the Borrower, the Lenders party thereto, JPMorgan Chase Bank,
N.A. and Bank of America, N.A., as Administrative Agents and JPMorgan Chase
Bank, N.A., as Paying Agent (the Existing Credit Agreement, as so amended and
restated, by the Amendment and Restatement Agreement, and as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”).
 The amendment and restatement of the Existing Credit Agreement pursuant to the
Amendment and Restatement Agreement is conditioned upon, among other things, the
execution and delivery of this Agreement.  Parent is the parent company of the
Borrower, will derive substantial benefits from the extension of credit to the
Borrower pursuant to the Credit Agreement and is willing to execute and deliver
this Agreement in order to induce the Lenders to extend such credit.  The
Subsidiary Guarantors are subsidiaries of the Borrower, will derive substantial
benefits from the extension of credit to the Borrower pursuant to the Credit
Agreement and are willing to execute and deliver this Agreement in order to
induce the Lenders to extend such credit.  Accordingly, the parties hereto
agree as follows:

 

SECTION 21. 

Definitions

(a)  Credit Agreement.  (A)  Capitalized terms used in this Agreement and not otherwise defined herein have the
meanings specified in the Credit Agreement.

(B)  The rules of construction specified in Section 1.03 of
the Credit Agreement also apply to this Agreement.

 

(b)  Other
Defined Terms.  As used in this Agreement, the following terms have the
meanings specified below:

 

“Claiming
Party” has the meaning assigned to such term in Section 3.02 of this
Agreement.

 

“Contributing
Party” has the meaning assigned to such term in Section 3.02 of this
Agreement.

 

“Credit
Agreement” has the meaning assigned to such term in the preliminary
statement of this Agreement.

 

“Credit
Parties” means (a) the Lenders, (b) the Agents, (c) the
Issuing Banks, (d) the beneficiaries of the Borrower’s indemnification
obligations under the Credit Agreement and (e) the successors and assigns
of each of the foregoing.

 

“Guarantors” means Parent and the
Subsidiary Guarantors.

“Obligations”
means the due and punctual payment by the Borrower of (a) the principal of and
interest (including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (b) each payment required to be made by the Borrower under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) and obligations to provide cash collateral, and (c)
all other monetary obligations of the Borrower to any of the Credit Parties
under the Credit Agreement and each of the other Loan Documents, including
obligations to pay fees, expense reimbursement obligations and indemnification
obligations, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding).

 

“Subsidiary
Guarantor” means, at any time, any Subsidiary Loan Party that is party to
this Agreement at such time, except any such Subsidiary Loan Party the
Guarantee hereunder of which has been released and terminated in accordance
with the terms of this Agreement.  The initial Subsidiary Guarantors are listed
on Schedule A.

 

(c)  Restatement.  This Agreement amends and restates the
Existing Guarantee Agreement in its entirety.

 

SECTION 22. 

Guarantee

(a)  Guarantee.  Subject to the
limitations set forth herein, each of the Guarantors unconditionally
guarantees, as a primary obligor and not merely as a surety, the due and
punctual payment of the Obligations.  Each of the Guarantors further agrees
that the Obligations may be extended or renewed, in whole or in part, without
notice to or further assent from it, and that it will remain bound upon its
guarantee notwithstanding any extension or renewal of any Obligation.  Each
Guarantor waives presentment to, demand of payment from and protest to the
Borrower of any of the Obligations, and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment.  Notwithstanding any other
provision of this Agreement, the maximum liability of the Bloomingdale’s
Parties with respect to the Obligations under this Agreement at any time of
determination shall be limited to the difference of (a) the maximum liability
that the Bloomingdale’s Parties may have under this Agreement without causing
Bloomingdale’s to fail to be in compliance with Section 26.15 of the
Bloomingdale’s Lease minus (b) $10,000,000.

