Document:

exv10w12

Exhibit 10.12

Resolution of Board of Directors

(Resolution to Borrow)

By

U.S. GLOBAL INVESTORS, INC.,

a Texas corporation (the “Corporation”).

Dated: February 26, 2009

The Corporation desires to engage in financial transactions from time to time with JPMorgan Chase
Bank, N.A., and its successors and assigns (the “Bank”); and

The Corporation desires to authorize certain of its representatives to engage in these transactions
for the Corporation; and

The Corporation desires to ratify all past transactions and eliminate the necessity of presenting
separate individual resolutions to the Bank in the future; and

The Corporation has found that the transactions authorized by the resolutions are or will be in the
Corporation’s interest and to its financial benefit.

Resolved: That any                     [if this blank is not completed then those authorized herein can act singly on behalf of the Corporation] of
the following named representatives, of this Corporation whose actual signatures are shown below:

	 	 	 	 	 
	Title, if any	 	Printed Name	 	Sign
	 

	 	 
	 	 

are authorized from time to time for the Corporation to enter into any agreements of any nature
with the Bank, and those agreements will bind the Corporation. Specifically, but without
limitation, the authorized person is authorized, empowered, and directed to do the following for
and on behalf of the Corporation:

	1.	 	Borrow and incur any indebtedness, negotiate and procure loans, lines of credit, letters of
credit, discounts, and any other credit
or financial accommodations from the Bank in any form and in any amount and on any terms as
may be agreed upon between

the Corporation and the Bank.
	 
	2.	 	Subordinate, in all respects, any and all present and future indebtedness, obligations,
liabilities, claims, rights, demands, notes
and leases, of any kind which may be owed, now or hereafter, from any person or entity to the
Corporation to all present and
future indebtedness, obligations, liabilities, claims, rights and demands of any kind which
may be owed, now or hereafter, from
such person or entity to the Bank (“Subordinated Indebtedness”), together with subordination
by the Corporation of any and all
security interests, liens and mortgages, of any kind, whether now existing or hereafter
acquired, securing payment of the
Subordinated Indebtedness, all on such terms as may be agreed upon between the Corporation’s
representatives and the Bank
and in such amounts as in his or her judgment should be subordinated.
	 
	3.	 	Mortgage, pledge, transfer, endorse, hypothecate, or otherwise encumber and deliver to the
Bank any property now or hereafter
belonging to the Corporation or in which the Corporation now or hereafter may have an
interest, including without limitation, all
real property and all personal property, tangible or intangible, of the Corporation, as
security for the payment of any credits,
loans, or other financial accommodations so obtained by the Corporation or any promissory
notes so executed, including any
amendments to or modifications, renewals, and extensions of such promissory notes, or any
other or further indebtedness of the
Corporation, however the same may be evidenced. Such property may be mortgaged, pledged,
transferred, endorsed,
hypothecated, or encumbered at the time such loans are obtained or such indebtedness is
incurred, or at any other time or times,
and may be either in addition to or in lieu of any property theretofore mortgaged, pledged,
transferred, endorsed, hypothecated or
encumbered.
	 
	4.	 	Lease personal property as lessee and elect as to tax credit and depreciation deductions.
	 
	5.	 	Sell, assign, pledge or transfer all or any present or future stocks or securities registered
in the Corporation’s name.

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	6.	 	Enter into any agreement for any rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction,
floor transaction, collar transaction, forward transaction, currency swap transaction,
cross-currency swap transaction, currency
option or any other similar transaction, including any option with respect to any of these
transactions, or any combination
thereof, whether linked to one or more interest rates, foreign currencies, commodity prices,
equity prices or other financial
measures.
	 
	7.	 	Draw, endorse, and discount with the Bank all drafts, trade acceptances, promissory notes, or
other evidences of indebtedness
payable to or belonging to the Corporation or in which the Corporation may have an interest,
and either receive cash for the
same or cause such proceeds to be credited to the Corporation’s account with the Bank, or
cause such other disposition of the
proceeds derived therefrom as he or she may deem advisable.
	 
	8.	 	Sign and deliver to the Bank, promissory notes or notes, drafts, acceptances, guaranties,
subordination agreements, assignments,
applications and reimbursement agreements for letters of credit, security agreements,
financing statements, mortgages, deeds of
trust, pledges, hypothecations, transfers, leases and any other instrument or document deemed
necessary or required to carry out
the authority contained in this resolution, and any one or more renewals, extensions,
modifications, refinancings, consolidations
or substitutions of any of the foregoing.
	 
	9.	 	In the case of lines of credit and other extensions of credit, to designate additional or
alternate individuals as being authorized
to request advances and the issuance of letters of credit under such lines, and other
extensions of credit, and to direct the
disposition of such advances.
	 
	10.	 	Negotiate, consent to, and sign any instrument, writing, document or other agreement with the
Bank containing a provision or
provisions for waiver of the right to a trial before a jury; provisions for resolution of any
and all disputes, claims, actions, issues,
complaints, suits, or controversies, of any kind or nature, by arbitration; and provisions
for cognovit, and confession of judgment
and warrant of attorney for any indebtedness, or for any guaranty of indebtedness of the
Company to the Bank.
	 
	11.	 	Do and perform such other acts and things, pay any and all fees and costs, and execute and
deliver such other documents and
agreements as any authorized representative of the Corporation may in his or her discretion
deem reasonably necessary or proper
to carry into effect the provisions of this resolution.

Further Resolved: The Corporation authorizes any one of the persons authorized above or any other
person designated by any of those persons to handle the operation of all credit facilities now or
hereafter provided to the Corporation by the Bank, which operation may be handled in any manner,
whether orally or in writing (including email and other forms of communication) or otherwise. The
Corporation also authorizes the Bank to pay the proceeds of any action taken pursuant to these
resolutions in the manner directed by any of the persons authorized to act, including (but not in
limitation) directing the payment of such proceeds: (i) to any deposit or loan account of the
Corporation; (ii) to the order of any of such persons in an individual capacity; or (iii) to the
individual credit of any such person or the individual credit of any other person; and further to
direct the payment from any of the Corporation’s accounts in satisfaction of any of its
obligations. The Corporation ratifies, confirms and approves all actions previously taken by any
one of the persons authorized to act. The Bank is released from any liability and shall be
indemnified against any loss, liability or expense arising from its reliance on this resolution.

Further Resolved: The authority given is retroactive, and any acts referred to which were
performed prior to the adoption of these resolutions are ratified and affirmed. This resolution
shall be continuing, shall remain in full force and effect, and the Bank may rely on it until
written notice of its revocation shall have been delivered to and received by the Bank. Any such
notice shall not affect any of the Corporation’s agreements or commitments in effect at the time
notice is given. The Corporation does indemnify and hold harmless the Bank from any loss or damage
incurred by the Bank by acting in reliance upon this resolution.

Further Resolved: The Corporation will notify the Bank prior to any (i) change in the
Corporation’s name; (ii) change in the Corporation’s assumed business name(s); (iii) change in the
management of the Corporation; (jv) change in the authorized signers; (v) change in the
Corporation’s chief executive office address; (vi) change in the jurisdiction under which the
Corporation’s business organization is formed or organized; (vii) conversion of the Corporation to
a new or different type of business entity; or (viii) change in any other aspect of the
Corporation that directly or indirectly relates to any agreements between the Corporation and the
Bank. No change in the Corporation’s name will take effect until after the Bank has been notified.

1 Certify that I am the duly elected and qualified Secretary, Assistant Secretary or President of
the Corporation and the keeper of the records and the corporate seal of the Corporation, and that
the above is a true and correct copy of resolutions duly adopted at a meeting of the Board of
Directors of the Corporation held in accordance with its by-laws, or by a legally effective
instrument of action in lieu of a meeting, and that they are in full force and effect. This
resolution now stands of record on the books of the Corporation, and has not been modified or
revoked in any manner whatsoever.

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I Further Certify that the individuals whose signatures appear above have been duly elected and are
presently the incumbents of the offices set next to their respective signatures, and that the
signatures are the genuine original signatures of each respectively.

I Further Certify that all statements and representations made in this resolution are true and
correct.

(Signature)

(Printed Name)

(Title)

(Date Signed)

Complete this section only if the person certifying this resolution by signature and with the
title stated above is the only representative of the Corporation authorized to act on its behalf.
In such case, complete this section by the signature of a different representative or director of
the Corporation.

The undersigned as a representative or director of the Corporation hereby acknowledges the
authority of the person certifying this resolution by the signature and title stated above to act
alone for and on behalf of the Corporation as described in this resolution.

(Signature)

(Printed Name)

(Title)

(Date Signed)

Complete this section only if the Corporation is organized with only one
Officer-Director. 

As permitted by law of the state of incorporation, there arc
no other individuals who are either officers or directors.