 

(b)  Guarantee of Payment.  Each of
the Guarantors further agrees that its guarantee hereunder constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by the Paying Agent or any other Credit Party to
any security held for the payment of the Obligations or to any balance of any
deposit account or credit on the books of the Paying Agent or any other Credit
Party in favor of the Borrower or any other Person.

 

(c)  Limitations.  (A)  Except for (x) termination of a Guarantor’s obligations hereunder as expressly provided in
Section 4.10 and (y) the limitations with respect to the Bloomingdale’s Parties
set forth in Section 2.01, the obligations of each Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise.  Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by (i) the failure of
the Paying Agent or any other Credit Party to assert any claim or demand or to
enforce any right or remedy under the provisions of any Loan Document or
otherwise; (ii) any rescission, waiver, amendment or modification of, or
any release from any of the terms or provisions of, any Loan Document or any
other agreement; (iii) the release of any security held by the Paying
Agent or any other Credit Party for the Obligations or any of them;
(iv) any default, failure or delay, wilful or otherwise, in the payment of
the Obligations; or (v) any other act or omission that may or might in any
manner or to any extent vary the risk of any Guarantor or otherwise operate as
a discharge of any Guarantor as a matter of law or equity (other than the
payment in full in cash of all the Obligations).  Each of the Guarantors expressly
authorizes the Credit Parties to take and hold security for the payment and
performance of the Obligations, to exchange, waive or release any or all such
security (with or without consideration), to enforce or apply such security and
direct the order and manner of any sale thereof in their sole discretion or to
release or substitute any one or more other guarantors or obligors upon or in
respect of the Obligations, all without affecting the obligations of any of the
Guarantors hereunder.

 

(B)  To the fullest extent permitted by applicable law, each
Guarantor waives any defense based on or arising out of any defense of the
Borrower or the unenforceability of the Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of the Borrower,
other than the payment in full in cash of all the Obligations.  The Paying
Agent and the other Credit Parties may, at their election, foreclose on any
security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any other accommodation
with the Borrower or exercise any other right or remedy available to them
against the Borrower, without affecting or impairing in any way the liability
of any Guarantor hereunder except to the extent the Obligations have been paid
in full in cash.  To the fullest extent permitted by applicable law, each
Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any security.

 

(d)  Reinstatement.  Each Guarantor agrees
that its guarantee hereunder shall continue to be effective or be reinstated,
as the case may be, if at any time payment, or any part thereof, of any
Obligation is rescinded or must otherwise be restored by the Paying Agent or
any other Credit Party upon the bankruptcy or reorganization of the Borrower or
otherwise.  The provisions of this Section 2.04 shall survive any termination
or release under Section 4.10.

 

(e)  Agreement To Pay; Subrogation. 
In furtherance of the foregoing and not in limitation of any other right that
the Paying Agent or any other Credit Party has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Borrower to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Paying Agent
for distribution to the applicable Credit Parties in cash the amount of such
unpaid Obligation.  Upon payment by any Guarantor of any sums to the Paying
Agent as provided above, all rights of such Guarantor against the Borrower
arising as a result thereof by way of right of subrogation, contribution,
reimbursement, indemnity or otherwise shall in all respects be subject to Article III.

 

(f)  Information.  Each of the
Guarantors assumes all responsibility for being and keeping itself informed of
the Borrower’s financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope
and extent of the risks that such Guarantor assumes and incurs hereunder, and
agrees that none of the Paying Agent or the other Credit Parties will have any
duty to advise such Guarantor of information known to it or any of them regarding
such circumstances or risks.

SECTION 23. 

Indemnity, Subrogation and Subordination

(a)   Indemnity.  In addition to all such rights of indemnity
and subrogation as each of the Subsidiary Guarantors may have under applicable
law (but subject to Section 3.03), Parent and the Borrower jointly and
severally agree that, in the event a payment in respect of any Obligation shall
be made by any Subsidiary Guarantor under this Agreement, Parent and the
Borrower shall indemnify such Subsidiary Guarantor for the full amount of such
payment and such Subsidiary Guarantor shall be subrogated to the rights of the
Person to whom such payment shall have been made to the extent of such payment.

 

(b)  Contribution and Subrogation.  Each Subsidiary Guarantor
(a “Contributing Party”) agrees (subject to Section 3.03) that, in the
event a payment shall be made by any other Subsidiary Guarantor hereunder in
respect of any Obligation and such other Subsidiary Guarantor (the “Claiming
Party”) shall not have been fully indemnified by Parent and the Borrower as
provided in Section 3.01, the Contributing Party shall indemnify the Claiming
Party in an amount equal to the amount of such payment multiplied by a fraction
of which the numerator shall be the net worth of the Contributing Party on the
date hereof and the denominator shall be the aggregate net worth of all the
Subsidiary Guarantors on the date hereof (or, in the case of any Subsidiary
Guarantor becoming a party hereto after the date hereof, the date of the
supplement hereto executed and delivered by such Subsidiary Guarantor); provided,
however, that in the case of the Bloomingdale’s Parties, the numerator
of the foregoing fraction shall be the maximum liability of the Bloomingdale’s
Parties hereunder determined in accordance with Section 2.01.  Any Contributing
Party making any payment to a Claiming Party pursuant to this Section 3.02
shall be subrogated to the rights of such Claiming Party under Section 3.01 to
the extent of such payment.

 

(c)  Subordination.  (a)  Notwithstanding any provision of
this Agreement to the contrary, all rights of each Subsidiary Guarantor under
Sections 3.01 and 3.02 and all other rights of each Guarantor in respect of
indemnity, contribution or subrogation under applicable law or otherwise, shall
be fully subordinated to the indefeasible payment in full in cash of the
Obligations on the terms set forth in Schedule B hereto.  No failure on the
part of the Borrower or any Guarantor to make the payments required by Sections
3.01 and 3.02 (or any other payments required under applicable law or
otherwise) shall in any respect limit the obligations and liabilities of any
Guarantor with respect to its obligations hereunder, and each Guarantor shall
remain liable for the full amount of the obligations of such Guarantor hereunder.

 

(b)  Each of the Borrower
and the Guarantors hereby agrees that all Indebtedness and other monetary
obligations owed by it to Parent, the Borrower or any other Subsidiary shall be
fully subordinated to the indefeasible payment in full in cash of the Obligations
on the terms set forth in Schedule B hereto.  

SECTION 24. 

Miscellaneous

(a)  Notices.  All communications and
notices hereunder shall (except as otherwise expressly permitted herein) be in
writing and given as provided in Section 9.01 of the Credit Agreement.  All
communications and notices to any Subsidiary Guarantor shall be given to such
Subsidiary Guarantor in care of the Borrower. 

 

(b)  Waivers; Amendment.  (A)  No failure or delay by any Agent, any Issuing Bank or any Lender in exercising any
right or power hereunder or under the Credit Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power.  The rights and remedies of the Agents, the Issuing Banks
and the Lenders hereunder and under the Credit Agreement are cumulative and are
not exclusive of any rights or remedies that they would otherwise have.  No
waiver of any provision of this Agreement or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 4.02, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given.  Without limiting the generality of the foregoing, the making
of a Loan or issuance of a Letter of Credit shall not be construed as a waiver
of any Default, regardless of whether any Agent, any Lender or any Issuing Bank
may have had notice or knowledge of such Default at the time.  No notice or
demand on any Loan Party in any case shall entitle any Loan Party to any other
or further notice or demand in similar or other circumstances.

 

(B)  Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Paying Agent and the Loan Party or Loan Parties
with respect to which such waiver, amendment or modification is to apply,
subject to any consent required in accordance with Section 9.02 of the
Credit Agreement.

 

(c)  Successors and Assigns.  Whenever
in this Agreement any party hereto is referred to, such reference shall be deemed
to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Guarantor, the
Borrower or the Paying Agent that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and assigns.