(Signature)

(Printed Name)

(Title)

(Date Signed)

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Line of Credit Note

$1,000,000.00 Date:

February 26, 2009

Promise to Pay. On or before May 31, 2010, for value received, U.S. GLOBAL INVESTORS, INC. (the
“Borrower”) promises to pay to JPMorgan Chase Bank, N.A., whose address is 1020 NE Loop 410, Suite
100, San Antonio, TX 78209 (the “Bank”) or order, in lawful money of the United States of America,
the sum of One Million and 00/100 Dollars ($1,000,000.00) or so much thereof as may be advanced
and outstanding, plus interest on the unpaid principal balance computed on the basis of the actual
number of days elapsed in a year of 360 days unless that calculation would result in a usurious
interest rate, in which case interest will be calculated on the basis of a 365 or 366 day year, as
the case may be at the rate of 0% per annum (the “Applicable Margin”) above the CB Floating Rate
(the interest rate of this Note on any day is referred to herein as the “Note Rate”), and at the
rate of 3.00% per annum above the Note Rate, at the Bank’s option, upon the occurrence of any
default under this Note, whether or not the Bank elects to accelerate the maturity of this Note,
from the date such increased rate is imposed by the Bank.

In no event shall the interest rate exceed the maximum rate allowed by law. Any interest payment
that would for any reason be unlawful under applicable law shall be applied to principal.

Interest will be computed on the unpaid principal balance from the date of each borrowing.

Until maturity, the Borrower will pay consecutive monthly installments of interest only commencing
April 1, 2009.

The Borrower shall make all payments on this Note and the other Related Documents, without setoff,
deduction, or counterclaim, to the Bank at the Bank’s address above or at such other place as the
Bank may designate in writing. If any payment of principal or interest on this Note shall become
due on a day that is not a Business Day, the payment will be made on the next succeeding Business
Day. Payments shall be allocated among principal, interest and fees at the discretion of the Bank
unless otherwise agreed or required by applicable law. Acceptance by the Bank of any payment that
is less than the payment due at that time shall not constitute a waiver of the Bank’s right to
receive payment in full at that time or any other time.

Interest Rate Definitions. As used in this Note, the following terms have the following respective
meanings:

	1.	 	“Adjusted One Month LIBOR Rate” means, for any day, the sum of (i) 2.50% per annum plus (ii)
the quotient of (a) the interest
rate determined by the Bank by reference to the Page to be the rate at approximately 11:00 a.m.
London time, on such date or, if
such date is not a Business Day, on the immediately preceding Business Day for dollar deposits
with a maturity equal to one (1)
month, divided by (b) one minus the Reserve Requirement (expressed as a decimal) applicable to
dollar deposits in the London
interbank market with a maturity equal to one (1) month.
	 
	2.	 	“Business Day” means (i) with respect to the Adjusted One Month LIBOR Rate, a day (other than
a Saturday or Sunday) on
which banks generally are open in Texas and/or New York for the conduct of substantially all of
their commercial lending
activities and on which dealings in United States dollars are carried on in the London interbank
market and (ii) for all other
purposes, a day other than a Saturday, Sunday or any other day on which national banking
associations are authorized to be
closed.
	 
	3.	 	“CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate shall, on any
day, not be less than the Adjusted
One Month LIBOR Rate. The CB Floating Rate is a variable rate and any change in the CB Floating
Rate due to any change in
the Prime Rate or the Adjusted One Month LIBOR Rate is effective from and including the
effective date of such change in the
Prime Rate or the Adjusted One Month LIBOR Rate, respectively.
	 
	4.	 	“Page” means Reuters Screen LIBOR01, formerly known as Page 3750 of the Moneyline Telerate
Service (together with any
successor or substitute, the “Service”) or any successor or substitute page of the Service
providing rate quotations comparable to
those currently provided on such page of the Service, as determined by the Bank from time to
time for purposes of providing
quotations of interest rates applicable to dollar deposits in the London interbank market.
	 
	5.	 	“Prime Rate” means the rate of interest per annum announced from time to time by the Bank as
its prime rate. The Prime Rate is
a variable rate and each change in the Prime Rate is effective from and including the date the
change is announced as being
effective. THE PRIME RATE IS A REFERENCE RATE AND MAY NOT BE THE BANK’S LOWEST RATE.

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	6.	 	“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as
from time to time in effect and
any successor thereto or other regulation or official interpretation of said Board of Governors
relating to reserve requirements
applicable to member banks of the Federal Reserve System.
	 
	7.	 	“Reserve Requirement” means the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and
other reserves) which is imposed under Regulation D.

Authorization for Direct Payments (ACH Debits). To effectuate any payment due under this Note or
under any other Related
Documents, the Borrower hereby authorizes the Bank to initiate debit entries to Account Number
          at the Bank and to debit the same to such account. This authorization to initiate debit entries
shall remain in full force and effect until the Bank has received written notification of its
termination in such time and in such manner as to afford the Bank a reasonable opportunity to act
on it. The Borrower represents that the Borrower is and will be the owner of all funds in such
account. The Borrower acknowledges: (1) that such debit entries may cause an overdraft of such
account which may result in the Bank’s refusal to honor items drawn on such account until adequate
deposits are made to such account; (2) that the Bank is under no duty or obligation to initiate
any debit entry for any purpose; and (3) that if a debit is not made because the above-referenced
account does not have a sufficient available balance, or otherwise, the payment may be late or
past due.

Late Fee, Any principal or interest which is not paid within 10 days after its due date (whether
as stated, by acceleration or otherwise) shall be subject to a late payment charge of five percent
(5.00%) of the total payment due, in addition to the payment of interest, up to the maximum amount
of One Thousand Five Hundred and 00/100 Dollars ($1,500.00) per late charge. The Borrower agrees
to pay and stipulates that five percent (5.00%) of the total payment due is a reasonable amount
for a late payment charge. The Borrower shall pay the late payment charge upon demand by the Bank
or, if billed, within the time specified.

Purpose of Loan. The Borrower acknowledges and agrees that this Note evidences a loan for a
business, commercial, agricultural or similar commercial enterprise purpose, and that no advance
shall be used for any personal, family or household purpose. The proceeds of the loan shall be
used only to support accounts receivable.

Credit Facility. The Bank has approved a credit facility to the Borrower in a principal amount not
to exceed the face amount of this Note. The credit facility is in the form of advances made from
time to time by the Bank to the Borrower. This Note evidences the Borrower’s obligation to repay
those advances. The aggregate principal amount of debt evidenced by this Note is the amount
reflected from time to time in the records of the Bank. Until the earliest to occur of maturity,
any default, event of default, or any event that would constitute a default or event of default
but for the giving of notice, the lapse of time or both, the Borrower may borrow, pay down and
reborrow under this Note subject to the terms of the Related Documents.

Renewal and Extension. This Note is given in replacement, renewal and/or extension of, but not in
extinguishment of the indebtedness evidenced by, that Line of Credit Note dated June 3, 2005
executed by the Borrower in the original principal amount of One Million and 00/100 Dollars
($1,000,000.00), including previous renewals or modifications thereof, if any (the “Prior Note” and
together with all loan agreements, credit agreements, reimbursement agreements, security
agreements, mortgages, deeds of trust, pledge agreements, assignments, guaranties, and any other
instrument or document executed in connection with the Prior Note, the “Prior Related Documents”),
and is not a novation thereof. All interest evidenced by the Prior Note shall continue to be due
and payable until paid. The Borrower fully, finally, and forever releases and discharges the Bank
and its successors, assigns, directors, officers, employees, agents, and representatives (each a
“Bank Party”) from any and all causes of action, claims, debts, demands, and liabilities, of
whatever kind or nature, in law or equity, of the Borrower, whether now known or unknown to the
Borrower (i) in respect of the Liabilities evidenced by the Prior Note and the Prior Related
Documents, or of the actions or omissions of any Bank Party in any manner related to the
Liabilities evidenced by the Prior Note or the Prior Related Documents and (ii) arising from events
occurring prior to the date of this Note (“Claims”); provided, however, that the foregoing RELEASE
SHALL INCLUDE ALL CLAIMS ARISING OUT OF THE NEGLIGENCE OF ANY BANK PARTY, but not the gross
negligence or willful misconduct of any Bank Party. If applicable, all Collateral continues to
secure the payment of this Note and the Liabilities. The provisions of this Note are effective on
February 1, 2009.

Usury. The Bank does not intend to charge, collect or receive any interest that would exceed the
maximum rate allowed by law. If the effect of any applicable law is to render usurious any amount
called for under this Note or the other Related Documents, or if any amount is charged or received
with respect to this Note, or if any prepayment by the Borrower results in the payment of any
interest in excess of that permitted by law, then all excess amounts collected by the Bank shall
be credited on the principal balance of this Note (or, if this Note and all other indebtedness
arising under or pursuant to the other Related Documents shall have been paid in full, refunded to
the Borrower), and the provisions of this Note and the other Related Documents shall immediately
be deemed reformed and the amounts thereafter collectable reduced, without the necessity of the
execution of any new document, so as to comply with the then applicable law. All sums paid, or
agreed to be paid, by the Borrower for the use, forbearance, or detention of money under this Note
or the other Related Documents shall, to the maximum extent permitted by applicable law, be
amortized, prorated, allocated and

5

 

spread throughout the full term of such indebtedness until payment in full so that the rate or
amount of interest on account of such indebtedness does not exceed the usury ceiling from time to
time in effect and applicable to such indebtedness for so long as such indebtedness is
outstanding. To the extent federal law permits the Bank to contract for, charge or receive a
greater amount of interest, the Bank will rely on federal law instead of the Texas Finance Code.
To the extent that Chapter 303 of the Texas Finance Code is applicable to this Note, the “weekly
ceiling” specified in Chapter 303 is the applicable ceiling.

Inability to Determine Interest Rate. If the Bank determines on any day that quotations of
interest rates for the relevant deposits referred to in the definition of Adjusted One Month LIBOR
Rate are not being provided for purposes of determining the interest rate on any advance on any
day, then each advance evidenced by this Note shall bear interest at the Prime Rate plus the
Applicable Margin until the Bank determines that quotations of interest rates for the relevant
deposits referred to in the definition of Adjusted One Month LIBOR Rate are being provided.

Miscellaneous. This Note binds the Borrower and its successors, and benefits the Bank, its
successors and assigns. Any reference to the Bank includes any holder of this Note. This Note is
subject to that certain Credit Agreement by and between the Borrower and the Bank, dated June 3,
2005, and all amendments, restatements and replacements thereof (the “Credit Agreement”) to which
reference is hereby made for a more complete statement of the terms and conditions under which the
loan evidenced hereby is made and is to be repaid. The terms and provisions of the Credit Agreement
are hereby incorporated and made a part hereof by this reference thereto with the same force and
effect as if set forth at length herein. No reference to the Credit Agreement and no provisions of
this Note or the Credit Agreement shall alter or impair the absolute and unconditional obligation
of the Borrower to pay the principal and interest on this Note as herein prescribed. Capitalized
terms not otherwise defined herein shall have the meanings assigned to such terms in the Credit
Agreement.

THIS NOTE AND THE OTHER RELATED DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Borrower:	 	 
	Address:	 	7900 Callaghan Road	 	U.S. INVEST	 	 
	 

	 	San Antonio, TX 7S229	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Frank E. Holmes	 	 
	 

	 	 	 	 	 	 

Frank E. Holmes
	 	 Chief
Executive Officer
	 

	 	 	 	 	 	Printed Name
	 	Title
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Date Signed:	 	 

The Bank is executing this Note for the purpose of acknowledging and agreeing to the
notice given under §26.02 of the Texas Business and Commerce Code and the Bank’s failure
to execute or authenticate this Note will not invalidate this Note,

	 	 	 	 	 	 	 
	Bank:	 	 	 	 
	 
	 	 	 	 	 	 
	JPMorgan Chase Bank, N.A.	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ John Riquelme	 	 	 	 
	 	 	  	 	 
	 

	 	John Riquelme
	 	V.P.	 	 
	 

	 	Printed Name
	 	Title	 	 

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Amendment to Credit Agreement

This agreement is dated as of February 26, 2009, by and between U.S. GLOBAL INVESTORS, INC. (the
“Borrower”) and JPMorgan Chase Bank, N.A. (together with its successors and assigns the “Bank”).
The provisions of this agreement are effective on February 1, 2009 (the “Effective Date”),

WHEREAS, the Borrower and the Bank entered into a credit agreement dated June 3, 2005, as amended
(if applicable) (the “Credit Agreement”); and

WHEREAS, the Borrower has requested and the Bank has agreed to amend the Credit Agreement as set
forth in this agreement;

NOW, THEREFORE, in mutual consideration of the agreements contained herein and for other good and
valuable consideration, the parties agree as follows:

	1.	 	DEFINED TERMS. Capitalized terms used in this agreement shall have the same meanings as in
the Credit Agreement,
unless otherwise defined in this agreement.
	 
	2.	 	MODIFICATION OF CREDIT AGREEMENT. The Credit Agreement is hereby amended as follows from and
after the
Effective Date:

	 	2.1	 	The provision in the Credit Agreement captioned “1.3 Borrowing Base” is hereby deleted.
	 
	 	2.2	 	The provision in the Credit Agreement under Section 4.2 captioned “K.
Liquidity1” is hereby amended and restated
to read as follows:

K. Liquidity. Permit at any time its total of cash, marketable securities and
accounts receivable (net of
reserves), to be less than $5,000,000.00.

	3.	 	RATIFICATION, The Borrower ratifies and reaffirms the Credit Agreement and the Credit
Agreement shall remain in full
force and effect as modified by this agreement.
	 
	4.	 	BORROWER REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants that (a) the
representations and warranties contained in the Credit Agreement are true and correct in all
material respects as of the date of
this agreement, (b) no condition, event, act or omission which could constitute a default or
an event of default under the
Credit Agreement, as modified by this agreement, or any other Related Document exists, and
(c) no condition, event, act or
omission has occurred and is continuing that with the giving of notice, or the passage of
time or both, would constitute a
default or an event of default under the Credit Agreement, as modified by this agreement, or
any other Related Document.
	 
	5.	 	FEES AND EXPENSES. The Borrower agrees to pay all fees and out-of-pocket disbursements
incurred by the Bank in
connection with this agreement, including legal fees incurred by the Bank in the preparation,
consummation, administration and enforcement of this agreement.
	 
	6.	 	EXECUTION AND DELIVERY. This agreement shall become effective only after it is fully executed
by the Borrower and the Bank, and the Bank shall have received from the Borrower the following
documents: Line of Credit Note.
	 
	7.	 	ACKNOWLEDGEMENTS OF BORROWER / RELEASE. The Borrower acknowledges that as of the date of this
agreement it has no offsets with respect to all amounts owed by the Borrower to the Bank
arising under or related to the
Credit Agreement, as modified by this agreement, or any other Related Document on or prior to
the date of this agreement. The Borrower fully, finally and forever releases and discharges
the Bank, its successors and assigns and their respective directors, officers, employees,
agents and representatives (each a “Bank Party”) from any and all claims, causes of action,
debts, demands and liabilities, of whatever kind or nature, in law or in equity, of the
Borrower, whether now known or unknown to the Borrower, which may have arisen in connection
with the Credit Agreement or the actions or omissions of any Bank Party related to the Credit
Agreement on or prior to the date hereof. (“Claims”); provided, however, that the foregoing
RELEASE SHALL INCLUDE ALL CLAIMS ARISING OUT OF THE NEGLIGENCE OF ANY BANK PARTY, but not the
gross negligence or willful misconduct of any Bank Party. The Borrower acknowledges and
agrees that this agreement is limited to the terms outlined above, and shall not be construed
as an agreement to change any other terms or provisions of the Credit Agreement. This
agreement shall not establish a course of dealing or be

7

 

construed as evidence of any willingness on the Bank’s part to grant other or future
agreements, should any be requested.

	8.	 	INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER. The Credit
Agreement, as modified by this agreement, and the other Related Documents contain the complete
understanding and
agreement of the Borrower and the Bank in respect of the Credit Facilities and supersede all
prior understandings and
negotiations. No provision of the Credit Agreement, as modified by this agreement, or the
other Related Documents, may be
changed, discharged, supplemented, terminated, or waived except in a writing signed by the
party against whom it is being
enforced.
	 
	9.	 	Governing Law and Venue. This agreement shall be governed by and construed in accordance with
the laws of the State of Texas (without giving effect to its laws of conflicts). The Borrower
agrees that any legal action or proceeding with respect to any of its obligations under this
agreement may be brought by the Bank in any state or federal court located in the State of
Texas, as the Bank in its sole discretion may elect. By the execution and delivery of this
agreement, the Borrower submits to
and accepts, for itself and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of those
courts. The Borrower waives any claim that the State of Texas is not a convenient forum or
the proper venue for any such
suit, action or proceeding.
	 
	10.	 	NOT A NOVATION. This agreement is a modification only and not a novation. Except as expressly
modified by this
agreement, the Credit Agreement, any other Related Documents, and all the terms and
conditions thereof, shall be and remain in full force and effect with the changes herein
deemed to be incorporated therein. This agreement is to be considered
attached to the Credit Agreement and made a part thereof. This agreement shall not release or
affect the liability of any
guarantor of any promissory note or credit facility executed in reference to the Credit
Agreement or release any owner of
collateral granted as security for the Credit Agreement. The validity, priority and
enforceability of the Credit Agreement shall not be impaired hereby. To the extent that any
provision of this agreement conflicts with any term or condition set forth in the Credit
Agreement, or any other Related Documents, the provisions of this agreement shall supersede
and control. The Bank expressly reserves all rights against all parties to the Credit
Agreement and the other Related Documents.

THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT OF THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OR PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

	 	 	 	 	 	 	 
	 	 	Borrower:	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. GLOBAL INVESTORS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Frank E. Holmes	 	 
	 
	 	 	 	 

	 	 
	 

	 	 	 	 
	 	 
	 	 	Frank E. Holmes
Chief Executive Officer	 	 
	 	 	Printed Name	 	 
	 	 	Date Signed: 5/29/09	 	 
	 
	 	 	 	 	 	 
	 	 	Bank:	 	 
	 
	 	 	 	 	 	 
	 	 	JPMorgan Chase Bank, N. A.	 	 

	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John Riquelme

	 
	 
	 	 	 	

John Riquelme
	V.P.	 
	 
	 	 	 	 	 	 
	 
	 	 	 	Printed Name	Title	 

Date Signed: 6-2-09

8exv10w1

Exhibit 10.1

EMPLOYMENT AGREEMENT

     This
Employment Agreement (the “Agreement”), dated as of January 1, 2008 (the “Effective
Date”), is made and entered by and between Robert Fisch (the “Executive”) and rue 21, inc., a
Pennsylvania corporation (the “Company”).

RECITALS

     A. The Company is engaged primarily in the retail apparel business (the “Business”).

     B. The Company desires to be assured of the services of the Executive by employing the
Executive in the capacity and on the terms as set forth below.