 

(d)  Survival of Agreement.  All
covenants, agreements, representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any Lender or on its behalf and notwithstanding that any Agent, any
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended under
the Credit Agreement, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any fee or any other
amount payable under any Loan Document is outstanding and unpaid or any Letter
of Credit is outstanding and so long as the Commitments have not expired or
terminated.

 

(e)  Counterparts; Effectiveness; Several
Agreement.  This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute
single contract.  Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.  This Agreement shall become effective when it
shall have been executed by the Paying Agent and when the Paying Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each Loan Party, and thereafter shall be binding upon each Loan
Party and the Paying Agent, and shall inure to the benefit of each Loan Party,
the Paying Agent and the other Credit Parties and their respective successors
and assigns, except that no Loan Party shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein (and any
such assignment or transfer shall be void) except as expressly contemplated by
this Agreement or the Credit Agreement.

 

(f)  Severability.  Any provision of
this Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
invalidity, illegality or uneforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction.  The parties shall endeavor in good‐faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.

 

(g)  Right of Set-Off.  If an Event of
Default shall have occurred and be continuing, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of any Guarantor against any of and all the obligations
of such Guarantor now or hereafter existing under this Agreement owed to such
Lender, irrespective of whether or not any demand for payment thereof has been
made under this Agreement and although such obligations may be unmatured.  The
rights of each Lender under this Section 4.07 are in addition to other rights
and remedies (including other rights of set-off) which such Lender may have.

 

(h)  Governing Law.  This Agreement
shall be construed in accordance with and governed by the law of the State of
New York.

 

(i)  Headings.  Article and Section
headings and the Table of Contents used herein are for convenience of reference
only, are not part of this Agreement and are not to affect the construction of,
or to be taken into consideration in interpreting, this Agreement.

 

(j)  Termination or Release.  (a)
Subject to Section 2.04, this Agreement and the guarantees made herein shall
terminate when the Commitments have terminated, all the Obligations have been
paid in full, the LC Exposure has been reduced to zero and the Issuing Banks
have no further obligations to issue Letters of Credit under the Credit
Agreement.

 

(b)  At any time that
either Public Debt Rating shall be Baa1 or BBB+ or better (provided that
neither the Moody’s rating nor the S&P rating is more than one notch worse
than the other), the Borrower may by written notice to the Paying Agent release
and terminate the Guarantees hereunder by one or more of the Subsidiary
Guarantors to the extent doing so would not result in a failure to be in
compliance with clause (ii) of Section 5.08(b) of the Credit Agreement.

 

(c)  A Subsidiary Guarantor
shall automatically be released from its obligations hereunder and shall cease
to be a party hereto upon the consummation of any transaction permitted by the
Credit Agreement as a result of which such Subsidiary Guarantor ceases to be a
Subsidiary; provided that the Required Lenders shall have consented to such
transaction (to the extent required by the Credit Agreement) and the terms of
such consent did not provide otherwise.

[Remainder of page
intentionally left blank]

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

 

	
  MACY's, INC.,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
  MACY'S RETAIL HOLDINGS, INC.,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

   

  	
   

  

	
  Bloomingale's Atlantic City, inc.,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:  

  
	
   

  	
  Title:.... 

  

 

 

	
  Dayton's Iron Horse liquors, inc.,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:  

  
	
   

  	
  Title:.... 

  

 

 

 

	
  Macy's GC Sales, inc.,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:  

  
	
   

  	
  Title:.... 

  

 

 

	
  Macy's Hamilton by Appointment,
  Inc.,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:  

  
	
   

  	
  Title:.... 

  

 

 

	
  Marshall Fields Chicago, inc.,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:  

  
	
   

  	
  Title:.... 

  

 

 

	
  Mayfair Wine & Liquor Shop,
  inc.,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:  

  
	
   

  	
  Title:.... 

  

 

 

 

	
  Rooftop, Inc.,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:  

  
	
   

  	
  Title:.... 

  

 

 

	
  Minooka Exchange, LLC ,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:  

  
	
   

  	
  Title:.... 

  

 

 

 

 

 

	
  22 East Advertising Agency, Inc.

  22 East Reality Corporation
  Bloomingdale’s By Mail Ltd. Bloomingdale’s Gift Card, LLC

  Bloomingdale’s, Inc.

  Bloomingdale’s, LLC

  Central Regional Claims
  Corporation

  Charleston Stores Corporation

  Jordan Servicenter, Inc.

  Kaufmann’s Carousel, Inc.

  Laurel Plaza Development I, Inc.

  Macy’s California Realty, LLC

  Macy’s Central, LLC

  Macy’s Corporate Services, Inc.

  Macy’s Credit and Customer
  Services, Inc.

  Macy’s Department Stores, Inc.

  Macy’s East, LLC

  Macy’s Florida Stores, LLC

  Macy’s Florida, LLC

  Macy’s Gift Card, LLC

  Macy’s Home Store, LLC

  Macy’s Insurance, Inc.

  Macy’s Merchandising Group
  International, LLC

  Macy’s Systems and Technology,
  Inc. Macy’s Systems Leasing, Inc.

  Macy’s Texas, Inc.

  Macy’s West, LLC

  Macys.com, Inc.

  May Company Montgomery
  Condominium LLC

  May Credit Corporation

  May Properties of Maryland, Inc.

  May Stores IV, Inc.

  May Stores VIII, Inc.

  McIre One, Inc.

  MF Distribution Center of
  Illinois LLC

  MF Fargo-Grand Forks-Bismarck
  Stores LLC

  MF Grape-Coldwater Stores LLC

  MOA Rest, Inc.

  Nimbus Store LLC

  Nutmeg Acquisition Corporation

  OBP, LLC

  R.H. Macy Holdings (HK), Ltd.

  R.H. Macy Warehouse (HK), Ltd.

  Silver Spring Condo Corporation

  Southdale Stores LLC

  SWDC Investment Company

  Walden Stores Corporation

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  JPMORGAN CHASE BANK, N.A., as

  PAYING Agent,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

EXHIBIT
A

 

FORM
OF SUPPLEMENT TO AMENDED AND RESTATED GUARANTEE AGREEMENT

 

SUPPLEMENT NO.
__ dated as of [           ] (this “Supplement”), to the Amended and
Restated Guarantee Agreement dated as of January 5, 2009 (as amended,
supplemented or otherwise modified from time to time, the “Guarantee
Agreement”) among MACY'S, INC. (formerly known as FEDERATED DEPARTMENT
STORES, INC.) (“Parent”), MACY'S RETAIL HOLDINGS, INC. (formerly known
as FEDERATED RETAIL HOLDINGS, INC.) (the “Borrower”), the SUBSIDIARY
GUARANTORS party thereto (the “Subsidiary Guarantors”) and JPMORGAN
CHASE BANK, N.A., as Paying Agent.

 

A.  Reference is made to the Amended and Restated Credit
Agreement, dated as of August 30, 2007, as amended and restated as of January
5, 2009 (as further amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Parent, the Borrower, the Lenders
party thereto, JPMorgan Chase Bank, N.A. and Bank of America, N.A., as
Administrative Agents, and JPMorgan Chase Bank, N.A.,as Paying Agent.  

 

B.  Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement
and the Guarantee Agreement referred to therein.

 

C.  Section 5.08 of the Credit Agreement provides that
Subsidiary Loan Parties that are not Subsidiary Guarantors under the Guarantee
Agreement may be required to become Subsidiary Guarantors under the Guarantee
Agreement by execution and delivery of an instrument in the form of this
Supplement.  The undersigned Subsidiary (the “Additional Subsidiary”) is
executing this Supplement in accordance with the requirements of Section 5.08
of the Credit Agreement to become a Subsidiary Guarantor under the Guarantee
Agreement in order to induce the Lenders to make additional Loans and the
Issuing Bank to issue additional Letters of Credit and as consideration for
Loans previously made and Letters of Credit previously issued.