     C. The Executive desires to commit himself to serve the Company on the terms herein provided.

     NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements set forth below, the parties hereto agree as follows:

     1. Employment. The Company shall employ the Executive and the Executive accepts
employment by the Company for the period commencing on the Effective Date and ending at the close
of business on January 31, 2011, unless sooner terminated in accordance with the provisions of this
Agreement (the “Initial Term”). This Agreement may be renewed upon expiration of the Initial Term
for successive one year periods (each a “Renewal Period”), on terms and conditions substantially
similar hereto or as otherwise agreed to by the Company and the Executive if the Company provides
the Executive with a written notice of its intent to renew by July 31 of the last year of the
Initial Term (or July 31 of any Renewal Period) and the Executive provides to the Company a written
acceptance notice by the following September 30. The Initial Term as so extended by each Renewal
Period is hereinafter referred to as the “Term”. Upon expiration of the Term, except as expressly
set forth herein, this Agreement and all of its provisions shall terminate and shall cease to have
any force or effect. Subject to the Company’s obligation to provide severance benefits as specified
herein, the Executive and the Company acknowledge that this employment relationship may be
terminated at any time, upon written notice to the other party, with or without Cause or Good
Reason and for any or no cause or reason, at the option of either the Company or the Executive.

     2. Duties.

          (a) During the Term, the Executive shall serve as the President, Chief Executive Officer and
Chairman of the Board of the Company with responsibility for overseeing all aspects of the day to
day operations of the Company and with such other authority and duties as may be assigned to him
from time to time by the Board of Directors of the Company commensurate with such roles of
President and Chief Executive Officer including cooperating with such advisors to the Company as
may be engaged by the Board of Directors from time to time.

 

 

          (b) During the Term, the Executive shall devote all his working time, attention, skill and
efforts to the business and affairs of the Company, will use his best efforts to promote the
success of the Company’s business, and shall not enter the employ of or serve as a consultant to,
or in any way perform any services, with or without compensation, for, any other person,
enterprise, business, company, corporation, partnership, firm, association or organization where
such conduct would be inconsistent with, in competition with, or prevent, hinder or restrict the
Executive from carrying out, his duties to the Company or which would be otherwise inconsistent
with this Section 2(b) or any other provision of this Agreement, in each case, without the prior
written consent of the Board of Directors of the Company.

          (c) Nothing in this Agreement shall preclude Executive from devoting time during business
hours to (i) personal matters and investments, (ii) professional, educational, philanthropic,
public interest, or civic activities, or (iii) serving as a director or member of an advisory
committee of any trade association or other entity not in competition with the Company, provided
that such activities do not interfere with Executive’s regular performance of his duties and
responsibilities hereunder.

          (d) The Company shall use its reasonable best efforts to cause the Executive to continue to be
elected as a member of its Board of Directors and Chairman of the Board throughout the Term.

     3. Compensation and Related Matters.

          (a) Salary. From the Effective Date through January 31,2008 the Executive shall
receive a salary at the rate of $675,000 per annum (the “Base Salary”), payable in accordance with
the Company’s policies in effect from time to time, but in any event no less frequently than
monthly. Effective February 1, 2008 the Executive’s Base Salary shall be increased to $735,000 per
annum; effective February 1, 2009 the Executive’s Base Salary shall be increased to $800,000 per
annum; and effective February 1, 2010 the Executive’s Base Salary shall be increased to $875,000
per annum. For any Renewal Period thereafter, the Executive’s Base Salary shall be reviewed
annually for increases by the Board of Directors of the Company to be effective February 1
commencing February 1, 2011.

          (b) Bonus.

               (i) In addition to his Base Salary, provided the Executive remains employed by the Company on
the last day of the fiscal year for which such Performance Bonus is payable, the Executive shall be
entitled to receive an annual performance based bonus comprised of two components based on the
Company’s EBITDA performance during the Spring and Fall selling seasons using the same or a
substantially similar methodology as used in the past by the Board of Directors (the “Performance
Bonus”) for each fiscal year during the Term. The Board of Directors will determine the actual
Performance Bonus awarded to the Executive for any fiscal year, provided, however, that such
Performance Bonus for fiscal year 2008 shall be targeted at 50% of the Executive’s Base Salary for
such fiscal year and shall range from 0% to a maximum of 110% of the Executive’s Base Salary in
such fiscal year. The Performance Bonus for fiscal year 2008 will be based on the Company’s actual
EBITDA relative to the Company’s 2008 bonus plan. The bonus plan

Page 2 of 18

 

for each fiscal year and season during the Term will be determined by the Executive and the Board
of Directors of the Company. The Performance Bonus will be payable based upon the respective
year’s bonus plan and in accordance with and otherwise conform to the EBITDA Bonus Program for
Corporate Office as currently adopted by the Board of Directors.

               (ii) The Executive’s Performance Bonus for fiscal years 2009 and 2010 shall be determined by
the Board of Directors of the Company, provided that the range of Performance Bonus for which the
Executive is eligible in such years, as a percentage of the Executive’s Base Salary, shall not be
less than the range for fiscal year 2008 (i.e., 0% to 110%).

          (c) Equity Participation. As of the Effective Date, the Company hereby grants the
Executive options (the “Options”) to purchase 75,000 shares of the Company’s common shares,
pursuant to the terms of the rue 21, inc. 2003 Ownership Incentive Plan (the “Option Plan”). The
Options will have an exercise price equal to Eight Dollars ($8.00) per share representing the fair
market value of the Company’s common shares as of January 4, 2008. Thereafter, 25% will be vested,
respectively, on August 1, 2008, August 1, 2009, August 1,2010, and August 1,2011. Each of the
Options will be exercisable for a period of ten years from the date of grant. In the event of the
Executive’s termination prior to the end of the Term, the options will cease to vest on the date of
such termination in accordance with the Option Plan, and the Option Agreement executed by the
Executive. Upon the occurrence of a Change of Control as defined under the Option Plan, the
Executive shall become 100% vested in the unexercised options granted to the Executive and shall be
entitled to exercise said options within 30 days after the occurrence of the Change of Control.

          (d) Expenses. The Company shall reimburse the Executive for all reasonable travel and
other reasonable out-of-pocket business expenses incurred by the Executive in the performance of
his duties under this Agreement upon evidence of payment and otherwise in accordance with the
Company’s procedures in effect from time to time.

          (e) Employee Benefits. During the Term, the Executive shall be entitled to participate
in or receive benefits under any employee health benefit plan or other arrangement made available
by the Company to its senior executives (“Health Benefit Plan”) on a basis consistent with the
terms, conditions and overall administration of such Health Benefit Plan. The Executive shall also
be entitled to participate in or receive benefits under any other employee benefit plans, on a
basis consistent with the terms, conditions and overall administration of such other employee
benefit plans. The Company shall provide and pay the entire cost of additional term life insurance
coverage for the Executive. The amount of coverage under the additional term life insurance shall
equal at least three times the Executive’s Base Salary.

          (f) Vacation; Automobile. The Executive shall be entitled to four weeks paid vacation
for each year during the Term in accordance with the Company’s vacation policies in effect for its
senior management. Vacation days that are not used within any fiscal year during the Term may not
be used in any subsequent fiscal year. The scheduling of such vacation days shall be subject to the
mutual agreement of the Board of Directors and the Executive. During the Term, the Company will
provide to the Executive an automobile mutually agreed upon by the Executive and the Board of
Directors and will pay directly or reimburse the Executive for all insurance and maintenance costs
relating to such automobile.

Page 3 of 18

 

          (g) Certain Housing/Travel Expenses. The Company will reimburse the Executive for a
mutually agreed upon apartment for a residence in Pittsburgh, Pennsylvania. The Company will
reimburse the Executive for all roundtrip airfare between either Connecticut and Pittsburgh,
Pennsylvania or Miami, Florida and Pittsburgh, Pennsylvania, during the Term of the Agreement. The
Company also shall reimburse the Executive’s spouse for all roundtrip airfare between either
Connecticut and Pittsburgh, Pennsylvania or Miami, Florida and Pittsburgh, Pennsylvania, during
the Term of the Agreement.

          (h) Attorney’s Fees. The Company will reimburse the Executive for all reasonable,
documented attorney’s fees incurred by the Executive in connection with the negotiation and
execution by the Executive of this Employment Agreement and the Stock Option Agreement.

          (i) Deductions and Withholdings. All amounts payable or which become payable
hereunder shall be subject to all deductions and withholding required by law.

     4. Termination. This Agreement may be terminated under the following circumstances:

          (a) Death. The Executive’s services hereunder shall terminate upon his death. In the
case of the Executive’s death, the Company shall pay to the Executive’s beneficiaries or estate, as
appropriate, after his death, his then current accrued and unpaid Base Salary, the pro rata portion
of the Executive’s Performance Bonus for the year in which the Executive’s death occurs (based upon
the Performance Bonus for which the Executive is eligible that year, with any discretionary
components deemed satisfied to the fullest extent), the Executive’s Performance Bonus for the year
preceding the year in which the Executive’s death occurs if then due and owing and other benefits
and payments then due (including, without limitation, life insurance payments and reimbursement of
amounts under Sections 3(d) and (e)) to which the Executive is entitled hereunder. The Executive
and his beneficiaries, shall be entitled to no other compensation under this Agreement following,
or as a result of, a termination under these circumstances.

          (b) Disability

               (i) If a Disability (as defined below) of the Executive occurs during the Term, the Company
may give the Executive written notice of its intention to terminate his employment. In such event,
the Executive’s services with the Company shall terminate on the effective date specified in such
notice. In the case of a termination as a result of a Disability, the Company shall pay to the
Executive after his termination, his then current accrued and unpaid Base Salary, the pro rata
portion of the Executive’s Performance Bonus for the year in which the Executive’s Disability
occurs (based upon the Performance Bonus for which the Executive is eligible that year, with any
discretionary components deemed satisfied to the fullest extent), the Executive’s Performance
Bonus for the year preceding the year in which the Executive’s Disability occurs if then due and
owing and other benefits and payments then due (including, without limitation, long or short term
disability benefits and reimbursement of amounts under Sections 3(d) and (e) to which the
Executive is entitled hereunder. The Executive and his beneficiaries, shall be entitled to no
other compensation under this Agreement following, or as a result of, a termination under these
circumstances.

Page 4 of 18

 

               (ii) For the purpose of this subsection 4(b), “Disability” shall mean the Executive’s
inability to perform his duties to the Company on a full-time basis, either with or without
reasonable accommodation, as defined in the Americans with Disabilities Act, for 120 consecutive
days or a total of 180 days in any twelve month period as reasonably determined by the Board of
Directors of the Company.

          (c) Termination by the Company for Cause. The Company may terminate the Executive’s
services hereunder for Cause (as defined below) at any time upon written notice to the Executive.
In such event, the Executive’s services shall terminate on the effective date specified in such
notice. In the case of the Executive’s termination for Cause, the Company shall promptly pay to the
Executive his then current accrued and unpaid Base Salary, reimbursement of amounts under Sections
3(d) and (e) to which the Executive is entitled hereunder and other benefits then due. The
Executive and his beneficiaries shall be entitled to no other compensation under this Agreement
following, or as a result of, a termination under these circumstances. For purposes of this
Agreement, the Company shall have “Cause” to terminate Executive’s services hereunder in the event
of (A) acts or omissions by the Executive which constitute intentional misconduct or a knowing
violation of a material written policy, of the Company (B) the Executive personally receiving a
benefit in money, property or services from the Company or from another person dealing with the
Company, in knowing violation of applicable law or a violation of material written Company policy,
(C) an act of fraud, conversion, misappropriation, or embezzlement by the Executive or his
conviction of, or entering a guilty plea or plea of no contest with respect to, a felony, the
equivalent thereof, or any other crime with respect to which imprisonment is a possible punishment,
(D) an act of moral turpitude adversely affecting the ability of the Executive to perform his
duties hereunder, (E) alcohol or controlled substance abuse, (F) reckless disregard in the
performance of the Executive’s duties, (G) the commission in bad faith by the Executive of any act
which injures or could reasonably be expected to injure the reputation, business or business
relationships of the Company, (H) a material breach by the Executive of any of the provisions of
Section 5 or (I) any other breach by the Executive of this Agreement in any material respect, which
continues uncured for thirty (30) days after receipt by the Executive of written notice of breach
from the Company, provided, however, the Company shall not be permitted to terminate the Executive
for Cause pursuant to subsections (B), (E) or (H) of this Section 4(c) if the Company shall not
have previously provided the Executive with a one-time only written notice from the Company that
the Executive committed any act set forth in subsections (B), (E) or (H) which Executive failed to
cure within thirty (30) days following receipt of such notice.

          (d) Termination by the Executive Without Good Reason

               (i) The Executive may terminate his employment hereunder for other than Good Reason (as
defined below), provided that Executive first gives the Company a written notice of
termination at least 30 calendar days prior to the effective date of any such termination. In the
event the Executive terminates his employment for other than Good Reason, the Company shall pay to
the Executive his then current accrued and unpaid Base Salary and other benefits and payments then
due (including, without limitation, reimbursement of amounts under Sections 3(d) and (e)) to which
the Executive is entitled hereunder and the Executive shall have 60 days from the date of delivery
of such notice to exercise any vested and exercisable options under the Company’s Stock

Page 5 of 18

 

Option
Plan then in effect. The Executive and his beneficiaries, shall be entitled to no other
compensation under this Agreement following, or as a result of, a termination under these
circumstance.

               (ii) For purposes of this Agreement, “Good Reason” means, other than with the Executive’s
consent, (A) the removal of the Executive from, or the failure to reappoint Executive to, the
position the Executive held with the Company pursuant to this Agreement, (B) any material decrease
or other material adverse change in the duties and responsibilities of the Executive below his
duties and responsibilities contemplated in Section 2(a), (C) the failure to continue to elect the
Executive to the Board of Directors or removal of the Executive from the Board of Directors at any
time during the Term, (D) any other material breach by the Company of this Agreement, and which,
with respect to clauses (B) and (D) hereof, continues uncured for thirty (30) days after receipt by
the Company of written notice of breach from the Executive or (E) a Change in Control of the
Company, provided, however, that in the event of a Change in Control of the Company, the Executive
shall be required to remain with the Company for a period of six months following the Change in
Control prior to Executive having a right to terminate for Good Reason hereunder solely by reason
of such Change in Control and provided, further, that notwithstanding the occurrence of a Change in
Control, the Executive shall have Good Reason if, following such change in Control, any of the
circumstances set forth in clauses (A), (B), (C) or (D) exists and, which, with respect to clauses
(B) and (D) hereof, continues uncured for thirty (30) days after receipt by the Company of written
notice of breach from the Executive. For purposes of this Agreement, “Change in Control” means,
other than with the Executive’s consent, the occurrence of any
of the following events:

     (A) the Company is merged, consolidated or reorganized into or with another Company or other
entity and, as a result of such merger, consolidation or reorganization, less than a majority of
the combined voting power of the then-outstanding securities entitled to vote generally in the
election of members of the Board of Directors (the “Voting Stock”) of such Company or other entity
immediately after such transaction is held in the aggregate by the holders of Voting Stock of the
Company immediately prior to such transaction; or

     (B) the Company sells or otherwise transfers all or substantially all of its assets or capital
stock to another company or other entity or person, and, as a result of such sale or transfer, less
than a majority of the combined voting power of the then-outstanding voting stock of such company
or other entity or person is held in the aggregate by the holders of the Voting Stock of the
Company immediately prior to such sale or transfer; or

     (C) “any “person” or “persons” (as such term is used in Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) other than APAX Partners LP and its
affiliates (“APAX”), becomes the “beneficial owner” (as determined pursuant to Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company’s then outstanding securities

          (e) Termination by the Company Without Cause. The Company may terminate the
Executive’s services hereunder without Cause at any time upon written notice to the Executive. In
such event, the Executive’s employment hereunder shall terminate on the effective date specified
in the notice. In the event the Executive’s services hereunder are terminated by the Company
without

Page 6 of 18

 

Cause, provided that the Executive enters into a Separation Agreement and Release of the Company
and related parties substantially similar to the form attached hereto as Exhibit A, the Company
shall: (i) pay the Executive an amount equal to two (2) times his Base Salary in effect on the effective
date of termination plus two (2) times his Performance Bonus target for the year in which such
termination occurs, and (ii) to the extent permitted by the Company’s benefit plans, provide the
benefits set forth in Section 3(e) then provided to the Executive for a period of 24 months
following the Executive’s termination pursuant to this Section 4(e), provided that, to the extent
such continuation of one or more benefits is not permitted by the Company’s benefit plans, the
Company shall pay to the Executive, within thirty (30) days after the discontinuation of any such
benefit(s), a lump sum payment of reasonably equivalent value to the discontinued benefit(s). The
entire amount payable under subsection (i) above shall be paid to the Executive in one lump sum
payment within thirty (30) days after the effective date of termination. In addition, the Executive
shall be deemed fully vested, as of the effective date of such termination, in all accrued benefits
under all retirement plans (excluding any stock option plans) for which the Executive is eligible
and has participated, and all such accrued benefits shall be calculated, for all purposes, as if
the Executive were credited, as of the effective date of termination, with two additional years of
age and/or service to the Company. Further, the Company shall reimburse the Executive for any
amounts then due pursuant to Section 3(d) and shall pay the Executive’s Performance Bonus for the
year preceding the year in which the Executive’s termination occurs if then due and owing, and the
Executive shall have 60 days from the date of delivery of such termination notice to exercise any
vested and exercisable options under the Company Stock Option Plan then in effect. The Executive
shall be entitled, at his election and his sole cost and expense, to receive benefits provided
pursuant to the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following the termination
date Executive’s benefits as set forth in the preceding sentence. The Executive and his
beneficiaries, shall be entitled to no other compensation under this Agreement following, or as a
result of, a termination under these circumstances.