 

Accordingly, the Paying Agent
and the Additional Subsidiary agree as follows:

SECTION 1.  In accordance with Section 5.08 of the Credit
Agreement, the Additional Subsidiary by its signature below becomes a
Subsidiary Guarantor and a Guarantor under the Guarantee Agreement with the
same force and effect as if originally named therein as a Subsidiary Guarantor,
and the Additional Subsidiary hereby agrees to all the terms and provisions of
the Guarantee Agreement applicable to it as a Subsidiary Guarantor and
Guarantor thereunder .

 

SECTION 2.  The Additional Subsidiary represents and
warrants to the Paying Agent and the other Credit Parties that this Supplement
has been duly authorized, executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms.

 

SECTION 3.  This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Paying Agent shall have received a counterpart of this Supplement that bears
the signature of the Additional Subsidiary and the Paying Agent has executed a
counterpart hereof.  Delivery of an executed signature page to this Supplement
by facsimile or electronic transmission shall be as effective as delivery of a
manually signed counterpart of this Supplement.

 

SECTION 4.  Except as expressly supplemented hereby, the
Guarantee Agreement shall remain in full force and effect.

 

SECTION 5.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 6.  In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Guarantee Agreement shall not in any way
be affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

 

SECTION 7.  All communications and notices hereunder shall
be in writing and given as provided in Section 4.01 of the Guarantee Agreement.

 

SECTION 8.  The Borrower agrees to reimburse the Paying
Agent for its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Paying Agent.

 

IN WITNESS WHEREOF, the Additional Subsidiary and the Paying
Agent have duly executed this Supplement to the Guarantee Agreement as of the
day and year first above written.

	
  [ADDITIONAL SUBSIDIARY],

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  JPMORGAN CHASE BANK, N.A., as

  PAYING Agent,

  
	
  by

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:termagree121508.htm

    Exhibit
10.1

    

    

    MUTUAL
TERMINATION AGREEMENT

    

    

    This MUTUAL TERMINATION AGREEMENT is
entered into as of December 15, 2008 (this “Agreement”), by and among Summit
Financial Group, Inc., a West Virginia corporation (“Summit”), SFG II, Inc., a
West Virginia corporation (“SFG”), and Greater Atlantic Financial Corp., a
Delaware corporation (“GAFC”).

    

    RECITALS

    

    WHEREAS, Summit, SFG and GAFC are
parties to that certain Agreement and Plan of Reorganization dated as of June 9,
2008 (the “Reorganization Agreement”) (capitalized terms used herein but not
otherwise defined herein shall have the meanings ascribed to them in the
Reorganization Agreement); and

    

    WHEREAS, Section 9.1(a) of the
Reorganization Agreement provides that Summit, SFG and GAFC may mutually
terminate the Reorganization Agreement; and

    

    WHEREAS, the respective board of
directors of Summit, SFG and GAFC have determined it is in the best interests of
their respective corporations and stockholders to mutually terminate the
Reorganization Agreement as provided herein effective immediately upon execution
of this Agreement.

    

    AGREEMENT

    

    NOW, THEREFORE, in consideration of the
premises and the agreements set forth herein, and intending to be legally bound
hereby, the parties
mutually agree as follows:

    

    1.           Termination of
Reorganization Agreement.  Summit, SFG and GAFC each hereby
agree to terminate the Reorganization Agreement effective immediately upon the
execution of this Agreement.