          (f) Termination by the Executive For Good Reason. The Executive may terminate his
employment hereunder for Good Reason upon written notice to the
Company. In such event, the
Executive’s employment hereunder shall terminate on the date specified in the notice. In the event
the Executive terminates his employment for Good Reason, provided that the Executive enters into a
Separation Agreement and Release of the Company and related parties substantially similar to the
form attached hereto as Exhibit A, the Company shall: (i) pay the Executive an amount equal to two
(2) times his Base Salary in effect on the effective date of termination plus two(2) times his
Performance Bonus target for the year in which such termination occurs, and (ii) to the extent
permitted by the Company’s benefit plans, provide the benefits set forth in Section 3(e) then
provided to the Executive for a period of 24 months following the Executive’s termination pursuant
to this Section 4(f) provided that, to the extent such continuation of one or more benefits is not
permitted by the Company’s benefit plans, the Company shall pay to the Executive, within thirty
(30) days after the discontinuation of any such benefit(s), a lump sum payment of reasonably
equivalent value to the discontinued benefit(s). The amount payable under subsection (i) above,
shall be paid to the Executive in one lump sum payment within thirty (30) days after the effective
date of termination. In addition, the Executive shall be deemed fully vested, as of the effective
date of such termination, in all accrued benefits under all retirement plans (excluding any stock
option plans) for which the Executive is eligible and has participated, and all such accrued
benefits shall be calculated, for all purposes, as if the Executive were credited, as of the
effective date of termination, with two additional years of age and/or service to the Company.
Further, the Company shall reimburse the

Page 7 of 18

 

Executive for any amounts then due pursuant to Section 3(d) and shall pay the Executive’s
Performance Bonus payment for the year preceding the year in which the Executive terminates his
employment for Good Reason if then due and owing. The Executive shall be entitled, at his election
and his sole cost and expense, to receive benefits provided pursuant to COBRA following the
termination date Executive’s benefits as set forth in the preceding sentence. The Executive and
his beneficiaries, shall be entitled to no other compensation under this Agreement following, or
as a result of, a termination under these circumstances.

          (g) Failure to Renew Agreement. The Executive and his beneficiaries, shall be
entitled to no compensation or benefits under this Agreement, following, or as a result of the
failure by the Executive to renew this Agreement pursuant to Section 1. In the event the: Company
elects not to renew this Agreement pursuant to Section 1, provided that the Executive enters into
a Separation Agreement and Release of the Company and related parties substantially similar to the
form attached hereto as Exhibit A, the Company shall: (i) pay the Executive an amount equal to 24
months of his Base Salary in effect on the date of the end of the Term in which the Company
elected not to renew the Agreement pursuant to this Section 4(g) and (ii) to the extent permitted
by the Company’s benefit plans, continue to provide the benefits set forth in Section 3(e) then
provided to the Executive, for a period of 24 months following the end of the term in which the
Company elected not to renew this Agreement pursuant to this Section 4(g). The amount payable
under subsection (i) above, shall be payable in equal weekly installments commencing on the date
of the end of the Term in which the Company elected not to renew the Agreement pursuant to
Section 4(g) and continuing thereafter until paid in full; provided, however, in the event the Company
fails to timely make any such weekly payment to the Executive, the entire unpaid amount due
Executive under subsection (i) above shall be payable in an immediate lump sum payment upon the
demand of Executive. In addition, the Company shall reimburse the Executive for any amounts then
due pursuant to Section 3(d). The Executive shall be entitled, at his election and his sole cost
and expense, to receive benefits provided pursuant to COBRA following the terms of the Executive’s
benefits as set forth in the preceding sentence. The Executive and his beneficiaries, shall be
entitled to no other compensation under this Agreement following, or as a result of, the Company’s
failure to renew this Agreement.

     5. Inclusion of Executive’s Shares in Offering, “Piggy-Back” Registration Rights. If
at any time or times after the Effective Date, the Company proposes for any reason to register any
shares of its capital stock for public sale under the Securities Act of 1933, as amended (whether
in connection with a public offering of securities by the Company, an initial public offering of
securities by stockholders of the Company, or both), the Company will promptly give written notice
thereof to the Executive, such notice to include a brief description of the proposed registration
and offering including the total proposed size, other anticipated selling shareholders, identity of
the underwriter (if any), and anticipated range of offering prices. Within ten days after the
receipt of such notice, the Executive may elect in writing to include some or all of his Company
shares for sale and registration in the proposed offering, in which case the Company wilt effect
the registration under the Securities Act of all such shares requested by the Executive, up to (but
not exceeding) that number of the Executive’s shares that bears
the same proportion to the total
number of all shares held by the Executive as the number of APAX shares that are included in such
registration bears to the total number of all shares held by APAX. In the case of the registration
of shares of the Company in connection with an underwritten public offering, the Company shall not
be required to include any

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shares of the Executive unless the Executive accepts the standard and customary terms of the
underwriting as reasonably agreed upon by the Company, APAX and the managing underwriter(s) for
such offering. The Company will bear all costs associated with the inclusion of the Executive’s
shares in any such offering with the sole exception of any applicable underwriting commissions or
discounts. The provisions of this Section 5 shall survive any termination of this Agreement and
termination of the Executive’s employment with the Company.

     6. Confidential and Proprietary Information

          (a) The parties agree and acknowledge that during the course of the Executive’s employment,
the Executive has been given and will have access to and be exposed to trade secrets and
confidential information in written, oral, electronic and other form regarding the Company (which
includes but is not limited to all of its business units, divisions and subsidiaries) and its
business, including, without limitation, the Company’s business methods, practices, strategies,
forecasts, pricing, and marketing techniques; the amounts paid to the Company’s licensors, vendors
and other suppliers; the identities of the Company’s key sales representatives and personnel and
other employees; advertising and sales materials; and other facts and financial and other business
information concerning or relating to the Company and its business, operations, financial
condition, results of operations and prospects. The Executive expressly agrees to use such trade
secrets and confidential information only for purposes of carrying out his duties for the Company,
and not for any other purpose, including, without limitation, not in any way or for any purpose
detrimental to the Company. The Executive shall not at any time, either during the course of his
employment hereunder or during the two years after the termination of such employment, use for
himself or others, directly or indirectly, any such trade secrets and confidential information,
and, except as required by law, the Executive shall not disclose such trade secrets and
confidential information, directly or indirectly, to any other person or entity. Trade secret and
confidential information hereunder shall not include any information which (i) is already in or
subsequently enters the public domain, other than as a result of any direct or indirect action or
inaction by the Executive, (ii) becomes available to the Executive on a non-confidential basis from
a source other than the Company, provided that such source is not subject to a confidentiality
agreement or other obligation of secrecy or confidentiality (whether pursuant to a contract, legal
or fiduciary obligation or duty or otherwise) to the Company or any other person or entity or (iii)
is approved for release by the Company or which the Company makes available to third parties
without an obligation of confidentiality.

          (b) All physical property and all notes, memoranda, files, records, writings, documents and
other materials of any and every nature, written or electronic, which the Executive shall prepare
or receive in the course of his employment with the Company and which relate to or are useful in
any manner to the business now or hereafter conducted by the Company are and shall remain the sole
and exclusive property of the Company, provided, however, nothing herein shall prohibit the
Executive from retaining, for his records only, a copy of any information relating to his
compensation and benefits, including copies of any benefit plans
under which he is a participant.
The Executive shall not remove from the Company’s premises any such physical property, the original
or any reproduction of any such materials nor the information contained therein except for the
purposes of carrying out his duties to the Company and all such property (except for any items of
personal property not owned by the Company), materials and information in his possession or under
his

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custody or control upon the termination of his employment shall be immediately turned over to the
Company.

          (c) The provisions of this Section 6 shall survive any termination of this Agreement and
termination of the Executive’s employment with the Company.

     7. No Solicitation.

          (a) The Executive acknowledges and agrees that he has gained and during the time of his
employment with the Company, will gain, valuable information about the identity, qualifications and
on-going performance of the employees of the Company. During the two-year period commencing on the
date of the termination of the Executive’s employment with the Company, the Executive shall not
directly or indirectly (i) hire, employ, offer employment to, or seek to hire, employ or offer
employment to, any of the Company’s (A) current employees or (B) former employees in senior
management or field organization positions who have been employed by the Company within one year
prior to any such hiring or solicitation thereof by the Executive, (ii) solicit or encourage any
such employee to seek or accept employment with any other person or entity or (iii) disclose any
information, except as required by law, about such employee to any prospective employer.

          (b) The provisions of this Section 7 shall survive any termination of this Agreement and the
termination of Executive’s employment with the Company.

     8. Injunctive Relief. The Executive and the Company (a) intend that the provisions of
Sections 6 and 7 be and become valid and enforceable, (b) acknowledge and agree that the provisions
of Sections 6 and 7 are reasonable and necessary to protect the legitimate interests of the Company
and its business and (c) agree that any violation of Sections 6 or 7 will result in irreparable
injury to the Company, the exact amount of which will be difficult to ascertain and the remedies at
law for which will not be reasonable or adequate compensation to the Company for such a violation.
Accordingly, the Executive agrees that if the Executive violates the provisions of Sections 6 or 7,
in addition to any other remedy which may be available at law or in equity, the Company shall be
entitled to seek specific performance and injunctive relief, without posting bond or other
security, and without the necessity of proving actual damages.

     9. Assignment: Successors and Assigns. The Executive agrees that he shall not assign,
sell, transfer, delegate or otherwise dispose of, whether voluntarily or involuntarily, any rights
or obligations under this Agreement, nor shall the Executive’s rights hereunder be subject to
encumbrance of the claims of creditors. Any purported assignment, transfer, delegation, disposition
or encumbrance in violation of this Section 9 shall be null and void and of no force or effect.
Nothing in this Agreement shall prevent the consolidation or merger of the Company with or into any
other entity, or the sale by the Company of all or any portion of its properties or assets, or the
assignment by the Company of this Agreement and the performance of its obligations hereunder to any
successor in interest or any affiliated entity and, subject to the Executive’s right to terminate
for Good Reason, the Executive hereby consents to any and all such assignments. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties and
their respective heirs, legal representatives, successors, and permitted assigns, and, except as
expressly

Page 10 of 18

 

provided herein, no other person or entity shall have any right, benefit or obligation under this
Agreement as a third party beneficiary or otherwise.