    

    2.           Effect of Termination;
Mutual Discharge and Release.  Each party hereto, on behalf of
itself and, to the fullest extent permitted by law, its affiliates,
subsidiaries, directors, officers, stockholders, employees, agents, financial
and legal advisors and other representatives, and the successors and assigns of
each of them (each, a “Releasing Party”),
hereby fully, finally and forever releases and discharges each other party
hereto and each of their respective affiliates, subsidiaries, directors,
officers, stockholders, employees, agents, financial and legal advisors and
other representatives, and the successors and assigns of each of them, from any
and all liabilities and obligations, claims, causes of action and suits of
whatever kind or character, joint or several, at law or in equity, whether
arising under any United States federal, state or local law, or otherwise, that
any Releasing Party has or has had, whether known or unknown, accrued or
unaccrued and  arising out of, relating to, or in connection with the
Reorganization Agreement and the transactions contemplated thereby, including,
without limitation, any liability or obligation arising out of any breach of any
representation, warranty, covenant or agreement contained in the Reorganization
Agreement (including, without limitation, any fee or expense set forth in
Section 9.03 of the Reorganization Agreement); provided, however, that nothing
in this Section 2 shall impair the survival and full force of the
confidentiality provisions of Section 7.05(b) of the Reorganization
Agreement.  Notwithstanding the foregoing, the parties agree to share
equally in the expense incurred for test deconversions from GAFC’s core
processor to the Summit IT system in an amount not to exceed
$60,000.

    

    3.           Representations and
Warranties.  Summit, SFG and GAFC each hereby represents and
warrants to the other party that: (a) it has full power and authority to enter
into this Agreement and to perform its obligations hereunder in accordance with
the provisions of this Agreement, (b) this Agreement has been duly authorized,
executed and delivered by such party, (c) this Agreement constitutes a legal,
valid and binding obligation of such party, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors’ rights and remedies generally and to general principles of equity,
whether applied in a court of law or a court of equity, (d)  it has
received no inducement to enter into this Agreement, and (e) it has not assigned
or otherwise transferred any of the claims, causes of action, suits or other
matters released by it under this Agreement.

    

    4.           Public
Announcement.  Summit and GAFC each shall issue a press
release, reasonably agreeable to the other party (the “Initial Release”), upon
the signing of this Agreement with respect to this Agreement and the termination
of the Reorganization Agreement.  Except as required by law or
applicable listing agreement, no other press release shall be issued regarding
the termination of the Reorganization Agreement by either Summit (including SFG)
or GAFC without the prior written consent of the other
party.  Notwithstanding the foregoing, Summit and GAFC shall be
permitted to make reference to the matters addressed in this Agreement, in other
press releases or in required filings or communications with the Securities and
Exchange Commission or filings or communications made to any other governmental
entity or regulation; provided, however, that such references are substantially
consistent with the Initial Release or are required by applicable law or listing
requirements.

    

    5.           Governing Law;
Successors.  This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Delaware applicable to
contracts made and to be performed entirely within such State (except to the
extent that mandatory provisions of federal law are applicable).  This
Agreement shall be binding upon any successor to Summit (including SFG) or
GAFC.

    

    6.           Specific
Performance.  The parties hereto agree that irreparable damage
would occur if any provision of this Agreement were not performed according to
the terms hereof and that the parties shall be entitled to specific performance
of the terms hereof, in addition to any other remedy at law or in
equity.  The parties hereto further agree that in any proceeding
seeking specific performance, each party will waive the defense of adequacy of a
remedy at law.

    

    7.           Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to constitute an original.

    

    [Signature
page immediately follows]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their duly
authorized officers as of the date first written above.

    

    

    Summit
Financial Group, Inc.

    

    

    

    By:            /s/  H. Charles
Maddy,
III                                                      

      H. Charles Maddy,
III

      President and Chief Executive
Officer

    

    

    SFG
II, Inc.

    

    

    

    By:            /s/  H. Charles
Maddy,
III                                                      

      H. Charles Maddy,
III

    
      	
               
      

            	
               
      President and Chief Executive
Officer

            

    

    

    

    Greater
Atlantic Financial Corp.

    

    

    

    By:            /s/  Carroll E.
Amos                                                      

      Carroll E. Amos

    
      	
               
      

            	
                President
      and Chief Executive
Officer

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