     10. Governing Law, Jurisdiction and Venue. This Agreement shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of the Commonwealth of
Pennsylvania without regard to the conflicts of law principles thereof. Suit to enforce this
Agreement or any provision or portion thereof may be brought in any court of competent
jurisdiction.

     11. Severability of Provisions. In the event that any provision or any portion thereof
should ever be adjudicated by a court of competent jurisdiction to
exceed the time or other
limitations permitted by applicable law, as determined by such court in such action, then such
provisions shall be deemed reformed to the maximum time or other limitations permitted by
applicable law, the parties hereby acknowledging their desire that in such event such action be
taken. In addition to the above, the provisions of this Agreement are severable, and the invalidity
or unenforceability of any provision or provisions of this Agreement or portions thereof shall not
affect the validity or enforceability of any other provision, or portion of this Agreement, which
shall remain in full force and effect as if executed with the unenforceable or invalid provision or
portion thereof eliminated.

Notwithstanding the foregoing, the parties hereto affirmatively represent, acknowledge and agree
that it is their intention that this Agreement and each of its provisions are enforceable in
accordance with their terms and expressly agree not to challenge the validity or enforceability of
this Agreement or any of its provisions, or portions or aspects thereof, in the future.

     12. Warranty. As an inducement to the Company to enter into this Agreement, the
Executive represents and warrants that he is not a party to any other agreement or obligation for
personal services, and that there exists no impediment or restraint, contractual or otherwise, on
his power, right or ability to enter into this Agreement and to perform his duties and obligations
hereunder.

     13. Notices. All notices, requests, demands and other communications which are required or may
be given under this Agreement shall be in writing and shall be deemed to have been duly given when
received if personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method upon receipt of telephonic or electronic confirmation; the day after it
is sent, if sent for next day delivery to a domestic address by recognized overnight delivery
service (e.g., Federal Express); and upon receipt, if sent by certified or registered mail, return
receipt requested. In each case notice will be sent to:

          (a) if to the Company:

rue 21, inc.

800 Commonwealth Drive, Suite 100

Warrendale, PA 15086

Attention: Keith McDonough,

Senior Vice President and Chief Financial Officer

Page 11 of 18

 

Telecopy:                                         

with a copy to:

APAX Partners LP

153 E 53rd, 53rd Floor

New York, NY 10022
 Attention: John Megrue

Telecopy: (212) 419-2412

Reed Smith LLP

435 Sixth Avenue

Pittsburgh, PA 15219

Attention: Peter Blasier

Telecopy: (412) 288-3063

          (b) if to the Executive, to:

28 Governors Row

West Hartford, Connecticut 06117

Attention: Robert N. Fisch

with a copy to:

Dinsmore & Shohl, LLP

255 E Fifth Street, Suite 1900

Cincinnati, OH 45202

Attention: Paul A. Ose

Telecopy: (513) 977-8697

or to such other place and with such other copies as either party may designate as to itself or
himself by written notice to the others.

     14. Cumulative Remedies. All rights and remedies of either party hereto are
cumulative of each other and of every other right or remedy such party may otherwise have at law
or in equity, and the exercise of one or more rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of other rights or remedies.

Page 12 of 18

 

     15. Counterparts. This Agreement may be executed in several counterparts, each of
which will be deemed to be an original, but all of which together shall constitute one and the
same Agreement.

     16. Entire Agreement. The terms of this Agreement are intended by the parties to be
the final expression of their agreement with respect to the employment of the Executive by the
Company and supersede, and may not be contradicted by, modified or supplemented by, evidence of any
prior or contemporaneous agreement other than the 2003 Incentive Ownership Plan between the Company
and the Executive. The parties further intend that this Agreement shall constitute the complete and
exclusive statements of its terms and that no extrinsic evidence whatsoever may be introduced in
any judicial, administrative or other legal proceeding to vary the terms of this Agreement.

     17. Amendments: Waivers. This Agreement may not be modified, amended, or terminated
except by an instrument in writing, approved by the Company and signed by the then existing parties
hereto. As an exception to the foregoing, the parties acknowledge and agree that the Company shall
have the right, in its sole discretion, to reduce the scope of any covenant or obligation of the
Executive set forth in Sections 6 or 7 of this Agreement or any portion thereof, effective
immediately upon receipt by the Executive of written notice thereof from the Company. No waiver of
any of the provisions of this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed or be construed as a further, continuing or subsequent waiver of any
such provision or as a waiver of any other provision of this Agreement. No failure to exercise and
no delay in exercising any right, remedy or power hereunder shall preclude any other or further
exercise of any other right, remedy or power provided herein or by law or in equity.

     18. Termination of Credit Agreements. The Company and the Executive
acknowledge that, concurrently with the execution of this Agreement, the Executive has delivered to
the Company for cancellation that certain irrevocable standby letter of credit issued in favor of
the Executive and the Company have terminated the related First Amended and Restated Employee
Security Agreement (the “Credit Arrangements”), which Credit Arrangements were put in place to
support certain contingent severance obligations payable by the Company to the Executive. Further,
the Executive will immediately file all appropriate UCC termination statements with respect to any
liens related to the Credit Arrangements.

     19. Representation of Counsel: Mutual Negotiation. Each party has had the opportunity
to be represented by counsel of its choice in negotiating this Agreement. This Agreement shall
therefore be deemed to have been negotiated and prepared at the joint request, direction and
construction of the parties, at arm’s-length, with the advice and participation of counsel, and
shall be interpreted in accordance with its terms without favor to any party.

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

Page 13 of 18

 

	 	 	 	 	 
	 	rue 21, inc.

 	 
	 	By:  	/s/ Robert Fisch
 	 
	 	 	Name:  	Robert Fisch 	 
	 	 	Title:  	President, CEO 	 
	 
	 	EXECUTIVE

 	 
	 	/s/ Authorized Signatory
 	 
	 	 	 
	 	 	 
	 

Page 14 of 18

 

EXHIBIT A 

SEPARATION AGREEMENT AND GENERAL RELEASE

     THIS SEPARATION AGREEMENT AND GENERAL RELEASE (“Release”) is entered into by Robert Fisch
(“Executive”) and rue 21, inc., a Pennsylvania corporation (the “Company”).

     Executive and the Company desire to settle fully any and all matters between them, including,
but not limited to, any matters relating to Executive’s employment with the Company, Executive’s
Employment Agreement with the Company, dated as of January 1, 2008, a copy of which is attached
hereto and is hereby incorporated by reference herein (“Employment Agreement”), and the
termination of Executive’s employment. Therefore, in consideration of the mutual promises set
forth herein and other good and valuable consideration, the receipt and sufficiency of which is
acknowledged, Executive and the Company agree as follows:

     1. Termination of Employment. Executive’s employment with the Company is
terminated effective                      (“Termination Date”). Executive waives and releases any claim
that he has or may have to reemployment with the Company, or any of its parent companies,
subsidiary companies, affiliates, successors or assigns.

     2. Employment Agreement. The Company will provide termination payments and benefits as of the
Termination Date as provided in Section 4 of Executive’s Employment Agreement. The Company will
provide any payments provided in Section 3 of Executive’s Employment Agreement owed to the
Executive as of the Termination Date. Executive agrees to comply with all of his or her continuing
obligations under the Employment Agreement, including without limitation Sections 6 and 7 of the
Employment Agreement, Executive will not seek any further compensation or benefits from the
Company, or any of its parent companies, subsidiary companies, affiliates, successors or assigns,
except as expressly provided in the Employment Agreement. Any rights Executive may have to equity
compensation and/or stock options are governed by the terms of 2003 Incentive Ownership Plan of the
Company, and other Company documents relating to stock options.

     3. No Authority. Executive understands and agrees that effective on the Termination Date,
Executive is no longer authorized to incur any expenses, obligations, or liabilities on behalf of
the Company.

     4. Release. As a material inducement to the Company to enter into the Employment Agreement and
to receive the termination payments provided in Section 4 thereof, Executive hereby forever
releases and discharges the Company, its parent, subsidiaries, owners, affiliates, divisions,
shareholders, directors, officers, members, partners, business associations, agents, current and
former employees, attorneys, related companies, predecessors, successors and assigns (collectively
“Released Parties”), and each of them, of and from any and
all charges, complaints, claims, or
liabilities (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known
or unknown, suspected or unsuspected, including, but not limited to, rights arising out of alleged
violations of any contracts, express or implied, or any state law tort claim, or any federal,
state, or other governmental statute, regulation, or ordinance, including, but not limited to,
claims under Title

Page 15 of 18

 

VII of the Civil Rights Act of 1964 or the Age Discrimination in Employment Act, 29 U.S.C. §§62
1-634, which Executive now has or claims to have, or which Executive at any time heretofore had or
claimed to have, against each or any of the Released Parties; provided, however, Executive
specifically does not release (a) any rights under the Age Discrimination in Employment Act arising
after the Effective Date of this Release, (b) any claims to enforce this Release or any claims
which Executive is precluded from waiving by operation of law, (c) any claims Executive may have
against the Company pursuant to the terms of the Stockholders Agreement, by and among the Company
and the Stockholders signatory thereto, if the Executive is a party to such agreement, (d) any
entitlement executive may have to indemnification from the Company for actions taken in his
capacity as an employee, officer or director of the Company for which indemnification is provided
pursuant to the Company’s Third Amended and Restated Articles of Incorporation, the Bylaws of the
Company currently in effect any applicable insurance policy of the Company or otherwise provided by
law, and (e) [Describe reasonable any non-employment related claim against the Company alleged by
the Executive in good faith to be outstanding on the date of this Release]. Notwithstanding the
foregoing, the parties acknowledge that any continuing obligations under the Employment Agreement
remain in full force and effect, including, without limitation, the Company’s and the Executive’s
obligations described in Section 2 of this Release and the Executive’s obligations set forth in
Sections 6 and 7 of the Employment Agreement.

     5. No Claims. Executive represents that Executive has not filed any complaints, charges, or
lawsuits with any local, state, or federal agency or court against the Company or any of the
Released Parties, that Executive will not do so at any time based upon any matter that he or she
released in Paragraph 4 that arose on or before the execution of this Release, and that if any such
agency or court assumes jurisdiction of any such charge, complaint, or lawsuit against the Company
or any of the Released Parties on behalf of Executive, Executive will request such agency or court
to withdraw from the matter.

     6. Consultation with Counsel. Executive agrees that Executive fully understands Executive’s
right to discuss all aspects of this Release with Executive’s attorney, that the Company encourages
Executive to consult with legal counsel, that Executive has carefully read and fully understands
all the provisions of this Release, and that Executive is knowingly and voluntarily entering into
this Release.

     7. No Representations. Executive represents and acknowledges that, in signing this Release,
Executive does not rely, and has not relied, upon any representation or statement made by any of
the Released Parties or by any of the Released Parties’ agents, representatives, or attorneys with
regard to the subject matter, basis, or effect of this Release or otherwise.

     8. Acceptance and Revocation. Executive agrees that this Release was presented to Executive
for review and consideration on                      (“Review Date”). Executive understands that
Executive has twenty-one (21) days from the Review Date within which to decide whether to execute
this Release and return it to the Company. If Executive does not return this Release to the
Company fully executed within twenty-one (21) days of the Review Date, any offer implied by the
representation of this Release for Executive’s review and consideration is withdrawn in its
entirety at that time. Executive further understands that Executive has seven (7) days after
execution of this Release within which to provide the Company with written notice of revocation of
this Release

Page 16 of 18

 

(“Revocation Period”). If said written notice of revocation is not received by the Company by the
close of business on the seventh day following Executive’s signing of this Release, Executive
agrees that this Release shall be final, binding, and irrevocable. If Executive does exercise his
or her right to revoke this Release, all of the terms and conditions of the Release shall be of no
force and effect and the Company shall not have any obligation to make payments to Executive as
set forth in this Release.

     9. Notices. The executed copy of this Release and/or any written notices should be provided
to:

rue 21, inc.

800 Commonwealth Drive, Suite 100

Warrendale, PA 15086

Attn: Secretary

     10. Effective Date. This Release shall not become effective in any respect until the
Revocation Period has expired without notice of revocation. In the absence of Executive’s
revocation of this Release, the eighth day after Executive’s signing of this Release shall be the
“Effective Date” of this Release.

     11. No Admissions. This Release shall not in any way be construed as an admission by the
Company that it has acted wrongfully or breached any Release with respect to Executive or any other
person, or an admission of any acts of discrimination whatsoever against Executive, and the Company
specifically disclaims any liability to or discrimination against Executive, on the part of itself,
its employees, its agents or its affiliates.

     12. Executive Breach. Executive agrees that, in the event Executive breaches any provision of
this Release, Executive agrees to indemnify the Company and the Released Parties against all
liability, costs and expenses, including reasonable attorney’s fees, and will reimburse the Company
for all benefits paid to-Executive pursuant to-this Release.

     13. Sole and Entire Agreement. The Release, including the Employment Agreement, constitutes
the entire agreement of the parties, and fully supersedes any and all prior and contemporaneous
agreements or understandings between the parties. This Release may be amended or modified only by
an agreement in writing and signed by both parties.

     14. Governing Law. The validity, interpretation, construction and performance of this
Agreement will be governed by and construed in accordance with the substantive laws of the
Commonwealth of Pennsylvania, without giving effect to its principles of conflict of laws.

     15. Severability. If any provision of this Release or the application of any provision hereof
to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder
of this Release and the application of such provision to any other person or circumstances will not
be affected, and the provision so held to be invalid, unenforceable or otherwise illegal will be
reformed to the extent (and only to the extent) necessary to make it valid, enforceable and legal.

Page 17 of 18

 

     16. Survival of Provisions. Notwithstanding any other provision of this Release, the parties’
respective rights and obligations under Sections 4, 6 and 7 of the Employment Agreement will
survive any termination or expiration of this Release or the termination of Executive’s employment
for any reason whatsoever.

     17. Counterparts. This Release may be executed in one or more counterparts, each of which will
be deemed to be an original but all of which together will constitute one and the same agreement.

     PLEASE READ AND CONSIDER THIS RELEASE CAREFULLY BEFORE SIGNING IT. THIS SEPARATION AGREEMENT
AND GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

	 	 	 	 	 
	 	 	 
	 	Signature:  	
 	 
	 	 	Robert Fisch 	 
	 	 	Date: 	 
	 

	 	 	 	 	 
	Witnessed:  	
 	 	 
	 	Name:  	 	 	 
	 	Date: 	 	 

	 	 	 	 	 
	 	rue 21, inc.

 	 
	 	By  	
 	 
	 	 	Title 	  
	 	 	Date: 	 
	 

Page 18 of 18

 

ACTION BY WRITTEN CONSENT OF

THE BOARD OF DIRECTORS OF

rue21, inc.

     Pursuant to the authority granted by 15 Pennsylvania Consolidated Statutes Section 1727(b),
the Board of Directors of rue21, inc. (the “Company”) adopted the following resolution by
unanimous written consent of all of the Directors of the Company:

     RESOLVED, that the form, terms and provisions of the Employment Agreement between Robert Fisch
and the Company dated as of January 1, 2008 in the form attached hereto as Exhibit A (the
“Employment Agreement”) are hereby approved and that each of the officers of the Company are
authorized and directed, on behalf of the Company, to execute and deliver the Employment Agreement
and such documents, instruments and agreements contemplated thereby and to take such actions as the
officers deem necessary or appropriate to perform the obligations of the Company thereunder.

     Signed this                      day of January, 2008.

	 	 	 	 	 
	 	 	 
	 	/s/
John Megrue
 	 
	 	John Megrue  	 
	 	 	 
	 
	 	 	 
	 	
 	 
	 	Kathryn Swintek 	 
	 	 	 
	 
	 	 	 
	 	
 	 
	 	Robert Fisch 	 
	 	 	 
	 

 

 

ACTION BY WRITTEN CONSENT OF

THE BOARD OF DIRECTORS OF

rue21, inc.

     Pursuant to the authority granted by 15 Pennsylvania Consolidated Statutes Section 1727(b),
the Board of Directors of rue21, inc. (the “Company”) adopted the following resolution by
unanimous written consent of all of the Directors of the Company:

     RESOLVED, that the form, terms and provisions of the Employment Agreement between Robert Fisch
and the Company dated as of January 1, 2008 in the form attached hereto as Exhibit A (the
“Employment Agreement”) are hereby approved and that each of the officers of the Company are
authorized and directed, on behalf of the Company, to execute and deliver the Employment Agreement
and such documents, instruments and agreements contemplated thereby and to take such actions as the
officers deem necessary or appropriate to perform the obligations of the Company thereunder.

     Signed this 18th day of January, 2008.

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	John Megrue 	 
	 	 	 
	 
	 	 	 
	 	
 	 
	 	Kathryn Swintek 	 
	 	 	 
	 
	 	 	 
	 	/s/ Robert Fisch
 	 
	 	Robert Fisch 	 
	 	 	 
	 

 

 

ACTION BY WRITTEN CONSENT OF

THE BOARD OF DIRECTORS OF

rue21, inc.

     Pursuant to the authority granted by 15 Pennsylvania Consolidated Statutes Section 1727(b),
the Board of Directors of rue21, inc. (the “Company”) adopted the following resolution by
unanimous written consent of all of the Directors of the Company:

     RESOLVED, that the form, terms and provisions of the Employment Agreement between Robert Fisch
and the Company dated as of January 1, 2008 in the form attached hereto as Exhibit A (the
“Employment Agreement”) are hereby approved and that each
of the officers of the Company are
authorized and directed, on behalf of the Company, to execute and deliver the Employment Agreement
and such documents, instruments and agreements contemplated thereby and to take such actions as the
officers deem necessary or appropriate to perform the obligations of the Company thereunder.

     Signed this 21 day of January, 2008.

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	John Megrue  	 
	 	 	 
	 
	 	 	 
	 	/s/ Kathryn Swintek
 	 
	 	Kathryn Swintek  	 
	 	 	 
	 
	 	 	 
	 	
 	 
	 	Robert Fisch

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